The Richest Man in Town by W. Randall Jones

The Richest Man in Town by W. Randall Jones

The Richest Man in Town – The Twelve Commandments of Wealth by W. Randall Jones, the founder of Worth Magazine, is one of the great business books I’ve read this year.  It profiles some of America’s most successful self-made super-rich, focusing on the richest person in towns throughout the United States, offering insights into how they made their money and their advice for someone who wants to follow on the same path.

The book offers some unique insights, such as explaining that a vast majority of the nation’s millionaires do not live in metropolitan hubs such as New York and Los Angeles.

In fact, according to the book, 81% of the richest men in town are doing business from their hometowns!  They are deeply rooted in the community and have often lived there their entire lives or at least several decades.  W. Randall Jones seeks to prove, by way of examples, that you can build a billion dollar fortune in any town in America.  (Who’d have thought the biggest and most powerful retailer in the history of the world would have come from Bentonville, Arkansas, population 19,730?

The Secret World of Brooks Brothers

Growing up in relatively modest circumstances, I had no idea how different clothes shopping was for men once they became successful.  Honestly, I never thought much about it but the assumption was that in terms of logistics, it would be just like shopping at Wal-Mart only with better surroundings, better service, higher quality and higher price tags.  You know, you walk into a Neiman Marcus or a Saks, look around at the merchandise, and then pay for it at a register if you were satisfied.

I was totally, completely wrong.

I’m not even talking about the best-of-the-best such as Kiton or Brioni, which are the fare of James Bond. I’m not talking about the brands favored by the trendy set, such as Burberry.  Nor am I talking about the stuff made on Savile Row.

I’m talking about retailers for business owners, attorneys, accountants, bankers and professors, who make the world go round.  The places that become affordable once your household income crosses into the six-figures per year, (which is a dentist in a small town married to a real estate agent or, likewise, a school teacher married to a police officer) and that are just taken for granted in most families.  The type of place where a guy who owns $15 million worth of hotels with no debt, wants to look nice but not stand out might shop, but an investment banker making $400k a year looks down upon.

I See Why Charlie Munger Is Crazy About Brooks Brothers

Take famed men’s clothier Brooks Brothers as an example.  The company has been dressing American Presidents since the mid-1800’s.  Berkshire Hathaway billionaire Charlie Munger is “crazy about Brooks Brothers” according to his daughter, Molly.  He would reportedly give his eight children gift certificates to the legendary clothing store long before he ranked among history’s greatest investors.

If you walk into a Brooks Brothers store, you would be making a mistake to just browse through the dress shirts, sport coats, and suits.  Why?  The company is a true haberdasher, just like in the older days (unless you are in your 80’s, you probably don’t realize that almost all clothes used to be custom made for you, not picked up based upon pre-manufactured sizes!)  To show you just how detailed the process is, I wrote an explanation of ordering custom men’s dress shirts.

The Brooks Brothers staff keeps huge books of fabric at a large, dark desk.  Perhaps you want a sports coat?  You go through the books and choose from more than 250 fabrics, which you can feel and see.  You select your fabric, you take measurements so the garment fits your body comfortably based upon your preferences, you choose how many pockets you want, where they go and the style, the buttons, and even the lining.  Do you want a pink cashmere sport coat with white silk lining and mother of pearl buttons?  They can do that.  How about a dark green water-resistant, lightweight wool sport coat to wear on the golf course in the morning when it is still a bit chilly?  They can do that, too.

Pew Research Center Completes Massive Study of Millennial Generation

The highly revered Pew Research Center has completed one of the most extensive studies it has ever undertaken.  It focuses on the so-called Millennial Generation, which consists of those who are currently 18-28 years old, and contrasts them with their parents, grandparents, and great grandparents on a wide range of economic, spiritual, social and cultural factors.

This study includes data on everything from the total percentage points that believe the Bible is the literal word of God to the average age of marriage to the total tattoos / piercings they have.

The whole study is worth reading, but I will highlight some of the interesting findings …

Why the iPhone Will Continue to Dominate the Smart Phone Market Even if It Doesn’t Have the Biggest Screen or Fastest Processor

It All Comes Down to the Existing Investment Consumers Have Made in their iTunes Library of Music, Movies, Games, Apps, and Television Shows

It seems that a handful of tech folks and business bloggers – and, in fact, even my own brother – don’t seem to understand that the reason people choose the iPhone over other smart phones, even if those other smart phones have bigger screens, more memory, and non-restricted applications, is because tens of millions of consumers now have a vested financial interest in their music, movie, television, and podcast libraries on the proprietary iTunes store.

