So you want to be a billionaire. Why not? Over a thousand other people have done it. And you should not be discouraged that that only represents less than .0001% of the world’s population.
Most of them don’t have anything more than you do in the way of intelligence. Some of the things they do have which are not really within your control are good timing and a little luck. Still, you won’t be any worse off for doing the things that they did along the way to becoming a billionaire.
First, let’s not perpetuate any delusions. Short of inventing the next big thing, or coming up with an idea to turn water into gas, everyone pretty much starts out on an even playing field which means saving and investing money the old-fashioned way. If you’re still in your twenties and earning at least $50,000 a year, you could easily accumulate a million dollars, assuming you invested wisely.
Want free money?
For instance, if you earned $60,000 a year and were able to save 10% of your earnings into an investment that averaged 7%, you could become a millionaire within 40 years. At the same rate of savings and return on investment, it would take you an additional 100 years. Given that life expectancy is constantly expanding, that may not be completely out of the question.
Here are some things you could do to increase your chances of amassing a billion dollars while you are young enough to enjoy it:
Earn More Money
Of course, you could simply increase your earnings and, thereby increasing your capacity to save.
If your career track puts you on a path to earn in excess of $100,000, you could shave off of about 20 years and become a billionaire within 130 years.
Remember, the more you earn, the more you pay in taxes. So doubling your income won’t necessarily double the rate at which you can become a billionaire, but it will get you closer.
The fact is that you would have to be able to invest $1 million a year at an average return of 7% in order to become a billionaire within 65 years.
But don’t be discouraged.
Become an Entrepreneur
There are two good reasons to become an entrepreneur if your goal is to become a billionaire.
First, it’s the quickest way to increase your earnings; and, second, entrepreneurship is where all of the billion-dollar ideas come from.
Billionaires and even most multi-millionaires didn’t get rich working for someone else. They had an idea and they monetized it.
The franchised hot dog stands or came up with a way to help people make or save a lot of money by inventing something.
There are at least 4 billionaires that started their business in their garage. The one thing that all entrepreneurial billionaires and millionaires have in common is that they didn’t give up.
You can get closer to becoming a billionaire by investing wisely or making it big by trading options. For example, Warren Buffet became a billionaire by mastering value investing – identifying long term growth potential in undervalued companies and then staying with it until it achieves its target. He doesn’t try to time the markets because he knows that it doesn’t work.
And he minimizes his risk by investing only in businesses that he completely understands. He parlayed his original investment into a larger portfolio of investments, and by applying the same methodology he grew his fortune exponentially. For example, if you are an art major you could consider investing in art because you completely understand the industry.
He is now the second richest man in the world. But he still lives in the same home he has owned since before he earned his fortune and gets around town in late model, nondescript car. He has always understood value – in his own life and in the companies in which he invests.
Buffet probably would have been just as happy to become a millionaire. After all, he plans on giving most of his billions to charity.
The Bottom Line
Yes, you too can become a billionaire. No one can predict the future and whether timing or luck will ever come their way. But, unless you get into the arena and start doing the things that future billionaires do, you may not even wind up as a millionaire.