Almost every self-made millionaire passed three tests: the Scale Test (growing output without costs growing as fast), the Leverage Test (accelerating growth with money, people, technology or media) and the luck test (being positioned in a market that is about to grow). According to the UBS Global Wealth Report, there are around 52 million millionaires in the world as of 2025, and nearly 80% of them are self-made. They started from scratch and all passed the same three tests, which decide who breaks through and who gets stuck.
Each section below explains one test, the numbers behind it and how people pass it.
Watch the full video here, or skip to the breakdown below.
The 3 tests at a glance
Test 1: The Scale Test
Most people think scale means doing more: more products, more staff, more sales. Grow like that and your costs rise as fast as your income, and you usually collapse under your own weight. That is where the saying more money, more problems comes from. In business it is called growing broke: the business grows on paper, but costs rise at the same rate, so you work harder for the same profit. Many businesses fail by expanding too quickly because they confuse getting bigger with scaling.
True scale is doing more with less, growing output without costs growing at the same pace. That is why job titles like growth hacker exist: their whole purpose is to get 10 times the results without 10 times the spending, and they are paid a fortune because it is so hard. The principle is that the bigger you get, the cheaper everything becomes, which economists call economies of scale.
Take a shirt. A small clothing brand might pay $7 to produce one. At tens of thousands the unit cost falls to around $3, at hundreds of thousands it drops again, and at millions factories retool production lines for you and you pay closer to $1.50. Fast fashion brands also cut costs by sticking to the two or three most common sizes instead of five, which saves millions in fabric, patterns, logistics and unsold stock. A 2019 investigation into Zara’s supply chain found a hoodie cost €2.08 to make at the factory and retailed for nearly €30 in Europe, a 15x markup powered by scale and efficiency. That is why competing with Zara or Shein is close to impossible unless you own the factory.
Big companies can buy scale by placing giant orders and pushing suppliers to cut costs. Small ones cannot, so creativity decides. Instead of hiring ten people, automate repetitive work so one person does the job of five. Instead of selling door to door, run one ad campaign that reaches thousands. Instead of endless variations, strip the product to one version that can be produced endlessly without waste. There is no single answer, only the right systems, and passing the test at a small size proves you can grow output without costs eating you alive.
It is not something people inherently know how to do. It is a skill you have to cultivate.
Test 2: The Leverage Test
At its core, leverage is a math problem that balances three things: outcome (how big the upside or downside can be), probability (the chance it happens) and cash flow (whether you survive long enough if it does not pay off right away). The better you run this math, the more leverage you can afford and the faster you can grow. If scale makes things cheaper as you grow, leverage is acceleration: it turns a small operation into a business that grows faster than you do. There are four main types, and every millionaire solved at least one.
- Financial leverage means borrowing to expand. A founder takes a $100,000 loan at 5% to launch a product, paying $5,000 a year in interest plus repayment. If the product brings in $120,000 after costs, that is a $20,000 profit even after repaying. If sales flop and bring in only $70,000, the founder still owes $100,000 plus interest. The test is whether the business can survive the downside long enough to reach the upside.
- People leverage means hiring employees or contractors to multiply your time. A salesperson at $4,000 a month who closes $12,000 in sales pays for themselves three times. The 3x figure is a rule of thumb: at 1x they only cover their own cost, at 2x they cover salary plus day-to-day costs with little profit, and at 3x salary and expenses are covered with profit left over.
- Technology leverage means handling a massive upfront cost, since tech needs development money and upkeep. Spend $50,000 on a software tool and attract 1,000 users paying $10 a month, and $10,000 in monthly revenue breaks even in five months, after which it is almost pure profit. If only 50 people sign up, that is $500 a month and over eight years to break even. Some combine it with borrowing, which amplifies everything: win big if it works, and be done if it fails.
- Media leverage means finding a way to cut through the noise, the territory where companies hire people to make brand memes on social media.
Passing the Leverage Test is not optional, because it marks the moment you stop running a job and start running a business. Plenty of people work nonstop on their business not because they want to but because they have to. They are employees of their own company because they have no leverage.
Test 3: The Test of Luck
This is the one nobody likes to admit. People want to believe success is all skill, hustle and strategy, but there is always an element of timing and positioning you cannot control. Luck here means being in the right place, at the right time, in a market that is about to grow. You do not decide when growth happens, but you do decide which arena you step into and when you make your move.
AI is the current example. The industry was worth around $200 billion in 2023 and is projected to reach nearly $1.8 trillion by 2030, an annual growth rate of almost 40%. AI engineer salaries are climbing, stock options are turning into fortunes, and Nvidia has tripled its value in less than two years. If you are positioned inside that wave as an employee, investor, supplier or even a freelancer who learns the tools, the tide itself pushes you forward.
In the 1980s AI had its first big hype cycle. Money poured into research and expectations soared, then reality did not deliver fast enough, governments pulled funding and companies abandoned projects. What is now called the AI winter froze the industry for years. Same field, same skills, different decade, opposite outcome: right place, wrong time. Solar energy in the 1980s and VR in 2016 show the same thing. The same effort, talent and even product can lead to a fortune or a failure depending on when the world is ready.
The video gives three ways to tilt the odds:
- Choose industries where long-term demand is undeniable. Aging populations mean more healthcare, medicine and caregivers in every country. The energy transition is replacing fossil fuels with renewables. And once a technology like AI proves itself useful, adoption only accelerates, because people do not go back to pre-AI workflows.
- Diversify. You do not have to get every call right. Some fail, but one or two ride the wave, and that is enough to cross the seven-figure line.
- Time your entry. Too late and you fight incumbents who already dominate. Too early and you run out of resources before the market matures. The sweet spot is when growth is accelerating, neither pure hype nor total saturation, but the inflection point in between.
This is why millionaires often look lucky. From the outside, they were in the right place at the right time, and in a way they were. What most people do not see is that they put themselves in situations where growth was likely, took multiple shots and stayed ready when the timing lined up.
Passing the luck test means your effort compounds because the world itself is pushing you forward.
How the three tests multiply
Scale makes your product efficient. Leverage accelerates your business. Luck, meaning timing and positioning, ensures the path you are on is growing by itself. Put all three together and they multiply, which is why these tests explain almost every self-made millionaire’s story.
The video asks which one you would struggle with most. The next step in the series is meeting the archetypes of people who get rich, since each type takes a different path through these tests.
FAQ
What are the three tests to become a millionaire?
The Scale Test, the Leverage Test and the luck test. Scale makes your product efficient, leverage accelerates your business and luck puts you in a market that is growing on its own.
What does growing broke mean?
It means your business grows on paper but costs rise at the same rate as income, so you work harder for the same profit. It happens when people confuse getting bigger with scaling.
What are the four types of leverage?
Financial leverage (borrowing money), people leverage (hiring to multiply your time), technology leverage (software and automation) and media leverage (cutting through the noise to reach customers).
How much should an employee generate to be worth hiring?
The rule of thumb in the video is at least 3x their salary. At 1x they only cover their own cost, at 2x there is little profit, and at 3x salary and expenses are covered with profit left over.
How many millionaires are self-made?
According to the UBS Global Wealth Report, there are around 52 million millionaires worldwide as of 2025, and nearly 80% of them are self-made.
How can you improve your luck in business?
Pick industries with undeniable long-term demand, diversify across several bets, and time your entry for when growth is accelerating, not at the hype stage and not once the market is saturated.
Keep reading
- 15 Actionable Steps to Become Self-Made
- 10 Habits of Self-Made Millionaires Who Retire Early
- These 15 Self-Made Billionaires were Once Poor
