How to Be a Billionaire. - Brief Article - Review - book review

How to Be a Billionaire

By Martin S. Fridson

John Wiley & Sons, Inc. -- US$24.95

THE COLDNESS WITH WHICH MARTIN S. Fridson, managing director of Merrill Lynch & Company, explains his strategies for becoming a magnate can only bring to mind The Prince by Niccolo Machiavelli. In his book, How to Be a Billionaire, Fridson doesn't quite measure up to the stature of that famous Italian Renaissance writer. But both works were written for leaders: Machiavelli's book is for political leaders, while Fridson's case is for business leaders, or to use his words, "titans of wealth."

Machiavelli's objective in his celebrated treatise was not to predicate the proper moral behavior of a leader, but rather to indicate what a leader should do to survive. In the struggle for survival, several human traits played decisive roles: cunning, deception, intrigue and a lack of pity. In much the same way, Fridson outlines a strategic plan in How to Be a Billionaire for those interested in accumulating the magic sum of US$1 billion and that plan involves being ruthless and not abiding by "conventions of behavior."

Fridson assails certain popular misconceptions and explains why they're wrong. In the section titled "The Paths Not Taken by Billionaires," for example, he points out that in Forbes magazine's list of the planet's wealthiest individuals, the word "salary" doesn't appear anywhere. That's to say that if you want to emulate Donald Trump, the first thing you have to do is quit your job. And contrary to conventional wisdom, innovation isn't the ticket to getting rich. Commenting on how Sam Walton, founder of the Wal-Mart retail chain, became one of the richest men in the world, Fridson reveals that the secret to his success didn't lie in having an original idea but rather in the ability to copy. Walton simply imitated the methods of other discount retail stores.

According to the author, playing the stock market isn't the way to make millions, either.

"Speculating in securities is a fascinating pastime, much like betting on horses. ... Passive investing has not landed a single individual on the current list of billionaires, however," Fridson says. "If you entertain hopes of making the Forbes 400 list by shrewdly managing your personal portfolio, the record strongly suggests that you should abandon the notion and get onto a more productive track."

To support this assertion, Fridson indicates that the average annual rate of return on the Standard & Poor's 500 Index between 1926 and 1998 was around 13.2 percent. With an initial investment of $100,000, a hopeful investor would have accumulated by mid-century around $49 million. It's not a trifling sum, but neither would it put you on the list of the rich and famous.

Fridson says that the path to becoming fabulously wealthy involves being more than a mere shareholder, it involves acquiring a controlling interest in a company.

Having studied the ideas and strategies of colossal successes like oil baron John D. Rockefeller and software programming genius and Microsoft creator Bill Gates, among others, Fridson explains their strategies for amassing fortunes and then lays out a plan for the aspiring billionaire. In a clear and entertaining style, each chapter examines a specific strategy: running huge risks, doing business in a new way, dominating a market, consolidating a certain sector, buying cheap, beating out the competition.

Among the basic principles the author espouses, one comes up repeatedly throughout the book and probably constitutes the very essence of individual economic triumph: what motivates magnates isn't the goal of making money but rather the pleasure they take in the constant exercise of accumulating wealth. And that exercise becomes a way of life.

There's no doubt that these wealthy titans subscribe to an idea posited by Franklin D. Roosevelt: "Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort." And Fridson doesn't hide the fact that the path to fame and fortune is a long and tortuous one and, as the Bible points out, few are chosen.

Excerpt from How to Be a Billionaire

"The best odds for becoming a billionaire, in summary, exist in industries that ride the key trends of economic development. This suggests that in newly industrializing countries, great opportunities may remain in infrastructure and basic industries. In the world's most developed economies, however, the cream of tomorrow's billionaires probably will emerge from communications, services, and technology."

COPYRIGHT 2000 Freedom Magazines, Inc.
COPYRIGHT 2000 Gale Group