One of first key reasons I consider business ownership is the wealth potential. Though wealth alone can not define a good life, it is a tool that will allow us to build a nest egg for ourselves and the ones we care for.
Twenty percent of the affluent all over the world are retirees. Of the remaining eighty percent, more than two-thirds are self-employed owners of businesses. Simply put, most of the affluent in America are business owners, including self-employed professionals. To put this into perspective, in America, fewer than one in five households is headed by a self-employed business owner, but these self-employed people are four times more likely to be millionaires than those who work for others.
Here is another critical thought. When you got your first car, how much did a gallon of gas cost? In 1975, the average cost of a new car was $4,250. Median income in 1975 was $33,148. A new car cost about 13% of one’s yearly income. In 2011, the average car cost about $30,000 and the median income for that year was about $50,502. A new car cost about 59% of one’s yearly income. To put that into perspective, you needed to work from January 1st until February 17th in 1975 to buy a car. In 2011, to purchase the same car, you would have worked from January 1st to August 3rd. That is the reality of inflation. For the vast majority of the population, the income generated by working as an employee does not keep pace with cost increases. The standard of living has dropped. When you are a business owner, you can adjust your pricing strategy to match inflation. You have more flexibility as a business owner to meet the challenges associated with inflation.
These are just a handful of the reasons that define why you want to consider owning a business. The economy is consistently growing as the populations of the world grows. Rather than getting a slice of someone else's business through a paycheck, this is a chance to define your own paycheck. I am always here to discuss these ideas and answer any concerns that you may have. Don't hesitate to reach out to me!
This chart of the consumer price index shows how much costs have risen in various areas over the past decade. Some of the largest increases have come in education and medicine. Both of these areas are crucial to human growth and survival. Owning a business can help you adjust to these costs. You cannot typically rely on an employer to increase your salary by 50+ percent in a decade to beat inflation and see a meaningful profit.
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Where does a business fit into your plan?