467. The Millionaire's Mindset: Why It's Better Than Being a Billionaire w/ Tae Kim
Oct 26, 2023
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Tae Kim, creator of Financial Tortoise and renowned YouTuber, shares why he believes it's better to be a millionaire than a billionaire. They discuss the difficulty of becoming a billionaire, the importance of defining personal values, and the concept of 'enough.' They also explore the relationship between money and a purposeful life and delve into the paradox of purpose.
Becoming a billionaire requires either an extended period of time or incredibly high returns on investment, making it unrealistic for the average person.
The concentration of risk is a significant drawback to becoming a billionaire, as it often involves concentrated investments or business ventures with high levels of risk.
Deep dives
Reason 1: Becoming a billionaire takes a long time and outsized returns
Becoming a billionaire is not impossible, but it requires either an extended period of time or incredibly high returns on investment. The compounding effect of money means that even with a decent return, it would take many years, possibly even beyond a person's lifespan, to accumulate a billion dollars. The likelihood of consistently achieving high returns is also quite low for the average person, making the path to becoming a billionaire unrealistic.
Reason 2: Concentration of risk
The concentration of risk is a significant drawback to becoming a billionaire. Many billionaires have reached their wealth through concentrated investments or business ventures, which come with a higher level of risk. While some may have been successful, for every success story, there are likely many more failures. Diversification is a key strategy for reducing risk, but it becomes more challenging as wealth accumulates. The potential for significant financial losses and instability is a risk that most people may not be willing to take.
Reason 3: Big returns are unlikely
Obtaining the high returns necessary to become a billionaire is highly unlikely for the average person. While there are exceptions, such as successful entrepreneurs and investors, these individuals are often the result of a combination of luck, timing, and exceptional skills. The average person would need to achieve consistently high returns over a long period of time, which is rare. Depending on luck or extraordinary circumstances as a strategy to become a billionaire is not a realistic approach.
Reason 4: Being a billionaire is overrated
Being a billionaire is often associated with fame, power, and success. However, the reality may not live up to the expectations. Billionaires may face challenges in maintaining authentic relationships and may constantly feel the pressure to live up to their status. Happiness and fulfillment are not necessarily guaranteed with wealth, as evidenced by the personal lives of some billionaires. The pursuit of wealth should not be the sole focus, but rather living a purposeful and fulfilling life, which can often be achieved without becoming a billionaire.
Join us in this insightful episode as we sit down with Tae Kim, the creator of the Financial Tortoise platform and a renowned YouTuber. Tae shares his perspective on why he would rather be a millionaire than a billionaire, and why you should consider the same approach. We delve into the mindset and strategies that can help turn millions into billions, but question whether this is necessary.