what stops millionaires from becoming a billionaire?

 

I think you might be missing a little of the math here:

A billion dollars is 1,000 million dollars. Please let that sink in.!!!

So if you are a millionaire, you need to increase your wealth by 1,000 times to become a billionaire. That takes a serious amount of velocity in your annual earnings. You might as well be asking “what stops someone who has 1,000 dollars from becoming a millionaire.” If you are running a business (like most self-made millionaires) even growing your business by 20% per year isn’t enough. You just won’t live long enough to amass a billion dollars.

The billionaires that have sprung up in the last 20 years are all in industries or areas with hyper growth - either in technology, or emerging markets (India/China). These opportunities don't pop up every day. It isn’t as simple as taking the same steps you took to become a millionaire and “lather, rinse, repeat” until you have a billion dollars.

That’s why there are only about 2,000 billionaires in the world. Much of that wealth is based on their equity in a business that rapidly expanded in scale (or promises to expand). Is Facebook really worth 345 Billion dollars? Is Tesla worth $27 Billion? Some people think so, but Facebook’s net income last year was only about $5 Billion, and Tesla lost $800 million. Until a billionaire sells his equity, the net worth is fluid and to some extent theoretical. Forbes list of billionaires changes all the time. Last year, only 2 of the top 20 billionaires managed to hold onto their ranking, 221 people fell off the list completely, and 198 newcomers were added.

To be a billionaire, your firm has to grow well beyond a billion dollars in value (not just revenue) as few founders own 100% of their shares in their firm. That often takes investors and partners. You can make a million dollars by yourself, but getting to 100 million in a lifetime takes partners. Getting to a billion requires much, much more.

There's an old maxim that “what every millionaire wants is to become a multimillionaire”, and in today's terms that is likely to go beyond a few million. Certainly, there may be some that decide enough is enough and they are content with $10 million or $100 million and would rather spend more time with their families or traveling the world than adding a few more zeros to their net worth. In that regard, money is a bit like sex: the more you have, the less likely you are to obsess about it.

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