Billionaire secrets they do not want people to know

1. "We just get richer and richer."

In 2013, the wealth of the w

orld's billionaires reached a record high - helped by 200 newcomers like Facebook founder Mark Zuckerberg. The 2013 Forbes Billionaires List names 1,426 billionaires with an aggregate net worth of $5.4 trillion, up a whopping 17% from $4.6 trillion last year. And that doesn't include royalty or, um, dictators.
Of those, some 442 make their home in the U.S. The average net worth of each U.S. billionaire: $10.8 billion, up from $9.1 billion last year, according to a separate survey released this month by private wealth consultancy Wealth-X and UBS.

2. "One million - or 10 - ain't what it used to be."

"The word now doesn't have as much power," says Charles Merlot, author of "The Billionaire's Apprentice: How 21 Billionaires Used Drive, Luck and Risk to Achieve Colossal Success." "In the eyes of the public, even $10 million is considered at the low end of high-net-worth."

For the global elite, keeping up with the Joneses, Gateses and Buffetts can require, at bare minimum, an eight-figure annual income. The online listing site Jameslist.com, a Craigslist for the super-rich, lists helicopters for a snip at $7 million-plus.

For those who believe a Bentley is too - well, obvious - the fastest and most expensive production car in the world is the $2.4 million Bugatti Veyron Super Sport car. Billionaires who don't want (or like) their neighbours can check out PrivateIslandsOnline.com, which has a collection of hideaways around the world to choose from. The 225-acre Katafanga Island in Fiji in the South Pacific is currently on the market with a price tag of $20 million.

3. "This is basically a boys' club."

Women are making some progress: There are 138 women among the 1,426 people on Forbes's Billionaires List this year, up from 104 last year.

Still, more than 90% of billionaires are men. Perhaps that should come as no surprise, considering that just 4% of CEO positions at Fortune 1,000 companies are held by women - a strikingly small proportion considering that 18% of members of US Congress and 30% of U.S. District Court Judges are female.

Luckily, rising through the corporate ranks isn't the only or even the most common way to become a billionaire. The richest woman in the world - Liliane Bettencourt, 91, who has $30 billion - inherited her fortune from her father, who founded the cosmetics giant L'Oréal. And the late Rosalia Mera, one of the 20 richest women in the world, was self-made: Although she dropped out of school at age 11, she co-founded the global clothing chain Zara (she died in August).

4.      "I may be smart, but I got a headstart."

America's billionaires tend to also be among its most well-educated, recent research suggests. In "Investigating America's Elite," published in the journal Intelligence, Duke University psychologist Jonathan Wai found that billionaires are more likely than CEOs, judges, senators or House members to have attended colleges with the most rigorous admission standards

But were they born smart, or born lucky? Wai says it's a bit of both. Most billionaires - including Bill Gates, America's richest man, and son of a successful lawyer - were born into an upper middle-class backgrounds, he says. The father of billionaires David and Charles Koch was Fred C. Koch, the founder of Wood River Oil and Refining Company, today known as Koch Industries; granted, the Koch brothers turned the company into the multi-billion dollar conglomerate it is today. S. Robson Walton, chairman of Wal-Mart, is the son of Sam Walton, the founder of Wal-Mart. "The first trick to becoming a billionaire is being born a millionaire," says author Mezrich.

5.      "It's like Monopoly money."

Billionaire Donald Trump offered to build a $100 million ballroom for the White House in 2011, but that's nothing compared with what some of the mega-rich have actually spent without blinking. In 2010, Russian oligarch Roman Abramovich purchased his latest yacht - the 536-foot-long "Eclipse"- for a reported price of about $1 billion. In 2009, Saudi prince Alwaleed bin Talal bin Abdul Aziz al-Saud bought an Airbus A380 for $400 million. In 2006, Mexican businessman David Martinez bought a Jackson Pollock classic drip painting from music producer David Geffen for $140 million. And in 2012, real estate mogul Stan Kroenke bought a 240,000-acre Montana ranch for more than $132 million.

But in some cases, the lavish spending is all relative. Oprah Winfrey, 59, was reportedly recently in the market for a $38,000 Tom Ford handbag, but she's worth an estimated $2.9 billion, according to Forbes - so the handbag would cost just 0.001% of her wealth.

6.      "What scares us? Divorce lawyers."

Luckily, and perhaps not coincidentally, divorce is relatively rare among the moneyed set. Of the 84% of billionaires who are married, only 8% are divorced, according to a survey of the world's billionaires published by Wealth-X earlier this month. That's far lower than the U.S. divorce rate: Some 40% to 50% of marriages overall end in divorce, according to the National Marriage Project at the University of Virginia.

