Why Do So Many Billionaires Drop Out of College?

by STEVE BLOOM

Mr. Franklin - El Señor Franklin

Bill Gates and Mark Zuckerberg both dropped out of Harvard.  David Geffen went to college for only three semesters before leaving.  Ralph Lauren, Ted Turner and Steve Jobs are others who dropped out before getting their bachelor’s degrees.

All are billionaires; all are college dropouts.

The actual list of billionaires has even more college dropouts.  According to the Forbes 400 list of billionaires, 63 earned nothing past a high school diploma.  And the bulk of these people earned their way onto the list rather than having inherited their wealth.

So what do these people do that allows them to build up such a vast empire with so little formal education?  What kind of life lessons can we learn from their stories?

The Decision to Drop Out

The billionaire dropouts are obviously doing something right.  When you average their net worth, it comes to $9.4 billion.  In contrast, the average net worth of billionaires with PhDs is $3.2 billion.

There are also more college dropouts than PhDs on the Forbes 400 billionaire list – 63 to 21.

Why are there so many college dropouts vs. PhDs on the list?

Most people look at these numbers and argue that it is a reflection on the educational system.  Perhaps the formal education system is dead or a waste of time.

It’s a simple conclusion.  But like most things in life, it’s not that easy.

Pointing at formal education falls apart when you look closer at the numbers.

There are only 2.5 million people with PhDs in the United States.  There are so many college dropouts that I wasn’t able to find an exact number anywhere online, but it is in the tens of millions.

You have to factor in an extremely high number of college dropouts and the relatively fewer PhDs in the country.  When you take these numbers into account, you see that you’re actually increasing the likelihood of becoming a billionaire by getting a PhD.

In fact, most people who drop out of college don’t do well.  Their average salary is much less than someone with a bachelor’s degree.

College dropouts becoming billionaires actually says less about the educational system than most people realize.

It’s not about education; it’s about who these people are.

The people who drop out of college and become billionaires have something about them that drives them to become successful and rich.

So what can we learn about these people that got them where they are?

The Two Types of Billionaire Dropouts

From the billionaire dropouts I’ve looked at, I’ve found that they generally land into two groups.

The first group left college because they had a specific product or business plan they wanted to pursue.  They had a vision of what they wanted to do and didn’t want to wait until after graduation to take action on it.

These are highly innovative people who clearly knew what they were going to do once they stopped going to school.  People like Mark Zuckerberg and Bill Gates who formed Facebook and Microsoft respectively fall into this category.

Some people in this group were already making a lot of money off their ideas before leaving college.  Michael Dell was already selling about $80,000 worth of computer kits a month before he dropped out of the University of Texas.

This group mostly relied on vision and innovation to drive them.  They knew what they wanted to do, already have the skills to do it and didn’t want to wait for a college degree.

The second group didn’t leave college to form a business or product right away.  Their path was similar, but different.  They established themselves in lucrative industries and worked their way up.  After several years of hard work and a few well-timed risks, they formed their own companies.

People in this group include David Geffen who worked in the entertainment industry for ten years before starting Asylum Records.  Ralph Lauren worked in the fashion industry as a salesman before opening his own store and finally a successful menswear line.

After Ted Turner left Brown University, he worked at his dad’s advertising company.  When his dad died, Ted took over and built the company up even further.  He diversified into radio stations, then television stations including CNN and even the Atlanta Braves baseball team.

This group hustled their way to success.  They found lucrative industries with vast potential for growth and put themselves right into the center of them.  Once they gained enough experience, clout and power, they made a series of well-timed risks that paid off.

Both of these groups tend to have these characteristics:

  • Clear vision for their future
  • Know what they want to do and where to go
  • Strong work ethic/Hustle
  • Want things done right away
  • Risk-taking attitude
  • Innovative or willingness to disrupt the status quo
  • Good decision-making skills

You can see the hard work ethic in Ralph Lauren when he strived to sell his first design to Neiman-Marcus.  It’s also there in Mark Zuckerberg as he built up Facebook.

Ted Turner disrupted the status quo through innovation by establishing CNN, the first 24 hours news network.  Bill Gates and Steve Jobs are also renowned for this trait.

The fact is that all of these billionaire dropouts share most or all of these characteristics to some extent.

They used these powerful characteristics to their advantage.  It made them a formidable presence in their industries.  None of them might have actually had a formal college education, but they had already learned this lesson: how to get places.
photo credit: Tetsumo

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Comments

  1. kaylee tietz says:

    i dont like your new entries it seems to me they are getting meager and piontless……not trying to be hurtful i genuinely enjoy this sight and check it regularly :)

    • Hi Kaylee, I’ve been taking a lot of risks lately on the type of posts I write about. Some of them have paid off well and others haven’t. I’m always trying to expand what I write about here so I keep things fresh. I appreciate your feedback. If you have suggestions on what you want me to write about or what posts you like and want to see more of, you can always email me.

