My interest and overall obsession with personal finance has led to my habit of talking with others about their own financial journey as well.
One group of people I often find myself talking with about finance and business topics is a very key part of the American economy- the small business immigrant shop owner. For some reason being raised in a immigrant family puts me in a position where I am comfortable discussing finances with immigrants, although the conversations can take some time to build.
I am impressed with the resourcefulness and grit you see in small business owners. Many of these people arrived in the U.S. with zero funding, no contacts or resources, yet many of them achieve financial success, raise their families, put their kids through college and build out enough assets to live comfortably in their retirements years. The more I speak with these successful business people, the more I find similar patterns in their behavior and outlook on business and life in general.
You can find immigrant shop owners who provide a variety of small business services in nearly every area of a large US city. Some examples of the small business shop owners include dry cleaners, watch repair, cell phone repair, restaurants, and many other industries.
Here are some of the key behaviors I have observed:
(i) Focus on long term shop ownership:
Nearly all of the shop owners I run into have relied on building and maintaining a successful business that lasts a minimum of thirty years. One shop owner recently told me that you need "at least thirty" years of successful business to establish yourself in this country. "Fortunes cannot be made quickly," was a comment I heard just this week.
(ii) Shop owner's hours vs banker's hours:
Another behavior I see is the long hours and often a seven days per week work schedule. A lot of people would frown at the prospect of working seven days a week. However, the shop owners I know never complain about the fact they can run their own business and create income seven days per week.
(iii) Stable family and avoidance of bad habits.
Nearly all of the small business shop owners married young and stayed married- to the same spouse. Starting a service business for instance is a major commitment of your time and by default your family's time. So maintaining a stable and intact family life simply makes the journey less rocky. Another common behavior I see in successful small business owners is the absence of key distractors, such as alcohol, smoking and gambling.
I visit a cell phone repair shop whenever I break the glass on one of my cell phones; The shop owner is a mid-60's gentlemen from Asia, and he looks ten years younger. We've talked about how he has achieved his success, he attributes his success in part to his avoidance of these key distractors. Besides, he told me, "How could I carry my own golf clubs if smoked cigarettes."
(iv) Appreciation of Customers
Several shop owners convey a similar message on the importance of keeping your customers happy. Another shop owner recently told me, "You must understand that there will always be good customers and bad/angry customers, and you cannot always make every customer happy, but the more customers return to you, the more business you will have in the future."
(v) College savings, not student loans
I've met many shop owners who make sure that their children attend college without obtaining student loans. The shop owners I talk to all paid for their kid's tuition outright with their available saved cash. These owners did not have the benefit of college when they arrived, so they make sure to financially cover their kids through college- no student loan debt issue for these people.
That's right, college and even graduate school is covered regardless if the school is a high cost private school or a local state university. Think about how many people you know who borrow hundreds of thousands of dollars to attend college, with some of those loans guaranteed by their parents, which means their parents could be paying those large loans into and beyond their retirement.
(vi) Living well below their means
Again, these shop owners spend a lot of their time working, with no time to get distracted by the category of companies the investment world calls "Sin stocks"- Alcohol, Tobacco, Gambling, etc. This agressive schedule and lifestyle choices enables the small business owner to live well below their means, only buying what they truly need with the extra time they have. More importantly they seem to avoid the American trap of consumerism. One shop owner reminded me that his old Toyota has 400,000 miles on it. He could certainly buy a new Toyota with cash, but he doesn't see the point of spending money when his car still runs fine.
(vii) First house and hold ownership.
Although a few of the small business owner I know own multiple rental units or commercial properties, all of them still live in the first house they purchased many years ago. I asked one shop owner if he took that tip from Warren Buffet, who himself famously lives in the house he bought in 1958 for $31,500. The shop owner told me that he hadn't heard of Warren Buffet.
His response reminded me that Warren Buffet's advice was probably not needed, as the shop owner had already figured out how to obtain assets, run their business and sometimes additional businesses. The idea of buying company stock that they don't actually run and control probably seems completely foreign to them.
I believe you can learn a lot by simply talking to people who have achieved success, whether it's a small business owner or real estate mogul. What I find even more interesting is the paths taken by the offspring of these small business owners. Some of them follow in their parent's footsteps and manage the family business, or move into completely different industries and become successful through their own small business creation ventures. This related subject on the offspring of immigrants is another topic I will cover at a later date. Perhaps it's just my perception, but I find that the children of immigrants can be less forthcoming than their parents on the topics of business and personal finance, so I'll need more time to gather information on that future topic.
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