My chances of becoming a billionaire

Penn ranks 3^rd among all world universities in the number of current billionaire alumni with 18 current billionaires (27 before the financial crisis wiped out a lot of their savings).

…just some quick back-of-the-envelope math:

Penn has only been around since the late 1700s-ish, but for the sake of our current calculation (and the fact that a "billionaire" is a fairly recent phenomenon), I'll only take the last 50 or so years into calculation (this is assuming the oldest living billionaire is probably around 70 years old and so graduated 50 years ago) This is also assuming that we're talking absolute amounts of money and not about purchasing power.

My graduating year had approximately 2,500 graduates, give or take? I couldn't find (was too lazy to look) actual Penn alumni numbers, so we'll just use the actual population growth rate over the past 80 years...which on the high end averages about 1.15% according to the U.S. Census Bureau. We'll assume that this number rough holds true for the past 50 years (a big assumption, I know, but let’s make it for the sake of simplicity). And of course, we're also assuming that Penn's student body size has grown in proportion to the US population.

We’ll start with the equation for CAGR (compound annual growth rate)

.

First solve for Penn’s 1959 graduating class size, where:

Final = 2500

n = 50

CAGR = 1.15%

Thus Penn’s 1929 graduating class size is approximately: 1427.

The next step is to find the summation of every year’s graduating class between 1959 and 2009.

First we manipulate the CAGR equation and get:

Then the summation:

Solving for this shows that there have been a total of 95,751 undergraduates in the past 50 years at Penn.

We’ll take the post recession number of 27 Penn billionaires. And so 27 divided by 95,751 yields 0.000282…

In other words, according to my calculations and historical trends, each Penn graduate has approximately a 0.0282% chance of becoming a billionaire!

Wow. How depressing.

If it’s any consolation, here is a major thing to take into consideration:

-By making the assumption that we’re talking about money in absolute terms and not in purchasing power terms, we’re essentially ignoring inflation. This can’t really be ignored because if you compare the purchasing power of the dollar 80 years ago and now…there’s a HUGE difference (in addition, the power of a dollar now versus in 40 years when I will become a billionaire will also be different too). Because of this, the millionaires who lived in the 1960s and 70s could also be counted as “billionaires” by today’s standards. In a similar manner, assuming inflationary trends continue, it will technically become easier for me to become a billionaire in 40 years than it will be for me to do so at the present time (although being a billionaire then will mean less in 2049 than being one in 2009). To take this all into consideration and to calculate my future chances of becoming a billionaire may require some more complicated math that I don’t quite feel like doing. But the general gist is that it will definitely increase my chances of becoming a billionaire (albeit probably only very very slightly).

-Bsingh also adds that to improve my chances, I should isolate just those majors that have a higher probability of making it big (i.e. business, engineering, law, med, etc). But then again, Steve Wynn was an English and Cultural Anthropology major at Penn...so there goes that logic...

Oh well.

(note: I probably could have gotten a much more accurate number had I had Penn’s almanac numbers at my disposal)