10 July 2021|Latest Posts, Psychology
By Rainer Zitelmann. Many young people overestimate the value of a university education as a prerequisite for professional success. This is especially true for anyone who wants to become rich. If that is your ambition, then studying is often not the best idea.
Not only did I go to university, I was even the best student in my chosen subjects (history and political science). Later on, I earned two doctorates, one summa cum laude and one magna cum laude. But was that in any way important for my success as an entrepreneur and as an investor? I don’t think so. I definitely don’t regret going to university, because I learned a lot in the process and enjoyed it immensely. But none of what I learned helped me as an entrepreneur or investor. I built a successful company and made a lot of money. I was also successful as an investor in the Berlin real estate market. But of course, none of this was connected in any way to what I studied at university.
At times in my life I’ve had friends who studied business administration, and I’ve seen what they learned in this subject: I am sure that none of the things they learned would have helped me as an entrepreneur. And vice versa: They didn’t learn anything at university about the things that are really important for an entrepreneur (e.g. how to sell)!
Erich Sixt, one of the most successful entrepreneurs in Germany, states that an MBA is a waste of time: “That’s why I wasn’t interested in earning an MBA. Studying for an MBA made no sense. The only thing I would have benefited from was a single semester of accounting. The rest of the course was so far removed from the real world, and it’s still like that today.” And Jack Ma, the fourth richest man in China with a net worth of 48 billion dollars, once said: “It is not necessary to study for an MBA. Most MBA graduates are not useful… Unless they come back from their MBA studies and forget what they’ve learned at school, then they will be useful. Because schools teach knowledge, while starting businesses requires wisdom. Wisdom is acquired through experience. Knowledge can be acquired through hard work.”
There are many successful entrepreneurs who either never went to college or dropped out before they graduated, including Steve Jobs (Apple), Ray Kroc (McDonald’s), Steven Spielberg (successful director) and James Cameron (successful director). You can find lists of rich and famous people on the Internet who either didn’t go to college or dropped out. You’ll find people such as the Russian billionaire Roman Abramovich, Paul Allen and Steve Ballmer (Microsoft), the British billionaire Richard Branson (who left school at 16), the American billionaire Edgar Bronfman and others. Then there are people such as the Google founder Sergey Brin and Warren Buffett, who only completed their studies after they’d become rich. A friend of mine, Theo Mueller, did not even graduate from high school – his only formal qualification is from a vocational school. When he took over his father’s dairy farm, it had five workers. Today, he employs 30,000. And he’s one of the richest men in Germany, worth five billion euros. Without studying.
In his book, The Education of Millionaires, which is based on interviews with a wide range of millionaires and billionaires who don’t have college degrees, Michael Ellsberg challenges the conventional wisdom that an academic education is an important factor in becoming rich: “Around 90% of the people I interviewed and feature in this book are literal millionaires, and several are even billionaires … All of the millionaires and successful people I interviewed for this book said ‘no thanks’ to the current educational model.” According to the book’s provocative thesis, very little of what universities teach will actually help graduates achieve financial success —and in some cases, what people learn in school is even a hindrance: “Education is still necessary to learn how to do the great work that gets you paid. But these days, almost all of the education that ends up actually earning you money ends up being self-education in practical intelligence and skills, acquired outside of the bounds of traditional educational institutions.”
For my study The Wealth Elite, in-depth interviews were conducted with 45 ultra-high-net-worth individuals. Most had benefited from a decent school and university education, just like many of their contemporaries. The interviews’ biographical questions revealed that there is no correlation between performance at school or university and the degree of wealth these individuals went on to achieve. The interviewees who performed best at school or university did not typically go on to rise to the absolute peak of wealth. Of course, a university degree does not always have to be a disadvantage and many very wealthy people did, after all, go to university. But studying is by no means a prerequisite for building wealth and the rich did not acquire or develop their most important skills and mindsets at school or university.
Rainer Zitelmann is the author of the book “The Wealth Elite” https://the-wealth-elite.com/