I spent 5 years studying millionaires — and yes, you can get rich working for someone else
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In my Rich Habits Study, I interviewed 233 wealthy individuals (177 of whom were self-made millionaires) with at least $160,000 in annual gross income and $3.2 million in net assets.
When most people think about self-made millionaires, they imagine some entrepreneur working around the clock, passionately toiling away in the pursuit of greatness.
Yet, 39% of the self-made millionaires in my study became rich working for someone else. How did they do it?
I discovered three ways employees were able to strike it rich:
1. Save and invest 20-30% of income
Saving your way to wealth is the safest way to accumulate wealth. It is also the slowest. It took the average self-made employee-millionaire in my study 32 years to accumulate their wealth.
By assiduously saving 20-30% of their income every year and investing it diligently, they were able to accumulate an average of $3.3 million. Most of their investments were in stocks and real estate.
2. Work for a big publicly-held company in a good industry
Other employees in my study worked for big, publicly held companies in an industry where profit margins were very good or in an industry that was growing. These employees were often beneficiaries of generous stock options or employee stock purchase plans.
Because the stock of the companies they worked for continuously appreciated, the stock they received provided the lion's share of their compensation packages and made them rich.
3. Sales commissions
The sales workforce is the engine of growth for most companies. Big companies rely on their salespeople to grow their revenue. Salespeople often receive commissions, in addition to their base wage. The best salespeople get the biggest commissions and can become extremely wealthy selling products or services for their employer.
Working for someone else takes most of the risk out of the pursuit of wealth. You don't have to worry about working capital needs, profitability, meeting payroll, or expenses like business owners do. You can focus on one thing — whatever it is you do for your employer.
From my research, the key is finding a company to work for in an industry that is prosperous and growing. These companies pay their employees generously and are often publicly held companies whose stock is listed on some stock exchange.
There are many paths to wealth. Not every self-made millionaire got there by running their own business.
Thomas Corley 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."