A Data-Driven Guide to Becoming a Consistent Billionaire
theartandscienceofdata.wordpress.com
theartandscienceofdata.wordpress.com
I specifically remember when I used a good friend of mine. A dyslexic CS major, as an example of how you could still have a brilliant career through education, disability training and really hard work - and it was put off by arguments like "well if he had dropped out he might've been bill gates, instead of just running an RND department at IBM". I pointed out that the likelihood of severely dyslexic Danes with no education (his age), even having a job was very low statistically, but they would hear none of it, because "most billionaires were dropouts".
It would've been nice to have this data back then.
I'm unsure what it's called, but it is most certainly a bad argument. If they instead said: "Here is all dyslexic with an education and their economic impact, and there it is for those without - I believe we should do B because it's most beneficial", but that argument is hard to make - and we KNOW that education is good. It sounds more like they just wanted a lower tax, and education is a rather expensive thing.
They weren't against education because of money though, rather because they genuinely believe people are less free, creative and innovative when they go through formal education rather than just being, well, "out there, doing stuff".
That was one of my points, albeit not clearly stated.
> because they genuinely believe people are less free, creative and innovative when they go through formal education rather than just being, well, "out there, doing stuff".
Seriously? With formal education, I can do everything I could before, and some more. If they want to make human nature argument that I become more ingrained in the set ways of the particular formal education, then they need to invoke some serious behavioral studies and argue exactly why no education is better. I'm not trying to argue with you, it just annoys me that, young I assume, people influence politics without knowing how to make a reasonable argument. Maybe I'm just getting older, but it seems that younger and younger people believe that they have wisdom in their mind, and they need to get it out and not be influenced by old farts.
We don't even have the excuse of a broken educational system.
>Sure, there is the off chance you might do better without that degree because you can start earlier, but statistically that chance is slim and the benefits of good education will serve you all your life.
Well, yes, when you assume all that it would be hard to see why anyone will forego it, however, not everyone is as convinced that e.g. 'the benefits of good education will serve you all your life' and whatever else you do instead during those 4+ years wont.
Going to uni is beyond valuable. Finishing uni ... 80/20 rule. Unless you wanna work in government or super big corpos, finishing isn’t that useful. Go there for the knowledge, not the paper.
Full disclosure: I say this as an extremely bad test taker who dropped out just before graduating after 5 years of undergrad. Just couldn’t make the case anymore that classes are better than making money freelancing.
But the excuse and freedom to explore interesting tech? I fear I’m never getting that back. It was amazing
It's been a bit more open for programmers as there has been a real lack, but these days you won't go far in that profession either if you're self-taught.
I'm not judging by the way, it's just how it is here.
In Europe, where (in most countries) education is free, I would say a degree is even worth less. There is massive "degree inflation". Like, everyone has one. And you can take 5-7+ years to complete undergrad, no problem.
I don't know when it became customary to only hire people with a bachelors degree for jobs like a receptionist or a PA, but I don't even understand what a degree signals these days. In most professions it definitely doesn't signal you are capable, not that you are smart.
I network quite a bit with other digitizing managers in the public sector, and oversee around 350 contracts for different systems. So I guess you can say I get around our tech scene.
I can't think of a single reputable company which hires non-educated tech staff these days unless they have a really solid record somewhere and a good excuse for not taking a diploma degree while working.
10-15 years ago it was a completely different story, but these days it's hard to get hired without an education.
We do have targeted programming/operations/support academy degrees that are 1-2.5 years though, and those are typically enough unless the company is extremely elitist.
Say you found someone who ticked all the boxes, was absolutely great across the board, yet just said: "I didn't bother finishing the degree, because I didn't feel it would teach me any new skills". Would you pass on that person, and if so, why?
I personally don't see any reasons why I would, but I'm curious to know why others would.
I have interviewed a few youngsters who were self taught though, but they lacked a lot of the basic theoretical knowledge about things like best practices. So while they may have been superstars at producing interesting prototypes I frankly couldn't use them in an enterprise environment.
On the other hand I've interviewed a lot of people with degrees who couldn't get their code up and running in a production environment because they had never actually done that. This is a lot easier to rectify than someone who doesn't understand how our peojects are run.
I'm sure this is different from place to place, but in Denmark where education is free, and the government pays you to go to school, it's really rare that talented people haven't gotten some sort of degree.
This is Italy I'm talking about, I don't know enough about other European countries. While the average youth unemployment rate for Europe is ~19%, ours got as high as 37%. That is a lot, only better than Greece and Spain.
There are many more factors to keep into account, such as the undeniable fact that a lot of current youngsters feel entitled just because they have a degree, or flat-out refuse jobs because that's not what they studied for, as if it was beneath them. They don't seem to realize that it's no longer like it was in the past decades, when very few people could access higher education, and were of course preferred in job interviews to people who just went to high school.
On the other hand, taxation is extremely high and heavy on entrepreneurs (employees cost ~2x their salary), who then hire under shitty one-off contracts because it costs less, so the whole job market is very hard to get into and very easy to drop off of.
