Did you ever finish your college degree? It’s never too late. Or perhaps you have a child or other family member that is considering not pursuing a higher education. You could have the power to convince him or her to reconsider.
A new study discovered Americans with advanced degrees are 50 times more likely to become millionaires than those without a high school diploma.
Economical experts have noted that wealth and income is “strongly linked” to education. Some young people (and even adults) don’t take that concept seriously, however. Instead of thinking with an eye toward the future, they focus only on their present endeavors. But the harsh reality is if your or your loved ones’ current careers fall through…then what? A lack of education could make things tough.
Let’s check out some more detailed statistics.
A recent CNBC article that analyzed the aforementioned study found the likelihood of a family without a high school diploma having at least $1 million in wealth in 2013 was 1 in 110, compared with 1 in 20 for high school graduates. It was 1 in 4.6 for college graduates and 1 in 2.6 for families with a professional/graduate degree.
The study further found that for those with a two- or four-year college degree, median income was $76,293, down 5 percent from last year, and for those with an advanced degree median income was $116,265, up 4 percent. (All dollar amounts are adjusted for inflation).
It gets even more interesting. Take a look:
Between 1989 and 2013, accumulated wealth increased 45 percent for families with a professional/graduate degree, to $689,100, according the study. It increased by 3 percent for those with a college degree, while dropping by 36 percent for those with only a high school diploma and 44 percent for those without a high school diploma.
The study suggests there may be other contributing factors to wealth besides education, such as native ability, highly educated and/or wealthy parents, an equally educated spouse, inheritances, good health, and becoming financially knowledgable.
Good financial decision-making, such as debt management and having a diverse portfolio, is also shown to be linked to education level – which only increases a family's accumulation of wealth.
“It’s suggestive that those differences are pretty stark across education levels. Those are probably mediating or influencing how (people's incomes) gets translated into their wealth,” said Bill Emmons, senior economic advisor at the Fed's Center for Household Financial Stability.
While some of the factors in the study may be out of your control, it’s proven the more you educate yourself on as many levels as possible, the more chances you’ll have at a profitable future.
Consider taking steps today to improve the financial situation of yourself or other family members with a higher education. It's rarely something one regrets.