7 Ways To Become A Billionaire From Zero

Ways to become a Billionaire from Zero

Becoming a billionaire seems like a great goal, but unfortunately, it's only a dream for most of us. The thing is, many billionaires didn't start out as such. Some certainly had economic and educational advantages but even without those, their smart decisions and business choices—plus a few key characteristics—led them to their billions.

Being a billionaire is more than having a bunch of zeroes in your bank account. Investing capital may be new to some, but it is not a barrier to becoming a billionaire. Working from a life of little or nothing to living in the lap of luxury is the classic American dream. To become a billionaire, create opportunities, invest wisely and retain wealth. Here's a theory of how to become a billionaire.

1. Invest more money

Invest more money

Investing, on the other hand, is the process of using your money to buy assets such as stocks, bonds, real estate, and other investments that should grow in value over a longer time period. Investing your money has historically been the better performer over one’s lifetime.

Self-made billionaire Warren Buffett is famous for his frugal ways and for his smart investments. Investing, of course, requires a little seed money and some accurate insight into which investments are smart and which could result in a loss. If you can follow in the footsteps of billionaire investors like Buffett, then this might be the route for you.

2. Do Innovate

Do Innovative

Innovation is the fine art of considering a current mainstream market and finding a creative way to improve the current offering.

Successful innovators will identify the real needs behind customer demands and will meet them with a smarter, better, more efficient product, or with a service that provides more than its competitors. Others may develop a business that works in a way just different enough to stand out from the rest. IKEA founder Ingvar Kamprad is a great example of someone who used innovation to yield billions. Furniture doesn't seem like a very exciting market, but his approach of providing modular, economical pieces with a modern flair from Sweden and other European designers and manufacturers to a global market proved fruitful.

3. Use credit card responsibly

Use credit card responsibly

Credit cards can be an important component of your financial life. Credit cards can also be the demise of your financial well-being. Many adults have used credit cards to purchase unnecessary and frivolous items only to put themselves in severe debt that can prove to be inescapable. When using a credit card, it is important to remember that you are borrowing money that you have to pay back. A few important things to remember when using a credit card:

• Pay off your entire balance by the due date
• If you don’t pay off the entire balance, you will charged extremely high interest rates
• Do not purchase items using a credit card unless you have the money to pay for them
• Beware of introductory interest rates and balance transfer offers
• Read the fine print of the credit card terms (the really small print they don’t want you to read)

4. Buy assets, Not liabilities

Buy assets, Not liabilities

Buy things that make you money, not things that make you owe money! For example, if you invest in a stock that pays a dividend (a portion of the profits that a company shares with you), you will receive cash every three months for doing absolutely nothing. If you purchase a bond, you will receive interest payments every six months. This is called passive income. Conversely, if you take out any kind of a loan to buy something, you now have accumulated debt that you will have to pay back with interest. Obviously, some loans may be necessary such as a mortgage when you purchase your 1st home, or maybe a car loan. However, other types of debt will increase your liabilities and hamper your ability to build wealth.

5. Be an Entrepreneur

Be an Entrepreneur

The third option for becoming a billionaire is in the time-honored tradition of entrepreneurial pursuits. Starting a business and taking it to success isn't always easy, but for those with good business sense and the ability to spot start-ups that have the potential to be great, entrepreneurship can be the vehicle to great wealth.

Billionaire entrepreneurs might work in one of two ways: either by coming up with a great idea and taking it all the way, as in the case of Bill Gates and Microsoft or by spotting someone else's good idea and investing in it early on. Both are viable ways to reach the success that can get you billions of dollars when it comes to your own net worth.

6. Embrace compound interest

Embrace compound interest

One of the greatest mathematical discoveries of our time is compounding. Compounding is when your earnings from your savings and/or investments create additional earnings. In other words, compounding is when your earnings generate earnings. As a matter of fact, compounding makes your money grow exponentially! The younger you are, the more time you have for compounding to do its job.

7. Establish a budget and save for hard times

Make a Budget

A budget is simply an estimate of expected income and expenses for a given period in the future, usually monthly. By establishing a budget, you can monitor how much money you are spending on certain items and services. An important aspect of a budget is to set aside money each month to build a cash reserve, also known as an emergency fund. An emergency fund is money you have saved for the purpose of providing cash in case of an unforeseen event in your life. Ideally, you should have an emergency fund equal to three to six months of living expenses. Your emergency fund should be kept in safe, easy-to-access investments like certificate of deposits (CDs), money market accounts, or simply a savings account.