How To Become A Billionaire, Or Just A Millionaire In 2010

I just finished perusing the Forbes 2010 list of billionaires. There are 1,011 billionaires worldwide at the moment -- and surprisingly neither Bill Gates nor Warren Buffett are number 1 this year... although they still have plenty of cash.

What can the list teach you about how to become a billionaire, or at least a garden variety American millionaire? First of all, I hate it when people get too wrapped up in these rankings. I doubt Warren Buffett, Bill Gates, or Mark Cuban is up late at night biting his nails to see exactly where he falls on Forbes' stupid list.

Who cares what an "old media" magazine, which is (allegedly) not doing so well, says about you... these guys are probably too busy living their dreams and growing their wealth in innovative ways to CARE about some stupid dead-tree publication's legacy rankings, designed mainly to whip up quick and easy publicity for Forbes.

As a billionaire, it must get somewhat annoying to have so many sycophant publications who throw your name around for traffic and attention, without focusing on what you have actually accomplished -- or how, precisely.

OK. With that said, browsing the list can provide you with some useful, if basic, information about the path to billionaire-dom: 

1. You've got to own, baby. Carlos Slim, Gates, Buffett, Mukesh Ambani, Lakshmi Mittal, Larry Ellison, Eike Batista. These captains of industry OWN and grow. They didn't get to where they are today by working at a Starbucks 9 to 5 and struggling to max out their 401k accounts. Or by denying themselves the occasional luxury of eating out or traveling. That isn't how massive wealth is created. That's how mediocre middle class status is achieved -- after 30 or 40 laborious years. The "save every penny" myth is just that; a myth. Billionaires are not created through miserly hoarding, but rather through innovation and savvy reinvestment of income and resources.

And sure, Berkshire Hathaway's Warren Buffett still has the same modest house he bought eons ago, and he's a man of the people and all that jazz... but when it comes to business, Buffett throws down (as is evidenced by his recent massive acquisition of BNSF). When you see something to invest in, you have to put your money where your mouth is, as it were.

2. It doesn't have to be glamorous. Sure, Gates and Ellison created software empires. But Batista (worth $27 billion, according to Forbes) made his money from mining and oil... Mittal (worth $28.7 billion, according to Forbes) made his wealth from steel... in fact, if you go through the 1,011 billionaires on the list, it is absolutely SHOCKING how many of these individuals made their money from the same stuff that wealthy folks were profiting from a century ago -- steel, oil, mining ventures.

3. Be patient. So being a cubicle slave who dutifully contributes to his Roth IRA and 401k is not the path to becoming a billionaire. Hopefully you already knew that. But if you are set on massive wealth creation, as I am, you won't rest until you have achieved it -- even if it takes you five years, ten years, twenty years. Spend every possible moment nurturing your business until the profits are substantial enough to hire brilliant people to do the nurturing. And even then, you will want to watch over your enterprise and make sure that the company remains committed, and that its corporate culture remains true to what you had originally envisioned.

Just my two cents... take it or leave it.

Comments

[Mike]

Well written article. Not so sure about the transparency of some of the major transactions that Carlos Slim has been involved in though.

[Jason]

Consolidating an industry is another common way to Billionaire status - like roof shingle distribution. A new one will be created with Dow Chem Solar shingles next year.

The key is to have a business network system in place.

[Pete]

Carlos Slim can teach you about deal-making. He is definitely old school. He’s of the tried and true “guerrilla billionaire” strategy: buy lots of businesses and either keep them for the cash flow or fix ‘em up and sell them. The goal is to make money off a lot of deals instead of a killing on just one.