The road to riches is paved with cup holders, burgers and miles of elementary school carpeting
By Juliet Chung of The WSJ. Excerpts:
"Derek Olson . . . has made a fortune making machines that rip up flooring, like carpeting in elementary schools."
"But a vast universe of traditional routes focused on providing goods and services has become increasingly central to the accumulation of significant, if less obvious, wealth in the U.S.
“We call it the stealthy wealthy,” said Owen Zidar, a Princeton University economist who has studied the group with University of Chicago economist Eric Zwick.
Olson’s annual income running his flooring-equipment company puts him in the top 1% of earners in the U.S., or people who as of 2022 made at least $550,000, excluding capital gains. He expects Minnesota-based National to bring in roughly $50 million in revenue this year, after recently buying an Australian manufacturer. His family’s luxuries include two Land Rovers, private school for the kids and a month-long European summer vacation.
Behind a paycheck, the largest source of income for the 1% highest earners in the U.S. isn’t being a partner at an investment bank or launching a one-in-a-million tech startup. It is owning a medium-size regional business. Many of them are distinctly boring and extremely lucrative, like auto dealerships, beverage distributors, grocery stores, dental practices and law firms, according to Zidar and Zwick."
"The share of income that ownership generates has increased to 34.9% in 2022 from 30.3% in 2014 for the top 1% earners."
"Zidar and Zwick attribute the growth of this group to tax cuts in recent decades for such business owners and low interest rates that have boosted company valuations. The number of such business owners worth $10 million or more, adjusted for inflation, has more than doubled since 2001, to 1.6 million as of 2022."
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