Episode summary
Wealthy People Are Hiding in Plain Sight (ft. Owen Zidar) | Rational Reminder 428
The Rational Reminder Podcast
· · 1 hr 15 min · Hosts: Benjamin Felix · Guests: Owen Zidar
Summary
Owen Zidar argues that most wealthy Americans are not celebrity founders or Wall Street financiers, but ordinary business owners in unglamorous industries such as auto repair, construction, dental services, distribution, and convenience stores. Using Treasury data on every firm and tax filer, he says private business ownership has become a much larger source of income at the top, helping explain a big share of the rise in top 1% income concentration.
The conversation emphasizes that wealth is usually built through ownership rather than wages, often over decades, and that early labor-market experience matters more than starting capital for many would-be entrepreneurs. Zidar says the typical wealthy business owner is older, often male, and often started in an industry that later made ownership likely. He also argues that the labor share has fallen materially, partly because owners now keep more of the gains from productivity growth and partly because non-competes, consolidation, and local market power weaken worker bargaining power.
Zidar also stresses that macro forces helped propel wealth accumulation: lower interest rates, tax cuts for business owners, deregulation, and globalization all boosted valuations. He sees private equity as potentially useful for financing and operational support, but also a channel for consolidation and pressure on workers. On policy, he points to healthcare costs, the tax code, and the minimum wage as places where reform could support workers without crushing business dynamism.
Key takeaways
- Owen Zidar says the typical rich American is a business owner in a mundane industry, not a celebrity founder or a finance executive.
- He says private business now accounts for a much larger share of income at the top, and explains more than half of the rise in the top 1% share.
- Zidar argues that early domain expertise matters more than access to capital for becoming an entrepreneur.
- He says the labor share has fallen because owners capture more of productivity gains and because non-competes and local consolidation weaken workers.
- He sees lower interest rates, tax cuts, deregulation, and globalization as major drivers of wealth gains for private business owners.
Notable quotes
“the way you get rich is by owning, not earning”
“They're often ordinary business owners who've gotten extraordinarily rich running unglamorous private businesses”
“if you look at at say the top one sorry top.1% of income in I'll give you a few numbers”
“only about 20% comes from finance and real estate. U the majority come from every other industry”
“the way you get rich is by owning not earning typically”
How the episode opens
The way you get rich is by owning, not earning. We have some of the coolest data that's ever been assembled on the rich in America. And her conclusion, she told me um for herself, she said, "If I could give my daughter $40 million or zero, I would give her zero."
Welcome to episode 428 of the Rational Reminder podcast. I'm Ben Felix, chief investment officer at PWL Capital. — And I'm Cameron Passmore, chief executive officer at PWL Capital. Today, Ben, we were joined by Owen Zedar, professor of economics, financial researcher, and co-author of the book, The Everywhere Millionaire. And Owens, a professor of economics and public affairs at Princeton. Uh, in the episode, we talk about the unglamorous industries behind most fortunes, uh, what the inequality debate misses, and how the rich spend their money and their time. Super interesting.
Super interesting. As always, stick around to the end to hear our thoughts about the conversation with Owen. But for now, let's get into the episode. — Owen Zadar, welcome to the Rational Reminder podcast. — Thanks for having me. — Owen, what's wrong with a common perception of what it means to be wealthy? You
Know, most people think that the way you get rich is to be like Elon Musk or Jamie Diamond or Taylor Swift. And when you look in the data, that's just not actually at all who the typical rich person is in America. They're often ordinary business owners who've gotten extraordinarily rich running unglamorous private businesses.
Uh so I have a three young kids and so I read a lot of kids books and the we've half jokingly talked about writing the ABCs of getting rich for the children's market. It's like A for auto dealer, B for beverage distributor, and C for um construction worker or sorry contractor.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- wealth concentration
- tax policy and inequality
- entrepreneurship
- private equity
- interest rates and wealth valuations
Watch the episode
Watch “Wealthy People Are Hiding in Plain Sight (ft. Owen Zidar) | Rational Reminder 428” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The Rational Reminder Podcast, this episode and its artwork belong to Benjamin Felix, Cameron Passmore, and Dan Bortolotti. Octagon is not affiliated with the show; this page is an independent summary.
