Life Advice: Become a Billionaire

I don't have a problem with the ambition to become a billionaire, but as advice I think it's inactionable at best, and counter-productive at worst. I say that because becoming a billionaire is an outcome that happens after a long chain of decisions and events that need to succeed and compound over a long period of time. Focusing on the outcome of becoming being a billionaire is just day-dreaming unless you have the next actionable step, and unless you are already a 100-millionaire the next actionable step on the path to a billion is not predictable.

In practice I believe every billionaire has some very strong skills that enabled them to scale their wealth in that way, but those skills had to have been acquired by pursuing more achievable goals along the way. Ultimately they were lucky enough that their skills and assets aligned with growing economic waves which they rode to outsized success. I don't think you can reverse engineer this because every billionaire is a product of a particular time and niche that has already been exploited.

IMHO the better advice for young people is to focus on finding what you are exceptionally good at, and then intently practice and build those skills with short-term goals in mind. As you go, keep an open mind, learn to identify opportunities, say yes a lot, and if you feel you are onto something then go all-in on it long enough to see where it goes.

Why should I assume I would be a better philanthropist billionaire than the next guy? To make a 'greater good' case for becoming a billionaire, this seems like a question we need to explore.

> the odds of becoming a billionaire are low, but it doesn’t matter if you only consider the conditional probabilities. [...] The bet sounds insane to begin with, but at each step you’re taking on a very reasonable level of risk.

I'm still not convinced that it makes self-interested sense to do the risky thing and spin the billionaire roulette wheel i.e. leave a steady well-paying job and try my luck with a start-up. (Ignoring that some people just prefer being in a start-up, and some prefer not being in a start-up.)

The most likely outcome is a significantly reduced personal wealth. There's a vanishingly small probability of vastly increased personal wealth, but as the article acknowledges, this suffers from diminishing returns. It's a question of what statisticians call 'expected value', and it seems unlikely to me that spinning the wheel improves the expected value of the sum of my happiness and life-satisfaction numbers. Even if I increase the expected value of my wealth, the non-linearity will presumably easily outweigh this.

It is strange we don't connect flooding the system with liquidity/bailouts and the creation of billionaires.

For my personal risk preferences I should mostly be a bond investor but we have basically made that impossible. I have to own equities to get any return. Practically everyone does so the people who own giant equity stakes in successful companies are making out like bandits.

Life advise to own a giant equity stake in a successful company is pretty absurd. Why not add be really good looking too?

> In practice, we can easily generate a reasonable lower bound for the probability. Just take the number of billionaires and divide by a count of the total human population. You end up with a small number, but one considerably larger than 0.

I just got 0.000000354. I guess it's a matter of opinion what counts as "considerably larger than 0," but that's a pretty small chance.

That's really not the lower bound, either. That's the average probability for all people, but some people's chances are much higher than that. For Jeff Bezos' kids, the chance is nearly 1. That means the chance for other people needs to be lower to come out with the number of billionaires we actually have.

I don't really want to put aside that advice like this necessarily can't scale because the number of people taking the advice changes how effective the strategy can be. In the limit, if every single person on the planet tried to found their own AI tech startup, 0 of them would succeed and humanity would quickly go extinct as we no longer had food because all the farmers quit to found AI startups.

We may or may not need some people trying to become billionaires, but we definitely do not want all people trying to become billionaires.

Excellent article, thank you. It’s OK and even rational to be ambitious.

Life advice addendum.

Become a Billionaire in a manner which is so quiet that only the IRS knows that you are one, even better not even them :)