Hello Entrepreneur

The fastest (and most sustainable) way to become a millionaire

Rachel Rodgers

10 Sep 2021
8

Many personal finance “experts” talk about curbing your spending habits and tracking every dollar and cent going in and out of your bank account in order to build wealth.

Here’s the problem. The focus tends to be on cutting back to save money instead of building and expanding to generate money.

We spend too much time brainstorming ways to reduce our spending instead of coming up with ideas to increase our earning potential.

I can tell you from experience — you can’t grow to 7 figures by cutting out the things you enjoy or by pocket-watching yourself to the point that your joy, convenience and freedom are severely limited.

Based on my own journey toward becoming a self-made millionaire, I’ve discovered that there are three paths to building wealth. Thomas C. Corley, the author of Rich Habits, also identified these three paths after studying a group of self-made millionaires.

The first path is what most personal finance experts tell you to do — cut expenses, cut coupons, save, save, save, and wait a long, long time. But it would take you, on average, 32 years to reach 7 figures this way.

The second path is working your way up the corporate ladder. It would take you less time to become a millionaire this way than the “save ‘til you drop” route — about 25 years instead of 32 — but it would still require you to be entrepreneurial by looking for opportunities to be paid for your performance, with metrics like commissions or profit sharing, recognizing how you add value to the company, and asking to be paid based on that value.

The truth is this... The fastest path to building real wealth, the kind of wealth that will serve you for generations, on your own terms, is entrepreneurship.

And for systemically marginalized folks — Black people, people of color, women, queer folks, disabled people, and other groups who have been historically disadvantaged — building a business is far more realistic to generate sustainable wealth than saving or climbing the corporate ladder.

Here are a few reasons why:

Saving from a salary is not practical for most marginalized folks.

When you belong to a historically marginalized group, you’re more likely to earn less than your typical white, cis men counterparts. This makes it harder and more time-consuming for you to save your way to 7 figures. I’ve mentioned these stats before, but I’ll mention them again because they’re relevant and important: on a white man’s dollar, white women make 79 cents, Black women make 62 cents, Native American women make 57 cents, and Latina women make 54 cents. Also, disabled people are less likely to have a paid job and typically earn significantly less than non-disabled people. When we earn less, we save less.

On top of earning less, women and people of color face more barriers to accessing employee share ownership as a wealth-building strategy, resulting in even less opportunities to earn more and put aside some income into savings. Also, Black people and POC are statistically far less likely to start their financial legacies with an inheritance or some kind of monetary assistance from family. Not only do we start our lives at a disadvantage financially, we also have more difficulty investing and saving because we often have the burden of clearing debt, taking care of sick relatives, and supporting our immediate and extended families — all of which requires us to direct our money away from ourselves.

Climbing the corporate ladder is not realistic for most marginalized folks.

The wealth gap between white men and systemically marginalized groups is the result of centuries of injustices and policies created to stifle the economic potential of women and Black, brown, queer, and disabled people. This systemic bias is baked into the corporate workplace structure and prevents marginalized folks from advancing in their careers.

Black workers often face labor market discrimination, which results in less opportunities to secure jobs that pay well, with benefits and opportunities for promotions and other forms of career advancement. Of America’s top 500 companies, only 1% have a Black CEO and 16 of these companies have reported that 85% of their senior executives and board members are white men. And in the United Kingdom, only 1.5% of senior roles are held by Black people.

Queer people, Black people, and POC face higher levels of discrimination, job loss, reduced work hours, and wage disparity in the corporate world. The COVID-19 crisis has made this even worse, especially for women, Black people and people in the LGBTQIA+ community.

To say that marginalized folks have a much harder time climbing the corporate ladder and face many more barriers to career advancement is not just an assumption. It’s a fact, and it’s been keeping people financially oppressed for far too long.

The solution for marginalized groups is entrepreneurship.

Here’s something I bet you’ve never heard a finance expert say before: the average sustainable business can take you to $7 million in revenue within 12 years.

When you think about the fact that saving your way to a million would take you, on average, 32 years, while climbing the corporate ladder would take you 25 years (and keep in mind, these paths take even longer or are downright impossible for marginalized folks), the fastest way to hit 7-figure territory is by building a sustainable business.

