mind are bill gates, Jeff Bezos, Warren Buffett, or even this guy (Mark Zuck).

But the problem is that these rankings are made based on the publicly available information,

and it doesn't include people who are much wealthier than even Jeff Bezos.

Take an example of Crown Prince of Saudi Arabia, or MBS as he is known more famously.

At 34 years old, he bought a yacht for 500 million dollars, a French Chateau for 300

million dollars.

And for dessert, he purchased a 450 million dollar Leonardo de Vincy painting.

Even people like Jeff Bezos, who have been dominating the Forbes list for a few years

now, would struggle to raise so much cash to make such extravagant purchases.

It might sound like I am talking about some kind of a conspiracy theory, but trust me,

I am not.

In this video, we are going to explore the five types of rich people and why Jeff Bezos

isn't the richest person in the world?

Why the real billionaires are hiding behind the curtness and would never want to be seen

at the top of the Forbes list?

Let's start with the poorest type of rich people.

I know that this sentence is quite controversial.

But believe it or not, we have a whole segment of rich people who appear on the Forbes list

all the time but don't even have a few million dollars.

They are known as paper rich.

They founded a company in silicon valley; the company seems promising, it might be successful

in the future, so investors, banks and financial institutions in general would gladly lend

them the cash they need to get to that position and start earning money.

Pretty much every startup in every silicon

is like that, the company might have a great product with hundreds of employees, but it

burns more money than it brings.

In fact, some of the largest companies are still running like that, like Uber, Lyft,

and even amazon as recently as a few years ago.

Amazon reported its first profitable quarter, just in 2018.

So, all of these people might claim to be multi-millionaires or billionaires, but in

reality, they probably can't even pay the rent.

Thats why they all strive to become level 2 rich.

If one day, your startup suddenly becomes popular and your net worth on paper will be,

let's say 5 billion dollars.

Here is a step by step guide on how to turn your 5 billion dollars on paper into actual

cash.

First, do your best to create hype around your app to boost its valuation and then take

it public.

During the IPO, since a lot of people will be willing to invest in your company, sell

a portion of your stake, but not too much since that will devalue your net worth, lets

5 to 10 percent.

Congrats, now you have 250 million dollars in real money.

Go and get yourself a mansion for 20 million, a supercar you always dreamed about, keep

a few million dollars in your account for emergency cases and the rest, invest it into

many different stable companies that actually turn a profit.

Forbes might estimate your net worth at around

5 billion dollars, but you perfectly know that's not real.

All you have is just a few hundred million dollars of real wealth.

Take an example of Evan Spiegel.

As of 2020, his net worth is 4.3 billion dollars.

He should also be able to buy a yacht for 500 million dollars and a mansion in France

for 300 million dollars, especially since he holds French citizenship.

But he can't, this 4.3 billion dollars is only on paper, from his stake in Snapchat,

in practice, he can't even get half of that.

Snapchat is a huge company and makes a lot of money, but Snapchat has never made a profit.

It has been two years since it went public.

With 218 million users, it's valued at around 31.5 billion dollars, and Evan's net worth

primarily comes from his 18 percent stakes in the company, so even though he is a billionaire,

he can't afford a 500 million dollar yacht-like MBS.

Of course, you can argue that he can suddenly sell his shares and raise billions of dollars

in cash, right?

Theoretically, yeah, but in practice, not really.

If he suddenly sells a large portion of

his stake, there will be an oversupply of Snapchat shares in the market and will drive

the price down, which means his net worth will be much lower.

On top of that, if the founder and the person who runs Snapchat will suddenly start selling

his shares, investors will lose confidence in the company.

They might decide to sell their shares as well, which can result in the crash of the

entire company.

Jeff Bezos, who is the richest person in the world, according to Forbes, is also in this

category.

Let's say you have had a successful IPO and raised hundreds of millions of dollars.

How do you turn the other 4.75 billion dollar net worth into real wealth?

Here is your step by step guide.

Keep growing your company, but at the same time, sell a small portion of your shares

every single year and invest them into many profitable companies.

In 10 or 15 years, you will successfully diversify your portfolio and will no longer be a cashless

billionaire.

The best example of someone who successfully did this is Bill gates.

He is famously known for building Microsoft, but today Microsoft makes only a small percentage

of his portfolio; in fact, his biggest stake is in Berkshire Hathaway, a conglomerate that

holds many different companies under its wings.

So if Microsoft shares suddenly drop.

His wealth won't be affected at all since his wealth comes from many different companies

from all around the world and from many different industries.

Another example is Travis Kalanick, the founder of Uber.

Uber has been around since 2009, but it still hasn't turned a profit, and in 2019, it went

public.

Travis Kalanick, one of the founders of the company, slowly sold off almost his entire

stake and diversified his portfolio even before the company made a dime in profit.

What could be better than having a net worth of 5 billion dollars that's diversified into

many different companies where interest alone probably brings you around 500 million dollars,

you don't have to touch the principal (wealth) at all because interest alone will provide

you unbelievable lavish life.

However, the next type of rich people are one step ahead, and they are heads of states.

In many countries around the world, some individuals rise to power and then consolidate the power

around themselves and hold on to it until the end of their lives.

And while they are in power, they have the entire wealth of the nation at their disposal,

yes of course, you might have angry journalists throwing at you uncomfortable questions, but

you can always use that wealth to prevent that from happening.

Take an example of former Lybian president (Gadaffi) who had an estimated nextwroth of

200 billion dollars, or the president of russia, who is in power for 20 years already and recently

changed the constiiton of the country to stay in power for another 20 years.

The entire nation has to pay taxes, and you can do with that cash whatever you wish,

or the profits from the natural resources will be under your country.

You can have as many private jets as you wish or yachts or whatever else you desire.

But this type of wealth is not sustainable.

At some point, the people of your country will get bored with you and would protest

to replace you.

And the Arab spring is a perfect example of that, where many heads of states that were

rulling their nations for 30 or 40 years were overthrown and replaced.

Qatar is an oil-rich country that has probably the highest GDP per capita in the world.

Emir Tamim bin Hamad Al Thani rules it.

The Constitution of this oil-rich country basically says: the Emir or the head the country

can only be chosen from the family of Al Thani and he is the head of the state and the commander-in-chief

of the Qatar Armed Forces and guarantor of the Constitution.

So no matter what he does, how much money he spends, how many palaces and private jets

he buys, he can't be taken down, he can spend the nation's wealth as he desires.

But most importantly, his son or one of his sons will be the next King of Qatar.

And that is the ultimate level of wealth where you own an entire country.

And Qatar isn't the only example, Saudi Arabia, UAE, Jordan are the neighboring countries

will similar structures of power.

In the UK, the queen is the head of the state and commander-in-chief of the British Armed

Forces, and The Government of the United Kingdom is known as Her Majesty's Government.

She might not control the government directly, but the taxpayers still have to pay for her

lavish life, and her entire family's expenses that are not cheap and anyone born into this

family will automatically be super-wealthy.

You can find similar examples in other European countries, in Africa, Asia, and pretty much

in every continent.

Royal blood is considered privilege and

people for one reason or another , in general, would treat you as someone blessed by God

himself if you are linked to a royal family.

That's why history is filled with examples of royal dynasties; people respect and admire

royal families and considered them upper-class citizens.

Thats it for this video.

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Thanks for watching and until next time.