Isabel Dos Santos: A Self-Generating Income
Episode #1 of the course 10 billionaires and their lessons on success by John Robin
Welcome to our study of ten of the world’s billionaires and their lessons on success.
My name is John Robin. I’m an author and an entrepreneur. If you’ve been on Highbrow for a while, then I am likely a familiar name.
This is now my 17th Highbrow course, and I have covered many topics: writing, math, science, productivity, health, wellness, exercise, and my most recent is on happiness: How To Become Happier: A Guide To Reprogramming Your Thinking.
I love to write educational fiction, but I am also a journalist at heart. In that spirit, I decided for this course to chase a story that’s had me curious for some time.
Why Learn About the Wealthy?
As of 2020, the world’s billionaires account for $8 trillion of the world’s money. With 178 new billionaires in 2020, from 20 different countries, the list of 10-, 11-, and even 12-figure juggernauts is over 2,000 long, with 241 of them women.
Many people feel angry at these individuals for hoarding so much wealth, and most of us would not aspire to be so wealthy. However, there are many lessons to be learned from them.
I will not be talking about Jeff Bezos, or Warren Buffet, or Mark Zuckerberg, because much has been written about them already. Instead, I will focus on the sheer diversity found within the billionaire community. It’s within this diversity that many hidden lessons abound, and like a good educational journalist, I have scoured less-visited articles to explore the many facets of what lies behind a billionaire’s success story.
Get ready to learn from our first billionaire.
Isabel Dos Santos: Investing in a Self-Generating Income
As the daughter of Angola’s president, José Eduardo dos Santos, it might seem on the surface that Isabel’s position of privilege makes her success story difficult to learn from.
But as you will see, what happened to her after she lost her position of privilege contains a fascinating lesson about managing windfall money to gain wealth.
Angola was under the rule of Portugal until 1975 when it won independence as a free African nation. However, rather than stability, chaos ensued as several factions battled for control, and though José took over as president in 1979, peace did not come until 2002.
During the turbulent years, while José focused on political control, his daughter Isabel was busy securing financial leverage. Isabel grew up in the presidential palace, where the family had Christmas trees flown in from New York and spent $500,000 on alcohol. Within this world of decadence, Isabel earned the nickname “the Princess.”
But Isabel also had a shrewd business sense and was able to leverage ownership in companies, starting with a failing restaurant in Angola’s capital city, Luanda.
Next came the opportunity to hold a 24.5% stake in Ascorp, originally founded from Angola’s state-owned diamond mining company. With millions of dollars per month in dividends, that stake in Ascorp was a cash cow.
She gained more money when her father helped her leverage her way into 25% ownership of Unitel, the nation’s telecommunication company. Like Angola’s diamond market, with the mobile phone boom in Africa, Unitel soon was making more than $1 billion per year, with 9 million subscribers.
Isabel soon held a 25% stake, through an investment vehicle, in the Angolan bank, BIC, then in oil, Angola’s other special resource, through its state-owned company, Sonangol.
Soon, she was Africa’s youngest billionaire.
But this streak would not last, and Isabel had planned accordingly.
When José Eduardo dos Santos stepped down in 2017, the new president, João Lourenço, removed many of Isabel’s shares due to problems with the political ethics surrounding how they were acquired.
Despite this, though, Isabel is still worth $1.7 billion today. How she managed this is exactly where we can learn from her:
Rather than simply living a lavish lifestyle and spending all her monthly millions, Isabel used her dividends to buy stakes in other businesses not under the influence of central Angolan power. She built an investment empire that now spans 41 countries.
Isabel saw the bigger picture—that she had to be prepared if her sources ran out. This gives us a good analogy to draw from.
Isabel’s Billionaire Lesson
If you have an unexpected windfall, don’t spend it! Buy shares in productive assets that will continue to earn money for you. This can be done through wise investing, or, if you’re business-savvy, through buying a percent share in promising startups.
To see this in action, let’s say you come across $100,000. There’s a way to make sure it never runs out, even if you live past 100:
Don’t spend a penny on it. Lock it all away in a long-term investment that renews annually. Then live off the annual interest.
Even with the most conservative, risk-averse investments, which yield 4-5%/year on average, that’s $4,000-5,000/year—a nice supplementary income!
But if you have a good money manager, you’ll get closer to 7-8%/year average. So, we can take this a step further:
If you can save up $250,000 and use Isabel’s strategy, then at 7-8%, you’d get $17,500-$20,000/year, every year, as long as you live!
Stay tuned for tomorrow, when we’ll uncover the story behind another African billionaire.
Recommended reading
Isabel dos Santos featured in Forbes, September 2013
Isabel dos Santos featured in Time, February 2018
The Angolan civil war, featured in The Washington Post, September 2015
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