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Forward on Reverse: The reverse mortgage/long-term care connection

National Mortgage Professional
Oct 31, 2005

America's New Breed of MillionaireDr. Kerry L. Johnsonaffluence, networking, marketing Bill Gates is one of the world's richest people. His house in the Seattle area cost $50 million to build, and if he wanted to move, he could buy every other house in Wyoming, Idaho and Montana. He drives a Lexus, but if he felt like buying a $250,000 Lamborghini, it would mean as much to his bankroll as dinner with your spouse (without the movie) means to yours. His time is worth so much, if he found a $100 bill on the street, he would lose more in the time it took to pick it up. Gates is a billionaire - the wealthiest of the wealthy - but affluence in America is not usually measured in billions; and millionaires are much more common than ever before. The average millionaire is not what you think. They don't act wealthy. They don't have a heliport in their backyard. They aren't driven around in the family Rolls Royce by a chauffer. You won't see them on a yacht; on the contrary, you'll probably find them in the office on weekends. They're more interested in coupon clipping than champagne and caviar dreams. Sound pretty average, right? Not so these people are part of America's new elite rank of millionaires. How many are there? According to Ed Bean of The Wall Street Journal, there are approximately 833,000 households in America with a net worth of at least $1 million. Mr. or Ms. Millionaire's average age is 57. They came from a middle class or blue collar background, and likely graduated from a state university. Today's millionaires rarely lead pampered lives of luxury; of course there are still the flashy jet-setting elite who flaunt their well-heeled posh attire and assets with aplomb, but they account for approximately five percent of the millionaire population nationwide. But who are these people the working class looks to with so much envy? Chances are you know one. Check your neighbors - the highest concentration is in the Northeast, although more make their home in California than any other state. Where did they get their money? According to Dr. Tom Stanley, professor of marketing at Georgia State University, only about 20 percent of millionaires are born into money; most millionaires come from seemingly humble beginnings. A few make it big by developing a revolutionary product or a breakthrough technique, but more are more are simple workaholics who own their own small business. Where do we find them? If you have prospected for millionaires in the past, you probably searched for social class and the trappings of wealth. Yet only half of these families own and occupy homes of $300,000 or more. The new breed of millionaire are not often hidden away in the lap of pampered luxury. In fact, one percent of the households in America are in the high seven figure income category. Less than five percent have annual incomes of $75,000 or more. Many wannabes are more interested in the appearance of wealth rather than the development of the discipline necessary to achieve millionaire status. Many salespeople are trained to hunt big game in the medical field, but more often than not, the lifestyles of physicians are defined by the expectations of society. Since they are in a prestige working position, they find themselves with better credit than candidates for expensive real estate, frequently living beyond their means. Often, the lifestyle of the pseudo-affluent focuses on projecting a facade that consumes nearly all of their disposable income. Since many of the would-be affluent live in $400,000 homes and drive expensive German cars, feigning the appearance of wealth becomes very costly. Credit card debt and capitalizing homeowner equity seem to be the only way of maintaining the image: albeit only for a short while. So, where does one snare the real goliaths of the well-heeled? Discovering where they work and live may surprise you: commercial printing, dry cleaning (multiple store units), jewelry retailing, specialty tool and manufacturing boutiques, commercial machines and equipment wholesaling, etc. These don't seem to be glamorous high affluence occupations, but they may be your best bet for trapping prospects. How do you sell to them? How, then, do you hunt for big game? Forget your hard-sell routine. According to Jonathan Robbin, chairman of the Charitas Corporation, millionaires should be sold to with great deference. They are not as self-consumed as the characters on "Dynasty" and "Dallas" might lead you to believe. Instead, they are very concerned with family, although most are males with non-working wives. They care about friends, politics and work, and their spouses are often kept in the dark about the family's income for fear of competition both at the office and at home. The best way to sell to the highly affluent is to do a good job of networking. These earners don't respond to cold calls. They are unlikely to answer surveys and telephone machine solicitation. However, they are very likely to listen to solid referrals. Another technique is to focus on industry organizations. The dry cleaning industry, for example, has numerous association meetings. Every one of them needs speakers, and one of the hottest topics in America is how to get a mortgage for less and what the future holds for interest rates. Offering to write monthly columns on financial issues for commercial printing industry magazines may warm up those cold calls, especially when you mention how connected you are. Also, consider acquiring an association directory of an affluence-rich industry. A cold call to a member of the state metal electroplating society may be met with less resistance than you think! Then, send a mailing and make the calls. There's gold in them there hills! But the secret is knowing where to look. If you prospect in the same way and places as other originators, you're sure to work hard and make a mediocre income. Your future success lies in skill, not luck. Hunt the big quarry. Let your competitors knock each other out trying to bag the wildebeests ... you want the elephants! Dr. Kerry Johnson is the author of six best-selling books and a frequent speaker at many mortgage industry conferences. To order his book, Mastering the Game or get a free subscription to his newsletter, The Professional Sales Excellence Series: Online, call (800) 386-1749 or e-mail kerry@kerryjohnson.com.
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