15 Secrets Only Billionaires Know

Introduction

• As of 2023, there are 3,112 billionaires in the world.

• Billionaires have a unique perspective on life that differs from what most people have experienced.

• Their perspective often goes against common beliefs and challenges traditional thinking.

Secret #1: Ownership Percentage

• Percentage of business ownership by billionaires

• The importance of not being overly protective

• The financial benefits of owning a smaller percentage of a larger business

One of the secrets that only billionaires know is that they don't usually own 100% of their businesses. In fact, many billionaires own a much smaller percentage of their companies. For example, Jeff Bezos owns 12.7% of Amazon, Elon Musk owns 13% of Tesla, and Bernard Arno owns 46% of LVMH. This goes against the common belief that millionaires should be overly share-protective. The truth is, that by owning a smaller percentage of a larger business, billionaires can benefit financially.

By not being overly share-protective, billionaires can accelerate their wealth accumulation in a shorter time. Owning 15% of a multi-billion-dollar business can be much more financially lucrative than owning 100% of a smaller business worth only a few million dollars. This is because larger businesses have the potential for exponential growth and greater profitability.

Additionally, owning a smaller percentage of a larger business allows billionaires to diversify their investments. They can use the funds from their smaller ownership stake to invest in other businesses and industries, further increasing their wealth. By spreading their investments across different sectors, billionaires can reduce risk and take advantage of opportunities in various markets.

So, if you're a business owner or aspiring entrepreneur, remember that owning a smaller percentage of a larger business can have significant financial benefits. Don't be overly share-protective, and consider the potential for accelerated growth and diversification that comes with owning a smaller stake in a larger enterprise.

Secret #2: Real Estate vs. Private Equity

• Comparison between real estate and private equity

• The significance of private equity in billionaire net worth

• Advantages of using business interests to increase net worth

When it comes to wealth accumulation, two popular avenues that billionaires often explore are real estate and private equity. While both options offer opportunities for growth and financial success, there are key differences between them.

Comparison between real estate and private equity

Real estate involves investing in physical properties such as homes, commercial buildings, and land. Private equity, on the other hand, focuses on investing in privately held companies and startups.

Real estate is often considered a "dumb millionaire's game" because it can make individuals millionaires through property appreciation and rental income. However, private equity has the potential to take individuals beyond the million-dollar mark and into billionaire territory.

The significance of private equity in billionaire net worth

Many billionaires attribute a significant portion of their net worth to private equity investments. This is because private equity allows them to leverage their capital and buy pieces of other businesses, multiplying their wealth exponentially.

By using their business interests to increase their net worth, billionaires can diversify their investments and reduce risk. They can allocate funds from one business to another, taking advantage of opportunities in different industries and markets.

Advantages of using business interests to increase net worth

Owning a business and investing in private equity offer several advantages for billionaires. Firstly, it allows them to have control over their investments and make strategic decisions that can lead to substantial returns.

Secondly, owning a business provides the opportunity for accelerated growth. By scaling up their businesses and increasing revenue, billionaires can quickly multiply their net worth.

Lastly, using business interests to increase net worth provides a source of passive income. By owning equity in various companies, billionaires can earn dividends and distributions, adding to their overall wealth.

In conclusion, while real estate can make individuals millionaires, private equity is often the key to billionaire status. By leveraging their business interests and strategically investing in other companies, billionaires can accelerate their wealth accumulation and diversify their investments.

Secret #3: Leveraging Other People's Money

• Earning one million dollars vs. earning one billion dollars

• Steps to using other people's money to become rich

• An example of a simplified model for wealth creation

When it comes to building wealth, there is a vast difference between earning one million dollars and earning one billion dollars. While both amounts are substantial, billionaires have figured out the secrets to reaching the billion-dollar mark.

Steps to using other people's money to become rich

One of the key strategies that billionaires employ is leveraging other people's money. They understand that using outside funds can help them accelerate their wealth accumulation and achieve exponential growth.

The first step in using other people's money is finding individuals or institutions willing to invest in your business or idea. This can include friends, family, banks, or angel investors. By presenting a compelling vision and offering a percentage of ownership in your company, you can secure the funds needed to get started.

