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Every year the Internal Revenue Service issues a report that shares data on the top 400 taxpayers. According to the IRS, here’s how the top 400 makes their money:
- 4.47% – Wages & Salaries
- 4.24% – Interest Income
- 10.89% Dividends
- 16.24% – Profits from Partnerships and Corporations
- 65.16% – Capital Gains
Almost all of the capital gains for the Top 400 Taxpayers was the result of selling all or part of some business interest they owned.
When you combine the last two categories (Profits & Capital Gains), this equals 81.36%. This 81.36% is income derived from business ownership.
Owning and Selling an interest in a business, it turns out, is by far the greatest contributor to wealth in America.
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 or borrow enough money to invest in some business or build your business on the side while working full-time.
Tom Corley is an accountant, financial planner, public speaker, and author of the books “Effort-Less Wealth: Smart Money Habits At Every Stage of Your Life” and “RichKids: How to Raise Our Children to Be Happy and Successful in Life“. Corley’s work has appeared on CNN, USA Today, The Huffington Post, SUCCESS Magazine, and many other media outlets and podcasts in the U.S. and 27 other countries. Tom is a frequent contributor to Business Insider and CNBC.
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