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Why the average millionaire's college GPA is 2.9 [video]

53 points by champagnepapi 9y ago

cperciva 9y ago
Something to keep in mind when looking at that statistic: The average American millionaire is 62 years old. They went to college in the mid 1970s. Thanks to decades of grade inflation, that 2.9 average GPA is probably the equivalent of a 3.3 today.
- 5ilv3r 9y ago
  My GPA when I dropped out was 3.3! Where are my millions!!??
  - 0xbear 9y ago
    You need to be 62 as well.
- jstalin 9y ago
  lol, today it's probably equivalent to a 4.2.
kyleschiller 9y ago
It's worth noting that millionaires who inherited their wealth had much less of an incentive to care about their GPA since wealth was more or less guaranteed. Also, children of millionaires will be able to attend top colleges even with substandard high school GPA/SATs [0], meaning they'll tend to underperform once there. [0] https://www.wsj.com/articles/SB1047409881995483800 https://www.wsj.com/articles/SB1047409881995483800
kyleschiller 9y ago
"Valedictorians often go on to be the people who support the system they become a part of the system, they don't change or overthrow the system." I really don't buy this explanation at all. Valedictorians might tend towards conformity, but you don't need to be a revolutionary to hit 1M. Anyone with a 20 year career in finance, consulting or tech and reasonable savings can hit a million dollars without doing anything crazy.
- downandout 9y ago
  You're right that a more accurate term in this context would have been "financially successful disruptors and entrepreneurs". $1M technically qualifies you to be a "millionaire," even though you can get there by simply making your mortgage payments for 30 years. However, the title makes sense for YouTube, as most of the population views generally defines "millionaires" as self-made people with many millions of dollars - not just those with $1M tied up in a house or other assets earned over a long period of time.
  - phkahler 9y ago
    I think the conventional definition of millionaire in the financial world is a person with a million dollars in investments or liquid assets. A home does not count. Of course you may downgrade to a cheaper home (at retirement for example) and take some of the difference in cash.
    - madengr 9y ago
      The home does count, as you can either put the money into rent, investment accounts, or a mortgage. I'd consider a house more liquid than retirement accounts. I still owe $170k on my mortgage but have $1M in net worth. It's all in retirement accounts; all on paper and subject to markets. I surely don't feel wealthy. I'm 45 and hopefully I can get it to $2M - $4M by late 60's. I still don't consider that rich since people woefully underestimate retirement needs. I'm stating the Dave Ramsey steps to see if I can get the mortgage payed off over 4 years, and get $160k saved for 2x kids college.
  - mamon 9y ago
    I think that the term "millionaire" became synonymous with "rich" long before the Great Depression, when $1M was worth much more ($14M in today's dollars). Now, thanks to inflation, "millionaire" lost it's appeal.
- bdcravens 9y ago
  > without doing anything crazy In other words, not overthrowing the system?
kyleschiller 9y ago
In the original student, Karen Arnold went to great lengths to highlight this counter-intuitive phenomenon as a gendered issue [0] in which women, who tended to get better grades then men [0], would still end up less successful. It's seriously regrettable that her point got lost in this rehashing. On a side note, I don't have the data, but would expect a similar effect with Asian-Americans, who tend to excel academically, but through socialization and institutional barriers, may fail to hit the "highest levels of success metrics" mentioned in this video. [1] [0] https://archives.library.illinois.edu/erec/University%20Archives/3901018/Topic%20Files/N-Z/Valedictorian%20Study.pdf https://archives.library.illinois.edu/erec/University%20Arch... [1] https://www.forbes.com/sites/liyanchen/2016/01/20/how-asian-americans-can-break-through-the-bamboo-ceiling/#1022f1511e43 https://www.forbes.com/sites/liyanchen/2016/01/20/how-asian-...
- hasenj 9y ago
  I would say that having high grades has no correlation with business success. The required traits and skills for the two things are vastly different. (Think Tesla vs Edison, and Wozniak vs Jobs). Sure, if you measure it across the entire population, it might appear that there's some correlation between academic success and being a millionaire, but if you measure it within the people who are already smart enough to get into universities, the correlation is probably non-existent, or might even be negative.
  - ryanmarsh 9y ago
    Why anyone confuses what it takes for academic success with what it takes for financial success baffles me. It's like there's One True system for success and it requires good grades. I know very wealthy guys (real estate investors) who can't log into their home wifi. They're just good with people, and can do basic math. Hell, I'm a high school dropout and I billed my clients over $300k last year.
    - hasenj 9y ago
      > It's like there's One True system for success and it requires good grades. There is one thing that is required for success and it can be measured: IQ. If you don't have enough of it, you will struggle with a lot of things. But having it alone doesn't tell you what kind of field you can succeed in. I bet the wealthy real estate investors do have IQs that are well above average. (Not knowing how to use certain technologies is not a good indicator of IQ).
thaumasiotes 9y ago
Question: given two distributions X_1 and X_2 with mean μ_1 and μ_2, standard deviations σ_1 and σ_2, and correlation r, what is the average value of X_1 among data points for which X_2 exceeds (μ_2 + 2σ_2)? You would only expect millionaires to have very high GPAs if being a millionaire didn't require anything else.
- uiri 9y ago
  You would only expect millionaires to have very high GPAs if being a millionaire didn't require anything else. Slightly more accurately, you would only expect millionaires to have very high GPAs if being a millionaire involves no variables that are independent of GPA. For example, let's say that SAT scores and GPA are highly correlated. If the government runs a program whereby they give $1M to everyone who gets a perfect SAT score after they graduate from college, then the mean GPA of millionaires would skew much higher despite the dependent variable being SAT scores rather than GPA.
  - thaumasiotes 9y ago
    > If the government runs a program whereby they give $1M to everyone who gets a perfect SAT score after they graduate from college, then the mean GPA of millionaires would skew much higher I don't know. It seems like the GPA of people with a perfect SAT score might fall if they knew about that program.
