How billionaires got their money

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Did you ever wonder how billionaires got their money? Well, if you have, here’s a post with the answers!

How Billionaires Got Their Money

What is a billion dollars?

It’s written out numerically as 1,000,000,000. That’s a million dollars times one thousand. Yes, it’s an almost inconceivable amount of money – at least in my mind. Yet there are quite a few people in the world with a net worth of at least one billion dollars – 540 in the United States alone!

What are the main billionaire source categories?

In the most recent analysis, performed by HowMuch.net, it was determined there were five main source categories of how billionaires got their money.

Those categories are:

  • Inherited
  • Company founders
  • Executives
  • Political connections and resource related
  • Financial sector

Geographic differences

How billionaires got their money varies quite a lot from country-to-country. What I found interesting – largely because I never thought about it before – is that every major country in the world has billionaires. If you want to see a full map of the countries, color-coded by billionaire categories, you can check out this article over on Indy100.com.

Billionaires in the United States go their money from…

The United States has the largest number of billionaires in the world. In fact, the US has just over 30% of the world’s billionaires. What’s the top way those people acquired their wealth? Think it was inheritance? Think it was because they have political connections? If that’s what you thought, you would be wrong.

Looking at billionaires in the United States, the largest number of billionaires (32%) gained their wealth from starting businesses. That’s right, they are company founders. Entrepreneurs who took some risks, worked hard, and built their own companies. On a related note, this is also the top way that American millionaires acquired their wealth. Those statistics and a lot more are available in the book the Millionaire Next Door, which is a great read that I highly recommend.

How else did American billionaires get their money? Here’s the breakdown…

  • 32% company founders
  • 29% inherited
  • 27% financial sector
  • 8% executives
  • 4% political and other connections

How about billionaires in China?

China is the country with the second largest number of extremely wealth people – with just over 9% of the world’s billionaires. While the top wealth-building method still holds true there – company founders have the lead – the percentages vary quite a lot, as do the rest of the category rankings.

Here’s how billionaires got their money in China:

  • 40% company founders
  • 25% executives
  • 24% financial sector
  • 9% inherited
  • 2% political and other connections

It makes me wonder why the number of billionaires who inherited their money is so much lower in China. My guess is that either a) they spend their money rather than leave it to kids or b) a lot of their wealth was built in recent generations so hasn’t passed on to children yet.

Want to be a billionaire?

According to the data, it looks like your best change of becoming a billionaire is to start a business or work in the financial sector. In the US you can also inherit the money, but we don’t have control over our parents, so let’s ignore that option.

Now that you know how billionaires got their money, would you make life changes to become one? Have you ever thought about starting your own business? Perhaps you should. Or maybe a career change into the financial sector is something to consider?

Of course there is a lot more to life than acquiring wealth. Money is nothing more than a tool to use, but used the right way you could leverage it to accomplish a lot of great things and help a lot of people. So, go for it!

 

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2 Comments

  1. Mustard Seed Money February 23, 2017 at 2:50 am - Reply

    Creating a company definitely sounds like the best way to become a billionaire. Knowing that you created a billion dollar company from nothing has got to be an incredible feeling. It’s definitely something I would love to do. If only I had a brilliant idea to sell the world 🙂

    • Brad Kingsley February 23, 2017 at 10:54 am - Reply

      Indeed! It’s one of the best ways to become a millionaire too! Sometimes the brilliant ideas start out small. A side hustle or a hobby can sometimes grow into something quite amazing!

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