America's Real 1% Has Nothing to Do With Silicon Valley or Wall Street

In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributor Rachel Warren talks with Eric Zwick, professor of economics at the University of Chicago Booth School of Business and co-author of The Everywhere Millionaire, about the decade of research that rewrote what he thought he knew about wealth, inequality, and the American economy.

They discuss:

• Who actually makes up the top 1%.
• What these Main Street millionaires can teach public market investors about capital allocation and competition
• The economic indicators worth watching right now if you want to track the health of the businesses that actually power most of the country.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.

A full transcript is below.

This podcast was recorded on Oct. 25, 2026.

Eric Zwick: When you collectively add them up, they have more net worth than the Forbes 400 by an order of magnitude, so more than 10 times the collective net worth of the Forbes 400, even though individually, they're not as rich as Elon.

Rachel Warren: That was Eric Zwick, Professor of Economics at the University of Chicago Booth School of Business. On a group of Americans almost no one has ever heard of who collectively hold more wealth than the entire Forbes 400. I'm Motley Fool analyst Rachel Warren. Eric spent a decade working through economic data that most researchers never get access to, and what he found completely rewrites the story of wealth in this country. We get into who actually makes up the real 1%, what this hidden economy of Main Street millionaires means for investors watching the public markets, and the statistic that made Eric rethink everything he thought he knew about inequality. We hope you enjoy.

Welcome back to Motley Fool Conversations. I'm Motley Fool analyst Rachel Warren. Today, I'm delighted to welcome Eric Zwick, Professor of Economics and Finance at the University of Chicago Booth School of Business to the show. Eric is also the co-author of an incredibly eye-opening new book, The Everywhere Millionaire. Who is really rich in America and how they got there? Eric has spent a decade digging through economic data to shatter the myth that transformational wealth belongs only to Silicon Valley tech founders and Wall Street executives. Instead, this research has uncovered America's hidden 1%, the regional business owners, pass-through entity founders, and Main Street entrepreneurs, building generational fortunes completely away from the spotlight. Eric, it's wonderful to have you on the show. Welcome.

Eric Zwick: Thank you so much for having me. Great to be here.

Rachel Warren: One of the things that struck me is the core thesis of The Everywhere Millionaire challenges the popular narrative that massive wealth creation requires building a software giant or managing a hedge fund, and there are many other examples. When you look at the data, what does the typical member of America's real 1% actually look like?

Eric Zwick: Yes, so we're told that the path to prosperity is through Silicon Valley or Wall Street, you have to be a tech CEO or a VC-backed start-up founder or a Wall Street trader in order to get really rich in America. What we found through a decade of research, working with unprecedented administrative data that then in the book, we turned into stories by going out and finding these Everywhere Millionaires lurking in plain sight. Wealth is much more pervasive. It's much more abundant across the country. There are people running unglamorous businesses in towns and suburbs and Tier 2, Tier 3 cities all across the country, who are incredibly wealthy. Our average millionaires have an average net worth of around $25 million. They have minimum net worth of about $5 million. They are people who own a private business, and we estimate there are about three million of them.

That's a lot of people. When you collectively add them up, they have more net worth than the Forbes 400 by an order of magnitude. More than 10 times the collective net worth of the Forbes 400, even though individually, they're not as rich as Elon. They're just collectively this huge group of people that we really didn't know that much about, I think, for various reasons that we can talk about. Concretely, who are they? We do something we joke because we both have little kids, on and I, the ABC board book. The ABCs of getting rich. A is for auto dealers, B is for beer distributors, C is for contractors. D is for dentists and it could go on. But it's like that type of mid market business owner across a whole bunch of industries that are not super glamorous. These are the Everywhere Millionaires whose stories we try and tell in this book.

Rachel Warren: I think in the book as well, you call this group the stealthy, wealthy. I wonder why has this segment of the population managed to build this wealth, but very much away from the spotlight and even the radar of Wall Street?

