Many people associate prosperity with owning a good house,
having lots of money in the bank, a vacation home, and maybe a boat.
However, the wealth of the world's richest 1% eclipses this concept. This group of people owns
whole corporations, multibillion-dollar investment funds, Caribbean islands, and even space rockets.
Over the last two decades, the average net worth of the 1%,
or the richest 1% of the world population, has skyrocketed.
It currently stands higher than ever before, and above the typical citizen's net worth.
Here, have a look at some of these fundamental facts concerning the 1%'s lifestyle.
The richest 1% of the population has a minimum net worth of $11.1 million.
To enter the top 1%, a person would need to earn an annual average of
$758,434 dollars. And according to the 2020 Billionaire Census,
there were 2,825 billionaires in the world in 2019, up 8.5% from 2018.
North America had 834 billionaires, and Europe had 847, although North America's
billionaires had higher wealth (About $3.5 trillion vs. $2.5 trillion in Europe).
China, Germany, and the United States topped the nations with the most billionaires.
China had 342 people listed, with a combined fortune of $1.2 trillion,
while Germany had 153 people listed, with a combined wealth of $477 billion.
With 788 billionaires and a combined worth of $3.4 trillion, the United States took the top place.
So, now that you know these mind-blowing figures,
have you ever wondered how millionaires made their money?
Self-made millionaires and millionaires born into riches, are the two categories of millionaires.
"Self-made" refers to more than two-thirds of those having a net worth of $30 million or more.
And whatever method millionaires choose to make their money, they all have specific
common characteristics, such as prioritizing savings, and diversifying their investments.
According to studies, the majority of today's millionaires were not born into it.
As per a "Wealth-X" research published in 2019,
over 68% of people with a net worth of $30 million or more, made their money on their own.
In addition, according to a second research conducted by Fidelity Investments,
88% of all millionaires are self-made, which means they did not inherit their fortune.
Investments & capital appreciation, pay, and employee stock options & profit sharing,
were the top sources of assets for self-made millionaires, according to the Fidelity survey.
Those who inherited their riches are more inclined to attribute their fortune to entrepreneurship,
real estate investment appreciation, and the bequest itself.
Coming into money isn't always easy for self-made millionaires and billionaires;
many of them worked hard to acquire their financial success,
and then had the foresight and skill to use their newfound riches wisely.
So quick question for you:
what characteristics do you think some of these self-made billionaires have,
and what lessons can you take away for your own investment strategy? (Comment the answers below)
Now, let's look at the characteristics of billionaires.
Despite the fact that billionaires earn money in a variety of ways and means,
the Fidelity research found that they share some common characteristics: In no particular order.
1. They make ambitious goals for themselves and follow through with them.
Whether launching a business or pursuing other professional or personal goals,
billionaires and yes millionaires, put their ideas and desires into action.
Many people who achieved their fortunes without inheriting anything share this desire.
Have a look at Elon Musk; his ferocious determination enabled him to create reusable
rockets for his SpaceX project, despite a lot of discouragement from everyone around him.
2. Mentors drive them. Many self-made billionaires & millionaires
would openly acknowledge that they cannot possibly know everything. They go and look for people who
are familiar with the ins and outs of various sorts of saving and investing, gaining perspective
and insight from the top brains in the field. And for them, this usually pays off very handsomely.
3. They're looking for input. Self-improvement is a never-ending process
for a billionaire. Billionaires seek out criticism and comments on their ideas and business methods
to better uncover blind spots, and ensure the success of their companies.
4. They have no fear of failure. Billionaires recognize the valuable lessons of
failure. Although they would never outright seek it, their risks are meticulously calculated, and
each scenario is extensively tested. To sum it up, they give their all once they commit to anything.
They are aware of the importance of time management and the value of time.
That's why they are meticulous about how they use it.
I have a question for you, if you were rich, let's say a millionaire
with a net worth of about $30 Million dollars, how would you spend your money?
I bet for most people who stumble upon a large fortune, some of the first things they would
do is buy a ton of liabilities. Such as a massive new house, a fuel-guzzling SUV
(probably German made), designer cloaths, and so on, you get the picture.
However, according to the study, self-made millionaires were more likely to add stock
assets to their financial portfolios, whereas those who were born affluent had more real
estate investments. Many millionaires believe that diversifying their investments is key.
Millionaires invest in a number of areas, such as their principal residence, mutual funds,
equities, and retirement accounts. Millionaires deposit their money in places where it will grow.
They avoid putting significant quantities of money into products that will depreciate. An automobile
used for daily transportation, for example, will almost certainly depreciate in value over time.
Most billionaires understand the importance of saving money before spending it.
Regardless of their yearly earnings, most billionaires spend their money on stocks,
bonds, and other secure assets that will grow over time.
If you want to be a millionaire, then pay attention.
