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At The Money: Who Is Wealthy in America, and How Did They Get Rich? · Masters in Business

• 0:02
  Speaker 1: Bloomberg Audio Studios. Podcasts.
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  Speaker 2: Radio. News.
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  Speaker 3: We know America is a rich nation, but do you
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  Speaker 3: know exactly how rich?
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  Speaker 2: Who holds all of that wealth? To help us unpack
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  Speaker 2: this and what it might mean for your prosperity, let's
• 0:39
  Speaker 2: bring in Owen Zedar and Eric Zwick. They are professors
• 0:43
  Speaker 2: at Princeton and the University of Chicago, respectively. And they
• 0:46
  Speaker 2: are the authors of a fascinating new book, The Everywhere Millionaire,
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  Speaker 2: Who is Really Rich in America and How They Got There. So, guys,
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  Speaker 2: I'm fascinated not only by all the data and the
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  Speaker 2: information in the book, but But how the book came about,
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  Speaker 2: you were effectively hired by the IRS and Treasury to
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  Speaker 2: do a data analytics. Tell us a little bit about that.
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  Speaker 4: Thanks for having us, Barry. It's great to be here.
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  Speaker 4: Right out of grad school, we were PhD economists. We
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  Speaker 4: were brought in to work with folks at the Treasury
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  Speaker 4: and the Office of Tax Analysis to work on a
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  Speaker 4: project linking businesses to their owners and workers and this
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  Speaker 4: pass-through business sector had grown dramatically over the prior 40 years.
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  Speaker 4: And it was difficult for folks to basically estimate how
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  Speaker 4: much tax those businesses were paying because the businesses don't
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  Speaker 4: pay tax themselves. You have to link them back to
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  Speaker 4: their owners to figure out the individual owner's tax position.
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  Speaker 4: And so this was a project that was really important
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  Speaker 4: for tax policy. And it turned out to be a
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  Speaker 4: lever for us to learn about much more than tax policy, income, wealth,
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  Speaker 4: and prosperity in the country.
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  Speaker 2: Almost accidental that you guys created this massive database of
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  Speaker 2: those tax records. What was in that data that all
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  Speaker 2: of the other surveys and data we see from Commerce
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  Speaker 2: or the Federal Reserve? I'm a fan of the Survey
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  Speaker 2: of Consumer Finances. What did you guys find in this
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  Speaker 2: database you created that those surveys missed?
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  Speaker 5: So the Federal Reserve Survey of Consumer Finance is fantastic.
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  Speaker 5: We don't want to say anything bad about it. It's
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  Speaker 5: a big effort to collect it, but it's fundamentally much
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  Speaker 5: less rich than the.
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  Speaker 1: Data we put together. So the data we put together
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  Speaker 1: is a panel.
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  Speaker 5: So you can do things like study every business that
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  Speaker 5: was created and trace how well they're doing and what
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  Speaker 5: allows them to succeed. A second dimension is that you
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  Speaker 5: can see much more granular information about industries and geographies.
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  Speaker 5: to learn about where wealth and opportunity are in this country.
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  Speaker 2: So that raises really a fascinating question. What did you
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  Speaker 2: find in your data analytics that's in the book, The
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  Speaker 2: Everywhere Millionaire, that was a key misconception that the very broad,
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  Speaker 2: non-granular Federal Reserve surveys just don't have access to? What
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  Speaker 2: misconception did the data force you to abandon?
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  Speaker 4: I think we call it the everywhere millionaire because what
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  Speaker 4: we learned was that top wealth and income and just
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  Speaker 4: this wealth is like much more abundant and also closer
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  Speaker 4: to home for more people than we previously thought. So
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  Speaker 4: if you thought all the wealth was on the coasts,
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  Speaker 4: that misconception we basically upended because- You know, we put
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  Speaker 4: our everywhere millionaires on a map and the whole country
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  Speaker 4: lights up. If you thought it was just in tech
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  Speaker 4: and finance, which maybe was a bit more our prior
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  Speaker 4: going into this work, it turns out it's all across
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  Speaker 4: lots of industries, including many unglamorous sort of more blue
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  Speaker 4: collar industries that we hadn't really thought about as paths
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  Speaker 4: to wealth at the top. And if you thought it
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  Speaker 4: was just the Forbes 400 billionaires that were getting extremely
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  Speaker 4: rich and driving inequality statistics, well, no, that's not true
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  Speaker 4: either because we're talking about millions of people. So we
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  Speaker 4: have 3 million everywhere millionaires, we say have net worth
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  Speaker 4: of at least $ 5 million that are private business owners.
