Is the profit in the Healthcare sector reasonable?
This is a very controversial topic. With aging population and rapidly rising healthcare cost, this is a topic on every country's concern list. Now that I have read and researched each of the 89 healthcare self-made billionaires, I have a conclusion.
The profit is reasonable. Here are the 4 reasons:
1. The average net worth of a healthcare SMS is about $2.4B, which is more than $1B less than the average of $3.6B. Clearly, if a youngster just want to make money, healthcare is not an attractive sector because the profit potential is below average.
2. The long drug discovery period:
A youngster drop out of college at age 19 or 20, can make billionaires in 6 to 7 years. The average time to become healthcare self-made billionaire is 25 years. It is one of the longest. Making money in the healthcare industry will test the maximum patience of the entrepreneur
3. High Startup Cost:
To start a drug company, a hospital chain, a drugstore chain, a medical equipment firm require enormous amount of startup capital. It is much easier to do it with software and fashion, where the startup cost is a few thousand dollars.
4. Highly regulated environment
While there is almost no regulation on Fashion (I have written a eBook on 60 Fashion Self-made Billionaire) , almost no regulation on software (you don't need government approval to roll out a new web site or an app), little regulation on real-estate , the regulation hurdle in healthcare is one decade for drugs, and 5 years for hospital etc.
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