"Local Monopolies" The Data Approach To Getting Rich
Welcome Back
I read an interesting study about the most common ways people become millionaires.
They build local monopolies.
Seth Stephen Davidowitz, a data scientist, has amazing research on the matter.
He looked deep into studies and IRS records to see what the average wealthy American is doing to get rich.
It turns out, it’s businesses that have some kind of a monopoly on their local market.
Car dealerships for example have a franchise right per city which makes little local monopolies.
There is this myth that competition is good for local businesses but trust me you don’t want to be the new record store on the block.
He wrote the book Don’t trust your gut. Highly recommend it!
This leads to my findings.
1/ Remote Tire Shop Making Millions 🚗
2/ Mouse Dining Gives you alerts when Disney Reservations become available. 🐭
3/ A welding Shop in NE Ohio on its way to making millions ⚙️
Selling Tires In a Remote Area 🚗
I talked to a guy on Reddit who closed his tire shop and move to an unknown town in texas where he was the only Tire shop.
He had so much demand that he quickly grew the team and became a millionaire as a result.
Mouse Dining 🐭
Local shops are not the only kind of local monopolies. It could be a simple website like this one.
There are a ton of events going on at Disney world and Disney land. It’s super hard to get reservations with crazy wait times.
This website simply sends you alerts. They constantly check availability and notify you when something opens up.
Don’t know their number but wouldn’t be surprised if they’re banking.
Similarweb estimates that they’re making $2M - $5M per year
They appeal to travel planners, agencies, and people that are going all the time) - Getting traffic through SEO (144k monthly visits)
Welding Shop ⚙️
I also met the owner of a welding shop in NE Ohio. He started 2 years ago, by himself now they’re on track to make high six figures with 1 employee.
Profit margins on these kinds of shops can be pretty high 30%-40%.
His secret was tackling a huge variety of work. “I weld on everything from thin sign boxes and teapot handles to excavator arm extensions weighing in at 8000 lbs.”
Estimating to make millions of dollars in a few years.
Riches can actually be found in Niches.
Lesson - Find your point of leverage and go all in.
Hope you enjoy this Friday edition. See you Sunday!