15 Secrets Only Billionaires Know

Summary

This script uncovers the secrets of billionaires, revealing that most do not own 100% of their businesses and that real estate is a millionaire's game, while private equity propels wealth to billions. It emphasizes the importance of using other people's money to scale businesses and the strategy of buying low and selling high. Art as a store of value, the insignificance of liquid wealth for the ultra-rich, and the role of experts in minimizing risk are also highlighted. The script dispels myths about stocks and luck in wealth creation, and stresses the importance of decision-making and persuasion skills for success.

Takeaways

• 💼 **Ownership Diversification**: Billionaires typically own a smaller percentage of their businesses, allowing for growth through the infusion of outside capital.
• 🏘️ **Real Estate vs. Private Equity**: While real estate can make you a millionaire, private equity investments are key to building billionaire wealth.
• 🤝 **Leverage Other People's Money (OPM)**: Billionaires often use other people's money to fund their ventures, scaling their businesses and increasing valuations.
• 📈 **Buy Low, Sell High Strategy**: Billionaires apply the principle of buying low and selling high across various industries, optimizing markup and scale.
• 🎨 **Art as a Store of Value**: Art is a preferred asset class for the ultra-wealthy due to its portability and potential for high returns.
• 📊 **Stocks and Luck Limitations**: Stocks and luck may contribute to millionaire status, but systematic strategies and planning are required for billionaire wealth.
• 🤑 **Wealth Creation Through Others**: New billionaires often bring along early investors, multiplying wealth among a network of believers in their vision.
• 💸 **Illiquidity of Wealth**: Most of a billionaire's wealth is not liquid; they use assets as collateral for loans rather than selling them for cash.
• 🌐 **Crisis as Opportunity**: Billionaires view economic downturns as opportunities to acquire assets at a discount, setting up for future growth.
• 🧐 **Surrounding with Experts**: Billionaires rely on experts to mitigate risks and maximize returns, ensuring they can focus on strategic growth.
• 💼 **Enterprise Over Consumer**: Billionaires often profit more from enterprise deals than direct-to-consumer sales, focusing on B2B models for recurring revenue.
• 🏛️ **Wealth and Context**: Many billionaires come from privileged backgrounds, which provided them with the resources and opportunities to succeed.
• 🛠️ **Exploitation in Supply Chains**: The production of technology and other goods often relies on underpaid labor, a reality hidden from consumers.
• 🧘 **Obsessive Focus**: Billionaires are often singularly focused on wealth and success, willing to make significant personal sacrifices to achieve their goals.
• 🗣️ **Decision-Making and Persuasion**: The ability to make high-impact decisions and persuade others is crucial for building and maintaining billionaire status.

Q & A

How many billionaires are there in the world as of 2023 according to the script?

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

What is the common misconception about owning a business when you become a billionaire?

The common misconception is that to become a billionaire, one must own 100% of their business. However, most billionaires, such as Jeff Bezos, Elon Musk, Bernard Arnault, Warren Buffett, and Larry Ellison, own a significant but not majority stake in their respective companies.

Why is owning a smaller percentage of a multi-billion dollar company more lucrative than owning 100% of a smaller business?

Owning a smaller percentage of a multi-billion dollar company is more lucrative because the overall value of the company is much higher, thus even a smaller percentage represents a larger absolute wealth compared to owning 100% of a smaller business.

What is the running joke among the ultra-wealthy about real estate?

The running joke among the ultra-wealthy is that real estate is the 'dumb millionaire game', implying that it's a simpler path to millionaire status compared to the more complex strategies billionaires employ.

How do billionaires typically use other people's money to make themselves rich?

Billionaires often start by seeking funds from friends, family, banks, and investors, offering a percentage of their business in exchange for capital. They then use this money to grow their business, increase revenue, and eventually sell more shares at a higher valuation, using the funds to further expand and scale their operations.

What is the main principle behind every business according to the script?

The main principle behind every business, as stated in the script, is the 'Buy Low, Sell High' equation, with the scale of transactions being the key differentiator.

Why do billionaires prefer art as a store of value?

Billionaires prefer art as a store of value because it is easily movable, can be leased to museums, and serves as a bargaining chip. It is more convenient to move large sums of money in the form of art rather than in hard assets like gold or silver.

What is the role of luck in becoming a billionaire according to the script?

While luck may help one become a millionaire, the script suggests that it is not a significant factor in amassing a billion-dollar fortune, which requires strategic planning and execution over time.

Why do billionaires keep less than 5% of their worth liquid?

Billionaires keep less than 5% of their worth liquid because they prefer to have their wealth tied up in assets that generate income or appreciate in value. When they need cash, they use their assets as collateral for loans rather than selling the assets.

How do billionaires view crises as an opportunity?

Billionaires view crises as opportunities to purchase assets at significant discounts, akin to a 'Black Friday' event for the wealthy, allowing them to make strategic investments for long-term growth.

What are the two billionaire-tier skills that the script suggests are essential to master?

The two billionaire-tier skills mentioned in the script are decision-making and persuasion, which are crucial for making high-value decisions and convincing others to support one's vision and mission.