The Billionaire Mindset: 5 Ways Billionaires Think Differently From Millionaires

What's going on everybody? Welcome to the First Class Founders podcast. The goal of this show is to equip you with powerful mental models and frameworks so that you can master the art of decision-making. In each episode, I introduce and apply these concepts in real-world scenarios. My name is Yong-Soo Chung and I'm the Founder of Urban EDC, an e-commerce brand selling everyday carry gear, and GrowthJet, a Climate Neutral certified third-party logistics company. For the past 7+ years, I bootstrapped an 8-figure business from scratch. And now, I'm ready to pull back the curtains and take you backstage with me to discover what kinds of frameworks I use to operate my own business.

So imagine for a moment. You are very savvy with your finances. You stash away a big chunk of your income each month and put it away into investments, which you have slowly compounded over the last several years into just north of a million dollars. 

Congratulations. That's an incredible accomplishment!

Now, after you reach the millionaire status, let's look beyond that. How do you level up from there? Do you do more of the same that got you there in the first place?

The answer might surprise you.

Today, we're going to go over 5 mindset differences between a millionaire and a billionaire.

I'll dig deeper into each one with real-world examples from today's billionaires.

By the end of this episode, you'll have the playbook for jumping from a millionaire to becoming a billionaire.

Let's get down to business!

Okay, let's begin with a simple question: What motivates billionaires after having achieved financial success?

Billionaires are often more driven by the challenge of having a big impact on the world.

Many of them want to leave behind a legacy that will outlive them.

They measure their success in units of impact vs. units of money. What does this mean?

Billionaires are motivated to hit a certain milestone whether that's feeding a billion people, in the case of motivational speaker Tony Robbins.

Or Marc Lore, who sold two businesses Diapers.com and Jet.com, is now on a mission to build a new utopian city called Telosa. 

And of course, how could we forget Elon Musk who wants humanity to colonize Mars?

Elon even sold his homes in California to buy a small house in South Texas with a $50,000 prefab house as his guest house.

Millionaires, on the other hand, cash out when they're financially comfortable. Many of them even retire at an early age.

For many millionaires, they're driven by the allure of status symbols. Whether it's a bigger house, a nicer car, or a fancier vacation, they tend to be more lavish in showing off their material wealth. They seek admiration and respect by others from flaunting what they can afford.

These are critical differences in how billionaires and millionaires approach their lives. 

Billionaires aren't as driven by material goods. They measure their success through impact.

Yes, many billionaires do own private jets, private yachts, and even private islands. So it may seem like they are driven by financial gains.

But billionaires often cite convenience and privacy as their main reasons for these expensive purchases.

Real estate mogul Grant Cardone has often said that he purchased his private jet because it bought him time, his most precious commodity.

Okay, now let's move on to the second idea, and that is constantly learning and self-improvement, even after they are no longer financially motivated. 

Here's an example. Bill Gates, one of the richest men in the world, takes an entire week off every year isolating himself to a secret cabin somewhere in a cedar forest in the Pacific Northwest.

And what does he do by himself for an entire week?

He reads. That's it. He calls it his “Think Week.”

Gates arrives by helicopter or seaplane and spends the week reading science books, research papers written by Microsoft employees pitching new innovations, or anything else that he's currently interested in. According to The Wall Street Journal, he can read up to 18 hours a day, staying up until the early hours of the morning.

Billionaires are hungry for knowledge because they're always looking for an edge. They want to be ahead of the curve. Many of them are big fans of biographies. They study historical figures like Benjamin Franklin, Walt Disney, Henry Ford, and others who came before them so that they can get into the minds of these brilliant thinkers and learn the fundamentals of achieving success.

Not only are billionaires hungry for knowledge, they're also incredibly methodical, making disciplined, continuous progress toward their goals. This is similar to the 20 Mile March concept we discussed in Episode 2. If you want to listen, I’ll link to it in the show notes.

Millionaires tend to lose their motivation and drive for learning once they get comfortable financially.

Jeff Bezos said it best when he stated that "Work-life is a circle, not a balance." 

Bezos seeks work-life harmony, rather than balance, because balance implies a strict trade-off.

So in other words, if you're having a great day at work, that positive energy will carry into your home in the evening and vice versa. It's a harmonic relationship between work and life, not balance.

In other words, work and life have a reciprocal relationship. Each enhances the other and they are not mutually exclusive.

Grant Cardone also believes that there is no such thing as burnout from working too hard. He believes that if you're feeling burnt out, it's not that you've worked too hard for too long. Instead, he thinks that you're not getting enough unexpected wins in your work which is causing you to feel burnt out.

