Average Net Worth of all US college graduates is ....

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learning_head
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Average Net Worth of all US college graduates is ....

Post by learning_head » Sun Feb 17, 2013 6:19 am

~$1Million !

and has varied from ~0.98M to ~1.15M during the last decade. If you think I am joking, check it out yourself... this is according to Federal Reserve stats (see 3rd row from last in table 4 (on pg 17) in http://www.federalreserve.gov/pubs/bull ... /scf12.pdf)

Now, granted, average is misleading and the median was instead more like 200k-300k through the decade, but just goes to show
- how much averages could be misleading, and
- median is still surprisingly high to me

I am pretty sure I did not see "sampling only from bogleheads.org posters" on there...

P.S. Perhaps less surprising... from same document, average income for families with college grad as "head" is 130k-150k with median 74k-84k during the decade.
Last edited by learning_head on Mon Feb 18, 2013 8:52 am, edited 6 times in total.

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Rainier
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Re: Average Net Worth is of all US college graduates is ....

Post by Rainier » Sun Feb 17, 2013 6:32 am

This is worthless, you can't use the average.

Do you know how much somebody like Warren Buffett skews the average?

learning_head
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Re: Average Net Worth of all US college graduates is ....

Post by learning_head » Sun Feb 17, 2013 6:39 am

Rainier wrote:This is worthless, you can't use the average.

Do you know how much somebody like Warren Buffett skews the average?
That's one of my points that I mentioned... Still, median is higher than I thought as well, and I think it's a fun fact for cocktail parties :-)

P.S. I wonder if they count Bill Gates as a college grad :?

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Re: Average Net Worth of all US college graduates is ....

Post by dickenjb » Sun Feb 17, 2013 8:09 am

learning_head wrote:
P.S. I wonder if they count Bill Gates as a college grad :?
Why would they? Wasn't he a dropout?

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Re: Average Net Worth of all US college graduates is ....

Post by learning_head » Sun Feb 17, 2013 8:16 am

dickenjb wrote:
learning_head wrote:
P.S. I wonder if they count Bill Gates as a college grad :?
Why would they? Wasn't he a dropout?
Apparently, he got an honorary degree from Harvard

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Re: Average Net Worth of all US college graduates is ....

Post by ks289 » Sun Feb 17, 2013 8:23 am

Median is more revealing than mean for this since there are outliers in every category.
Beyonce/jay-z, Kobe Bryant/ Lebron James, tiger woods/bill gates.

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JamesSFO
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Re: Average Net Worth of all US college graduates is ....

Post by JamesSFO » Sun Feb 17, 2013 8:29 am

US college graduates is somewhat misleading without the context that we aren't talking about the day after graduation we are talking across their lifespan. If we assume that most of the college graduates they interviewed were more than a few years out from college this is not that surprising, especially when you focus on the median.

Lastly, the SCF oversamples wealth households, I assume that effect has been corrected for in the data tables...

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Re: Average Net Worth of all US college graduates is ....

Post by gvsucavie03 » Sun Feb 17, 2013 9:34 am

Bottom line - college graduates make more than non-college graduates on the whole (well, except Bill Gates before the honorary degree). This is great information for our young kids whether it be 200-300k or 1M net worth or 150k or 75k of income, the message is still there. All outliers skew averages and you can twist numbers to say a lot of things, but the bottom line is that education is perhaps your greatest investment.

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Re: Average Net Worth of all US college graduates is ....

Post by VictoriaF » Sun Feb 17, 2013 9:41 am

dickenjb wrote:
learning_head wrote:
P.S. I wonder if they count Bill Gates as a college grad :?
Why would they? Wasn't he a dropout?
Gates's net worth should be added to the pool of non-college graduates to prove that college education is not worth it. :twisted:

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Re: Average Net Worth of all US college graduates is ....

Post by reggiesimpson » Sun Feb 17, 2013 10:00 am

Throw out the highest and the lowest?

