We’re looking for rich people in the wrong places

When you picture a rich American, who do you picture?

Maybe a hedge-fund manager in Greenwich, or a tech founder in San Francisco. Or a Fortune 500 CEO, or a celebrity. Or, depending on how much time you spend online, perhaps a 27-year-old software engineer bragging about how he makes $700,000 a year at Meta.

These people are rich, but they’re unusually visible versions of rich.

Last week, economists Owen Zidar and Eric Zwick published a book about the much larger group of wealthy Americans we don’t hear much about.The Everywhere Millionaire is the result of more than a decade spent studying tax records and private businesses to understand who actually accumulates wealth in America. A surprising number of them own extremely boring companies.

Who are these people, exactly? They own car dealerships, HVAC companies, restaurant chains, medical practices, and car washes. (The operative word to focus on here is own.)

Zidar and Zwick estimate roughly 1.7 million Americans have more than $10 million in net worth tied to private-business ownership, and the authors themselves describe private-business ownership as one of the most common routes into the top of the income distribution. For every CEO of a large public company, they calculate, there are more than 1,000 private-business owners worth more than $25 million. All of these points are aptly captured by the title of their Atlantic piece: Americans Don’t Understand Who’s Rich.

The New Yorker called them “the wealthiest — and stealthiest — class in America.”

Maybe you read all of this and decide your financial destiny is to start selling air conditioners. But the part I find more interesting is why this wealth is so surprising to us in the first place.

We spend an enormous amount of time looking at rich people. Entire industries exist to tell us what billionaires are buying, what CEOs make, what a software engineer earns, and how much some influencer paid for her house. Yet a huge share of American wealth sits inside businesses and assets that produce almost no cultural footprint at all.

If so much wealth is stealthy, why are we so fixated on the wealth that isn’t?

I think part of the answer is that Americans have learned to recognize wealth through income and consumption, which are relatively easy to see. Ownership is much harder.

The durable version of wealth depends on owning something that can keep generating value after the work that paid for it is finished.

We see consumption much more clearly than ownership

We are extremely good at recognizing the aesthetics of affluence. We conceptually know what a person making $500,000 in Big Law looks like. We know the neighborhoods they live in, the restaurants where they eat, the vacation they post from, the gym they go to, the section of the plane they sit in.

Their income gets translated into visible consumption, which makes their economic position relatively easy for the rest of us to read. Ownership is much less legible.

Someone who owns several plumbing companies in Ohio could have a substantially larger net worth than that attorney while appearing, culturally, much more middle class. The attorney may have the prestigious degree, the known employer, and the spending to match. The business owner may drive a ten-year-old Ford F-150 and spend Saturday morning at Costco while sitting on an eight-figure asset.

And I think we have conflated consumption, wealth, and class for so long that it’s distorted how we understand wealth itself.

The difference between making money and owning money

Go back to the lawyer and the plumbing-company owner. Both are doing extraordinarily well relative to the average American, and both have enormous capacity to build wealth. But each of their work is creating two different kinds of financial value.

The employee gets paid for her labor. She can take that money and invest it, and plenty of highly paid employees become extremely wealthy this way. But she does not own the job itself. She cannot sell her position for $8 million when she retires, and if the employer eliminates her role, the income attached to it disappears.

The business owner may be working every bit as hard while simultaneously creating equity in something that can be sold, passed down, borrowed against or continue producing income.

This distinction shows up as you climb the income distribution. Brookings has found that investments and businesses accounted for 82% of income among the top 0.01% and 88% among the top 0.001%, compared with just 7% for the bottom 80%. Ordinary households get the overwhelming majority of their income through wages and retirement income; the mix changes dramatically at the very top. (You can start to see just how dramatically wealth inequality starts to come into play here).

As of the second quarter of 2026, Federal Reserve data shows the richest 10% of households held roughly 88% of corporate equities and mutual-fund wealth and about 85% of wealth in unincorporated businesses.

That is a staggering concentration of the assets that allow wealth to reproduce itself. Most Americans make money primarily by selling their time and skills. The wealthiest Americans increasingly receive money from things they already own.

This is how you get a large professional class that has achieved the income and consumption patterns we associate with wealth (the neighborhoods, the spending, the vacations) before necessarily achieving the ownership-based security underneath it.

