Fitness INSPIRATION – DAVID Oberto
June 10, 2023
It’s no coincidence that a hugely disproportionate number of millionaires are self-employed, running their own businesses. Entrepreneurship provides major advantages for building wealth that simply can’t be matched by traditional employment. Understanding why so many of the financially elite embrace self-employment reveals keys to accumulating your own seven-figure net worth.
For starters, business owners enjoy tax advantages that employees don’t. They can deduct a multitude of business expenses to lower taxable income, from health insurance and travel to office supplies and vehicles. Business losses can offset other income. Strategic use of retirement plans like solo 401(k)s can shelter even more.
Owning a business also provides incredible leverage. The ability to scale a company’s income and impact with minimal additional time investment is unmatched. Adding more customers, products and services creates exponential growth versus the linear path of trading hours for dollars through a salary.
Additionally, equity in an appreciating business is a key wealth accelerant. As a business grows, so does the value of ownership equity. Millionaires sell companies or take their firms public to realize massive windfalls that no salary could ever match.
Business owners also enjoy flexibility that employees lack. They can choose their own hours and work location. They aren’t capped on vacation days or sick time. Millionaires structure their lives and schedules to maximize productivity and happiness.
Self-employment also provides tax-free fringe benefits like travel and entertainment. Millionaires deduct these as business expenses rather than paying for vacations and leisure with after-tax dollars.
Owning a business additionally creates opportunities to shelter wealth in real estate. Millionaires buy buildings their companies lease, generating deductions that offset other income. They grow wealth through appreciation while their companies pay the mortgages.
For millionaires seeking passive income, businesses provide multiple options. They earn royalties, license products and technologies, and collect rental income from properties they lease back to their own firms. Diverse income streams fuel wealth.
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