Are people wealthier because they’re business owners (or self-employed)?

I know this is a loaded question, I am really wondering why the statistics seem to point to most millionaires being self-employed or business owners.

(Read: The Millionaire Next Door by Stanley and Danko, where they say that most millionaires next door are ordinary unassuming business owners).

Stanley says that 90% of business owners or the self-employed are NOT millionaires, but for me,Β it’s still curious that a large percentage of self-made millionaires say that working for themselves seems to be the golden ticket.


This is true in my case, but it is not true for all industries or jobs, and it takes a certain niche to be able to freelance with nothing but your brains invested in it.

Even as a business owner, you have to imagine that they need to pay employees, buy supplies, pay vendors, manage customers and collect the $$$$.

Sure, the income could be higher, but there is so much to think about and pay, that it might be more profitable to be an employee.


I have learned a lot more about managing overhead expenses like traveling, or setting aside buffers in the bank account and taxes.

I’m going to assume that if you run a business successfully, you have to know how to manage your money.

No ifs, ands or buts about it.

If you don’t have money to pay the guys who drop off your supplies every week, because you didn’t invoice your customers on time — you’ve got a problem!

Managing cash flow, bills, debt and keeping expenses down are quick lessons that are hard won when you run your own business.


Risk. Risk is a big thing when you’re on your own without much of a safety net.

They literally had no other choice but to save and scrimp at the start of their business.

You have to save like there is no freaking tomorrow. When your contracts dry up, or if you go through a rough patch in business, you need something to tide you over in the bad times.

When you go through such an experience of either heavy debt, lack of savings or no safety net, it changes your perspective on money.

You can’t spend like a rockstar and expect to be fine when the market tanks.

(This is also true for employees (even top ones) who are fired because of company shifts.)

Saving is key especially for the self-employed, and their emergency funds should be as fat as possible.


Perhaps there’s a grain of truth to the fact that a lot of self-made millionaires are self-employed, but I think we shouldn’t just zero in and focus on that correlation.

Not all businesses make it. 90% of them fail in their first year. Others just go on to ‘make a living’, but they haven’t made themselves into millionaires.

I think the millionaire mindset can be applied to employees as well, it’s all just about saving, keeping expenses low and watching your cash.

You don’t necessarily have to own a business or work for yourself.

The main difference may be that perhaps in a business, losing your shirt and literally everything you’ve worked for is a lot more painful (emotionally) than losing a job, so there is a greater fear in wanting to save, save, save.

There are plenty of others out there who became millionaires quietly — just by saving their money, living frugally and investing properly.

What do you think?

About the Author

Just a girl trying to find a balance between being a Shopaholic and a Saver. I cleared $60,000 in 18 months earning $65,000 gross/year. Now I am self-employed, and you can read more about my story here, or visit my other blog: The Everyday Minimalist.