Why the average millionaire's college GPA is 2.9 [video] | Hacker News Reader

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

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53 pointschampagnepapi60 comments

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?

Here's a study you might be interested in:

http://time.com/money/4779223/valedictorian-success-research...

Why must there ALWAYS be an auto playing video at the top of every article, that does nothing but play music, and show text.

Probably appeals to people with different learning styles than you. Doesn't take much effort for you to stop the video from playing.

It doesn't take much effort to start a video if you should so want it. This method has the added benefit of not annoying folks like me who seriously do not appreciate the noise pollution.

This study, at least as Time summarizes, seems to be quite badly formed. 81 valendictorians are far too small of a sample size to determine who goes on to be a visionary, given that the baseline odds of being a visionary (whatever that even is) are probably less than 1 in 1000.

The fact that you can randomly sample thought leaders and see a reasonably high number of valedictorians (Peter Thiel, Ben Bernanke) suggests there's a positive correlation.

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%20Arch... [1] https://www.forbes.com/sites/liyanchen/2016/01/20/how-asian-...

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.

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.

> 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).

IQ is a very narrow measure of intelligence.

Grades aren't a useful measure of IQ.

> I would say that having high grades has no correlation with business success.

Maybe it should. The fact that so many people is business successful while being uninformed and mostly incompetent is a problem. The current USA's president is a really good example on this. A general immoral behavior, and lack of knowledge allows him to accumulate wealth. And that's bad for a society, as it means that it is rewarding the wrong behaviors.

In a lot smaller scale I have seen this make business fail. In one company sales people were getting money on every sale, so they had their long time customers (company customers really) and had to do nothing to keep earning a big salary. The company changed this policy to bigger bonuses but just associated with new customers. This was a game changer. If you reward the correct behavior, you get it.

While we reward lobby creation, abuse of the legal system, etc. that's what makes rich people and that's what we get.

"end up less successful"

If you mean end up less successful at being old millionaires with big houses and flashy cars, that's true. Is it important for males and females to become that in equal numbers? Do we need old millionaires driving around with flashy cars and big houses at all?

What about parents raising children who are upright, have morals, and contribute to wellbeing of society? Are they less successful?

Are you suggesting that there isn't something fundamentally inequitable about large segments of society having a harder time obtaining material wealth?

I agree with what I assume is your position that material wealth shouldn't be the sole metric of success, but I also think the fact that women and minorities struggle relative to white men to obtain material wealth is a problem we should try to solve. Those positions are not contradictory.

If fewer people accumulate material wealth, can you conclude that they had a harder time doing it? I mean, I'm not ruling it out, but it also seems plausible the group wasn't trying to do that as much.

Is that what we are? Biological-chemical constructions who accumulate metrics of successes? Will people become more fulfilled in their lives because we give them all material wealth?

Why not have a world where people don't think of excessive material wealth as a metric of success at all, where people care about what fulfils their own and other's lives? In this world people don't accumulate wealth for the sake of accumulating it in the first place, and the distribution of wealth will also be more equal.

Your position would work directly against this vision, as an example.

You're talking about changing human behavior, across the entire species. And if that's the end goal, there are many more critical issues to resolve than (material) wealth judgement.

It seems to me that you are trying to achieve equality of outcome, or you assume that all people are fundamentally the same so that any disparity in outcome must be a result of a fundamental inequality in society.

One of the GP comments mentions Asians. I don't think Asians in North America (or anywhere else for that matter) have a hard time obtaining enough material wealth to live comfortable lives and raise families.

Meric (to whom you're replying) does have a point -- if you can effectively bar women from economic activity they're much more likely to stay home or do community and volunteer work. There are certain advantages to forcing segments of society to do work that is poorly paid or not respected, especially if you can get them to do it for free. Exploitation of women and minorities has been phenomenally successful in history exactly because you can cheaply get the best of these particular demographic groups doing jobs they wouldn't do if they had more opportunity.

It is obvious that this is fundamentally inequitable, but equity isn't everyone's highest value.

If you do not respect work that don't bring money, like parenting, spending time with children, preparing a family gathering, that's your prerogative. Don't project your disdain for these activities on me.

You define traditionally feminine activities as disrespected, poorly paid, cheap, and then put traditionally masculine activities on a pedestal by calling it a metric of success then tell everyone who is doing the former they are prevented from doing the latter. Who is creating the inequity here?

And is equal material wealth your highest value? What about love?

And I am unequivocally against barring women or minorities from economic activity. Just in case, you thought I am.

Big houses and flashy cars are usually a sign of debt, not wealth.

> Do we need old millionaires driving around with flashy cars and big houses at all?

> What about parents raising children who are upright, have morals, and contribute to wellbeing of society?

I've met plenty of very successful, wealthy people that raise great kids. It's none of my business or anyone else's how these people spend their money but I'll give you the benefit of the doubt and presume "old" means "old money" which means "never worked a day to get wealthy". In which case, yes, I think they often can raise garbage kids, but I'm unsure how one could go about "fixing" that.

I don't think material wealth is worthy enough as a metric of success for society to care about giving equal access to it to everyone - mere sufficient access ought to be enough, and focus on what's more important than material wealth, of which good parenting is one example. Which is a more pressing problem: the top paid individuals of group X earns less than the top paid individuals of group Y, or the fact that so many in society are focused on the wrong things when they think about what makes them content and happy?

> Which is a more pressing problem: the top paid individuals of group X earns less than the top paid individuals of group Y, or the fact that so many in society are focused on the wrong things when they think about what makes them content and happy?

Great question! I'll risk to assert the latter simply because problem 1 would fix itself in my mind. There were times when no American went without...

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

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.

My GPA when I dropped out was 3.3! Where are my millions!!??

You need to be 62 as well.

lol, today it's probably equivalent to a 4.2.

"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.

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.

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.

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.

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.

> without doing anything crazy

In other words, not overthrowing the system?

There are plenty of crazy things one can do that don't overthrow the system

I had a 2.0 in high school. Though in college I had a 3.56 due to the liberal arts requirements; 3.9 in STEM courses. 20 years in engineering, maxing out 401k and not blowing money on cars, etc. it's easy to have > $1E6 net worth.

>>Anyone with a 20 year career in finance, consulting or tech and reasonable savings can hit a million dollars

Yet most don't.

You are under estimating the amount of discipline it will take to sustain a frugal campaign several years to arrive at any decently high figure.

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.

I eat yellow grits for breakfast. I'll attribute it to that.

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?

Probably. Gritting your teeth is certainly a sign of enduring hardship. Though it also grinds food into grits.

But poor grades indicate a lack of grit.

Do they? Good grades indicate grit in getting good grades. The question is whether that translates to other areas of life.

No they don't. That's the lie the corporate world wants consumers to believe.

They indicate a different priority system.

Fairly successful guy here. No they don't. I worked till 5am last night on a new business. I absolutely hated school. I love to learn. We all learn differently but the system works for one type of learner. When I dropped out of high school I took the GED, of the guys I took the test with, most of them scored in the 90th percentile. We were all smart, and most of us liked to work, we just didn't fit the system.

Only in the imposed system of judgement of academics, not your own pursuits.

Many people with poor school histories succeed fantastically when working on their own projects and passions.

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.

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.

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.

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.

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.

> 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.

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&...

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.

Primary school math is fine for counting money.

Can confirm - failed 1st year university maths, concentrated mostly on nothing too "computer sciencey" for the rest of my undergrad IT degree.

Did you have the big colorful picture books about what computers are for and how they work?

Books? Didn't need them. And computers just work, no need to know their inner workings. /s

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.

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