How Billionaires Become Billionaires

Londongrad From Russia With Cash - The Inside Story Of The Oligarchs

The Russian Billionaires

I have been reading about the Russian oligarchs (aka "billionaires") for a few months now as you may have noticed. While they are highly controversial figures, you have to give them credit for having big brass ones. If you're a tycoon in Russia, you commute in an armored limo accompanied by a convoy of SUVs filled with men toting automatic weapons. It's the only way you can survive. The threats can come from rival tycoons as well as any of Russia's hundreds of different police and security units. One oligarch, Vladimir Gusinsky, was estimated to have a private security force of 1000 former military and police men guarding him and his assets.

Here's the latest book on these men. It focuses on the ones who fled to London after Putin took over from Yeltsin a decade ago. Putin has been gradually clawing back some of the assets that they obtained for next to nothing in exchange for providing political support to Yeltsin in the 1990s.

Londongrad From Russia With Cash - The Inside Story Of The Oligarchs by Mark Hollingsworth and Stewart Lansley.

The amazing true story of how London became home to the Russian super-rich - told for the first time ever. A dazzling tale of incredible wealth, ferocious disputes, beautiful women, private jets, mega-yachts, the world’s best footballers - and chauffeur-driven Range Rovers with tinted windows.A group of buccaneering Russian oligarchs made colossal fortunes after the collapse of communism - and many of them came to London to enjoy their new-found wealth. Londongrad tells for the first time the true story of their journeys from Moscow and St Petersburg to mansions in Mayfair, Knightsbridge and Surrey - and takes you into a shimmering world of audacious multi-billion pound deals, outrageous spending and rancorous feuds.But while London's flashiest restaurants echoed to Russian laughter and Bond Street shop-owners totted up their profits, darker events also played themselves out. The killing of ex-KGB man Alexander Litvinenko in London to the death - in a helicopter crash he all but predicted - of Stephen Curtis, the lawyer to many of Britain's richest Russians, chilled London's Russians and many of those who know them.

This is the story of how Russia's wealth was harvested and brought to London - some of it spent by Roman Abramovich on his beloved Chelsea Football Club, some of it spent by Boris Berezovsky in his battles with Russia's all-powerful Vladimir Putin. Londongrad is a must-read for anyone interested in how vast wealth is created, the luxury it can buy, and the power and intrigue it produces.

You can get more information on the book here: Londongrad From Russia With Cash - The Inside Story Of The Oligarchs

Business Wisdom from Billionaire Warren Buffett

Billionaire Warren Buffett shares his business lessons and wisdom.

Here are the hi-lites:

When do you decide to invest in a firm?

The best thing that happens to us is when a great company gets into temporary trouble. We want to buy them when they’re on the operating table. (Mr. Buffett bought Coke when it had its biggest fiasco after launching New Coke; he bought American Express when it went through a loss making phase in the early 60’s)

What do you look for in people when they come to sell their firms to you?

I don’t look for the usual credentials such as an MBA, a pedigree (Harvard, Wharton), or cash reserves or market cap of their firm. What I look for is just a passion in their eyes; I think that’s the key. A person who is hungry will always do well. I prefer it when people even after selling stay on and work for the firm; they are people who can’t wait to get off their bed to get to work. Passion is everything; there is no replacement for innate interest.

Why do stock market crashes happen?

Because of human nature for greed and insecurity. The 1970s were unbelievable. The world wasn’t going to end, but businesses were being given away. Human nature has not changed. People will always behave in a manic-depressive way over time. They will offer great values to you.”

What are the things that are taught wrong in Business school and the corporate world?

I like such open ended questions, I think Business schools should refrain from teaching their wards about profit making and profit making alone, it gives a sense of 1 dimensional outlook to the young students that loss is a curse. In reality, in the corporate world, failure and loss making are inevitable. The capital market without loss is like Christianity without hell. I think they should teach the student on how to buy a business, how to value a business? Not just on how to determine the price of a business. Because price is what you pay, value is what you get.

How do you feel after donating $ 40 Billion to the Bill and Melinda Gates foundation? You are a hero to us!

I feel nothing. I haven’t sacrificed anything in life. I have had a good life. I donated after I turned 75. I think I admire those people who sacrifice their time, share their food and home, as the people to be emulated not me. Besides, what is money before a man’s life?

What do you think are the pitfalls in donation?

