The Perfect Storm

"As an economist, I deal with large-scale trends in the economy, often measured in the billions or trillions of dollars. But people often don’t grasp the meaning of billions and trillions. People aren’t really concerned about “the economy”—they’re concerned about “their economy.” They want to know, “What can I do in this new economy to succeed, to take care of myself and my family?” I wrote The Next Millionaires to explain where our economy has been, where it is today, and where it’s going—but even more importantly, to bring all of this down to the level of “your economy.”

Since 1991, U.S. household wealth quadrupled from $13 trillion to about $52 trillion in 2005. Reading such figures, you might say, “That’s interesting… that sounds like good news.” But it becomes very personal when we look at what this actually means to individual entrepreneurs who are involved in the most economically vibrant emerging new industries.

There is something very different about this enormous increase in household wealth—something that has never happened before, and which has significant implications for people’s individual lives: This growth is occurring not only among an exclusive group of the already-rich, but throughout a broad demographic that includes millions of “ordinary people.” I call this the “democratization of American wealth.” Let’s take a quick look at how this works, and then see some of the most powerful ways to ensure that you can be part of this exciting trend.

The Democratization of American Wealth

In 1991 there were 3.6 million American families with a net worth of $1 million or more. Today there are more than 10 million such families and we are adding new millionaire families at the rate of one million per year. While we’ve always had periods where families of great wealth increased their net worth still further, where the rich get richer, we’ve never had so many ordinary working-class people become rich.

You can see dramatic evidence of this at the very top echelon of U.S. wealth, the billionaires on the “Forbes 400” list of the richest Americans. When this list was released in 1981, it contained mostly familiar names such as Rockefeller, Astor and Morgan and represented a significant portion of total U.S. household wealth. Twenty-four years later, only 40 of the original 400 remain on the list, and the wealth of all 400 combined is only $1 trillion, less than 2 percent of the $52 trillion in U.S. household wealth. The extremely rich, the top 10 on the list, account for almost 25 percent of the $1 trillion total, but when we look closer we see that all of these top 10 were born poor or middle-class!

Over the next 10 years, as U.S. household wealth doubles to $100 trillion, at least $10 trillion of that new wealth will represent new entrepreneurs coming to the table. That $10 trillion represents another 10 million new millionaires.

A great opportunity lies ahead, not for just a chosen few, but for literally millions of “ordinary people,” individual entrepreneurs who were not born into wealthy families, but who choose to apply themselves in the new and emerging industries where this new wealth is being created. Two of the strongest emerging industries where this growth will occur are wellness and network marketing.

The Wellness Industry

Ironically, of the $2 trillion we spend on health care in this country, which represents one-sixth of the U.S. economy, most has very little to do with health.

“Health” is defined in the dictionary as, “being sound in body, mind or spirit,” but what we call “health care” has a very different focus, and would more appropriately be called the sickness industry.

Sickness industry: Products and services provided reactively to people after they contract an illness, ranging from a common cold to cancerous tumors. These products and services seek to either treat the symptoms of a disease or eliminate the disease.

Wellness industry: Products and services provided proactively to healthy people—that is, those without an existing disease—to make them feel even healthier and look better, to slow the effects of aging, or to prevent diseases from developing in the first place.

I stumbled upon the wellness industry in the 1990s, as so many do, through an experience with my own health. For 10 years (against medical advice) I had put off getting expensive knee surgery. Finally, I started taking a dietary supplement called glucosamine—and within a year the cartilage was repaired. The surgeon was positively amazed when he examined my X-rays; I no longer needed the operation.

This experience piqued my interest; I wanted to find out what else my surgeon and my other medical providers didn’t know. I also noticed that people were spending more on new things such as exercise programs and fitness coaches, supplements and organic foods, alternative medicine and anti-aging therapies. I began to research this field and soon arrived at an amazing conclusion: This new and emerging industry, which only a decade ear earlier had hardly existed, was already a $200 billion business.

This represents an extraordinary economic opportunity. The millions of people spending billions of dollars to further their wellness represent a new and growing economic sector who are eating and living healthier than anyone ever before in history. They are primarily wealthy people who, as they start to have money, start looking for ways they can be healthier—outside the medical establishment. Today, for example, this sector spends over $70 billion annually on vitamins and food supplements.

Who are these people? Mostly baby boomers: prosperous people from the ages of 40 to 60. Baby boomers are the first generation in history who refuse to blindly accept the aging process. They are also a powerful economic force; they represent only 28 percent of our population—yet this group and their spending represents 50 percent of our economy.

Until recently, marketing to baby boomers had been all about how to help them remember what it was like to be young—oldies music, retro clothes, and 50s-styled automobiles. Now, it has gone a step further. Today, boomers are starting to buy things that actually make them younger in terms of having a healthier body, more acute senses and a sharper mind!

Paul Zane Pilzer