Another issue is that there are a bunch of useless degrees, such as this thing called "Political sciences", which makes you pretty much unemployable, and sadly a lot of people choose it, and wonder why they can't find a job.
There are also many other factors at play here. It's a shitshow, really.
Higher education does have a lot of value in terms of teaching how to solve problems and hopefully teaching you how to network, but there are reasons to either drop out or don't even get into college in the first place.
So at some point it isn't the workers that are being unreasonable. And I'm really curious what you think that point is? What defines who is being unreasonable among the business owner or worker? Or is that just dictated by which socioeconomic class you fall into?
The way you phrased it, it sounds entitled. But I guess the people downvoting your comment have no idea what it is to enter the workforce nowadays.
It's a bit of self-entitlement on the part of the prospective employees, and a bit of self-entitlement on the part of the entrepreneurs. The latter are rightfully mad at the government, and since they're in it for the money, they try to save as much money as they can. I'm not condoning these practices, I'm just saying that, when everything you earn from January to June goes in taxes, I can understand them trying everything they can.
Comparing to the rest of Europe businesses in Poland pay relatively low taxes, youth unemployment is below the EU average and barely anybody can afford to turn down a job opportunity.
I don't see how anyone could think economic growth, entrepreneurship and wage growth is possible when employment taxes are 100% (of salary) and people are encouraged by their accountants to spend just the right amount of effort cheating on their taxes. Add to this a corrupt, purpose-bred government class that consists of people who never held a normal job in their lives.
The EU should get on this problem with considerably more effort.
I don't know if the solution looks so simple to me (lower the fucking cost of labor already) because I don't know anything about economy, or because someone is interested in maintaining this status quo.
Specifically, the issue I have in mind is the commonly shitty way that trades are viewed (and trades people not seen as educated). Like plumbers, carpenters, hvac professionals, metal workers, etc.
My understanding is that there isn't as much of a divide or poor view of those paths in at least certain parts of Europe. Germany comes to mind, but I certainly could be wrong.
In many professions they also don't properly value experience (fresh graduate, with a degree), but that's another issue.
Which means your strategy should be going to school so no one gets on your case while you develop your product. And use that school to gather connections and talent. Foregoing school before you have even a mostly developed idea is idiotic. Not saying people didn't make it, ~2000 is a pretty large pool to draw from.
But then again, when you're with people who say that, the right move is to get the hell away.
Ps. They already had money ;)
Not that there is no value in university, but I think in many cases the large financial and opportunity cost does not lead to any great improvement in useful skills.
Respond with:
"And if only you were dyslexic you might be running an RND department at IBM instead of doing whatever you're doing now."
Being middle class has value, being upper class has value, being rich has value, having a degree has value, having provided a meaningful recognisable addition to human development has value. It's so easy to have such a number drop to 50% or to zero even, without changing anything about your value, your opportunities etc. For instance if Elon Musk lost all his money tomorrow you bet he would still be able to attempt another huge project next week. But if I give you one billion dollar, you might still not be able to start a project of the same size, because you miss the skill, connections, track record etc.
The most important thing to worry about is actually doing something valuable for the people around you. The more people you can influence positively the better your life will become as well.
Example: In my country there's a start-up that tries to revolutionize the train system. All they achieved was to repair one second-hand train, rent the railway slots to drive once up south to north and once down north to south, a few days a week. Then they ran out of money.
But! It really influenced a lot of people positively, made great press, showed strong customer engagement. So even after going broke they were able to continue after a short break, because someone bought them. No money, no profit, loads of way-too-hard-work nobody else wants to do. And still they are able to get this working, because they provide something provably valuable.
It can be considered a subtle difference, but it's the point I'm trying to make. Stop worrying about the number "one billion US dollars" and instead start worrying about becoming rich.
Also,
> It's possible to be a billionaire on paper and starve to death.
Can you provide an example?
If you have a billion dollar on a bank account with a bank that would cash that amount of money, then I'd say yes you are rich. But the Forbes list is mostly guessed values that are used in calculations, based on real but unknown values that may change a lot between one day and another.
I hope that was the point. If not give me some hints or explain your point of view more detailed. I wouldn't be surprised if we find out that we actually share the same view but express it differently.
Yes, the Forbes list is different.
And yes, erikb's point about being a billionare is strange, because not many people would consider anyone a billionare just because someone funded a company with nominal value 1B$.
However, erikb is right, that rich people have cheap access to enormously powerful success multipliers. (They can very realistically - almost literally - get a cheap loan from any of their dad's neighbour, or get in touch with anyone, and so on.)
While "possible", the kinds of scenarios that lead to a starving billionaire are the kinds in which _everyone_ starves (ie widespread famine). If one's paper is actually worth $1B there are some sane people who would pay a large sum to buy it for a discount. Say $500M. I would argue that billionaires are able to live fundamentally easier lives than non-billionaires and most difficulties they face can be solved by 1) paying money or 2) accepting sub optimal outcomes (eg, not working on their business to make it outperform the S&P 500).
