This article is on how to get rich. Your chance of being a self-made millionaire has increased dramatically in the recent decades. Just follow these five simple rules on education, technology, global competition and capital. Each rule is followed by a dangerous myth that pervades our culture and may cause you to choose the wrong path. These conclusions are based on findings of multiple researchers, some using the Forbes database on the richest people in the world.
Rule 1. Go to college, stay in college
Myth 1. The wealthiest people in the world are college dropouts.
Steve Jobs and Bill Gates are the exception. The wealthiest are more likely to have completed college than to have dropped out. Dave Lavinsky, a Forbes Contributor, says “93 percent of top entrepreneurs attended college, compared to 42 percent of Americans aged 18 to 24 who are/have attended college.” Lavinsky adds that a lower proportion of millionaires dropped out. Only 21 percent of top entrepreneurs dropped out before finishing compared to a 33 percent rate of dropouts among the general population. Jonathan Wai, Duke University, in two academic studies confirms that billionaires in the U.S. and throughout the world are disproportionately highly educated and cognitively able.
Rule 2. Don’t pass up grad school.
Myth 2. MBA is a waste of time and money.
A Harvard M.B.A. means nothing to investors says Inc. Magazine’s Ilan Mochari. On the contrary, Dave Lavinsky finds that 15 percent of the top entrepreneurs have MBA’s compared to five percent of the general population. Wai found more of the world’s most powerful attended an elite college, but also showed that self-made billionaires tend to have graduate degrees
Rule 3. Go for the world.
Myth 4. Buy local.
As income around the world increases and everyone, especially the superstars of the world, are able to create a global brand and sell more stuff to more people. Professional entertainers, athletes, corporate CEOs and Internet pioneers all benefit from selling to a global market. This is explained more fully in, “Why the highest paid people make so much money.” Buying local can never be sustainable given the competitive advantage of geography and economies of scale.
Rule 4. Leverage technology
Myth 4. Fear technology
Get your degree in business or STEM (science, technology, engineering and math), says Wai. Apply your skill to a scalable industry such as technology, finance, or mass retail say Steven Neil Kaplan at the University of Chicago and Joshua Rauh of Stanford.
Use technology to gain a competitive advantage. Many researchers say it is the driver increasing the spread in high to low pay. Robert Frank, a Cornell University economist, theorized as early as 1995 that new technology such as cell phones and email will give the advantage to the best sales person, doctor or lawyer to “handle a much larger share of the load than before," adding "It's a real bad time for mediocre people." Twenty years later, we see the highly successful celebrities, performers, professionals and politicians leverage technology to gain market share.
Rule 5. Own the business
Myth 5. Fear failure
Fully two-thirds of Forbes wealthiest started their own business in 2011 compared with only 40 percent in 1982. Better yet, today’s millionaires are making it on their own, as opposed to inheriting their wealth, say Kaplan and Rauh. Most of the new breed of millionaires grew up in middle-class families, they say.
These rules apply across the world, almost
Wai says education and being cognitively able are the keys to success in all the world’s countries except China or Russia. Almost all of the 105 billionaires in China and Russia are self-made but do not have college education. Women throughout the world did not fare as well in becoming globally elite, although he did find eight self-made billionaire women in the U.S. and five in China.