Billionaire divorces can cost hundreds of millions of dollars and exact a heavy toll on the couple's privacy, says Janet Lowe, author of books about biographies of several billionaires, including Berkshire Hathaway's BRK. A +0.57% Charlie Munger and Google co-founders Larry Page and Sergey Brin. The 2003 divorce between former General Electric head Jack Welch and his second wife Jane Welch, she says, is a prime example: Divorce paperwork filed in Connecticut revealed the couple's high (and previously undisclosed) standard of living, and major newspapers throughout the U.S. publicised the details, focusing on the generous benefits Welch received as a retired GE exec. The Securities and Exchange Commission then launched a formal inquiry into Welch's compensation agreement, and Welch voluntarily gave up his GE retirement package, valued at $2.5 million a year. "In this environment, I don't want a great company with the highest integrity dragged into a public fight because of my divorce proceedings," Welch wrote in a column for The Wall Street Journal at the time, explaining his decision.

7.      "We didn't get rich investing in stocks."

If you want to be a billionaire and you're starting from scratch, don't bet on the stock market, some advisers say. Sure, an individual who happens to invest at the bottom of the market and sell at the top can do quite well.

In general, "if you beat stock indexes by 1% consistently over 20 years, you're a massive superstar," says Martin Fridson, author of "How to Be a Billionaire: Proven Strategies From the Titans of Wealth." But at that rate, it'll be a long time before the average investor becomes a billionaire. Here's another way to look at it: If you earned 15% a year on your investments - an astronomical benchmark that almost nobody has consistently hit - you'd still have to start with about $65 million in order to wind up with $1 billion after 20 years.

8.      "You say evading, we say avoiding."

There's no data on whether the ultrawealthy shirk their responsibility to pay taxes more often than the average citizen, but incidents involving billionaires certainly garner more media attention - presumably because of the vast sums involved.

"A lot of billionaires try to avoid paying taxes," says Friedman of Wealth-X. The latest to be named and shamed - and face jail time: Ty Warner, 69, CEO of Ty, the maker of stuffed Beanie Babies and worth an estimated $2.6 billion, according to Forbes.

"I apologise for my conduct," Warner told a U.S. District Court in Chicago in October. "I made a mistake. I'm fully responsible." He owes the government $53.6 million for failing to file a report on foreign financial accounts, one of the largest offshore-account penalties ever.

9.      "My family hates me, loves my money."

Spare a thought for Gina Rinehart, 59, Australia's richest woman - whose children, John Hancock, 37, and Bianca Rinehart, 36, are suing her. They allege that she engaged in serious misconduct as trustee of the family's multi-billion-dollar trust by trying to delay the date when the trust's beneficiaries - her four children - could access their money. (Gina Rinehart's law firm, Corrs Chambers Westgarth, says she denies all wrongdoing and, in a statement released to the press, said she's offering to give up her role as trustee to end the litigation.)

Not all family disputes are about money, however. Nor is it always the kids suing the parents: Financier T. Boone Pickens sued his son Michael in February for alleged defamation, libel, invasion of privacy, intentional infliction of distress and harmful access by computer, after Michael began writing about the family in a blog called "5 Days In Connecticut." Collin Porterfield, an attorney representing Michael Pickens, says the case is being considered by Dallas County Court and no decision had been reached.

10.   "King Lear taught me everything I know."

  

Most billionaires have traditionally left their fortune to their offspring or brought them into the family business. Case in point: Three of Donald Trump's children work in the family business and even appear on his reality TV show, "The Apprentice." These days, however, more billionaires are taking a slightly different tack. At least 30 billionaires have chosen to sign the "Giving Pledge," an initiative started in 2009 to encourage the ultrawealthy to give away half their wealth. (Warren Buffett has pledged to give away 99% of his wealth. He once told a television interviewer: "I want to give my kids just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing.")

Others who have made the pledge thus far include hotelier Barron Hilton, banker David Rockefeller, financier Ronald Perelman, Citigroup founder Sandy Weill and his wife, Joan, hedge-fund managers Julian Robertson Jr. and Jim Simons, private-equity financier David Rubenstein and "Star Wars" creator George Lucas. In fact, Lucas, 69, also sold off the bulk of his business empire last year, which some experts say will prevent a power struggle among his three adopted children after he's gone.

Source: http://www.news.com.au