Billionaires can seem worlds away from us, and in many ways they are. Lots of them own fancy yachts and multiple homes, each of which can cost tens of millions of dollars.
Yet we still have plenty of things in common with billionaires. For example, all of us have 24 hours in each day, and most of us have families of some kind -- parents, kids, siblings, and/or a group of very close friends. We all can suffer from colds, flus, and more serious health setbacks, and we all can enjoy a glorious sunset on occasion.
Here are three key differences between billionaires and the rest of us -- and one thing that we all have in common.
Image source: Getty Images.
Many billionaires wake up early -- and have routines
Many -- but not all -- billionaires wake up rather early, and many of them stick to routines. For example, Tim Cook, CEO of Apple, reportedly gets up before 4 a.m., while Richard Branson, founder of Virgin Galactic, wakes up around 5 a.m.
There's logic to that: If you wake up before most people, you're likely to have more time to yourself, before family members or colleagues start interacting with you -- so you may be able to get more done, whether it's work or reading. Having a routine can be effective if it includes many things you want to keep on top of without forgetting or procrastinating.
Some of us might benefit from trying to adjust our schedules to rise earlier, and we might try routines, too. Even if it's just for the first few hours of your day, you might include exercising, meditating, writing, and perhaps clearing out your inbox.
Many billionaires read a lot more than you
According to one study, billionaires are rather educated in general, with 56% having a bachelor's degree, 23% having a master's degree, and 7% with a Ph.D. They tend to read a lot, too.
Warren Buffett, for example, has explained that his job mostly involves reading and thinking. He devours multiple newspapers each day, along with books, and has recommended that people read 500 pages a day -- because each thing you learn can help you learn more things. He said: "That's how knowledge works. It builds up, like compound interest."
Bill Gates, co-founder of Microsoft, has noted that "reading is still the main way that I both learn new things and test my understanding." He reportedly reads about 50 books per year and often publishes lists of recommended books.
Most of us may not manage 500 pages a day or even 50 books a year (though that's a more manageable book a week), but we can still aim to read as much as possible -- and not just pleasant mysteries or romances, either. Lots of biographies of successful people can be very interesting and even entertaining while teaching us things, too. Books about how various industries work, such as Daniel Yergin's series on energy, can be very illuminating. And reading about great investors and companies can help us refine our investing strategies and learn to spot promising business.
Billionaires can risk (and lose) more
This may seem obvious, but because they have so much money, billionaires can put far more of it at risk than we can. They can invest in some things that are long shots and put venture capital to work in small companies that might pay off astronomically one day. Billionaires can also afford to lose a million or many millions here and there -- not that they would want to, of course.
We need to be careful with our money, though, because many of us need or want to retire with $1 million or even $2 million. So it's critical that we learn a lot about investing and invest in effective ways for many years. Simply dollar-cost averaging into a low-fee broad-market index fund can be enough. Here's what could happen if you do so and earn an annual average return of 8%.
|
Growing at 8% for |
$5,000 Invested Annually |
$10,000 Invested Annually |
$15,000 Invested Annually |
|---|---|---|---|
|
Five years |
$31,680 |
$63,359 |
$95,039 |
|
10 years |
$78,227 |
$156,455 |
$234,682 |
|
15 years |
$146,621 |
$293,243 |
$439,864 |
|
20 years |
$247,115 |
$494,229 |
$741,344 |
|
25 years |
$394,772 |
$789,544 |
$1.2 million |
|
30 years |
$611,729 |
$1.2 million |
$1.8 million |
Data source: Calculations by author.
Consider taking some big risks now and then, too. Many billionaires, for example, took sizable risks by borrowing money and starting small businesses in their garages. Such ventures don't always pay off, but if you have a dream, look into whether you might try chasing it. Just have a grasp of how much you're putting at risk, and how much you might lose. Plowing money into penny stocks or day trading, for example, are examples of risk-taking that are not likely to pay off well at all.
Like the rest of us, billionaires have limited time
Finally, one thing that we have in common with billionaires is time -- and in many cases, we have a lot more of it than they do. Bill Gates, for example, is 66, while Jeff Bezos, executive chairman of Amazon, is 58. And Warren Buffett is 91.
Looking at the table, you'll see that with enough time and a lot of diligence, you can probably make yourself a millionaire, if not a multimillionaire. Becoming a billionaire is less likely, but $1 million or $2 million can be all you need to achieve financial security for the rest of your life. That's pretty good -- and you might even end up happier than many billionaires.
