Everyone Wants Financial Freedom. Almost Nobody Wants Ownership
The latest Federal Reserve data reveals why earning more is only the first step—and why most assets still fail to build wealth.*
On June 18, the Federal Reserve updated one of the most revealing datasets in finance.
It tracks who owns American wealth, asset by asset.
The latest figures show that the wealthiest 10% of US households own 87.3% of all corporate equities and mutual fund shares.
The bottom half owns 1.1%.
This is usually presented as a statistic about inequality.
I think it is just as useful as an investment lesson.
The people at the top do not simply earn more.
They own a much larger share of the assets that convert economic growth into dividends, buybacks and capital gains.
A salary pays you for a period of work.
Equity gives you a continuing claim on the value a business may create in the future.
That difference sounds obvious.
But I don’t think most people structure their financial lives around it.
For years, I didn’t either.
Income and ownership follow different rules
Most traditional financial advice begins with income.
Study something valuable.
Find a good job.
Negotiate a better salary.
Save part of what you earn.
There is nothing wrong with that sequence.
Income is usually where wealth creation starts.
The mistake is treating a higher income as the final objective rather than the raw material used to acquire ownership.
The historical evidence makes the difference clearer.
In one of the largest studies of long-term asset returns ever assembled, researchers Òscar Jordà, Katharina Knoll, Dmitry Kuvshinov, Moritz Schularick and Alan Taylor collected data on equities, housing, bonds and bills across 16 advanced economies from 1870 to 2015.
Across the full period, equities and residential real estate both produced average real returns of roughly 7% per year.
That number is not a forecast.
It hides long periods of poor performance, crashes, taxes, transaction costs and large differences between countries.
But it illustrates the mechanism.
Productive and scarce assets can generate income, retain earnings, reinvest cash and increase in value.
Labor income does not contain the same automatic compounding mechanism.
A raise increases your next paycheck.
It does not increase the value of every hour you worked during the previous ten years.
An asset can work differently.
A business can use this year’s profits to open another location, develop another product or acquire another customer.
A property can produce rent while the underlying land becomes more valuable.
A company can reinvest earnings, repurchase shares and increase the amount of profit represented by each share you own.
The owner participates in that process without having to resell the same hour every month.
This is why I increasingly think of income as fuel.
Ownership is the engine.
What changed for me
I understood this intellectually before I understood it personally.
When I started building newsletters, I mostly thought about revenue.
How many subscriptions could an article generate?
How much could a sponsor pay?
How many editions could I publish?
Those questions mattered because the business needed cash flow.
But over time, I realised that the most valuable things I was building were not visible in that month’s revenue.
They were accumulating underneath it.
The subscriber relationships.
The archive of research.
The brand.
The distribution.
The recurring subscriptions.
And eventually, the software and data infrastructure surrounding the publications.
An individual article might generate income once.
But it could also strengthen an audience, improve the product and make the entire business more useful in the future.
That does not make the business passive.
I still have to work on it every day.
The difference is that the work does not have to disappear at the end of the month.
Part of it becomes embedded in an asset I continue to own.
Once I understood that, I started looking at both my time and my money differently.
I no longer ask only:
> How much can this pay me?
I also ask:
> What will still exist after the work is finished?
That question has influenced almost every important decision I have made since.
The dangerous version of the ownership argument
There is, however, a very easy way to misunderstand all of this.
You can conclude that the solution is simply to buy more assets.
More stocks.
More property.
More businesses.
More digital products.
But ownership alone does not create wealth.
Bad assets compound losses just as effectively as good assets compound gains.
Hendrik Bessembinder’s latest research makes this point better than almost anything else I have read.
In his 2026 update, he studied 29,754 companies that traded on the US stock market between 1926 and 2025.
The stock market as a whole was an extraordinary wealth-creation machine.
Individual stocks were a very different story.
The median lifetime buy-and-hold return across those companies was negative.
Nearly 60% of the stocks reduced shareholder wealth relative to investing the same money in short-term Treasury bills.
And although the market created approximately $91 trillion in net shareholder wealth over the century, just 46 companies accounted for half of it.
The market was exceptional.
The typical stock was not.
That distinction matters.
The correct lesson is not simply that you should own assets.
It is that you need to own assets with the ability to compound—or be diversified enough that you do not miss the small number that eventually do.
For most investors, broad market ownership is the simplest way to capture those rare winners.
Concentrated ownership can still work, but only when it is supported by a genuine analytical or operational advantage.
Otherwise, concentration is not conviction.
It is simply exposure to a very uneven distribution of outcomes.
The same principle applies outside public markets.
A private business without a moat can become a demanding job with additional capital risk.
A property purchased at the wrong price can produce a poor return even when its market value rises.
A software product without distribution can be technologically impressive and economically worthless.
An audience that depends entirely on one platform can disappear when the algorithm changes.
Owning something is not enough.
The economics of what you own determine whether it compounds.
AI makes this distinction even more important
Artificial intelligence is making it cheaper for individuals and companies to create assets.
A solo founder can now write code, produce content, analyse data, answer customers and automate operations with tools that barely existed a few years ago.
That is a real change.
But there is another side to it.
When the cost of creating something falls, the supply of that thing usually increases.
It may become easier for you to launch software.
It also becomes easier for thousands of other people to launch competing software.
It may become easier to produce research, videos or educational products.
It also becomes more difficult for any individual piece of content to remain scarce.
AI therefore makes asset creation cheaper.
It does not automatically make the resulting assets more valuable.
In some markets, it may do the opposite.
This is where I think a large part of the current AI investment debate goes wrong.
Investors often focus on how much productivity a technology can create.
They spend less time asking who will retain the economic value of that productivity.
A company can use AI to reduce its costs and still lose most of the benefit through lower prices and stronger competition.
A business can grow faster while its product becomes easier to replicate.
An industry can experience an extraordinary technological transformation without producing extraordinary returns for every company participating in it.
The assets that capture the most value are usually the ones that control something competitors cannot easily reproduce.
Distribution.
Proprietary data.
Customer relationships.
Switching costs.
Regulatory permission.
Trusted brands.
Physical infrastructure.
Or a network that becomes more useful as more people join it.
My view is that the next decade will make ownership more important—but indiscriminate ownership less rewarding.
It will become easier to build.
It may become harder to defend what has been built.
That means investors need a better framework than simply buying companies that use AI or acquiring anything described as an asset.
They need to understand where the compounding actually occurs.
The ownership portfolio
Below the paywall, I’m going to turn this idea into a practical investment framework.
I’ll compare the five main forms of ownership available to an individual investor:
- Broad public-market equity
- Concentrated public-market equity
- Private business ownership
- Real estate
- Digital and intangible assets such as software, intellectual property and audience
I’ll score each one across return potential, liquidity, control, scalability, reinvestment capacity and downside risk.
I’ll also explain the distinction I use between **market ownership** and **edge ownership**—and why I believe most people need both, but in very different proportions.
Finally, I’ll show how I would structure an ownership portfolio for three different situations: someone whose main asset is currently a salary, a solo entrepreneur building a business, and an investor with capital but limited operating time.
The goal is not to own as many things as possible.
It is to identify the small number of assets capable of turning today’s income and effort into a durable claim on future value.
Your income determines how much capital you can deploy today.
What you own determines how much of the future reaches you.
The full ownership framework continues below for premium subscribers.