Financial Lessons for Entrepreneurs From the Richest Man That Ever Lived
Elon Musk and his $182,5 billion, Jeff Bezos and his $182,3 billion (loser), Bernard Arnault and his $145 billion, and Bill Gates and his $120 billion may make your head spin considering the enormous wealth they own.
However, when compared to the net worth of the richest man that has ever lived, their wealth appears to be ridiculous – and become by the same token, much more attainable.
In this article, we’ll first compare Elon Musk’s net worth to the net worth of the richest man that has ever lived. Afterward, we’ll talk about you!
Imagining that you wish to acquire a modest net worth of $10 million and build a company that makes $1 million in yearly revenue, we’ll look at which share of the worldwide trade, worldwide GDP, and worldwide net worth you would need to acquire to realize your goal.
Hint: it’s actually pretty small!
The Richest Man That Has Ever Lived
The richest man that has ever lived is not Elon Musk, nor Bill Gates, or Jeff Bezos.
The richest man in the history of the world was the ruler of the biggest empire that has ever existed. Meet Genghis Khan.
At its peak, his empire had a size of…23 million square/km. The size of the land of the world is about 149 million square/km, which makes Genghis’ empire 15% of the entire land on earth.
When one owns 15% of the world (without the oceans), one becomes de facto rich. Really rich. As such, his wealth was estimated to fluctuate around $100 trillion in today’s money, or $100 000 billion.
Genghis Khan may have been the richest man the world has ever known. In comparison, today’s richest people’s nets worth appear ridiculous. Elon Musk’s net worth, for example, is “only” 0,18% of Genghis Khan’s fortune.
Not even 1%!
Which Share of the Value of the Worldwide Trade of Goods Should You Get to Make $1 Million in Revenue per Year?
The global trade value of goods is equal to $19 trillion. This means that each year, countries export to other countries a bunch of goods (cars, clothes, medicines, whatever you can buy) worth $19 trillion.
$19 trillion is a big number. And yet, mind here that we are only talking about goods, not even about services.
Let’s imagine you wish to create a company that will export goods to other countries only, and that you’ll be happy once your company makes $1 million in revenue per year.
The classic thought-process is to calculate how big a worldwide trade value “cake slice” you’d have to cut to get your million. However, this is incorrect thinking because the value of worldwide trade cannot be represented by a cake.
It’s a pot.
An infinity pot, to be specific.
It’s a giant pot into which those that responsible for trade pour…mmh, let’s say gold.
Gold represents the value of the goods produced and shipped. The more people work, the more goods are produced and shipped, the more gold gets into the pot. The size of the pot is infinite. The more we produce and exchange, the more gold will come into the pot.
When you sell a good for $1000, that’s $1000 you can pour into the pot. Now, you have to do it again until you reach…$1 million.
As such, if you want to compare your own production to the one of the rest of the world, you need to look at how much adding $1 million into the pot will grow the pot.
Since the pot is worth $19 trillion per year and you wish to grow it by $1 million, a simple equation will do: 19 trillion x the percentage we want = 19 trillion and 1 million → the percentage we want = 19 trillion and 1 million divided by 19 trillion.
The answer is 0,00000005, or 0,000005%.
To make $1 million, you only need to grow the pot by 0,000005%.
Seem much? Actually, yeah. It is way too much.
Let’s have a look at the same question, but with the world GDP.
By How Much Should You Grow the World GDP to Make $1 Million in Revenue per Year?
The world GDP is the value of the total goods and services produced in the world each year.
The value of the world GDP is $88 trillion. It means that if we add the value of the work of everyone on earth, we arrive at $88 trillion.
I don’t need to explain that GDP is not a cake but a pot. It would be a cake if you looked at stealing the value of the work that other people do (or alternatively, if you wished to buy a company). However, in our case, we are looking at creating value and deliver gold into the pot. So, it’s a pot.
The question is: by how much should you grow the worldwide GDP pot to make $1 million per year?
The calculation will be the same. $88 trillion and 1 million divided by $88 trillion = 1,000000011.
If you want to sell for $1 million of goods, you’ll only have to grow the worldwide pot by 0,000000011 or 0,0000011%.
That’s much less than 0,000005%!
How Much of the Worldwide Net Worth Should You Own to Have $10 Million?
We arrive at the last calculation of our article.
Let’s say you wish to acquire a $10 million net worth.
$10 million is not so much. You could afford maybe one or two Ferraris, a reasonable house, a small yacht and that’s about it. No private jet for you, nothing to go crazy about.
If you want to afford the $100 million yacht, you’ll have to work a bit harder (and longer).
But $10 million is enough for you to invest your money and live off your returns so that you can do whatever you wish with your life without ever worry about money.
The net worth concerns the value of assets someone owns. The net worth of Elon Musk is $182,5 billion. It means that if we add everything Elon Musk owns, we get to $182,5 billion.
The world net worth is therefore the sum of the value that everyone on earth owns. That sum is equal, according to Wikipedia, to $360 trillion.
$360 000 000 000 000.
And you only want $10 million of these. How much, in percentage, would that be?
The calculation is $10 million divided by $360 trillion which is equal to 0,0000000278, or 0,00000278% of the world GDP.
Is this a lot? No. It is not much. By comparison, Elon Musk owns 0,000506, or 0,0506% of total world GDP.
We are far, far away from Genghis’ 100 trillion.
The Bottom Line
These calculations are not meant to make you dream, but to help you realize something.
The world is extremely wealthy.
Mainstream media constantly bashes you out with poverty and debt, but the truth is completely other: we are extremely rich. The reason why the media talk so much about poverty is that there are in fact, a lot of very poor people in the world.
If the media kept on saying ” wE aRe So RiCh”, people would be burning the streets. So most of the wealth is hidden, and we don’t talk about it. As a result, many people believe that being rich is unattainable, “since there is so much poverty”.
As we have seen though, the truth is other.
So much wealth has already been created that when we compare a meager $1 million in revenue per year or a $10 million net worth to the rest of the world, it isn’t much. Even when we compare it to Elon Musks’s fortune, $10 million seem rather accessible.
So it is important to change your mindset. It’s important to look at the way rich people have contributed to the advancement of the world and think about how you can contribute to it as well.
It doesn’t have to be much. A mere 0,0000011% will help you grow a business that makes $1 million in revenue.
When we think about it, that’s very little. But that’s enough.
For more content, head to bornmillennials.com.