Secrets of wealthy whiz kids: How to make a million by 21
Earlier this month, Reuters Money featured a story with advice on how to get on the road to Millionaire Row. But what if you’re in a hurry, like so many multi-tasking teens of the 21st Century? What if your goal is to make that million by the time you turn 21? Can it be done?
The answer is yes, if you take the fast lane as an entrepreneur on steroids — something common to the four millionaires we polled for this follow-up. Three made it to the seven-digit milestone by 21; the fourth reached it when he turned 24. Here, those wealthy whiz kids past and present share the secrets that contributed to the fortunes they made.
Position: Owner and designer of the Private Stock denim line, marketing guru and manufacturer of auto accessories.
How he made it: A licensing and fashion marvel, Koon made his first million at 16 as a pioneer in car tuning, where vehicles are modified with special parts to enhance appearance and performance.
Top tips for millionaire hopefuls: Get a business plan.
Koon saved $5,000 to start his first company, but the business plan helped him get substantial backing. “Investment is always tied to a clear opportunity for profit and that exact stream of profitability needs to be identified from the beginning,” he says.
Koon also advises young business hopefuls to stretch. “I always set my goals above the bar and out of reach,” he says. “I believe it’s always better to surpass expectations then just meet expectations.”
Now that’s rich: Koon’s unofficial motto is “the world better prepare — Jon Koon, the next billionaire.” He also hands out gold-plated business cards.
Catherine Cook, 21
Position: Cook, who turns 22 this month, co-founded myYearbook.com with Dave Cook, her older brother by 18 months. The virtual meeting place geared towards students has attracted more than 20 million visitors.
Top tips for millionaire hopefuls: Find a successful mentor.
Cook happens to be the younger sister of myYearbook CEO Geoff Cook, who is 11 years older and started his own web company in college. She learned watching him build Cyberedit.com, a service that edited college admissions essays and resumes. Geoff sold CyberEdit in 2004 to Peterson’s, a division of Thomson Learning, for a multi-million dollar sum.
Catherine Cook also stresses that being a teen is actually an advantage for today’s entrepreneurs. “At 17, you’re living off your parents at home, and they’re paying for your meals. When you’re older it’s a lot less likely you will quit a job to follow through on an idea. When you’re young you do an idea and if it fails, so what? There are almost no downsides.”
Now that’s rich: Of the 100 myYearbook employees, Catherine Cook has the highest rank and the youngest age. “But when you’re all working on something, you don’t notice it,” she says. “The people there are all very passionate about the site. And the age differences disappear.”
John Magennis Jr., 29
Position: Owner of Magennis Entertainment, LLC. A reality TV show producer and author.
How he made it: Working from his bedroom without any startup funds, Magennis launched Internet Exposer, a web design firm, at 14. At first, he charged $15 an hour for website templates. By age 17, he built it into a million-dollar company with Fortune 500 business affiliates as clients, and was nominated for the Ernst & Young’s New England Entrepreneur of the Year award. Magennis has worked in development, casting and producing for ABC, NBC, Bravo, Discovery, Animal Planet, CMT and Lifetime, and as a supervising casting producer for Oprah Winfrey’s OWN.
Top tip for millionaire hopefuls: Invest in a passion or hobby.
Magennis says it’s easier to enjoy yourself, and avoid disappointment, if you tie business goals to personal passions. “When I started my technology company, I had a passion for learning everything I could about the tech industry and how I could provide a service that would benefit my clients,” he says. As he tackled skills from programming to budgeting, “I enjoyed each step of the way. The process of learning was in itself an investment of my time, but it never felt like a chore. It was exciting to me.”
Now that’s rich: Magennis has a half dozen TV projects in development, including a reality show that sounds a tad autobiographical: “Teen Moguls: Saving America.”
Position: Founder and CEO of J. Christopher Capital and co-chair of the board of directors for Tory Burch LLC, which produces Tory Burch, a women’s apparel line; former board member of Guggenheim Capital.
How he made it: As an undergraduate at Ithaca College, he invested $2,000 with his brother Bob to start Eagle’s Eye, a women’s clothing line. Burch made his first million by age 24, and the brothers grew Eagle’s Eye into a business with more than $140 million in sales before they sold it to Swire Pacific Ltd. in 1989. At the time, Burch was 35.
Top tips for millionaire hopefuls: Cater to customers first.
“Many young entrepreneurs today don’t think about the customer enough,” Burch says. “They think about themselves, and it’s not good. It’s not about how much you sell your business for; it’s how you provide a service or product that’s extra and do it in a unique and amazing way.”
Burch adds that if he were starting from scratch today, “I would write a very innovative plan, do a one-minute or two-minute video, and show what the focus of the brand is. Show it in a cool way with cool music and put in on a computer. Then go around with the video, and raise a small amount of money from friends and family, or a small group. Don’t be afraid. It’s actually not that hard.”
Now that’s rich: Burch is currently building nine clothing and lifestyle brands, in addition to engineering private equity deals. It’s a long way from the early 1970s, when he received his first-ever shipment of of sweaters from Scotland. “Every single sweater was small enough to fit a monkey,” he recalls. “It was the most depressing day of my life.” He still managed to sell them all.