Despite their traditionally modest salaries, a recent study conducted by Ramsey Solutions, led by personal finance expert Dave Ramsey, challenges the common perception of teachers’ financial status.
The “National Study of Millionaires” highlights that many teachers have achieved substantial wealth, as reported by Yahoo Finance.
According to moguldom.com, The study sheds light on the financial success of educators, challenging stereotypes associated with their earning potential and showcasing their ability to accumulate significant wealth.
According to the study’s findings, teachers rank as the third most likely profession to have millionaires among their ranks, even with a median salary of just $61,000. Teachers rank third, behind engineers and accountants, on a top-five list of careers most likely to have millionaires within their ranks. Business professionals and lawyers came in fourth and fifth, respectively.
Here are three factors that explain why teachers ranked third.
1, High incomes don’t always make millionaires
One of the study’s most surprising findings is that high incomes alone do not guarantee wealth. The study surveyed 10,000 millionaires, and 93 percent of them attributed their wealth to hard work rather than high-salary jobs. Only 15 percent held senior management positions, and just 31 percent earned over $100,000 annually at any point in their careers, according to the Ramsey Solution.
“You can’t earn your way out of stupidity,” said Ramsey.
Financial literacy and smart money management are musts over simply earning a high income.
2, Patience and long-term investing
Millionaires seem to share a common trait: a dedication to long-term investing and disciplined financial habits. They also invested in education. Some 88 percent of the millionaires polled had graduated from college, and 52 percent had earned postgraduate degrees.
And their wealth-building strategies revolved around consistent, long-term investing. Eight out of ten millionaires invested in their company’s 401(k) plans and consistently contributed to them. They also took great care when managing their expenses, with 94 percent living below their means.
“They are systems people. They work with a set of principles and they don’t have free rein to make up their own rules,” Ramsey said in his on-air review of the results. “When you are a lawyer, and you go before the judge, you have to follow exact procedures. … You don’t have a choice. You don’t have a choice when you are designing a bridge. There is one way; otherwise it falls.”
3, Passion for careers
Teachers often pursue their careers out of passion and dedication to education and not typically for financial gain. Ramsey advises individuals not to choose a career solely based on income potential but also to consider factors like personal fulfillment and creativity.
“Don’t pick your career based on how much money you can make only,” Ramsey says. “Also, don’t pick a career that says you will be happy but broke. That won’t work either. You should make more money if you are doing something you love, because you are good at it, you care about it, and you are creative and you have energy. You should make more money, not less.”