everdev 9y ago
I'm a millionaire with a 2.8 GPA through college. For me, I was fine trying hard at things I was good at and didn't spend much time on things that were hard. To get a good GPA, you either have to be great at everything or willing to work hard at everything. To start a successful business, you need to work hard at the small amount of things you're good at. And a little luck along the way helps too. I've always thought it would be nice if school's worked similar to businesses in that you could get a far more concentrated education if you wanted. Or, your grades could be the average of your top 5 classes.
- dpkonofa 9y ago
  What do you do for a living? Did you come from a wealthy family or did you earn your millions? I think your point makes a lot of sense but I also think that "a little luck along the way helps" more than most people think.
  - everdev 9y ago
    I ran a web agency, 2008-2014. Parents were middle class. I had a unique strength of being able to explain technical solutions in an easy way to CMOs/CEOs and give them ideas of what value the technology could provide that they hadn't thought of before. I also understood what would make my clients successful and how to design a tech project to align with those goals. Everything else I think I was pretty average at, but there seemed to be a lot of value in bridging the knowledge gap between C-level execs and programmers. I just kept doing that until the money wasn't fulfilling anymore.
mdxn 9y ago
The average GPA of millionaires alone is obviously not enough information to make the conclusions that this video is making. An average GPA of 2.9 is not far off from the average college GPA of regular students, anyways (for, let's say, the ones that graduate). For all we know (from just this statistic), college GPA could be completely independent from who is a millionaire and who is not. We really need information about the shape of the distributions in order to really compare these two groups. For instance, we would, at least, need to know that valedictorians (for the sake of simplicity, just people with 4.0s) have a lower likelihood of becoming millionaires than other groups. The average alone does not help us enough here. I have a few questions for the people who are really more knowledgeable about the topic: Is there really a lower incidence of high GPA graduates (3.8-4.0s) becoming millionaires than those closer to the average? Is this distribution tighter around the mean or are there clusters in certain bands of GPAs?
- deleted 9y ago
  [deleted]
- dlo 9y ago
  Here's a study you might be interested in: http://time.com/money/4779223/valedictorian-success-research-barking-up-wrong/ http://time.com/money/4779223/valedictorian-success-research...
  - overcast 9y ago
    Why must there ALWAYS be an auto playing video at the top of every article, that does nothing but play music, and show text.
    - thomyorkie 9y ago
      Probably appeals to people with different learning styles than you. Doesn't take much effort for you to stop the video from playing.
      - Broken_Hippo 9y ago
hristov 9y ago
Is that even true? I have met some rich people and they, in general, do not like to talk about how much money they have or what their grades were. I don't even know how anybody would conduct a study like this. How do you get a sample size that is representative of the average millionaire? I guarantee you will not be able to get all millionaires to complete your survey, and you won't even be able to get a list of all the millionaires in america. So you will necessarily have a survey of only a subset of millionaires, most likely a very small subset, and how could you possibly know if this subset is average at all? The youtube presenter does cite a scientific study, but that is a different study that surveyed valedictorians. Valedictorians are much easier to track down, as being a valedictorian is a public award that gets big mention in every yearbook. So, no I am not sure this is true. I suspect this might be one of these completely made up factoids that become famous and travel widely because they seem true and people kind of just want them to be true. Something like Malcom Gladwells's 10 000 hours rule. Of course it is possible that this is true, or the true average is another mediocre number. I would not be surprised, but even if this is the case there are many other possible explanations other than rule breaking. As an aside I have to say that we must be a little careful about worshiping rule breaking rich people. Rule breaking can be very beneficial to society if it bring about more wealth. But it can also be very harmful to human beings and downright evil. The rules being broken may be the laws of the land or moral rules we all feel are important. In that case I do not think being a rule breaker is an excuse.
madengr 9y ago
Reminds me of a T shirt I saw 25 years ago: limit ENGR_GPA -> 0 = Business Major A 2.9 in STEM is not a 2.9 in non-STEM. Ha ha, you can still get it: https://teespring.com/shop/engineeringlimitequation#pid=226&cid=5858&sid=front https://teespring.com/shop/engineeringlimitequation#pid=226&...
- bitwize 9y ago
  This fits nicely with my observation that people who major in Management Information Systems are the ones who couldn't cut it in Computer Science because of all the math.
  - ryanmarsh 9y ago
    Primary school math is fine for counting money.
  - glenr 9y ago
    Can confirm - failed 1st year university maths, concentrated mostly on nothing too "computer sciencey" for the rest of my undergrad IT degree.
    - bitwize 9y ago
      Did you have the big colorful picture books about what computers are for and how they work?
      - glenr 9y ago
        Books? Didn't need them. And computers just work, no need to know their inner workings. /s
bedhead 9y ago
Rich guy here. 2.9 undergrad gpa from a mediocre school. Academics were never my thing. Grit gets you farther than anything else in life.
- madengr 9y ago
  I eat yellow grits for breakfast. I'll attribute it to that.
  - brianwawok 9y ago
    Do the two words have a similar origin? I never thought of that until just now. Is the act of grit like being chunky and kind of hard? The same as the food and the thing that ruins bearings?
    - madengr 9y ago
      Probably. Gritting your teeth is certainly a sign of enduring hardship. Though it also grinds food into grits.
- deleted 9y ago
  [deleted]
- ditonal 9y ago
  But poor grades indicate a lack of grit.
  - alayne 9y ago
    Do they? Good grades indicate grit in getting good grades. The question is whether that translates to other areas of life.
  - deleted 9y ago
    [deleted]
  - gamechangr 9y ago
    No they don't. That's the lie the corporate world wants consumers to believe. They indicate a different priority system.