To be clear: A high income gives you a very high capacity to build wealth. In fact, it may be the single most important resource most people have.

But at some point, if you want your financial position to be durable, something you own has to do some of the work that your salary currently does. This could be through investing, or real estate, or acquiring equity.

The real wealth-building advantage, in other words, is often turning work into an asset. Two people can work equally hard and earn similar incomes, but if one person’s labor builds equity and the other’s only produces wages, their financial trajectories can diverge dramatically over time.

The system is increasingly wired for owners

Much of America’s vast wealth inequality can be attributed to the growing divide between earned income and ownership, which is only increasing.

The Wall Street Journal recently reported on the historic divergence between corporate profits and worker compensation: corporate profits have captured a growing share of economic output while labor’s share has declined. And analysts warn that AI may accelerate this pattern by funneling more economic value to capital owners and shareholders rather than workers.

This split helps explain why ownership matters so much to who participates in economic upside. Because who gets these profits? Shareholders. And ownership of those shares is extremely concentrated, as the Fed numbers above show.

Plus, our economic system itself amplifies the earn/own divide.

Capital gains are taxed at lower rates than wage income. Business owners can deduct expenses that W-2 employees cannot. The compounding mechanics of the economy tilt toward people whose wealth comes from what they own rather than what they earn. When you earn a paycheck, you pay income tax before you can invest what’s left. When you own an appreciating asset, the gains compound untaxed until you sell.

This is also the bigger point behind something I’ve written about before in the K-shaped economy: People whose finances are heavily connected to appreciating assets can experience the same economy very differently from people whose finances depend primarily on wages.

This explains why most people identify as working class

A few weeks ago, Pew asked Americans whether they considered themselves “working class.” Sixty percent said yes.

That included half of college graduates and, remarkably, half of upper-income adults earning above $155,600. Pew also found that the label is partly cultural and political: Plenty of financially comfortable people identify as working class even when they report relatively low financial stress.

This may sound confusing, on the surface. But what “working class” means if you strip it down is often: I work for my money. My economic position depends on my continued labor. If I stop working, the money stops.

And that is an accurate description of how the vast majority of Americans, including very well-paid ones, are economically organized. It doesn’t matter whether you’re earning $55,000 or $355,000 if your entire financial life still revolves around a paycheck. Sure, the scale and material conditions are obviously different. But the structure is the same: you are on the labor side of the economy, and your security is contingent on continuing to sell your time.

This is the divide that gets lost when we use salary as our primary measure of economic position.

• Income tells you how much money is flowing into your household right now.
• Wealth tells you what you have accumulated.
• Ownership tells you how much of that accumulated wealth has the potential to keep producing value.

All of this trickles down into our culture and own money psychology:

• It explains why high earners often don’t feel rich. Our cultural image of “making it” is still a big salary, nice apartment, expensive vacations, etc. But someone earning $250K can still feel financially precarious if everything depends on keeping that job. They have affluence without much economic autonomy.
• It changes what status actually means. The old status markers were visible consumption: the car, house, watch, vacation. Increasingly, the ultimate luxury may be not having to work — owning a business, having investments, taking six months off, quitting a bad job. Optionality itself becomes a status symbol.
• It helps explain the obsession with “passive income.” Side hustles, rental properties, entrepreneurship, creator businesses, FIRE, stock portfolios … underneath a lot of these trends is the same aspiration: How do I stop exchanging every hour of my life for money?

No wonder the boring business is having a moment

AI has made the future of many white-collar jobs considerably harder to predict, while the price and value proposition of a four-year college degree is facing a lot of scrutiny. The credential-to-career-to-salary pipeline (the one that has dominated our idea of “making it” for decades) is looking quite shaky.

So people are pivoting into freelance work, content creation, and increasingly, buying up unglamorous businesses.

At the University of Virginia’s Darden School of Business, MBA students and alumni are increasingly looking to buy HVAC companies, plumbing businesses, electrical contractors, landscapers, and small manufacturers. Professor Les Alexander points to two forces driving the interest: these businesses tend to be relatively resistant to AI disruption, and millions of Baby Boomer owners are approaching retirement with businesses that need buyers.

The cultural fantasy of entrepreneurship used to center much more heavily on inventing something new: found the startup, build the app, raise venture capital, become Zuckerberg, etc. Now there is an entire ecosystem built around entrepreneurship through acquisition, where the goal is to buy the already-profitable roofing company that somebody else spent 30 years building.

