There’s a new rich list. Hoorah! Let’s look at how many people have far more money than we do.
Forbes just released ‘Australia’s 50 Richest People.’ The list shows 27 Aussie billionaires. The remaining 23 spots are just multi-millionaires. But it’s the number one spot that’s most interesting. And confusing.
Blair Parry-Okeden tops the list with $8.8 billion.
Uh, sorry? Who?
That was my first reaction. I expected to see Gina Rinehart at the top of the list. But that’s not the case. Apparently Parry-Okenden is American who grew up in Hawaii. But her ex-husband was an Aussie. According to Forbes,
‘Recently confirmed to be an Australian citizen she lives in near-seclusion near Scone, a rural village known for horse farms. After her mother’s 2007 death she inherited a quarter of American media conglomerate Cox Enterprises. Her grandfather — twice governor of Ohio and failed U.S. Democratic presidential candidate in1920 — started the company. Her brother, Jim Kennedy, a billionaire in his own right, manages the massive firm. She herself has no role there.’
There you have it, the richest Australian isn’t even Australian. Gina Rinehart comes in at number two as you’d (now) expect. Then we go all the way down to 27th position. That’s where we find Kerry Stokes with a net worth of just $1 billion.
27 billionaires is a lot. If you add up their wealth you get a total of $70.37 billion. Another impressive figure.
But the real wealth is nowhere near Australia.
Take for example Bill Gates (US), Carlos Slim (Mexico) and Warren Buffet (US). This time last year each one of them had personal net worth of more than $70.37 billion.
This time last year Gina Rinehart was the richest person in Australia. Yet she was the 94th richest person in the world.
Fast forward to today…looking at Forbes ‘Real Time’ figures only Bill Gates has more than $70 billion. He’s still the richest person in the world, has been for 16 of the last 21 years. Gina Rinehart is now in 135th.
The bigger they are the harder they fall
According to Forbes real-time data, there are currently 1,574 billionaires in the world. This time last year there were 1,826.
Real-time figures also show the number of billionaires in the world’s biggest countries,
- US – 500
- China – 169
- Germany – 90
- India – 77
- Russia – 77
Compare this to last year’s number of billionaires…
- US – 613
- China – 213
- Germany – 103
- India – 90
- Russia – 88 (down from 111 the year before)
That means there are 216 billionaires who are now millionaires. Ouch! That has to hurt among the mega-yacht set. Imagine being at a party introducing yourself as ‘former billionaire.’
These numbers aren’t a huge surprise. Last year was tough for pretty much everyone. This year has been tough too. On a daily basis things are tough. Even for the mega rich…
For example, let’s look at Amancio Ortega. Ortega owns retail giant, Zara. Yes, Ortega is worth $68.4 billion. But today Ortega is $884 million poorer. Those are the kind of swings the wealthiest have to deal with.
Facebook however had a strong day on Thursday. Mark Zuckerberg is now $6.4 billion richer — in just one day. The personal wealth swings of these uber-rich won’t make you feel any better about your portfolio. But it is proof that you’re not the only one dealing with shocking markets.
These mega billionaires rise and fall with the markets like everyone else. The market doesn’t care if you’ve got $68 billion or $68,000. When you own stock in a company you all rise and fall with its stock price.
You might not be Zuckerberg but you can still make big money
It always hurts when you lose money on the market. Even if it’s paper losses it’s still not nice to see red on your portfolio statement. That’s why it’s crucial that when you are investing in the market you’ve choosing the right stocks. It’s equally crucial that you choose them in the right sector.
Blue chip stocks aren’t going to make you big money. Not in this market.
This market calls for great companies down in the small-cap section of the ASX. If you can find companies able to survive the current market storm and deliver returns then you’ll be in a great position.
Last year there were small-caps that exploded to 714%, 700% and 523% gains. That’s exactly what Bellamy’s Australia [ASX:BAL], Pilbara Minerals [ASX:PLS] and Netcomm Wireless [ASX:NTC] respectively returned in 2015.
These companies are the ones that can still make you mind blowing returns — even when things are bad.
Now the chances of any of these making you as wealthy as Zuckerberg or Ortega are slim. But that doesn’t mean you can’t still make life changing money in small cap stocks. I think investing in great small cap, shockproof companies on the ASX is the best way to build real money on the stock market.
Of course if you want to be a billionaire, investing in the market probably won’t get you there. Even I’m not that delusional.
If you want to be the next Zuckerberg or Ortega you’ve got to do it yourself. Investing in the markets, the small-cap markets, can make you wealthy. But nothing really beats some good old entrepreneurial spirit and years of hard work. A little bit of self-made luck and a never say die attitude helps too.