How they did it - how you can do it!

Per definitionem all billionaires did exceptionally well building a fortune. But how did they got to where they are now? By examining the Arabian Business Rich List we found the key factors and moreover found that the way how to build fortunes is different nowadays than it was decades ago.

This article traces the way of the richest people in the Arab World. In part one we examine the businesses, industries and the environment in which they accumulated their wealth. In part two we'll have a closer look at young enterpreneurs and how they earn their money nowadays. Finally in part 3 we bring together the key factors of how you can do it as well.

We analysed 20 of the richest Arab entrepreneurs and found some interesting patterns. Even if the way each of them did is unique there are still a few interesting patterns, which is them all in common.

The older the richer!

First of all we found that most of these giants are aged 55 and older. No surprise as it usually takes a while to start up your business, grow it and finally profit from it. But actually there is more about it. These billionaires started at a time when there was no computer, no internet and globalisation was just a word in the dictionary. It was a time, when industrial products have been scarce and infrastructure was underdeveloped. So indeed a good business opportunity to provide all of these things. At the same time newly discovered oil fields brought enough money and boosted industrialisation, automation and the development of infrastructure in the 60 and 70ies. A lot of money was spent in industries like construction,...

The right industry is crucial

This is surely one of the reasons why most of them have either their business roots in construction and real estate or at least are in any kind related to real estate. Here some examples: Mohammad Al Amoudi, who made his first fortune in construction and real estate, Nasser Al Rashid founder of Rashid Engineering or the Bin-Laden family one of the major players in the Arabian construction industry. These are just some examples, but indeed almost every one of these billionaires is in the construction and real estate business.

Usually the real estate sector is highly dependent on funding. That's why banks have been an important player in financing all these projects. Consequently we find 2 bankers in the top 10 of the Arabian Rich List: Sulaiman Al Rajhi (Al Rajhi Bank) and Saleh Kamel (Al Baraka Banking Group).

Surprisingly there's only a few of these billionaires, who are directly associated to the oil industry. One exemption may be Mohammad Al Amoudi, who is a investor to oil refineries in Morocco and Sweden. But like most of them he started up in the construction and real estate business.

Over time all of them added more and more businesses in different industries, so today they own a global business conglomerate.

To summarize the right industry is quite substantial. When there was a shortage of construction they jumped in and supplied what was demanded. The same with other industries like cars (Abdul Latif Jameel Company Ltd with world's largest Toyota dealership) or international franchise rights (Nasser Al Kharafi): This was a new industry back then with huge growth potential. Today these markets are saturated and you won't make a lot of money by entering.

Country of origin

Nine out of 20 billionaires are from Saudi Arabia, 4 are from the United Arab Emirates. But there are even people from Kuwait, Bahrain and Palestine. Many of them have profited from either their family business or from close ties to ruling families. Allegedly these relationships helped them to get into the business, and receive the funds they needed to flourish their business. For example Prince Al Waleed or the Bin-Laden-family profited from their close relationship to the royal family.  

There is only a few self-made billionaires. They built their businesses from the scratch like for example Mohammad Al Amoudi or Said Khoury.

Shariah-compliant businesses

Actually we know none of them who operated according to Shariah-principles. However with regards to the quite young industry of Islamic banking we have to keep in mind that it was probably not possible to invest according to Shariah-law as there was no banking industry supporting no-interest loans. But in either case it is not permitted to invest in shares of conventional banks like Citi Bank as for example Prince Al Waleed has done.

It's not only about chosing the right industry and to have close relationships to powerful families. Above all it's the right idea and attitude that makes you a billionaire. This is what we will examine in part 3 of the article.