The 3 Characteristics That Will Make You a Billionaire
Who are the world’s super-rich, and where do they come from? While many of the most successful names and faces came from relatively humble beginnings, we often think of the upper-upper crust – think, names that compose the Forbes 100 list – as people from “old money” families, or that were given tremendous advantages at birth. In many cases that’s true, but the newest batch of billionaires seems to differ from them in some key ways.
A new working paper, put together by Caroline Freund and Sarah Oliver and published by the Peterson Institute for International Economics in Washington D.C., outlines a few of those key ways by digging through the data. “Despite slow global income growth, extreme wealth is increasing rapidly. The 2015 Forbes World’s Billionaires list shows a record number of billionaires in the world (1,826), as well as a record number of billionaires under age 40, self-made billionaires, and female billionaires,” the paper says.
“These records break the same records set by the 2014 list. The billionaire characteristics dataset used in this paper, by compiling the Forbes lists from 1996–2015 and adding detailed information on the individuals listed, helps identify patterns in the most well-rewarded activities across countries and over time.”
So, by sifting through the numbers and demographic data associated with the world’s billionaire lists, the authors were able to identify some common threads and trends. As mentioned, we’re seeing unprecedented growth among the world’s richest classes – while the world’s poorest have also been growing in ranks (although, somewhat ironically, extreme poverty has been declining). The trends identified are giving us insight into who billionaires are, how they’re achieving success, and where they’re coming from.
It’s basically a very loose blueprint, if you want to look at it that way. You can read through the paper yourself (as you should), but know that the authors focus on three specific trends found in the data. From those three trends, we can derive a few specific characteristics of “the new rich.” Here are those characteristics.
1. What they do
The first thing we’re seeing among the new class of the super-rich is that they’re largely doing it on their own, through innovation. The Internet has obviously played a large part in this, and opened up almost every industry – opened up so that different approaches can be taken, and more efficient means of getting from A to B can be found. The people who are finding and implementing those means? They’re getting insanely rich.
These days, the ticket to the 1% is earned by reworking the ways of old, proving yourself as a leader, and making it happen. There are other ways, of course, but this is notable among the latest crop of billionaires.
2. How they do it
“Wealth is increasingly self-made, even in the advanced countries,” the paper says. And we’ve seen this happen first-hand a number of times over the past decade or so. There have been household names like Bill Gates and Warren Buffett, sure; but who could’ve predicted the rise of people like Jeff Bezos, Mark Zuckerberg, or Snapchat’s Justin Spiegel?
These new members of the super-rich are finding new and innovative ways to conduct business – and making billions doing it. These aren’t the robber barons, or industrial titans of the past. The new class of billionaires is making money with technology, relatively small work forces, and outside-the-box thinking.
3. Where they’re from
This sentence, direct from the paper, pretty much says it all: “Extreme wealth is growing significantly faster in emerging markets than in advanced countries.” In short, if you’re in an “emerging market,” you have a better chance of hitting the proverbial home run. There are a lot of reasons for that, but it boils down to lower costs, access to capital, and more opportunity. The super-rich being birthed by these markets are “longer concentrated in the resource and politically-connected sectors of the past,” and are “a large and growing share of whom are company founders, creating new and innovative products.”
Your chances are particularly good if you’re in East Asia, where countries like China are seeing their economies quickly pick up speed. Other parts of the world, like Africa and the Middle East, are still dominated by traditional political powers, and inherited wealth.
So, if you plan to make a lot of money fast, it might pay to do it away from the comforts of North America or Europe.