The World’s First Trillionaire

The World’s First Trillionaire
The past few years have seen the list of the world’s richest people change substantially. There are multiple factors as to why this happened.

In this blog, we will take a look at a small group of individuals who have been gathering exuberant amounts of money and try to predict which one of them will win the race to the USD 1 trillion net worth.

We will present a conjectural forecast on who might hit the USD 1 trillion mark. Note that this is based on the world’s current richest people and the growth rate of their net worth in the last five years.

The following tables display the methodology behind the forecast:

You should note that Elon Musk is considered an outlier here since most of the growth in his net worth was in 2021 and it is largely tied to the value of Tesla’s share price. Musk’s fortune growth was relatively stagnant before this year.

This is of course a flawed representation of a forecast for multiple reasons, including:

1.     The type of investment that is required to turn USD 100 billion into USD 1 trillion is extremely rare. That level of money (more than USD 100 billion) becomes a hindrance to the concept of rate of return. It requires a change in the global scope to be able to invest that amount of cash and find an investment that would grant that return.

2.     In 2020 and 2021, the pandemic was such an event and the main benefactors of the pandemic were chiefly online services and eCommerce.

3.     This comes after the aforementioned pandemic, which skewed the rate of growth between multiple industries. The nature of the pandemic and the response towards it has altered the behavior of consumers in the last two years, which helped some sectors and hindered others.

4.     This does not account for inflation. The value of cash and the general price level is already a contentious variable, and a trillionaire in 2027 is less valuable than a trillionaire today.

This is based on the world’s current richest, meaning that the first to hit USD 1 trillion might be someone outside of this list.

Net worth considers the value of the shares they own in their companies and others, and since the value of shares fluctuates a lot, and is susceptible to economic and market cycles, the net worth will be variable as well.

The next one-trillion-dollar man or idea could be from outside this list. We think the current richest would take some time to get there, but there could be an idea that could have the ability to generate an accelerating, ginormous rate of return. 

One more thing, some of these people are on the older side and even if their net worth continues to grow, they might not be able to live to see it. For instance, Arnault is 72 and Buffet has passed 90 years of old.

The Most Likely to be the One-Trillion-Dollar Man

Now that we got this out of the way, we will focus on the aforementioned candidates.

First off, we will write Elon Musk off this list, as we consider him an outlier and the growth of his net worth is highly volatile. However, the valuation of his private rocket company, SpaceX has crossed the 74-billion mark, but as mentioned before, it is hard to justify a triple-digit jump in valuation.
Based on the growth rate forecast, Musk’s potential for the USD 1 trillion still needs another similar acceleration in net worth in the following years to make him a candidate.

Bill Gates and Warren Buffet’s rates of growth are not substantial enough for them to be prime candidates for the USD 1 trillion club.

Mark Zuckerberg’s net worth is growing at a steady pace. What could make him a potential candidate for the first to hit that milestone depends on Facebook’s success in its ventures.
Facebook has been investing across the board in potential grand ideas. AI, data, gaming, and VR are the main candidates for a tech revolution and that’s where Facebook is throwing its extra cash.

This leaves us with the two candidates, the current world’s richest man Jeff Bezos and close contender Bernard Arnault.

Bezos has recently stepped down as Amazon’s CEO, but his net worth is still increasing. Amazon’s earnings and its value rose rapidly since the start of the pandemic, and subsequently Bezos’ net worth.
Fundamentally, Amazon has a very bright future ahead, and growth is expected to rise further, but we believe that is reflected on its share price, and thus, more gains are likely to have a steady, consistent nature, rather than explosive acceleration.

As for Arnault, he runs an empire of over 70 brands, including Louis Vuitton, Sephora, Dior, and more recently, Tiffany. 

Although Louis Vuitton’s earnings took a hit in 2020, it has managed to keep its free cash flow unharmed and was able to bounce back in 2021 stronger than before the pandemic.

The corresponding net worth growth of the Arnault Family has also been growing at a consistent pace. It slowed down in 2020, but as is the case with LV, the jump in 2021 was much stronger.

Based on our forecast of growth rate, and the strong prospects of their holdings, we expect Arnault to take the cake.

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