How to Invest like a Billionaire

Forbes has a list for everything these days.

Most recently, they put together the billionaire’s list.

It’s interesting to different people in different ways.

For the odd ones like me, I am interested in what these people have built.

Because these people have built great companies that have generated significant returns for a long time.

That equals a great investment, and like you, I am always searching for great investments.

See where I am going with this?

Let’s dive in.

To continue the list theme and give you more context before I dive into how to be a better investor, here are the three best ways to build assets across a lifetime, based on historical returns and as a friendly reminder:

1. Own Real Estate

2. Invest in equities

3. Own a business

   
   

Not much other than that.

The Forbes billionaire lists prove this point – these people mostly own businesses (lots are publicly traded), some are real estate investors, and a fair amount are private equity folks. A growing subset inherited it from mom and dad, but it’s mostly business owners.

So, these people have consistently generated high rates of returns over many, many years.

What are they doing, and what’s the takeaway?

There are three specific things.

These things are 100% worth implementing as you invest and build your portfolio.

They epitomize entrepreneurship and growing money safely over long periods.

And who doesn’t want that?

So here are three uncommon growth hacks to build a high-performing financial life.

Unparalleled commitment is table stakes.

If you’ve ever employed someone, you know what I am about to say: owning a business that has payroll requires a ton of commitment. If people are relying on you for their groceries, car payments, 401k savings, or childcare expenses, you know, it’s intense. That intensity creates excellence. Excellence creates more money. Money favors excellence over foolishness. But all this can be traced back to the level of commitment. When you think of yourself as a business owner vs. a stockholder, you develop more commitment to your chosen strategies and subsequent investment choices. This forces excellence. Excellence performed consistently over decades produces more income and more assets.

Only the best is allowed on the balance sheet.

When you limit your choices by considering yourself a business owner vs. a stockholder, you pass on many opportunities because of point #1. When you get more money, you add more to the existing pie vs. always buying more stuff. This purposeful limiting of choice, combined with a commitment to your strategy, ideally lets only the best opportunities in. Warren Buffett emulates this best. Think about this article, then listen to a Buffett interview, and you’ll see what I mean. These two points lead to the not-so-obvious final point.

Simple personal balance sheets scale amazingly well.

When you possess unparalleled commitment and are picky about what gets on your balance sheet, things tend to get simpler… and simple scales. I’ve had many conversations with people over the years who have had confusing financial lives because they lack points #1 and #2. Confusing isn’t always bad per se, but if simple isn’t a word that comes to mind in your financial life – you are probably doing something wrong. Many of these billionaires have over half their net worth in just one or two assets. When you buy businesses and keep buying them vs trading stocks, you create a simple environment suitable for scaling.

That’s the three-step process.

Buy businesses, not stocks.

Be picky.

Commit to what’s best for you.

Build systems aimed towards simplicity.

All to unlock more levels of freedom in your life.

When I invest – I always look at what I already own, and almost 100% of the time, I add more to what I already own.

I am deeply committed to what I invest in. I have purposefully limited my choice so only quality gets in, and this has yielded a level of simplicity that scales.

Because of this, I have time and freedom to pursue projects like Tired and Rich, which help deepen the understanding of the almost 900 of you who get this every Saturday while also allowing me to do what I love—write.

It’s a win-win.

Play the long game, and keep buying businesses.

In summary:

1. Develop unparalleled commitment to your investment strategy and yourself.

2. Say no most of the time – only quality is allowed on your balance sheet.

3. And make it simple so it scales better.

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