When you build a business, you are building a valuable asset that can create consistent cash flow, month after month and year after year. This particular path to 7 figures takes half the time and can lead to greater financial rewards. By no means is it an easy route to creating wealth, but it has the potential to change you and your family’s lives forever.

Entrepreneurship done the right way opens the doors to earning a level of income that allows you to not only have the money you need to take care of your family, but also to give you the disposable income to save, invest, and reinvest in your business. As a business owner you get to dictate your price, your offer, and the amount of work you have to show up to do. You get to charge according to the value you bring to the table, not according to a broken hierarchy of fixed incomes.

Even in the face of so many challenges and injustices, recent studies have shown that business owners from disadvantaged groups, specifically women, the Latinx community, and men of color, are starting to outnumber white, men business owners. There is hope because of our resilience, our independence, and our desire for more.

But there is still room for improvement.

Although the opportunities to create businesses do exist, there is much to be done when it comes to opening doors to marginalized folks who want to start their own businesses and grow them successfully.

Our research at Hello Seven has shown that a whopping 67% of women-owned businesses in the United States are making $24,999 or less annually. And only 2% of women-owned businesses are making 7+ figures annually.

Historically, Black and Latinx entrepreneurs have often been denied access to capital and networks that support business ownership, and have less access to well-capitalized social networks than their white counterparts.

And entrepreneurs of color and LGBTQIA+ entrepreneurs are consistently underrepresented in the media, giving us less inspiration and drive to achieve our big dreams.

These realities motivated me to create Hello Seven — to not only show all marginalized folks what’s possible for them, but to also teach them the exact, tangible steps I took to become a self-made millionaire so that they can apply them to their own businesses. To open doors for them that they wouldn’t otherwise have access to. To create a community of badass entrepreneurs that can learn from each other and support each other.

As a Black woman from a low-income background, I have experienced the life-changing effects of owning and growing a successful business from the ground up.

When I was a child, my family was on public assistance. As a college-aged adult, I used to overdraft my bank account on a weekly basis. Now, I am a millionaire. Entrepreneurship made that happen (in about 7 years).

I want you to know that you can have this transformation, too — no matter your background, where you’re at in life right now, or what society has said about you.

In my next article, I’m going to talk about why you should shoot for 7 figures and why 6 figures isn’t enough. My reasons might surprise you.

In the meantime, I want you to think about three things this week.

1. What skills do you currently have, or want to learn, that can help you create wealth?

2. What can you do that’s profitable without needing a ridiculous amount of capital to get started?

3. What is your dream monthly revenue goal, and how can you make that possible?

Stay tuned! We have more mindset shifts, business strategy and “how to”s coming your way. Watch this space.

xo,

R

8

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8 comments

  • Nicole Lapin
    Writes The Money Minute
    Yes! So important to build a plan for sustainable growth!
    • 33 w
  • Demetrius J Bagley
    A1: want to improve my collaborating with others; sharpen my sense of small business financial data & reports in a robust yet layperson’s way


    A2: producing more diverse (and virtual) astrology events…
    See more
    2
    • 35 w
  • Robert Hartwell
    Rachel, I love this so much. It answers what Black people have always done to survive - look within and use what we have. This article is spot on. I’m most excited to dig into “What skills do you currently have, or want to learn, that can help you create wealth?”
    2
    • 35 w
  • Cassandra Woodson
    I know this is true. I had just started to turn the corner and make money in my afterschool program when I suddenly had to shut down. I am working a 9-5 currently, but I plan to reopen my center within the next year. It's hard work, but so worth it.
    • 35 w
  • Tiffany Lee
    Great questions Thanks!
    • 35 w
  • Pelagia Komni
    Excellent thoughts (as always) by Rachel!!!
    2
    • 35 w
  • LeaRose Powell-Ellis
    I believe this to be so true. I finally left my directors position because my male boss who is a man of color could not handle my level of knowledge and felt threatened that he would be seen less. If I was able to implement new systems to increase cust…
    See more
    • 33 w
  • Elle Jones
    So good!
    • 33 w
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