According to the Fidelity study, when it comes to their financial future, 30% of millionaires polled
are concerned about conserving their money, while 20% are concerned about expanding their
fortune. If you want to become a billionaire, this is the foundation of some basic tactics.
"Today's billionaires are multifaceted, and to truly comprehend them, you must examine
not just their current viewpoint but also their road to riches and future financial ambitions."
Number 1: Focus on growing wealth instead of looking rich.
As I previously said, many people who desire to appear wealthy purchase large homes,
flashy cars, or pricey jewellery, and so on. They may also buy
all these on credit., which is a huge... massive mistake!
While wealthy individuals occasionally buy attractive items, they understand that it
is more vital to generate long-term wealth than impress their neighbors. So instead,
put their money into investments that would help them increase their net worth.
Number 2: Use debt to your advantage. Rich people aren't scared to take on debt.
However, unlike about 99% of people, they do it differently. The rich use debt to
increase their wealth rather than using credit cards to purchase things they can't afford.
They may, for example, borrow to purchase investment properties that provide a stable
rental income while also increasing their net worth, as the value of the properties rises.
Number 3: Use Tax breaks. Everybody knows rich people take
advantage of tax benefits. And, while they have a terrible reputation for it, there's nothing wrong
with working within the existing structure to save as much money as possible on taxes.
But it's not just the wealthy who can take advantage of the tax law. Everyone should
be aware of the tax benefits of being smart about the investment accounts into which they put money,
and they should maximize their tax savings by investing in tax-advantaged accounts each year.
Starting a business is by far the most popular approach to generating a lot of money.
Of course, names like Jeff Bezos, Elon Musk, and Richard Branson are well-known entrepreneurs.
To generate seven figures with your firm, you don't have to come anywhere near their level.
There are many various sorts of businesses you may start,
and the hurdles to entry are typically minimal. Online companies, on the other hand,
are tremendously popular, which means competition is fierce.
Number 4: Have multiple sources of income. The more revenue streams you develop,
the more likely you are to make seven figures. Sure, one source of income may be
worth a million dollars, but putting all your financial eggs in one basket can be perilous.
Aside from earned income, where you're exchanging time for money, you'll need to diversify your
revenue streams in order to free up time, while simultaneously achieving financial independence.
The most common method is to earn passive revenue, which you may achieve by,
for example, developing digital items. Affiliate marketing, residual revenue,
or rental property income might potentially help you reach your seven-figure objective.
A good example is that, the notable top billionaires, the likes of Bill Gates,
Elon Musk, and Jeff Bezos, among others, own more than five businesses and massive shares
among famous business brands and social media platforms. These multiple revenue
streams enable their businesses to make 6 to 7 and 8 figures, monthly and yearly, possible.
Number 5: Do million-dollar math’s. Grant Cardone, an author and entrepreneur
worth over $300 million, is notable for saying, "To achieve any objective,
you must believe in its viability as a realistic and practicable aim. "The simplest method to
achieve this is to conduct Million Dollar Math." "How many ways can you get a million dollars?"
Cardone claims that if you can convince 5,000 individuals to buy a $200 product,
you'll have $1 million. Alternatively, if 5,000 individuals paid you $17
a month for a year, you'd have $1 million. Of course, they are simplified versions,
but the concept remains the same: "Do the math to generate potential, then develop strategy."
Number 6: Became an influencer An influencer is a person with
a well-established reputation who, as a result of their high profile,
has the ability to influence others (including their purchasing patterns).
Many influencers have made millions of dollars thanks to the success of platforms like Instagram,
YouTube, SnapChat, and TikTok. Sponsorships, ads,
and/or the production and selling of their own goods, are all ways for influencers to
make money. Naturally, not everyone who has a blog or a YouTube channel will make
a lot of money. However, for those who are successful, the sky is the limit.
Have a look at these Interesting Facts: According to Forbes, 9-year-old Ryan Kaji
was the highest-paid YouTube personality in 2020, earning $29.5 million. Kaji has topped the list
for three years in a row (roughly one-third of his life), earning more than $20 million each year.
The 20 highest-paid Instagram stars, according to Influencer Marketing Hub,
earn anything from $180,000 to $700,000 every post.The most successful influencers
earn far over $1 million each year, as you can see from the figures.
To reach the seven-figure level, you'll need a lot of luck, but it's not impossible.
In fact, Jimmy Donaldson (aka Mr. Beast), the second-highest-earning YouTube personality,
did not launch his channel until 2017.
It goes without saying that earning seven figures would be a huge accomplishment.
Of course, tones of people desire to achieve this degree of success, but only a tiny number
of them will be able to do so. But who knows what might happen if you set big objectives,
adopt the appropriate attitude, and have the patience and perseverance to stay with it.
Suppose you wish to earn $1 million or more. In that case, it takes immense sacrifice,
perseverance, and financial discipline to dream,
get out of your comfort zone and work to reach your goals. But it is possible.
With that said, like this video, subscribe if you are new here, and do have a great week.