Facts about rich people

by on September 17, 2007 at 7:14 am in Data Source | Permalink

In the first Forbes 400 [1982], oil was the source of 22.8 percent of the fortunes, manufacturing 15.3 percent, finance 9 percent, and technology 3 percent.  By 2006 oil had fallen to 8.5 percent and manufacturing to 8.5 percent.  Technology, however, had risen to 11.75 percent and finance to an extraordinary 24.5 percent.

And get this:

The average net worth in 2006 of Forbes 400 members without a college degree was $5.96 billion; those with a degree averaged $3.14 billion.  Four of the five richest Americans — Bill Gates, casino owner Sheldon Adelson, Oracle’s Larry Ellison, and Microsoft cofounder Paul Allen…– are college dropouts.

Both are from the quite engaging All the Money in the World — How the Forbes 400 Make — And Spend — Their Fortunes, by Peter W. Bernstein and Annalyn Swan.

In inflation-adjusted terms, here are the richest Americans of all time; Bill Gates is #13.  Here are graphs on California vs. New York.

sammler September 17, 2007 at 7:47 am

Since Bill Gates’s wealth, at its peak, was $87 billion instead of the present $55 billion, there is clearly a problem with the table of richest Americans. Do they not apply their method to the living?

odograph September 17, 2007 at 8:42 am

Shefaly, I went through a California State University in the late seventies and early 80′s, flirting with a Masters in Computer Science.

Actually, I’ll pause for a story about that: In an upper level computer science class, an instructor with a heavy Greek accent said (circa 1982) asked the class “who is here because they want to be rich like Bill Gates? Raise your hand.” You know, by upper level classes most students are experienced enough not to raise their hands for anything … but one person did. The instructor said “Get out of my class!” Everyone was shocked. We thought initially that he was some kind of socialist ;-), but then he said “If you want to get rich like Bill Gates you don’t need my class, you just go do it.”

Now for me that doesn’t say you should do away with the University, but by all that is Holy, the University should have changed by now. It should have gone “virtual” to some degree and required less physical presence for the simple stuff.

(I’m also with those who think some kind of feedback between the college loan industry and academia caused something else entirely to happen.)

spencer September 17, 2007 at 10:49 am

Interestingly the changes in the wealth shares by industry roughly coincides with the changes in the composition of the s&p 500 over the same era.

kebko September 17, 2007 at 11:30 am

Here’s the same list of wealthy Americans, presented in a different way.

http://www.nytimes.com/ref/business/20070715_GILDED_GRAPHIC.html#

John Dewey September 17, 2007 at 1:05 pm

Shefaly; “I think it will take more than a few stories to convince me that college education has no value. ”

Not sure how anyone can argue against the value of a college education. In the U.S. in 2005, median earnings for graduates of four year colleges was 63% higher than median earnings for men with only a high school education. The gap was only 19% in 1975.

Median earnings of similarly degreed women was 70% higher than median earnings of women with only a high school education. The gap had been only 37% in 1975.

Education Pays

josh September 17, 2007 at 1:38 pm

Some people argue that education is socially costly signaling.

Shakespeare's Fool September 17, 2007 at 3:53 pm

http://www.nytimes.com/2007/09/16/magazine/16epidemiology-t.html?pagewanted=1
= http://tinyurl.com/2j6u5x

Having read the New York Times article on medical
research this morning, I am biased to be skeptical of
the research that purports to show that a college
education leads to increased wealth.

Certainly higher incomes and college education are
correlated. But that may not be causation.

John

odograph September 17, 2007 at 4:26 pm

Hi guys, didn’t check back until just now.

I’d say that the people who answer me argue against things I didn’t exactly say. I didn’t say college education was worthless, or that face-to-face interaction had no value.

The question is how well the balance is made, and should be made in the future. Has anyone done serious “refactoring” (to borrow from my domain) in university education? Could or should degrees be reduced to “skills for lifelong learning in an information rich environment?”