Eric Zwick: We call them stealthy, wealthy, and some are maybe nefarious a little bit in their behavior, but many, they're just flying under the radar, but just not with anything untoward about their behavior. We call them the stealthy wealthy just cause people aren't looking for them in the right places. Looking away from the coasts. A lot of our attention is drawn to the coasts, where we tend to look in the media at public company activity. A lot of retail investors listen to a podcast. Public companies are specific subset of the American economy, and they disclose their information. You know what they are. They tend to be consumer-oriented businesses, not always. They tend to be in more capital-intensive sectors, so they have to raise capital to go public. This is not a representative pick of the American economy, and it's not the ballpark in terms of where people work, where the profits are.

More than half of the total profits in business across the country are in what we call pass-through businesses. These are non-public businesses. There's a ton of activity. Most businesses in the country are these pass-through businesses, non-public businesses, and they’re all over the place. I think the Forbes 400 is another example of when people think about who's really rich, they jump to the top of the Forbes list. Those are tech founders, typically public companies owners, and also people who are seeking attention in some cases by buying media companies. Our stealthy, wealthy are not actively trying to hide, although some are. One car dealer is notoriously referred to as Batman because everybody knows that he exists, but nobody's seen him. I think they just are running their businesses. They're not in these media markets, and they're doing their thing and enjoying it in a lot of cases, without a lot of attention at all.

Rachel Warren: One of the things that struck me I saw there was a comment on your book from the Nobel Prize-winning economist Angus Deaton, and he was saying that in his comment, there's currently five million households in America with over $5 million each running entirely below the radar. I wonder, what does that tell us about just the scaling capacity, but also the overall health of the U.S. consumer economy?

Eric Zwick: I think there's this fisheye lens view of the U.S. economy that is prevailing in the media narrative where it zooms in on Elon or zooms in on a few billionaires. Then it's like everybody is being left behind. I think the message from these stories is that there's a lot more opportunity for people to do incredibly well. We're not talking about people who just have a million bucks in a pension. We're talking about people who don't really have to think too hard about how they spend their money at this point. They're close to post economic, if not post economic, to use a term of art, where they basically, I want this. I'm going to buy it. There are millions of people like that across the country, and many of them weren't born with a lot of opportunities.

We figure that about a third we try and estimate this in various ways of our Everywhere Millionaires inherited businesses or come through that shortcut into prosperity as business owners, but that means the two thirds or maybe 70% either founded their business or bought one and grew it later in their careers. That's a lot of self made stories in the data. We tell some of these stories individually, **** Portillo from Chicago, who started out growing up in the Cabrini Green Housing Project and started a hot dog stand. He didn't actually know how to make hot dogs at the time. He didn't know how to steam a bun. Had an $1,100 investment initially. Built this thing incrementally with no outside investors, very little debt, just plowing his profits back into the business. It was the largest privately owned restaurant company by the time he eventually sold it because he didn't really want to pass it on to his kids. He was business, and so he was I'm going to sell it in his 80s, although he was annoyed to do it after selling it, he's told us he was bored. But he sold it for over a billion dollars, and we found him in yacht registration data.

He has a very large yacht, a 100-foot yacht called Top Dog. There are stories like this. He's an outlier within that class because he's more like a billionaire that people haven't heard of. But there are just tons of stories that look like him in the data, and I think it's quite inspiring, and it says that there's more opportunity available than I think the prevailing narrative. I think it's an optimistic take on the economy that you don't hear as often as maybe we should.

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Rachel Warren: What do you think maybe the primary misconceptions are among the public, among investors about where that real durable wealth is being generated right now?

Eric Zwick: Silicon Valley tech apps, influencer economy. These are terms that I think are the flashy Instagram reel images that we see about rich people. We don't see the trash bag liner manufacturer who supplies to all the McDonald's franchises. Then when he retired from that business, bought a submersible so he could hunt for actual treasure in the Caribbean from sunk in treasure ships. We don't see the guy who has 20 Wendy's franchises that he's built that portfolio of franchises over time running Wendy's, who's maybe a decca millionaire or something like that. These are unglamorous businesses. They don't draw our attention in the same way, even though the people are laughing their way to the bank.

