Investing Hints From the Newest Forbes Billionaires

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Renzo rosso Credit: Vittorio Zunino Celotto/Getty ImagesWhen it comes to getting rich, the best textbook may be Forbes' list of the world's billionaires. After all, who better to show the right steps to financial freedom than the men (and, increasingly, women) who have already gotten there? And, with a new list fresh off the presses, what better time could there be to reap their wisdom?

Looking at the list, one of the first lessons is that the shortest path to wealth goes through the delivery room. Whether you're talking about the Waltons or the Kochs, the Bulgari brothers or the Mars mob, it's clear that things go a lot easier if you can start off with a few million from mom and dad. Heck, even for famed self-made mogul Bill Gates and newcomer fashion maven Tory Burch, it didn't hurt to come from a rich family.

Those looking for guidance from the Forbes list will quickly realize, however, that it generally shows where the most profitable places in the world were, not where they will be. With the benefit of a few decades of hindsight, it seems obvious that telecom, personal computers and low-cost retailing were smart places to put your money. But when Carlos Slim, Michael Dell and Sam Walton were starting out, their business plans may have seemed insane.

But that doesn't mean that you can't pick up some valuable lessons from the list. If you're looking for places to invest your savings, a good place to start is with the newest members of the billionaires club. After all, these are the people who have most recently latched onto a new economic opportunity, a new business model, or a new market segment. In other words, they're the ones who have the best ideas at where the market may be heading.

Unless, of course, they're the Bulgari brothers, in which case, they're just damned lucky.

At any rate, here are some lessons you can glean from the latest list:

Fashion

There has always been a lot of money in fashion, but in the last year, improved distribution, smart marketing, and increased consolidation have mixed to put some of the biggest names in fashion onto the billionaires list. For example, Renzo Rosso, the creator of Diesel jeans, made the list this year after snapping up a passel of other brands, including Maison Martin Margiela and Viktor & Rolf. Other European brand names that managed to make the list include Paolo and Nicola Bulgari, Domenico Dolce and Stefano Gabbana and French Cosmetics scion Bris Rocher.

A little closer to home, American designer Tory Burch also joined the list, making her America's second-youngest self-made female billionaire. Spanx inventor Sara Blakely beat her by five years.

Mid-Level Retailers

It's no secret that bargain retail companies like Walmart, Target and Dollar General have often been good recessionary bets. But the billionaires list suggests that more mid-level retailers, the kind of places with a definite identity, which people tend to visit for a bit more of a splurge, are starting to look like solid bets. The world's biggest gainer on the billionaires list is Spanish mogul Amancio Ortega, the majority owner of Inditex, one of the world's largest clothing brands. And, as Zara, Inditex's main brand, pushes further into the American market, it seems likely that Ortega's position will get even stronger.

And Zara is only one of many mid-level retailers that are doing quite well. Anders Povlsen, the owner of Danish retailer Bestseller, also found his way onto the Forbes list this year, as did Edward Stack, CEO of Dick's Sporting Goods.

Look Farther From Home

As some of the earlier entries suggested, many of the biggest areas for consumer growth are outside the U.S. And, for that matter, so are many of the newest billionaires. For example, Fernando Belmont, who made the list this year, did so at the helm of Yanbal International, a cosmetics company that sells its wares door-to-door in Latin America.

And Belmont is hardly the only non-American commercial mogul to get on the list this year. India's M.A. Yusuff Ali, for example, joined the list as CEO of the LuLu Group, one of the fastest-growing retail chains in the world. (And not to be confused with the entirely unrelated Lululemon Athletica, though that company's founder, Chip Wilson, is on the list too.) Similarly, China's Zhau Xiaoguang, leader of the NeoGlory jewelry group, made her way onto the list by selling costume jewelry in a thousand stores throughout China.

Pharmaceuticals

For anyone who has paid attention to demographics over the past few years, the ever-increasing profitability of pharmaceuticals should come as no surprise. In Israel, newly-minted billionaire Mori Arkin rode the trend, selling his family's pharmaceutical company for stock in an even larger drug company, which he then diversified, investing in several other medical firms. South African billionaire Stephen Saad followed a similar route: His company, Aspen Pharmacare, is the largest drug concern on the Johannesburg stock exchange.

Creating Creators

As the Facebook saga has unfolded over the past few years, one thing has become clear: The era of democratized web content creation is here to stay. And, riding this trend, entrepreneurs who are willing and able to bring users closer to information and provide them with the tools to create will increasingly fill the ranks of the world's richest people. Arkady Volozh, the founder of Russia's largest search engine, recently made his way onto the Forbes list. Meanwhile, China's Lei Jun worked his way to $1.75 billion as CEO of Xiaomi, one of China's fastest-growing smartphone companies.

Not surprisingly, this trend continued in the U.S. as well. One of the country's newest billionaires, Nicholas Woodman, joined the list when his company, GoPro, was valued at $2.25 billion. The firm makes high-impact digital video cameras that enable extreme sports enthusiasts to record and share their exploits.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971

Photo Credit: Vittorio Zunino Celotto, Getty Images

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