Self employment key to wealth

NBR editor in chief Nevil Gibson notes the characteristics of many on the Rich List:

. . . High incomes are not necessarily the main factor, either, as often this is accompanied by lavish spending habits.

Indeed, a key feature of these ordinary millionaires is their rejection of flashy cars.

Another is that most are economically self-sufficient: from the start of their adult lives they have had to support themselves.

But most critical is the way they earn their living.

Self-employment gives you a four-times greater chance of becoming rich.

The type of business does not matter, so long as it is successful. Many of them are mundane, providing everyday goods and services.

You will find all of these characteristics in the profiles of the Rich List 2013. Businesses that are built up over a lifetime, or those continued successfully through several generations, are the foundations for fortunes.

A focus on business success, careful investment decisions and identifying entrepreneurial opportunities complete the picture.

The value of property, shares and bonds may rise and fall – but first you have to acquire it.

Very few get rich through wages and salaries alone.

Self-employed or not, the wealthy invest in assets which provide yields which enable their capital to grow.

Few if any will have got it right all the time.

Most, if not all will have lost considerable sums at some time because they got it wrong. But the successful ones learn from their mistakes, pick themselves up, work hard and succeed again.

The usual suspects from the left have greeted the publication of the rich list with cries of inequality.

But Gibson points out:

The past year has been a good one financially and this has benefited the majority as well as the select few.  . .

Another feature of many of the people on the list is their willingness to help others either through charitable donations or other means. this includes giving people opportunities in their businesses.

It’s called the rich list but it’s not so much a celebration of wealth as of success through hard work, risk taking and shrewd investment.

I doubt if any of the people on the list will say that money doesn’t matter. But if my experience of wealthy people is anything to go by, they will say it’s not important in itself but for the choices and opportunities it provides for them and for others.

The full list is here.

Those who like to sneer at Prime Minister John Key and his success might take some satisfaction in the knowledge that running the country hasn’t made him wealthier, in fact, if the NBR’s calculations are accurate it has cost him.

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