What It Costs To Become A Billionaire

When I was in my teens, I thought I knew what my goals were.

I wanted to be a tech startup Founder. I wanted to be a Billionaire. I wanted to be on the cover of Men’s Fitness. I wanted my name to be mentioned alongside that of Jobs, Zuck and Musk. My goals were lofty, and I believed I’d achieve them.

Throughout my twenties, I worked towards achieving my goals and I had some minor successes that kept my hopes alive.

Over time I read countless books, I spoke to hundreds of people ahead of me, I listened to my heros on podcasts, and I got to learn what it takes to achieve some of those goals.

Once I learned the cost of achieving my goals, I had to decide whether I was willing to pay the price.

Spoiler alert - the cost for most of them is too high

What Does It Cost To Achieve Your Goals?

Let’s take my goal of becoming a world-changing startup founder.

In reality, to have a chance of making that happen, I needed to move to SF in my early twenties, spend several years learning to become a programmer, raise angel and VC money to launch a startup, and work 80 weeks for many many years.

Less than 2% secure VC funding, then over 75% of VC-backed startups fail to even return their investors capital, let alone become a world-changing company. That puts your odds of success somewhere around 1 in 200.

If I move to SF and give up the best years of my life working 80-hour weeks, I have a 1 in 200 chance of achieving my goal.

Doesn’t sound like a great deal.

You’re probably thinking ‘yes, but even if you fall short of your goal, you’ll likely still make millions’. In reality, the winner takes all when it comes to startups. The most likely scenario is that you get acquihired by a bigger player and you end up working for someone else on a decent salary. That isn’t for me.

What about the cost of becoming a Billionaire?

I’m a big fan of Andrew Wilkinson. He started an agency 15 years ago, then used to profits to build a holdco that made him a billionaire before the age of 40. Sounds cool right?

I thought so to.

In reality, building Tiny was likely incredibly unpleasant. He worked super long hours throughout the best years of his life, he endured incredible stress thanks to having hands in 30+ businesses and managing other people’s hard earned money. He likely had to fire hundreds of good people, he will have had investments go wrong and let down a lot of people, and at any moment the whole thing could have collapsed and been worth nothing.

I had to make several good people redundant last year, and I lost sleep over it for weeks. I can’t imagine the stress Andrew put himself through.

And after all of that, all he talks about is how he has no need for all the money, and he has no idea what to do with it.

That’s the BEST case scenario.

In reality, if you try to copy his playbook, you probably have a single digit percentage chance of succeeding.

So you sacrifice your time, your health and your relationships for an tiny chance of achieving something that isn’t all that great.

That’s a cost too high for me.

This thought process doesn’t just apply to career goals.

I have always been a gym junkie. In 2016 I finally got on stage and won a regional men’s physique contest.

But what would it take to actually win the Men’s Physique contest at Mr Olympia? Or to become a fitness influencer who gets paid thousands per post?

Steroids.

I’ve met several guys at the top, and I can tell you that they all take a lot of steroids to achieve those head turning physiques.

A 2013 study of professional wrestlers, many of whom abused steroids, found their average lifespan was around 50-60 years, 16-26 years shorter than the average male in the US. Other studies suggest that heavy steroid abuse can reduce your lifespan by 5-20 years.

Are you willing to pay that price?

You Don’t Even Want Those Things

A couple of years ago I read Wanting by Luke Burgis, and learned that most of the things I thought I wanted are due to mimetic desire.

Once you understand that you only want things because people you look up to have them, you start to realise that you don’t really want those things at all.

I don’t actually want to be a billionaire.

I just want to live a life with freedom of time, freedom of location, and enough money to do the things I love.

Tim Ferris’ 4 hour workweek taught me that you don’t want to be a millionaire, you want to live like one. And if you actually sit down and work out what living like one costs, it’s actually not that expensive.

Matching What You’re Willing To Pay To Your Goals

The business you choose to start is by far the most important decision you’ll make as an entrepreneur.

It’s far more important than your level of skill/experience, how hard you work and how much resources you have behind you.

Probably the biggest mistake I see in business is people choosing the wrong business to spend years working on.

I learned this the hard way, waisting many years and six figures on the wrong businesses.

Before deciding what type of business you should start, you need to know what your goals are, and if the business will help you get there.

My goal is to build a diversified holding company that produces six figures in free cash each year, with very little of my input required. By 35 I want to be financially free and be able to work 10 hours a week, so I can travel the world and ‘live like a millionaire’ with my family, and spend a large chunk of my time ticking off my giant and very ambitious bucket list.

Some people just want to make £100k/y so they an be their own boss and never have to work for anyone again.

Others want to make £100m+ so they can buy the yacht, the super cars, the private jet, live the high life and change the world.

If your goal is to make a few mil and be financially free, you would be foolish to try and build a startup that has the potential to make billions and change the world.

That’s a mistake I had to learn the hard way.

The bigger the prize, the more people and VC money that will compete for the prize, and the lower chance you have of succeeding. The smaller the prize, the less competition (usually).

Choosing A Business That Matches Your Goal

If you want the highest possible chance of achieving your goal, you have to choose a business with the highest chance of helping you do that.

If you only care about working for yourself and making £100k a year, go start a plumbing business, become a freelance marketer, or open a small accounting practice. Offer a service that people really need and is in high demand, that you can learn how to deliver within a few months. You’ll compete against lots of other people so you can’t overcharge, but if you work hard enough you can make £100k a year in most cases.

If you want to be financially free in the next 5-10 years, start an agency or consultancy and sell it for £3m-£5m. You’ll need to learn how to hire and incentivise good people, and you’ll need to pick a niche where you can charge a lot of money. Learn how to generate leads and sell high ticket services. Scale it up and you’ll have a sellable asset.

If you want to be a billionaire and change the world, move to Silicon Valley, raise VC funding and grind 80-hour weeks for the next 10-30 years.

Whatever you choose to persue, make sure you find out the real cost of achieving it as soon as possible, and be honest with yourself about whether you’re willing to pay that price.