Once you have the initial investment, you can use it to generate revenue and build a team to scale your business. The goal is to increase your revenue and attract external investors who can provide additional funding. With each round of investment, the value of your company will increase, allowing you to leverage more capital.

Using this model, you can continue to raise funds, develop new products, and expand your business. Eventually, you may even be able to take your company public through an IPO, further increasing your net worth.

An example of a simplified model for wealth creation

Let's simplify this model with an example. Imagine you start a business and secure $100,000 from friends and family, giving them a 20% stake in the company. With this initial investment, you generate $1 million in recurring revenue per year.

You then go on to secure additional funding at a valuation of $10 million, raising $2 million and maintaining a 60% ownership stake. Using this capital, you scale your business to $10 million in yearly recurring revenue.

Continuing this pattern, you raise another round of funding at a $100 million valuation, bringing in $20 million and retaining 40% ownership. With this capital, you develop new products and hire salespeople, driving your recurring revenue even higher.

Finally, you file for an IPO at a $10 billion valuation, floating 10% of your shares on the public market. At this point, you and all of your investors become billionaires.

While this simplified model may not reflect the complexities of real-world wealth creation, it illustrates the power of leveraging other people's money to build wealth. By following similar strategies, you can accelerate your path to financial success and achieve your own billion-dollar dreams.

Secret #4: Buy Low, Sell High

• The importance of the Buy Low, Sell High business model

• Optimizing markup and scale for financial success

• Examples of successful businesses using different strategies

The buy low, sell high business model is crucial for financial success. Billionaires understand the importance of this concept and have built their wealth by implementing it in their businesses.

The importance of the Buy Low, Sell High business model

By buying low and selling high, billionaires can generate significant profits. They understand that the profit is made at the point of purchase, not the point of sale. By acquiring assets, products, or investments at a lower price, they can maximise their returns when selling them at a higher price.

This strategy allows billionaires to take advantage of market fluctuations and capitalise on opportunities for growth and profitability. They carefully analyse market trends, timing their purchases and sales to optimise their financial gains.

Optimizing markup and scale for financial success

In addition to buying low and selling high, billionaires also focus on optimising markup and scale. Markup refers to the difference between the cost of acquiring a product or asset and the price at which it is sold. By strategically setting their markup, billionaires can increase their profit margins.

Furthermore, billionaires understand the importance of scaling their businesses. By increasing the number of transactions and expanding their customer base, they can generate higher revenue and accelerate their financial growth. This allows them to leverage economies of scale and maximise their profitability.

Examples of successful businesses using different strategies

Successful businesses across various industries have implemented different strategies to buy low and sell high. For example, e-commerce giant Amazon focuses on high transaction volumes with relatively low-profit margins. They offer competitive prices to attract a large customer base, leveraging their scale to generate significant revenue.

On the other hand, luxury brands like LVMH, owned by Bernard Arno, implement a different strategy. They focus on premium pricing and exclusivity, targeting high-end customers willing to pay a premium for their products. By creating a perception of luxury and scarcity, they can command higher prices and generate substantial profits.

These examples demonstrate the versatility of the Buy Low, Sell High model and how it can be applied in different business contexts. Whether it's through high transaction volumes or premium pricing, billionaires understand the importance of buying low and selling high to achieve financial success.

Secret #5: Art as an Investment

• Art as a preferred store of value for billionaires

• Advantages of investing in blue-chip art

• Comparison with other investments and profitability

When it comes to investment strategies, art is often overlooked by the average investor. However, for billionaires, art is a preferred store of value. High-net-worth individuals often allocate a significant portion of their investment portfolios into art and collectibles.

Blue-chip art, in particular, has proven to be a profitable investment for billionaires. Blue-chip art refers to works by renowned artists with established reputations and proven track records of appreciation. These works are often highly sought-after and command premium prices in the art market.

One of the advantages of investing in blue-chip art is its ability to perform well in high-inflation environments. In fact, according to a study by UBS, blue-chip art has consistently outperformed the S&P 500. This makes it an attractive option for billionaires looking to diversify their investment portfolios and protect their wealth.

Compared to other investments, such as stocks or real estate, blue-chip art offers unique benefits. Unlike stocks, which can be volatile and subject to market fluctuations, art has a more stable and predictable value. Additionally, art can be easily moved and stored, making it a flexible and portable investment.

