Who is the richest person in your state and can you learn something about becoming wealthy yourself?
Forbes is out with an interesting list displaying the richest person in each state, along with their net worth and origin of their wealth. I decided to take a closer look at some of these 50 one-percenters, how they really made their money and what they do with it to stay on top.
From Bill Gates to Humble Robert Gillam, How the Rich Made their Money
Bill Gates remains America’s richest man with a fortune of nearly $80 billion while “poor” Robert Gillam of Alaska brings up the rear with a net worth of just $320 million.
Harry Stine makes it on the list for my home-state of Iowa with his $3.4 billion made in agriculture. Being dyslexic and mildly autistic didn’t stop this farm boy from making billions on plant genetics and seed patents.
Ten of the people on the list inherited nearly all their money, growing it marginally on investments but not through their own corporate know-how. I’m always a little skeptical when magazines like Forbes talk about self-made million- or billionaires starting from scratch. More often than not, these self-made titans started with a pretty shiny silver spoon.
While Charles Koch’s $42.7 billion fortune is attributed to “diversified” on the broad range of industries touched by the Koch empire, it didn’t hurt that Father Fred Koch amassed $2.3 billion from the company he started in 1927. The four brothers fought a legal battle against each other for the inheritance with Charles and David winning the lion’s share.
While the Koch brothers have used their headstart to become even more wealthy, there are others on the list that seem to enjoy the life of ease. Maybe it’s just jealousy but I don’t consider the three Walton heirs on the list (Arkansas, Texas and Wyoming) to be rich…just very, very lucky.
How the Rich Stay Rich
A survey published last year, and the topic of an article on personal wealth here on PeerFinance101, showed some surprising facts about how rich people around the world invest their money. The survey of 2,523 people with an average net worth of $7.6 million showed that most of the well-off invest the largest portion of their fortune in their own business.
Beyond the risk they take in their own businesses, the world’s wealthy invest pretty conservatively. Only 17% of their wealth is tied up in stocks and nearly two-fifths (39.9%) is in relatively safe bonds and cash.
The moral here? Don’t expect to get rich on stocks or other investments that don’t require a lot of hard work. If you can find something you enjoy doing and can make a business out of it, then give it a try. If you don’t have that entrepreneurial drive, and there’s nothing wrong with that, then find realistic goals that make you happy.
Comparing your financial successes to those of millionaires is a lot like comparing your jump shot to that of Knicks forward Carmelo Anthony. Instead, make your financial goals and progress the measure of how you judge success. I see a lot of people trying to be Donald Trump but end up missing their own goals because they take ridiculously high risks investing.
I spent years planning for the day I would make some list of the rich and powerful. It led me to make the biggest money blunder of my life and got me no closer to riches or happiness. When I finally figured out how to be happy and make money doing something enjoyed (the subject of tomorrow’s post), I stopped worrying about how many zeros I could count in my checking account.
Find what makes you happy, invest in yourself and set realistic financial goals.
About the Author
Joseph Hogue is a financial expert and investment analyst. After serving in the Marine Corps, he started his career investing in real estate before becoming an investment analyst for some of the largest private investors. He's appeared on Bloomberg and on CNBC as an investment expert and has published ten books in personal finance. Now he helps investors reach their financial goals and invest in the stock market with some of the same advice he used when working for the rich.