53 points by champagnepapi 9y ago

Something to keep in mind when looking at that statistic: The average American millionaire is 62 years old. They went to college in the mid 1970s. Thanks to decades of grade inflation, that 2.9 average GPA is probably the equivalent of a 3.3 today.

5ilv3r 9y ago
My GPA when I dropped out was 3.3! Where are my millions!!??
- 0xbear 9y ago
  You need to be 62 as well.
jstalin 9y ago
lol, today it's probably equivalent to a 4.2.

kyleschiller 9y ago

It's worth noting that millionaires who inherited their wealth had much less of an incentive to care about their GPA since wealth was more or less guaranteed. Also, children of millionaires will be able to attend top colleges even with substandard high school GPA/SATs [0], meaning they'll tend to underperform once there. [0] https://www.wsj.com/articles/SB1047409881995483800 https://www.wsj.com/articles/SB1047409881995483800

kyleschiller 9y ago

"Valedictorians often go on to be the people who support the system they become a part of the system, they don't change or overthrow the system." I really don't buy this explanation at all. Valedictorians might tend towards conformity, but you don't need to be a revolutionary to hit 1M. Anyone with a 20 year career in finance, consulting or tech and reasonable savings can hit a million dollars without doing anything crazy.

downandout 9y ago
You're right that a more accurate term in this context would have been "financially successful disruptors and entrepreneurs". $1M technically qualifies you to be a "millionaire," even though you can get there by simply making your mortgage payments for 30 years. However, the title makes sense for YouTube, as most of the population views generally defines "millionaires" as self-made people with many millions of dollars - not just those with $1M tied up in a house or other assets earned over a long period of time.
- phkahler 9y ago
  I think the conventional definition of millionaire in the financial world is a person with a million dollars in investments or liquid assets. A home does not count. Of course you may downgrade to a cheaper home (at retirement for example) and take some of the difference in cash.
  - madengr 9y ago
    The home does count, as you can either put the money into rent, investment accounts, or a mortgage. I'd consider a house more liquid than retirement accounts. I still owe $170k on my mortgage but have $1M in net worth. It's all in retirement accounts; all on paper and subject to markets. I surely don't feel wealthy. I'm 45 and hopefully I can get it to $2M - $4M by late 60's. I still don't consider that rich since people woefully underestimate retirement needs. I'm stating the Dave Ramsey steps to see if I can get the mortgage payed off over 4 years, and get $160k saved for 2x kids college.
- mamon 9y ago
  I think that the term "millionaire" became synonymous with "rich" long before the Great Depression, when $1M was worth much more ($14M in today's dollars). Now, thanks to inflation, "millionaire" lost it's appeal.
bdcravens 9y ago
> without doing anything crazy In other words, not overthrowing the system?

