THE TRILLION DOLLAR QUESTION
The RICH are getting RICHER. According to the EXPERTS, it WON’T be long BEFORE a one-percenter hits 13 DIGITS. So, HOW can the REST of us CASH IN?
a look at who will be the world’s first trillionaire
The first person to become a trillionaire will be an entrepreneur working with artificial intelligence. That was the prediction made by billionaire Mark Cuban, at a recent conference in the US. “I’m telling you, the world’s first trillionaires are going to come from somebody who masters AI and all its derivatives and applies it in ways we never thought of,” said the star investor at the SXSW Conference in Austin, Texas. “Whatever you’re studying right now, if you’re not getting up to speed on deep learning, neural networks, etc., you lose. We’re going through the process where software will automate software, automation will automate automation.”
He’s not the only one contemplating the trillion-dollar question: what’s the secret to making 12 zeros? A recent report by Oxfam set the internet buzzing when it predicted that Bill Gates will be a trillionaire within the next 25 years, based on the exponential growth of his current US$75 billion fortune (despite his best efforts to give his money away to charity).
It might seem unimaginable that one person could amass a trillion-dollar fortune – the owner of that sum would be wealthy enough to give out US$140 to everyone on the planet. So far, the word trillionaire isn’t even acknowledged by your computer’s spellchecker. But, those in the know say it’s not only possible, but inevitable – and it will happen sooner than you might think. >
THE WORLD’S FIRST TRILLIONAIRES ARE GOING TO COME FROM SOMEBODY WHO MASTERS ARTIFICIAL INTELLIGENCE.
The investment bank Credit Suisse predicts in a global wealth report that there will be 11 trillionaires within the next two generations. Meanwhile, Sam Altman, the president of Y Combinator, the largest start-up incubator in Silicon Valley, has said, “We need to be ready for a world with trillionaires in it. And that’s always going to feel deeply unfair. It feels unfair to me. But to drive society forward, you’ve got to let that happen.”
There are currently 2043 billionaires in the world (worth US$7.7 trillion in total) according to Forbes, and the number is only rising. Behind Bill Gates is Warren Buffett, Amazon’s Jeff Bezos and Amancio Ortega, the founder of Zara. Women make up 11 per cent of the list, and are led by France’s Liliane Bettencourt, the beauty heiress who owns a third of L’Oréal with her children.
The 0.1 per cent are getting richer. So, who’s likely to enter the ‘Four Comma Club’ first?
“The world’s first trillionaire is likely to be somebody who sees potential in an invention,” says Oliver Williams, head of WealthInsight, a company that conducts research into the habits of the financial elite. “The largest invention of our age – the world wide web – didn’t yield a fortune for its creator, Tim BernersLee. Instead, it has been the realisers of its potential who have cashed in on the internet – Bezos, Jobs, Page, Brin and Zuckerberg. Although, it’s doubtful these men will become trillionaires as the tech boom shows signs of plateauing.”
If not them, then who? “Many Gulf rulers, such as the Saudis, may once have been on the road to trillionaire-dom, but as the family extends and oil prices slump, this now seems unrealistic,” says Oliver. “It’s more likely that the world’s first trillionaire will be self-made, as approximately 60 per cent of today’s billionaires made their wealth from entrepreneurship, though some may have had a helping hand in the form of inheritance. Perhaps he or she won’t even be in it for the money, but to answer some paralysing problem such as global warming, water shortages, or sustainability.”
One of the reasons a trillion-dollar fortune is possible is because money is no longer a physical entity, thanks to digital and cryptocurrencies. “So far, we’ve been through two phases of money,” says Neha Narula, director of research at the Digital Currencies Initiative, and who gave a TED talk on the topic. “In an analogue world we had
WE NEED TO BE READY FOR A WORLD WITH TRILLIONAIRES IN IT… YOU’VE GOT TO LET THAT HAPPEN.
to deal with these physical objects, and money moved at a certain speed – the speed of humans. In a digital world, money can reach much farther and is much faster.”
According to Neha, we’re about to enter a new phase of money. “The future of money is programmable,” she says. “When we combine software and currency, money becomes more than just a static unit of value and we don’t have to rely on institutions for security. In a programmable world, we remove humans and institutions from the loop entirely.” There’s even speculation the first trillionaire could be Satoshi Nakamoto – the name used by the person or group of people who created Bitcoin.
So, how will trillionaires manage all that money? “The relationship between the super rich and their wealth managers is extraordinarily intimate, because everything that affects the client’s life – health, family, work – also affects the client’s fortune,” says Brooke Harrington, who spent eight years studying elite wealth managers for her book Capital Without Borders. “So building the relationship between client and wealth manager can sometimes take years, in order to create enough trust to discuss the necessary issues.”
Aside from the obvious tax requirements, there are other legal obligations that billionaires (and future trillionaires) have that wealth managers assist them with. “Wealth managers assist these clients to protect against all threats to the client’s fortune,” she says. “In addition to taxes, that might include debts – skillful wealth managers can get their clients out of them in some innovative ways, or [get them out of] trade regulations such as embargoes or other limits on commerce and profits.”
If you’re a wealth manager who dreams of catering to the super rich, you’ll have to break into the inner circle. According to Brooke’s research, there are between 150,000 and 200,000 ultra-high-net-worth individuals in the world – that means people whose investable assets (not including the value of their primary residence) total at least US$30 million. “They hang out with one another,” she says. “They’re on the party circuit between Cannes and the Hamptons each year, for example, and they tend to use the same professional service providers, whether that means physicians or wealth managers. The soon-to-be first trillionaire is surely already using this ‘grapevine’ referral system.”
So, who wants to be a trillionaire?
IN A DIGITAL WORLD, MONEY CAN REACH MUCH FARTHER AND IS MUCH FASTER.