i want to be able to prove that the less formal education you have,
the more money you make. please take the top 50 richest people in the
U.S., add up all the money made by people who have never completed
college, and compare it to the money of all the people who have
completed college. i want detailed info on this. thanks! (just trying
to prove my teachers wrong...)

also, what are the odds of one person (in the U.S.), not going to
college, and becoming a billionaire?

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Request for Question Clarification by secret901-ga on 24 Sep 2002 02:00 PDT

When you say "not going to college" do you mean that they not attend
college at all or that they have not completed at least an
undergraduate degree?

I’m going to equate “money you make” with INCOME.  Then, I’m going to
equate “richest” with NET WORTH.

Statistics are odd creatures!

Note that if the net worth of the individual is based on stock that
isn’t publicly traded (the Bechtels (?)) or if the estimate is based
on their investments in “mutual funds” or “real estate”, who really
knows what these people are worth!!!

According to Forbes’ 2002 “The Forbes 400 Richest Americans”, roughly
39%, based on NET WORTH, of the top 50 wealthiest individuals did not
have a college degree.  The notable, non-degreed persons are:  Bill
Gates, Paul Allen, Jim and John Walton, Larry Ellison and Michael
Dell.  (As I recall, Gates, Allen, Ellison and Dell did get fairly
close to graduation.) Based on my computations, the net worth of the
Top 50 is about $458 billion.  The non-degreed individuals are worth
about $178 billion.  At least, this is according to Forbes.

Fourteen out of 50, or about 28% of the individuals are non-degreed.

So, either way, most of the top 50 richest people have at least an
undergraduate degree.

I briefly looked over the Forbes 2002 list of the CEO pay.  Of the top
10, 2 didn’t have college degrees:  Ellison and Dell.  Unfortunately,
there isn’t a list that includes the income of all individuals in the
US.  Theoretically, only the IRS really knows for sure who makes the
most!

So, I’m going to guess that formal education does play a role in how
much people make and how much they are worth.  That, or who their
father was!

P.S.  Sorry, there doesn’t seem to be a web site with the actual
statistics.  So, I just did a quick C&P and made the calculations
myself.

Becky here had a wonderful comment. However, I would like to add a
couple of thoughts.

There's a big difference between the few who are immensly rich and the
rest of us:

A. Many come from well-to-do families. Prince William doesn't need a
college degree to be rich. So are many US millionairs: their family
already owned a business or the basic fortune needed to develop a new
one.

B. Those "Furtune 400" list are a minority - 400 out of almost 300
million. That means that most people don't reach this top level.
Statistically, the chances are that a given individual from a "normal"
(not very rich) family, would be similar to the rest of the
population. In the rest of the population, it is very clear that
without certain entertainers/athletes (who are, again, a rarity), most
well-to-do people have a profession that required certain level of
education (MBAs, Computer engineers, lawyers, physicians).

Sorry to disappoint you :-)

Sorry to disappoint you, but for the rest of us, the higher your
educational level, the more money you make.  See the Statistical
Abstracts of the US:
http://www.census.gov/prod/2002pubs/01statab/educ.pdf.
The 50 richest people in the US have an aggregate net worth of $488
billion.  Of the few who did not complete college, most of them were
in college when they discovered a better money-making opportunity.  I
read the Forbes 400 issue when it came out, and the only person who
stood out to me was David Howard Murdock, who was truly a high school
dropout.  With $1.3 billion net worth, his ranking was 149, hardly
enough to be listed in the top 50.

beckyp thanks for your answer, i'll listen to you ;-)

watch out for me in a couple years... i'm only 17 so i think i have a
jumpstart on everyone else whose already out of high school. with 4
extra years added to my life not having to worry about any school and
everything i already know, i think it's just a matter of time.

i've been researching this question for a long time, thanks all

well judging by the comments posted and my theory...