They're not as entertaining to look at if you're swiping and scrolling. I think that's why there's just this misconception about it. But once you start to look for them, you do see them everywhere, even if you live in New York City, you actually can see them all over the place. I live in Chicago. I walk from work to school to drop off my kid. There's a beer truck that says Budweiser on the side, and on the side of the door is the name of the distributor. I'm — that's Reyes. That's one of the largest beer distributors in the country, incredibly wealthy, and most people haven't heard of him or that family, and their story is quite interesting in terms of how they rolled up distributors across the country over many decades. But there's that kind of thing. They're right all around us closer to home than you think. But you're not looking for them on your phone, you're looking for them in the world around you.

Rachel Warren: From your research into these Main Street businesses, I wonder what are some takeaways or a framework that maybe you can draw into evaluating public companies? If you're a retail investor listening to this conversation, what are maybe some lessons that can be learned from these private businesses that can be drawn into the health of the public markets?

Eric Zwick: That's a good question. I like that question. One is probably to think about competition a little bit more broadly. There's scope for competition from the private market in certain product lines. Thinking about when you're picking investments, it's not just about competition from other publics. It's competition from products that are being offered just by these Everywhere Millionaires and their businesses, and which ones are robust to that competition? Which ones have an opportunity to disrupt the sleepier Everywhere Millionaires in certain industries.

I think we've seen legal services, companies that are trying to enter and disrupt, say, these law practices across the country because there's tons of profit there. If you're looking for opportunities or growth, I think disrupting some of these businesses where they're not so focused on staying ahead or adopting new technology. I think it's quite interesting. We've seen a little bit of that with the software as a service. Is this going to be disrupted by AI or is it going to be complimentary with AI? I think we could think about some of these more tactile industries, fast casual dining or auto parts, or mid market manufacturing, making frozen quiches, like this stuff in big box stores.

Is AI going to disrupt all aspects of that business or is AI going to help with customer relations management is going to help with sales? What does that mean for some of the other stocks I'm looking at or some of the opportunities I'm looking at? I think it's useful to have a reminder that the economy isn't just zeros and ones and chips and code, that there's this much richer in the world three dimensional economy out there, and the stories might be a little different than the Magnificent 7. I think, as a public market investor, that's what we think about all the investors are flooding into those seven bets. What are some, maybe interesting contrarian bets? There's some thoughts I have on that question.

Rachel Warren: One of the other things that I was thinking about often, when we look at the public markets, we see some companies expend massive amounts of capital on dilutive acquisitions or even poorly time share buybacks. I wonder how do the stealthy, wealthy, as you call them in the book? How do they tend to think about capital allocation? Because I also think that there's often parallels that we can draw when we're looking at quality businesses in the public markets from what we see in terms of the actions taking place in the private markets.

Eric Zwick: I see some of these acquisitions or throwing capital back at investors through buybacks, it's the consequence of having run out of good ideas. In some cases the dilutive acquisition is, well, we see the writing on the wall with our main business line, which is trending down. In the absence of this acquisition, it's going to look even worse. It could still make sense to do it, even if it's not a great, it's not going to lead to salvation for the company. Stealthy, wealthy folks have the benefit of being able to grow without reinventing themselves in a lot of cases, as I mentioned, geographically or adding a few products like the chemical importer exporter that we profile can just find a few more customers can tell you hard to do, but because their market shares are so much smaller, it's an easier problem to solve to try and grow that business, at least conceptually. Sales is not easy if nobody's heard of you, so you really got to get in the door and go to the customers and talk to them and work that network for sure.

But they have a bit of an easier job growing, especially if they're in a growing industry, so then they can just ride those tailwinds. Big public company that's very established market leader. Dilutive acquisition might be the only game in town, or returning money to shareholders might be the only game in town. I think maybe the stealthy, wealthy version of that is, well, reaching the end of my life cycle going to retire. I don't know who's going to take over the business, so maybe I'll just sell this thing to private equity and ride off into the sunset on my yacht. That's what some of those stories look like. It's returning the money to shareholders, as opposed to burning the thing down to maintain control.

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Rachel Warren: It's interesting to think about how as investors in public companies who gain indirect exposure to these players just by nature of their relationships with some of these big players. When you were writing this book, as we get to the end of our time here together today, I'm curious, What surprised you the most in your research as you were learning about these Main Street entrepreneurs and their businesses?

