It’s a fact—the wealthy start their own businesses.
Here’s a breakdown of the top ten richest people in the world…
One sports team owner.
One business magnate.
That’s true further down the totem pole as well. Fidelity Investments research revealed that 88% of millionaires are self-made entrepreneurs.²
Why? Because businesses can create wealth that equals or surpasses savings, often in a quicker time frame.
Here’s how it works…
Let’s say your ideal retirement income is $5,000 per month. Just enough to rent a beachside condo, enjoy a night on the town once in a while, and visit the grandkids whenever you want.
But where will your retirement income come from? Not a job—remember, you’re retired!
Standard procedure is to save a nest egg and live off the interest. In this example, you would have to save $1.4 million at 5% interest to generate $5,000 monthly income.
That goal is fine if you’re 25 with enough cash flow to put away some each month. But what if you’re closer to retirement? You simply don’t have the years needed to unleash the power of compounding interest to grow your savings. You need retirement income, and you need it now.
That’s where starting a business can help.
As the business grows, the hope is that your income will too. If and when you reach your target income, you should have a strategy in place to step away from active operational management of the business and still enjoy cash flow. After all, you’re the one who took the risk of starting it!
This concept is called Wealth Equivalency. Simply put, building a business can create an income stream equal to living off the interest of your savings.
That’s why the wealthy start businesses. They know it’s an opportunity to create an income that’s equivalent to saving millions for retirement in a much shorter time frame.
So here’s the question—which one is more feasible for you?
Saving a nest egg that generates a $5,000 monthly income?
Or building a business that generates a $5,000 monthly income?
If you’re young, the answer might be saving. With time and compound interest on your side, you can build the wealth you need to retire with confidence.
But if you need income NOW, consider imitating the wealthy and starting a business. It may create an income that rivals saving on a far more realistic timetable.
Best of all, with the right mentorship and strategies, entrepreneurship doesn’t have to be a leap of faith. In fact, it can leverage skills, relationships, and hobbies that you already have!
If you want to learn more about creating a sustainable income for retirement, let’s chat. We can review your situation and see what strategies you can leverage to face the future with confidence.
¹ “The 10 Richest People in the World,” Dan Moskowitz, Investopedia, Jan 3, 2023, https://www.investopedia.com/articles/investing/012715/5-richest-people-world.asp
² “The Ultimate List of Entrepreneur Statistics 2022,” Jack Steward, Findstack, Dec 5, 2021 https://findstack.com/entrepreneur-statistics/