First Citizens Wealth, the wealth management division of First Citizens Bank, published its “Beyond Wealth” study of business owners and wealthy Americans, finding they are adapting their professional and personal financial planning strategies to navigate today’s evolving economic landscape. Despite challenges, optimism and resilience remain high for business owners, with nearly all saying that owning a business is “worth it.”
“As business owners navigate inflation, market shifts and changing policy landscapes, the survey results underscore that they are finding innovative ways to preserve stability and plan for long-term growth,” Marc Horgan, executive director of First Citizens Wealth, said. “Working with an experienced wealth management team that understands both personal and business objectives can further support individuals and business owners alike as they plan their future with intention, build for the future of their business, adjust as needed and ultimately pass down a lasting legacy.”
Most business owners (66%) fund their ventures with their own savings or rely on traditional bank loans (40%) to sustain operations. However, more seasoned entrepreneurs are branching out, being twice as likely (38%) as first-time owners (18%) to leverage private equity or venture capital to grow their businesses.
Experienced owners are also reinvesting in their businesses at higher rates than first time owners, being twice as likely to expand operations or hire new employees, reflecting a focus on long-term growth despite economic headwinds. When responding to economic pressures, owners are most likely to adjust pricing strategies (34%), followed by increased marketing efforts (23%) and changing their vendor or supplier relationships (22%).
Looking ahead to an exit for their business, most owners plan to exit their business through a sale and current stakeholders including family, business partners or management/employees are the most commonly named successors to take on ownership. Yet only two in five plan to retire following their business exit, suggesting an appetite to continue working.
Financially, business owners are notably self-assured:
- 54% are very confident in their financial situation, compared with 35% of wealthy non-owners.
- On average, owners have greater retirement savings than non-owners but carry nearly four times more debt.
- Personal and business finances overlap for many, often sharing the same bank accounts, credit cards, tax professionals and financial advisors for both.
- 94% say that business ownership provides personal fulfillment, outweighing financial stress.
“Even amid economic uncertainty, there’s a clear sense of control and optimism among business owners; they are adjusting, not retreating,” Nerre Shuriah, senior director of wealth planning and knowledge at First Citizens Wealth, said. “That said, business owners are missing the larger opportunity to protect their wealth. By partnering with a financial professional early on, business owners can build in long-term financial flexibility to help offset some of the entrepreneurial risks they may be taking and have a clearer understanding of both sides of their personal balance sheet.”
Wealthy Americans: Branching Out and Spending Less
Since 2024, wealthy Americans have broadened their sources of savings and wealth. While investments and income from working remain the top sources, the source of wealth that saw the biggest increase year-over-year was “stock/options in company employed with.” The top source of wealth also varies by generation: business ownership for millennials (34%); income from working for Gen X (38%) and investments for Boomers (49%).
Despite strong financial positions, over half of wealthy Americans report feeling stressed about their finances. Inflation remains the top stressor (62%), followed by stock market volatility (44%) and changes in government economic policy (42%). As a result, many are cutting back on discretionary spending, particularly on luxuries.
When it comes to investing, most wealthy Americans maintain a focus on traditional assets (stocks, mutual funds, ETFs), but diversification is growing. Nearly half (45%) own private equity or private investments, and a third (35%) own cryptocurrencies. Generational differences also persist: Millennials are more likely to hold private equity, private investments (58%) and cryptocurrencies (56%), while Boomers favor certificate of deposits and money market accounts (74%).