While investing in art may seem out of reach for the average person, platforms like Masterworks are making it more accessible. Masterworks allow everyday people to invest in multi-million-dollar paintings by buying shares of the artwork. This allows individuals to participate in the art market and potentially reap the financial rewards.

In conclusion, art is not only a form of creative expression, but it can also be a profitable investment. For billionaires, art is a preferred store of value and a way to diversify their investment portfolios. Blue-chip art, in particular, has proven to be a lucrative investment option, outperforming traditional investments like stocks. So, if you're looking to diversify your investments and potentially achieve financial success, consider exploring the world of art as an investment.

Secret #6: Stocks and Luck

• Limitations of stocks in wealth creation

• The importance of long-term perspective and starting capital

• Comparison between market performance and real estate

While stocks can be a popular investment choice, they have their limitations when it comes to wealth creation. Many people believe that investing in stocks alone can lead to billion-dollar success, but the reality is quite different.

Limitations of stocks in wealth creation

Stocks can be volatile and subject to market fluctuations. The value of stocks can go up and down, leading to potential losses. Additionally, not all stocks perform well, and it can be challenging to identify the right stocks to invest in.

Furthermore, stocks require a long-term perspective. It takes time for investments to grow and generate significant returns. Instant wealth is unlikely to be achieved solely through stock investments.

The importance of long-term perspective and starting capital

Billionaires understand the importance of taking a long-term perspective when it comes to stocks. They don't expect immediate results and are willing to ride out market fluctuations.

Additionally, starting capital plays a crucial role in stock investments. Billionaires often have a significant amount of capital to invest, allowing them to take advantage of opportunities and diversify their portfolio. Starting with a larger capital base can lead to greater potential returns.

Comparison between market performance and real estate

When comparing the performance of the stock market to real estate, it's essential to recognise the differences. Real estate offers stability and the potential for appreciation over time. The value of properties tends to increase, providing a more predictable return on investment.

Furthermore, real estate investments offer additional benefits, such as rental income and tax advantages. These factors contribute to the allure of real estate for wealth creation.

In conclusion, while stocks can be a part of a diversified investment portfolio, they have limitations in terms of wealth creation. Billionaires understand the need for a long-term perspective, starting capital, and diversification across different asset classes like real estate to achieve their financial goals.

Secret #7: Backing Promising Businesses

• The role of billionaires in turning millionaires into billionaires

• Examples of successful investments by billionaires

• The importance of making money first to invest in others

Billionaires play a significant role in turning millionaires into billionaires through their investments and support. They can spot promising businesses and provide the necessary resources and expertise to help them grow and succeed.

One of the secrets that only billionaires know is the importance of making money first before being able to invest in others. By building their own wealth and success, billionaires gain the financial capacity and credibility to support other entrepreneurs and businesses.

Examples of successful investments by billionaires are plentiful. For instance, Peter Thiel's early investment in Facebook proved to be a game-changer, turning him into a billionaire and paving the way for the social media giant's success. Similarly, Gary Tan's early investment in Coinbase yielded billions in returns as the cryptocurrency platform grew.

By leveraging their financial resources and industry knowledge, billionaires can provide mentorship, capital, and strategic guidance to help promising businesses reach their full potential. They can open doors to new opportunities, connect entrepreneurs with influential networks, and provide valuable insights gained from their own experiences.

It's important to note that not all billionaires start from the bottom. Many have had advantages such as access to higher education, a safety net, and connections to wealthy families. However, their success is not solely attributed to their background but also to their drive, determination, and willingness to take risks.

In conclusion, billionaires can transform millionaires into billionaires through their investments and support. By making money first and achieving their own success, billionaires can back promising businesses and entrepreneurs, helping them achieve their own financial milestones.

Secret #8: Liquidity and Using Assets as Collateral

• Percentage of liquid assets held by billionaires

• Borrowing money against assets for low-interest loans

• Avoiding taxes on debt instead of selling assets

When it comes to managing their wealth, billionaires understand the importance of liquidity and using their assets as collateral. Here are some key points to consider:

Percentage of liquid assets held by billionaires

Contrary to popular belief, most billionaires do not keep a large percentage of their wealth in liquid form. Instead, the majority of their net worth is tied up in stocks, real estate, businesses, and other investments. This allows them to maximise their potential for growth and increase their overall wealth.

