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A Data-Driven Guide to Becoming a Consistent Billionaire

• santoshalper 9y ago
  Well, I'll be sure to keep this in mind.
• tudorconstantin 9y ago
  TL;DR be an african 30 something male with a PhD and start a business in telecom
• paulsutter 9y ago
  More concise version here: http://longorshortcapital.com/four-simple-steps-to-becoming-a-billionaire.htm http://longorshortcapital.com/four-simple-steps-to-becoming-...
  • jimmies 9y ago
    You're such a troll, but I love the read, thanks for nothing.
  • singularity2001 9y ago
    ) Take outrageous risks ) Be the 1 out of 500 million for whom it pans out. This one is key so focus on it.
• robterrin 9y ago
  Thanks Rosebud! This is a cool analysis, and I really appreciate you sharing the code. There are a ton of ways to pick apart the interpretations, but I feel that you were pretty up front about the difficulties of inferring much. I can empathize with the level of data cleaning fatigue you must have felt. Here's an analysis of VC backed enterprise startups that I did for a stats class: http://robterrin.com/MissingData/index#1 http://robterrin.com/MissingData/index#1 By the end, I was pretty much burnt out on this data set to draw many strong conclusions. Still, you busted some myths and flagged some interesting observations for further research. Thank you! P.S. Oops, I realize the OP is not the author, but cool nonetheless.
  • softwarelimits 9y ago
    Interesting! Would you like to offer the slides as a pdf, the html version is broken, most slides have their content cut off by a big black frame. Thanks!
    • robterrin 9y ago
      Thanks for your interest! Press w for widescreen mode and f to go full screen. Sorry it was a presentation for class so it wasn't designed to be super user friendly. I also reknit and uploaded a pdf version, it just doesn't look as pretty. http://robterrin.com/MissingData/Final_Project.pdf http://robterrin.com/MissingData/Final_Project.pdf
  • dayve 9y ago
    yes, OP is not the author, I've sent a link to the original author to comment
• noddy1 9y ago
  Isn't "consistent billionaire" a surrogate for "way over a billion" whereas the "non-consistent billoinaire" is someone who makes about a billion? And, does any of this mean anything? who cares?
  • prostoalex 9y ago
    "Silicon Valley" S02E07, where Ross Hanneman finds out his net worth drops slightly below $1,000,000,000.
    • yyyyip 9y ago
      My doors aren't opening like an albatross anymore!
    • alexander-edge 9y ago
      To re-billionising!
    • gm-conspiracy 9y ago
      The 3 commas club.
    • davidkuhta 9y ago
      My personal favorite: Richard: (referring to the McLaren) You got this for me? Russ: What? No, I It's for me. I bought this for myself to celebrate you guys helping me get back to a billion. That's why I came here, to show it to you. To say thank you. I'm not an * * * * * * *. Dinesh: You drove here with a bow on it? Russ: No, I put it on after I parked.
• geocar 9y ago
  Erm. Bayes might have some trouble with this kind of analysis. There are around 2,000 billionaires in the world, and over a billion people living in Africa. Anyone moving to Africa with the hopes of becoming a billionaire is going to be disappointed.
• eksemplar 9y ago
  I had a month long heated debate in a eco/alternative economy political party I was a member of a few years back (I'm Danish so we're talking really liberal), about the value of education. The majority didn't value it, and as such didn't want our political program to support it. It eventually led me to leaving the party because it was just too silly for my blood. I specifically remember when I used a good friend of mine. A dyslexic CS major, as an example of how you could still have a brilliant career through education, disability training and really hard work - and it was put off by arguments like "well if he had dropped out he might've been bill gates, instead of just running an RND department at IBM". I pointed out that the likelihood of severely dyslexic Danes with no education (his age), even having a job was very low statistically, but they would hear none of it, because "most billionaires were dropouts". It would've been nice to have this data back then.
  • hvidgaard 9y ago
    > "well if he had dropped out he might've been bill gates, instead of just running an RND department at IBM". I'm unsure what it's called, but it is most certainly a bad argument. If they instead said: "Here is all dyslexic with an education and their economic impact, and there it is for those without - I believe we should do B because it's most beneficial", but that argument is hard to make - and we KNOW that education is good. It sounds more like they just wanted a lower tax, and education is a rather expensive thing.