Or have the loan folks aligned with the tradition folks to ensure that 200 freshmen sit in a single classroom (face to face, but 1:many)?

(I think a lot of the tradition descends from Colleges being islands of knowledge in an information poor environment. Then, you didn’t want to leave college too soon, because you were leaving the knowledge behind.)

odograph September 17, 2007 at 4:47 pm

Would college help you with your reading comprehension there John? Or lifelong learning in an information rich environment?

And I quote:

“Could or should degrees be reduced to ‘skills for lifelong learning in an information rich environment?’”

odograph September 17, 2007 at 5:42 pm

Sorry, I thought you were picking out “no college” from a post about “different college.”

We live in an age when high schools build supercomputer clusters and high schools compete in DARPA challenges. No doubt some companies would rank a 4 year degree before a DARPA win, but not all would.

I don’t think we’re really explored what a 21st century degree should look like. I’m sure some people motivated can do without the college degree, just as they always have done, but companies will also look for something that certifies a student as proficient in unstructured advanced learning.

How long does it take to learn the core of a field, and then the unstructured advanced learning to advance in it?

Is it more that tradition that makes 4 years “magic” in 2007?

odograph September 17, 2007 at 6:42 pm

“I wouldn’t want engineers building our infrastructure if they had less than the traditional 4.5 year engineering program.”

You wouldn’t want your infrastructure designed by fresh college graduates either. Speaking from that experience, what you need from school is to understand the principles, and then to learn the systems are in place at the firm you join (in my case emergency room medical diagnostics).

Floccina September 18, 2007 at 9:21 am

If you look at school as a big test then the value to the individual is large but the value of sending all these people to college may be small or negative.

Also if you are to judge the value of sending all these people to college you need to be sure that you that you take into account that many of the people who did not go to college could not go or where not as motivated as those who went or who where more rebellious than those who went. All of these things make them different than those who go and could cause them to have more success in earning money.

IMHO there is huge waste in sending all these people to college in the age of the internet.

Tongue in cheek: If you want face to face interaction offer to buy Tyler lunch at his choose of place next time you are in the area of GMU, as I intend to. End Tongue in cheek.

Really hire a tutor for a one on one session now and then.

Floccina September 18, 2007 at 1:12 pm

What do you mean when you write “all these people”?

Over 50% of high school grads now start college.

“Does anyone really think that degrees in fields such as nursing, microbiology, electrical engineering, mathematics, accounting, agronomy, chemistry, music, geology, physical education, and veterinary science will be learned well without classroom instruction and labs? So what if even 20 percent of classwork could be done via the internet. Why should it? Are you folks arguing against the value of face-to-face interaction?”

On the job training, apprenticeship and tutors can cover allot of it. Most people learn more after getting out of school.

IMHO People go to books, the internet, tutors, friends, TV (discover/PBS) and for profit schools to learn things they go to not for profit schools to get credentials. Not for profit schools are all about testing and giving credentials, in fact you can go to them for free and audit classes as long as you just want to learn and do not need the credentials. I think that this is becuase they know what their jobs is. On the other hand it is tragic when people who need credentials go to certain for profit schools.

A Guest September 19, 2007 at 12:53 am

And how much of JD Rockefeller’s wealth would it have cost him to buy a TiVo HD and a 52″ 1080p LCD TV?

(Which I, who am certainly less wealthy than BillG, can purchase with about one week’s salary…)

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Blake February 16, 2010 at 2:25 am

At the age of 18 I decided to move to S.E. Asia and use the money and time I would have spent in college to start an export company. I’m now 21 and while all my friends back home in CA are 20-30k in debt from student loans, I’ve got 10k in the bank and 4 warehouses filled with products. Last month my net worth was calculated at $315,000. College is cool if you don’t have what it takes to be a self-driven entrepreneur. But if you got the kajones, by all means go make a fortune.

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