What did I discover from my first national survey of millionaires in 1980? Just over one-half (53%) of these wealthy respondents graduated from college. What about 30 years later? The large majority (90%) of millionaires today are college graduates holding at least a bachelor’s degree. The same proportion applies to those with multimillions including decamillionaires.
It is very clear that a college degree and wealth are complements. But note that one’s grade point average is not a substantial predictor of wealth. Income is also a correlate of wealth and accordingly college graduates earn substantially more than those without a degree.
Generally, it is easier to save and invest more of your income if your income is above the norm. The median annual income generated by a male [female] worker with a bachelor’s degree is $60,910 [$45,410]. For those who hold a master’s degree it is $75,430 [$52,442]. These incomes figures are substantially higher than for those workers who are in the high school graduate category, i.e. $37,030 [$26,740].
What typically happens in a household where both the husband and wife are college graduates and both are employed full time? More often than not, such households have incomes in excess of $100,000. Over a 40-year working career, this couple should earn approximately $4.3 million. What if such a couple saved $12,000 a year? According to a recent article by Vanguard, (The boring way to become a millionaire) “at that rate, you would be a millionaire in 31 years providing you earned a 6% average annual investment return. And if you earned 8% annually, you’d make it in just 27 years.” This is not rocket science. Yet only 3 1/2 % of American households have an investment portfolio of $1 million or more. Yet, more than 14% of the approximately 115,000,000 households in this country generate an annual realized income of $100,000 or more. The good news is that there is still time for these high income producers to hit the million dollar mark before reaching retirement age.
In more than 80% of the households in the $100,000 or more income category at least one income earner is a college graduate. Obviously many of these people are not fully utilizing the same high intellect and discipline required to graduate from college in their effort to build wealth. Most people learn how to multiply $100,000 by 40 years when they are in elementary school. And computing the compound growth of investments is a topic covered in middle school. Learning is much more valuable when applied to enhancing one’s well being.
And certainly a college degree is more than just an issue of economics. It is about pride of achievement, developing discipline and time management, enhancing one’s socialization processes, and finding a vocation that gives great satisfaction even beyond money.
I have often found in interviewing millionaires that even a major league net worth cannot replace the satisfaction and esteem of having a college degree. Along these lines consider the comments from a self-made, 50 year old woman with a net worth in excess of $15 million:
I am a college dropout-in spite of this I have been fortunate enough to do well in business-however, my greatest regret in life is that I did not complete my study to [receive] a degree-it will always be an ache in my bones-I have continued to study and learn but my advice to everyone is stay in for the long haul-you are-not as smart as you think!! Attain the highest degree possible then make your fortune-no one has any sense until they are 35 years old anyway-might as well spend those formative years learning-listening instead of talking!!
Yes, you can still become a millionaire without earning a college degree. But I’ll wager that in most cases all of those dollars will not fully replace the satisfaction of having a college diploma on your wall.