It takes two things to make the billionaire list: concentration and leverage.
(Concentration is another word for under-diversification, which we covered earlier.)
Leverage is borrowing money to invest.
It makes billionaires because you can multiply your gains by borrowing. Of course, the flip side is also true. You can also multiply your losses.
In The Aspirational Investor, Chhabra studies the billionaire list and notices something interesting. It changes a lot, and that is because it takes incredible risks to become a billionaire. You have to take massive bets and go all in.
While we have all probably wondered what we would do with a billion dollars, remembering the survivorship bias can be helpful. Many people tried to become billionaires and ended up with nothing, often worse.
Investing with your earned money can feel unexciting at first as your account slowly climbs in value, but slow and steady is almost always the most dependable path to success.
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