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To the average person, "millionaire" and "billionaire" sound similar; they're both people with money, right? And, indeed, both have access to far more wealth than the average citizen, and neither may have to worry about money ever again.
Related: 6 Money Tips From Self-Made Billionaires
Furthermore, because entrepreneurship is often the route to wealth accumulation, both may have earned their way to riches the same way. Yet while their monikers "millionaire" and "billionaire" sound the same, there are in fact significant differences between the two.
For starters, the difference between a million versus a billion dollars is immense. To put it in context, consider that one million seconds amount to 11.5 days, while one billion total 31.5 years!. A billionaire could give his or her wealth away and make 1,000 new millionaires overnight.
Further, there are 2,200 billionaires on the planet, according to a CNBC report; and while some of these wealthy elite gained their status from a family inheritance, many of the top-ranked billionaires are entirely self-made through entrepreneurial endeavors. So, what separates these hyper-successful entrepreneurs from millionaires, who are also considered successful?
The billionaire factors
These are some of the most important factors distinguishing billionaires from millionaires:
1. Goals and commitment
First, it's important to consider the billionaire's goals and commitments. Very few people become one accidentally; instead, billionaires tend to relentlessly pursue wealth, and refuse to compromise to achieve it. Consider the entrepreneur who grows an innovative tech startup for a few years, then gets an acquisition offer from a major tech company for, say, $15 million.
This isn't exactly rare; Alphabet makes a dozen or more such acquisitions every year. A "typical" entrepreneur might cash out and take the $15 million as a personal victory (and early retirement). A billionaire, however, setting his or her sights higher or living out a commitment to the business's core idea, might reject the $15 million in hopes of obtaining something better, or growing the business further.
Related: Billionaires Like Warren Buffett, Jeff Bezos and Mark Cuban Live by Ancient Stoic Philosophy
Though these rejections don't always pan out, you can't become a billionaire by settling to be (just) a millionaire.
2. Scale
What should also be considered is the scale on which billionaires operate. If we consider profit as a product of both efficiency and impact, then the more locations your business reaches, the more money you're going to make. Owning a chain of restaurants in one state might make you a millionaire, but you'll need to change the world on an international scale if you want to be a billionaire.
3. Repetition
Billionaires rarely make their riches by starting just one business. In some cases, they experience a crushing failure and apply the lessons learned from that failure to future endeavors (see: Bill Gates's Traf-o-Data). In other cases, they settle for selling a company for a few million dollars, only to roll those funds into bigger, better startup ideas (see: Elon Musk's path through Zip2, Compaq and X.com).
They're not only willing but eager to repeat the entrepreneurial process over and over again to achieve success.
4. Budget and self-control
There's a reason why so many lottery winners end up losing everything. It's because poor financial habits and decisions end up bankrupting them no matter how much money they start with (conversely, good financial habits and financial decisions can put you ahead even with a modest income).
Billionaires -- when they first reach millionaire status -- tend to avoid spending lavishly or wasting their money, which makes it easier to grow their wealth even more and retain what they've acquired. Some even take this practice to an extreme: Warren Buffett, for example, still lives in the Omaha, Neb., house he bought for just $30,000 in 1958.
5. Passion
You don't become a billionaire by just "getting the job done." That level of wealth requires you to constantly come up with new ideas; adapt and refine your ideas when challenged; and put in long, hard hours throughout the entire process. While plenty of millionaires can certainly be described as passionate, their level of passion often pales in comparison to that of billionaires (think: Richard Branson, Bill Gates, Jeff Bezos, Oprah Winfrey, Meg Whitman).
Passion was always a big motivator for people like these, and kept them moving forward even after their initial success.
Related: 7 Real-Life Business Lessons You Can Learn From Billionaires
Is luck a factor?
Is luck a factor in the success of a billionaire versus a millionaire? This is a hard question to answer, and one that's been examined in at least one scientific study. Luck is objectively hard to measure, because virtually any positive or negative development for a business might be considered good or bad luck. For example, if you beat an unknown competitor to market by just a few days, is that considered mere luck or the outcome of your tenacity?
While luck is almost certainly a factor (depending on how you define it), it isn't the only factor, nor is it the most significant. A simple stroke of luck isn't enough to justify a thousand-fold increase in the monetary success thousands of entrepreneurs enjoy; rather, that success is a product of these fortunate individuals' different mindsets and practices.
