Dear Money & Crisis Reader,
James Altucher knows billionaires better than anyone.
Every week on his podcast, The James Altucher Show, he delves into the lives of the world’s most successful people — many of whom are billionaires.
Earlier this month, he had billionaire David Rubenstein on the show to chat about business, persuasion through example, and owning and original copy of the Magna Carta (valued at $21 million).
James has spent years studying these wealthy outliers, trying to see what makes them tick… and what it takes to become one himself.
Today, a lifetime of research and thousands of interviews, he believes he knows what it takes to become a billionaire.
He’s decided it’s not for him.
James says he’s satisfied just being a millionaire, for now. And he’d have to sacrifice so much of what he loves about his own life to pursue t hose extra zeros.
That said, he believes anyone with the right tools can become a billionaire. And we’re going to see a whole lot more of them in the next 10 years.
In today’s issue of Money & Crisis, James reveals the 10 trends you need to know about to become a billionaire in the next 10 years.
All the best,
Editor, Money & Crisis
10 Things You Need to Know to Become a Billionaire
I’m practically vomiting billionaires. I’ve interviewed so many. I’ve done a thousand hours or more of research on them.
Heck, I was even an adviser to a fake billionaire when I was the adviser on this season’s hit TV show Billions.
So let me explain why I hate myself.
I always believe in the saying, “Those who can’t do… teach.”
I always wanted to be a doer and not a teacher. BUT… I’m not going to be a billionaire.
There are many aspects to becoming a billionaire. I can do some of those things but others I have no interest in.
For instance, I don’t like to meet other people. I like to sit at home and write. Writers rarely become billionaires.
I have started many businesses. And I have invested in many. So who knows? I could get lucky. But probably not.
But this I know: I’ve probably studied billionaires more than anybody else. So I feel I can teach what it takes even if I can’t DO what it takes.
And the near future, the next five-10 years, is ripe for the picking.
At the risk of being labeled a “futurist,” I will describe 10 areas where I think more billionaires will be created in the next 10 years.
I’m not going to be one of those billionaires. But maybe you will be.
10 Things You Need to Know About the Near Future to Become a Billionaire
1. The Access Economy
The access economy is all the businesses that contain these three parts:
- People who have surplus space.
- People who want access to that space.
- A platform to connect the two.
A prior example is Airbnb, which has:
- People with empty homes or apartments.
- People who want access to those empty homes when traveling.
- A website to connect the two.
The platform, in this case a website, must have a search function, secure transactions, reviews, and mediation when there are problems.
2. The Subscription Economy
Netflix and Amazon Prime and newspapers with online firewalls are version 1.0 of this.
There are many examples of subscription services (Tinder, HBO, newspapers, etc.) but I think this area is just beginning, particularly when combined with growing trends.
At the comedy club I am part owner of, we created the “LaughPass.” Subscribe and you get special discounts or free access to not only our comedy club but 100 other comedy clubs around the country we just made a deal with.
And if you are a comedian, perhaps you can now go on our LaughPass comedy tour given the relationships LaughPass has with comedy clubs all around the country.
Maybe a GolfPass gives access to golf clubs all around the country. Or BookPass allows you to get four books a month from any bookstore around the country.
This is a very Warren Buffett-style business (think everything ranging from his Blue Chip stamps in the ’70s to insurance).
Money is paid in advance (this is called “the float”). That money can be invested until it is used. It may not be used. Or it may be used in the future. But the money invested and the money not used are the profit.
3. Innovations in Currency
Bitcoin solves the basic problems of government-issued paper currency by ensuring the following:
- No forgery
- No human error
- Fewer intermediaries per transaction
- No government intervention
- Much cheaper basic contract law and logistics via blockchain
But there will be even more innovations in cryptocurrency 2.0 once all the initial scams are flushed out.
Then we’ll see currencies dedicated to greater privacy. Currencies with specific purposes like gambling or trade finance or contract law or converting “travel points” into currencies, etc.
And then there will be the “picks and shovels” companies for these new currencies. Software agencies to make new currencies. Media companies for the new currencies, innovative peer-to-peer exchanges, etc.
It’s going to be legal everywhere. So this is going to require distribution, media, Yelp-style reviews of different strains, education, medical uses, hydroponic labs, access to grow houses, etc.
5. New Media
Everything in media is already dead.
Book publishers are dead. They have been replaced by self-publishing.
Local TV is already dead.
And yes, even Netflix is dead.
I will tell you why.
Netflix is a popular service that used its profits to make TV shows, so we use that service (via our TV set-top boxes) to watch shows.
But any popular website can do the same thing. In fact, they already are:
Uber has a Spike Lee-produced TV series on it. Facebook is making TV shows. YouTube had user-generated short videos, and now YouTube Red is making highly produced shows.
I bet LinkedIn will be next.
To be a TV producer you have to find a website that is very popular and profitable, pitch them a show and go for it.
You no longer have to pitch one of the three networks (media 1.0) or the streaming services (media 2.0). Now you can pitch anyone (media 3.0), even companies with a big email list or social media following.
Combine this with the access economy and perhaps people with excess ideas for shows can be on one side of the platform and people with money who want to be producers (or websites with a lot of traffic) can be on the other side of the platform.
