Sunday, December 15, 2013

Risk Taking Tendency of Billionaires

The Habits of Self Made Millionaires

If there is any one common denominator among self made millionaires and billionaires, it’s that they were all willing to take risks. In fact, they may not have been so willing to in the beginning, but then they realized if they didn’t, nothing in their lives would change. Success isn’t about being careful, and it’s not about dipping your toe in the water. You should do at least that much, but what happens after is most important. It’s the ability to take action that separates you from everyone else.

What have you NOT done, that you need to do right now? You could be one decision away from another way of life.
While many people inherit their fortune, most do not. They work for it. They have to take strides to go from nothing to something, and they weren’t all from wealthy families. In fact, you should also know that several millionaires have not graduated from college. If you can take just a few minutes of your time to finish reading this article, and then connect with me to learn more, you can at least make a decision later as to whether or not you believe you have what it takes to create a new life.

It’s all in the mind, but the habits of self made millionaires show us that we are all capable of doing more, having more, and of course being more.

Vision

Most billionaires have a vision of what they think the world will be like in the future - and how they can capitalize on it. Take Sergey Brin and Larry Page, cofounders of Google (NYSE:GOOG). They (fittingly) tied for 24th place on the Forbes' 2010 billionaire list, with $17.5 billion each to their names. This pair saw the possibilities for the internet as a tool for opening up the world of information to people, so they started a company, Google, based on a superior search engine that would help this vision become a reality. Launched in 1998, the company has since become the world's most popular search engine and has radically expanded the internet's scope; the cofounders' wealth has expanded right along with it. (Find out where Google's been headed lately, in Google Takes Aim At Microsoft

Forward Thinking
Bill Gates didn’t become a billionaire simply by selling the most computer systems. He anticipated that people and businesses would need a personal integrated suite of office software in a multi-tasking operating system and then he created the product to fill that need. He was forward thinking enough understand what people would want before it existed to be wanted. This kind of self-fulfilling prophecy, the ability to create public expectation and then meet it, is how billionaires get ahead of the pack and establish themselves before competitors can get a foothold on new technology.

Have incredible curiosity.
“They are incredibly curious; what the rest of the world thinks is a problem and complains about — that’s what these people go and work on” says Robert Jordan.

One mogul, James Dolan, once bought a hundred-year-old legal newspaper publisher. After surveying the subscribers, he found the biggest reason read the paper was for the foreclosure notices they ran.

So James Dolan started a real-time national foreclosures reporting service.

Perseverance
Billionaires tend to have fantastic ideas about the future. But unlike typical visionaries, billionaires have gone beyond just planning and talking about their ideas. They have long term goals and work steadily and consistently until their goals are achieved. They break down large problems into a smaller set of obstacles that can be eliminated one by one until the goal is reached.

Going Against the Grain
When the crowd starts following a new trend, billionaires are shrewd enough to take advantage of the financial opportunities that are being ignored by everyone else. Warren Buffet made his fortune by buying investments when everyone else was selling. Tech gurus like Zuckerberg and Gates could have taken conventional jobs and lived quite comfortably but chose to start their own businesses. Billionaire status is achieved by people who are willing to ignore the advice from those around them and pursue their goals.

Frugality
Millionaires are often infamous for their big purchases and lavish lifestyles. Breaking from millionaire to billionaire status means holding onto money and cultivating it through wise investments. A frugal attitude towards money doesn’t disappear once wealth is achieved. Billionaires Warren Buffet and Carlos Slim are known for their frugal lifestyles, maintaining modest homes and doing without private yachts or planes. Ikea founder, Ingvar Kamprad actually made his fortune by developing a marketing plan for furniture based on his own frugal ideals. Despite his success, he continues to make economy class travel arrangements and drive an older model Volvo.

