Good news for aspiring entrepreneurs: The majority of the world's billionaires are self-made, having created more than $3.6 trillion over the past two decades, according to new research.
The 2015 Billionaires Report, conducted by financial services firm UBS along with professional services company Price Waterhouse Coopers, surveyed over 1,300 billionaires over the past 19 years. The results reveal several of their unique characteristics: 66 percent are first-generation wealth creators, for one thing, and in the U.S., techies are on the rise. While 30 percent of American self-made billionaires hail from finance, the tech sector is close behind producing roughly 27 percent. It's also worth noting that the number of European billionaires is steadily declining, while Asian billionaires--particularly, the industrialists--are second only to American entrepreneurs.
That so many of the wealthiest individuals did it on their own suggests some serious financial acumen, as the survey notes. Billionaires are calculated risk-takers, as well as astute investors, for example, especially when it comes to safeguarding their wealth.
Here are some of their expert money-saving habits, drawn from the survey's findings. After all, it's not enough to simply amass money. If you don't have sound financial habits, you're likely to lose your wealth over time.
1. They invest in college.
Although dropping out of school (or avoiding it altogether) is something of a popular startup narrative, research finds that 82 percent of all self-made billionaires have a college degree.
While 23 percent of self-made billionaires launched their first business before the age of 30, nearly half worked at big firms beforehand in jobs that are often difficult to secure without the benefit of higher education.
2. They bet on the public markets.
After achieving some degree of success, many entrepreneurs-turned-billionaires cement their wealth by taking their companies public, then selling down their own shares periodically and reinvesting in other companies to gain portfolio diversity. By investing broadly, they protect their finances during a bear market.
3. They give back to charity.
Today's billionaires are more giving than ever before, with UBS predicting that philanthropy will soon be more popular than it was during the "Gilded Age"--around the beginning of the twentieth century--when the Rockefellers and Carnegies of the world created their foundations. Bill Gates's 'Giving Pledge' alone, for instance, has roped in more than 100 billionaires, each pledging roughly 50 percent of their wealth to various causes like education and the arts.
Qualified charity donations, of course, come with generous tax deductions.
4. They make use of family offices.
Preserving wealth can be just as difficult as earning it, and many self-made billionaires later turn to family offices, or firms that manage the finances of high net worth individuals. While traditional financial advisers handle the smaller details, such as wills and tax strategies, today's family offices are increasingly hands on, managing entire companies and offering a wide range of financial advice.
5. They become professional wealth managers.
After cashing out of their business, billionaire founders often turn to one of three paths: financial investor, portfolio investor, or serial entrepreneur. Sixty percent choose financial investor, meaning that they withdraw completely from the business and focus on managing their own wealth. Portfolio investors, who make up 23 percent, act as principal investors to their companies, but no longer take part in the day-to-day business operations. By contrast, 17 percent of billionaires elect to start another company.SOURCE INC.COM
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