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Want to be insanely rich? Study Economics.

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Economics is an intellectually challenging and  socially relevant area of study. According to the Hamilton project studying economics gives you a better shot at striking it rich. Here are some nice figures that illustrate the point:

Updated: These are cumulative distributions. Notice that economics first-order stochastically dominates almost all other majors, and second-order stochastically dominates all other majors. So anyone who has normal risk preferences will choose to do an economics major.  Economics pretty much dominates every other major.

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24 Responses to "Want to be insanely rich? Study Economics."
  1. I’m sure you are only being half-serious, but I nonetheless feel the need to point out this is probably a selection effect rather than a causal effect.

    • Sure it’s causal in my opinion. First, have you ever had a chance to talk to a non-economist. I did once a few years back and was not altogether impressed.

      Secondly, it’s a result of a market equilibrium with rational expectations and no fancy tricks.

      Let’s think about this. Taking your argument to an extreme it says that the smartest students do economics because other smart students do economics and the market knows that smart students do economics.

      Take a student who is very smart and is choosing between doing economics and another degree known not to attract the smartest but which adds value to your human capital. Which would you do?

      Perhaps _not_ economics but the degree that gives you the most value added.
      After all, you know that you are very smart and eventually will be close to the top of the income game, so you’ll be interested in the value added and not the signalling.

      I’m happy to concede that smart students do economics, because they smartly know that it adds a lot the student’s intellectual capital.

  2. Nice to see computer science beating economics (purely out of self interest). There should be a boredom by wealth interaction term as that might tell a different story, as being a programmer/business analyst/IT support might be a bit of yawnfest compared to economics.

    • Economics second order stochastically dominates computer science. Look at the cumulative distribution, i.e., it beats CS hands down. That means that a normal risk averse student who wants to have a shot at being super rich, will do economics.

      As for the risk loving individuals, they are probably better off opening a coffee shop in Sydney.

  3. Economics is an interesting field to study and to work in because just like every other field out there it is growing rapidly and needs smart people that are focused and are able to keep up with the world out there. I somehow don’t agree that economics is the number one field that gives more rewards and make a person stinking rich, however the behaviour towards the money that we receive is what at the end makes a person rich. My point is as someone studying or being in the field of economics we know money is a scarce resource therefore we handle it with care by maybe investing or even risking the money on the stock market hoping for greater returns or something like that where as someone in IT would be more focused on getting the latest IPhones or advancing in technology which in turn is money wasting 🙂

  4. Apparently science, engineering, law and medicine don’t require smart people because all the smart people do economics… only a pure economist could come to such an insane conclusion.

  5. Thanks for all the illustrations. All though I have to say that I don’t think they are all correct, as it is hard to believe that a person studying economics will become richer then a person studying biology or computer science.

  6. Economics are everywhere applicable. All buying decisions include some economic aspects because you must evaluate aspects like marginal utility etc. Economists are on high demand around the world, and meaning economics will have a impact on all financial investments. Economist must analyze and predict the market so that investors can make more valuable decisions. Economists themselves knows the market and can invest their own money in such a way to ensure their own wealth. Economics may not make you the riches but it will definitely make you rich and smart.

  7. I agree, economics are one of the field you can’t go wrong seeing that economics are in every day activities and each person contributes somewhat to the economy. It will help you to think further when you make decisions when buying things, investing or even just help you to understand what is actually going on in the world of economics.

    Each person will then have more understanding of why there is such things as poverty, infation , increases in tax rates and everything that takes part in economics.

    Therfore I agree that economics will make you rich if you just know when and where to use your knowledge.

    • I believe that studying economics leaves a person with an unlimited potential for basically doing as they see fit with regards to the market environment , like either working on the stock exchange or investing .They are able to identify different economic patterns and factors that contribute to price rises an falls on the market wich could potentially make them become very wealthy because they have the neccesary knowledge to move their investment in order to achieve maximum profits .

