Things Determining the Size of Your Wealth
How much do you really want?
Every order of magnitude of wealth starts with an order of magnitude of thinking, planning and praying.
In a world of 8 billion people, how many billionaires are there?
The US leads with 902 billionaires, followed by China with 516, India with 205, Germany with 171, Russia with 141, and Canada with 76 billionaires. The top 6 countries accounted for 66% of the 3,028 billionaires worldwide in 2011.
15 billionaires have 100B+ (0.5%)
257 billionaires have 10B+ (8.5%)
2756 billionaires 1B+ (90%)
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Total 3028 billionaires of 8 billion (0.00004%)
29,350 centimillionaires 100M+ (0.0004%)
Based on the above pattern, how many people worth $10M+ are there in the world?
If you guessed 300,000, that would be an excellent guess--add a zero.
The estimated number of high net worth individuals (HNWI) above $10M+ is 2.3 million (0.03%.)
And the number of millionaires is around 60 million people worldwide (0.75%)
613 million adults hold a net worth between $100,000 and $1 million. (7.7%)
So, less than 1% of the world's population are millionaires, and less than 0.03% are decamillionaires, centimillionaires, and billionaires.
This data suggests that it is incredibly challenging to become extremely wealthy. And it's unconventional, as 99% of the world will not become millionaires and beyond. And as wealth increases, it becomes more and more challenging to add that order of magnitude (another 0) to your wealth.
But How Do You Become Wealthy?
Wealth is mostly in your heart, then your head, then in your wallet and then given to others.
Dr. Kevin Ham
As I review the billionaire list, I don't see many people who have achieved this status by winning the lottery. Most of them either inherited wealth (10%), are self-made (61%) or a combination of both. Many deca and centi billionaires are tech moguls. They excelled in one or a few areas and scaled their success globally. Tesla, Facebook (Meta), Amazon, Oracle, LVMH, Berkshire Hathaway, Google, Zara, Microsoft, Walmart, and Bloomberg are examples of how thecentibillionaires made their fortunes.
They rode on a wave of a revolution that scaled. They were leaders and typically pioneers. Google was the 21st search engine, but they did it better than anyone else before them. Then, they compounded their lead by controlling the mobile OS (acquiring Android in 2005), becoming the dominant browser via Chrome, and striking a deal with Apple to power their search (they pay Apple $20 billion each year to be Apple's default mobile search engine).
If you keep going down the list of billionaires, you can see that they were focused on typically one area and built an ecosystem or supply chain around it.
What do Walmart or Costco create? The products they sell are those of other manufacturers, but they have developed a supply chain and logistical system that is accessible and offers volume-priced discounts, leveraging economies of scale. Walmart started in middle America, in small towns, and then expanded into the big cities. Amazon started with a long tail of books and an unlimited, searchable inventory, which made it the world's largest bookstore. It then replicated this model across every other category and leveraged its cloud computing business to build a logistical infrastructure that served its stores and customers.
All of this is fractal, meaning the patterns at the highest level are mirrored at the lower levels, but just on a smaller scale and also at the higher levels at a larger scale.
It's easy to predict who will 10x to the trillionaire level.
I believe that each of these individuals had a handful of things in common:
They thought, dreamed, planned and executed BIG. John Doerr of Sequoia Capital, a Venture capitalist, asked the Google founders, Larry Page and Sergey Brin, how big they thought they would be when they were interviewing them. Page responded, "10 Billion." John thought they meant market value, but when they said $10B in annual revenue, John nearly fell out of his seat.
They were bold and contrarian. They knew that the current way of things was limited and that there was a much better way to do it. Most will not agree with them initially. Everyone thought AirBNB was a stupid idea that would fail. Why would anyone want to rent out their room or house to a stranger?
They had an insight based on little data but could intuit and see the future. The Kodak moment when phones would replace digital cameras gave rise to Instagram.
They saw the revolution that would displace the current lifestyle. Ford saw that the automobile was not just something for the elite but could be democratized for all people within a decade. Bill Gates envisioned a future where every house would have a computer, and software would power them all.
They had self-confidence, self-belief in themselves and their mission. Many of them believed they would impact the world or had a greater mission and ambition, such as Elon Musk's desire to go to Mars. Jeff Bezos started Amazon because he wanted to go to outer space as well.
They believed in the long-term viability of what they were doing. Rockefeller bought the shares of those who thought each crisis they faced would be the demise of Standard Oil. Rockefeller believed he would become the wealthiest man in the world and that there was always a way to prevail and serve the world.
They served a large number of people and enterprises with their mission, products, and services. In return, they were rewarded with more than they gave or contributed.
They leveraged network effects by creating relationship networks, customer networks, business networks, logistics networks, and technology networks, among others.
How to Add a Zero or More to Your Net Worth
The dollar figures are the output. The input is how many people you dream of helping in a way that is better, cheaper and/or faster than what exists today.
Dr. Kevin Ham
If you dream of making $100,000 a year, you'll likely make that +/- 20%.
If you dream of making $1 million a year, you'll likely make that +/- 50%.
If you dream of making $10 million a year, you'll likely make that +/- 80%.
If you dream of making $100 million a year, you'll likely make that +/- 90%.
If you dream of making $1 billion a year, you'll likely make that +/- 95%.
