4 Reasons Copying Billionaire Advice Doesn’t Work for Most People
Billionaires get quoted in the financial press all the time, and it makes sense. Most people want to hear what they say and wonder what they did to acquire all that money.
But the problem is that billionaires operate in a completely different financial reality than the average American worker living paycheck-to-paycheck. Here are the reasons why trying to copy their advice can often backfire.
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Billionaires Can Afford To Be Wrong
The biggest financial difference between billionaires and average Americans is that billionaires can afford to make mistakes. So when they make predictions, you have to take them with a grain of salt.
As CNBC's Jim Cramer put it in 2025, "Please be careful listening to any billionaire. They made billions, and it's not for you."
The point of Cramer’s message was that billionaires manage money differently than average Americans.
If a billionaire gives out a stock tip on TV and it goes down, it will hardly register to a billionaire, who likely has tens, hundreds or even thousands of other investments. But someone trying to “make it big” by buying that stock could blow up their whole portfolio.
Worst of all, the average person doesn’t have nearly as much margin in their budget to absorb such a loss.
Survivorship Bias Is Real
Just because one billionaire succeeded by taking a certain path doesn’t mean it will work for everyone. For every billionaire who dropped out of college and struck gold, there are thousands who dropped out and didn't. You just never hear from them.
Behavioral economist Sendhil Mullainathan calls this survivorship bias, which refers to drawing conclusions from the people who made it while ignoring everyone who tried the same thing and didn't.
Writing in Scientific American, he explains that while the world likes to hear the stories of dropouts who turned into moguls, like Mark Zuckerberg, there’s a far larger group of dropouts who never became anything close to a Zuckerberg. In hindsight, it looks obvious that they did everything right. But many went down a similar path and ended up with nothing.
Billionaires Don’t Have an 'Either-Or' Problem
Billionaires have enough money that they don’t need to choose between two options. They can afford to go out to a fancy dinner every night of their lives even if they’re losing millions of dollars in the stock market in any given month or year.
Many average Americans, on the other hand, have to choose between saving and putting food on the table, or between putting money in an investment account and paying for health insurance.
The Federal Reserve's most recent Economic Well-Being of U.S. Households report explains this distinction in no uncertain terms. According to the report, only 63% of U.S. adults said they could cover a $400 surprise expense using cash or its equivalent.
Someone who struggles to cover a $400 expense is not in the position to take the same risky market bets as a billionaire.
Soundbites Aren’t Real Financial Advice
It’s one thing to sit down for a 60-minute in-depth conversation with a billionaire about how to save and invest. It’s an entirely different thing to get a 30-second soundbite from the financial news about something a random billionaire might be recommending.
Even if they have the best intentions, the path a billionaire takes is often not applicable to the average investor. But even worse, it’s entirely possible that a billionaire says something on TV to make further profits if other investors pile into the same trade, driving the price higher.
Regardless of what you hear online or in the financial press, always invest based on your own personal risk tolerance and financial goals, not by copying what someone rich happens to be doing that week.
How To Become Your Own Version of 'Rich'
This isn’t to say that the advice of billionaires is completely worthless. On the contrary, you can often learn a lot by paying attention to the right things. Lessons like “spend less than you make,” “invest early and often” and “stay patient” are financial truisms that can help nearly everyone.
But when it comes to mirroring specific moves that billionaires make, you have to consider the context. As you likely don’t have the risk capacity, the safety net and the years of insider access that all helped billionaires get to where they are, following random recommendations can often be nothing more than a seductive trap.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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