      • kaylee tietz says:

        Hey steve! I think you should write more about how to conquer negativity I beleive you might have one but im talking more severe sort or maybe more on what exactly is the piont of our lives, which is hard because everyones is different, I think one on the importance of listening to everything will be beneficial, like how other people and music or speeches or anything really can have a major effect on peoples lives. You are a great writer, thanks to all of your entrys :)

  2. I think the key word in this post is “hustle.” They all have it. I would dare say that all self-made billionaires, college dropouts or not, have a neverending supply of hustle.

    Hustle is what gets them taking action after action. Risk after risk. It’s what sets them apart from the rest of us non-billionaires.

    Among other traits, I’m sure.

    If I could have just one trait of the billionaire (besides his money) it would be his hustle. Because a little hustle goes a long way.

    Cheers!

    • There is a good argument to be made for hustle. The people who tend to do well keep going. They never stop. Even when they are finishing one thing, they immediately start the next one. That’s a really good trait.

  3. I agree with Trevor’s analysis. That “hustle” will make people successful, whether they have a degree or not, if they can focus it on the right thing. That is the trick. I know people that work incredibly hard, but in a field that doesn’t take hold, and they take the defeat personally. It is the ones that truly view setbacks as learning opportunities that make it.

    • That’s a great point. View setbacks as learning opportunities and don’t take them personally. What you choose to focus on can help with that. I read somewhere once that it’s harder to not take things personally if you’re in a creative field. But no matter what you focus on, hustle helps.

  4. I’m with Trevor and Tammy.
    that Je ne sais quoi that these billionaire drop-outs have is “HUSTLE”. And also the foresight to see something where someone else saw nothing and to capitalize on that. I used to be a keen believe in college and university but these days with the internet, you cna learn so much on your own that it may not be necessary for EVERYONE. Yes doctors need to go to university but I know lots of computer programmers and designers who just learned as they went. I wish i had dropped out of college sometimes.

    • It’s true that you can learn a lot online. The shift to needing a university education is definitely happening. After all, there are so many degrees and classes you can take online that will give you the same amount of information/education that you would get in a college classroom.

      But this assumes that people will actually go out and get that information. I know too many people who wouldn’t learn college level material unless they actually had to go there.

      I’m with you though about needing to go to college though. I could have found most of what I learned online or from the library. I sometimes wonder if it was worth it.

  5. Interesting read, Steve! In my opinion, I think it’s about taking chances and forging your own path rather than relying on typical ones.

  6. Hey Steve,

    interesting article but I guess the stat I’d really like to see is dropouts vs degrees.

    Phd’s I think are something quite special for academically minded with degrees being the main further education qualification most people in the world of business care about. Could be just my opinion.

    Do you know what that 63 to 21 stat is for dropouts vs degrees?

    hope all is well,
    take care,
    Alan

    • Alan, you can find that info in the link at the beginning of the post. Here are the numbers: High school only – 63, law degree – 35, Masters of science -29, PhD – 21, medical doctors -5.

      Those with high school only degrees are still the most represented group.

  7. I’m SOOOO glad you took the time to take the nuanced view. It pisses me off so much every time I hear the advice that “Bill gates did it, so can you” etc… advice that dropping out of college is okay.

    Those people had “it” – the hustle, the drive, the vision – for them college was unnecessary. But let’s not forget they also had luck. Monetary success is a gamble – for every college dropout who tried and made it, there are many more who failed. Education helps to equalize away some of the chance and luck. But I think it does so on both ends of the distribution – it makes you less likely to fail (e.g. poverty), but also less likely for astronomical success (e.g. because of indoctrination and sucking away of passion).

    • Yeah, it bothers me when people dismiss education outright just because Bill Gates did it. I always suspected people discounted education way too easily. It’s usually not that simple.

      It really about what qualities these people have. Education or not, these people were going to do well. Of course, luck comes into play too. They made a few good gambles. That’s what comes with being a risk-taker though. You take a few chances and take advantage of the ones that do well.

  8. Great article Steve!

    I had long noticed that there seemed to be a strong correlation between highly successful people and school college dropouts. I always have disliked school, so obviously this intrigued me even more.

    I really enjoyed the way you broke the billionaires into two categories!

    Have a nice day!

    • I’m glad you like the post, Gabriel. I’ve heard so much about the correlation between big money-makers and being dropouts that I thought I would explore the topic. I thought it was interesting what I found.

  9. I have always been a strong believer in “It’s not what you know, but how you use it”, in other word’s, have a college degree can be a great advantage and can set you up for both a very enjoyable and financially rewarding career. But unless you know how to apply you knowledge to something useful, or even use it to create your own business like Bill Gates or Mark Zuckerberg, than it can very often be pretty useless.

    • Being able to apply what you’ve learned is certainly beneficial. Having good information is only half the battle. It’s also important to know how you can use that information too.

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