Millionaire Dropouts and the Educational Process

Millionaires (this includes billionaires) who dropped out of high school or college are often invited to universities to speak to students, sometimes to give commencement addresses. A famous (and entertaining) example is that of Bill Gates speaking at Harvard. Recently, Adani spoke at one of the prestigious Indian Institutes of Technology.

More recently, a relative of mine told me that an alum (who had flunked the 11th grade) of his daughter's school had been invited back to speak at her school. A lot of people, including my relative, ask me - what is the point of education if one can become a millionaire without even clearing 11th grade?

This post is aimed at discussing this question. For the sake of argument, I will break the discussion up into smaller pieces.

1. Is it easy to become a millionaire? I would not say it is easy, but it is not as hard as one might think. Of course, a lot depends on variables such as the person's background - if they are born in extreme poverty then they may find it difficult to become very rich; if they are born in a millionaire's family, wealth is likely almost automatic.

   
   

   But let's look at the numbers - Google says there are 58 million dollar-millionaires in the world today. This is about 1.5% of the global adult population. The chances of becoming a millionaire are therefore small, but not astronomically so.

   
   

   On the other hand, there are only about 3000 billionaires in the world today. That's about one ten-millionth of the world population. So a real measure of extreme financial success might be the achievement of billionaire, rather than millionaire status.

   
   

   Still, flunking 11th grade and becoming a millionaire seems to present a dramatic counterexample to the necessity for education.

   
   

2. Can everyone failing 11th grade become a millionaire? This question can be settled by making a list of all 11th grade dropouts and counting the number of millionaires in that pool. I invite the reader to confirm that the answer is no.

   
   

   The fact is that achievement of millionaire status depends on many factors, including some luck, and is not exclusively inversely correlated with education (otherwise we should just shut the high schools down after 11th grade; or force our children to fail).

   
   

   In fact, Google says:

   
   

   "Approximately 88% of millionaires have a college degree, according to a comprehensive study by Ramsey Solutions. This is significantly higher than the general population, where only about 38% of people have a college degree. The study also found that 52% of millionaires hold a master's or doctoral degree, compared to just 13% of the general population."

It also says that about 70% of billionaires hold at least a college degree.

These facts imply that although a significant number of currently wealthy folks dropped

out of or never attended college, they are still in a minority. Going purely by the

numbers, the probability is much higher that you will become a millionaire if you have

an advanced degree. Millionaires and billionaires are, on average, actually better

educated than the rest of the population.

We get to hear more about dropouts like Jobs, Gates, and Zuckerberg because they

provide dramatic examples. For every such example, if the numbers are correct, we can

find multiple counter-examples: Jeff Bezos graduated Princeton for college, Warren

Buffet has a masters degree, Elon Musk has two bachelors degrees (though Buffet and

Musk both argue against the need for higher education), Larry Page has a masters,

Sergey Brin has a masters (although Page and Brin both dropped out of the PhD

program at Stanford).

3. Does dropping out of school indicate the end of education? Typically, those who dropped out of high school, college or PhD programs and became millionaires climbed a learning curve as steep or even steeper than they would have in conventional education.

   
   

   Musk spent enormous amounts of time learning about coding; Adani worked first as a diamond sorter then as a manager of a plastics factory (he believes he would have benefited from more formal education); Gates still reads one book per week and watches lectures constantly.

   
   

   I will end this part with a quote from the late Charlie Munger, Buffet's partner at Berkshire Hathaway: "In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time—none. Zero. You’d be amazed at how much Warren reads—and how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out."

Conclusion

Formal education provides knowledge, practical experience brings wisdom. Being educated is helpful, because then you know (much) better what you are doing. In either case, you cannot afford to stop learning. Even if you are a (m,b)illionaire.

Afterword

I am currently reading David Nasaw's biography of Andrew Carnegie, the Scottish born American billionaire (his legacy includes Carnegie Hall, Carnegie-Mellon University, the Carnegie Endowment for International Peace, etc.), who in the early 1900s was perhaps the richest person in the world.

What I find remarkable about him, in addition to his tremendous business drive, was his great worry and obsession about being educated. He read the great authors extensively; wrote complaint letters to the Pittsburgh municipality about underfunded public libraries when he was still poor; took off to visit museums, galleries and monuments in Europe the first thing after becoming financially independent.

I hope to review the book, in the near future, on this site.