How to Be a Billionaire
Being a billionaire takes more than a bunch of zeroes. The world of investments and capital is tumultuous and strange to most "regular folk," but that doesn't mean that there's a barrier to you becoming a billionaire. Working your way up from little or nothing to a life in the lap of luxury is the classic American narrative, but you've got to learn to create opportunities for yourself, invest wisely, and hold onto your wealth to make it work for you. See Step 1 for more instructions.
Part 1 of 3: Creating Opportunities
Study up.People do not become billionaires by accident. Demystify as many of the variables as you can before you assemble a plan, such as interest rates, tax brackets, dividends and so on. Take a class online or at a university on finance, read books about investing and know the rules.
Start saving money. It takes money to make money. Take a certain amount of money out of your paycheck as soon as you get paid and put it in a savings account, to be used for future investments or to simply collect interest.
Start an Individual Retirement Account (IRA). Available from most financial institutions, IRAs are customizable financial plans that you can set up to start saving for the future. If you want to end up saving an amount of money that ends with nine zeroes, you need to do this as soon as possible. You'll accrue interest on your savings and elect to take an amount of risk in investments to make money off the money you have.
Pay off your credit card debt. It's hard to get ahead if you have debts of any kind hanging over your head. Student loans and credit card debt needs to be paid off as soon as possible. The average annual percentage rates vary anywhere between 20% and 30% which means the balance will end up keep growing if you don't get on top of it sooner rather than later.
Make a five-year plan. Calculate a conservative estimate of how much money you could manage to save over 5 years. Depending on the amount, decide what the best use of your money should be, whether it's investing, starting a business or simply allowing the money to continue to collect interest.
Part 2 of 3: Investing
Buy real estate. A common way to make more money is to invest in real estate. Property will generally appreciate in value over time, and might give you a good return on your investment. Your investment can be flipped, rented, or developed.
Invest in business.Starting your own business or buying into one can be a solid way to make money over a long term. Create or choose a company that offers a product or service that you would buy yourself, and put your time and money toward improving it. Become knowledgeable about the industry you wish to go into and learn to differentiate between good and bad business investments.
Buy and sell stocks. The stock market can be a great place to grow your fortune. Watch the markets carefully before you start to buy and pay attention to which stocks do well; gathering this information will help you make smart purchases in the future. Once you invest, understand that most stocks appreciate over the long term. Ride out small decreases in value if you can and take the occasional risk.
Put your money into Money Market Accounts (MMAs). These accounts have a higher minimum account than a regular savings account, but accrues twice the rate of interest of a savings account. High-yield MMAs are somewhat risky--your ability to draw on the money and your ability to affect its investments are limited--but it's a good way to let your money grow by doing, essentially, nothing.
Invest in government bonds. Bonds are interest certificates issued by government agencies, in particular the Treasury, which offer no risk of default. Because the government controls the printing presses and can print whatever money is required to cover the principal, these are relatively safe investments and a good way to diversify your money.
Part 3 of 3: Maintaining Wealth
Consult brokers for good advice. Your money is as good as the advice you receive about it. If you start to accrue a considerable amount of wealth, you're not going to want to spend all your time huddled in front of a monitor watching the stocks change by fractions of a percentage. You're going to want to be out living your life. Surround yourself with good financial advisors and brokers that you trust who will work for you to keep your accounts swelling with fundage.
Diversify your portfolio and investments. Don't keep all your money in one place. By diversifying your portfolio and investing in stocks, real estate, mutual funds, bonds, and other investments recommended by your brokers, you're both ensuring that your money will be isolated in different markets that behave differently. If you end up making a risky investment in ShamWow absorbent towels and it ends up tanking, at least you've still got a considerable amount of money in other ventures.
Make smart financial decisions. The Internet is full of penny stock schemes and get-rich-quick hokum that preys upon the ignorant and forces gullible people into making bad financial decisions. Do the research and commit to a lifetime of investing and making money. There's no such thing as an overnight billionaire.
Know when to get out. At a certain point, you're going to have to know when to pull the trigger and get out of something before it collapses from under you. If you've surrounded yourself with smart brokers, listen to their advice, but also know when to listen to your gut.
Act the part. If you're going to be a billionaire, you've got to act like one. Surround yourself with moneyed and cultured people, picking up advice and know-how from the experienced.