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SBA: Average Self-Employed Person Has More Wealth Than People Working for Others

  • U.S. Small Business Office of Advocacy looks at wealth comparisons between self-employed and those who work for others
  • Business equity is a considerable driver of wealth, second only to home equity
  • Report cautions that certain factors skew the data, such as uncertainty over whether self-employed started with more wealth, created it, or both

Summary by Dirk Langeveld

People who earn their own income rather than working for someone else tend to enjoy more wealth, according to the U.S. Small Business Administration’s Office of Advocacy.

Using 2019 data from the Federal Reserve, the Office of Advocacy found that self-employed people were on average wealthier than those employed elsewhere. Overall, business equity accounted for 34 percent of non-financial assets in the United States, second only to home equity at 45 percent.

  • Higher net worth families were more likely to have business equity; 45 percent of families in the top 10 percent of net worth had this type of equity, compared to just 3 percent of families in the bottom 25 percent of net worth
  • Self-employed families have a median net worth of $380,000, four times as much as those working for others and twice as much as families of retirees
  • The SBA offered the caveats that the averages are skewed as a result of the relatively large wealth of a few families, and that it was unclear whether the higher net worth among self-employed families was a result of them starting with more wealth, creating it, or both
  • Business equity made up a considerably larger share of the non-financial assets of White families than it did for Black or Hispanic ones, and White families had a much higher median net worth

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