Pentamillionaire Facts and The Invisible Hand
Amount of wealth required to be in the nation's top 1%: More than $5,000,000
Number of U.S. pentamillionaire ($5m) households in 2007: 930,000
Number of U.S. pentamillionaire households in 1997: 232,000
Percent of the nation's big family fortunes that are less than 13 years old: 70%
Percent of pentamillionaires from passive investments: 10%
Percent of pentamillionaires from inheritance: 10%
Percent of pentamillionaires from either starting their own business or working for a small company that experienced explosive growth: 80%
How most pentamillionaires acquire their wealth: They make up their minds to solve a problem or do something better than it's been done before. And almost all of them made their fortune in a big lump sum after many years of effort.
Source: SmartMoney Magazine, based on a wealth study by the Harrison Group.
Bottom Line: Most wealth is not inherited, and most fortunes are not made passively in the stock market. Rather, wealth and fortunes are mostly created by many years of hard work and effort directed toward "solving a problem or doing something better than it's been done before." In other words, in the self-interested pursuit of wealth, entrepreneurs are led by the "invisible hand" to solve other people's problems, or produce new products for other people, or produce existing products more efficiently for other people, to the great benefit of everybody in society.