Both Bezos and Cardone identify a key distinction here between millionaires and billionaires.

Millionaires want to separate their personal life from work while billionaires don't mind bringing work home and integrating it into their personal life as long as they're seeing the results.

Billionaires are never satisfied with how the world is run so they're constantly looking at the world through a lens of continuous improvement. 

One last point on this idea. 

Billionaires think abundantly, with a growth mindset. They don't worry about their competitors but choose to focus their energy on serving their own customers and growing their own empire.

They know that this isn't a zero-sum game, and opportunities are everywhere if you know where to look for them. 

They also don't let their life circumstances stop them from achieving their goals. Many billionaires come from poor families and throughout their lives, they have focused on what they can control versus being envious of what others already have.

This mindset allows them to focus their energy on growth and impact rather than comparing themselves to others. 

All right, let's move on to the third difference between millionaires and billionaires.

But before we do, if you're enjoying this episode, please consider sharing this episode with a friend. Word-of-mouth referral really helps us grow the show and it would mean the world to me. I really appreciate it! Thank you so much.

Okay, let's move on to leverage.

Billionaires are tackling the world's largest problems. So naturally, they use more leverage than anybody else in the world. They are running multiple businesses at the same time, leveraging a great team to make it all happen.

A millionaire, on the other hand, is generally the operator of a single business. The business may be quite large doing millions of dollars per year, but they're still managing one business and that limits their reach of impact on the world. 

To make the next step up, they need to step up and recruit an all-star general manager to help them oversee their current business operations so that they can either move on to other growth areas within the business, or start another business altogether.

There are four types of leverage: People, Capital, Media, and Code. 

It's no surprise that so many tech billionaires have emerged in the last two decades. Software is easily scalable and thus leverage can be deployed on a massive level with the right people and funding.

Quick side note - we go deep into talking about leverage and compounding in episode 3 if you want to check that out. I'll link it in the show notes!

One more note on leverage - billionaires are masters of compounding. In episode 3, we discuss how important it is to have time on your side as time is the amplifier of leverage.

Billionaires typically generate most of their wealth through assets that appreciate over time. 

While the difference in compounding may seem small over a year or two, the difference in wealth creation is staggering once compounding really kicks in over several decades.

The reason billionaires are able to compound their wealth at such high rates is because they use leverage.

Okay, let's move on to the fourth difference between millionaires and billionaires and that is optimizing for time vs. money.

This is a big mind shift for many of us.

Millionaires have a tendency to save money whenever possible. This has become popularized by books such as The Millionaire Nextdoor and The Wealthy Barber.

The general premise is that if you save $5 on a cup of coffee each day, you'd have $150 by the end of the month, which you can use to invest in an index fund earning 10% a year.

Or, the idea that you should always negotiate with your mobile phone or internet provider for an hour or two every year to save $10 per month.

Billionaires flip this script upside down and approach their relationship with time & money completely differently.

Instead of optimizing for money, billionaires know and understand that time is their most precious commodity.

They do everything in their power to protect their time. Many of them even set an hourly rate for themselves and never vow to do anything unwillingly unless the activity is above their hourly rate threshold.

For example, if you have an old stereo in your house that you haven't used in a while, you could sell it on eBay and make $100, or $200. You take a few photos, upload them, write the descriptions, carefully pack the stereo, and ship out the items, earning you a nice payout of $200.

For a millionaire, this makes perfect sense. Sell your old stuff, make some side income, and then invest that money.

For a billionaire, this makes absolutely no sense. Quite simply, it’s not worth their time.

You're better off donating the $200 stereo to Goodwill or gifting it to someone who might want it. Your time is not worth the extra $200.

Let’s take a look at the other variable now, which is time. 

Another difference between millionaires and billionaires is the timeframe they view their work and career.

Most millionaires plan out their careers and personal accomplishments in one, two, five, maybe 10 years max, but billionaires?

They plan out for several decades in advance.

When Masayoshi Son from Softbank in Japan was just 19 years old, he created a "50-year life plan" for himself.

Similarly, Jeff Bezos infamously kept reinvesting Amazon’s profits back into the business for decades despite shareholder pressure to become profitable. He had a larger vision than any of his shareholders could imagine. And now, his company is one of the most valuable companies in the world. 

He’s also currently building a 10,000-year clock powered by Earth's thermal cycles. He is building this clock as a symbol for long-term thinking.

The clock is designed to tick just once a year and chime once per millennium.

These are examples of billionaires not only thinking big with their ambitious goals but thinking big with their time horizons as well.

All right, now we've come to our final mindset difference.

And that is their unique approach to decision-making.

But before we get into decision-making, I want to tell you about the First Class Founders Membership. 

