The Young Rich reveals some interesting new directions in the making, and spending, of serious money.

By Tony Featherstone
BRW. 15 September 2005

The BRW Young Rich list has lots of glitz, glamour and gossip on who's worth what, but the real value is the trends that emerge on entrepreneurship and the differences between the Young Rich and the BRW Rich 200. Here are 21 quick observations:

1. Exit signs. The Rich 200 build companies that last a lifetime. The Young Rich build companies they can sell. They think about an exit strategy from day one.

2. Travel light. The Rich 200 own factories, land, plant and equipment. The Young Rich own only what is necessary and outsource everything else.

3. No emotion. The Rich 200 stay with their companies for decades, sometimes generations. The Young Rich have less attachment to their companies.

4. Stay private. A few years ago every fast-growing company talked about listing on the stockmarket. Not any more. Many shudder at the thought of going public.

5. Born global. Most on the Rich 200 made their fortunes here and avoided global markets. The Young Rich are planning global companies from day one.

6. China. The Young Rich are embracing China. This year's highest debutant, Peter Hosking, built his empire by importing cheap power tools from China.

7. Target the tigers. Many companies have retreated from smaller Asian economies, but not the Young Rich. Eagle Boys' Tom Potter, for example, has big plans to take his pizza business to Malaysia, Hong Kong and other parts of Asia.

8. Take on the US. If you want to make it really big in sport, entertainment or fashion, you have to make it in the United States.

9. Avoid crowded industries. The Rich 200 made their fortunes from property, resources and agriculture. Not so the Young Rich. There are some property developers, but the Young Rich generally have a lower representation in traditional industries.

10. Cheap can be good. Some Young Rich have made their fortunes in extremely competitive, low-margin industries. The pizza market is a good example. Hard work is their competitive advantage.

11. Be yourself. Fitness gurus Kerry McEvoy and Rowena Szeszeran-McEvoy ban conventional staff titles. They call their general manager Queen Poobah, the managing directors Head Honchos, and their admin person the Princess of Paperwork.

12. Not enough women. Although there are more women on the Young Rich than on the Rich 200, the representation is still too low. Not enough women are taking their businesses to the next level because they do not get enough support from the government and others.

13. Avoid big companies. If you want to make serious wealth, you have to build your own company. Like the Rich 200, few on the Young Rich have made serious wealth by working for others.

14. 35 is the new 25. The average age of the Young Rich is 35. This sounds young, but many on the list have been building businesses since they were 16. There are few overnight success stories.

15. Build great brands. Boost Juice, Crazy John's, Dodo ... the Young Rich have a knack of building great brands through clever marketing.

16. Go with the trend. Kelli Fox is making millions from astrology, Sonia Amoroso is cleaning up in complementary medicine, and the McEvoys are making a fortune from fitness. Like the Rich 200 , the Young Rich spot big trends and stick with them.

17. Love your staff. When Mark Fawcett moved his manufacturing business from Sydney to near Wollongong, 64 of his staff and their families followed him. The Young Rich know how to share the rewards and develop loyalty.

18. University is not everything. Can entrepreneurship be taught? No, judging by this list. Like the Rich 200, some on the Young Rich dropped out of school or struggled to get through their university degree.

19. Motivation. Emotional impoverishment might drive many young money makers, according to Hugh Joffe, who explores the psychology of the Young Rich in a fascinating feature in this issue..

20. Good karma. Pat Rafter leads the Young Rich pack when it comes to philanthropy, and more on the list are giving to charities.

21. Work-life balance. Many Young Rich complain about working nights, day and weekends. They have no work-life balance. As the playwright Neil Simon wrote: "Money brings some happiness. But after a certain point, it just brings more money."

Job well done
There are many to thank for this year's Young Rich, but first a special thanks to Rich 200 editor Robert Skeffington. After five years of analysing the wealth of Australia's richest people, Robert is handing over the reins to James Thomson, who is off to a flying start with this issue. Robert has done a terrific job on the Rich 200 and was the driving force behind some of our special issues such as the Young Rich and BRW Rich Summer. Robert will help edit the weekly issues of BRW and write more on boards and their directors. Thanks also to art director Justin Garnsworthy, who designed this issue, picture editor Paul Jones, production manager Anna Wolf, production editor Tom Brentnall, chief copy editor Paul Watson and all of our production staff and writers. Once again, they have done a great job under tight deadlines. Our researchers, Christopher Blane, Briana Everett, Emma Marshall, James Williams and Dylan Welch, also deserve mention for their work.

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