Billionaires understand that having a significant portion of their assets tied up in illiquid investments can actually be more beneficial in the long run. It allows them to take advantage of opportunities and strategically allocate their resources to generate higher returns.

Borrowing money against assets for low-interest loans

Instead of selling their assets to access cash, billionaires often choose to borrow money against their assets. This allows them to maintain ownership and control while still accessing the funds they need. By using their assets as collateral, they can secure low-interest loans and preserve their overall wealth.

For example, if a billionaire needs cash for a new business venture or investment opportunity, they can use their stocks, real estate, or other assets as collateral for a loan. This not only provides them with the capital they need but also allows them to avoid selling their assets and triggering potential taxes or capital gains.

Avoiding taxes on debt instead of selling assets

Another advantage of using debt instead of selling assets is the tax benefit. When billionaires borrow money against their assets, they do not trigger capital gains taxes or other taxes that may be associated with selling their assets. This allows them to effectively manage their tax liabilities and preserve more of their wealth.

By strategically using debt, billionaires can navigate the complex world of taxes and take advantage of legal loopholes and deductions. This allows them to minimise their tax burden and maximise their wealth accumulation.

In conclusion, liquidity and using assets as collateral play a crucial role in the financial strategies of billionaires. By keeping a smaller percentage of their wealth in liquid assets, they can allocate resources more effectively and take advantage of opportunities for growth and diversification. Borrowing money against their assets allows them to access capital while maintaining ownership and control, and it also provides tax benefits by avoiding the sale of assets. So, if you're looking to manage your wealth like a billionaire, consider the benefits of liquidity and using your assets as collateral.

Secret #9: Making Money in a Crisis

• Billionaires' perspective on recessions

• Taking advantage of discounted opportunities

• Strategic plays for long-term growth

Billionaires have a unique perspective on recessions. While most people fear economic downturns, billionaires see them as opportunities for wealth accumulation. They understand that during a crisis, assets and businesses are often undervalued, providing the perfect chance to make strategic investments.

During a recession, billionaires take advantage of discounted opportunities. They actively seek out assets, stocks, and businesses that are trading below their true value. By purchasing these assets at a discount, billionaires can position themselves for significant returns when the market recovers.

Additionally, billionaires make strategic plays for long-term growth during a crisis. They have the financial resources and patience to invest in businesses that may not yield immediate profits but have the potential for exponential growth in the future. By identifying emerging trends and industries, billionaires can position themselves at the forefront of innovation and capitalise on long-term market growth.

Overall, making money in a crisis requires a billionaire mindset. It involves seeing opportunities where others see obstacles and being willing to take calculated risks. By leveraging their financial resources, strategic thinking, and long-term perspective, billionaires can navigate through uncertain times and come out even wealthier.

Secret #10: Expertise and Decision-Making

• The importance of experts in minimising risk and increasing returns

• The role of executive coaches in billionaire decision-making

• Benefits of accessing world-class super coaches

Expertise plays a crucial role in the decision-making process of billionaires. They understand the importance of seeking the advice and guidance of experts to minimise risk and increase returns. By tapping into the knowledge and experience of specialists, billionaires can make more informed and strategic decisions.

One area where billionaires often rely on expertise is in the realm of executive coaching. These high-level professionals act as trusted advisors, helping billionaires navigate complex business challenges and providing insights and strategies for success. Executive coaches assist in keeping billionaires focused, aligning their actions with their goals, and providing clarity of thought.

Executive coaching is comparable to having a world-class super coach in your corner. These coaches have an in-depth understanding of the industry and can provide valuable insights and perspectives that may not be readily apparent to the billionaire. With their guidance, billionaires can refine their decision-making process and optimise their strategies for maximum impact.

Accessing world-class supercoaches can have a transformative effect on a billionaire's life and business. These coaches have a wealth of experience and knowledge that they can impart, helping billionaires unlock their full potential and achieve their goals. By leveraging the expertise of these professionals, billionaires can accelerate their path to success and overcome challenges that may arise along the way.

In conclusion, expertise and decision-making go hand in hand for billionaires. They understand the importance of seeking advice from experts and leveraging the insights and strategies provided by executive coaches. By tapping into this expertise, billionaires can make more informed decisions, minimise risk, and increase their chances of success.

