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Ask HN: What do billionaires do different than millionaires?

11 points by sarisari 12y ago

Besides getting much luckier, is there anything else that can be controlled?

Someone1234 12y ago
The market they're in. Playing follow the leader is rarely a way to make a lot of money.
- trcollinson 12y ago
  This is an absolutely excellent point. A few eye opening examples of this can be seen in the History Channel Docu-Drama "The Men Who Built America" [1]. Excellent show, honestly, with interesting points and some good history. It also showed how each of these extremely successful business people did not follow, they were leading into new territory. [1] http://www.history.com/shows/men-who-built-america http://www.history.com/shows/men-who-built-america
- brd 12y ago
  The first part is absolutely true, the second line sounds like something directly from Peter Thiel. While there's wisdom in his idea of finding green pastures and being a pioneer, its actually not the best way to become a billionaire. Picking the right industry is a far better strategy. If you look, something like 25% of newly minted billionaires made it there via investments (i.e. finance) while another large chunk got there via real estate. Neither of which requires much in the way of being a trail blazer, just hard work and competence.
  - dalke 12y ago
    3 of the top 10 billionaires are from the Walton family, so another good way is to inherit it. I say that to suggest that you have a strong bias error. http://selectusa.commerce.gov/industry-snapshots/financial-services-industry-united-states http://selectusa.commerce.gov/industry-snapshots/financial-s... says there are 5.87 million in the 'financial services and insurance sectors' in the US. There are under 2,000 billionaires in the word, so at most 500 "newly minted" billionaires who made it there via investments. It's impossible that a lack of "hard work and competence" is the reason that the remaining 5.87 million failed to become billionaires.
    - brd 12y ago
      I wouldn't say my bias is so strong, more that you're allowing labor statistics to water down what would be meaningful paths to being a billionaire via the finance industry. To your point: A large majority of the tech billionaires have software backgrounds yet only ~30% of the IT industry are programmers. So while the IT industry may look like a better place than finance, its really programming that looks better, not IT.
      - dalke 12y ago
        I was suggesting that "just hard work and competence" was insufficient to explain the reason for success. FWIW, assuming that "newly minted" means "within the last year", only 3 of the 27 listed at http://www.forbes.com/special-report/2014/billionaires/newcomers.html http://www.forbes.com/special-report/2014/billionaires/newco... come from the investment industry. 5 come from the entertainment industry.
        brd 12y ago
        I must have misread a headline at some point because the number of finance billionaires is smaller than I thought. Having said that, of the 268 listed by forbes, 15 were in finance. http://www.forbes.com/sites/alexmorrell/2014/03/06/worlds-billionaires-newcomers-the-full-list-of-268/ http://www.forbes.com/sites/alexmorrell/2014/03/06/worlds-bi... Anyway, I'd certainly agree that "hard work and competence" is an understatement but one of the luxuries of being in finance is that your entire career is built around making money from money. This affords a much more systematic approach to being a billionaire than you might find in other industries.
xrange 12y ago
On a side note, I met a couple today who decided to go to the super bowl, and claimed that they were dropping $3k per ticket, not including air-fare and hotel. They didn't want to have nose-bleed tickets, but they didn't need to be front row with the VIPs. What kind of income do you generally suppose someone would have to make to afford that kind of expenditure?
- brd 12y ago
  I'd say its more about living within your means and having the motivation to spend on what you decide matters. Although if they splurge on activities like that on a regular basis it would be an entirely different story. At 23, I was making sub 6 figures and bought a ~$3000 plane ticket at the last minute to visit some friends around the Mediterranean.
bbcbasic 12y ago
I would guess wealthy or powerful connections matter a lot. Ideally if they are family, childhood friends etc. I know that is a sucky answer but I am assuming you mean all billionaires not just the completely self made ones. Also for most people making a few million is enough to solve the money problem. There may not be any further desire to get rich. However if you do have that desire and it outweighs other psychological constraints (avoiding fear, pain, change etc.) and that desire can last decades then it is possible to get from well off to rich.
scholia 12y ago
Billionaires have enough money that they probably don't have to worry about money. Millionaires are mostly pretty ordinary people, except they own a house and have a job and a pension fund. Many of them are "asset rich, cash poor": they have to watch what they spend. The average house price in London UK is $771,360, so lot of people own houses worth more than $1 million. The median house price in New York is $548,500, while "The median price paid in June for a new or existing single-family home or condo in San Francisco hit $1 million for the first time, according to a report released Wednesday by DataQuick." http://www.sfgate.com/business/networth/article/1-million-city-S-F-median-home-price-hits-7-5626591.php http://www.sfgate.com/business/networth/article/1-million-ci... You can become a millionaire by working hard at something and investing wisely, and a multi-millionaire if you're exceptionally good at your trade (or lucky). Becoming a billionaire looks a lot trickier, but I suspect you're less likely to do it while working for somebody else.
brd 12y ago
I'd say the most important thing to do is to decouple your income from your time. You can easily become a millionaire with a reasonable paying job but to become a billionaire requires that you find ways to massively scale your income. There is an upper threshold on what you can make per hour and barring the most successful CEOs, it is likely impossible for you to be a billionaire by trading your time for money. This is why finance is such a lucrative area. In finance you leverage money to make money as opposed to using your time to make money, property has a similar effect. Starting a company is another good option simply because you begin to make money by trading other people's time.
deleted 12y ago
[deleted]
mtmail 12y ago
This answer from two weeks ago was very enlightening on how billionaires think of money http://www.reddit.com/r/AskReddit/comments/2s9u0s/what_do_insanely_wealthy_people_buy_that_ordinary/cnnmca8 http://www.reddit.com/r/AskReddit/comments/2s9u0s/what_do_in...
hashtag 12y ago
Most people here, if not everyone, is probably unqualified to answer this question. Any answers given are likely to be speculation and best guesses. Take any answer you get with a grain of salt.
JSeymourATL 12y ago
Given the complexities and multiple models of wealth creation, I don't think a qualified separating control factor exists. Fun to think about however. BTW - Bloomberg News has an entire page dedicated to Billionaire stories> http://www.bloomberg.com/video/billionaires/?cmpid=billionaires728x90 http://www.bloomberg.com/video/billionaires/?cmpid=billionai...

