6 Habits of Financially Successful People
Utah and Idaho entrepreneurs share their “secret sauce” for winning with money in business and in life.
It’s the stuff of legend: Billionaire Warren Buffett still lives in the same house he bought for $31,500 in 1958 — despite the ability to significantly upgrade.
The “Oracle of Omaha” is known for his frugal quirks, but what about his successful peers? What habits do they employ to win with money?
The answers might surprise you. We talked to five successful entrepreneurs in Idaho and Utah, who shared their secrets to financial success — and it turns out they’re pretty darn simple.
1. Work Hard
Entrepreneur Cody Sommer credits his “Utah work ethic” for his success in business.
“I grew up on food stamps, in a poor family, so I’m self-made from ground zero,” says Sommer, who is opening a chain of Tropical Smoothie Cafés across Utah. “It takes a lot of hard work.”
Larry Olson was just a kid when he started working for his father’s company, Les Olson Company, a third-generation family business that focuses on printing, document management and IT services. He remembers sitting at the kitchen table mixing chemicals and resurfacing disks for dictation machines, which earned him one penny each.
In eighth grade, he caught the selling bug, and started making sales calls with his dad. “We didn’t get our titles from our age or our position in the family, we got our titles from how we performed,” Olson says.
He and his 11 brothers and sisters helped at home, too, by packing their school lunches assembly-line style, and doing the dinner dishes every night.
The road to financial success hasn’t been an easy one for Sylvia Hampel, owner of Clearview Cleaning, which has almost 400 employees working in Idaho, Utah, Oregon and Washington.
She struck out on her own at the age of 16 and put herself through high school and college, all while taking care of a young daughter. Later in life, after a successful career as an air traffic controller, she became a stay-at-home mom, but found herself without an income following a divorce. That’s when she started her cleaning business.
“I often tell women, go after what it is you want. Don’t expect that someone else is going to get that for you,” she says. “Be a problem solver. Don’t complain about it — solve the problem.”
John Reese balks at the idea that he’s just been lucky. “Luck is where preparation meets opportunity,” he explains, noting that he and his brother worked their way through college, and that his wife worked in a sewing factory to help.
2. Pay yourself first.
On this topic, Russ Gentner is passionate. “Take money out (of your paycheck) and put it in your 401(k),” he advises. “Put in the maximum you possibly can — always.”
He says it’s not easy, but if you pay yourself first, you take the decision-making out of it.
“The younger you are, the more difficult it is to visualize being my age, and new car is much cooler than thinking about getting money for your rocking chair,” he says. “But the ones that do it, it really pays off,” he says, noting that he has young employees at his company, Listen Technologies, who have amassed six-figure sums by following this approach.
He says compared to a $400 per month car payment, a 401(k) contribution is worth a lot. “It’s pre-tax, it gets matched, and if you’re young, it might grow for 40 years,” he says. “The cost of that new car is outrageous compared to the return.”
Hampel agrees, and says she bases her own personal financial philosophy on the book, “The Richest Man in Babylon.”
“Even when I was that poor, I learned that you pay yourself, you save, and you give to others,” she says. “When you have 10 dollars and you save one, it’s not about the dollar. It’s about setting up that kind of a mentality.”
As the Clearview Cleaning client base grew, “I wouldn’t give myself an additional salary. I would pretend that money wasn’t there,” Hampel says. “I’ve done that throughout my whole life. I’ve never been in debt. It serves me really well.”
3. Don’t overleverage, and pay cash as much as possible.
“Make sure you can handle the debt you are taking on,” Reese advises. “You’ve got to have some security in life. I try to avoid debt like the plague. Business debt is a little different, but personal debt, if I can’t pay for it, I don’t buy it.”
Sommer learned early on that cash is king. “The one constant my grandpa taught me is, you can’t afford anything that you can’t pay cash for,” he says. “I’m OK financing the purchase of real estate but that is literally all I have. Pay cash. I live well beneath my means.”
Olson recalls a lesson his dad taught him at the dinner table. “He pulled out a napkin and wrote 10 numbers on it, 1 to 10, and handed me a dollar bill, and said for every shoe shine I’m giving you 10 cents, but I’m paying cash up front so I get the first shoeshine free,” Olson recalls. “It taught me a great principle about the two ways to make money: one was to earn it, and one was to save it. In our business, my dad never missed a cash discount.”
4. Think big, and have a vision.
The Olsons are no strangers to the disruption of technological advances, but the key to survival has been changing with the times.
“I remember my father saying in the 1970s, one day you will be able to hold (something) in your hand and will be able to print to it in a printer in your home,” he says. “He was talking about the cell phone.”
With that example in mind, Olson says that in business, you can’t stand still. “You always need to find ways for improvement.”
John Reese used a $10,000 loan from his dad in 1978 to purchase a nursing home and with his business partner grew the business to a dozen locations and a couple thousand employees. Vision and big picture thinking are his forte; his partner “dots the I’s and crosses the T’s.”
“I’ve always enjoyed business, and always enjoyed the excitement and fun of making the deal,” he says. “I’ve got an outstanding partner who is more like a brother than a partner. He’s just terrific.”
Even with the success they’ve enjoyed, Olson says they have not lost sight of his father’s dream to provide for their families and other families as well, and to pass the business down to the next generation. “I told my son, your job is to teach the fourth generation to invest in the business like other generations have done; your job isn’t to sell it,” Olson says.
5. Be frugal.
“I’m still definitely a bargain shopper. TJ Maxx is my friend,” Hampel says. “I love to bargain shop, and I won’t pay full price for things.”
Olson says his parents instilled in their children that you don’t have to buy more than you need, and you don’t have to have the best of everything.
“My wife drove her last car for six years and it had close to 100,000 miles,” Olson says. “We downsized. We have the money to buy the bigger car, but we don’t need it. Our house is 13 years old. It’s not huge, but it’s probably bigger than we need, and it’s paid for.”
6. Give back.
Hampel says even when she had no money, she did a lot of volunteer work with her daughter in tow. Today, she’s a passionate supporter of the Boys & Girls Clubs of America, the Women’s & Children’s Alliance in Boise, and programs for children in the foster care system. “My favorite quote is, ‘Live your life so that when others speak badly of you, no one will believe them,’” Hampel says.
In his retirement, Olson serves on the board of directors of several organizations, offering his business expertise and fundraising abilities. “I’m trying to give back to the community now, for all the great things that the community did for me and our family,” he says. “You have to give some of it back.”
Sommer loves to fly his eight-seat private jet. But he says 80 percent of the hours he flies are for Angel Flight West, a nonprofit organization that arranges free, non-emergency air travel for children and adults with serious medical conditions.
“I don’t like giving cash to charities. You can mail a check, but you just have to trust that they’re doing the right thing with it,” he says. “Angel Flight allows me to donate my time, my skill and what I love doing. The immediate appreciation that I get from it, there’s just nothing like it.”