Research & Analysis for Business
and Investment Clients
So you want to be a Billionaire, right? You'll stealthily maneuver past Big Brother Facebook's facial recognition software, leapfrog Twitter's fail whale, add some special Silicon Valley Zyng (a healthy organic grass-fed free-range crowd-sourced digital farm product), and IPO your way to billions like Mark Zuckerberg. It could happen. Well maybe...
Contrary to popular belief, you neither "get rich quick" nor gain billionaire fortunes from fame.
Fortune's 1200 Billionaires tell a different story—older, often wise, and (generally) industrious. But for Facebook's rock stars and a few others, you're extra ordinary if you make a billion before 50. Surprisingly, the 95% cut-off is 85. If you earn a billion before 60, you're better than most billionaires. Great news if you're not planning to retire by 26. It takes a long time to generate billionaire wealth.
Figure 1 plots the number of billionaires vs. age. Note how few billionaires exist before age 40. The number jumps around age 45 and is maintained steadily through 75. Predictably, around 90 you've retired or were strongly encouraged to pursue other endeavors. As we'll see in figure 3, the grim reaper is not as significant to your billionaire tenure as your board.
Key Conclusions from the Data
(1) True wealth isn't created in your dorm room (see figure 1).
(2) Between 45 and 75 you hit a sweet spot. Age does not matter. Just as many billionaires are minted at 48 as 68 (see figure 2).
(3) You're still in the game through 85. After that you're "pushed out". Not by the grim reaper, but by the board (see figure 3).
(4) Billionaire wealth accumulation fits the same model as tumor growth. Entire markets are captured by these winners. Billionaire wealth and the underlying company growth are fueled by the business environment's resources (consumer bank accounts) until constraints are reached. Capturing and expanding market share is, as a result, a necessary business obsession (see figure 3). Dominant firms like Google, Facebook, Intel, Microsoft, Oracle, Berkshire Hathaway, Telmex, & Walmart control the commanding heights of our current economy, and as a result, are difficult to displace.
(5) Mergers and acquisitions are logical with this growth outlook. Gaining market share through mergers and acquisitions helps solidify a company's future by eliminating competitors.
(6) If you want to make billions, you need to produce energy products, run a hedge fund, produce steel, develop a key world-changing technology, or distribute goods world-wide. Some famous names not appearing on the list include Britney Spears, Tiger Woods, Michael Jordan, Clinton, Bush, Cheney, Obama, Blankfein, Hank Paulson, and Greenspan.
(7) The population of billionaires can be better under- stood by equating their wealth with country GDPs around the world. The youngest 10% have the wealth equivalent of Argentina's GDP at purchasing power parity (PPP). Aggregating billionaire wealth through age 60 yields France's GDP. The aggregate billionaire wealth sums to Japan's GDP (see figure 3).
Supporting analysis follows below and on page 2.
Given Your Age, Where do You Fit?