(From left to right, top to bottom) Billionaires Warren Buffett, Mark Zuckerberg, Bill Gates, Elon Musk, Jeff Bezos, Steve Ballmer, Larry Ellison, Bernard Arnault, Sergey Brin, Larry Page - Photo: CNN/GETTY IMAGES
How can one become a billionaire? That is the question that Business Insider , a US-based news site focusing on business and finance, answered in an article published in January this year, with impressive answers.
3 legal ways
According to Business Insider , there are three legal ways to become a billionaire:
First, inheritance. According to last year's Forbes 400 list, about 30% of the 400 richest Americans got their billions this way.
"So if you don't think you can make $1 billion, cheer your parents on," Business Insider wrote.
Second , marry a billionaire. According to Forbes magazine, as of 2023, the US has 735 billionaires. Most of these billionaires are probably married, but there are also some single people emerging. And there are also cases of billionaires getting divorced, then finding new people.
The third , and by far the most popular, way is to work hard to make a lot of money. 70% of the billionaires on the Forbes 400 list did that.
But how to make billions of dollars?
Except in rare cases, we generally cannot just work and save our way to becoming a billionaire.
Even highly paid people like American football star Tom Brady struggle to make it on salary alone.
For example, Brady signed a 10-year contract with Fox Sports worth $375 million. After taxes, he will probably earn about $20 million a year. If this is Brady's only source of income and he saves all of it, it will take him about 50 years to become a billionaire.
Instead, one way to make billions is to own “assets that will one day be worth billions of dollars.”
For most billionaires, these assets are in the form of stocks and shares in companies. Others may be in the form of partnerships (such as hedge funds or private equity funds) or licensing agreements (such as basketball legend Michael Jordan’s deal with sportswear maker Nike, allowing the company to use his name).
Some billionaires also receive salaries, but these usually contribute only a very small portion of the billionaire's total wealth.
For example, American billionaire Warren Buffett is paid $100,000 a year by Berkshire Hathaway, but his wealth comes from the Berkshire shares he has bought and held. An investment of $450,000 has grown to about $122 billion over 60 years.
A study in Norway found the same thing: A very small fraction of people become wealthy through labor income (such as wages).
So the advice is to create or buy something that will one day in the future be worth billions of dollars.
Forbes' list shows that many companies have created many billionaires over time, such as Tesla, Microsoft, Oracle, Google, Facebook, Bloomberg, Berkshire Hathaway, Dell, Airbnb, Nike, Amazon, Walmart...
However, it is also important to note that there are a number of factors that affect the path to becoming a billionaire, such as time, luck, and where you live.
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