The Million-Dollar Difference of A College Degree

by Christina Couch

College grads typically earn more than workers with high school diplomas, but just how much varies from job to job. Earning a bachelor's degree is statistically a huge payoff in many professions, but for some, such as electricians, janitors and postal service mail carriers, there's no difference between the lifetime earnings of college and high school grads, according to research from Georgetown University's Center on Education and the Workforce. In fact, workers with bachelor's degrees in jobs such as carpentry actually have a lower median wage than those without.

Read on to discover the jobs where the difference between a bachelor's degree and a high school diploma is at least seven figures over a lifetime. Culled from Georgetown's The College Payoff study, these jobs don't absolutely require a four-year degree to break in, but they do provide substantial financial incentive for those who hit the books.

The "median pay difference" listed is the lifetime pay difference between earning a degree versus a high school diploma.

Top brass in public and private positions

Position: Chief executive officers and legislators
Median lifetime pay difference: $1.9 million

Mark Zuckerberg, Steve Jobs and Michael Dell built their empires without degrees, but that's not how most CEOs make it, says Stephen Rose, research professor at Georgetown University's Center on Education and the Workforce and a co-author of The College Payoff study.

"If you look at CEOs of the 500 largest corporations, what you find is that 93 percent have a bachelor's degree and 50 percent have a graduate degree," he says. "By and large, most people aren't just supertalented like Bill Gates."

Rose adds that even for grads who don't major in business or entrepreneurship, a four-year degree still hones leadership, critical thinking, problem-solving skills and the ability to see a long-term task through from beginning to end.

Successfully break in, and you'll be handsomely rewarded. While Fortune 500 CEOs earn well into the millions, the median pay for chief executive officers is $165,080 per year, reports the Bureau of Labor Statistics, or BLS. In the government sector, the annual salary for most representatives and senators is currently $174,000 per year.

Getting Wall Street cred

Position: Securities, commodities, financial services sales agents
Median lifetime pay difference: $1.5 million

In the financial services field, those with some college education make $1.9 million over their lifetimes, but college grads make $3.4 million on average.

With a median salary of $70,190 per year, according to the BLS, workers in this field typically have cushy jobs that come with generous benefits packages. A four-year degree in economics, statistics or mathematics can provide securities, commodities and financial services workers with technical know-how.

But having a college degree serves a valuable networking function, too, says Jonathan Thom, a vice president of professional staffing at Express Employment Professionals in Oklahoma City. Express is one of the largest staffing firms in North America.

Because they interact with high-net-worth investors and institutional clients with bachelor's or graduate degrees, workers in this field need to have a college degree "to show credibility," Thom says.

As important as the number-crunching know-how, Thom adds, is the exposure to industry insiders through internships, alumni networks and mentoring programs that undergrads gain.

Showing your ROI

Position: Financial manager
Median lifetime pay difference: $1.3 million

A four-year degree in business, finance or accounting can get your foot in the door, but Brandi Britton, a district president with the worldwide staffing firm Robert Half International' says grads will also need work and management experience outside the classroom through internships, summer jobs and extracurricular activities.

"Employers will look for small things in the leadership area that a lot people don't always think are important like, for example, did you lead a group at school? Did you lead your sorority or fraternity, or if you worked at, let's say, Starbucks, were you in a capacity where you led other employees?" she says. "Things like that demonstrate that you have that entrepreneurial behavior but also that desire to take on more responsibility."

Britton adds that companies that employ financial management professionals focus strongly on employee return on investment -- specifically, whether managers are saving the company money, improving service or making internal processes more streamlined. To stand above the wave of other grads, Britton encourages those breaking into the field to highlight where they've made organizational improvements, even if it's on a small level.

Getting degree in the right field

Position: Miscellaneous managers
Median lifetime pay difference: $1.3 million

Managers of all types usually get paid more than those they manage, but a degree in a business field isn't the only way to move up the corporate ladder.

"(Students) should think broadly about what fields they might be interested in, what type of career that they might like to see and get those core skills in those areas," says G. Jason Jolley, an adjunct assistant professor of finance at the University of North Carolina at Chapel Hill. For example, students interested in managing engineers can break in with an engineering degree in addition to business experience.

Students aiming for a management role in a highly prestigious organization should also carefully decide where they attend school, adds Jolley.

"If your goal is to work on Wall Street eventually in some sort of management role, going to a highly regarded college, particularly one with a highly regarded business school, you're more likely to be exposed to the recruiters from those firms," he says.