    • mulmen 9y ago
      Education is only expensive in the short term. In the lifetime of a student it pays for itself many times over.
      • turk184 9y ago
        That was before banker class of billionaires got their greasy paws on it. Nowadays, in the US, higher education is debt serfdom for the majority of higher ed customers.
    • eksemplar 9y ago
• jondubois 9y ago
  There is no such thing as a self-made billionaire. Luck is such a huge factor that it makes the other characteristics irrelevant. I think that there is more to learn about life from a bum on the streets than from a billionaire.
  • muzani 9y ago
    There's a trick to luck: find the best set of dice for you and keep rolling them. The bums are interesting, but more so the ones that end up millionaires or billionaires. I've learned that a lot of millionaires are not very intelligent; they're just incredibly persistent. They can do the exact same thing, despite failure, for nearly a decade and end up gathering a reputation for it. Whereas most people would just give up and change careers in the middle. There's also an element of luck here - Bubba Gump comes to mind. But sometimes luck is just being in the right position at the right time, and there is a methodology to being in that position.
  • Jdam 9y ago
    "luck favours the prepared mind"
    • jondubois 9y ago
      Yeah but just because you have two legs, it doesn't mean that you're going to win the 400m relay in the Olympics if you keep trying... Having two legs barely scratches the surface; even in the extremely unlikely case that you actually make it to the Olympics, you have to account for the fact that your personal success depends more on your team's performance than on your own performance. Everybody and everybody's mum has a 'prepared mind'. The kind of basic level of intelligence that's required for earning a billion dollars is extremely common among the general population. Billionaires are not geniuses; they have slightly above average intelligence and/or skill. The pool of people who have 'slightly above average intelligence and/or skill' is massive. Hundreds of millions of people. On the other hand, the pool of people who are billionaires is tiny in the thousands. It's easy to see why it's a lottery.
      • 9y ago
• dzhiurgis 9y ago
  Is this supposed to be taken seriously? This looks like a regular degree distribution: https://theartandscienceofdata.files.wordpress.com/2017/06/billionaire-degree.png https://theartandscienceofdata.files.wordpress.com/2017/06/b...
  • dahart 9y ago
    I think it is. There is a persistent myth that rich people drop out of school at larger rates than average. That "fact" is often used to suggest that education might be the opportunity cost that prevents one from getting rich. It looks to me like the distribution of degrees among the billionaires skews higher than the general population, according to this: https://en.m.wikipedia.org/wiki/Educational_attainment_in_the_United_States https://en.m.wikipedia.org/wiki/Educational_attainment_in_th... Your point is super important too, because it's extremely unlikely that level of education has anything to do with being in the top 0.01% of the income distribution. The article's "AI data" that says a bachelor's degree is 6% important is sort of meaningless. He's measured the relative correlation of variables, among only billionaires. It's still true that only 0.01% of bachelor degree educated people get there, just like only 0.01% of dropouts get there. We can't talk about how important education is to getting there until this analysis is done on the general population.
• erikb 9y ago
  I think the idea to evaluate yourself or other people as Millionaire or Billionaire is crap. Being middle class has value, being upper class has value, being rich has value, having a degree has value, having provided a meaningful recognisable addition to human development has value. It's so easy to have such a number drop to 50% or to zero even, without changing anything about your value, your opportunities etc. For instance if Elon Musk lost all his money tomorrow you bet he would still be able to attempt another huge project next week. But if I give you one billion dollar, you might still not be able to start a project of the same size, because you miss the skill, connections, track record etc. The most important thing to worry about is actually doing something valuable for the people around you. The more people you can influence positively the better your life will become as well. Example: In my country there's a start-up that tries to revolutionize the train system. All they achieved was to repair one second-hand train, rent the railway slots to drive once up south to north and once down north to south, a few days a week. Then they ran out of money. But! It really influenced a lot of people positively, made great press, showed strong customer engagement. So even after going broke they were able to continue after a short break, because someone bought them. No money, no profit, loads of way-too-hard-work nobody else wants to do. And still they are able to get this working, because they provide something provably valuable.
