The Everywhere Millionaire

 

Hot off the press after coming back from the Cameron Highlands, I've been reading this cool book by Zidar and Zwick called The Everywhere Millionaire. It continues a line of books that began with The Millionaire Next Door by sociologist Thomas Stanley, and this time it's written by economists armed with lots of government data.

When you use data to figure out what millionaires are actually like, you risk the insights not transplanting into another society like Singapore.

The only thing I found useful is the millionaires' affinity for mischief and rule-breaking as kids, which I also observe among Singapore businessmen. I find this isn't sufficiently emphasized in local business literature; sometimes you need a level of non-conformity to do well in entrepreneurial pursuits.

Another point the book keeps repeating is that rich, successful millionaires all use some kind of pass-through tax instrument to make their money. These are similar corporate entities like Sole Proprietorships and LLPs in Singapore. It works because, as it turns out, large corporations face much higher tax rates than individuals, so companies that use these pass-through instruments can achieve massive tax savings, even though these rates are astronomical compared to Singapore figures.

The book then explains why these tax loopholes are maintained by the same wealthy people through political lobbying via PACs, or Political Action Committees, and the book frames one of the biggest problems in America as that these millionaires can use their wealth to influence political outcomes that seem to help "small businesses" at the expense of the American consumer, like blocking corporations from cutting out the middlemen to sell cars at a lower price. 

In such a case, I'm more reluctant to condemn American business lobbyists or the inequality inherent in their system.

Starting a business is a high-risk endeavor, and failure rates are high regardless of where you do it. Maybe America's strength is that business winners eventually gain the privilege of maintaining their wins through political lobbying, encouraging constant entrepreneurial risk-taking. 

Maybe as Singaporeans we should not be too hasty to judge.

But I do wish that NUS or NTU would perform a similar study in Singapore. 

Without the data, my intuition is that our local millionaires are mostly the folks who own landed property and real estate along Bukit Timah Road, or those who run legal and medical practices in Singapore.

Do you think a similar study in Singapore would be controversial?