Dick Portillo started his hot dog business with about $1,000 and a shack that had no running water. He washed the dishes in his family’s bathtub. Decades later, he sold the company for roughly a billion dollars, which makes him one of the starkest examples of how boring businesses quietly create American wealth.
He’s not an outlier. Economists Owen Zidar and Eric Zwick spent more than a decade in the Treasury Department matching anonymized tax returns to the private businesses behind them. They found roughly 3 million private business owners worth at least $5 million each, who together hold more than ten times the wealth of the entire Forbes 400.
These aren’t tech founders or Wall Street tycoons. They own beer distributors, car dealerships, HVAC companies, dental practices and trash-bag-liner manufacturers. These boring businesses typically have 10 to 50 employees and took decades to build.
Most of these owners didn’t start out rich, either. The majority of founders behind successful businesses grew up in families outside the top 10% of earners, and only about 23% of top-earning business owners inherited their companies.
Owen and Eric join the show to talk about their book, The Everywhere Millionaire, and what it means for anyone thinking about starting or buying one of these boring businesses. They cover how to find an edge, why retiring baby boomers are opening up opportunities, and how to run small experiments without betting the house.
Key Takeaways
The biggest ideas from the conversation
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- Private business owners hold more wealth than billionaires: Roughly 3 million private business owners have a net worth of at least $5 million, averaging about $25 million each. Individually they’re nowhere near Elon Musk, but as a group they hold more than ten times the combined wealth of the Forbes 400.
- The richest Americans often run boring businesses: Beer distributors, car dealers, HVAC companies, mid-market manufacturers, dentists and lawyers fill the ranks of the top 1%. These boring businesses usually have 10 to 50 employees and $10 million to $50 million in revenue, and they drive more than half the rise in top 1% income share.
- The edge comes from years of experience: Most owners spend years learning an industry first. Larry Miller, for example, worked in a Toyota parts department before he bought dealerships. The average founder of a star business is in their late 30s or early 40s, and the typical owner is in their late 50s or early 60s.
- Retiring baby boomers are selling their businesses: A wave of baby boomer owners want to retire, and many of their kids don’t want the business. Buying one of these boring businesses means the idea is already tested, and seller financing can keep the previous owner invested in its success.
- Fund experiments with profits, not debt: Successful owners focus on profitability early and reinvest cash flow instead of borrowing, so no single failed experiment wipes them out. Reinvesting through the business also reduces taxable profits, which makes growth cheaper than pulling money out and investing it elsewhere.
- Concentration builds wealth; diversification protects it: Star business owners stay deeply concentrated in one business for years and carry a lot of idiosyncratic risk. Zidar and Zwick suggest diversifying by moving profits outside the business into retirement accounts, index funds or real estate, and keeping enough of a cushion to cover basic household needs.
Resources
Links, tools and references mentioned
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Buy a retiring owner’s business or build your own?
Find the ownership path that fits your money and risk.
Find your path
The Everywhere Millionaire
Owen Zidar and Eric Zwick’s book on the private business owners and boring businesses behind most American wealth.
Get the book
The Everywhere Millionaire on Substack
More research and data from Owen and Eric.
Read the Substack
The Millionaire Next Door, by Thomas J. Stanley and William D. Danko
The classic book Paula and the guests compare with the tax-data findings in this episode.
Get the book
Chapters
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Note: Timestamps are approximate and may vary across listening platforms due to dynamically inserted ads.
| 02:20 |
Why 3 million business owners outweigh the Forbes 400 |
| 06:13 |
The overlooked businesses behind America’s quiet fortunes |
| 11:22 |
Why retiring owners could be your buying opportunity |
| 17:31 |
Own all of something small, not 2% of a unicorn |
| 21:36 |
Buy a business or start one? |
| 29:24 |
How to fail small without getting wiped out |
| 34:35 |
What yacht and private jet data revealed |
| 44:20 |
Most successful founders didn’t grow up rich |
| 1:06:31 |
Double down or diversify once it works? |
| 1:18:51 |
Should you leave a high-paying job for this? |
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