Wealth Habits

CHAPTER 7The Three Reasons Why Owning a Business Is a Powerful Wealth-Builder

Starting a business is one of the few pillars of wealth that has a low barrier of entry. You don't need an MBA, you don't need a million dollars to start, and you don't need some radical, life-changing idea. Regardless of where you are from, regardless of the education you have—entrepreneurship is for you.

Although you may not think of building a business as a form of wealth (compared to saving and investing in a Roth IRA for example), in fact, creating a small business is the primary way that most individuals and families build wealth in the United States. (The definition of wealth is simply the value of all assets of worth owned by a person, community, company, or country.)

Owning a business is a main driver of income generation and wealth accumulation among the top 10% and 1%. But what I love about business ownership is its role in wealth generation that's available for everyone.

Three Wealth Pillars

There are really three main pillars of wealth building—investments, real estate, and owning a business.

The first two of these pillars—investments and real estate—have either a high barrier to entry or a long time line to build wealth. And sometimes they have both.

Investing in mutual funds, Roth IRAs, a 401(k) has a low barrier to entry and a long time line.

Investing in real estate has a higher barrier to entry and the time line varies.

Starting a business, however, can be done in a weekend with ...