I have never donated a dime to churches or other such organizations; I need to believe in something before I end up doing that. I have been observing the Bill & Melinda Gates foundation for years now and I am confident they will do a fantastic job of making use of the money. I am a big believer in Outsourcing, others believed in me as an Investor and gave their hard earned money to invest. I believe in Bill Gates, he is a better donor than me.

You seem to be so well read, tell us how it all started.

My father was a stock broker, so we had all these financial books in our library. He introduced me to those classics and I got into them. I am lucky that my father was not a fan of Playboy! Reading is the best habit you can get. Well, you can learn from teachers too, and have mentors but there are so many constraints attached- they will talk fast, talk slow, they might talk like a pro or they might be terrible communicators. Books are a different animal altogether, I love reading! The beauty about reading and learning is that the more you learn the more you want to learn.

What is the 1 biggest advice you would impart to a young investor like me?

Think for a moment that you are given a car and told this is the only car you would get for the rest of your life. Then you would make sure that you car is taken care of well, it is oiled and detailed every now and then. You would make sure that it never gets rusted, and you would garage it. Think of yourself as that car. You just get 1 body, 1 mind and 1 soul. Take care of it well. Invest in yourself that would be my advice.

You can read more from Warren Buffett here.

If you really want to understand Warren Buffett check out his new biography: Alice Schroeder: The Snowball: Warren Buffett and the Business of Life

If you're a serious entrepreneur, check out the free mini-course on billionaire strategies.

Billionaire Richard Branson's Toughest Business Lessons

Excerpt from the Richard Branson biography.

Richard Branson shares his hardest lessons in the revised edition of Tom Bower's biography Branson.

Conjuring a fortune from thin air has been Richard Branson's genius since the early 1970s. By chasing fashion and juggling options, Britain's most popular businessman has turned investments in music, airlines, radio and now mobile telephones into mega-million-pound windfalls to be neatly deposited in his family's tax-free offshore trusts.

His latest coup, transforming Virgin Mobile from a mere idea in 1999 to a company valued at over £800m, is certainly remarkable. Incredibly, Virgin Mobile owns nothing more than a sales force and a customer base, allegedly, of 4 million subscribers. The telephone network and the company's headquarters are rented. The ace is the Virgin brand name and Branson himself, posing as the People's Capitalist.

In common with everything connected to Branson, the headline announcement last week that NTL, a cable company, wants to buy Virgin Mobile triggered much babble but little illumination. After rejecting an opening bid, Branson, with his customary cool, is waiting for the inevitable new offer and a top price.

NTL is not paying with cash but with NTL shares, and the hype of combining NTL, Telewest and Virgin into a seamless company to rival Sky exemplifies Branson's permanent lust to play in the big league. Challenging Rupert Murdoch has become a virility symbol for British tycoons irritated by their pygmy status on the world stage. Jargon about "quadruple play", meaning one server providing telephones, internet and TV, sounds good until you examine the parentage. NTL is criticised as unreliable, while Branson is the master of hype, often followed by failure.

Since he started Student magazine in 1967, Branson's searing ambition and personality has lured friends, entrepreneurs and established corporations to believe they can always earn fortunes by their attachment to him. Fuelled by the self-made tycoon's incessant self-glorification and ferocious publicity campaigns, the headline successes over the years have sustained the myth of invincibility.

Virgin Music - started amid a sophisticated purchase-tax fraud that Branson admitted in 1971 - was sold in 1992 for a record £560m. That money sustained Virgin Atlantic, the airline started in 1984 with a single, old Boeing 747. In 1999, when Branson sold a 49% stake of the airline to Singapore Airlines to relieve a financial squeeze, he valued the business at £1.2bn.

But beyond those two outstanding successes is a history of failed enterprises, which might have cautioned NTL. Virgin Cola, hailed by Branson in 1994 as the inevitable successor to Coca-Cola, has practically disappeared. Virgin Clothes, launched on the stock exchange in 1996, folded with losses to shareholders. Virgin Money was launched with a glitzy advertisement of Branson emerging naked from the sea, but did not deliver the expected big financial rewards. Then came Virgin Vie, Virgin Vision, Virgin Vodka, Virgin Wine, Virgin Jeans, Virgin Brides, Virgin Cosmetics and Virgin Cars - none fulfilling their creator's inflated dreams.

