How the really wealthy do it
If you want to be one of the richest people, there is only one way to do it. There is only one path.
It doesn’t matter how you define your comparison set, either. You could be talking about being one of the richest people in your city, county, state or even in the entire country, it doesn’t matter. There is only one way to make it happen. There is only one way to become one of the richest.
You have to build a business.
Don’t get me wrong – you can earn a wonderful living serving as a professional. Doctors, lawyers, architects, engineers, accountants, pharmacists and even business managers earn tidy sums each year. But they don’t come close to making what successful business owners do over their lifetimes.
Here’s a case in point: Look at the top five richest people in the United States right now. In descending order, that list includes Jeff Bezos, Elon Musk, Bill Gates, Mark Zuckerberg and Warren Buffett. Bezos created Amazon.com. Musk helped start PayPal and has since grown Tesla and launched SpaceX. Gates is the founder of Microsoft. Zuckerberg is the mastermind behind Facebook. And Buffett built Berkshire Hathaway.
All of them started a business and grew it to a massive scale.
The numbers don’t lie. And we have solid numbers on these people because, at least for the top five wealthiest people in the U.S., most of their wealth resides in the publicly traded companies they started. These companies trade on established market exchanges with regulatory reporting requirements.
We know, for example, that Jeff Bezos owns 53.2 million shares of Amazon.com, about 10 percent of the company. The reason we know that is because he is legally obligated to report that information to the Securities Exchange Commission. Each share of Amazon.com currently trades for around $3,100. That means Bezos has an investment in Amazon.com worth roughly $165 billion.
The same holds true if the consideration set is defined more locally. If you want to be in the top echelon of wealth in your city or county, you have to own a business.
To be fair, I cannot prove this on a more local level. The vast majority of business owners in the U.S. don’t have a company that is traded on a public stock exchange. That means they have no obligation to report their financial matters publicly.
Anecdotally, however, I can say without a shadow of doubt that it’s true. Nothing builds wealth like a successful business.
But not everybody can build a really successful business – defining ‘successful’ in monetary terms. In fact, most people cannot. It’s tough. Starting or growing a successful business takes time, perseverance, focus and probably even a little luck.
If it was easy, everyone would start a business and become fabulously wealthy.
Here’s the thing: Setting out to become the richest person in your [you choose] is not a great goal. In fact, it’s a pretty poor goal.
If money is your only driving force, you are not likely to do well. Because, as any successful businessperson will tell you, they usually start out making squat. For a lot of years, business builders see doctors, lawyers, architects, engineers, accountants, pharmacists and even business managers making a lot more than they do.
But with enough time, perseverance, focus, and yes, even luck, the tide begins to turn. And when it turns, it can turn in a massive way.
But it’s the challenge that motivates them, not just the money.
It’s no secret. That is how the wealthiest do it. If you want to be among them, the path is clear.
Justin Lueger, CFP®, is President of Invisor Financial LLC, a registered investment adviser firm in the State of Kansas. All opinions expressed are his own and should not be viewed as individual advice. He can be reached at [email protected]
This column is paid for by Invisor.