Bill Gates and Mark Zuckerberg dropped out of Harvard University. Steve Jobs dropped out of Reed College. They are all iconic billionaires. So if you want to be a billionaire, you don’t need to go to college, right?
Well, not exactly. But of course it depends on who you are.
In a recent Forbes article—The scary smart are the scary rich: Examining tech’s richest on the Forbes 400—I examined whether the 48 American tech billionaires on that list were also in the top 1% in brains. It turns out the majority of them were, and 47 of them had gone to college demonstrating that they were nearly all highly educated. The one person who did not attend college, Sean Parker, was a child programming prodigy.
What about the brainpower and education level of the American billionaires outside of the technology sector?
Using the same methodology and the Forbes Billionaires database, I examined the link between billionaire status and brainpower/education level across American sectors that had sample sizes larger than 25.
Here is the methodology:
“I have assessed whether the following people are in the top 1% of intellectual ability simply based on the school that they were admitted to as an undergraduate or graduate student. Attending an elite undergraduate or graduate institution requires a certain test score level, which according to Charles Murray in his book Coming Apart: The State of White America, 1960-2010, translates into an IQ score well within the top 1% if the institution has high enough median scores. According to Murray, “the average graduate of an elite college is at the 99th [per]centile of IQ of the entire population of 17-year-olds.” As a reasonably select cut, any school within the top 12 national universities or liberal arts colleges according to U.S. News & World Report rankings were categorized as “elite” and in the top 1%. In addition, Oxford and the Indian Institutes of Technology are among the most selective universities in the world, so they were also included as elite. Any school not in the elite category was labeled “excellent” as these schools are obviously quite good but likely do not have quite as high average standardized test scores. (For more on how a standardized test score can be translated into an IQ score, visit here.)”
In the figure above (which includes data on 332 American billionaires), attendance at “Elite Schools” (blue) indicates top 1% in brains status. The designation of “Graduate” (red) indicates a graduate degree and likely top 1% in brains status. “Bachelors” (green) indicates college attendance. “No College” (purple) indicates no college attendance.
Brainpower was greatest for Technology and Investments and least for Food and Beverage and Fashion and Retail. This illustrates that you don’t have to be quite as smart and/or educated to become a billionaire in the latter compared to the former sectors.
However, the major take home message is this: Nearly all American billionaires attended at least some college with the vast majority of them graduating from college. So if you want to be a billionaire, this analysis would suggest that to maximize your chances you should not drop out of college.
Unless, of course, 1. you have a Thiel Fellowship, or 2. you are the next Gates, Zuckerberg, or Jobs and the opportunities presented to you are simply too good to resist.
© 2012 by Jonathan Wai.
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