This week BRW released its annual list of Australia's richest people aged 40 years and under. It's a fascinating look at the next generation of entrepreneurs in Australia and highlights the way the economy is changing.
One of the biggest changes lies in the ways these young people are building fortunes.
Other than the celebrity sports stars and entertainers of the list, very few of the names are well-known in business circles. That might have something to do with the age of these entrepreneurs, but it probably has more do with the fact that many of the members of the Young Rich operate in the services economy.
While people like Richard Pratt, Frank Lowy, John Gandel and Len Buckeridge built their fortunes by creating vast, capital-intensive empires employing tens of thousands of people, the members of 'Generation Next' are focussed on relatively small businesses operating in very specific niches, such as hedge fund management, specialist areas of the technology sector and specialist retail areas, such as fashion and cosmetics.
So what are the secrets to building a fabulous fortune before you hit 40? Here are some of key trends from this year's Young Rich list.
1) Find a bit of dirt with some minerals in it
The quickest way to get rich right now is to find a patch of dirt containing coal or iron ore and sell it for a crazy amount of money. The Young Rich list is led this year by Nathan Tinkler, who has built his $441 million fortune in two years. In early 2006, Tinkler's company Custom Mining bought the Middlemount coal deposit in central Queensland for $15 million. In December 2007, Queensland coal independent Macarthur Coal acquired Custom Mining and its 70 per cent in the Middlemount project for $275 million in cash and shares. Tinkler sold his shares earlier this year and is now sitting on a pretty pile.
2) Become a fund manager
Working as a money manager might not seem like a lot of fun at the moment, but establishing a funds management business and winning the backing of a couple of wealthy investors and institutions is still a very handy way to amass a lot of cash. The Young Rich list features a number of high-flying fund managers, including the London-based Greg Coffey (worth $335 million), and Hilton Nathanson, the chief investment manager at London-based funds manager Marble Bar Asset Management, who is worth $385 million.
Of course, whether these desk-jockeys can hang onto their cash over the next 12 months will be interesting, particularly given the bans on short selling in place around the world.
3) Join the second dot-com boom
Technology dominates this list, providing a fifth of the members. That's not surprising, given the low barriers to entry (anyone can start a website these days) and the low amount of capital required.
The best thing about this sector is that you don't have to come up with killer app (to use a bit of tech speak) like Google or Amazon. Simon Clausen, valued at $170 million, made his money from PC security software company PC Tools, which was recently sold to Symantec for $300 million. Queensland-based pair Sam Sciacca and Daniel Tzvetkoff (who is aged just 24) provide billing systems to websites and are valued at $120 million.
Neither idea is particularly original, but that matters little – you only need a minuscule slice of the global IT pie to make a lot of money.
4) Get very good at soccer, tennis or golf
If you've got a bit of talent for ball sports but not much else, then fear not – you can still become very rich. The list features a number of sportsmen, including motocross star Chad Reed and Formula 1 driver Mark Webber, soccer players Mark Viduka and Harry Kewell, tennis players Patrick Rafter and Lleyton Hewitt and golfers Adam Scott and Karrie Webb. The secret is picking a sport that is big in the United States or Europe – global companies will only sponsor athletes involved in global sports.
5) Make someone beautiful
The flock of young Australian entrepreneurs making millions from cosmetics is amazing. Napoleon Perdis' cosmetics empire is worth $85 million, while Natalie Bloom from Bloom Cosmetics and Mecca Cosmetica founder Jo Horgan are both valued at $31 million. Husband and wife team Christine and Richard Matta have built a $30 million fortune with their Perfume Empire retail chain.
Fashion is the other big source of list members. It's a cut-throat, fickle business, but the barriers to entry are low – anyone can design jeans or t-shirts in their bedroom. Sarah-Jane Clarke and Heidi Middleton from Sass & Bide are worth $40 million, while Nigel and Tania Austin, owners of the Cotton On chain, are worth an impressive $120 million.
6) Become an entertainer
Plenty of room for pretty faces on the Young Rich list: actors Cate Blanchett and Naomi Watts make the list, as do musicians Kylie Minogue, Keith Urban, Daniel Jones and Darren Hayes (from Savage Garden). Kylie leads the charge with a fortune of $84 million. As with the sporting members of the list, the key to becoming wealthy from entertainment is
developing an international profile.
7) Get a trade
Anyone who has paid for a plumber or electrician in recent years can tell you that getting a trade is a great way to get rich. But several members of the Young Rich list have taken this to a new level by building property development empires from their trade business. Mark Etherington (who is valued at $60 million) started his career as a carpenter, as did Queensland developer Chris Anderson ($75 million). Melbourne's Shane Wilkinson ($32 million) was a builder.