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  Speaker 4: And that's just, they collectively have more than 10 times
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  Speaker 4: the wealth of the Forbes 400 combined. So again, just
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  Speaker 4: like this much broader picture of wealth than we thought
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  Speaker 4: we had going in.
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  Speaker 2: So let's talk about all those unglamorous businesses. You write
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  Speaker 2: about auto dealers, HVAC companies, medical or dental practices, restaurants, distributors, sanitation.
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  Speaker 2: These aren't remotely sexy. I have to ask the question,
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  Speaker 2: they may not be sexy, but they're obviously very lucrative.
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  Speaker 2: Why has this group been so consistently underestimated?
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  Speaker 5: You know, it's fun to talk to people, even NBA
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  Speaker 5: players like Russell Westbrook, when they're trying to make money.
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  Speaker 5: We have this quote in the beginning of one of
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  Speaker 5: the chapters that's like, unsexy is sexy to me because
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  Speaker 5: he went and bought some of these types of businesses.
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  Speaker 5: I think one reason why they're consistently underestimated is it's
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  Speaker 5: very hard to know who's rich. You know, public companies
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  Speaker 5: have to report to their shareholders and file information. There's
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  Speaker 5: investigative reporting on the very richest people. But I think
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  Speaker 5: Celebrity billionaires have really monopolized attention. And with this better data,
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  Speaker 5: we have a brand new view for who's really rich
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  Speaker 5: in America.
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  Speaker 2: Yeah. Coin operated laundromats and car washes like some of
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  Speaker 2: the some of the businesses are kind of astonishing. One
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  Speaker 2: of the things that I've always noticed when I'm so
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  Speaker 2: thrilled about this book, which is really just an exercise
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  Speaker 2: in confirmation bias to me, is every time I visit
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  Speaker 2: a new city, every time I go to a new town,
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  Speaker 2: I always kind of wander by the waterfront. And I'm
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  Speaker 2: a fisherman and a boater, and I know the prices
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  Speaker 2: of all these boats. And it's like, I don't understand.
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  Speaker 2: There are just hundreds and hundreds of vessels in a
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  Speaker 2: marina that That's $ 4 million. That's $ 2 million. That's half
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  Speaker 2: a million. That's $ 800. I know the prices of these things.
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  Speaker 2: I'm like, where is all this money coming from? The
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  Speaker 2: books kind of lay out, but the fascinating thing is
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  Speaker 2: this has been out there in plain view for decades.
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  Speaker 2: How did we all miss this?
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  Speaker 4: It's so funny. I mean, we joked that one of
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  Speaker 4: the sections of the book should be called Yahtzee. It's
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  Speaker 4: sort of like, you know, you look at who owns
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  Speaker 4: yachts and you see it, you know, we actually scaled
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  Speaker 4: up your intuition, which, you know, I wouldn't bet against
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  Speaker 4: Barry in the markets. And I think confirmation bias, maybe
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  Speaker 4: you're just right. We bought yacht registration data. And so
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  Speaker 4: you could actually, unlike in the tax data where, you know,
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  Speaker 4: our large scale research was done. you can actually see
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  Speaker 4: the names of the people in the yacht registration data.
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  Speaker 2: The tax data is all anonymized. So you get the specifics,
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  Speaker 2: but not the person.
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  Speaker 4: You get like, okay, this business is in auto dealer.
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  Speaker 1: This is HVAC.
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  Speaker 4: You know, this is a dentist, that kind of thing.
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  Speaker 4: You get rough geography, right? Like sort of county or
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  Speaker 4: area zip code.
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  Speaker 1: Exactly.
