In early 2023, Jeff Bezos was worth approximately $107 billion. A year later – to make the math easier – he was worth $177 billion. That's a difference of $70 billion, which means he made a little under $8 million per hour last year.

Granted, that's not his per-hours-worked rate. That's his per-total-hours-in-the-year rate.

Which is the point. To use the old passive income cliche, Bezos made a lot of money while he slept because he's an owner, not an employee.

Hold that thought.

Many people want to be rich. (How you define "rich" is of course up to you; my "rich" may seem like pocket change to His Airness.)

Many don't. But if you do, you will never become incredibly wealthy by working for someone else.

Data backs up that statement. According to the IRS Statistics of Income Division's 400 Individual Income Tax Returns Reporting the Largest Adjusted Gross Incomes Each Year, 1992-2014 (the most recent report I could find), the average income of those on the list was $317 million.

How did they make their money? Here's the breakdown:

• Wages and salaries: 4.4 percent
• Interest: 4.2 percent
• Dividends: 10.9 percent
• Partnership and S Corp Net Income: 16.2 percent
• Sale of Capital Assets: 65.2 percent

Salaries are a tiny percentage of wealthy people's earnings. The same is true for stock dividends and interest. Owning a business, and maybe someday selling a portion or all of that business? That's where the money comes from.

If you don't trust the IRS, check out the top seven on the Forbes billionaires list. Arnault. Musk. Bezos. Ellison. Buffett. Gates. Bloomberg. All entrepreneurs. Each built incredibly successful businesses.

Each is an owner.

The same is true for the aforementioned Michael Jordan. Jordan owns, through his royalty agreements, a piece of Nike's Air Jordan brand.

He also owned, until recently, the Charlotte Bobcats. Sure, he got paid handsomely by the Bulls. He got paid handsomely for endorsements.

But the bulk of his fortune came from owning things – things that, as with Bezos – other people helped build and grow.

Amazon employees? They get paid a salary in return for effort. Fair enough. That's the nature of employment; I do this, you give me that.

When I stop doing this? You stop giving me that.

That's not the case for owners. Bezos has stepped away from day-to-day duties. But as long as Amazon continues to perform well, he still makes money.

Because he's an owner. He owns an asset that has value. He has the owner's mentality.

And so should you. 

While investing in stocks is a form of ownership – since you do own a piece, however small, of the company – your ability to influence the success of that company is nonexistent. You can only analyze, assess and hope.

The owner's mentality goes deeper. Taking owning a rental property. Sure, you might not make a lot of money, at least in the short term.

(While there are plenty of other considerations involved, a simple metric my wife uses is that each of our properties should average at least $800 in positive cash flow per month, a standard we've achieved because, well, she's a really, really smart real estate investor.)

Short-term income is great, but the real value of ownership is long-term: increased property values, building greater equity as someone else pays down the mortgage, and long-term, annuity-like income.

Yes, time and effort are involved. The income we get and the wealth we slowly build, isn't passive. But we also do make money while we sleep.

Also, keep in mind you can be an employee and embrace an owner's mentality. My wife works in health care. I work for other people, on a contract basis.

The only thing I own is the book I wrote a few years ago. (That's why I'm writing another one.) The key is to look for ways to own something or things, even if just on the side.

A contractor friend started a side business installing HVAC systems on the weekends. A few of his friends work with him, and he's slowly building a business with assets he can leverage to either grow or sell.

He's thinking and acting like an owner, not an employee. Will he get rich? Maybe so. Maybe not. Either way, he's taking a chance. You might see it as a risk.

But being "only" an employee is even riskier. In return for less freedom, less control, and less fulfillment, every day you go to work for someone else your upside is always capped. (And your downside is total, since you can lose your job at any moment.)

The downside for owning something is also total, but in return, you enjoy the possibility of an unlimited financial upside.

Maybe not a Bezos-level upside, but one that is surely greater than if you only ever trade your effort for pay.

 

Inc