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Re: Average Net Worth of all US college graduates is ....

Post by gvsucavie03 » Sun Feb 17, 2013 10:03 am

VictoriaF wrote:
dickenjb wrote:
learning_head wrote:
P.S. I wonder if they count Bill Gates as a college grad :?
Why would they? Wasn't he a dropout?
Gates's net worth should be added to the pool of non-college graduates to prove that college education is not worth it. :twisted:

Victoria
Interesting point of sarcasm.... how many top-perofrming entrepreneurs have skewed the non-college graduate numbers? Very interesting, and very funny :happy

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Re: Average Net Worth of all US college graduates is ....

Post by texasdiver » Sun Feb 17, 2013 11:35 am

Obviously these sorts of statistics can be deceptive. And people tend to misunderstand the distinction between median and mean. If Bill Gates walked into a room full of teachers the median income in the room would be about $50,000 but the mean income would be in the $100 million or so. The median does not change much with the addition of outliers, but the mean changes dramatically.

Here is a more appropriate way to understand the benefits of college education.

Image

EDIT: and the link to the article as requested: http://www.bls.gov/emp/ep_chart_001.htm
Last edited by texasdiver on Sun Feb 17, 2013 12:37 pm, edited 2 times in total.

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VictoriaF
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Re: Average Net Worth of all US college graduates is ....

Post by VictoriaF » Sun Feb 17, 2013 11:46 am

texasdiver,

Your figure cuts off the most interesting part. Can you re-post it?

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Re: Average Net Worth of all US college graduates is ....

Post by NAVigator » Sun Feb 17, 2013 11:51 am

VictoriaF wrote:texasdiver,

Your figure cuts off the most interesting part. Can you re-post it?

Victoria
Here's the link; Education pays ...

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Re: Average Net Worth of all US college graduates is ....

Post by VictoriaF » Sun Feb 17, 2013 12:00 pm

NAVigator wrote:
VictoriaF wrote:texasdiver,

Your figure cuts off the most interesting part. Can you re-post it?

Victoria
Here's the link; Education pays ...

Jerry
Thank you, Jerry.

I expected that the difference in weekly earnings between a Master's degree and a Doctoral degree would be smaller and in unemployment rates greater. In other words, I thought that PhDs were compensated for the extra effort not as much by a salary as by stability.

Victoria
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Re: Average Net Worth of all US college graduates is ....

Post by FedGuy » Sun Feb 17, 2013 12:28 pm

VictoriaF wrote:I expected that the difference in weekly earnings between a Master's degree and a Doctoral degree would be smaller and in unemployment rates greater. In other words, I thought that PhDs were compensated for the extra effort not as much by a salary as by stability.
Most of my good friends have PhD's. I thought that having a PhD is generally correlated with lowering your income relative to other postgraduate degrees, since you're either too specialized or too "overqualified" for so many professions, and that the only way in which having a PhD usually pays off is that it's generally a necessary credential to get into academia. So--and this is simplifying--a PhD gets you into academia, but outside academia it's generally a liability compared to other postgraduate degrees.

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Re: Average Net Worth of all US college graduates is ....

Post by texasdiver » Sun Feb 17, 2013 12:36 pm

VictoriaF wrote:
NAVigator wrote:
VictoriaF wrote:texasdiver,

Your figure cuts off the most interesting part. Can you re-post it?

Victoria
Here's the link; Education pays ...

Jerry
Thank you, Jerry.

I expected that the difference in weekly earnings between a Master's degree and a Doctoral degree would be smaller and in unemployment rates greater. In other words, I thought that PhDs were compensated for the extra effort not as much by a salary as by stability.

Victoria
Anyone close to academia will be happy to disabuse you of that notion. Unlike a professional degree (MD, JD, DDS, MBA, etc.) many if not most PhDs are highly specialized in fields that do not necessarily have high demand or job security. I have friends with PhDs who banged around for years as part time adjuncts at various commuter schools and community colleges until they finally gave up and started teaching HS just for the job security. If one gets a PhD in something like petroleum engineering or other in-demand technical areas that is one thing. Getting a PhD in something like anthropology or sociology is something else entirely.