Secret #11: Enterprise Deals vs. Direct-to-Consumer

• The profitability of enterprise deals over direct-to-consumer

• Examples of successful enterprise deals in the tech industry

• The difference in income between selling to individuals and businesses

When it comes to generating profit and increasing overall income, billionaires understand the advantages of focusing on enterprise deals rather than direct-to-consumer sales. Here are some key points to consider:

The profitability of enterprise deals over direct-to-consumer

While direct-to-consumer sales can be lucrative for smaller businesses, the profitability of enterprise deals is often much higher for billionaires. Selling products or services to businesses allows billionaires to negotiate higher prices and secure long-term contracts, resulting in larger profit margins.

Furthermore, enterprise deals often involve larger order volumes, providing a more stable and consistent source of revenue. This allows billionaires to forecast and plan their finances more effectively, reducing the risk of market fluctuations and other economic uncertainties.

Examples of successful enterprise deals in the tech industry

Many billionaires in the tech industry have capitalised on the profitability of enterprise deals. For instance, Amazon's cloud infrastructure business, AWS, has experienced significant growth, generating over $80 billion per year in revenue. This enterprise-focused service has become a major source of profit for Amazon, outperforming its direct-to-consumer operations.

Similarly, Google's cloud services have become a multi-billion-dollar business, catering to the enterprise market. By offering scalable solutions and customisable services to businesses, Google has been able to increase its overall income and diversify its revenue streams.

The difference in income between selling to individuals and businesses

One of the key advantages of selling to businesses is the potential for higher income. Selling products or services to businesses often involves larger order values and longer-term contracts, resulting in more substantial revenue streams.

Additionally, businesses are typically willing to pay a premium for solutions that meet their specific needs and help drive their own profitability. This allows billionaires to command higher prices and generate a higher overall income compared to selling to individual consumers.

In conclusion, billionaires understand the profitability of enterprise deals and the advantages they offer over direct-to-consumer sales. By focusing on selling to businesses, billionaires can increase their profit margins, secure long-term contracts, and generate higher overall income. So, if you're a business owner or aspiring entrepreneur, consider the potential benefits of targeting the enterprise market for financial success.

Secret #12: Privileged Backgrounds

• The influence of privileged backgrounds on billionaire success

• Access to education, resources, and safety nets

• The importance of recognising advantages and opportunities

Privileged backgrounds play a significant role in the success of billionaires. Having access to wealth, education, and resources gives them a distinct advantage over those who come from less privileged backgrounds.

Billionaires often have access to the best education money can buy. They can attend prestigious schools and universities that provide them with a strong foundation of knowledge and skills. This education equips them with the tools necessary to succeed in their chosen fields.

In addition to education, billionaires have access to resources that can help propel their success. They often have access to funding, whether it be from family, friends, or investors, that allows them to start or expand their businesses. This access to capital gives them a head start and the ability to take risks that others may not be able to afford.

Furthermore, billionaires often have safety nets in place that provide them with a sense of security and the freedom to pursue their goals. They have the financial means to bounce back from failures and setbacks, allowing them to take calculated risks without fear of losing everything.

Recognising the advantages and opportunities that come with a privileged background is important. It is essential to acknowledge the role that privilege plays in billionaire success and to work towards creating a more equitable society where everyone has equal access to education, resources, and opportunities.

While it is true that hard work and determination play a role in success, it is also important to acknowledge that not everyone starts from the same place. Privileged backgrounds provide a head start that can significantly impact an individual's chances of becoming a billionaire.

In conclusion, privileged backgrounds have a profound influence on the success of billionaires. Access to education, resources, and safety nets gives them a significant advantage over those who come from less privileged backgrounds. Recognising these advantages and working towards a more equitable society is essential for creating opportunities for all individuals to succeed.

Secret #13: Exploitation of Slave Labour

• The dark side of billionaire wealth creation

• The exploitation of slave labour in various industries

• Awareness of the hidden costs behind cheap products

While many people admire billionaires for their wealth and success, there is a dark side to their wealth creation that is often overlooked. One of the secrets that only billionaires know is the exploitation of slave labour in various industries.