In 1994, a man wearing a suit was sitting on a weathered dark green wooden bench in Central Park in New York City. It was a chilly, overcast day. Walking by, no one could tell that this man was facing one of the biggest decisions of his life. He had just turned 30 that year and had recently been promoted as the youngest senior vice president at one of the world's most prestigious financial institutions. His financial life was set.

But, he was itching for more. He had heard that this thing called the internet had grown 2,300% in one year. As he sat there pondering his future, he pictured his life 50 years out. He would be 80 years old.

All of a sudden, he realized looking back from his 80-year-old self, that he could not afford to let this opportunity go. He understood that if he didn't go, he would forever regret this exact decision.

At this very moment, his decision became crystal clear. He quit the very next day, packed up all his belongings, and drove across the country to Seattle, Washington to embark on his dream. 

A year later, he launched a little online book store out of his garage and named it after the longest river in the world: Amazon. And the rest is history.

This story demonstrates how Jeff Bezos used the Regret Minimization Framework to reframe his dilemma and see through a different lens. By using this exact mental model, he made his life-changing decision and didn't look back.

And this is why the First Class Founders Membership exists. It gives you the tools, the key frameworks, and the support to make that same leap of faith that Jeff Bezos made back in 1994 before he started Amazon. To become a member, you can go to FirstClassFounders.com/join.

All right, we're back.

Let's talk about how billionaires have mastered the art of decision-making.

By studying timeless books and filling their minds with frameworks and mental models, they are able to navigate our complex world to make real-time decisions quickly with little weight on any past decisions that they have made. 

They understand that any previous decisions are now sunk cost and it’s best to assess any new information that has surfaced since the last decision was made. 

Billionaires are constantly assessing risk vs reward and limit their downside as much as possible while leaving the upside unbounded. 

They are extremely calculated in their risk-taking. Yet, once they find an asymmetric risk/reward payout, they go all in. 

Millionaires diversify their investments into things like index funds to reduce their risk but billionaires put their eggs in a few baskets and watch them very closely. 

When you look at all the reputable billionaire investors — Warren Buffett, Carl Icahn, George Soros — they all only have one thing in common when it comes to investing. 

They make large concentrated bets where they have a lot of conviction. 

And this is the exact opposite of what's commonly taught in business school. 

In 1992, billionaire fund manager Stanley Druckenmiller told his boss George Soros at the time that he was going to short 100% of the fund in the British pound against the Deutschmark, Soros looked at Druckenmiller with great disdain. 

Soros thought the trade was good enough that he should be going in at 200% because Soros saw it as a once-in-a-generation opportunity. 

A quote by Mark Twain states: “Put all your eggs in one basket and watch the basket carefully.” 

This is how billionaires approach their risk vs. reward profile.

This story brings us to the next point which is that billionaires are contrarian in their thinking. 

They look for patterns and identify trends before anyone else. They don’t follow the herd. Instead, they create their own following with their contrarian ideas and thoughts. 

In other words, they come to their own conclusions using First Principles Thinking. 

Back in episode 6, we discussed the idea of First Principles Thinking and how powerful it can be to come up with a unique solution when tackling a complex problem. I’ll link to this episode in the show notes!

Okay, let's summarize today's lesson. 

There are 5 main mindset differences between billionaires and millionaires:

Impact over money, constant learning & self-improvement, thinking bigger using leverage, optimizing for time over money, and a contrarian approach to their decision-making.

Before we end, I'll leave you with one more thought.

Making the leap from millionaire to billionaire is not for the faint of heart.

It's not an easy path and not necessarily an enjoyable one. It requires a lot of sacrifice, particularly with family life.

And when you reach the billionaire status, now, your every move is scrutinized by the public and privacy becomes a real issue.

Oftentimes, billionaires are criticized by the public and frowned upon by mainstream media.

Having said all that, becoming a billionaire enters you into a rarefied club that puts you in a unique position. You have the privilege of working with global leaders to impact and change the world pushing the boundaries of human potential.

So, is it really worth it to become a billionaire? Is the power and influence worth the price of privacy and public scrutiny?

I'll leave that up for you to answer on your own.

On the next episode of First Class Founders, we ask: Is it possible to create your own luck? It sounds crazy but we'll deconstruct what luck is and come up with a framework to create your own luck. Surprisingly, it's a lot easier than you think.

If you want to connect with me, I would love to hear from you. You can follow me on Twitter at @YongSooChung. Let me know which episodes you liked or if you have any future topics you'd like me to cover. You can find links to all my social accounts in the show notes.

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All right, I’ll see you on the next episode of First Class Founders!