Research & Analysis for Business
and Investment Clients
Cumulative Billionaire Wealth
– Think Japan
A billion is quite a sum for one person. To gain an appreciation for the vast capital quantities retained by world luminaries, cumulative wealth is compared to gross domestic product (GDP) values at purchasing power parity (PPP).
Figure 3 plots cumulative billionaire wealth (over 4 trillion). Cumulative wealth values vs. age are plotted by the gold curve. The horizontal colored lines show the GDP values for countries ranging from Argentina to Japan. The billionaire sum total slightly exceeds Japan's GDP. A full list appears in a Google knol.
The Tumor Growth Model - A Perfect Fit
The gray line nicely tracking the gold line across ages 20 through 90 is the Gompertz tumor growth model. This model was found to model tumor growth vs. time quite well. Remarkably, the same model fits billionaire wealth.
Logically, the same model should fit wealth data. Billionaire wealth derives from goods and services that scale world-wide. Wealth scales with distribution (market share), which is based on population. Successful companies distribute to the largest consumer base. Eventually, the winning company outmaneuvers others and wins a global market.
The model overestimates billionaire wealth after age 90. The data flatten strongly. The model accounts, and in fact underestimates, survival after 90. Therefore, data indicate billionaire wealth is given away, retained by the originating corporation, or transferred to a successor or heir.
How Much Does Age Increase Your
Billions in the Bank?
Intuitively, one would think elder billionaires would have greater wealth. Based on the data, age does not dominate. Figure 4 plots billionaire number vs. age in blue and normalized billionaire wealth vs. age in green.
The "spread" or gap between the two plots is only a few years at most. This is notable. It suggests billionaire wealth is likely the result of a significant business success (i.e., a dramatic business model paradigm shift or truly novel innovation). In fact, the latter, innovation in consumer electronics (computing), generates the largest spread at around 55. Bill Gates was 55 when the data were published.
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