Every year the Internal Revenue Service issues a report that shares data on the top 400 taxpayers. This report focuses on those returns with the largest Adjusted Gross Income. In 2014, you needed $126.8 million to make it on their list. Here’s how the top 400 made their money:
- 4.47% – Wages & Salaries
- 4.24% – Interest Income
- 10.89% Dividends
- 16.24% – Profits from Partnerships and Corporations
- 65.16% – Capital Gains
Most of the capital gains were the result of selling all or part of some business interest owned by the taxpayers. When you combine the last three categories, this equals 92.29%. This 92.29% is income derived from business ownership. Owning an interest in a business, either as a stockholder, partner or sole proprietor, was the key to accumulating most of their wealth.
The odds of getting rich are stacked against those who derive their income from wages, since only 4.47% of the wealth of those in the report, became rich from their wages.
If you want to get rich, you must do what wealthy people do. They invest in businesses or create their own business. Since 80% or more of the wealthy come from poverty or the middle-class, this means you must either save enough money to invest in some business or you must create something on the side, some side business.
If you’re a great saver and want to become rich, you must take a risk with your savings by investing it in some business that will generate dividends, profits or capital gains upon the sale of your investment.
If you’re not a great saver, this means you must take a risk and invest your time and whatever money you do have in some business that will generate dividends, profits or capital gains upon it’s sale.
Either way, you must take risk in order to become rich and that risk typically involves some business investment.
About Thomas C. Corley
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