Other disappointments were truly painful. Virgin Express, an airline based in Brussels, was intended to rival easyJet, but the original investors on the stock market lost money. Similarly, the McCarthy brothers, who invested over £30m in V2, Branson's second music company, lost all their money and, unable even to pay the milkman, faced personal bankruptcy. Australians who invested in the 2003 flotation of Virgin Blue, an audacious, no-frills airline, rewarded Branson with over £200m for a stake of his original investment. Initially the airline was successful, but soon after Branson pocketed the money, shareholders watched the share price fall.

His ventures have also included two catastrophes. Virgin Rail was Branson's big dream. For years he had campaigned in Westminster about the advantages of privatising the rail network. Branson posed as the socially acceptable capitalist, able to offer cheap, modern and reliable rail travel without government subsidies. His promises were not fulfilled. Virgin Rail remains dependent on state money, aggressively protects its monopoly, and is subject to innumerable passenger complaints. The company's history damaged the Virgin brand and Branson's reputation as a reliable entrepreneur, the capitalist with a social conscience.

By 2000, Branson believed that the catalogue of disappointments was behind him. In a millennium lecture in Oxford, he confessed that winning the national lottery licence remained his major, lifetime's ambition. His reason was simple. That year, all his businesses other than the state-protected monopolies in airlines and rail, were losing money. His assiduous promotion of a People's Lottery and his overt support for Tony Blair, Branson believed, could secure his dream on his second attempt. His ambitions are not solely altruistic.

Possessing the lottery licence would bequeath a vast cash flow in management fees and endless free publicity to Virgin by association while Branson anointed the lottery's millionaires. By controlling the lottery, Branson would never again need to bother with dicey enterprises like cola, clothes, cosmetics or even mobile phones. Most important, he would reverse the crushing humiliation he suffered by two rejections.

Convinced by his own genius, Branson had been shattered in 1994 to be told that his bid for the lottery was not only unsuccessful but rated poorly compared with his competitors. He was infuriated by the regulator's decision.

Two years later he launched a libel writ against Guy Snowden, the American mastermind of Camelot, the winner. Snowden was accused by Branson of offering him a bribe. When Snowden denied this, Branson successfully sued for defamation. Regardless of the merits, Branson's pursuit of Snowden, long after Camelot's success was established, suggested to his critics a nastier side of the tycoon's character. Snowden was classed among those who had initially been attracted to sup with the legendary businessman, only to find himself to be his victim.

That view about Branson influenced the strange events following the original award of the lottery licence in 2000 to Branson. Challenged by Camelot in court for her conduct in selecting Branson, the lottery regulator was forced to resign and the competition was re-opened. Eventually, the same lottery commissioners decided to reverse their decision and re-award the licence to Camelot. In the aftermath, Branson pledged never again to bid for the lottery, but recently he has embarked on preliminary discussions with the regulator to consider launching a third pitch. His addiction to winning the Big One reflects his insecurity.

While in recent years he has confounded his critics and rescued himself, thanks to Australian investors in Virgin Blue, he lacks a secure foundation to sustain his fortune from market fluctuations. The profits from airlines and mobile telephones are vulnerable to events. The lottery is guaranteed cash.

If he can profitably exit from telephones just as the business is getting difficult, that would be convenient. Some of the profits could be used for his lottery bid. Branson's hurdle will be silencing the whispers of the wounded, urging his failure. 

~

The above excerpt is from the Tom Bowers book Branson.

If you are a serious student of business, check out the free mini-course on how billionaires become billionaires.

How to Succeed & Get Rich: Inspirational Words From Felix Dennis

How to Succeed & Get Rich: Inspirational Words From Felix Dennis

This is the self-made British billionaire Felix Dennis speaking.

 

You must believe in yourself. Otherwise why should anyone else believe in you? – Felix Dennis

Here is his book  How to Get Rich: One of the World's Greatest Entrepreneurs Shares His Secrets
 

Business Lessons From The Richest Man In The World: Carlos Slim

Business Lessons From The Richest Man In The World: Carlos Slim

"When you live for others' opinions, you are dead. I don't want to live thinking about how I'll be remembered."

"I think one of the big errors people are making right now is thinking that old-style businesses will be obsolete, when actually they will be an important part of this new civilization. Some retail groups are introducing e-commerce and think that the "bricks" are no longer useful. But they will continue to be important."

"When there is a crisis, that’s when some are interested in getting out and that’s when we are interested in getting in."

"When we decide to do something, we do it quickly."

