The Tried and True Path to Multimillionairedom

Are you interested in understanding what it takes to become a multi-millionaire? I’m Chris Volk and I’ve been interested in wealth creation for a long time. I’ve taken three outperforming companies public on the New York Stock Exchange, conceiving and co-founding two of them. Along the way, I devised business model efficiency metrics centered on the Value Equation, a formula I devised to determine company equity creation yields, which are a prime driver of financial success. That approach led me to write a book on business wealth creation called “The Value Equation: A Business Guide to Wealth Creation for Entrepreneurs, Leaders and Investors.”

Starting this month and over the next year, I plan to release two short videos a month that will walk you through the financial drivers of business wealth creation. The approach and the formula hacks are all mine and are not widely applied. I wrote the book and am doing the video series to see if I can change that. Understanding the most taken path to achieving personal multi-millionaire status should not be a secret.

Getting To Be Worth a Million Dollars

There’s an abundance of accessible financial planning advice that can help make most households millionaire households. That advice customarily involves avoiding debt, living within your means, saving money and then having that money work for you by investing it.

Inclusive of home values, almost 20% of US households achieved millionaire status in 2023. Were you to add the values of household social security annuities or retirement plans, that figure would have been meaningfully more.

Given 2024 median household income of $84,000 and the long-run average return for a globally diversified portfolio of stocks and bonds approximating 7% you’d need to set aside about 6% of your income annually over forty years to achieve savings comparable to today’s millionaires. This sounds easier than it is.

Becoming a Multimillionaire

Becoming a millionaire requires a generous amount of discipline. But note this: Achieving multimillionaire status is almost twice as hard. Inclusive of home values, there are almost 1.9X as many households having a net worth of $1 million as there are households achieving the entry-level multimillionaire status of $2 million. Without question, saving $2 million is flat hard unless your household happens to benefit from high salaries that enable more investments.

Given that saving $2 million is an accomplishment, how do households save up $5 million or more?

The most common answer to this question is that people become multimillionaires by owning large stakes of equity in a business. Frequently, multimillionaires founded a business. But they are also likely to come from the ranks of business leaders having generous amounts of stock in the companies they work for. The richer one is, the more likely it is that the source of that wealth comes from business equity ownership.

Every member of the Forbes 400 list of wealthiest Americans owes their fortune to hitting a business valuation jackpot. But the importance of business ownership to personal wealth creation starts long before that lofty number.

Business Model Dynamics

A common characteristic of businesses that give rise to multi-millionaire leaders is that they become worth more than they cost to create. This probably sounds obvious. But about half of Americans work for small businesses, most of which never rise to become worth more than creation cost. Business owners often have the enjoyment of working for themselves in what amounts to an exercise of personal job creation, rather than personal wealth creation.

All business begins with a concept for a customer deliverable. The open secret is to wrap that product or service into a solid business model capable of delivering wealth.

Sometime back, I determined that there were just six high level financial business model variables that mattered most. They became the Value Equation. And with just a dozen variables, you can create a complete high level corporate financial model. To keep it simple, the variables are all relationship variables, meaning that numbers are not essential to understanding corporate business model dynamics.

Of course, inserting numbers into the Value Equation and into the Value Equation Universal Business Model, which will be laid out for you in the video series, ultimately matters a lot. The bigger the numbers are, the more wealth you and your team have the chance to create.

Choices, Choices

Life may be full of choices, but it is helpful to understand the playing field as you start. I graduated from college with a degree in History and French, having not taken a single business class. I’ve never regretted that path, but I graduated from college completely clueless about how the world worked and what my options were.

I began my career in banking, going to night business school along the way. Ultimately, I helped guide the business model creations for multiple companies, learning and developing the fundamentals for business model dynamics along the way. I concluded that business model dynamics should not be a secret. This is important stuff that everyone should have access to.

If you are looking to be an entrepreneur, understanding the basics of business model dynamics will help you design your company. Most businesses have no shot of vaulting you into the realm of the world’s wealthiest people. That’s okay. You can still become a multimillionaire, achieving a higher personal net worth than you could ever otherwise save.

If you are looking for a career in business, understanding something about business model dynamics can help you make better employer choices. Employers with better business models definitely tend to offer better compensation, stock packages and career paths.

If you are looking for a career outside of business, having some knowledge of business model dynamics can improve your investing acumen. As a leader of three public companies, I was astonished to see at least two thirds of our daily trading volume done by people or machines having no idea what we did and no familiarity with our financial statements or investor presentations. To my personal way of thinking, individual investors that have not taken the time to evaluate investor presentations or financial data cannot be serious investors.

Financial Success Does Not Just Happen to Some People

When graduating from college and considering life’s options, I had little understanding of the many paths that might be open to me. I was likewise completely clueless about the many paths in business and the varying skills and interests required. If you had told me that I would wind up leading three companies that provided net lease capital to middle market companies across the country, I would have been astonished. I knew little of real estate or finance.

When I graduated from college, I assumed that becoming a multimillionaire was something that just happened to very few fortunate, well-connected people. I did not understand at the time how broadly attainable such an achievement is. Like any goals one sets, I did not appreciate that one can set goals when it comes to business wealth creation, which is at the center of the greatest personal financial fortunes.

Over my time leading companies, a driving personal motto has been this:

“You either make things happen or things will happen to you.”

I have been known to use more colorful language. I have welcomed luck but creating business value entails skill and a sense of urgency to drive business model implementation. Without question, having some understanding of business model dynamics would have been eye opening as I was starting to select from life’s career menu. That’s why I am beginning my Substack authorship by announcing my video series. I hope you like them and I’d welcome your feedback at christopherhvolk.com.