11 points by sarisari 12y ago

Besides getting much luckier, is there anything else that can be controlled?

Someone1234 12y ago

The market they're in. Playing follow the leader is rarely a way to make a lot of money.

trcollinson 12y ago
This is an absolutely excellent point. A few eye opening examples of this can be seen in the History Channel Docu-Drama "The Men Who Built America" [1]. Excellent show, honestly, with interesting points and some good history. It also showed how each of these extremely successful business people did not follow, they were leading into new territory. [1] http://www.history.com/shows/men-who-built-america http://www.history.com/shows/men-who-built-america
brd 12y ago
The first part is absolutely true, the second line sounds like something directly from Peter Thiel. While there's wisdom in his idea of finding green pastures and being a pioneer, its actually not the best way to become a billionaire. Picking the right industry is a far better strategy. If you look, something like 25% of newly minted billionaires made it there via investments (i.e. finance) while another large chunk got there via real estate. Neither of which requires much in the way of being a trail blazer, just hard work and competence.
- dalke 12y ago
  3 of the top 10 billionaires are from the Walton family, so another good way is to inherit it. I say that to suggest that you have a strong bias error. http://selectusa.commerce.gov/industry-snapshots/financial-services-industry-united-states http://selectusa.commerce.gov/industry-snapshots/financial-s... says there are 5.87 million in the 'financial services and insurance sectors' in the US. There are under 2,000 billionaires in the word, so at most 500 "newly minted" billionaires who made it there via investments. It's impossible that a lack of "hard work and competence" is the reason that the remaining 5.87 million failed to become billionaires.
  - brd 12y ago
    I wouldn't say my bias is so strong, more that you're allowing labor statistics to water down what would be meaningful paths to being a billionaire via the finance industry. To your point: A large majority of the tech billionaires have software backgrounds yet only ~30% of the IT industry are programmers. So while the IT industry may look like a better place than finance, its really programming that looks better, not IT.
    - dalke 12y ago
      I was suggesting that "just hard work and competence" was insufficient to explain the reason for success. FWIW, assuming that "newly minted" means "within the last year", only 3 of the 27 listed at http://www.forbes.com/special-report/2014/billionaires/newcomers.html http://www.forbes.com/special-report/2014/billionaires/newco... come from the investment industry. 5 come from the entertainment industry.
      - brd 12y ago
        I must have misread a headline at some point because the number of finance billionaires is smaller than I thought. Having said that, of the 268 listed by forbes, 15 were in finance. http://www.forbes.com/sites/alexmorrell/2014/03/06/worlds-billionaires-newcomers-the-full-list-of-268/ http://www.forbes.com/sites/alexmorrell/2014/03/06/worlds-bi... Anyway, I'd certainly agree that "hard work and competence" is an understatement but one of the luxuries of being in finance is that your entire career is built around making money from money. This affords a much more systematic approach to being a billionaire than you might find in other industries.