You might assume that a billionaire's drive stems from the for a luxurious lifestyle. However, some of the world's richest people ascended to their positions thanks to their ability to watch the bottom line. Take Warren Buffett, for example. His $47 billion fortune put him at No.3 on Forbes' 2010 list of billionaires, but this ultra-rich investor investor's success can be partly credited to his frugal lifestyle. From a very young age, Buffett was making and investing his money. By the time he was 26 years old, he had already made and saved the modern-day equivalent of more than $1 million. This allowed him to start his own investment partnership, which eventually allowed him to invest in and take control of Berkshire Hathaway (NYSE:BRK.A). And the rest, as they say, is history! (For related reading, see 5 Billionaires Who Live Below Their Means.)

Healthy Lifestyles
Billionaires tend to be goal oriented and clear headed. This attitude extends beyond their business and into all aspects of their lives. Healthy eating and regular exercise keep billionaires in top shape so that they can run their empires with focus and endurance.

Rely on Others

Far from being the independent mavericks that we see in the movies, billionaires know that they can’t do it alone. They surround themselves with smart, reliable and honest people and value their skills and feedback.

Idealists

Lastly, billionaires bring a positive attitude to everything they do. They believe in themselves and in their ideas and that obstacles can be overcome. Failure is accepted as a natural part of business and an opportunity to learn and improve.

They crash through obstacles

“It just happens as a matter of fact that everybody who hits the billion-dollar level hits massive challenges, without exception.” says Jordan. “Some of this stuff is so massive it makes you think, I don’t know how they got passed it.”

Take Joe Piscopo of Pansophic. “An employee got pissed off, took an electromagnet, and walked through their data center. He destroyed every last byte of data sitting on their computers,” says Jordan. “If that isn’t a company destroyer, I don’t know what is! And they actually survived.”

Self-Made Billionaires are excellent problem solvers
At the point most people think “game over”, Billionaires find ways to fix impossible problems.

Billionaires have great attitudes
Attitude trumps skill set.

“This is a group that is far less cynical than the rest of the world,” says Jordan “That’s just not the way they look at the world. They have a passionate desire.”

Dane Miller ,who went from slang slings to a biomed fortune actually had a surgeon implant a piece of titanium in his own arm to prove to people titanium was safe for human implants and better than steel.

They make money from their mistakes
Billionaires turn lemons into lemonade.

According to Jordan, a major difference between billionaires and regular people is how they handle their mistakes.

Software entrepreneur Bill Merchantz created Lakeview Technology. His company created a software product that blew up so bad he had to create new software to fix it. He made his fortune off the fix.

Billionaires make use of boredom

“The problem is boredom. If I’m bored, I may break something just for the fun of fixing it. That’s kind of rough on the people who actually work in the company, you know?” – Billionaire Jim Dolan.

Billionaires don’t go it alone

The world likes to cast the Bill Gates, Mark Zuckerbergs as solo, lone-wolf founders.
But usually their success is the product of a team.
Key employees, lesser known co-founders, even family all contribute to the final success.

“Bill Gates is the known quantity as the founder of Microsoft, but he wouldn’t have gotten anywhere without Steve Ballmer and everyone else around him. I think they just figured, ‘He’s rich, let him just be the lightning rod of the company.’ But none of it was a solo act.” says Jordan

Billionaires take risks

Most people are afraid of failure.
They seem to almost seek failure by taking big risks.

The world is full of risk takers. Every day on the news we hear about people who face the consequences of reckless behaviour, often measured by the losses of life or property. But unlike the typical risk taker, successful billionaires weigh their decisions carefully and take the risks that are worth taking. They may start out by investing in an unproven market or gamble their funds on a failing business, but in the end, they make measured choices and never take a risk they can’t recover from.

“Many people go about business in a very cautious way, through networking and things like that. That’s not what these people did. They actually had a moment where they had to take a risk, and they did it,” says Jordan.

Vince Pettinelli, of PeopleServe, was 35 and the head of Ohio’s mental health program when he went in to business for himself.

“When Pettinelli told his wife he was quitting his job, she practically gnashed her teeth,” says Jordan. “She said, You’re going to do WHAT?! ”

Still, Pettinelli started simply by opening up a home for severely retarded people.