kyleschiller 9y ago

In the original student, Karen Arnold went to great lengths to highlight this counter-intuitive phenomenon as a gendered issue [0] in which women, who tended to get better grades then men [0], would still end up less successful. It's seriously regrettable that her point got lost in this rehashing. On a side note, I don't have the data, but would expect a similar effect with Asian-Americans, who tend to excel academically, but through socialization and institutional barriers, may fail to hit the "highest levels of success metrics" mentioned in this video. [1] [0] https://archives.library.illinois.edu/erec/University%20Archives/3901018/Topic%20Files/N-Z/Valedictorian%20Study.pdf https://archives.library.illinois.edu/erec/University%20Arch... [1] https://www.forbes.com/sites/liyanchen/2016/01/20/how-asian-americans-can-break-through-the-bamboo-ceiling/#1022f1511e43 https://www.forbes.com/sites/liyanchen/2016/01/20/how-asian-...

hasenj 9y ago
I would say that having high grades has no correlation with business success. The required traits and skills for the two things are vastly different. (Think Tesla vs Edison, and Wozniak vs Jobs). Sure, if you measure it across the entire population, it might appear that there's some correlation between academic success and being a millionaire, but if you measure it within the people who are already smart enough to get into universities, the correlation is probably non-existent, or might even be negative.
- ryanmarsh 9y ago
  Why anyone confuses what it takes for academic success with what it takes for financial success baffles me. It's like there's One True system for success and it requires good grades. I know very wealthy guys (real estate investors) who can't log into their home wifi. They're just good with people, and can do basic math. Hell, I'm a high school dropout and I billed my clients over $300k last year.
  - hasenj 9y ago
    > It's like there's One True system for success and it requires good grades. There is one thing that is required for success and it can be measured: IQ. If you don't have enough of it, you will struggle with a lot of things. But having it alone doesn't tell you what kind of field you can succeed in. I bet the wealthy real estate investors do have IQs that are well above average. (Not knowing how to use certain technologies is not a good indicator of IQ).

thaumasiotes 9y ago

Question: given two distributions X_1 and X_2 with mean μ_1 and μ_2, standard deviations σ_1 and σ_2, and correlation r, what is the average value of X_1 among data points for which X_2 exceeds (μ_2 + 2σ_2)? You would only expect millionaires to have very high GPAs if being a millionaire didn't require anything else.

uiri 9y ago
You would only expect millionaires to have very high GPAs if being a millionaire didn't require anything else. Slightly more accurately, you would only expect millionaires to have very high GPAs if being a millionaire involves no variables that are independent of GPA. For example, let's say that SAT scores and GPA are highly correlated. If the government runs a program whereby they give $1M to everyone who gets a perfect SAT score after they graduate from college, then the mean GPA of millionaires would skew much higher despite the dependent variable being SAT scores rather than GPA.
- thaumasiotes 9y ago
  > If the government runs a program whereby they give $1M to everyone who gets a perfect SAT score after they graduate from college, then the mean GPA of millionaires would skew much higher I don't know. It seems like the GPA of people with a perfect SAT score might fall if they knew about that program.

everdev 9y ago

I'm a millionaire with a 2.8 GPA through college. For me, I was fine trying hard at things I was good at and didn't spend much time on things that were hard. To get a good GPA, you either have to be great at everything or willing to work hard at everything. To start a successful business, you need to work hard at the small amount of things you're good at. And a little luck along the way helps too. I've always thought it would be nice if school's worked similar to businesses in that you could get a far more concentrated education if you wanted. Or, your grades could be the average of your top 5 classes.

dpkonofa 9y ago
What do you do for a living? Did you come from a wealthy family or did you earn your millions? I think your point makes a lot of sense but I also think that "a little luck along the way helps" more than most people think.
- everdev 9y ago
  I ran a web agency, 2008-2014. Parents were middle class. I had a unique strength of being able to explain technical solutions in an easy way to CMOs/CEOs and give them ideas of what value the technology could provide that they hadn't thought of before. I also understood what would make my clients successful and how to design a tech project to align with those goals. Everything else I think I was pretty average at, but there seemed to be a lot of value in bridging the knowledge gap between C-level execs and programmers. I just kept doing that until the money wasn't fulfilling anymore.

