I got a call the other day from a mother who was concerned about her son who is getting ready to apply to college. She’s worried about what he should declare as a major. The good news is that the boy knows what he wants: he wants to get rich, filthy rich. She explained that his view of the world is slightly skewed because where they live all of his friends’ parents are either movie stars or hedge fund managers. (I immediately made a mental note to start hanging out at their local Starbucks.) Her son has decided that his talents are more suited to hedge fund managing than movie stardom. And the investment guys have assured him that the road to hedge fund managing has lower risk and better financial upside – invoking the old Peter Principle if the last couple of years are any indication.
Anyway, her question stumped me. If he had chosen movie stardom the answer would have been a snap. As we all know the road to movie stardom is the road most traveled in college; it is paved with debauchery and narcissism, or as my generation called it – sex, drugs, and rock ‘n roll. (*disclaimer – anecdotal only: the author has no direct knowledge of these indulgences) This called for more than my usual, “Take two aspirin and follow your bliss.”
Fortunately, her call came right after an article written by Beckie Supiano appeared in the Chronicle of Higher Education (http://chronicle.com/article/Education-Pays-but-So-Does/128526/) that summarized a study called “The College Payoff: Education, Occupation, Lifetime Earnings” conducted by three Georgetown professors on lifetime personal income broken down by degree and profession. Physicians and surgeons with professional degrees top the list with lifetime earnings of $6,172,000. Chief executives with a doctoral degree earn $5,131,000, while chief executives with just a masters degree earn $5,160,000, and chief executives with only a bachelors degree have to get by on $4,483,000. Professors with a PhD, like those who did this study, have average lifetime earnings of $2,803,000.
The study does not include move stars or actors, but the average annual salary of an actor in 2010 was $5,000. Johnny Depp made $75 million that year, Ben Stiller made $53 million, and Leonardo DiCaprio made $48 million. Lloyd Blankfein, the ceo of Goldman Sachs, saw his income slip from $68.5 million in 2007 to $13.2 million in 2010.
I’m guessing these luminaries share the same zip code as the mom who called me. These are the outliers, as Malcolm Gladwell might say. But the College Payoff study once again demonstrates that level of education directly correlates to increased lifetime earnings, no matter what your bliss is.