That may not sound like “a recipe for getting rich”, but Pettinelli ended up with 7,800 residents and sold his business ResCare for $200 million.

One thing virtually all billionaires have in common is that they are willing to take a leap of faith in their pursuit of success. For some billionaires such as Bill Gates or Lawrence Ellison (software giant Oracle (Nasdaq:ORCL) founder), this might be dropping out of college to pursue a business opportunity. But some billionaires have been known to push the stakes even higher - like George Soros (net worth $14 billion). This renowned investor and hedge fund manager is known as the man who "broke" the Bank of England by making a multibillion-dollar bet that the British pound would decline in value. It did, earning Soros more than $1 billion in a single day. (To read more about Soros, see George Soros: The Philosophy Of An Elite Investor and Stocks Soros Is Holding.)

The Habits of Self Made Millionaires Include Taking Risks
If you were dig deeper into the stories of the habits of self made millionaires, I can assure you’ll see another common thread. Going back to taking risks; it’s important. Many of these self made millionaires took risks by:

Buying companies that were ruined
Investing when times were hard
Willing to try new trends that others were critical of
They were willing to fail as often as it took to get it right

Don’t look at failure as glorious, but just see it as a stepping stone to get to a higher place. Failure isn’t FINAL, but victory isn’t that far either. Communicate openly with team members, and don’t be afraid to spend time with them. Don’t have the, “I’m the owner mentality, and everyone else is beneath me.”

Billionaires have patience.

Not only do billionaires tend to be able to pounce when the moment's right, they also make patience a habit. After all, sometimes it takes a while for a good idea to pay off.
They realize nothing happens overnight.

Most billionaires take years to become successful.
Even if success seems to happen overnight it didn’t.

Take Groupon. Success for co-founder Eric Lefkofsky was a long and painful process. Groupon was a left over project from another company that failed.

Even though Groupon seems like an “overnight success”, it’s fortune was years in the making.

Ever heard of Amazon.com (Nasdaq:AMZN)? It was founded by former Wall Street executive Jeff Bezos in 1994. The now-major company started in Bezos' garage, with only a few employees. Bezos is now the CEO of the largest online retailer in the U.S., with a net worth of $12.3 billion in 2010. However, it took seven years before the company turned a profit, which it eventually did in fourth quarter of 2001. It was a major coup after the dotcom crash, which left many wondering whether an online business model was viable at all. Bezos believed it to be so, and persevered until the world was ready to embrace online shopping.

Beer and the Habits of Self Made Millionaires!
What in the world does beer have to do with the habits of self made millionaires?

James Koch, the gentleman that started Sam Adams, knew a lot about beer. He became the master of his craft. He mastered beer, then he set out to master how to run a business. It’s about knowing your market, what they are looking for, and being willing to taste the product for yourself. Would you buy it? Would you enjoy it? If you don’t see how someone would need it, your answer is probably NO.

Koch didn’t have it easy either, banks turned him down just as fast as he walked into them. When the Boston Beer Company started offering microloans to like-minded individuals that wanted to be in the food or beverage industry, he finally got a hold of enough money to get going. Koch not only became a huge success, but he decided to help others do what he was doing.
This is where it’s at. You master the thing you want to leverage your business with, then you learn how, then you teach. Does it get any better than that? As a result, Koch’s business is growing, and had been short with his time and money, his life may not have been so wealthy as it is today.

The Bottom Line

No one said that creating a billion-dollar fortune was easy. In fact, many of the world's billionaires share key qualities such as vision, patience and an incredible fortitude in the face of risk. Luckily, these billionaire habits are tools that are available to everyone, free of charge, and could help you move take a few more steps up your own wealth ladder.

It could be that you just weren’t ready, so you need to make some life changes. You’ll grow as you go.

If you would like to learn more about the “habits of self made millionaires” that I am working with, and how it has changed my life and worldview, CLICK the banner below to learn more.

No comments:

Post a Comment