Another Path to a Billion

Another year, another list of billionaires. But their wealth-making secret hasn't changed. Entrepreneurship remains the surest path to riches.

Oh to be an owner
Especially now. Of all the changes to Forbes' list of the nation's 400 richest, most notable is the northward march of the Google twins. Sergey Brin and Larry Page are now ranked fifth and sixth, respectively, while the heirs to Sam Walton's fortune from Wal-Mart have fallen from the top 10.

Let's look, once again, at that top 10. How many entrepreneurs are there?  Six! Microsoft's Bill Gates is first, Oracle's Larry Ellison is fourth, and Dell's (Nasdaq: DELL  ) Michael Dell is eighth. Real estate mogul Sheldon Adelson, whose fortune is comprised mostly of stock in Las Vegas Sands (NYSE: LVS  ) , remains in third.

And there are many more business owners among the remaining 390. Paychex (Nasdaq: PAYX  ) founder B. Thomas Golisano ranks 57th with $2 billion. Venture capitalist and Sun Microsystems (Nasdaq: JAVA  ) co-founder Vinod Khosla is 317th with $1.5 billion. And Limited Brands' (NYSE: LTD  ) chief designer, Leslie Wexner, ranks 135th with a $2.8 billion fortune.

Invest with owners
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 Gates is, the bulk of his wealth comes from staying invested in the company that brought him 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. Consider this chart. A $1,000 investment in Mr. Softy at the dawn of 1990, four years after his debut on the Nasdaq, would be worth roughly $65,000 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 meaningful insider ownership.

Consider Drew Industries (NYSE: DW  ) . Tom recommended the stock to subscribers in May 2005 for its extraordinary cash flow and exceptional record in corporate governance. Shares of the company are up more than 78% since, crushing the market. Yet Fools weren't the only ones to profit -- insiders still own nearly 15% of the business.

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. Want help identifying promising prospects? Click here to join Hidden Gems free for 30 days.

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

Fool contributor Tim Beyers owned shares of Oracle at the time of publication. Dell is a Stock Advisor selection. Dell, Microsoft, Limited Brands, and Wal-Mart are active picks for Inside Value. Limited is also an Income Investor pick. The Motley Fool's disclosure policy always takes ownership.


Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 540057, ~/Articles/ArticleHandler.aspx, 9/14/2014 10:24:13 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement