Want To Be A Billionaire? Start Your Own Business

By David and George Marotta

There are 946 billionaires in the world according to a recent survey. Half are in one country, the United States of America. The others are scattered throughout 53 other countries. Because of the surging world economy, 195 newcomers were added to the list last year and only 32 dropped out. Learning how billionaires amass their wealth may expand your financial horizons and possibly stimulate some ideas that could lead to your name being added in the future.

Topping the list for the past thirteen years is Microsoft founder, Bill Gates, the richest person in the world with $56 billion. Investor Warren Buffet remains in second place with $52 billion. They are followed by three foreigners: Mexican telecom executive Carlos Slim Helu; Swedish Ingvar Kamprad, the founder of the Ikea stores; and Indian steel magnate Lakshmi Mittal

Germany is the next country with 55 billionaires, but probably not for long. Russia with 53 is moving up fast having been freed from the shackles of communism and benefiting from rising world oil prices. In fourth place is the “emerging-market” country of India with 36 billionaires overtaking the “mature” economies of Japan and the U.K.

How does one become a billionaire? If you are lucky, you are born into the right family. The fifteenth richest person in the world Karl Albrecht ($20 billion) inherited his mother’s corner grocery store and grew it into the giant supermarket chain Aldi. In the U.S., he owns the fast-growing Trader Joes gourmet food shops.

Do what you’re good at, work smart, invest wisely and you too may be pleasantly surprised.

If you are a “geek” in college, start a business in your dormitory. That’s what two billionaires did: Larry Page and Sergey Brin. They were graduate students at Stanford University when they conceived the idea that has become the most popular computer internet search engine — Google. When the company went public in 2005, they were each worth $7 billion. Now each is worth double that: $16 billion. Earlier, Michael Dell started his business while a student at the University of Texas.

Devise a method to sell good products at the lowest cost. That’s what Sam Walton did by starting Wal-Mart. His five heirs are each worth about $17 billion. If Papa Sam were still alive, he would easily be the richest man in the world with $85 billion. Sam was a smart man who had six basic rules for his business: think small, communicate, keep your ear to the ground, push responsibility and authority down, force ideas to bubble up and fight bureaucracy.

Is it possible to get rich while you are on welfare? Well, one single mother in England did just that. Billionaire Joanne Kathleen Rowling started writing stories about “Harry Potter” while on “the dole” during the time her child was sleeping.

Is it possible to get rich collecting waste paper? Yan Cheung, China’s richest woman with $2.4 billion did just that. The waste paper she collects in the US goes to China to be made into cardboard that then brings back to us the goods we buy from China.

How does one get rich? We analyzed the top fifty billionaires in the United States and found that most of them gained that stature by starting their own business. The next best (and easiest) way to become a billionaire is to have billionaire parents and inherit wealth. The third best way is to entertain people and be in the media business. Fourth, be a good investor (common stocks earn an average of 11 percent annually and at that rate you can double your money every six and a half years). Buying and owning real estate is the fifth best way as it earns an average of eight percent annually, and at that rate you can double your wealth every nine years.

Is a billion dollars a lot of money? Think of it this way. Just to count to a billion would take over 32 years. The wealthiest people today are not like the “robber barons” of a century ago. Most are honest, good citizens, who worked hard to create their wealth, but also did well for society in general. Eventually, most of the wealth is gifted to charity.

Bill Gates, the wealthiest person, and his wife Melinda, set up the world’s largest private charitable trust worth $33 billion that is dispensing funds for medical research, education, etc. Last year, Warren Buffet announced that he would give $31 billion of his Berkshire-Hathaway stock to charity; most of it to the Gates Foundation. Guided by the belief that every life has equal value, the Foundation seeks to reduce inequities and improve lives around the world.

If you want to be rich, be prepared to pay more taxes. The wealthiest people in the US, the top one percent of earners, pay 36% of all federal income taxes. The top 5% pay 57% of all federal income taxes. If the government wants to continue doing “good,” a lot of tax revenues needs to come from the wealthiest families. When the wealthy do well, the government is able to afford to “do good” for society.

With the victory of capitalism over communism, the “democratization of wealth” is becoming more commonplace in Russia, Eastern Europe and China. Deng Zhao Ping, the architect of China’s transformation, was smart. He told his fellow politburo members that in order to advance. China had to let some people get rich.

But, just where does one start? First, you need to accumulate some capital. If you work for someone else, save enough to quit your job and start your own business. It is a long shot to becoming a billionaire, but it’s worth the try. On your way to becoming a billionaire, the million markers become commonplace.

Over seven million households now have a net worth of over $1 million. That is five times the number that existed in 1989. The odds of someone becoming a millionaire through personal efforts are good — about one in five. Do what you’re good at, work smart, invest wisely and you too may be pleasantly surprised.

David and George Marotta both work for Marotta Asset Management, Inc. of Charlottesville which provides fee-only financial planning and asset management.

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6 Responses to Want To Be A Billionaire? Start Your Own Business

  1. Minimum Wage says:

    I’m not aware of anyone becoming a millionaire on minimum wage.

  2. Harrison says:

    What a great article that consists so much of billionaires’ stories. I believe everyone can be a billionaire and from this article we know that it only takes a simple idea to make billions of dollar.

  3. gabby says:

    There are people with no money who came to this country and now they are entrepreneurs, they started doing simple things and working hard. So what do they have, that you don’t have to be successful?

  4. Zook says:

    Ummm. I don’t want to be a billionaire. It takes hard work and a long time to become a billionaire.

  5. Kevin says:

    Your income potential is unlimmited
    with your own business.

  6. K Rajamanickam says:

    Salaried people can never become billionaire as proper tax is deducted from the salary. Those enthusiastic billionaires should allocate at least 50% of their income for charitable purposes and also should not hesitate to help needy individual on very genuine cause and not behind tax rebate.

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