Eric Zwick: I came at this thinking about the stories on especially like top inequality was maybe one of the early things that we thought about. Piketty’s Capital had just come out, that book that was all about. We're back in the Gilded Age. It's a new Gilded Age. A few billionaire industrialists that are taking over the whole economy. These massive companies, and that's where all the money at the top is. We started to look at, well, what's driving the top 1% share in income? Which in Picketty's book, the top 1% is this nameless, faceless group of people. You don't really get a lot of humans. We joke about the book as Piketty with people, but it’s like you actually meet these people that are in the top 1% and see what they’re doing and get a little bit about their stories from their own mouths. You're, Oh, this is not the typical one percenter or even 0.1 percenter is not like the money bags monopolist, Gilded Age person. It's like a private business owner with a mid market business. There are tons of these people. The top 1%. When we looked at narrow industries, the industry generating the most profits for their owners was doctors' offices. I was, Oh, doctors' offices, that doesn't feel like a capital intensive business at all.

That's really just they are running practices, they've structured as businesses, so they can pay themself a bit lower wages, but higher profits get better tax treatment, but also scale the business up and sell some of the services and so on, that doctors do. But there's just a ton of doctors, and healthcare is 18% of the economy, and a big chunk of it is not hospitals or pharmaceuticals. It's just services being provided by these people. I was, Okay, this is a totally different view on inequality and who's really rich than I entered and you just trying to answer that question. That blew my mind.

The more we talk to people or tell them about what we're learning in the data, not just economists or academics, but just like friends, family, people that we encounter, conferences, and so on, people that I play golf with. They just know all these people. They know these stories. They recognize the stories pretty quickly from their own lives, from their own backgrounds, from where they grew up, from people they know, their regional banker, from who they're lending to, the magnet manufacturer, this kind of thing. I think you realize they're all around us and we just haven't really been looking for them in the right way. It was very eye-opening to me, and I think a lot of people who have read the book, which was written not just to be collected, but also to be enjoyed and read, will have that eye-opening experience, I believe.

Rachel Warren: One final question for you as well. Just as investors who are hearing all of this and drawing on the lessons that you've showed us today, I also wonder, what are some key elements, metrics we can be looking at tracking the health of the economy, tracking the health markets. If I'm an investor listening, trying to see how can I be tracking the health of the economy and the markets over the next 12-18 months? What would you be looking at?

Eric Zwick: That's good. Thinking about these Everywhere Millionaires, some of the more aggregate, tangible retail sales, consumption data. These businesses are often selling, say, the fast casual dining. You're looking at those kinds of metrics. That's not just quarterly earnings, but really what's going on with consumption? Are people able to spend money or people pulling back because prices have gone up? I think that's an important thing going forward on the economy and that's where through a lot of these types of businesses, they'll grow if customers keep coming in the door and they'll stop growing. They won't close, but they'll stop growing if traffic slows down. Then if you're in the supply chain, there are a lot of cost shocks. We're looking at some of the PPI numbers to think about where are inputs, especially tight.

What are some of the second and third order effects of, say, energy prices going up? Well, fertilizer goes into food, so food costs, or you have all the distribution logistics and trucking and so on, that uses fuel. Well, that means like everything that moves around that needs to go from warehouse to consumer, warehouse to store. That's going to be more expensive. You track some of that stuff. A lot of them Main Street millionaires are running the businesses along that supply chain or in those input providing. You can see in some of the aggregate data that comes out of the statistical agencies, you can see the health of the economy that way. I think those are some of the problems that we face today. I'm looking at some of those statistics to see where things are going in the next 12-18.

Rachel Warren: Thank you so much for that, Eric. It's been so great to speak with you today, and for those who are listening or watching, check out Eric's new book co-authored with Owen Zidar, The Everywhere Millionaire: Who Is Really Rich In America and How They Got There. Thank you so much, Eric.

Eric Zwick: Thanks for having me.

Rachel Warren: To see the full interview, go to our Motley Fool Conversations YouTube page. As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. For the Motley Fool Hidden Gems Investing team, I'm Rachel Warren. Thanks for listening. We'll see you next time.

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