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Re: Average Net Worth of all US college graduates is ....

Post by LadyGeek » Sun Feb 17, 2013 12:42 pm

texasdiver wrote:And people tend to misunderstand the distinction between median and mean...
It never hurts to review the basics: Mean, Median, Mode, and Range
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Re: Average Net Worth of all US college graduates is ....

Post by VictoriaF » Sun Feb 17, 2013 12:44 pm

texasdiver wrote:
VictoriaF wrote:I expected that the difference in weekly earnings between a Master's degree and a Doctoral degree would be smaller and in unemployment rates greater. In other words, I thought that PhDs were compensated for the extra effort not as much by a salary as by stability.
Anyone close to academia will be happy to disabuse you of that notion. Unlike a professional degree (MD, JD, DDS, MBA, etc.) many if not most PhDs are highly specialized in fields that do not necessarily have high demand or job security. I have friends with PhDs who banged around for years as part time adjuncts at various commuter schools and community colleges until they finally gave up and started teaching HS just for the job security. If one gets a PhD in something like petroleum engineering or other in-demand technical areas that is one thing. Getting a PhD in something like anthropology or sociology is something else entirely.
You may be right. The PhDs I know are in the STEM areas.

Victoria
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Re: Average Net Worth of all US college graduates is ....

Post by VictoriaF » Sun Feb 17, 2013 12:50 pm

LadyGeek wrote:
texasdiver wrote:And people tend to misunderstand the distinction between median and mean...
It never hurts to review the basics: Mean, Median, Mode, and Range
The NCTM site allows you to visualize it interactively.

Victoria
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Re: Average Net Worth of all US college graduates is ....

Post by grabiner » Sun Feb 17, 2013 8:09 pm

There is an interesting bias in the data. If you take out student loans while in college, you have a negative net worth while you are a college student, and even if you don't, you have a very low net worth. But while you are in college, you are counted toward the average net worth of people with some college, so you lower that average; your low or negative net worth is not counted in the average net worth of graduates.
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Re: Average Net Worth of all US college graduates is ....

Post by papito23 » Sun Feb 17, 2013 10:07 pm

learning_head wrote: Now, granted, average is misleading and the mean was instead more like 200k-300k through the decade
I think you meant "average is misleading and the median was instead..." b/c average = mean.

Thanks for the data (now back to that thesis...)!
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Re: Average Net Worth of all US college graduates is ....

Post by jjbiv » Sun Feb 17, 2013 11:24 pm

grabiner wrote:There is an interesting bias in the data. If you take out student loans while in college, you have a negative net worth while you are a college student, and even if you don't, you have a very low net worth. But while you are in college, you are counted toward the average net worth of people with some college, so you lower that average; your low or negative net worth is not counted in the average net worth of graduates.
Not sure which data set you are referencing since there are now two mentioned in this thread but BLS usually controls for (most of) this bias by only including individuals over 25 when classifying individuals based on educational attainment.

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Re: Average Net Worth of all US college graduates is ....

Post by learning_head » Mon Feb 18, 2013 8:52 am

papito23 wrote:I think you meant "average is misleading and the median was instead..." b/c average = mean.
Yes, of course. Thanks, I corrected OP.

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Re: Average Net Worth of all US college graduates is ....

Post by learning_head » Mon Feb 18, 2013 9:03 am

By the way, one point of this thread is that when folks often talk about an "average" (well, really, "median" ;-) ) family in US living on 50k with almost no savings (on these boards), given that most people on this board have a college degree (just a guess), I think it's also interesting to realize that an "average" / "median" family with a college grad is living on ~80k with ~250k in net worth.

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Re: Average Net Worth of all US college graduates is ....

Post by Alex Frakt » Mon Feb 18, 2013 11:19 am

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