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  Speaker 4: But you don't, you know, to protect people's privacy, you
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  Speaker 4: don't know who they are and we're not allowed to,
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  Speaker 4: it's illegal to do that. So we got other data
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  Speaker 4: for the book to kind of, Figure out we sort
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  Speaker 4: of knew where to look from the research. Let's go
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  Speaker 4: find some of them and meet them. And the yacht
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  Speaker 4: data is how we found people like Nancy Mueller, who
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  Speaker 4: made yacht money, you know, building a business selling ready
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  Speaker 4: to bake frozen quiche in big box stores.
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  Speaker 1: That's how we found people.
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  Speaker 4: Dick portillo who made yacht money starting from like a
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  Speaker 4: single hot dog stand in suburban chicago 50 years ago
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  Speaker 4: uh to have the largest private you know red fast
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  Speaker 4: casual restaurant business doing hot dogs italian beef chocolate cake
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  Speaker 4: shakes and the like sold it to berkshire partners for
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  Speaker 4: a billion dollars and his yacht was called top dog.
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  Speaker 2: Amazing really amazing um So I always find the idea
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  Speaker 2: of who is wealthy fascinating. And anytime I write about it,
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  Speaker 2: it always seems to generate a lot of clicks. But
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  Speaker 2: I love the way you guys frame this in terms
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  Speaker 2: of earn or own. And so the question is, how
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  Speaker 2: important is business ownership versus a high and rising income
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  Speaker 2: from labor to getting into the top 1% or top 0.1%.
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  Speaker 5: If you look at top incomes, for example, take the
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  Speaker 5: top decile and then ask what share of people's income
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  Speaker 5: is coming from labor income, like from a normal salary
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  Speaker 5: job or from business ownership or other capital income, you know,
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  Speaker 5: the typical person in the 90th percentile, um, is getting salaries.
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  Speaker 5: But as you go up, the graph converges and crosses
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  Speaker 5: so that in the top 0.1%, most of the top
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  Speaker 5: income is coming from business income. And the main typical
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  Speaker 5: way you get wealthy in the country is by owning
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  Speaker 5: something rather than earning.
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  Speaker 1: There's a saying.
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  Speaker 5: That salaries is for suckers.
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  Speaker 1: That's a tax thing.
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  Speaker 5: It's like better to own something from a tax point
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  Speaker 5: of view, but it's also how a lot of people
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  Speaker 5: are wealthy in America.
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  Speaker 2: So you mentioned the pass-through. My firm is a pass-through.
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  Speaker 2: Most of the people I know who own businesses are
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  Speaker 2: set up as pass-throughs. I'm curious, give us a little
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  Speaker 2: bit of the background of when that changed, at least
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  Speaker 2: in the tax code, and how that manifests itself on
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  Speaker 2: entrepreneurs in the economy.
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  Speaker 4: Yeah, so pass-through businesses don't pay tax at the firm level.
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  Speaker 4: So the tax rates that are relevant for them are
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  Speaker 4: the individual owner's taxes. So the income flows through, that's
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  Speaker 4: why I say pass-through, to the owners, and then it's
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  Speaker 4: taxed the individual level. Until the 1986 tax reform, which
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  Speaker 4: was a bipartisan reform. Reagan was president. Democrats were in
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  Speaker 4: charge of Congress, brought the personal income tax rate down
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  Speaker 4: below the corporate tax rate for the first time in
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  Speaker 4: the history of the tax code. It didn't make sense
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  Speaker 4: to be a pass-through because it was tax disadvantaged. But
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  Speaker 4: all of a sudden, it was cheaper to be a
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  Speaker 4: pass-through if you were a business. And over time, as
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  Speaker 4: individual tax rates have come down, say the Bush tax
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  Speaker 4: cuts brought them down, their carve-outs from the payroll tax
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  Speaker 4: are passed through business owners. The 2017 tax reform introduced
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  Speaker 4: a new carve-out for certain categories of pass-throughs. They get
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  Speaker 4: a 20% deduction. And so it's been, it's like a
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  Speaker 4: great deal to be a business owner. And it's very
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  Speaker 4: important to be a business owner as a pass-through for
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  Speaker 4: most of these businesses because you get better tax treatment.
