In-depth research has revealed that billionaires are not born to their money but make their own fortunes.
After interviewing hundreds of billionaires from around the world, researchers found almost one in four started their first business before the age of 30 years old and two-thirds were established in business before reaching 40.
Out of 1,300 billionaires, 917 were self-made and had generated wealth of $3.6 trillion.
The report Billionaires: Master architects of great wealth and lasting legacies, from Swiss bank UBS and accountants PricewaterhouseCoopers (Pwc), disclosed billionaires around the world demonstrated similar character traits, such as risk taking, obsessive focus on their business and strong work ethics.
However, the similarity often ended there, as how they made their fortunes depended on where they lived.
Roots in poverty
In the USA, almost a third of billionaires worked in financial services and generated wealth of around $4.5 billion each.
Consumer services created more self-made billionaires in Europe (50%) and the Asia Pacific (20%). European billionaires tended to have more wealth (45.7 billion) than their colleagues in the USA or Asia ($3.2 billion).
The researchers found Asian billionaires are younger than their counterparts elsewhere – averaging 57 years old. That beats those in the US and Europe by around a decade. A quarter of Asian billionaires also had an impoverished childhood – compared to 8% in the USA and 6% in Europe.
Many billionaires are now approaching retirement age and are making succession decisions about their businesses.
The report discovered 60% of US and European billionaires keep their wealth and intend to pass the business to their families. Around 30% sell parts of their businesses and just 10% sell the entire business.
More than half of European and Asian self-made billionaires are keen on the idea of building a business dynasty, but Americans are more likely to sell.
The report explains that a shift in the number of wealth-creating billionaires was highlighted by the research and that this is expected to result in a trend of more billionaires rising in the Asia Pacific than in the traditional Western developed nations in the future.
“We live in an age of opportunity and wealth generation similar to that that followed economic development following the late industrial revolution,” said Josef Stadler, head of global ultra-high net worth at UBS.
“History has shown wealth generation is cyclical and in recent decades the global economy has benefitted from a strong surge in that cycle.”