One Very Good Way to Make a Very Nice Living as a Retired Person

The following is an account of how my friend BM is going to be living one day soon. All of the numbers are real. All he has to do to realize his dream is convince himself to let his son and brother run his main business for him . . . Imagine this as your retirement lifestyle. You have breakfast on a balcony overlooking your boat, which sits on the Intracoastal Waterway.

After reading the newspaper, you drive your Bentley convertible to the “playroom” (as your beautiful spouse calls it) — an 1,100-square-foot oak and marble command center that overlooks a 7,500-square-foot “garage” in which your 16 vintage cars are parked. You spend the first half-hour talking to your good friend Craig, the auto dealer, about selling the blue Ferrari to a wealthy Brit who saw you driving it last month. “Tall, blonde, great body,” he says. “Saw you in front of Starbucks.”

But you don’t remember. Not exactly. You have coffee every morning at 10:00 at Starbucks. And there are so many people who come up to you to talk about your cars and watches. “Ho hum,” you tell Craig. “I’ll let it go for $180,000.” “You’re being very nice,” Craig tells you. “It’s worth at least $190,000.” “What can I tell you?” you say. “I like the English.” Of course, you don’t like the English any more than you like anyone else. But you do like giving away good deals, because it means more and better business for you in the future.

And since you bought that car from someone in financial distress for $155,000 six months ago, you’re happy to make a mere $25,000 (less Craig’s commission). You know that this will be just the first of six or eight such transactions you’ll do this year. Just last week, you sold that Corum Limited Edition Admirals Cup watch for $16,000 — the one you bought from the gambler for $11,000.

After Craig hangs up, you phone your brother and check in on the new paintings and bronzes he’s bringing in from China — eight containers this month. You realize that your share of that deal will be approximately $80,000. Joe, your part-time valet/tailor, comes by with the digital pictures he took of a bronze statue you saw at the Four Seasons last weekend. He’s done a good job. With those photos, you’ll be able to have very good replicas made in China. “The concierge told me that the statue was made by some famous Italian artist,” Joe tells you.

But he can’t remember the name. “I think it was Donald Someone.” “A famous Italian named Donald?” you muse. “Could it have been Donatello?” “Yeah, that’s it!” You check out the piece against — the service you use for such research. Within five minutes, you receive a report indicating that another copy of that same statue was last sold in auction at Sotheby’s in Palm Beach for $52,000. You thank Joe and phone Malcolm, your old school friend whom you put into the furniture business. “I’m e-mailing you digital photos of a bronze statue, about three feet high, that sold at Sotheby’s for $52,000.

Take a look and tell me if you like it — and, if so, what you would pay for it.” A few minutes later, he calls you back. “It’s very appealing,” he says. “Sentimental. Just what my customers like. I think I can buy a bunch of them from you for $3,500 each.” “Malcolm,” you say. “Do I have to remind you who put you into this business?” “You’re right. How does $4,000 sound?” “I could live with that,” you say, and hang up the phone. Malcolm will be good for at least a dozen, you figure. And then there’s Rick and Joanne and Mr. Schifmiller.

All told, you should be able to offload about 30 replicas next month. Since your cost, landed, will be about $750, you figure your net profit from the transaction (even counting Joe’s fees and the tip to the concierge) will be about $92,000. You lie down on the leather couch beside the fireplace, pick up your copy of “Pride and Prejudice,” and read for a while. When you were younger, you didn’t have time for casual reading. Now, it’s one of your favorite ways of passing time.

Somewhere into the second chapter, you doze off. When you wake up, you realize it’s time for lunch. Michael is waiting for you at City Oyster. You enjoy your luncheons with Michael, because he loves listening to your stories. “You are amazing!” Michael says, after hearing about the Ferrari deal. “What do you make each year — just from this luxury watch and car hobby of yours?” “Oh, I don’t know,” you tell him. “Maybe a hundred grand.” “And how many hours do you spend on it?” “I don’t really know,” you admit. “It’s something I do for amusement, really. I never pay attention to the time.” “But if you had to say,” Michael persists. He’s scribbling notes in that little index-card holder he always has in his back pocket. “I don’t know.

