Wealthy investors almost unanimously claim education played a role in their wealth status.
Parents want their children to grow into self-sufficiency someday. They want them to be able to care for themselves physically, emotionally and financially.
One path to such self-sufficiency is a good education. Most parents value a good education for their children and grandchildren, and that includes affluent investors.
Spectrem’s newest wealth segmentation series study Financial Behaviors and the Investor’s Mindset surveyed investors about the value of education and the importance of a child’s education with a variety of questions. What resulted was an indication that no matter how wealthy an investor is, education played a role in getting them there, and those same investors want their progeny to have the same basis for success.
Let’s start at the very beginning. Affluent investors almost unanimously select “education’’ as a wealth creation factor. Ninety-three percent of Ultra High Net Worth investors with a net worth between $5 million and $25 million do so, and 86 percent of Millionaires with a net worth between $1 million and $5 million do so.
Asked to place the value of a college equation on a 0-to-100 scale, UHNW investors placed it at 88.24, the highest rating for any of the five core beliefs statements given to UHNW investors in the study. Millionaires also placed the value of a college education at the highest level, at 85.65.
Fretting over the cost of a college education is almost a solely American exercise, and most Americans participate. It is even true of UHNW investors; 12 percent admit to having a level of concern for the financing of their children, and 27 percent are concerned about the educational financing for their grandchildren.
It is worth noting that the level of concern over financing education has dropped considerably as the economy has improved. In 2011, when the recovery from the recession of 2008 was nowhere near complete, 35 percent of UHNW investors expressed concern over financing the education of their children.
It is also interesting that Business Owners have the greatest concern over financing the education of their children, with 22 percent expressing that concern. Meanwhile, 34 percent of Professionals (doctors, lawyers, accountants) express concern over the financing of the education of their grandchildren.
For the first time, the Spectrem study asked investors of all wealth levels to place a 0-to-100 value on this statement: a college students should finance most of his/her education or be responsible for paying back his/her student loans. The response to this statement ran along wealth lines: the UHNW investors rated it lowly (51.92) while Millionaires rated it higher (62.92) and Mass Affluent investors with a net worth between $100,000 and $1 million rated it at 66.44.
These results are consistent with the idea that wealthy investors plan to pay for the college education of their children and grandchildren and therefore do not intend for the next generation to have to deal with college tuition costs.
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.