xrange 12y ago

On a side note, I met a couple today who decided to go to the super bowl, and claimed that they were dropping $3k per ticket, not including air-fare and hotel. They didn't want to have nose-bleed tickets, but they didn't need to be front row with the VIPs. What kind of income do you generally suppose someone would have to make to afford that kind of expenditure?

brd 12y ago
I'd say its more about living within your means and having the motivation to spend on what you decide matters. Although if they splurge on activities like that on a regular basis it would be an entirely different story. At 23, I was making sub 6 figures and bought a ~$3000 plane ticket at the last minute to visit some friends around the Mediterranean.

bbcbasic 12y ago

I would guess wealthy or powerful connections matter a lot. Ideally if they are family, childhood friends etc. I know that is a sucky answer but I am assuming you mean all billionaires not just the completely self made ones. Also for most people making a few million is enough to solve the money problem. There may not be any further desire to get rich. However if you do have that desire and it outweighs other psychological constraints (avoiding fear, pain, change etc.) and that desire can last decades then it is possible to get from well off to rich.

scholia 12y ago

Billionaires have enough money that they probably don't have to worry about money. Millionaires are mostly pretty ordinary people, except they own a house and have a job and a pension fund. Many of them are "asset rich, cash poor": they have to watch what they spend. The average house price in London UK is $771,360, so lot of people own houses worth more than $1 million. The median house price in New York is $548,500, while "The median price paid in June for a new or existing single-family home or condo in San Francisco hit $1 million for the first time, according to a report released Wednesday by DataQuick." http://www.sfgate.com/business/networth/article/1-million-city-S-F-median-home-price-hits-7-5626591.php http://www.sfgate.com/business/networth/article/1-million-ci... You can become a millionaire by working hard at something and investing wisely, and a multi-millionaire if you're exceptionally good at your trade (or lucky). Becoming a billionaire looks a lot trickier, but I suspect you're less likely to do it while working for somebody else.

brd 12y ago

I'd say the most important thing to do is to decouple your income from your time. You can easily become a millionaire with a reasonable paying job but to become a billionaire requires that you find ways to massively scale your income. There is an upper threshold on what you can make per hour and barring the most successful CEOs, it is likely impossible for you to be a billionaire by trading your time for money. This is why finance is such a lucrative area. In finance you leverage money to make money as opposed to using your time to make money, property has a similar effect. Starting a company is another good option simply because you begin to make money by trading other people's time.

deleted 12y ago

[deleted]

mtmail 12y ago

This answer from two weeks ago was very enlightening on how billionaires think of money http://www.reddit.com/r/AskReddit/comments/2s9u0s/what_do_insanely_wealthy_people_buy_that_ordinary/cnnmca8 http://www.reddit.com/r/AskReddit/comments/2s9u0s/what_do_in...

hashtag 12y ago

Most people here, if not everyone, is probably unqualified to answer this question. Any answers given are likely to be speculation and best guesses. Take any answer you get with a grain of salt.

JSeymourATL 12y ago

Given the complexities and multiple models of wealth creation, I don't think a qualified separating control factor exists. Fun to think about however. BTW - Bloomberg News has an entire page dedicated to Billionaire stories> http://www.bloomberg.com/video/billionaires/?cmpid=billionaires728x90 http://www.bloomberg.com/video/billionaires/?cmpid=billionai...