% ppl who earn >$1 million cumulative from trading over a lifetime?

[pinetboltz]

So I recently came across a statistic that says the average college grad makes $1.2 million pre-tax 2014 dollars, over a lifetime:

http://www.hamiltonproject.org/papers/major_decisions_what_graduates_earn_over_their_lifetimes

I guess if we try to do the estimates, and filter out:
- % of working population with lower levels of disposable income/ investable assets
- % who buy & hold S&P/treasuries in their IRAs in a mutual fund, and never trade
- % who derive their wealth from real estate, stock option grants, etc, and don't trade
- % who trade but lose money on a net cumulative basis
...
what % do you think ultimately makes >$1 million from trading, over a lifetime?

It'd be very interesting to see the statistical distribution of total profit/loss across individuals' personal accounts on a cumulative basis.

 

[DaveV]

The article states: "Looking at cumulative earnings over the entire career, the typical bachelor’s degree graduate worker earns $1.19 million, which is twice what the typical high school graduate earns, and $335,000 more than what the typical associate degree graduate earns."

That $1.19 million lifetime earnings seems very low.

The average median starting salary for recent college graduates from ranked National Universities is $50,187, according to U.S. News data. Multiply that by 40 working years and it works out to $2 million lifetime.

 

[Handle123]

So I recently came across a statistic that says the average college grad makes $1.2 million pre-tax 2014 dollars, over a lifetime:

http://www.hamiltonproject.org/papers/major_decisions_what_graduates_earn_over_their_lifetimes

I guess if we try to do the estimates, and filter out:
- % of working population with lower levels of disposable income/ investable assets
- % who buy & hold S&P/treasuries in their IRAs in a mutual fund, and never trade
- % who derive their wealth from real estate, stock option grants, etc, and don't trade
- % who trade but lose money on a net cumulative basis
...
what % do you think ultimately makes >$1 million from trading, over a lifetime?

It'd be very interesting to see the statistical distribution of total profit/loss across individuals' personal accounts on a cumulative basis.

I have learned that degrees are nearly worthless if you don't work actually ever work in the industries in which I went for school, degrees mostly not all represent a calling card to allow you to get a foot in the door and reduce the masses for many jobs. I am firm believer while growing up if your family taught you about the process of making money, saving it, construction and real estate from young age, most without college can do very well. Our family kept a ritual starting at eighteen you started with your first rental house, remodeling it and dealing with leases and renting it out, but much family support. But in today's society, I do not see where fathers and uncles lift a hand for start of their kids and nephews/nieces to get ahead in life, people now are very lazy and selfish. And I have earned three degrees, they helped a little in businesses I have owned and rental property, but even if I didn't, you need the drive to just do it, many don't have this drive, this intense feeling of not relying on people. It not about beating the "Jones" or neighbors, it is about the challenges of self. The same with trading, very few ever make a million in their life let alone in a year, you have to learn so much of what doesn't work so you can take other sides of people who don't do it right.

 

[Lee-]

The numbers are brought down by those who graduate with degrees in fields that are not well paid. Also consider the people who don't actually utilize their degree or end up in jobs for which no degree is required. Some people are from independently wealthy families and end up not working at all even though they went to college. You also have to consider people who are stay at home parents, people who die early, or otherwise have circumstances that prevent them from working or choose not to work or to work minimally.

Having said all of that, I'm still surprised to see only $1.2M.

As far as those making > $1M trading, if you're trying to compare the benefits of college education vs going without college to trade, I think you're missing a key point -- the people who are able to make > $1M trading are likely highly correlated to the people who also stand to make much greater than $1M working. In part because in order to make > $1M trading, they had to have some $ to start with, which in turn implies they had a job that allowed them to build up trading capital to get started. In other words, people who are making < $30K are going to have a much more difficult time saving $ in order to get started trading and therefore are less likely to be able to make $1M trading even if they would have been able to had they had the capital.

 

[dozu888]

college is complete waste of money - say 4 year tuition/fees are $100k... just put in SPY at 10% annual, compounding 40 years comes to $4.5m... in QQQ at 12.75% it is over $10m..

that is the end result if you just sit there watching TV for 40 years.

and busting your ass 9-5 for 40 years only gets 1.2m? not to mention there is earning power just with a high school diploma, so the net gain from the college degree is even less.

so stupid to spend money on college.

 

[luisHK]

college is complete waste of money - say 4 year tuition/fees are $100k... just put in SPY at 10% annual, compounding 40 years comes to $4.5m... in QQQ at 12.75% it is over $10m..

that is the end result if you just sit there watching TV for 40 years.

and busting your ass 9-5 for 40 years only gets 1.2m? not to mention there is earning power just with a high school diploma, so the net gain from the college degree is even less.

so stupid to spend money on college.

Not sure your reasoning is valid, you are optimistic with 10% a year compounding, besides once one get a decent professional activity it is no big deal to save around 25k a year and invest it in some etf , and if you want to let whatever money you have invested grow you need to live on extra income. Not having gone to college might make it harder.

 

[dozu888]

Not sure your reasoning is valid, you are optimistic with 10% a year compounding, besides once one get a decent professional activity it is no big deal to save around 25k a year and invest it in some etf , and if you want to let whatever money you have invested grow you need to live on extra income. Not having gone to college might make it harder.

it's straight forward. person A puts 100k in SPY for 40 years while sustain himself on job with high school diploma; person B spends the 100k on college... the math is simple.

 

[mushinseeker]

ok so I will tell my kid who just graduated HS to get $100,000 and keep it in SPY and watch TV for 40 years and then draw on the $Million as he survives doing menial jobs w a HS diploma but where is he gonna get the 100,000 initially ? OR he can spend 50k with let's say an economics degree, up his salary from lets say $30,000 to $75000 after graduating college.

 

[dozu888]

ok so I will tell my kid who just graduated HS to get $100,000 and keep it in SPY and watch TV for 40 years and then draw on the $Million as he survives doing menial jobs w a HS diploma but where is he gonna get the 100,000 initially ? OR he can spend 50k with let's say an economics degree, up his salary from lets say $30,000 to $75000 after graduating college.

we are talking general math of course... personal variations based on family income, how much need based grant you can get etc.

to respond to your question, if you come out of nothing family and can get college education for free, go for it... but if you have to pay for full price, my math is solid.

 

[mushinseeker]

agree! I live in an exclusive town and I shudder at the $$ being spent at Ivy/private schools here by parents where their kids get English or communciations degree at N'eastern at $50,000 per year! WTF!.That is a steep price to pay to be able to tell your friends around graduation time.. "oh my kid is going to <insert ivy here>" . I think the path is somewhere in between.. like get a STEM degree at a community college , get A's then get a masters at a kick ass school. You get out at 23 yo with a terminal degree with not too crazy debt level , starting at $70000 .. now plow that into ETF and your math takes over.!