In 2007, just before the financial crisis, the richest 12 people on the UK Sunday Times Rich List<\/a> had a combined wealth of approximately 78.84 billion GBP. Today, the combined wealth of the top 12 is about 158.36billion GBP.<\/p>\n\n\n\n That represents a rise of about 101% in 12 years, or about 6% per year compounded growth. <\/p>\n\n\n\n The US S&P was trading at about 1,300-1,400 in 2007. It is at 2,900 now. It has risen about 119% in USD terms, despite the 2008-2009 collapse, and about 150% in GBP terms.<\/p>\n\n\n\n This means that to keep pace with the S&P, the 12 richest people in the UK, would need to have seen their wealth increase to close to 200billon GBP.<\/p>\n\n\n\n Or put in another way, most average buy and hold<\/a> investors, have gotten better results than the wealthiest people in the country.<\/p>\n\n\n\n However, the last 12 years has been an extreme time, especially in the UK. So let’s look at a longer data set for the US. <\/p>\n\n\n\n From the early 1980s until today, the original members of the US Forbes Rich List saw their wealth grow by 9% per year. The S&P, during the same period, has increased by an average of 11.20% per year. <\/p>\n\n\n\n Perhaps this shouldn’t surprise us after all. It is harder to compound larger sums of money than smaller sums of money.<\/p>\n\n\n\n Let’s take a simple example of an entrepreneur who uses Facebook ads to get sales. He or she spends $100 to get 10 leads. On average, 1 from 10 leads closes, and the average revenue is $10,000 from that 1 sale. <\/p>\n\n\n\n That entrepreneur could be making $9,700-$9,800 from a $100 investment, before tax, assuming they have no fixed costs due to being an online business. A huge return.<\/p>\n\n\n\n Now let’s say they increase the investment to $10,000 a month. They get 1,000 leads. They can’t handle all of these 1,000 leads themselves, so need to farm out some of these leads to a salesforce. <\/p>\n\n\n\n That means more costs, which in turn means fewer profits as a percentage of the original investment, even if total revenue increases.<\/p>\n\n\n\n For multi-billion dollar businesses, getting a good return on investment gets harder and harder. You need to get high sales even to maintain your position, let alone grow it. <\/p>\n\n\n\n Everybody is trying to learn from your success, and are copying your techniques. You only need one unexpected event, like a scandal or a top senior executive to leave, to see your business struggle to see any growth.<\/p>\n\n\n\n I personally saw many established business people in Thailand, with successful businesses that took 10-20 years to build up, get put out of business due to the 2014 political instability affecting their business. <\/p>\n\n\n\n It sure shows us why a business can’t be a pension.<\/p>\n\n\n\n Si desea invertir como expatriado o particular con un elevado patrimonio neto, que es en lo que estoy especializado, puede enviarme un correo electr\u00f3nico (advice@adamfayed.com) o WhatsApp (+44-7393-450-837).<\/p>\n\n\n\n Esto incluye si busca una segunda opini\u00f3n o inversiones alternativas.<\/p>\n\n\n\n Algunos de los hechos pueden cambiar desde el momento de la redacci\u00f3n, y nada de lo aqu\u00ed escrito constituye asesoramiento financiero, jur\u00eddico, fiscal o de cualquier tipo, ni una invitaci\u00f3n a invertir.<\/p>\n\n\n\n \u00bfLe duele la indecisi\u00f3n financiera? <\/strong><\/p>\n\n\n\n![\"\"](\"https:\/\/adamfayed.com\/wp-content\/uploads\/2019\/04\/The-Rich-are-Getting-Richer-512x294.jpg\")
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