I spent 5 years analyzing how rich people get rich — and found there are generally 4 paths to wealth (2024)

Our experts choose the best products and services to help make smart decisions with your money (here's how). In some cases, we receive a commission from our partners; however, our opinions are our own. Terms apply to offers listed on this page.

• I spent five years interviewing millionaires, trying to figure out how they amassed their wealth.
• After analyzing my research, I determined there were generally four paths to wealth, which often overlap: the Saver-Investor, the Big Company Senior Executive, the Virtuoso, and the Dreamer-Entrepreneur.
• Almost anyone can be a Saver-Investor, while becoming a Virtuoso or a Big Company Senior Executive is harder and more risky.
• Find a financial advisor near you with Smart Advisor.

The top 5% of households in America reported $197,651 or more in income in 2016, according to theTax Foundation. This same top 5% controlled 60% of the nation's wealth, according to theFederal Reserve Survey of Consumer Finance.

This 5% run big companies, run small companies, employ millions, hire and fire employees, invest in new companies, liquidate old companies, increase or decrease wages, and essentially control the lives of the other 95%.

This 5% can, and does, alter our lives, for better or for worse.

So, what do these people actually do that made them so rich?

I devoted five years of my life to answering that question. In my Rich Habits research, I interviewed 233 wealthy people over five years (177 of whom were self-made millionaires) with at least $160,000 in annual gross income and $3.2 million in net assets. I then wrote a series of Rich Habits bookssharing the data I had gathered.

Here's a snapshot of that data, as it relates to how the rich get so rich:

• 13% were salesmen/saleswomen
• 28% had some professional designation; some worked for big companies, others in a small business
• 63% took a personal financial risk in search of wealth
• 41% were "B" students
• 29% were "C" students
• 68% had a college degree
• 25% had a postgraduate degree
• 86% worked more than 50 hours a week

If you were to boil it down, the rich became rich by pursuing wealth in at least one of four ways — though I found there to be overlap between all four paths:

• 49% were Saver-Investors, or average people with modest incomes who consistently saved 20% or more of their income and prudently invested their savings over a period of 32 years
• 18% were Big Company Senior Executives
• 7% were Virtuosos, or top experts, in their field
• 51% were Dreamer-Entrepreneurs (Twenty-seven percent of these Dreamer-Entrepreneurs failed at least once in business)

Path 1: Saver-Investor

The Saver-Investor Path is one almost any person can take. It has only two rules you must follow:

1. Save 20% or more of your income by living off of 80% or less of your income, and
2. Consistently and prudently invest your savings.

According to my Rich Habits Study, this chosen path took 32 years to accumulate an average of $3.3 million.

This path is not for everyone. It requires enormous financial discipline and a long-term commitment.

Path 2: Big Company Senior Executive

Working for a big company and rising up the ladder into senior management is another path to riches. In most cases, the wealth these self-made millionaires accumulate comes from either stock compensation or a partnership share of profits.

This path is also not for everyone. You must devote yourself to one company for a long time. And there are risks: The biggest risk is that you could lose your job.

A secondary risk is profitability. If the company struggles financially, for whatever reason, your time investment in the company may not be rewarded to the extent you expected.

Path 3: Virtuoso

Virtuosos are people who are the best at what they do or possess knowledge that sets them apart from the competition.

Becoming a Virtuoso requires an enormous investment in time and often money.

Skill-based Virtuosos devote themselves to many years of Deliberate Practice and Analytical Practice. Analytical Practice often requires the services of a coach, mentor, or expert who can provide immediate feedback. This feedback, in most cases, costs money.

Knowledge-based Virtuosos must spend many years in continuous study. Often this requires formal education, such as advanced degrees (Ph.D., medical degrees, law degrees, etc.).

Again, this path is not for everyone. Not everyone has the ability to devote significant hours every day practicing their skill or the financial resources to pursue advanced degrees.

Path 4: Dreamer-Entrepreneur Path

The Dreamer Path requires the pursuit of a dream. This might be starting a business. It might involve becoming a successful author, musician, actor, or artist. Or it might be the creation of an app, product, or some unique service that provides added value to a significant number of people.

You can see there's more than one way to build wealth — but none of them are easy.

Thomas C. Corley, CPA, CFP, is the author of "Rich Habits: The Daily Success Habits of Wealthy Individuals," and "Rich Kids: How To Raise Our Kids To Be Happy And Successful In Life." Follow him on Twitter @RICHHABITS.

• Read more:
• People always ask me how much money it takes to be wealthy, and after studying millionaires for 5 years I know what to tell them
• After asking nearly 200 self-made millionaires, I can tell you there are 3 primary ways they got rich
• I interviewed more than 200 millionaires, and about half of them followed the same straightforward path to wealth
• After studying millionaires for 5 years, I can tell you many people think about what it takes to get rich all wrong