How to Be a Billionaire

Co-authored by Marcus Raiyat

Last Updated: January 31, 2023 References Approved

Being a billionaire is more than having a bunch of zeroes in your bank account. Investing capital may be new to some, but it is not a barrier to becoming a billionaire. Working from a life of little or nothing to living in the lap of luxury is the classic American dream. To become a billionaire, create opportunities, invest wisely and retain wealth. Here's a theory of how to become a billionaire.

Part 1

Part 1 of 3:

Creating Opportunities

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Study hard. Normally, billionaires don't happen by accident. Be a billionaire by studying interest rates, tax brackets and dividends.
- Study finance and entrepreneurship. Learn to identify consumer needs, then develop business models to fulfill those needs. Currently, computer science skills and new technology are lucrative careers.^{[1]
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- If you haven't heard already STEM jobs (Science, Technology, Engineering, and Math)^{[2]
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  Research source} are going to be on the rise and are already on the rise. Taking "STEM" classes to be able to increase your chances of getting a job in the future, as well as they are fields in which the pay check has almost no limit.
- Read about successful billionaires; Warren Buffett, Bill Gates or Jon Huntsman, Sr. Be wise with money to amass more.
2
Save money. It takes money to make money. Use part of your income to generate wealth.Set aside a specific amount of money from each paycheck and put it in a savings account, to collect interest and use for future investments.
- Decide what percentage of earnings to spare - as little as $20 per paycheck will make a difference over three or four years. Invest into the market only the money you can afford to lose.
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3
Start an Individual Retirement Account (IRA). Available from financial institutions, IRAs are customized financial plans, set up to save for the future. To save a billion dollars, start saving as soon as possible. Interest accrues on savings.^{[3]
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- Depending on the financial institution, a minimum amount of money may be required initially. Research options and talk to a financial advisor.
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Pay off your credit card debt. It's hard to get ahead with debts hanging over head. Student loans and credit card debt should be paid off as soon as possible. Average annual percentage rates vary between 20% and 30%, so the balance will continue growing.^{[4]
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Make a five-year plan. Estimate how much money to save over 5 years. Decide the best way to use money, whether it's investing, starting a business or allowing money to collect interest.^{[5]
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- Keep finances a priority. Write financial goals down and refer to these regularly. To stay interested in financial projects, write reminders and put them where they will be seen every day - for instance, on the bathroom mirror or the dashboard of your car.

Part 2

Part 2 of 3:

Investing

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Buy real estate. A common way to make money is investing in real estate. Property may gain in value over years, and may provide a good return on investment. Investments can be flipped, rented, or developed.
- Beware of investing during an artificially inflated market, and make sure the monthly mortgage is easily affordable. It would be a good idea to read about the 2008 sub prime mortgage crisis in the United States to learn from cautionary tales.
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Invest in business. Starting your own business or buying into one can be a solid way to make money. Create or choose a company that offers a product or service that you would buy yourself, and put time and money toward improving it. Learn about the industry to differentiate good and bad business investments.
- Investing in green energy^{[6]
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  Research source} and computer technology may be a good plan for the future. These businesses are projected to grow over the next decades, so investing now may be a smart investment.
3
Buy and sell stocks. The stock market may be a good place to increase wealth. Watch the markets carefully before buying and pay attention to which stocks are successful. Be informed to make smart purchases. Most stocks appreciate over the long term. Ride out small dips in value and take occasional risks.
- Dividend reinvestment plans (DRIPs) and direct stock purchase plans (DSPs) bypass brokers (and commissions) by buying directly from company agents.^{[7]
  X
  Research source} These are offered by over 1,000 major corporations. Invest as little as $20-30 per month; fractional shares of stocks can be bought.
- For a beginner investor, index and passive funds are a good place to start. This way you get familiar with the stock market but don't need to manage your investment yourself.
- As time goes on and you get experience, you can put small portions of your income set aside for investing into passive funds, active investing, CFD trading, margin trading, options trading, and then pick and choose whichever you like the most.
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Open Money Market Accounts (MMAs). These accounts require a higher minimum amount than regular savings accounts, but accrue twice the rate of interest of a savings account. High-yield MMAs are somewhat risky--withdrawing the money and affecting its investments are limited--but it's a good way to allow money to grow by doing, essentially, nothing.^{[8]
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Invest in government bonds. Bonds are interest certificates issued by government agencies, like the Treasury, which offers no risk of default. The government controls the printing presses and can print whatever money is required to cover the principal, so these are relatively safe investments and a good way to diversify your investments.^{[9]
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- Talk to a trustworthy broker and consider a bond-buying plan over to diversify your portfolio.

Part 3

Part 3 of 3:

Maintaining Wealth

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Consult good brokers for advice. Money is as good as the advice received. After accumulating a considerable amount of wealth, nobody wants to spend time huddled in front of a monitor watching stocks change by fractions of a percentage. You're going to want to be out living life. Good, trustworthy financial advisors and brokers will work to keep your accounts swelling with excess funds.
2
Diversify portfolio and investments. Don't keep money in one place. Diversify your portfolio and invest in stocks, real estate, mutual funds, bonds, and other investments recommended by brokers to modify risk. If a risky investment in ShamWow absorbent towels ends up tanking, at least you've still got a considerable amount of money in other ventures.^{[10]
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Make smart financial decisions. The Internet is full of penny stock schemes and get-rich-quick hokum that preys upon the ignorant and seduces gullible people into making bad financial decisions. Do the research and commit to a lifetime of investing and making money. There are very few exceptions to becoming an overnight billionaire.
- When in doubt, be conservative with investments. Diversifying money wisely, letting interest accrue and riding fluctuating markets will be a smart decision in the long run.
- If anything seems too good to be true, be careful. Never act too fast and always analyze the situation.
4
Know when to get out. At a certain point, knowing when to pull out of an investment before it collapses from under you is essential. If you've surrounded yourself with smart brokers, listen to their advice, but also know when to listen to your gut.
- If you see an opportunity to sell big and make a profit, do it. Profit is profit. If that stock ends up appreciating the next year, you've still made money that you can reinvest elsewhere.
5
Act the part. To be a billionaire, act like one. Mingle with moneyed and cultured people, pick up advice and knowledge from the experienced.
- Cultivate interests in fine art, fine dining, and travel. Consider buying a yacht and other standard trappings of the wealthy that are unaffordable.
- There's a distinction between "old money" and "new money." New money is a derogatory term for people who have gained wealth quickly and live ostentatiously, spending and living a lavish lifestyle. To hold onto wealth, learn from old money and ascend to the stratosphere.

Community Q&A

Question

How old do you have to be to invest in business and buy stocks, real estate, and the like?

Community Answer

There is no specific age to start to be an investor. Warren Buffet started when he was 7 years old. Read up on what you want to invest in, and ask anyone you know who invests for tips.
Question

How can I become a billionaire quickly if I am young?

Community Answer

Work hard and connect with people who have money. They may introduce you to investment and job opportunities.
Question

When starting my own company, is it better to do so on a national level or an international level?

Community Answer

Often, it's better to start a company on a national level. When your company is gets big enough, you go international.

Warnings

Avoid get-rich scams. Run from people promising unrealistic stock market returns (any return of 10-15% or more).

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