-90% of people go to college, and make up 61% of the Forbes richest by
NET WORTH
-that means that 10% of people that do not go to college make up 39%
of the richest
-doesn't that conclude that, using the formula 90/61 * 39/10,
no-college people are 5.75 times more likely to be rich?

please correct me if i'm wrong... thanx

You're using a fallacious argument, cwdmark,
Your sample population is "the 50 richest people in America," thus the
chance that ANYONE in your population is rich is 100%!  Thus, in your
sample, non-college-people and college people are equally likely to be
rich.
To get an accurate idea of the chance of a non-colleged people being
rich, you'd have to get the number of non-collged people who are rich
and divide it by the total number of non-collged people in the US,
which I think would be much lower than the chance of a colleged person
to be rich.  If you perform a test of significance with the null
hypothesis that the chance of a non-college person is equally likely
or more likely to be rich than a colleged person, your null hypothesis
will be rejected.  Alternately, you can test with the null hypothesis
that non-colleged people has a greater or equal income to colleged
people; this one will be rejected as well.
You can read the statistics about how much people with certain
educational levels make here:
http://www.census.gov/prod/2002pubs/01statab/educ.pdf in page 140.
The chance of anyone becoming a top 400 richest people in the US is
currently 400/288,124,561, which is extremely slim.
As a college student, I urge you to go to college.  It is virtually
impossible for anyone to become rich without a college education
nowadays.
secret901-ga

I think one of your problems, cwdmark-ga, is that you've decided on
your conclusion before you've started, and want to create an arguement
to back it up. That's why college is good for you. You are trained to
think and reason :)
.
However, there are some additional reasons and statistics you can look
at. Firstly, the Forbes 500 and whatnot is not a good place to start
looking. People on the Forbes 500 list made their fortune by very
clever entrepenurial behaviour, or they've inherited the family
business. Either way, I'm not sure that's how you're going to become
rich. My other muse is that the billionaires that never got a degree
may have done better had they done so.
.
I'd like to provide a small profile of the wage differentials.
.
A high school graduate, over the working life, earns a peak earning of
$38,340. A graduate with a 4 year degree earns a peak of $66,063 and a
graduate with a higher degree earns an average peak of $107,799
(http://www.census.gov/population/www/socdemo/educ-attn.html)
.
A graph of the relationship between educational attainment and average
lifetime wages can be found in the book "The Economics of the Labour
Market", 5th edition, by Bruce E. Kaufman and Julie J. Hotchkiss.
.
There are many arguements as to why education generally leads to
imrpoved average earnings. But I can think of none against education.
Is it just that you don't want to go to school, and want an excuse? ;)
.
Educational levels are also strongly correlated with the wealth of
nations. A recent study (which I cannot remember the source, bad me)
showed that while the average wage in the US was 10 times greater than
the average Malaysian wage, it also showed that the average
productivity in Malaysia is 1/10th that of US workers. India,
Pakistan, all of Africa, have poor educational systems (in the areas
where they exist), and not surprisingly, wages are low.
.
In short, school is good for you. And yes, I'm a college student :)

Hi, Did any of these comments answer your question? If so could you
please let us know or close it, we would like to make sure that your
quesion is answered, but don't want to offer a Researcher answer if
you no longer need the research done.

Thanks, 

webadept-ga

Swing by Pakistan. Rich doesnt mean high income. Wealth makes on rich
also.
Provided wealth is liquid enough. 
We have loads of simpletons here, whove lived on villages and cant
speak a word of english.
Yet, they are multi millionaires. 
how??? Land I say

To tell you the truth, I think you're all just trying to draw a
comparison between two arbitrary occurrences. How many wealthy people
eat eggs? A whole lots baby, but eating eggs isn't going to make you
wealthy.

Simple fact, it all comes down to initiative. If you want to focus on
"degrees" then, yes, I would say sticking through college and earning
a degree goes hand and hand with "initiative"

Said that, there are alot of people (Gates, Dell, Ellison...) who
simply put, HAVE INITIATIVE. Nothing can stop their drive, not
education, or lack of it.

You could be the smartest person in the world, but you're not going to
make money sitting on the couch eating bon bons and watching "Simon
and Simon" re-runs.

I think people (rightly) try and draw correlations between the outcome
of education (i.e., degree, etc...) and income.

This is flawed logic, for the pursuit of education is "driven" by a
force, a force likely to not need a degree in the first place.

Said that, unfortunately in the US today there are many jobs that have
a prerequisite of a degree, so again, an issue that can taint the
answer to your question.

HTH
pjordan