You Are Not a Billionaire

Hal Masover | Nov 06 2025 17:00

You might think my headline is a bit bold but consider that there are only roughly 1100 billionaires in the US. The current population of the US is estimated to be 340 million. That means there’s a .0003% chance that you’re a billionaire. So, okay, I probably should have said, “You’re Probably Not A Billionaire.” But since there’s a 99.99 percent chance that you’re not, I’ll stick with my headline.

 

But okay, big news, right? Since 99.99% of Americans are not billionaires why even write that headline? Stay with me because it’s important. Maybe extremely important to your financial future and wellbeing.

 

Because you might be a millionaire. And if you’re not today, it’s possible you may become a millionaire someday. If we remove the value of people’s homes, that leaves an estimated 15 million millionaires in the US, which works about to roughly 4% of the population. And that’s today. In the future some people that are not millionaires will become millionaires. By current regulations, once you achieve the threshold of having a million dollars in investable assets, there’s a whole segment of investments that open up to you. Sounds like a good thing, right?

 

Maybe, but maybe not. There’s a tendency to think that now that you’re a millionaire you have access to something special that’s not available to just anyone and so, by definition, it must be better. Kind of like becoming a member of a country club that you couldn’t afford to join before. Nice, right? Special.

 

But there’s a reason that Congress mandated that to invest in certain kinds of investments you must be a millionaire. It’s not because these kind of investments are better. They might be, but that’s not the reason for the requirement. It’s because they’re considered to be riskier. The idea is that if you have at least $1 million investable assets, then you can afford to lose whatever you put into one of these so-called special investments.

 

Most of these special investments are what are called private. They’re not available to the general public. There is a wide range of private investments, but really the most common kind that I see is stock in a new company that’s being offered privately.

 

The first thing to be aware of is that every single startup company trying to get you to invest has a great story. It’s just the nature of the process. No one is going to talk to you unless they think they can get you enthusiastic enough to put your money into it. So, remember, no matter how good the story is, they all sound good. I have not yet found a way to determine which actually are good. I have only learned not to be seduced by great sounding stories. But more important is this. No matter if it’s a private startup, a private loan, a private real estate deal, and on and on, you are at risk of losing every dime you invest. This is the biggest reason that Congress required that only millionaires can invest in this kind of thing. Because they deemed that if a millionaire lost all the money they put in a private investment, they’d still be okay. What they initially didn’t realize was that some people would actually invest ALL of their money in a private investment. It was only later, after

many tragic stories of people losing their life savings in a private investment that regulations restricting how much of your net worth you could invest in this kind of investment came to be.

 

So yes, private deals are special if you consider extraordinary risk to be special.

 

If you buy the stock of ABC Widgets (a fictional name) on the stock market, and a couple of weeks later you think that you made a mistake, you can easily sell it at a profit or a loss. But if you invest in a private investment, there’s no way to sell it. You’re stuck, for better or worse. And since so many of these private deals are startup companies, consider that startup companies have a very high failure rate.

 

According to the US Bureau of Labor Statistics, approximately 20% of new businesses fail in their first year, 49% within the first 5 years and 65% within a decade. And in some industries the figures are much worse, with as much as a 90% failure rate.

 

Yes, when you invest in a startup it’s very possible you are getting in on the ground floor. The problem is that so many fall into the basement. So yes, there are wonderful success stories in America: Apple computers starting in Steve Jobs’ house, Hewlett Packard starting in a garage, Facebook starting in a dorm room. Wouldn’t it have been amazing to have been an early investor in one of these? Maybe you’d be a billionaire now.

 

But consider how professional venture capital companies work. They utilize teams of MBAs to comb through thousands of startup companies from which they choose a very small number to invest in. And even after eliminating over 90% of the deals they are offered, only a small percent of the companies they put money in make a lot of money. This business model works if you have a LOT of money to invest and a team of experts to help you decide on which companies deserve some of your capital. And you are capable of investing in a portfolio of companies in the hopes that roughly 10% of those actually live up to and maybe exceed their promise.

 

But you are not a billionaire. You don’t have a staff of MBAs to comb through all the private deals out there and you probably don’t have enough money to then invest in a portfolio of these private deals and still be okay even if all of them fail, which is a possibility.

 

During my decades in the financial world I have heard many horror stories about people making private investments and ending up losing all of their savings. Whether it was with an outright fraudster like Bernie Madoff, or just a friend’s startup that failed, the result was the same. Financial ruin.

 

I am certain that I will hear more such stories in the decades to come. I’m hoping that if you read this, you won’t be one of those stories.

 

 

Hal Masover is a Chartered Retirement Planning Counselor and a registered representative. His firm, Investment Insights, LLC is at 508 N 2^nd Street, Suite 203, Fairfield, IA 52556. Securities offered through, Cambridge Investment Research, Inc, a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Investment Insights, Inc & Cambridge are not affiliated. Comments and questions can be sent to hal@getyourinsight.com. These are the opinions of Hal Masover and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principal. Past performance is no guarantee of future results.