"I don't believe in working 20 hours or 16 hours or 14 hours. When you work too much, it is because your job is beyond you. If you need to work 15 hours, 16 hours, this is because you're not organized. You don't have delegation of your responsibility, and I don't believe that in any business, in any activity, you need to work 15 or 16 hours, and you don't have time for yourself or for your family or for anyone."

"All times are good time for those who know how to work and have the tools to do so."

"I’m a paper man, not electronic. My children gave me a lap top for Christmas, but all I know how to do so far is push the on button."

"I spend most of my time studying new technologies. My main task is to understand what's going on and try to see where we can fit in."

"We started doing something similar for Telmex employees about a year ago. We sold 28,000 computers at a very low, accessible price to employees. Eventually, we want all of the workers in several of our companies to have computers so that they and their families can use them. You can't attend your Internet clients well if you yourself don't know how the system works."

"First, you begin creating your organization with a team of salesmen, not with one. You need to create many hundreds of salesmen to go to the market to offer the product. What you can do, maybe, if you are going to begin, is to find which area the casualties are lower, the risks are lower, because there are less stolen cars and accidents, and you can begin in this place. You will begin selling one maybe at 11 o'clock, but at 5 o'clock, maybe you've sold 100, and 200 next day, and 600 and 1,000, and as much as you go there, you're taking a statistical risk."

"Do not allow negative feelings and emotions to control your mind. Emotional harm does not come from others; it is conceived and developed within ourselves."

"Live the present intensely and fully, do not let the past be a burden, and let the future be an incentive. Each person forges his or her own destiny."

Learn more about Carlos Slim's strategy.

How Did Carlos Slim Become the Richest Man in the World?

How Did Billionaire Carlos Slim Become the Richest Man in the World?

The answer is that Carlos Slim did it the tried and true old-school way: deal-making. Deal-making is defined as the acquisition of many assets over a prolonged period of time. The intention is to increase the value of the assets so that they can at some point be sold off at a profit. Some are kept long-term because they are "cash cows," to reference the famous Boston Consulting Group portfolio matrix.

Rather than relying on any single idea to make them wealthy, most self-made billionaires develop cookie-cutter systems for doing lots of deals. The great news is that any business person can learn from them and develop their own system for accelerated growth.

It just requires the guts to take the first step. Surprisingly, most people don't even have enough to do that.

Here's your chance to find out how Carlos Slim became not only a billionaire but the richest man in the world. Take the free 10-day mini-course on the systems and strategies self-made billionaires use by clicking the above link.

Bill Gates Displaced as World's Richest Man By Carlos Slim

Bill Gates hands over mantle of world's richest man to Carlos Slim.

Meet Carlos Slim, the richest man in the world

He may not be as famous as Microsoft's Bill Gates, but Mexican oligarch Carlos Slim Helú is wealthier – and much more ruthless, says Tom Leonard.

The 70-year-old Mexican's path to an estimated $53.5 billion (£35.8 billion) fortune is resolutely "Old School", too – buy companies cheap, turn them around and then ruthlessly drive the competition out of the market. (Carlos Slim, World's Richest Man)

How does the "Old School Billionaire Strategy" work? Read more by clicking the link. Check out the free billionaire mini-course too. Sounds like Carlos Slim is a Guerrilla Billionaire.

The Tycoon Playbook: How Billionaires Build Their Empires.

The Tycoon Playbook: How Billionaires Build Their Empires

It's tough trying to grow your business in this economy with the same palette of tired old strategies everyone else is relying on. Maybe it's time to learn some advanced strategies for growth from the best of the best? While not everyone can become a billionaire that doesn't mean that we can't learn valuable lessons from them that can be applied in our businesses. That's what this blog and the course are about. Both were created for serious entrepreneurs interested in aggressive growth. It's about learning from the best and entering a lucrative game the existing players don't want you to know about.

Have You Got What It Takes to Apply These Strategies?Do you even know what they are? Probably not.

This is about playing  Full Contact Capitalism. Most people waste their lives playing at the Pop Warner League level.

Learn About the Strategies of Self-Made Billionaires 

To find out their secrets simply fill in this form and the free mini-course will start immediately. Find out if you have what it takes to follow in their footsteps. If you don't, what if you could do just 1% or 5% of what they can? Would your business and life improve? The answer is yes.

