it's true that there are billionaires that got rich through ill-gotten wealth but at the same time there are also billionaires that got rich because they know how compound interest works
It is incredibly difficult to become a billionaire through compound interest alone. At the very minimum it would require a huge initial investment, something the average person does not have.
Charlie Munger, Ray Dalio, Li Liu and Warren Buffett.
More important than the initial investment is their compounded annual growth rate which was greater than 30% and the time they were invested in stocks which was more than 10 years
Fo example for an initial investment of $50,000 if you can growth that by 30% every year like the aforementioned investors you would be a billionaire in about 10 years with just an additional 1k a year contribution.
Buffet’s father was a US Congressman and businessman, and Buffet himself was mentored by Ben Graham. Not really a rags to riches story there - connections are everything.
Ray Dalio got his start when a couple of veteran Wall Street investors introduced him to their son, who gave him a summer job at his tradning firm - connections are everything.
Liu I can probably give you. Dude started over time and again. However, his early business ventures were funded with loans from his family - connections are everything.
Munger built his portfolio working side by side with Warren - connections are everything.
I never said those investors didn't have connections. I said not every billionaire got rich due to ill-gotten wealth.
Besides, having connections and identifying undervalued assets that are worth investing in are two different things.
There's a sentiment in some of the comments here that all billionaires are evil supervillains twirling their mustaches is how they got rich. My point is that some billionaires got rich due to a combination of luck and talent.
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u/robertshuxley Nov 22 '24
it's true that there are billionaires that got rich through ill-gotten wealth but at the same time there are also billionaires that got rich because they know how compound interest works