mdxn 9y ago

The average GPA of millionaires alone is obviously not enough information to make the conclusions that this video is making. An average GPA of 2.9 is not far off from the average college GPA of regular students, anyways (for, let's say, the ones that graduate). For all we know (from just this statistic), college GPA could be completely independent from who is a millionaire and who is not. We really need information about the shape of the distributions in order to really compare these two groups. For instance, we would, at least, need to know that valedictorians (for the sake of simplicity, just people with 4.0s) have a lower likelihood of becoming millionaires than other groups. The average alone does not help us enough here. I have a few questions for the people who are really more knowledgeable about the topic: Is there really a lower incidence of high GPA graduates (3.8-4.0s) becoming millionaires than those closer to the average? Is this distribution tighter around the mean or are there clusters in certain bands of GPAs?

deleted 9y ago
[deleted]
dlo 9y ago
Here's a study you might be interested in: http://time.com/money/4779223/valedictorian-success-research-barking-up-wrong/ http://time.com/money/4779223/valedictorian-success-research...
- overcast 9y ago
  Why must there ALWAYS be an auto playing video at the top of every article, that does nothing but play music, and show text.
  - thomyorkie 9y ago
    Probably appeals to people with different learning styles than you. Doesn't take much effort for you to stop the video from playing.
    - Broken_Hippo 9y ago

hristov 9y ago

Is that even true? I have met some rich people and they, in general, do not like to talk about how much money they have or what their grades were. I don't even know how anybody would conduct a study like this. How do you get a sample size that is representative of the average millionaire? I guarantee you will not be able to get all millionaires to complete your survey, and you won't even be able to get a list of all the millionaires in america. So you will necessarily have a survey of only a subset of millionaires, most likely a very small subset, and how could you possibly know if this subset is average at all? The youtube presenter does cite a scientific study, but that is a different study that surveyed valedictorians. Valedictorians are much easier to track down, as being a valedictorian is a public award that gets big mention in every yearbook. So, no I am not sure this is true. I suspect this might be one of these completely made up factoids that become famous and travel widely because they seem true and people kind of just want them to be true. Something like Malcom Gladwells's 10 000 hours rule. Of course it is possible that this is true, or the true average is another mediocre number. I would not be surprised, but even if this is the case there are many other possible explanations other than rule breaking. As an aside I have to say that we must be a little careful about worshiping rule breaking rich people. Rule breaking can be very beneficial to society if it bring about more wealth. But it can also be very harmful to human beings and downright evil. The rules being broken may be the laws of the land or moral rules we all feel are important. In that case I do not think being a rule breaker is an excuse.

madengr 9y ago

Reminds me of a T shirt I saw 25 years ago: limit ENGR_GPA -> 0 = Business Major A 2.9 in STEM is not a 2.9 in non-STEM. Ha ha, you can still get it: https://teespring.com/shop/engineeringlimitequation#pid=226&cid=5858&sid=front https://teespring.com/shop/engineeringlimitequation#pid=226&...

bitwize 9y ago
This fits nicely with my observation that people who major in Management Information Systems are the ones who couldn't cut it in Computer Science because of all the math.
- ryanmarsh 9y ago
  Primary school math is fine for counting money.
- glenr 9y ago
  Can confirm - failed 1st year university maths, concentrated mostly on nothing too "computer sciencey" for the rest of my undergrad IT degree.
  - bitwize 9y ago
    Did you have the big colorful picture books about what computers are for and how they work?
    - glenr 9y ago
      Books? Didn't need them. And computers just work, no need to know their inner workings. /s

bedhead 9y ago

Rich guy here. 2.9 undergrad gpa from a mediocre school. Academics were never my thing. Grit gets you farther than anything else in life.

madengr 9y ago
I eat yellow grits for breakfast. I'll attribute it to that.
- brianwawok 9y ago
  Do the two words have a similar origin? I never thought of that until just now. Is the act of grit like being chunky and kind of hard? The same as the food and the thing that ruins bearings?
  - madengr 9y ago
    Probably. Gritting your teeth is certainly a sign of enduring hardship. Though it also grinds food into grits.
deleted 9y ago
[deleted]
ditonal 9y ago
But poor grades indicate a lack of grit.
- alayne 9y ago
  Do they? Good grades indicate grit in getting good grades. The question is whether that translates to other areas of life.
- deleted 9y ago
  [deleted]
- gamechangr 9y ago
  No they don't. That's the lie the corporate world wants consumers to believe. They indicate a different priority system.