Here's a Little Known Secret

Most people have no idea how billionaires build up their empires. They just assume erroneously that you need to be in the right place at the right time to do it like Bill Gates, Jeff  Bezos, or the Google Guys did. Wrong. Most tycoons and billionaires actually do it in another way that's simple yet brilliant.

If you are an entrepreneur interested in learning how to grow your existing company more aggressively, this free mini-course is for you. This is the strategy followed by billionaires like Carlos Slim, Warren Buffett, and Ted Turner and many others. Indeed it's the most proven route to success.

The Tycoon Playbook: Your Booster Rocket

interested in learning how to grow aggressively. Think of it as the booster rocket that launches you into the game. It doesn't promise to make you a billionaire, but it does promise to get you started and show you how to win at it.

The rest is up to you. Do you have the guts to even try?

Life is too short to be small. - Benjamin Disraeli

"The longest journey begins with but a simple step." - Chinese Proverb

"Hell is watching an endless film loop of how your life might have been if only you had taken the actions necessary to make it happen." - Peter Ireland

No guts, no glory. - Anon

If you're serious about learning how to use the strategies and tactics of tycoons, you can access additional detailed information instantly. Just fill in the form for instant access. If you're not a serious business-person, then please don't. You know who you are.

How I Built It: Barry Sternlicht on Buying Hotels

How I Built It: Barry Sternlicht on Buying Hotels 

Barry Sternlicht, the founder of Starwood Capital, talks to the WSJ about investing in real estate and founding a successful hotel company.

Find out how tycoons like Barry Sternlicht build their empires.

Russia's Theft of the Century

This is a story for your "If it sounds too good to be true" file.

After the collapse of the USSR in 1991, the greatest theft in history unfolded as Russian president Boris Yeltsin raced to "privatize" the country's wealth. Rather than going with a gradual and orderly privatization, which would allow overseers to spot and learn from mistakes, he recklessly chose to put everything on the auction block at once. If this wasn't bad enough, at the time Russian natural and industrial assets were typically valued at 1% to 10% of their counterparts in the west.

What made an already bad process worse is that Yeltsin and other government officials then manipulated affairs so that a small group of opportunists could seize control of the jewels of Russia's economy: oil & gas companies, industrials, and media companies, literally for pennies on the dollar. Yeltsin was driven in part out of a need to build a powerful alliance of wealthy businessmen who would then pay him back by supporting his second run for the presidency. Yeltsin's first term was such an unmitigated disaster that the hated communists looked as if they might be voted back into power by the masses.

This small group of men, who became billionaires almost overnight, came to be known as The Oligarchs because they ruled Russia as a committee along with the inept and drunkardly Yeltsin. By the later 1990s, the damage was done. Practically all of Russia's wealth was concentrated in the hands of two dozen, or so, oligarchs, while the rest of the population suffered greatly from the total economic collapse. At that point Russia had sunk to Third World status in terms of economic and living conditions.

In contrast, the oligarchs used transfer pricing scams to export natural resources, such as oil & gas and minerals, out of the country at Russian prices and then sell them at prevailing world prices for a quick 900% profit.Most of the profits then disappeared into Swiss bank accounts which paid for villas in Monaco and yachts. 

Over the past month or so I have read two fascinating books about what happened in Russia after the collapse of communism. The first book was The Oligarchs: Wealth And Power In The New Russia by David Hoffman. I am just now finishing off the final chapter of Godfather of the Kremlin: The Decline of Russia in the Age of Gangster Capitalism by the late Paul Klebnikov. I say "late" because an unknown party executed him in 2004 in Moscow, as he was leaving his employer's (Forbes) offices.

During the 1990s western bankers, businessmen, and investors tried to get in on the action of acquiring grossly undervalued assets in the former USSR countries. Most got badly burned by the oligarchs and wrote off billions in losses.

One of these men was Bill Browder, the Founder of Hermitage Fund.Bill, by his own account, was one of the first westerners to spot the seeming opportunity of the millennium to pick up assets selling at 90% or better discounts. For a few years, Bill was a master of the Universe rolling in dough. Then the Russians decided it was time to pull the plug on his gig. In the following talk, Bill tells his story. It's packed with business lessons if you listen closely. Most importantly, the talk takes you inside the mind of someone who spotted a risky opportunity early on and went after it. Unfortunately, Bill was no match in the end for the gangster capitalism that ruled Russia in the 1990s.

This is a great talk riddled with good humor. (If you decide afterwards that you want to learn more about the oligarchs, read the two books above in the same order that I read them.)