Most investors will never become billionaires, but there are still some valuable lessons to be learned by examining what the richest people in the world have in common. You may be able to apply some things to your own life or portfolio, even if you don’t ultimately reach billionaire status.
(Working with a financial advisor may also be a wise decision if you are looking to optimize your portfolio and grow your wealth.)
Bankrate looked at the 10 wealthiest people on Bloomberg’s Billionaires Index as of December 2024 – top business icons including Elon Musk, Jeff Bezos and Warren Buffett, to name a few – to see what they had in common.
1. Extreme concentration in their portfolios
One of the most common pieces of investing advice is to diversify your portfolio, but the top billionaires must not have been listening. The richest people in the world have largely achieved their billionaire status by holding, essentially, a single financial asset.
Larry Page and Sergey Brin are worth more than $300 billion combined thanks to their holdings of Google parent company Alphabet. Jeff Bezos and Mark Zuckerberg have relied on the performance of Amazon and Meta Platforms, respectively, to boost each one’s net worth to above $200 billion.
Legendary investor Warren Buffett has long said that he has more than 99 percent of his net worth in Berkshire Hathaway stock, though the company does own a diverse portfolio of underlying businesses. Still, Buffett has often advocated for concentrating your portfolio in your best ideas when you understand the business and its stock is attractively priced.
Buffett once voiced his support for a concentrated portfolio in his annual letter to shareholders by quoting actress Mae West: “Too much of a good thing can be wonderful.”
2. Long-term holding periods
You’ll also notice that none of the top billionaires achieved their status overnight. In fact, most of these billionaires have held their stock positions for a minimum of 20 years.
Billionaires such as Bezos, Zuckerberg, Page and Brin have benefited massively from the rise of the internet over the past two decades. But others, such as Microsoft co-founder Bill Gates and former CEO Steve Ballmer started with the company more than 40 years ago.
In order for your net worth to grow significantly, you need a long runway to do it. The top billionaires have compounded their wealth at high returns for a long time.
3. They founded companies
Many of the top billionaires are founders or co-founders of the companies they’re involved with. The main financial benefit of being a founder is that you often end up with a large stake in the company because, after all, you helped create it.
Buffett is unique in that he purchased his stake in Berkshire Hathaway and then grew the company through various acquisitions. But he paid for his shares just as any other shareholder would have.
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4. Competitive mindsets
One characteristic that most billionaires possess is a competitive mindset. In a lot of ways, business is a competitive sport, in which the players (companies) are competing with each other to have the best product, attract the best employees or raise capital.
All of the top billionaires want to win in their respective fields. Amazon’s Bezos once warned competitors that “your margin is my opportunity.”
Watching former Microsoft CEO Ballmer during a Los Angeles Clippers (a National Basketball Association team he now owns) game gives you a sense of how competitive he is. Ballmer can often be seen aggressively clapping, cheering, screaming or sweating during games, no different than when he was leading Microsoft.
5. A focus on the technology industry
It’s worth noting that eight of the top 10 billionaires made their fortunes in the tech industry, and Buffett, one of the two who didn’t, has a large stake in Apple.
The tech companies that have propelled their founders to enormous wealth often share two key features: high profitability and huge markets. It’s hard to become one of the richest people in the world if your business only operates in small markets, and businesses that don’t generate much in terms of earnings don’t end up being worth much to shareholders.
Think of a retailer that, before the internet, had to grow by finding new store locations and slowly canvassing the country. Today, an online retailer can reach anyone with an internet connection just about instantly.
The tech industry has created some massive winners, and all signs suggest that will continue.
6. A desire to keep learning
Many of the top billionaires also share a desire to keep learning and have had to change and evolve as their businesses changed. Artificial intelligence is one area where many of the richest people have had to devote more time and energy to make sure they’re prepared to defend their current market positions and able to take advantage of new opportunities.
Buffett has said that he spends most of his day reading. And his late partner Charlie Munger once said that his own kids thought he was a “book with a couple of legs sticking out.”
When Bill Gates was running Microsoft, he famously took one week, twice a year, to just go to a cabin in the woods and read.
7. Commitment to philanthropy
In 2010, Buffett, Gates and Melinda French Gates created the “Giving Pledge,” a commitment for billionaires to give the majority of their wealth to philanthropy either during their lives or in their wills.
In addition to Buffett and Gates, Elon Musk, Mark Zuckerberg and Larry Ellison have all taken the pledge as of December 2024.
Bottom line
There are several lessons to be learned from the top billionaires, but the reality is that most investors won’t be able to do everything on this list, like invest a lot of money into a single company. You’ll likely be better off by building a diversified portfolio that includes low-cost index funds.
You may also benefit from working with a financial advisor to help you develop a long-term investment plan. Bankrate’s financial advisor matching tool can help you find an advisor in your area.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
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