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  Speaker 4: And that's led to this massive growth in the pass-through sector.
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  Speaker 4: More than half of business income is pass-through business income,
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  Speaker 4: even though all the public companies are C corporations, traditional corporations.
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  Speaker 4: Nearly half of employment is in pass-through businesses and nearly
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  Speaker 4: every business in the country because pretty much all the
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  Speaker 4: small businesses are pass-throughs.
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  Speaker 2: And let me annotate. Your answer, I think it was
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  Speaker 2: the 2017 or 2018 tax cuts and job acts created
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  Speaker 2: an opportunity. So that was a Republican-led tax cut, but
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  Speaker 2: it created an opportunity for Democratic-led high-tax states to ask
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  Speaker 2: the IRS, hey, we want to embrace TCJA. And we
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  Speaker 2: want to allow these pass-through entities to pay state tax
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  Speaker 2: at the corporate level, which means that if you own
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  Speaker 2: a business, your business is paying the state tax. So
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  Speaker 2: you're not paying federal tax on the income you're taking
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  Speaker 2: to pay the state tax. It's yet another tax advantage
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  Speaker 2: for business ownership. And kind of surprisingly, New York State
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  Speaker 2: Ask the IRS, California, Massachusetts, New Jersey, Connecticut, all these
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  Speaker 2: high tax states. And to everybody's surprise, the IRS said, sure,
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  Speaker 2: go ahead and do that. If you want to essentially
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  Speaker 2: add on a tax cut to that, we're fine with that.
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  Speaker 2: And so it's even that much advantaged over. But I
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  Speaker 2: knew how useful pass-throughs were. I had no idea how
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  Speaker 2: significant the impact was on the overall economy, you guys
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  Speaker 2: essentially give that aspect of the 1986 Tax Reform Act
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  Speaker 2: credit for unleashing a whole new wave of business formation
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  Speaker 2: and entrepreneurial activity. Explain that a bit.
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  Speaker 1: I mean, just some stats to give some context on it.
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  Speaker 5: If you take one of the most famous graphs in economics,
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  Speaker 5: the share of the top 1% income and hold fixed
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  Speaker 5: how important pass-through business income is in 1985 before that
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  Speaker 5: reform and let it follow through, you basically get half
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  Speaker 5: of the rise in the top 1%. If you look
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  Speaker 5: at wealth growth, two-thirds of the wealth growth from 1989
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  Speaker 5: to the most recent data in the SCF are coming
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  Speaker 5: from private business of the top 0.1%. And so this
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  Speaker 5: is really quite central from an accounting point of view
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  Speaker 5: for where the wealth has grown and where top incomes
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  Speaker 5: have come from.
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  Speaker 2: Really, really interesting. So I said this was an exercise
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  Speaker 2: in confirmation bias. Let me try and disconfirm the book
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  Speaker 2: and argue against what I think we all kind of believe.
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  Speaker 2: The book almost makes entrepreneurship sound easy. Find an unglamorous business,
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  Speaker 2: develop an expertise in it, scale it up, but maintain
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  Speaker 2: your ownership the whole time. The question is, how much
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  Speaker 2: survivorship bias is in here? Because you obviously, when you're
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  Speaker 2: looking at wealthy people, you're looking at the businesses that succeeded.
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  Speaker 2: What percentage of these businesses fail? What doesn't make it?
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  Speaker 4: So absolutely. I mean, you know, anytime we talk about
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  Speaker 4: the top 1%, right, or the Forbes 400, we're looking
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  Speaker 4: at that same survivorship bias question, right? And so one
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  Speaker 4: thing we're able to do in our now like sort
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  Speaker 4: of the large scale admin data research is you can
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  Speaker 4: look at all new businesses formed since 2000. So that's
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  Speaker 4: like 10 million founding events. And we can follow those
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  Speaker 4: people over time, whether the businesses succeed or fail and say,
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  Speaker 4: how much better offer those founders on average compared to
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  Speaker 4: very similar workers who didn't become business owners? The answer
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  Speaker 4: is on average about 10% higher incomes for them, not
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  Speaker 4: even including the unrealized say capital gain from selling the
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  Speaker 4: business that they built. And that includes a bunch of failures.
