While there are hundreds of different industries to build wealth, these are in my opinion, the top 5 industries that can build generational wealth.
Here are my top 5:
1: Technology
2: Healthcare
3: Finance
4: Property
5: Manufacturing
I have also classified each industry opportunities into Tier 1,2 and 3.
Tier 1 is the hardest to achieve but commands the highest reward and create generational wealth.
Tier 2 is where the average millionaire operates, with sellable business in hand.
Tier 3 is where most people in these industries get started initially before either moving to Tier 2 or stuck at Tier 3.
For each industry’s examples, we will start with Tier 3, followed Tier 2 and 1.
Industry 1: Technology
Tier 3 (Services) – Developer
The quickest way to start in tech is being a software developer, where you get clients and help them develop apps or SAAS (software as a service).
The benefit is your margin would be high and the risk is low, as you are not responsible for the success or failure of the SAAS. This would be dependent on the client.
However, the challenge is getting new clients and ensure you and your team have the competency to complete and deliver the project.
Note: Even if you are not running your own business as a software development agency business, you can still earn a good living working as an employee for well-funded tech companies.
Tier 2 (Product and Branding) – SAAS
Tier 2 is more challenging as you need to take on more risk, which can equate to higher reward.
Tier 2 is where you develop your own SAAS to solve a problem.
If the problem is big enough, you will get sustainable MRR (monthly recurring revenue).
While Tier 3 is heavily reliant on you, a SAAS can operate on its own and you can focus on building a team of developers and great customer support.
A SAAS is also more sellable as this business is appealing to sellers given that the business is not key person reliant, unlike a service business in tier 3.
Tier 1 (Convenience and Reliability) – Middlemen Model
Tier 1 is the hardest business model. It’s easy to start but hard to succeed as you will need a lot of capital.
Every Tier 1 tech company goes by middlemen model, here are some examples:
Meta: Does not own any content/media, yet they are the largest social media company as users create content on their platform for other users.
Google: Connect users to websites that they don’t own to solve a problem/deliver educational content.
Amazon: Largest ecommerce site, where most of the items sold are not Amazon products.
Uber/Grab: Connect users to access transport despite not owning any vehicles.
iProperty/Property Guru: Connect home buyers and sellers.
Agoda/Booking: Hotel bookings without operating a hotel.
Industry 2: Healthcare
Tier 3 (Services) – Solo Practice
While being a solo practice is easy to start and have high margins, the challenge is the business can’t run if you are sick or go on vacation.
So imagine if you are earning RM2k a day at the clinic, and you are going on a 5 days vacation, that is RM10k income not earned, but you will still need to pay staff salary and rental.
Scale is the biggest challenge here and lots of hours are required at the clinic.
Tier 2 (Product and Branding) – Chain of Clinics
Tier 2 is more fun as you scale into a chain of clinics, where each clinic will have its own head to run the clinic operations while you still own the majority of the clinic’s shares and brand name.
A well-run chain of clinics is interesting for external investors they can buy your clinic knowing that the clinic is not 100% reliant on you.
Also, your customers or patients will trust your brand more if they see you have a chain of clinics in different location. The caveat is you will need still deliver quality treatments.
Tier 1 (Convenience and Reliability) – Hospital and Medicines
Mass scale for healthcare comes in when you own a hospital or pharmaceutical company that create their own drug.
However, this stage will require massive capital to be able to pull it off, with the rewards potentially much greater as you list the company public given the potential for scaling even further.
Industry 3: Finance
Tier 3 (Services) – Freelance Accountant
Being a freelance accountant, your margin is literally 100% as you don’t require office space and any expenses.
Accounting is also recession proof, whether the economy is doing well or bad, every business needs an accountant.
However, your clients would typically be SMEs as bigger corporations would have their own team of accountants.
This tier is interesting as your business can be highly profitable and you can choose to work on your time and at any place of your choice.
Tier 2 (Product and Branding) – Accounting, Audit, and Tax Firm
Here comes the challenging part as you scale into tier 2. This is where your clients are too many that you now need a team of accountants and an office.
Expenses will go up at this point, but you can start to let go of certain clients to your staff and your role then transition into finding new clients for the firm and having a capable team to deliver the tax returns and accounting records.
At this point, your business can scale as you have a team that can operate with or without you.
Tier 1 (Convenience and Reliability) – Banks/Venture Capital/Private Equity
Tier 1 is for the big boys, where the most profitable finance verticals Banks, Private Equity (PE), and Venture Capital (VC).
The interesting thing is you don’t even need to start a bank or PE/VC to get wealthy.
For example, being a top investment banker or venture capital partner would already make you a multi-millionaire, and you take on super low risk as those are not even your money. Low risk, high upside. What a dream!
The tradeoff is you will need to work long hours.
You can also start your own PE/VC once you have enough experience, connections, and capital. That’s where the exponential curve and unlimited upside kicks in.
