A hedge fund manager has three sources of wealth:
Investing her own money in her own fund
Getting fees from investors in her fund
Earning a portion of the trading profits of people she employs
A retail trader has only (1), he has no way of levering his talent.
Consider a retail trader who starts with $1 million (more than most retail traders do), earns 20% profit every year (the consistency is important, most retail traders have more erratic returns) and pays no taxes or living expenses (not realistic). It would still take him 38 years to accumulate a billion dollars. And he’d probably elect to knock off after 21 years with $50 million.
Compare that to a hedge fund manager who spends 5 years at as a trader at a big dealer or fund, saving $10 million to start her own fund. At that time, she has the reputation to raise $100 million from investors. If she produces consistent 20% annual returns, her fund will grow rapidly, say 50% per year. She gets to be a billionaire in five years, at 2%/20% fees.
Of course that calculation is optimistic as well. She will have some costs and taxes and living expenses. On the other hand, she can grow her business by adding new funds and hiring other managers. Plus, she not only has $1 billion in cash, she owns a business that could be worth much more than that.