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  Speaker 4: And that's looking at sort of the income flows for
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  Speaker 4: those people that they're getting from those businesses. How do
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  Speaker 4: I interpret that? Well, even if a business fails, person
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  Speaker 4: learning something, and if they're not doing anything illegal, They
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  Speaker 4: have an opportunity to either reenter the labor market or
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  Speaker 4: start something new where they solve some of the problems
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  Speaker 4: with the first venture. So we see about 20% of
• 15:44
  Speaker 4: our founders are serial founders, not in terms of inventing
• 15:49
  Speaker 4: boxes of cereal, but they found multiple times. And that
• 15:53
  Speaker 4: means maybe the second or third business they start is
• 15:55
  Speaker 4: really the one that makes them the yacht money. And
• 15:59
  Speaker 4: so I think it's kind of an interesting, it's definitely
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  Speaker 4: not the case that it's automatic. or it's set it
• 16:04
  Speaker 4: and forget it, the way these entrepreneurs who are success
• 16:07
  Speaker 4: stories get to the top. But I think it's also
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  Speaker 4: surprising to us that while they are taking more risk,
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  Speaker 4: on average, it seems to be a pretty good deal
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  Speaker 4: for these people.
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  Speaker 2: I have a friend in Switzerland, born and raised, lived
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  Speaker 2: in the US for a few years, went back. And
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  Speaker 2: he has repeatedly said, failure in Europe is a black market.
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  Speaker 2: It's something that sometimes takes generations to live down. Failure
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  Speaker 2: in the U.S. is like a checkbox. Okay, fail, try again.
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  Speaker 2: And his theory is the genius of American business and
• 16:47
  Speaker 2: entrepreneurship is that failure is not a scarlet letter. It's
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  Speaker 2: part of the process. How accurate is that assessment from
• 16:55
  Speaker 2: across the pond?
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  Speaker 4: That really resonates to me just based on kind of
• 16:59
  Speaker 4: looking at this data. I also teach MBA students who
• 17:03
  Speaker 4: do entrepreneurship and take entrepreneurial ventures and follow them, the
• 17:06
  Speaker 4: careers I've been doing for a decade. And the ones
• 17:10
  Speaker 4: that come from overseas, failure definitely, you have to explain
• 17:14
  Speaker 4: to your family what you were doing, that hole on
• 17:16
  Speaker 4: your resume. Why weren't you working for the blue chip company?
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  Speaker 4: Whereas here, it's like go out and do something is
• 17:22
  Speaker 4: very much in the water. And I mean, you know,
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  Speaker 4: I would love to figure out a way to show
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  Speaker 4: that systematically, but I think it quite resonates.
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  Speaker 2: The data point related to that that I've been tracking
• 17:34
  Speaker 2: for years is new company formation at record highs and
• 17:38
  Speaker 2: every year since the pandemic. It's kind of amazing. But
• 17:41
  Speaker 2: you mentioned the blue chip company. I think those folks
• 17:45
  Speaker 2: would be surprised to know that the richest person in
• 17:48
  Speaker 2: most communities isn't necessarily the CEO of a public company.
• 17:54
  Speaker 2: It's the people who own a local car dealership or
• 17:57
  Speaker 2: a medical or dental practice or an HVAC company or
• 18:01
  Speaker 2: anything like that. What is the wealth building process like
• 18:05
  Speaker 2: for entrepreneurs versus the folks who are earning their wealth
• 18:10
  Speaker 2: through stocks, options, and venture capital?
• 18:14
  Speaker 5: And so one thing that's quite different than the venture
• 18:18
  Speaker 5: capital kind of Silicon Valley move fast and break things
• 18:23
  Speaker 5: model is that That seems very fast, whereas the typical
• 18:27
  Speaker 5: private business owner that we're talking about rolls up their sleeves,
• 18:30
  Speaker 5: has a lot of hard work, and it takes decades.
• 18:33
  Speaker 1: These are not quick hits on a quick hit app.
• 18:38
  Speaker 5: Most of the people that we talk to, they're typical
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  Speaker 5: ones in their 60s because they've worked and gained domain
• 18:46
  Speaker 5: expertise over a series of decades. That's one distinction that
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  Speaker 5: it's not a get-rich-quick scheme.
