Billionaires Tells Us the One Simple Secret To Being Rich

The Secret To Becoming A Billionaire

While having money and being rich may not be the key to happiness, it certainly is a major stress reliever. Aside from having nice sports cars or taking luxury vacations, it is also nice to be wealthy enough where you know you’ll never have financial difficulties again. Sure many people want to be rich, and those that don’t are probably lying, but if it were so easy to become wealthy, everyone would do it. That’s obviously not the case. It’s one thing to be wealthy, but it’s a whole other animal to be a billionaire. And I’m not talking about trust-fund babies that never had to work for it, I’m referring to the hard workers and self-made billionaires out there. But what if there was a secret to becoming rich? Well there actually might be, and it’s not that much of a secret.

Just because someone is a multi-millionaire or a billionaire, it doesn’t necessarily mean they are any more intelligent than those who aren’t. In many cases, that may be the case, but it’s not a definitive quality that every wealthy individual has. The difference between someone making an average, stable income and a millionaire is how exactly they spend their money. There’s a well known saying that goes “you’ve got to spend money to make money”, and that is, according to many billionaires, the “secret” to joining their ranks.

Now, that seems like a trivial statement, but there’s a lot of meaning behind it that makes sense. Out of all the wealthy individuals in the world, only a few became extremely wealthy overnight because of one amazing idea. Most of them had to work hard and put in the time to get where they are. Back in 1995 Ted Turner, media mogul who founded CNN and billionaire, gave a speech at the commencement address at Brown University. He talked about how to become successful, but the biggest take away was what he said was the hardest thing he had to overcome. “The biggest challenge of my career”, he said, “was making the first million. After that everything was easy. Money begets money”. So is that the secret to becoming a billionaire? Just earn a million dollars? It’s easy for him to say, right? Well it seems like he’s on to something here.

For some reason, most people seem to think that “earning your first million” is in the form of a single paycheck. That’s obviously not the case at all. The really important thing is what is at the heart of that quote. For someone to earn a million dollars on their own, they have to work hard and save their money. A truly successful person does not throw away his earnings on fast cars or mansions, at least, not initially. A successful person uses their money to make even more money. A person that can accomplish this feat has a better understand of finance and how to overcome obstacles than your average individual. The thing is, once you earn your first million dollars, there are other non-tangibles that come along with that aside from money. If you’ve made a million dollars for the first time, then you have probably made a large network of connections during your climb to success, for example. It is then how you use these connections and your wealth that will determine if you will become even wealthier.

Basically it all comes down to numbers. There is a massive difference between increasing your wealth from $50,000 dollars to $1 million. However there is a smaller difference when you go from having $17 million to $18 million. The growth rate required to attain the latter of those two examples is much less than the first one; it’s simple mathematics.

Going back to what Ted Turner and many others have said, “money begets money”. The initially climb to making $1 million dollars is difficult, however once you’re there, you now have a large amount of assets (both tangible and non-tangible) that you can use to invest in things to make more money. For example, a simple $500 dollar investment with an 8% rate of return would be worth $534 dollars after one year. A successful $360,000 dollar investment at that same rate, would be worth $384,480 after one year. This isn’t groundbreaking at all, its very simple. The more money that you use to increase your wealth, the more money you get back (provided the investments are successful).

So what Ted Turner, and many other billionaires are saying, is that essentially it gets way easier to earn more money after you have earned your first $1 million. Basically the “secret” to becoming extremely wealthy, is to work extremely hard towards saving up $1 million in your bank account. If it were easy, then everyone would be rich. After that initial $1 million, you will then have an easier time through connections and your assets to earn even more money. That’s why people often say “the rich keep getting richer”; they have the capital to do so. So instead of having crazy dreams to “instantly become a billionaire”, focus on working extremely hard to earn that first $1 million as it will only get easier from there, or so they say.

Photo by Mark Wilson/Getty Images

Written by Sebastian Hensiek

From Philadelphia, Sebastian is a fan of music, writing, art, and entertainment.