Yes, they are but let’s dive deeper into the answer.
The terms “entrepreneur” and “capitalist” are often used interchangeably with each other.
While there is overlap between the two, they’re not the exact same thing as each other. An entrepreneur is an entrepreneur and a capitalist is a capitalist.
To answer the main question of this article, entrepreneurs are definitely capitalists… but what exactly does that mean? What does being a capitalist mean? What does being an entrepreneur mean? What’s the difference and does it even matter?
Well, read on and hopefully all of those questions will be answered by the end of this article.
What does being a capitalist mean?
Being a capitalist means that you like making money right?
While that’s not wrong, the actual definition of a capitalist is being a person that uses their wealth to invest in a trade or industry for the purpose of profit which is in accordance with the principles of capitalism. The function of a capitalist is to make capital available.
If you provide capital for a trade or industry, then you are by definition a capitalist.
That’s a fancy way of saying that a capitalist is an investor that puts their money in a business in order to make a profit.
Did you invest $100 in Robinhood before you figured out that they’re a terrible investment platform?
Well, because you put that $100 into the trading platform and invested it into company stock or crypto in hopes of making a profit, you are a capitalist.
If you’re a capitalist and an investor, you’re in a unique position where you can make a huge profit by simply having a lot of capital lying around and choosing the correct things to invest in.
As long as you have enough capital and can choose the correct investments, then you can make a lot of money by doing as much work as you feel like. Put in your capital and collect your interest and dividends.
Now that’s passive income.
A great example of a capitalist is Warren Buffett. There isn’t a single person who’s interested in personal finance and investing that doesn’t know who he is.
Since you’re reading this article about entrepreneurship, there’s a chance that you’re a fan of him yourself.
Warren Buffett isn’t shy about the fact he’s a capitalist and why would he be? As of 2022, he’s worth a staggering $125 billion and the fifth-wealthiest person in the world.
Warren Buffett is a legendary investor and American business magnate.
Right now he keeps busy by being the chairman and CEO of Berkshire Hathaway, the multinational conglomerate holding company.
Warren Buffett also likes to give out investment advice and just give advice in general. That comes with getting old but since Warren Buffett is Warren Buffett, all that advice is definitely worth at least a second glance.
What does being an entrepreneur mean?
The textbook definition of an entrepreneur is “a person who sets up a business or businesses, taking on financial risks in the hope of profit”.
An entrepreneur is someone that starts a business to make a profit while taking on all the risks associated with starting a business.
To put it simply, if you start a business, you’re an entrepreneur.
It doesn’t matter if you went all in and took out every loan you could to start your business or if you started a side-business while working at your day job.
As long as you took a risk and started a business while hoping to make a profit, you’re an entrepreneur.
Did you sell candy, soda or USB sticks and MicroSD cards in highschool? Congratulations, you’re an entrepreneur!
Do you sell handmade arts and crafts that you make in your spare time on Etsy? Congratulations, you’re an entrepreneur! Do you buy out every PS5 and event ticket in your area then sell them for a ridiculous profit? Then you’re an entrepreneur but you’re also absolute scum.
If you’re an entrepreneur then you’re in a unique position where your potential to make profits is only limited by yourself.
There’s no ceiling to your earnings and the profit you take home. You just need to know what you’re doing… and also work till there’s not a single drop of sweat or blood left in your body.
An example of a successful entrepreneur? You’re probably already thinking of him.
The man that people either absolutely love or completely hate. The man that just bought Twitter for $44 billion because he felt like it.
The man who wants to bring humanity to Mars and sends rockets into space because he can. The man who is the face of Tesla and wants you to drive electric cars and futuristic trucks.
Also, he was a co-founder of PayPal. That’s one that a lot of people forget.
Imagine how successful of an entrepreneur you’d have to be for people to forget that you helped start one of the most widely used financial services around the world? That’s how successful Elon Musk is as an entrepreneur. The man is literally the richest person in the world right now and has an eye-watering net worth of $260 billion.
Capitalist VS Entrepreneur: What’s the difference between the two?
So now that you know what a capitalist is and what an entrepreneur is, can you explain what’s the difference between the two?
Here’s a quick rundown to really help you hammer in the differences between a capitalist and an entrepreneur.
|Capitalists invest in things to make a profit.
|Entrepreneurs build a business to make a profit.
|Capitalists don’t need to do the legwork in order to be considered capitalists. They just need to be able to provide capital.
|Entrepreneurs need to put in their time, effort and capital in their businesses to be considered entrepreneurs.
|Capitalists risk losing their money if their investments go under.
|Entrepreneurs risk losing their time, their hard work and their money if their business goes under.
|Capitalists profit from the capital that they provide and the risk they take when they invest that capital. If a capitalist is good at picking their investments, then they’ll profit.
|Entrepreneurs profit off their businesses success after they work hard and take on all the risk that comes with starting a business. If an entrepreneur is skilled at growing their business, they’re rewarded handsomely.
Hopefully this article cleared up any doubts you had about the “capitalist vs entrepreneur” debate and answered any question you had about the topic.
A capitalist is basically an investor in a business that doesn’t need to put in any work, just their money or capital. An entrepreneur puts up capital, does the work as well as eats the risk and takes the burden of starting a business.
Are entrepreneurs capitalists? By default, an entrepreneur is a capitalist since they put up capital to start and invest in their business.
That being said, whether you’re a capitalist or an entrepreneur, you can become rich either way. And really, isn’t that all that really matters in the end?