Is Owning a Business the Path to Riches?

If you were to look at Forbes’ list of the world’s wealthiest people, after a while I think you would begin to see a very common trait – a vast majority of these individuals are self made and generated their billions by owning businesses.

Just to make sure I wasn’t seeing things I recently had a poll up on The New Business Blog to see if other people shared my belief.  In the poll I asked people to respond to the following question: What is the most likely path to becoming wealthy?  Respondents were able to choose between owning a business, working a 9 to 5, investing and winning the lottery.

As I thought would happen, a pretty big chunk of people (53%) stated that they thought owning a business was the most likely path to becoming wealthy – followed by investing (34%), winning the lotto (10%) and working a 9 to 5 (4%).

It seems to me that owning a businesses is the path to riches for several reasons:

• Many popular business structures provide protection for your personal assets.  Legal structures like the Limited Liability Company (LLC) or the S-Corp allow business owners to have limited personal liabilities for their business.  This means that as long as the owner stays on top of their paperwork and doesn’t make any heinous errors, all of their personal assets (their home, stocks, cash, etc.) will not be able to be taken if something should happen to the business.
• The costs and burdens of starting a business are becoming less and less.  Back in the day, it used to take a lot of money and investors (or lots of debt) to get a business up and running.  Now, thanks to the internet, many businesses incur little to no overhead costs, require very little start up capital and recoup their initial costs shortly after start up.
• “You don’t make money working for someone; you make money by having people work for you.”  When push comes to shove, you’re not going to amass a fortune by working for The Man, but chances are pretty good you’ll amass a fortune by being The Man.  In many cases, starting a business allows you to become The Man.
• Self-fulfillment and pride.  I think this is one of the most underrated aspects of being a business owner.  Think about it, you’re working at something that you’ve started and poured your heart and soul into.  Even if it doesn’t make you wealthy, the experience alone is invaluable.

Anyway, this is just my “you should start a business” propaganda.  Granted, it’s not all sunshine and roses, it does require a lot of your time and there’s no certainty you’ll succeed, but if you want to become wealthy – like tens of millions of dollars wealthy – it’s almost a prerequisite.