Maybe six hours, plus or minus.” “And from that you get a six-figure income!” He’s beaming. And that’s what you like about Michael. He seems so genuinely happy for your good fortune. “Now that we’re doing this,” he says — though you didn’t know you were doing anything — “let’s do a rundown on your other projects. How much do you make from your Chinese knock-off business?” “It’s not a knock-off business,” you remind him. “It’s a fine-arts replication service.” “Right. So how much does that make?”

You feel uncomfortable giving him all these numbers. “Are you going to pass this along to anyone?” you ask. “Just about 400,000 people who read my e-mail magazine,” he says, still beaming. “But don’t worry. I won’t use your name. I’ll use your initials.” “Gee, thanks,” you reply. But then you can’t deny him what he wants to know. It’s too much fun talking about it. “When I was running the business full-time, I made a million dollars a year from the Chinese stuff,” you admit. “Now that I’m retired, I make less.” “Less. Like how much less?” “It’s substantial.” “Come on,” he pleads. “OK, let me guess. You get about 50% of what you used to get.” He’s good. You smile. He shakes his head. “You are amazing,” he says again.

Then he gets you to talk about your real estate investments. Michael is doing deals just like you are, but his deals are smaller. He has always done bigger business than you — but with local real estate, he’s never stepped up. You ask him why. “I don’t know, exactly,” he says. “I think it’s because I don’t spend any time looking around and getting a feel for the upscale market. Since I don’t know it that well, I’m afraid to get into it too deeply.” “But it isn’t complicated,” you tell him. “It’s as easy to buy and flip an $800,000 property as one that sells for $180,000.” “I’m sure you’re right,” he says.

That afternoon, you inspect the two new homes you are building on Swinton Avenue. You just got an offer for the first one at $800,000. That’s $50,000 more than you were prepared to take. The second one might go for $850,000 or $900,000. You figure you and your partner (the builder) will split $350,000 on both sales. Funny that Michael didn’t ask you about your real estate profits, you think. Had he done so, he’d have realized that you are making about $500,000 a year on that. And the time it takes?

About two hours every afternoon, five days a week. You’re doing the real estate stuff not because of the money (it’s great, but you have plenty from your other ventures), but because you really love it. Building and restoring beautiful homes is something you’ve always wanted to do. It was tough getting into it at first, but all your problems were resolved the day you met Louis. You handle the financing. He does the actual hard work. The fun part — looking for new properties and shopping for materials — you share.

All told, you have an active income of more than a million dollars a year and you feel like you aren’t working. You’re spending each day doing exactly what you want — driving and swapping vintage cars . . . wearing beautiful, prestigious watches . . . building big, beautiful homes . . . and making deals with your former business partners. Plus, there’s plenty of time for reading, napping, lunching with friends, and . . . well, yes, it’s time for your tennis lesson.

As I mentioned at the beginning of this piece, BM is not yet retired. He is doing pretty much everything you have just read — except he is not reading or playing tennis. He’s spending all of that time running his furniture and import businesses. While it’s true that he is making more money by running these businesses himself, he knows that he could easily afford to let his brother run the import business and let his son run the furniture business. (They are practically running those businesses now.) If he does let them take over, the working part of his life would consist mostly of lunches, a few phone calls, and driving around a few hours a day looking at potentially profitable (and beautiful) neighborhoods.

Needless to say, he’s thinking seriously about doing just that. And when he does, he’s going to convert one of his warehouses into a “command center” like the one I described above. He got the idea from me. I’ve had my personal office in garages and warehouses for more than 20 years. Always, there is at least one spot reserved for at least one collectible car. BM will have about 10 or 12 cars in his. And every day, at lunchtime, he’ll look down on his collection from his luxurious loft office and pick one to take for a drive that day. BM came to thi

s country about 20 years ago with $600 in his pocket. He opened up a small furniture store on Glades Road in Boca Raton about a year later. (After saving every nickel he earned.) With hard work, common sense, and a winning personality, he leveraged that little store into the wealth-generating lifestyle he has today.

[Ed. Note.  Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]