Joe Mansueto: The simple idea that made me $1bn

With its shares up by more than 100% since it listed in 2005, the success of investment research group Morningstar has catapulted its founder, Joe Mansueto, 53, onto the rich list. But you wouldn't think his life had changed much. "Sure, I like money for the independence it gives me," says Mansueto in his easy Midwestern drawl. "But as for the material things, I couldn't care." He has only recently bought a new car, having driven an old BMW for seven years. Before that, it was a Mitsubishi Montero with rust holes in the floor panels.

The son of an Indiana doctor, Mansueto's first business venture came in the late 1970s, selling soft drinks from his dorm room at the University of Chicago. "We made $500 a quarter, enough to keep us in beer money." A keen stock analyst, he got interested in the writings of a "guy called Warren Buffett, who was very obscure then", and what made him buy some stocks over others.

He wrote off to Buffett's Berkshire Hathaway vehicle and other fund managers for information. Before long, piles of prospectuses were clogging up his one-bed apartment on the North Side of Chicago. Mansueto thought the funds were a great way for "the average person to get investing". But the amount of material in the prospectuses was overwhelming. "So I thought, wouldn't it be a good idea to gather them all into one compendium for investors?"

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With $80,000 in start-up capital, in April 1984 he crammed five tables and three IBM personal computers into his kitchen. He created a database of the information the funds sent to him. Within six months the first copy of the resulting publication, the 400-page Mutual Fund Sourcebook, was on his desk, containing everything an investor needed to know about every fund on the market.

He then spent $6,000 for a large advertisement in Barron's, the US investment weekly, from which he got 600 orders at $32.50 a piece. Charging so little for that kind of information "was unheard of at the time". More importantly, people paid up front, meaning "I had the money before I needed to pay the printers or Barron's". His timing couldn't have been better. In 1984, there were only 1,243 mutual funds in the US, with net assets of $370bn. As of the end of 2008, there were 8,022 funds worth $9.6trn.

Morningstar has grown alongside them. In 1985, it had £100,000 in sales. That hit $1m in 1989 as it launched its first CD-ROM based product. This carried all the data that up until then had only been available in the print edition, but was far easier to search through. The advent of the internet gave the company new ways to distribute its information, and Morningstar.com launched in 1997.

With revenues of $502m today, it's "been by far and away my best investment", says Mansueto, who is worth around $1.3bn. But he still dabbles in the market. He's currently wondering what to invest in for his three young children. "I'm torn between buying what I think would be good investments or what they can relate to. My dad bought me ten shares in Chrysler when I was ten... so maybe I should buy shares in Disney. You should stick to what you know."