I find that shift fascinating because it brings us back to The Everywhere Millionaire. For decades, our most visible stories about getting rich focused on extraordinary professional salaries or extraordinarily scalable startups.

But they skew our understanding of the much more ordinary machinery that creates wealth every day, in every city, in businesses most people don’t think about twice.

What ownership actually looks like (and how to start thinking about it)

I’m not telling you to quit your job and buy a laundromat.

Private-business ownership can be spectacularly risky. For one, the business can fail. Your wealth can become concentrated in one business, one location and one industry. Buying an existing company often means borrowing money (AKA being in debt). And unlike an index fund, you cannot sell a portion of a plumbing company from your phone because you suddenly need cash.

But maybe it’s worth asking: How much of the money I’m earning today is becoming something I will still own tomorrow?

For most people, the simplest answer has nothing to do with entrepreneurship. Your 401(k) is an ownership vehicle. So is an IRA. So is a taxable brokerage account. When you buy a diversified stock fund, you are buying tiny pieces of companies and giving yourself a claim on some portion of their future economic value.

That is why I care so much about investing consistently even when the dollar amount feels insignificant. A $100 investment can look laughably small next to a six-figure salary, but they represent different things. The salary compensates you for work you already did. The investment becomes an asset that can remain yours and potentially grow long after that particular month of work is over.

Real estate can provide ownership too, although buying a house at any price and labeling the result “wealth building” is how we end up doing some extremely questionable financial math. For others, owning a business will be the right path. You can start one, buy one, join one in exchange for equity, or build something alongside your existing career.

The shared characteristic of all these routes is that most of them are pretty boring (compared to what you may see on social media).

work → income → ownership → compounding → options

Our mental model of getting rich is badly distorted by selection bias. For every 25-year-old startup founder who gets a headline, a person who bought index funds for 30 years does not. The spectacular outcome is disproportionately visible, which makes spectacular, high-risk strategies feel disproportionately normal.

For most people, building wealth will involve far fewer breakthroughs and far more slow-and-steady-wins-the-race: gradually taking some of the money produced by labor and turning it into assets.

The gap between what you earn and what you consume determines how much room you have to make that conversion, which is why lifestyle creep becomes so consequential. A raise that can increase your assets can eventually change how dependent that life is on the next raise.

The bigger the gap between what you earn and what you consume, the more money you have available to make that conversion. (I wrote a guide on how to deal with this earlier this week!)

Money is supposed to fund your life. But, eventually, some portion of your income eventually needs to become something you own.

We spend a lot of time asking rich people how much they make. It’s an understandable obsession because salaries are visible, comparable and easy to turn into content. But ownership is the hidden layer that can build real, lasting wealth.

Most financial checkups ask how much you earn, how much you spend and whether you’re saving enough. Instead, let’s ask: How much of your financial life do you actually own? (For paid subscribers)

Yes, this is basically a 2026 remix of The Millionaire Next Door, which, ICYMI: The original 1996 book argued that many wealthy Americans look surprisingly ordinary because consumption and wealth are very different things. Zidar and Zwick add an important layer: some of those unassuming wealthy people didn’t simply save more than everyone else. They own the company.

As I’ve written about before, class and wealth are related, but they are not the same thing. Class includes all sorts of social information: where you went to school, what you do for a living, where you live, how you talk, what you buy and the people around you. Brookings has previously grouped definitions of the middle class into broad categories including cash, credentials and culture, which helps explain why somebody with a net worth on paper can see themselves as culturally middle class while someone with a prestigious six-figure job gets coded immediately as affluent. I think we have relied on class signals as proxies for wealth for so long that we have started confusing the two.

The tax treatment depends heavily on the asset and business structure, so “owners pay less tax” is too broad a statement to make. But U.S. tax law does treat some forms of ownership income differently from wages. Long-term capital gains can face a maximum federal rate of 20% before the 3.8% net investment income tax, versus a top ordinary-income rate of 37% in 2026; eligible pass-through owners can also deduct up to 20% of qualified business income. Short-term gains, interest and many forms of business income follow different rules.

There are plenty of cultural and political reasons for this. Pew finds that working-class identification varies by political affiliation even after accounting for income, education and financial stress, and Americans have always been weird about class labels.