Another Path to a Billion

Recently, Foolish colleague Tim Hanson revealed some of the secrets of the world's billionaires. Surely his findings were obvious to most: Master investors make oodles of money, especially those who faithfully follow a strategy that plays to their inherent strengths.

But he didn't mention that entrepreneurs dominate the same list of Forbes billionaires, including five of the top 10.

Oh, to be an owner
You know the list: Microsoft's Bill Gates and Paul Allen, Oracle's Larry Ellison, and Dell's (Nasdaq: DELL  ) Michael Dell are the three most obvious. Real estate mogul Sheldon Adelson and his $20 billion fortune, composed mostly of stock in Las Vegas Sands, ranks third, rounding out the list of self-made billionaire entrepreneurs among Forbes' top 10.

But, of course, there are many, many more. News Corp. (NYSE: NWS  ) head honcho Rupert Murdoch ranks 32nd with a $7.7 billion fortune. Apple Computer (Nasdaq: AAPL  ) co-founder Steve Jobs is 49th with $4.9 billion. Oakley's head hipster, James Jannard, is 278th with $1.4 billion. And John J. Fisher, the appointed top cop among Gap's fashion police, ranks 297th with $1.3 billion.

Invest with owners
If you're feeling envious, I don't blame you. Wouldn't it be great if we were all billionaires, unencumbered by the need for money? Of course it would be. But that's not how the world works.

Still, I find it reassuring that, as rich as Bill Gates and Paul Allen are, the bulk of their wealth came from staying invested in the company that brought them to the billionaires' ball. Why? Because anyone with a brokerage account could have enjoyed similar percentage gains.

In fact, many did. So great is the story of Microsoft's ability to generate wealth that it has a name -- the uprising of the so-called "Microsoft millionaires." At least hundreds of them must still exist. Seriously, consider this chart. A $1,000 investment in Mr. Softy at the dawn of 1990, four years after its debut on the Nasdaq, would be worth more than $55,000 today.

Searching for the next Microsoft
That's why Motley Fool Hidden Gems co-advisors Tom Gardner and Bill Mann focus on the stocks of up-and-coming firms in which the managers own a significant stake. Some of their best performers still feature heavy insider ownership.

Consider speech-recognition software maker Nuance Communications (Nasdaq: NUAN  ) , which Bill first singled out in the January issue of Hidden Gems. The stock is up more than 60% in a few short months and insiders remain firmly committed with an 18% stake.

And then there's restaurateur Buffalo Wild Wings (Nasdaq: BWLD  ) , which has more than doubled since Tom first picked it for the July 2004 issue. Insiders still own more than 13% of the shares of this small-cap superstar.

So don't envy the billionaire owners. Invest alongside them. They're the ones who really have the best chance to create the next Microsoft, and make you millions in the process. And if you'd like Hidden Gems to help you identify some promising prospects, click here to join the service free for 30 days.

This article was originally published on Oct. 12, 2006. It has been updated.

Fool contributor Tim Beyers owns shares of Oracle and Buffalo Wild Wings. Get the skinny on all of the stocks in Tim's portfolio by checking his Fool profile. Dell and Gap are selections for both Motley Fool Inside Value and Motley Fool Stock Advisor. The Motley Fool's disclosure policy always takes ownership.


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