  8. Economics is a field of study that helps you in your personal capacity, as well as helping others to invest and helping them manage their money. Economics helps to foresee risks, helping one to get great returns on ones investments! I think that this is why people associate those who study economics are those who “strike it rich” as it teaches you money management in relation to stock markets and other market related changes within a countries economy.

    Economics is also a very broad field of study, and is used every day, however, studying economics does not necessarily mean that you will automatically be a success, but it is a huge stepping stone to this. Economics can help you substantially in a lot of ways. Economics is not for everyone, it can also be seen as a passion and not just a field of study.

    • I reckon studying economics provides you with a few heuristics with which to construct porky pie explanations of real world behaviour. After a few years of handling the porkies with care, a few econ grads land in high paying bank/govt/consultancy jobs.

  9. 14252610 Dlamini Siyabonga
    I think studying economics helps one understand everyday economic activities as well as general direction and performance of the economy. You get to understand why certain economic issues such as inflation are they what they are at that moment. Furthermore it also teaches you to make rational choice out limited scarce resources you have.
    However I don’t think studying economics will eventually become reach, I think the writer based this article on a coincidence and is biased. The cateris paribus theories and all those bunch of economic assumption will not make you reach. It just all depend on your choices and how you work hard toward building your wealth not economics.

  10. I think understanding economics is very important. Obviously companies need people who understand the economy and can help them forecast and then manage changes in the economy that will have an effect on the organization. Things like inflation, taxes, government policies and fluctuations in consumers’ demand need to be considered when decisions regarding the company are made. Even small business owners will benefit from understanding economic concepts and adapting to the changing environment. Investors also need to be able to read the economic climate if they want to make smart investments.

    I definitely think studying economics will help with making smart, informed decisions that can lead to great financial gain.

  11. Considering the blog post economics is a great subject to study. It helps you understand more about the macro- and microeconomics environment. Graduates who have studied economics are well equipped with analytic and problem-solving skills, numerical and computer skills. Having gained these skills it will be easier to analyse daily market and economical changes, therefor helping one understand economical trends. In the business environment these skills help encourage graduates to become entrepreneurs and small business owners thus helping decrease the unemployment rate.
    Further, by understanding the changes in the economy,interest rates,inflation,etc you may have a better shot “at striking it rich” when it comes to financial opportunities

  12. Clearly everyone aims at becoming rich and studying economics is the fastest way to become rich. This might sound insane but economics caters for everyone not like other fields of study like engineering, medicine, chartered accountancy etc. It doesn’t necessarily require a person to be intelligent because the study involves economical and social issues which can be learnt. Economics shows the reality about an economy of a country and how money should be handled to make and save more money.

  13. A very insightful blog however there were some statements that you made that i found very stereotypical and bias. I don’t think its the degree you study that determines the type of success but how you use it depends on the degree of success you will achieve now days. Economics is a very useful subject that most people should do at some point during they undergraduate degree as it does equip with necessary skills used to understand and analyse the business environment successfully.

  14. Economics plays a very huge role in the country as a whole that is why it is not a surprise when we hear it is one of the most paying careers in the world. I agree with the blog and I like how they used figures and diagrams to illustrate what they are talking about. I also like the fact that studying economics can make you rich, it is true I have seen it happen. Many people that I know that studied Economics are filthy rich.

  15. U14239583
    The use of graphs to help highlight the difference in earnings for each respective field of study was very effective. OI feel that there could have been more explanations provided with regard to how the economists actually make their money.
    Seeing the graphs does make one feel that studying economics could be widely beneficial.

  16. If one wants to become rich then it is important that we do the hard work, it’s not possible to achieve anything without that. I am lucky that I have got excellent help from Forex trading like business where I can do whatever I want especially with high class broker like OctaFX, it’s awesome with having great contest like cTrader, it really helps me work smoothly and understand new ways of trading while even having chance to win prizes up to 500 dollars.

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