|
|
|
|
| The Basics | 7 ways to make a million
|
From a successful songwriter to a first-generation entrepreneur, these millionaires' paths to wealth are diverse, but what they share is 24/7 commitment.
By Kiplinger's Personal Finance Magazine
So you want to be a millionaire -- who doesn't?
If you're looking for a little inspiration on your quest for wealth, get tips from people who already have made their millions. These success stories run the gamut from Grammy-winning songwriter to first-generation entrepreneur to everyday people who simply lived below their means. Their paths to wealth are diverse, but what they have in common is a 24/7 commitment to their goals. Learn from their experience what it takes to become a millionaire.
Seize an opportunity
When Nina Vaca came to Los Angeles from Quito, Ecuador, at the age of 2, her parents' goal was to build a family business that all of their children could be involved in. "My father believed that the key to the American dream was through entrepreneurship," says Vaca. But never in his wildest dreams did Hernan Alfredo Vaca think that at the age of 34 his daughter would be the sole owner of Pinnacle Technical Resources, an IT business projected to generate $60 million in revenues in 2006.
Hernan had a much more modest goal: He opened a travel agency, expanded to a chain of three and hoped eventually to have five agencies, one for Nina and each of her four brothers and sisters. When they were kids, the siblings took the bus downtown after school to work in the family business. But shortly after Nina graduated from high school, her father was killed during a robbery at his travel agency. Devastated, Nina and her older sister, Jessica, ran the business for a year and prepared it for sale.
Nina majored in business at Texas State University, graduated in three and a half years and headed for New York City to work for a technology company. She returned to Texas to head up its Dallas office. But when the charismatic Vaca discovered she "had a talent for attracting clients," she jumped into business herself. In 1996, at the age of 25, she and a partner started Pinnacle to recruit IT talent for companies that needed technical personnel to administer their computer systems. "Because of my upbringing, I always took matters into my own hands," says Vaca. "In my gut, I knew I could do this."
More from Kiplinger's and MSN Money
When the tech industry tanked in 2001, her company "was almost down to a liquidation plan." Her partner offered to sell, and "I scratched up as much money as I could to buy the business, paying him a little more than the book value of his share." She changed Pinnacle's focus to provide IT consultants to businesses that had been laying off their tech staffs, charging a fixed price per project rather than an hourly fee. She landed as clients PepsiCo and Verizon, among others. Revenues soared to $10 million in 2003 and are predicted to reach as high as $60 million this year.
Vaca reinvests most of her money in the business, which she hopes to build into a family legacy, as her father would have wished. Pinnacle employs more than 600 people in 23 cities -- including three of her siblings and her husband, Jim Humrichouse, who left his job as a management consultant to join the company four years ago. Even her three children -- now ages 6, 4 and 1 -- came to work with her for the first few months of their lives. "That's something you can do when you're the boss," says Vaca, who is expecting her fourth child in May.
Besides focusing on family and business, Vaca led a college scholarship fund-raising drive for the Greater Dallas Hispanic Chamber of Commerce. She speaks frequently to college students about entrepreneurship and twice was named National Hispanic Businesswoman of the Year. To juggle all those balls, she logs on to her wireless network from bed at 11:30 p.m., she says, and "I do without lots of things most people take for granted," such as eating breakfast, getting eight hours of sleep or reading a book. Says Vaca, "I get fueled by inspiring other people."
Have a fallback
To see the burnished conference table, the sleek leather couch and the restrained modern art, you'd think you were visiting a San Francisco law firm. Then you spot the hoodie-clad employees. The framed T-shirts, with silly messages such as "Visit Cuba (some restrictions apply)." The whiteboard in the conference room, listing topics such as "condoms," "jello-shot mold kit" and "refrigerator magnet -- naked girls."
Welcome to CollegeHumor.com, whose founders, Josh Abramson, 24, and Ricky Van Veen, 25, have made big bucks operating an online repository for tasteless videos, silly digital pictures and sophomoric commentary, contributed mostly by college kids. The high school buddies started the Web site as college freshmen and brought in Jakob Lodwick, 24, and Zach Klein, 23, while the four were still undergraduates. The site, which earns its revenues by selling ads, T-shirts and other products, is expected to pull in $9 million in 2006.
Abramson and Van Veen live the frat boy's fantasy, but they went into the gig with the seriousness of CEOs. "We wanted to start a Web business, and we wanted to do it together," says Abramson. "My brother worked for Advertising.com. He told us about silly Web sites making huge amounts of money in Internet advertising." A concept that relied on juvenile and blue humor spoke to their strengths, says Van Veen. "Our friends have always been funny, and we've always been jackasses."