• 18:52
  Speaker 2: Get rich slowly. Yeah.
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  Speaker 4: Move slow and make things.
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  Speaker 2: Move slow and make things, not move fast and break things.
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  Speaker 2: I really like that. So let's talk a little bit
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  Speaker 2: beyond wealth. You guys really say these business owners aren't
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  Speaker 2: merely wealthy. They become important political players in their towns.
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  Speaker 2: How does this economic power translate to the ability to
• 19:20
  Speaker 2: influence policy at local, state, and federal levels.
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  Speaker 4: So we like to say there's an ever millionaire in
• 19:27
  Speaker 4: every congressional district. So unlike Silicon Valley and Wall Street,
• 19:31
  Speaker 4: which are very specific geographies, there's like a car dealer
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  Speaker 4: in almost every congressional district. These people have a lot
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  Speaker 4: of employees. They pay a lot of sales tax. They're
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  Speaker 4: visible in the local community as an example. But the
• 19:45
  Speaker 4: local business owner is an archetype that's broader than that.
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  Speaker 4: And as a result, they have a lot of clout.
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  Speaker 4: They're very popular. They have higher approval than the military,
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  Speaker 4: Supreme Court, the Congress, the small business, quote unquote. And
• 20:02
  Speaker 4: so they end up running for office quite often, not
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  Speaker 4: just lobbying. There's a frequent... overrepresentation at the federal, state,
• 20:08
  Speaker 4: and local level with office holders being private business owners.
• 20:12
  Speaker 4: So we found about a quarter members of Congress are
• 20:16
  Speaker 4: private business owners. And if you want to include law
• 20:18
  Speaker 4: firm partners, that number could get up to like 40, 50% almost.
• 20:23
  Speaker 4: State and local office, because these are part-time jobs, low
• 20:26
  Speaker 4: salary jobs. Mayors are like even more overrepresented by business owners.
• 20:33
  Speaker 4: And some of that's good. They know how to get
• 20:35
  Speaker 4: things done. They know how to run large organizations. And
• 20:38
  Speaker 4: some of that's, well, they have very specific priorities and
• 20:41
  Speaker 4: they go into office. And when you see policy going
• 20:44
  Speaker 4: in a certain direction, they can be the key to
• 20:46
  Speaker 4: understanding why it's going in that direction.
• 20:50
  Speaker 2: Really interesting. So we briefly talked about survivorship bias. I'm
• 20:55
  Speaker 2: curious because the pandemic really revealed how many companies were
• 21:01
  Speaker 2: marginal and got put out of business and If you
• 21:05
  Speaker 2: were fortunate enough to set up an HVAC company or
• 21:09
  Speaker 2: an auto dealership, you probably did pretty well. If you
• 21:13
  Speaker 2: set up a small retail shop or local newspaper and
• 21:19
  Speaker 2: things like that, there have been huge, huge swaths of
• 21:23
  Speaker 2: the economy that have been completely disrupted by the big
• 21:27
  Speaker 2: players in technology. So whether it's Amazon and retail companies,
• 21:33
  Speaker 2: Craigslist and media, even Uber and small taxi companies, a
• 21:39
  Speaker 2: lot of these businesses have gone belly up. So one
• 21:42
  Speaker 2: of the questions is, hey, how much just serendipity and
• 21:46
  Speaker 2: dumb luck is involved in this? And how much of
• 21:49
  Speaker 2: this is insight in identifying a business that may or
• 21:52
  Speaker 2: may not be vulnerable?
• 21:54
  Speaker 4: So the long-term goal is to be an owner-operator of
• 21:58
  Speaker 4: a successful business, one that is probably in an industry
• 22:00
  Speaker 4: that's like there's some natural growth to can be quite helpful. Um,
• 22:05
  Speaker 4: some of our, you know, successful entrepreneurs that we interviewed, uh,
• 22:09
  Speaker 4: they encountered these kinds of headwinds and they pivoted. Um,
• 22:14
  Speaker 4: so we have a story of somebody who was running,
• 22:16
  Speaker 4: doing pretty well running tanning salons and, uh, you know,
• 22:20
  Speaker 4: consumer tastes moved against that in a hard way as
• 22:24
  Speaker 4: the safety, as the health concerns like became more salient.
