There are thousands of different ways to become a millionaire. Having simply an above average job and saving and investing money will make you a millionaire. Getting into an above average paying field will likely make you a millionaire. Most doctors, lawyers and other specialized service professionals will become millionaire at some point in their careers.
Thousands of people every year will start small, simple businesses that will make them millionaires. You can become a millionaire in just about any field or industry if you are diligent and discipline. You don’t need a revolutionary idea or connections to other highly successful people. If you show up, do the work and make strategic decisions you can become a millionaire.
Billionaires are different. Unlike a millionaire who can pick a career path and work their way up, billionaires need the right pedigree of opportunity, execution, timing, strategy and a little bit of luck.
Successful people often believe they go where they were purely from working harder than everyone else. This is probably true to some degree, they probably did work harder and hold themselves to a higher standard than most people. When differentiating between a millionaire and billionaire, it take a lot more than just working hard or developing skills.
You could spend 30 year studying and practicing medicine, becoming one of the greatest doctors in the world, performing difficult surgeries that are mentally, physically and emotionally draining. If you did this, you’d probably have a great career making around $1 million per year. If you were really strategic about chasing the highest paying positions or starting your own practice, you could make $3–4 million per year.
Billionaires, or people on the path to becoming one, can make 100x what the doctor makes in a year. Someone who started a business that catches on and grows rapidly can make millions or billions in a relatively short period of time. Billionaires likely separated themselves from their millionaire counterparts with a few strategic decisions and a some luck.
Bill Gates and Steve Jobs are widely considered the most successful entrepreneurs of the generation. They created companies that as I write this are the two largest businesses in the world. They are direct competitors to each other, the two contenders in the world largest duopoly. Gates ended up making over $100 billion; Jobs died with an estimated net worth of $10 billion. Does this means Gates worked 10x harder than jobs? Was he 10x smarter? The difference in their wealth was a few strategic decisions and that paid off, Gates isn’t 10x smarter or harder working. Are they both smarter than an executive or entrepreneur who only made $100 million? Not really.
Billionaires are outliers in many ways. It’s difficult to measure outliers because they typically score off the charts relative the people around them. When you’re winning a race by a mile, it’s tough to compare your time to someone else who won a different race by a mile.
One thing billionaires have in common, they are playing a different game than their millionaire counterparts. Unlike the millionaires who come from all over the place and every industry, there is a limited number of ways to become a billionaire.
Nearly all of them are entrepreneurs. Other than a handful of extremely high paid executives, athletes and entertainers; it’s almost impossible to become a billionaire as an employee. Nearly all of them are either the sole or majority owner of a business that can be grown to a large scale.
Even most successful entrepreneurs don’t have a realistic shot of realizing this type of growth. Most businesses have a local presence or a specialized product offering that would be difficult to grow to $1 billion. Most of the entrepreneurs will also walk away long before they reach the billionaire level. When you have a successful company, you’ll get offers from outside investors or other companies to buy you. Most entrepreneurs will take the offer.
This isn’t about “selling out” or giving up on their business, it’s usually a rational decision. They will be offered life changing money to sell their companies and be perfectly happy with far less than $1 billion. If someone offered you $100 million, in all likelihood you’d take the money. Even if you thought you could get more later, what’s the point. Making $100 million versus a $1 billion will have almost no impact on your life, especially if you are relatively broke at the time. A billionaire likely made many irrational decisions along the way. The rational or “smart” decision would be to stay at the high paying executive job at a big firm or keep their company small and not risk their capital. They have to take a lot of risk and put it all on the line for years before they cash out, most people don’t want to do this.
To become a billionaire it takes a perfect combination of strategy, execution, discipline and luck.