I think the millionaire next door type is actually dying. And to be relevant in 2023, seems it would need to be the 10 millionaire next door.
I think as capitalism advances, the barrier to entry and good profits will become harder. Peoples labor will not have as much purchasing power to even start a small business while large corporations gobble up vast amounts of market share. Combine this with systems that harm small businesses (Think about software license for modern cars to squeeze mechanics, or apple not licensing small shops for repair) and i think it is and will die. In the end (not sure what timeline) - only those that fully own their vertical will survive successfully. Anyone who is tier 3 will get squeezed by the tier 1-2 suppliers.
Not to shit on the system but I think we are in late stage capitalism - and I say this as someone who has started 2 businesses with employees that I very much enjoy running and improving.
I think the idea of running a small business as a path to wealth is relevant for sure. But as capital gets funneled upwards and consolidated in a few hands, the people at the bottom will have not much money to spend at small business.
So I think the lifestyle of a small business owner with 10 employees running at a nice 15% profit margin will buy substantially less living status than that same person maybe 20-40 years ago.
But fuck do I know - this is my opinion only. I still think owning your labor and even profiting off the labor of others is one of the fastest ways to build up capital that can be invested. Its a challenge to grow capital on your labor alone.
To first disclose my bias, I am super protective of and defensive about small business entrepreneurs. That's a far stronger "political" or "philosophical" principle for me than voting "red" or "blue". I also think a free market economy does the best job of allocating resources and growing incomes, reducing poverty, and supporting democracies.
All that said, something does seem wrong to me. Or changing. And the Economist has been pointing to the data and discussing in recent months.
There is for example a far heavier regulatory burden which basically doesn't matter to giant firms but beats the crap out of small firms. This observation and example: It's about the same amount of work and expense for a $1M firm to comply with multi-state taxes as it is for $100M firm... except that cost and burden will probably kill the smaller firm or force it to
not comply.
Big firms especially the tech companies do orchestrate and then exploit network effects to create monopolies which just beat up on small firms. And so I think shouldn't be legal or allowed. (BTW the most recent issue of Economist points to change that VC funded firms now much less likely to ever go public... they're more likely now to be acquired. Which is okay for founders but...)
All that said, I don't know that this eliminates the opportunities of small business entrepreneurship anymore than it does for some other group. While fewer new businesses are getting formed, I still think or see that "small" private companies have lots of opportunity.
In my small business category, for example, the small CPA firms are now going great with the extra complexity and compliance burden of new taxes feds and states have levied. Staff make more. Owners are growing their profits. The losers in this case? The consumers and new businesses who can't afford the services that now cost maybe 50% or 100% more. And this is true in other categories I see and sign tax returns for.
I also think that something the FIRE crowd needs to be alert to here: If we get stagnation or stagflation? That could show up in rates of return. Which impacts both how quickly you grow your nest egg and then also the size of the nest egg you need to support a given level of income.