Building on intangible skills

Position: Models, demonstrators and product promoters
Median lifetime pay difference: $1.3 million

"A product promoter could be somebody (such as a representative) at a high-end retail shop that says, 'Would you like to try this fragrance?' to somebody who's really arranging product placement on TV and in movies," says Stephen Rose of Georgetown. "The one that's doing the perfuming is in a very low-paying job, and the one that's negotiating contracts with TV stations and movie companies is in the high-end job. ... What we see is that more educated people (in this field) have been able to get the top spots in that job."

Even in an industry such as modeling that seems largely contingent on physical attractiveness, workers still need the skills to build their brand, communicate articulately and create an effective career strategy to get to the top, says Rose. Those intangible skills, he adds, "can be the difference between success and failure."

Experience in and out of classroom

Position: Marketing and sales managers
Median lifetime pay difference: $1.3 million

The BLS reports that candidates who have course work in management, accounting, business law, statistics, finance and marketing will have an advantage in the job market over those who don't. Willis Turner, president and CEO of Sales and Marketing Executives International, a professional association for sales and marketing managers, says the field is competitive. Candidates also need to come armed with additional experience gained outside the classroom.

"Valuable experience can be gained through co-op and internship programs," Turner says. "The candidate's portfolio should include evidence that will help the potential employer see a balance between education, work and community service."

Once you've broken in, the payoffs are significant. Sales managers earn a median pay of $98,530 per year, while marketing managers rake in a median salary of $108,260 per year, according to the BLS.

Showing you have what it takes

Position: Salespeople in wholesale and manufacturing
Median lifetime pay difference: $1.3 million

A four-year degree pays off even for sales reps below the managerial level. Though the median pay for these workers is roughly half of what their managerial counterparts earn, according to the Bureau of Labor Statistics, lifetime earnings for workers with a high school diploma are also low enough that the difference in lifetime earnings stays the same.

The value in having a four-year degree in this field lies less in acquiring technical skills necessary for a specific job and more in demonstrating soft skills that can push sales reps to generate commissions, explains James H. Wyckoff, director of the Center on Education Policy and Workforce Competitiveness at the University of Virginia in Charlottesville, Va.

"Individuals with a (bachelor's degree) have shown they have the personal traits like persistence and motivation to actually do what is necessary to get a B.A. that those with only a high school degree have not (shown)," he says. "It is not the knowledge that a B.A. confers that is important, but the signal it provides about personal traits that are often hard to measure or determine in an interview."

For analytical problem solvers

Position: First-line supervisors and managers, nonretail work
Median lifetime pay difference: $1.2 million

Budgeting, management, human resource and accounting skills all combine for workers who manage a sales team in industries ranging from telecommunications to wholesale trade services. First-line supervisors act as a liaison between production workers and upper-level executives.

Their responsibilities include creating policies that meet the goals of the organization and the workers, improving company productivity on a ground level, and nipping production and human resource problems in the bud before they escalate.

While median pay is $70,520 per year according to the BLS, only those who have the analytical and problem-solving skills that frequently accompany a four-year degree will be able to snag such a salary.

Surpassing the supervisory role

Position: General and operations managers
Median lifetime pay difference: $1.1 million

Considered one of the highest executive positions, general and operations managers work with the executive team to create company-wide initiatives and oversee daily operations in public and private sector organizations, reports the BLS. They also bring in a sweet median pay of $95,150 per year, with the top 25 percent earning $144,050 or more.

Thom of Express Employment Professionals says it's technically possible to break into this field with only a high school diploma, but most workers without a college degree top out at the supervisor level. To set yourself up for a general operations manager job, Thom recommends an undergraduate course of study that mixes general business classes with accounting, finance, management and statistics courses. Students who gain each of these skills leave campus with "a better fiscal understanding of the business, which is always important."

Building from scratch

Position: Construction management
Median lifetime pay difference: $1.1 million

People who can plan and coordinate a construction project from beginning to end are rewarded with a median salary of $83,860, reports the BLS.
Richard Lambeck' department chair of the Construction Management Department at New York University's Schack Institute of Real Estate, says degrees in this field focus on helping students hone their ability to create budgets, manage teams of subcontractors and ensure that work done is installed properly.

"It's all about mitigating risk in the construction industry," he says, which "is looking for people who understand the process, how they can reduce their risk, how they can make sure the project is going to be on time and within the budget that's originally established between the contractor and the developer."

The real benefit to getting a degree, he adds, is that students get an interdisciplinary skills set. The skills set mixes technical know-how in the construction field with business development, labor relations, contract evaluation and project management course work.

"We're giving people the skills to manage the construction process," he says.

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A New Rule of Thumb for Tapping Savings

by Susan Garland

When it comes to tapping your retirement savings, a basic rule of thumb calls for withdrawing from taxable accounts first and allowing tax-deferred traditional IRAs and tax-free Roth IRAs to grow as long as you can. But a mounting body of research shows that you may be better off switching the order a bit.