When Brin and Page first started Google (initially named BackRub), it was the 21st search engine, and they envisioned $10 billion in annual revenues. Why? How did they come up with that number? They created the website PageRank, which ranked websites based on the number of sites linking to them (Backlinks) and then prioritized them further based on their authority, as determined by these backlinks. They didn't develop a revenue model for five years. Still, they improved the pay-per-click model that Yahoo had by considering how best to benefit advertisers, searchers, and themselves in a model that improved relevance for searchers and lowered costs for advertisers. What if they had only thought small and envisioned themselves making $1 million a year? Would they think of a model that scaled? Perhaps. Would they have raised as much money?
BTW, Google is the misspelling of 'googol', which refers to the number 1 followed by 100 zeros. This was the amount of information they wanted to rank and give search results for users. They thought big even when they were little. They conceptualized a server model, a ranking model and business model that scaled from small to large.
I believe Ford, Bezos, Disney, Jobs, Musk, and Zuckerberg all thought in the billions, what tech calls a unicorn company, when they started when it was just an idea, or there was a moment when they thought "BIG."
Your ceiling is the limit you place on your ideas, your dreams, your work, and your habits. You are that in being and what you are in being then has the potential to be realized in the physical world. The spiritual and mental world manifest into the physical world.
So, ask yourself, at what level do you dream of earning? 50k, 100k, 1m, 10m, 100m, 1b, 10b, 100b? And whatever level it is, you need to think, plan and execute at that level. To reach each of those levels, you need to be in sync with the same frequency of being, thinking, planning and executing.
As a reference, 22% of Canadians and 13% of Americans earn $ 100,000 or more. Approximately 1% of Americans earn $1 million or more per year.
People who earn a million dollars or more annually typically do so from high-paying professions, such as investment banking, law, insurance, engineering, business entrepreneurship, and investments, including stocks, real estate, and accredited investing.
The AI Revolution
The dollar figures are the output. The input is how many people you dream of helping in a way that is better, cheaper and/or faster than what exists today.
Dr. Kevin Ham
We've had the computer revolution, the Internet revolution, the social media revolution, the mobile revolution, blockchain (Bitcoin et al), and now entering the AI revolution. Soon to follow will be the quantum computing revolution, the robotic revolution, the cyborg revolution, the space revolution, the virtual and augmented reality revolution etc.
The speed at which AI is growing is exponential across all three axes of speed, quality, and cost decrease. Compute power is expected to 4x each year which computes to 1000x in five years.
To put that into perspective, if AI's speed is currently at 0.1, then in five years, its speed will be at 100. Today's AI is super slow to what will come. AI's costs will decrease by at least 99% every year. Imagine how cheap it will be in five years. Its quality will increase more than its speed as it is a neural network, like our brain. The network effects of all the connections will be profound, just like human intelligence, except AI will get faster, cheaper, better 24/7 as long as we have the servers. Still, ultimately this reasoning and memory can stand alone in a phone or connected to our brains. We plug into the 'matrix' for tapping into the big neural networks that become specialized for different functions.
The value will be both at the systems level but also at the application level. Companies will be worth $10 trillion, $20 trillion, and $30 trillion, which is 10 times the current value of Microsoft and NVIDIA. That means a $10B company, with a multiple of 10x, earning a billion dollars a year, would be only 0.03% of a $ 30T company. These huge companies will be disrupting and acquiring 1T plus companies and ignoring the $10B companies, as they would be too small to matter to them. So, what applications can you build in the AI era where you can build a 'moat' of specialized, differentiated features for that industry or group of users?
This would be fractal in theory and application to $100B, $10B, $1B, $100M, $10M, and $1M applications.
I believe that in the future, those who can develop the skillset to conceptualize and build products and applications leveraging AI will be the new entrepreneurs of the future. There are yet companies and applications to build that endure, just like the web, mobile and blockchain applications we have seen.
That also creates investment opportunities. Who invested in Bitcoin or the Top 10 cryptos like Ethereum, Cardano, Ripple, and Solana when they were pennies, dimes, dollars, or $100? Who invested in AI before ChatGPT debuted?
I've observed the rise of email, the Internet, and these revolutions, as well as the dot com crash, and I feel that the AI revolution is the biggest opportunity of our lifetime. I have been blessed with foresight and intuition by acquiring virtual real estate on the Internet and premium domain names that I can now leverage with AI. I've also invested in cryptocurrency, NVIDIA in 2018, and AI last year. I started investing in AI in 2007 and 2016. I was too early, but I recognized it was coming in 2018. In 2023, I was trying to find my sweet spot, and in 2024, I decided to plunge in and start conceptualizing and building applications with my teams.
If you are young, start learning how to build AI agents and applications. If you are older, consider how to leverage AI for investments, your own business, and your job to become more productive and efficient. But at the same time, figure out how to embrace your human nature and not lose your intelligence and heart.
Life Question:
What do you aspire to do in the next year and next ten years for your financial health?
The more focused you are, the more likely you are to execute that dream.
The more networked your ideas, the more powerful it becomes.
The more detailed your plans, the better you can execute on them.
The faster you execute and get feedback, the faster you learn and iterate on your plans and products/services.
Next week:
How You Can Develop Your Self-Confidence to Succeed
See you next Thursday!
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