The site soon attracted plenty of beer-centric, breast-baring content, along with an ad deal that generated $8,000 to $9,000 a month. Business fell off when dot-coms went south in 2000, but "we'd made enough money to keep going," says Van Veen. And they had a fallback: "College is the perfect place to start a business. If you fail, you just go back to being students."
In 2003, Van Veen graduated from Wake Forest and Abramson from the University of Richmond. Lodwick -- whom they had met online -- graduated from Rochester Institute of Technology the same year and Klein from Wake Forest the following year. The 2003 grads moved the business temporarily to San Diego ("It was like a one-year business sleepaway camp," says Van Veen) and later to a $10,000-a-month apartment in New York City, where the hours were 24/7 and the dress was Friday-night casual. "We worked in our underwear a couple of feet from our beds," says Lodwick.
Alas, everyone has to grow up -- or at least go up -- sometime. Now the partners take an elevator from their apartment to a sun-filled space a few floors above, which they share with 15 young employees. Ads have rebounded nicely, and accounts include Sprite, Coca-Cola, Toyota and DreamWorks. The College Humor Guide to College (Dutton, $24) hit stores in April, and a movie deal with Paramount is in the works.
The partners' payoff, besides a day job to die for? Well, there's the apartment, plus dinners at nice restaurants, travel for Klein (who also funded a grant program for young artists) and all the books Van Veen can read. Most of the stash, however, serves a long-term purpose (listen up, kids). Says Abramson, "The vast majority of our money goes into savings."
Learn from your experience
Want to become a millionaire the lazy way? Buy a lottery ticket and hope your number comes up. It does not require much effort, but your chances of success are slim. Dave Grotz, on the other hand, took the hard road to riches. "I worked my ass off," he says with a laugh. And it paid off.
For almost two decades, Grotz, who lives in Silverton, Ore., worked a succession of desk jobs while pursuing his passion -- developing exotic conifer trees -- in his free time. Says Grotz, "I basically worked every spare minute. On Friday nights, in the pouring rain, I would strap a flashlight on each arm, attach one to my hat, go to the nursery in the dark and take cuttings of the plants so I could graft them in my kitchen all weekend." He ended up with a business called Peace of Mind Nursery, which ships rare and exotic conifer varieties across the U.S. and is valued in excess of $1 million.
Grotz, 52, developed his fir fixation early. After dropping out of college in the mid 1970s, he spent three years planting seedlings in Oregon. He eventually earned a degree in natural-resources management from Ohio State. After graduating, he worked first for a plant geneticist and then as a timber cruiser, assessing the value of trees throughout Oregon and Washington State.
In the early 1980s the timber industry crashed, and so did the company that employed Grotz. He added an MBA to his rsum and was hired as a purchaser with Intel. "Intel had never had any layoffs," he says. "I'd been laid off a few times and wanted to bet on something more promising."
But Grotz found himself in a high-stress desk job that required him to keep track of 3,000 parts. When his parents invited him to cultivate acreage they owned on the Willamette River, he began devoting his free time to propagating firs and found that it suited him. "I didn't get any grief from the plants," says Grotz.
He cultivated the business using money from his investments and his Intel salary, and in 1993 he left Intel to make the nursery a full-time operation. But he had trouble developing a market for the relatively pricey plants and ended up supplementing his income by hiring on as a temp for Mitsubishi Silicon America. He stayed for seven years, ultimately as a manager with 44 people working under him.
Grotz's day job not only supported his sideline nursery, but it also helped him make his first million: He invested in technology stocks. When that bubble burst, says Grotz, "I lost everything."
Everything, that is, but one significant hard asset -- his trees. In 2003, when the Mitsubishi branch was sold and his job eliminated, Grotz gave up the nine-to-five grind to concentrate on his nursery. This time the key to his success was, ironically, his losses in the stock market, which had taught him to diversify his investments. "The problem with the nursery business is that what you put in the ground today may not be popular five years down the road," says Grotz. "My strategy was to grow a wide variety of plants in limited numbers to reduce the risk."
With a return of up to 500% per plant, Grotz has discovered that for him, money really does grow on trees. Peace of Mind now has two locations that house about 50,000 plants, where Grotz grows 500 varieties of mostly rare grafted conifers. He works as hard as ever, doing every chore except digging. But his success does allow him to spend free time scuba diving with his family (last year, he proposed to his wife, Ann, underwater by getting down on one knee -- not easy when you're wearing flippers, says Grotz). And he lives, fittingly, in a house paneled with old-growth cedar, rather than plaster or drywall. Says Grotz, "I'm living proof that you can reach any reasonable goal if you're willing to work hard."
|
|
|
|
