Investing in an education is key to building wealth, say millionaire doctors and lawyers.
Doctors, dentists, lawyers and accountants invest heavily in their educations, and the strategy has paid off for the many millionaire professionals who say education is a key factor in building wealth, according to a study conducted by Millionaire Corner in the first quarter of 2012.
Professionals account for 13 percent of the roughly 1.08 million high net worth U.S. households, which have investable assets of $5 million to $25 million. These professionals – more so than high net worth investors from other walks of life - say education is a primary reason they are in the mega-millionaire club. About 81 percent of high net worth business owners , for example, say education is a key factor in building wealth. In contrast, 96 percent of professionals attribute their success primarily to their education and the hard work it took to earn their degrees.
High net worth professionals are also more likely to attribute their wealth to frugality, compared to high net worth investors as a whole, but they rank smart investing, taking risk, luck and being in the right place at the right time as less significant factors in building wealth. Professionals also describe themselves as coming from more modest backgrounds than total high net worth investors - a characteristic that makes the financial commitment to a professional degree all the more significant.
The costs can be daunting. According to the Association of American Medical Colleges, in-state tuition and fees averaged $25,000 a year at a state university in 2010-11, while out-of-state tuition and fees averaged $48,000. Private medical school tuition and fees averaged $42,000 over the same period. The figures do not include living expenses.
The cost of a law degree can “easily exceed” $150,000, according to the Georgetown University website, which notes that 80 percent of law school students rely on student loans to finance some part of their law school education. For many families, education loans for law, medical or dental school add to student loans taken out to finance an undergraduate degree. The College Board reports that 56 percent of students who graduated from a public four-year college in 2009-10 had student loans averaging $22,000.
It’s clear that individuals who invest in a professional degree set themselves apart from the vast majority of Americans. They account for 1.9 percent of the U.S. population, according to a recent report from the U.S. Census Bureau, while those with a doctoral degree make up 1.2 percent of the U.S. population.
Professionals not only have a higher earning potential, according to Census data, and but they are also likely to fare better in an economic downturn. Unemployment for individuals with advanced degrees remained below 5 percent from January 2009 to December 2010 – far below the prevailing rates. Higher earning potential and employment, key attributes of professionals, are key factors in building wealth.