America Has More Millionaires Than You Think: The Ownership Path
Wertynews.com – America has more millionaires than you think, and many did not build their wealth through Wall Street, celebrity status or a major technology company. In communities across the United States, affluent people may own regional distributors, dental practices, construction companies and other established local businesses.
Economists Owen Zidar and Eric Zwick call these wealthy entrepreneurs “everywhere millionaires” in their book, The Everywhere Millionaire. Their research emphasizes how privately owned businesses can create substantial wealth far beyond the nation’s best-known financial and technology centers.
About 5 million U.S. households have a net worth of at least $5 million. Their combined wealth is more than 13 times greater than the wealth held by the Forbes 400. Roughly 3 million private-business owners are part of that broader group, with average wealth of about $25 million.
Business ownership is a powerful wealth-building route
Zidar and Zwick examined Treasury and IRS data that connect tax records to companies and their owners. Their findings suggest that owning a successful business is a more common path to major wealth than collecting a high salary alone, including for people with strong professional careers.
Many of these companies operate as pass-through businesses, including sole proprietorships and partnerships. Income generally passes through to the owners for tax purposes instead of first being taxed at the corporate level. These structures are common among privately held businesses in a wide range of industries.
The companies are often highly visible in everyday life, even when their owners are not. They may run medical offices, beer distribution businesses, service companies, contractors or other enterprises that have grown steadily within local and regional markets.
You’re walking down the street, you look at a truck that’s delivering beer, and if you look on the door, you see the name of the beer distributor, and then you go look them up, and you’re like, “Oh, that’s an everywhere millionaire.”
Wealth that is closer to home
America has more millionaires than many people assume because wealth is not limited to Silicon Valley, New York finance or the most visible public companies. A durable business built over decades can become an important asset for an owner as it expands, gains customers and develops a strong regional position.
This idea differs somewhat from the image popularized by The Millionaire Next Door, the 1990s book by Thomas Stanley and William Danko. That book focused on careful savers and investors with modest habits. The business owners in Zidar and Zwick’s research may enjoy expensive homes, yachts or other luxuries, but their fortunes can still stem from conventional, locally rooted companies.
The Forbes 400 represents only 3% to 5% of total U.S. household wealth, according to Zwick. Looking only at famous billionaires can therefore miss a much larger group of wealthy private-business owners whose companies affect local jobs, investment and economic activity.
Who are “everywhere millionaires”?
Three-quarters of the millionaires identified in the research started their own businesses, and most did not inherit their wealth. The typical person in the group is 62 years old, married and somewhat more likely to be a college graduate than the broader population.
Many remain actively involved in their companies through their 50s, 60s and later. For these owners, business success does not always signal an immediate retirement; the company often remains central to both their work and identity.
FAQ: Building wealth through business ownership in the U.S.
Do most wealthy business owners inherit their money?
No. The research found that most “everywhere millionaires” did not inherit their wealth, while three-quarters started their own businesses.
What types of businesses create these fortunes?
They often include familiar privately held companies such as medical practices, distributors, construction firms and service businesses. The common factor is ownership in a company that grows and endures over time.
Does becoming wealthy through a business require living in a major city?
No. These owners are found throughout the country. Their wealth frequently comes from businesses serving local or regional economies rather than national headlines.