6. Choose Yourself Economy
I, of course, have been writing about this for years, but it’s still the first inning.
- To publish a book you no longer need to be “chosen” by a publisher. You can self-publish.
- To make a TV series you no longer need to be “chosen” by a studio. You can create a mini version on YouTube.
- To start a company you no longer need to be “chosen” by a venture capitalist. You can use AngelList or Kickstarter OR you can start a company for 1% of the old costs using freelancer.com.
Choose what you want to do and then find ways to do it. Will this create a billionaire? I don’t know. I know it will create millionaires. I’ve seen it happen.
But perhaps it will create billionaires as the ability to “choose yourself” to create companies gets cheaper and cheaper.
Fourteen years ago I was running a fund of funds. Meaning people gave me money to invest in highly sophisticated unregulated funds called hedge funds.
One fund that I was interested in focused only on Africa. People were so excited about this fund that when I showed them the fund, they bypassed me, called the fund directly and would wire a million dollars without even thinking about it.
It was too early, though. I never invested in that fund. And the fund didn’t do well.
BUT… now it’s not too early. The reason? Access to clean water. Most of Africa went from having little to no access to clean water infrastructure to about 60–70%.
This is still not great. Africa is the worst continent in the world when it comes to clean water infrastructure. But it’s coming.
So what does that mean?
It used to be if a company was made in the U.S., the same company could be made in Europe (and then South America and then China and then Russia) and do well.
Now that will be true for Africa.
For instance, WaystoCap is the “Alibaba of Africa.”
But what’s the Google of Africa? What’s the Airbnb of Africa? What’s the Uber of Africa?
You can say, “Well, Uber will be the Uber of Africa.” But that’s not necessarily true. Uber tends to buy rather than start.
Same with Google and Amazon.
And Baidu became the Google of China and Mail.Ru became the Google of Russia.
So go make the Tinder of Africa and see what happens.
8. Data-Based Dating
The University of Kansas did a long-term study with 1,500 couples.
Guess what? Opposites don’t attract. Couples with similar backgrounds and beliefs were more like to stay together for the long term.
But what does “similar backgrounds and beliefs” mean? I think they did this roughly, with questions like “Where are you from?” and “What is your religion?”
But with data we can fine-tune this:
- Match people based on their genetics with 23andMe
- Match people based on their choices on Netflix
- Match people based on their buying patterns on Amazon
- Match people based on the news articles or books they read
- Match people based on which ads their eyes look at. Which art they like. Which people they look at in the street. Etc.
- Match people based on what Airbnbs they choose, what restaurants they eat at, etc.
It’s not short-term like Tinder but a data-powered “relationship app” could be the most powerful dating tool of all.
Now… I used dating as an example. But we already live in a data economy. There is more data on you than you can possibly imagine.
As a data expert once told me, there are companies that can tell you how many strawberries you ate last month.
Data like these are available from data-based companies like Experian or, if you have some programming ability, companies like Bitly or Twitter.
So what other possibilities are there?
9. AI Economy
When the world went from horse-driven buggies to cars, no jobs were lost. How come?
Because every horse driver became a cab driver. Every person who cared for horses became a car engineer. And so on.
When ATMs replaced bank tellers, no jobs were lost. How come? Because banks made higher profits, opened up new banks on every corner and hired more tellers than ever.
But now, if AI performs surgery on you, we don’t need a surgeon.
If AI creates a contract for you, we don’t need a lawyer.
If AI fills out your taxes, we don’t need accountants.
But there will be lots of money made, lots of profits, and an AI class of billionaires will be created.
If AI can study what different musical chords do to the neurochemicals in your brain, it can create music tailored just for you and your moods.
And on and on.
10. The Yesterday Economy
I was watching the comedian Ronny Chieng.
He made a joke about how people in America want everything (he shouted) “Now! Now! Now!” and then he made a joke about how soon there will be an Amazon SuperPrime where you get what you want “yesterday!”
But this is not so far-fetched.
What if I sign up for “Amazon Yesterday” (the subscription economy plus AI) and I simply get things delivered before I even know I want them?
Amazon knows my buying patterns so it can assume that before summer allergies kick in I will need a certain kind of medicine. Or before John Grisham’s next book comes out, I get an advanced copy. Or based on my toilet paper buying patterns, it sends toilet paper before I run out.
What else can be in the yesterday economy? Software that plans my Uber rides for me. Maybe a place that schedules restaurant reservations or orders food for me on Grubhub or finds possible Airbnbs for me when it sees vacations approaching.
Notice that all of these things exist to some extent already.
Billionaires don’t get rich by creating something 100% new.
Mark Zuckerberg created the 10th social network. But the first with verified identity.
The access economy already exists. But have we truly exhausted its possibilities?
Maybe not, if we combine it with the subscription economy, the AI economy and the yesterday economy.
Or we provide the “picks and shovels” companies for the above. Just like Richard Branson loved music but he wasn’t a musician, so he provided the picks and shovels for the music industry.
Nobody knows what the far future will bring. The “futurists” are very often wrong. And the billionaires don’t care.
But the near future is already 50% here. The billionaires will fill in the final 50%.