Is starting my own business venture or investing in someone else's business , the only way to get rich ? I am not looking to become rich quick. I am in no hurry. What are the other options available ?

2 Answers 2


Not at all. The Millionaire Next Door offers a book full of anecdotes on couples that earned money and saved their way to being millionaires. I believe about 1/3 or so had businesses, but the rest were employed and simply saved wisely. $3860/yr saved for 40 years at 8% will return $1M. Adjust the numbers to hit a million sooner or reach a higher goal.

The Author might be accused of survey bias. This is the phenomenon of studying the final results without looking at the pool of people years prior. Little Adv' is correct that while 1/3 of millionaires may have gotten that way by starting a business, that says nothing about how many businesses need to start to find the one millionaire that resulted. I view the book more as a lesson of "spend beneath your means" and focus on his anecdotes of the dual income couples who saved their way to this status. If you are in no rush, get this book from your library and spend the few hours to read it.

In response to my Friend Dilip's comment, MoneyChimp offers a good look at compound growth (for the S&P) over time. The 40 years ending 2012, which obviously include the 'lost decade,' returned a CAGR of 9.78%. Not to be confused with the average 11.43%. When I pull the numbers for each year's return and apply an annual $3860 deposit, the 40 years ends with $2.2M. A 1% fee, or 1% lower return resulted in $1.6M.

If 8% isn't conservative, of course you can run the numbers you wish. The 40 years contained both a lost decade and two great ones. Will the 3 decades post-lost average to get the Quad-Decade period to 8%+? I don't know.

  • 1
    Thinking about this, I know CEO of many big companies earn many millions of dollar in a year as their salary.
    – bagavadhar
    Jun 22, 2013 at 16:03
  • In the US, just over 1% of people have accumulated over $2M. The curve is pretty steep beyond that. For income, just under $400K/yr is the 1% level. Jun 22, 2013 at 16:15
  • 1
    Gee, Joe, please let everyone in on which investment is returning 8% for 40 years! Not as good as the 12% that some gurus are promoting heavily on TV, but not bad nonetheless. Oh, and +1 by the way :-) Jun 23, 2013 at 23:07
  • @JoeTaxpayer Thanks for the update and the details. Since 40 years have been brought up, perhaps it is worth keeping in mind that it was not possible for hoi polloi such as myself to invest in the S&P 500 Index in 1973, 40 years ago. In those days, one had to be super-rich to be able to afford to invest in 500 companies simultaneously. The Vanguard S&P 500 Index Fund was, I believe, the first S&P 500 Index Fund, and it began operations only in 1976 and finally it was possible for small-time investors to have a part of their portfolio track the S&P 500 Index. Jun 24, 2013 at 1:50
  • @DilipSarwate - I am 50, so my real investing life started around 1980 or so. You are right, in a sense there was little actual indexing pre-76. Not sure how I'll use that fact to still discuss data looking backward. Jun 24, 2013 at 2:02

That's actually a pretty good way to get bankrupt quick. You can get rich quick through lottery, gambling, mere saving or investing wisely, or marrying someone from the Kennedy or Bush clans. Starting a business is one of the ways to become a millionaire, but definitely not the only one.

  • If you have read my question and description below, I clearly stated it does NOT need to be quick.
    – bagavadhar
    Jun 22, 2013 at 14:06
  • @ashwin - Agreed, I think he missed that. Yours wasn't a get-rich-quick question. Jun 22, 2013 at 15:19
  • @ashwin took out the "quickest" portion, I know that's not what you meant
    – littleadv
    Jun 22, 2013 at 18:34

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