  • corporateslave2 9y ago
    This is non sense, the life for the rich is far better than for the poor. If you don't believe that is true, then you haven't been exposed to it enough. Having high status in any society can have massive advantages. More leisure time, better mates, ability to purchase expensive health care and therapy, organic food, the freedom to go anywhere in the world, the list goes on and on
    • erikb 9y ago
      I totally agree. But the set of rich people and the set of billionaires are only overlapping. They are not the same. And funnily it's not even true that one would be a subset of the other. It's possible to be a billionaire on paper and starve to death. But at least I personally would say if you are starving you are certainly not rich. Rich means having the ability to get what you need and a lot of things you want, including things that are unavailable to most. Would you agree? It can be considered a subtle difference, but it's the point I'm trying to make. Stop worrying about the number "one billion US dollars" and instead start worrying about becoming rich.
• fiftyacorn 9y ago
  Its a small point - but its a shame JK Rowling is used as an example of "the ghost" since the main reason she has dropped off is she is giving away her money
• baxtr 9y ago
  I would love to see the same analysis for millionaires. A lot bigger sample size to draw conclusions on and more relevant for many people who’s goal is to become rich one day.
  • turk184 9y ago
    Sorry but, "millionaire" in USD is not rich. Might make you upper middle class, but that's it. Maybe $10M and up?
• deleted 9y ago
  [deleted]
• poorman 9y ago
  Since founding year seems to be of some importance, I would really like to see a plot over time of the number of founders per year and possibly extrapolate founding year + sector to predict what a good time to enter a sector would be. Could yield some interesting results.
• dahart 9y ago
  > "founding_year” is intriguing. It could mean that it may be getting easier or harder to build a sustainable business. It could mean that. It could also mean inflation. The threshold of 1B is worth less and less every year, so the number of billionaires is expected to go up every year, skewing all data toward today.
• the_watcher 9y ago
  > when no one wants to be a Hajime? I understand the author is using hyperbole here, but it's a little ridiculous to write that no one wants to have vacillated between billionaire and near-billionaire.
  • ukulele 9y ago
    If you're not in the three comma club, what's the point?
• brosky117 9y ago
  All I could think about was Russ Hanneman.
• RosebudAnwuri 9y ago
  Hello Everyone, Rosebud here! I am overwhelmed by all the responses. I never expected the blog post to garner this much engagement! Thank you so much for all your comments and all the reads. Let's keep talking.
• davidshalev 9y ago
  Most of the rich became that way by engaging in unethical/immoral acts. Misrepresentation, fraud, financial elder abuse, serial bankruptcies, creating environmental disasters in third world countries without a blink of an eye. They just happen to not get caught or to not engage in activity that is outright illegal. Yes, there are innovators and inventors. They deserve our admiration. But most of the Wall Street and Real Estate billionaires are just people who are less reluctant to engage in certain behavior that is deemed by most as immoral. You can become very rich by selling financial alchemy to old ladies with dementia. Society will deem you as "successful" and a "role model" if it's not exposed.
  • tomcam 9y ago
    > Most of the rich became that way by engaging in unethical/immoral acts. Citation?
    • davidshalev 9y ago
      Admittedly, I don't have data to provide you. I can only tell you my observations based on a rather large social circle I'm exposed to and just the sheer frequency that the wealthy engage in white collar crime. Do you honestly believe that corporate raiders such as Nelson Peltz, Carl Icahn, Henry Kravis provided billions in value added, you are naive at best. Do you also believe the Russian oligarchs made their money in a moral way? Insider trading, market manipulation, Bribery (aka lobbying), fraud, etc..... That's how most people become billionaires.
• katastic 9y ago
  >. It’s not shocking that Country and Sector are important variables but “founding_year” is intriguing. It could mean that it may be getting easier or harder to build a sustainable business. It should be pretty obvious that LUCK is a huge factor. It's that age old saying... how does it go? "Success is when preparation meets opportunity." Bill Gates got rich because he was the right guy, at the right time, with the right (completely unfinished vaporware) product when IBM needed an OS. Most of the new billionaires are techies. Techies that happened simply because the world became tech oriented. Surprising... nobody. There are entire billionaire families from previous "Rushes". The gold rush, oil rushes, wall street, RAIL ROAD TYCOONS, etc. There is no scientific way to guarantee billion-dollar wealth, only correlations. And the only data I see from the article is: 1) There's more than one way to skin a cat. Some dropped out, some got Ph'ds, many stayed in the middle. That doesn't matter. Wherever you are now, you can start working. 2) Luck matters. You can be successful but the chances of you exploding is fractions of a fraction.