Pimp Your Finances

Forbes recently published their list of self-made billionaires, but more important than who is on the list is what they have in common.

I’m not saying that you should try to follow their path, as they’d certainly be considered outliers in the financial world. Instead, we can learn about their way of thinking, and apply it on a smaller scale in our own lives.

Here is what Forbes found out about the 657 self-made billionaires they studied:

• Many had parents with a high aptitude for math
• The most common professions are engineers, accountants, and small-business owners
• Nearly 2% worked at Goldman Sachs early in their career.
• 20% never completed college
• Those who made their money in finance are the most educated – 55% have graduate degrees, and 90% of MBAs got their masters from Harvard, Columbia, of University of Penn’s Wharton School of Business
• Several suffered “bitter professional setbacks” early in their careers, but consider them valuable learning experiences

There were a few other commonalities, but they’re too specific to really be applicable (unless you’re considering working at Goldman Sachs or joining a secret society like Skull and Bones).

Here’s what I’ll try to apply in my own life:

Education is key

Even though 20% didn’t finish college, they all know the value of a good education. Getting a degree is still the best ticket we have towards a lifetime of higher income – and job mobility. The skills we learn in college and on the job can be applied towards finance and entrepreneurship, and vice-versa.

Another takeaway is that a strong understanding of finance and economics is critical for success, regardless of what your career is.

It’s important to do your own thing

Many of these people left a successful career (or dropped out of college) to go into business for themselves. Even if you don’t start a business full time, there are always things you can do to supplement your income as well as broaden your horizons.

You learn more from your failures than your successes

The lessons you learn from mistakes and failures will stick with you more than any success. That’s why billionaires consider early failures something that helped them in the long run.

Failure early on is necessary condition for success, though not a sufficient one.

- Pharmaceutical tycoon R.J. Kirk

Related posts:

1. Retirement at 40? It’s Possible
2. Weekly Blog Roundup, March 22nd