What it takes to become a billionaire

The key factors influencing whether someone becomes a billionaire are the industry they work in, where they work, and, crucially, how long they allow their wealth to compound. 

Knight Frank’s annual The Wealth Report recently outlined how the world’s wealthy elite make, spend, and invest their money. 

In this year’s report, Knight Frank conducted a detailed analysis using data from Forbes to determine what it takes for an individual to become a dollar billionaire. 

Knight Frank took data about the more than 2,700 billionaires featured in Forbes’ annual wealth list, including five South African billionaires, to discover the common characteristics of the world’s richest people. 

The first factor Knight Frank identified was the industry in which billionaires made their money, with finance and investment accounting for 427 billionaires on the list. 

Among these billionaires are household names such as Warren Buffett and Michael Bloomberg. Closer to home, Capitec founder Michiel Le Roux is an example. 

However, when it comes to total wealth, tech dominates. Around $2.6 trillion of wealth is spread across 342 billionaires in this sector. 

Nine technology billionaires cross the $50 billion mark – more than any other industry. Fashion and retail are a distant second in this regard, with six billionaires crossing that threshold. 

Another key factor is where billionaires live, with the vast majority living in the US, the world’s largest economy. 

Nearly a third of all billionaires live in the US, with 40% of total billionaire wealth concentrated in the country. 

The US has extended its lead over second-placed China, whose 406 billionaires have seen their share of billionaire wealth dip below 10% as the country’s economy slows. 

Potentially the most crucial factor in becoming a billionaire is time, with compound interest doing much of the heavy lifting for the world’s richest. 

Very few of the world’s billionaires achieved nine-figure status overnight, and the vast majority took decades to accumulate wealth. 

The average billionaire’s age in 2024 was 65.7, which is up from 63.3 in 2014 and is higher than the ten-year average of 64. 

Even among tech billionaires, who are the youngest of the bunch, the average age is 57.2 years. Only four industries have an average billionaire age of under 65. 

Knight Frank said this makes it clear that wealth accumulation, no matter the sector, is a long-term pursuit and cannot be done overnight. 

The study also outlined what Knight Frank and Forbes think the billionaires of the coming decades would look like, with significant changes occurring in what it takes to be among the world’s richest in the future. 

Two key factors – the industry in which billionaires make their money and where they live – appear to be changing. 

Surprisingly, the study showed that manufacturing has produced more billionaires in the last decade than technology. 

This has been driven by the rise of Chinese manufacturing giants, with the world’s second-largest economy pumping billions into developing its industrial strength. 

Over the past decade, Asia has also led the creation of new tech billionaires, indicating the centre of wealth creation may be shifting eastwards. 

India has also become a centre of billionaires, with its ultra-rich population growing 12% year-on-year to 191. 

Last year, India created 26 billionaires, and Knight Frank expects this to continue as the country appears to be able to maintain its neutrality amid the US-Chinese trade war. 

Overall, Knight Frank said this shows that the billionaire landscape is becoming more global, with new hubs emerging outside the traditional powerhouses of Europe and the US. 

The age of new billionaires has also changed sharply in recent years, with the age gap between the newly minted and overall list widening from two years in 2014 to six years today.

This means that billionaires of the future may skew younger rather than older. However, even a six-year age gap means that the average age of a billionaire in the future will still be around 60. 

Knight Frank noted that in the coming years, there is expected to be a significant transfer of wealth, with younger individuals receiving billions in inheritance from baby boomers.