Behind the scenes, many billionaires accumulate their wealth by taking advantage of cheap labour, often in developing countries. They outsource production to countries with lower labour costs, where workers are paid meagre wages and subjected to poor working conditions.

In industries such as technology, fashion, and manufacturing, the use of slave labour is prevalent. Workers, including children, are forced to work long hours in unsafe environments for minimal pay. These workers have no choice but to accept these conditions due to economic desperation.

It is important to be aware of the hidden costs behind the cheap products that we purchase. While we may enjoy the convenience and affordability of these products, it comes at a great expense to those who are exploited in the process.

As consumers, we must demand transparency and ethical practices from the companies and brands we support. By choosing to buy from companies that prioritise fair labour practices and sustainability, we can contribute to a more just and equitable world.

So, the next time you purchase a product, consider the hidden costs behind its low price. Think about the workers who may be suffering to produce that product, and choose to support businesses that prioritise ethical practices and social responsibility.

Secret #14: Obsession with Money and Success

• The intense drive and sacrifice required for billionaire success

• Lack of work-life balance and hyper-competitiveness

• Different mindsets and perspectives on life

Becoming a billionaire requires an intense drive and a willingness to make sacrifices. The path to billionaire success is not an easy one, and it often requires a level of dedication and perseverance that most people are not willing to commit to. Billionaires are constantly pushing themselves to achieve greater heights, and they are willing to do whatever it takes to reach their goals.

One of the key characteristics of a billionaire is their lack of work-life balance. They are constantly working and thinking about their businesses, often at the expense of other areas of their lives. They are hyper-focused and dedicated to their goals, and they are willing to put in the long hours and make the necessary sacrifices to achieve them.

Additionally, billionaires have a different mindset and perspective on life. They see opportunities where others see obstacles, and they are always looking for ways to maximise their wealth and success. They are hyper-competitive and are constantly striving to be the best in their industries. This mindset drives them to constantly improve and innovate, and it sets them apart from the average person.

In conclusion, becoming a billionaire requires an intense obsession with money and success. It requires sacrifices, a lack of work-life balance, and a unique mindset and perspective on life. While the path to billionaire success is not for everyone, those who are willing to commit to it can achieve extraordinary levels of wealth and success.

Secret #15: Decision-Making and Persuasion

• The critical skills of decision-making and persuasion for billionaires

• The importance of making high-value decisions

• The role of executive coaches in developing these skills

Decision-making and persuasiveness are critical skills for billionaires. These skills allow them to navigate complex business challenges, make strategic choices, and ultimately achieve their financial goals. Here are some key points to consider:

The critical skills of decision-making and persuasion for billionaires

Billionaires understand that every decision they make can have a significant impact on their success. They have honed their decision-making skills to make informed choices that minimise risk and maximise returns. By carefully considering all available information and analysing potential outcomes, billionaires can make high-value decisions that drive their wealth accumulation.

Persuasion is another essential skill for billionaires. They are adept at communicating their ideas, visions, and strategies to various stakeholders, including investors, employees, and business partners. By effectively persuading others to believe in their goals and invest in their ventures, billionaires can attract the resources and support they need to succeed.

The importance of making high-value decisions

High-value decisions are crucial for billionaires because they have significant implications for their businesses and overall wealth. Every decision they make can either propel them towards greater success or hinder their progress. By prioritising high-value decisions, billionaires can ensure that their resources and efforts are focused on the most impactful opportunities.

The role of executive coaches in developing these skills

Executive coaches play a vital role in the development of decision-making and persuasion skills for billionaires. These coaches provide valuable insights, guidance, and strategies to help billionaires make informed choices and effectively communicate their ideas. Executive coaches act as trusted advisors, helping billionaires navigate complex business challenges and optimise their decision-making process.

Through one-on-one coaching sessions, billionaires can refine their decision-making skills, gain clarity of thought, and enhance their persuasive abilities. Executive coaches have in-depth industry knowledge and experience, allowing them to provide valuable perspectives and recommendations that can contribute to a billionaire's success.

In conclusion, decision-making and persuasion are critical skills for billionaires. By mastering these skills, billionaires can make high-value decisions, attract resources and support, and ultimately achieve their financial goals. With the guidance of executive coaches, billionaires can enhance their decision-making process and optimise their strategies for maximum impact.