At the Money: The Data Behind America's Wealthy
Masters in Business
The episode explores the hidden landscape of American wealth, moving beyond the well-known Forbes 400 to examine 'Main Street' millionaires and private
Key takeaways
- For every public company CEO, there are more than 1,000 private business owners worth at least $25 million.
- The Forbes 400 accounts for only 3% of total U.S. household wealth, while Main Street millionaires hold 40%.
Main topics
- Private business ownership
- Wealth distribution disparities
Notable quotes
The Forbes 400 list receives 50% of all news coverage on wealth.
Conclusion
The episode provides a data-driven reality check that challenges the p
Transcript preview
Speaker 1 (0:00) AI is entering its most consequential phase where scale, safety and sovereignty will determine who leads and who lags. Join Bloomberg Tech in London on November 2nd and 3rd as global leaders across business, finance and policy examine the defining trade-offs shaping the future of AI. Thank you to our presenting sponsor, Salesforce, and supporting sponsors, IDA Ireland and Schneider Electric. Learn more at BloombergLive.com slash Tech London. Speaker 2 (0:32) Bloomberg Audio Studios. Podcasts. Radio. News. Speaker 5 (0:44) America is a rich nation, but I want to get granular as to exactly how rich, who is rich, and how they got that way. The data is astounding. To help us unpack all of this and what it might mean for your personal prosperity, let's bring in Owen Zedar and Eric Zwick. They're professors at Princeton and the University of Chicago, respectively, and they are the authors of a fascinating new book. the everywhere millionaire, who is really rich in America and how they got there. And if you're listening to this, be sure and check out part one, where we discuss a lot of the findings in the book. Today, I really want to talk about the data, which really is very mind-blowing. Let's start out with the thousand to one ratio, private owners versus public CEOs. For every wealthy CEO, there are more than a thousand private business owners worth at least $25 million in net worth. That blew my mind. Tell me a little bit about that. Speaker 3 (1:49) Yes. So it's a great statistic. It started out when we were thinking about the pass-through income and the growth of pass-throughs. Let's add up all the income for top 1 % pass-through business owners. And what's Speaker 5 (2:01) a Speaker 3 (2:01) good reference for that to make the point that this is a huge, surprisingly huge group? Well, let's look at CEOs in the ExecuComp data set. which is roughly the S &P 1500. And it takes the CEOs, the CFOs and adds up their salary plus at the market values of their options. And you say, okay, add that up. And it turns out they're just swamped in size by the pass-through income flows for the pass-through business owners because they're just way more of them. And they're all across the industry, all across the country. We're talking about 1500 CEOs plus another thousand CFOs or like top execs. And we're talking about like over a million of these top one to 0.5 % business owners. Speaker 5 (2:45) A million and a half people worth $25 million or more who are not running public companies. It's amazing. Let's talk about something even more finite, the Forbes 400. You guys explain how much Main Street swamps the 400. The Forbes 400 list receives. 50 % of all news coverage on wealth. Its members hold only 3 % of total U.S. household wealth. Meanwhile, Main Street millionaires are worth 13 times more the total combined wealth of the Forbes 400, accounting for 40 % of all household wealth. That data is just mind-blowing, especially how lopsided the media coverage is on the billionaires in the Speaker 4 (3:35) Forbes 400. To us, that's one