I do agree with a good chunk of your sentiment about socialized skills that allow the elite to recognize and interact with each other and the basic idea that managing large amounts of money is not fraught with perils (scammers, sales people, poor advice, open hands wanting "their share"). A simple example of that is lottery winners. They know how to spend millions, but not now how to make it last or make it work.
And the more power you hold, the more people want it. Competitors, colleagues, employees, spouses and children. I have seen many rich people have their wealth ripped apart with years of family squabbling.
The optimum to tweak for is freedom, not wealth. You want the freedom to not work, but with great power comes great responsibility. The optimum may be a little less than being a millionaire. Billionaires possibly push far beyond the optimum. Many wake at 4, lacking the freedom to have a lazy Sunday or to just diss Zuckerberg on Twitter without it being sensationalized.
But is it far better than the life of the upper middle class?
People have lots of problems in life. Money solves a minority of them.
>Money solves almost all of them.
Capitalist propaganda.
If it did, I wouldn't find rich people who have more problems than I do. Definitely would not swap places with some of them.
Sure: If you take the same two people with the same intelligence, skills, and problems, having more money likely helps. But that's not the reality.
Given any random two people - one in the upper middle class and one very rich - perhaps on average the richer one will be a bit happier. But if you give me any random rich person, it'll be trivial for me to find a happier upper middle class person.
The difference in happiness is not huge, and the variance is high.
http://longorshortcapital.com/four-simple-steps-to-becoming-...
) Be the 1 out of 500 million for whom it pans out. This one is key so focus on it.
Russ: What? No, I It's for me. I bought this for myself to celebrate you guys helping me get back to a billion. That's why I came here, to show it to you. To say thank you. I'm not an * * * * * * *.
Dinesh: You drove here with a bow on it?
Russ: No, I put it on after I parked.
By the end, I was pretty much burnt out on this data set to draw many strong conclusions. Still, you busted some myths and flagged some interesting observations for further research. Thank you!
P.S. Oops, I realize the OP is not the author, but cool nonetheless.
I also reknit and uploaded a pdf version, it just doesn't look as pretty. http://robterrin.com/MissingData/Final_Project.pdf
This looks like a regular degree distribution: https://theartandscienceofdata.files.wordpress.com/2017/06/b...
It looks to me like the distribution of degrees among the billionaires skews higher than the general population, according to this: https://en.m.wikipedia.org/wiki/Educational_attainment_in_th...
Your point is super important too, because it's extremely unlikely that level of education has anything to do with being in the top 0.01% of the income distribution.
The article's "AI data" that says a bachelor's degree is 6% important is sort of meaningless. He's measured the relative correlation of variables, among only billionaires. It's still true that only 0.01% of bachelor degree educated people get there, just like only 0.01% of dropouts get there. We can't talk about how important education is to getting there until this analysis is done on the general population.
Citation?
Rosebud here!
I am overwhelmed by all the responses. I never expected the blog post to garner this much engagement! Thank you so much for all your comments and all the reads.
Let's keep talking.
It could mean that. It could also mean inflation. The threshold of 1B is worth less and less every year, so the number of billionaires is expected to go up every year, skewing all data toward today.
I understand the author is using hyperbole here, but it's a little ridiculous to write that no one wants to have vacillated between billionaire and near-billionaire.
It should be pretty obvious that LUCK is a huge factor.
It's that age old saying... how does it go? "Success is when preparation meets opportunity." Bill Gates got rich because he was the right guy, at the right time, with the right (completely unfinished vaporware) product when IBM needed an OS.
Most of the new billionaires are techies. Techies that happened simply because the world became tech oriented. Surprising... nobody. There are entire billionaire families from previous "Rushes". The gold rush, oil rushes, wall street, RAIL ROAD TYCOONS, etc.
There is no scientific way to guarantee billion-dollar wealth, only correlations. And the only data I see from the article is: 1) There's more than one way to skin a cat. Some dropped out, some got Ph'ds, many stayed in the middle. That doesn't matter. Wherever you are now, you can start working. 2) Luck matters. You can be successful but the chances of you exploding is fractions of a fraction.
I think that there is more to learn about life from a bum on the streets than from a billionaire.
I've learned that a lot of millionaires are not very intelligent; they're just incredibly persistent. They can do the exact same thing, despite failure, for nearly a decade and end up gathering a reputation for it. Whereas most people would just give up and change careers in the middle. There's also an element of luck here - Bubba Gump comes to mind. But sometimes luck is just being in the right position at the right time, and there is a methodology to being in that position.
Everybody and everybody's mum has a 'prepared mind'. The kind of basic level of intelligence that's required for earning a billion dollars is extremely common among the general population. Billionaires are not geniuses; they have slightly above average intelligence and/or skill.
The pool of people who have 'slightly above average intelligence and/or skill' is massive. Hundreds of millions of people. On the other hand, the pool of people who are billionaires is tiny in the thousands. It's easy to see why it's a lottery.