In other words, the Apple iPhone was the market leader in smart phones as a result of its state-of-the-art debut in 2007. More than 50 million consumers switched to the iPhone and began buying music, movies, and apps through iTunes. Those intellectual assets have real value and won’t work with other formats or machines, at least not without some non-standard skills that most people don’t have. By being first to market, especially for those who bought an iPod almost ten years ago, Apple locked people into their closed economic system.

Thus, the ability to simply plug the iPhone in to your existing system, have it synced with your Mobile Me mail, calendar, apps, music, movies, and more without any additional work on your part is the primary reason that the iPhone will continue to dominate other smart phones, even the competitors release better models to market. A slightly larger screen or faster processor doesn’t compensate for losing access to the library that you’ve built up over years.

In my own case, right now I have nearly 3,000 songs, at about $1 each, so $3,000. I have probably 500 television shows and movies at an average of $2 each, so another $1,000. I have maybe another $300 to $400 worth of apps for both my iPhone and iPad. Thus, my investment is roughly $4,300 thus far in the iTunes format, and that doesn’t even include the new iBook program, which I have been using to purchase books from Apple (and will probably become bigger than my music budget before long).

The Success of the iPad Will Come Down to App Development

Five days or so into my experience with the iPad and it continues to exceed expectations (by far). I’ve spent somewhere between $120 and $150 in the Apple iTunes App store, which compared to my previous purchases of apps (read: $0), means there is more cash flowing into Steve Jobs’ coffers. The overwhelming indication continues to be that the success of the iPad will come down to the applications that software companies develop for it. We bought our iPads for business purposes. As an Internet company, the easier we can access data, the better we can respond to customer needs.

Business Productivity on the iPad

The main benefit of the iPad is it allows us to monitor profits, costs, bills, and customer messages in real-time across all of our businesses. I can see, quite literally, sales flow into our sporting goods business or baby retailer as I sit on the balcony drinking coffee and listening to Coldplay’s Viva la Vida (which I’ve had on repeat all day). I can monitor our investment positions and submit complex options positions with a few clicks (er… taps). It has allowed me to get up from my desk and spend time elsewhere, greatly improving the quality of life.

If I’m already using the iPad to revolutionize our trading and investing positions, can you imagine when software companies develop high-end apps that allows medical records to be wirelessly access by doctors or nurses? What about lawyers that can access case law databases?

Books on the iPad

The Apple iBook store can be great. It’s just not there, yet. There isn’t nearly enough selection, especially when compared to the Amazon Kindle (which explains why I use the Kindle app and buy books from Amazon for the iPad). I should have the ability to print directly from the iPad any page I’ve noted, complete with my markups. Imagine what that would do for business productivity.

Games on the iPad

On the gaming front, there are a lot of things that could make the iPad a game changer. For example, if Square-Enix were to release the Final Fantasy games up through FFIX, I’d buy them in a heartbeat, no questions asked. If I can play Monopoly with my family members wireless over a network connection, regardless of physical distance, I’d be thrilled because it would be another way to spend time together.

The Best Habit I Have …

Another batch of books arrived from following my book buying binge at Borders the other night.  That’s typically how it goes, though … I buy a few dozen books at a time, mostly in business, philosophy, psychology, investing, finance, history, and biography (all non-fiction – I’m not a big fiction reader). Early in my…

People Who Are Drowning in Student Loan Debt

Victims of the Student Loan Industry or Irresponsible Borrowers?

I was reading a site called Student Loan Justice as well as a piece at the Huffington Post where people are talking about their “overwhelming” student loan debt that is – wait for it – $15,000 or $30,000.  Basically, less than the value of a car.  Or a couple both of whom smoke a pack of cigarettes each day for five to ten years. Or 4 to 8 months of pre-tax income for the average American household.

Rational, full-grown legal adults who have the power to vote actually made a decision to borrow money, pay interest for the cost of “renting” that money, and then when it’s time to repay, want the government (read: everyone else, including you and me) to pony up the money because it’s cutting into their standard of living.  One guy on the site, not that long out of college, complains that he has a $1,250 per month payment and can’t live in New York City.  Then get the hell out of one of the most expensive cities in the world! I read a study a few weeks ago that showed New York was the single most difficult metropolitan area for a new college graduate to build wealth.  If you choose to take on a situation where the odds are against you, don’t complain when you don’t win.  Choosing your battles is the first and most important part of coming out ahead in life, just as it is in war or any other undertaking.

Maybe I’m not sympathetic because, as you know, both Aaron and I, as well as most of our friends, were first-generation college students that had to pay our own way through school (complete with a $140,000 price tag for each of us over four years).