• 22:28
  Speaker 4: And she took what she had accumulated her expertise running
• 22:31
  Speaker 4: this kind of sort of consumer beauty service business, which
• 22:37
  Speaker 4: had a lot of transportable skills into waxing. So starting
• 22:41
  Speaker 4: like a waxing salon business, which didn't have those same
• 22:44
  Speaker 4: health issues, but I think allowed her to kind of
• 22:46
  Speaker 4: move those talents. And so that was kind of the
• 22:49
  Speaker 4: second act of her very successful career as a business owner.
• 22:53
  Speaker 4: And so it's kind of like paying attention to and
• 22:56
  Speaker 4: being willing to pivot in response to these industry or
• 23:00
  Speaker 4: consumer trends that are changing. That's like a pretty important
• 23:04
  Speaker 4: skill that we see. And I think that's one reason
• 23:07
  Speaker 4: also why it takes a while to build these successful businesses,
• 23:09
  Speaker 4: because you kind of like navigating, finding your opening, finding
• 23:13
  Speaker 4: your spot. And it doesn't get there automatically. And often
• 23:17
  Speaker 4: it requires some luck to find that thing that's opening
• 23:21
  Speaker 4: up and then you jump on it.
• 23:22
  Speaker 2: All right. Last question. You guys teach college students, MBA students,
• 23:27
  Speaker 2: et cetera. I want to lay out a little bit
• 23:29
  Speaker 2: of a challenge for you. Take all of your data
• 23:33
  Speaker 2: and give it to one of those 25-year-old MBA students
• 23:37
  Speaker 2: and tell them, here's the data. Show me the most
• 23:41
  Speaker 2: realistic path to becoming a multimillionaire in America today. What
• 23:47
  Speaker 2: do you think they're going to come back to you?
• 23:49
  Speaker 2: What should they do? What should they not do?
• 23:52
  Speaker 5: So we haven't done that exact exercise, and that's something
• 23:55
  Speaker 5: that I think is pretty interesting. One opportunity, I think,
• 23:59
  Speaker 5: is there's this big– boom of business owners who, like
• 24:03
  Speaker 5: I said, are in their 60s or 70s, many of
• 24:05
  Speaker 5: them want to retire. And for a lot of these people,
• 24:09
  Speaker 5: they might not have kids who want to take it
• 24:11
  Speaker 5: over or want to give it to their kids. And
• 24:13
  Speaker 5: so I think there's a lot that someone could do
• 24:16
  Speaker 5: trying to get some expertise, knowing how to run something
• 24:21
  Speaker 5: like a car dealership or a gas station or, you know,
• 24:26
  Speaker 5: you name the type of company that and work in
• 24:29
  Speaker 5: it for a few years and then try to put
• 24:30
  Speaker 5: themselves in a position to own the thing when the
• 24:33
  Speaker 5: owner wants to retire. They can set up things like
• 24:36
  Speaker 5: seller financing where they say, all right, I believe in
• 24:38
  Speaker 5: this business. I'll give you a loan in exchange for
• 24:42
  Speaker 5: some future profits. And if someone's willing to do that,
• 24:46
  Speaker 5: that kind of signals that the thing is worth something.
• 24:49
  Speaker 2: So to wrap up, if you want to become part
• 24:52
  Speaker 2: of the wealthy cohort, the top, let's call it 4%,
• 24:57
  Speaker 2: of Americans who are worth $ 5 million or more, sure,
• 25:03
  Speaker 2: a nice income will help a little bit. But if
• 25:07
  Speaker 2: you really want to get there, you need to own equity,
• 25:11
  Speaker 2: not just earn from equity. I'm Barry Ritholtz. You're listening
• 25:15
  Speaker 2: to Bloomberg's At The Money.
• 25:18
  Speaker 3: Baby, baby, you're a rich man. Baby, you're a rich man. Baby,
• 25:24
  Speaker 3: you're a rich man too.