In a recent study, researchers found that for some retirees, tapping part of a traditional IRA in the early years of retirement could pay unexpected dividends by reducing the size of required minimum distributions when they turn 70 1/2. Shrinking those taxable payouts could keep you in a lower tax bracket and actually boost your wealth over the long term.

For this strategy to be effective, the authors say, part or all of your early IRA withdrawals must be sheltered from tax by tax deductions and exemptions. Consider a married couple in which each spouse is 65 or older and knows that at least $21,800 of otherwise taxable income in 2012 will be tax-free thanks to their standard deduction and personal exemptions. If the couple's taxable income before any IRA distribution would fall below that level, the couple could use "withdrawals from the tax-deferred IRAs to create tax-free income," co-researcher Alan Sumutka, associate professor of accounting at Rider University, in Lawrenceville, N.J., said in an interview.

Sumutka and his colleagues sought to determine which of 15 possible withdrawal strategies would produce equal payouts but leave a retired couple with the largest account balance after 30 years. They considered a 65-year-old married couple who retired in 2013 with $2 million, split 70% in traditional IRAs, 20% in taxable accounts and 10% in Roth IRAs. The annual rate of return was 6%. The couple's expenses the first year were $80,000 offset by $30,000 in Social Security. The study assumed that Bush-era tax cuts would be extended.

The most tax efficiency occurred when, in the years before required distributions began, the couple tapped their traditional IRAs up to the amount of their deductions and exemptions. They took the balance for the year's expenses from their taxable accounts, paying up to 15% on any long-term capital gains. Once they began taking RMDs, they continued to withdraw from their taxable accounts until they were depleted and then began tapping their tax-free Roth IRAs. They saved the rest of their traditional IRAs to last. After 30 years, the hypothetical couple still had $1.61 million.

The conventional taxable-accounts-first strategy ended in sixth place. The thinking behind this strategy is that your tax-advantaged retirement assets should be left to compound as long as possible. But that strategy left the couple with just $1.17 million.

Keeping Income on an Even Keel

A key to tax efficiency over a 30-year retirement horizon is to keep adjusted gross income and taxable income steady, the authors say. They were able to stabilize income in part by shrinking the IRA -- and, thus, the size of taxable RMDs. "If you leave too much money in the account, eventually you may be forced into a higher bracket," says co-researcher Lewis Coopersmith, associate professor of management sciences at Rider.

The researchers found that following the conventional strategy led to more volatility in income over the years and resulted in the couple spending 23 years in the 25% tax bracket, with just seven years in the 0% or 15% brackets. With the optimal strategy, the couple spent 14 years in the 25% bracket and 16 years in the 15% bracket.

Tapping the Roth before withdrawing from the balance in the traditional IRA also helped even out taxable income. "If I took the tax-deferred money before the tax-free money, I would have to pay taxes, so I would be reducing the total ending balance," says Coopersmith.

There are times when the common rule would work, the authors say. Those would be cases in which initial portfolios are large -- $8 million or more -- or contain 45% to 55% in taxable assets.

Couples with large taxable pensions would not likely benefit from tapping the IRA first.

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Twenty One Ways Rich People Think Differently

by Mandi Woodruff

World's richest woman Gina Rinehart is enduring a media firestorm over an article in which she takes the "jealous" middle class to task for "drinking, or smoking and socializing" rather than working to earn their own fortune.

What if she has a point?

Steve Siebold, author of "How Rich People Think," spent nearly three decades interviewing millionaires around the world to find out what separates them from everyone else.

It had little to do with money itself, he told Business Insider. It was about their mentality.

"[The middle class] tells people to be happy with what they have," he said. "And on the whole, most people are steeped in fear when it comes to money."

1. Average people think MONEY is the root of all evil. Rich people believe POVERTY is the root of all evil.

"The average person has been brainwashed to believe rich people are lucky or dishonest," Siebold writes.

That's why there's a certain shame that comes along with "getting rich" in lower-income communities.

"The world class knows that while having money doesn't guarantee happiness, it does make your life easier and more enjoyable."

2. Average people think selfishness is a vice. Rich people think selfishness is a virtue.

"The rich go out there and try to make themselves happy. They don't try to pretend to save the world," Siebold told Business Insider.

The problem is that middle class people see that as a negative––and it's keeping them poor, he writes.

"If you're not taking care of you, you're not in a position to help anyone else. You can't give what you don't have."

3. Average people have a lottery mentality. Rich people have an action mentality.

"While the masses are waiting to pick the right numbers and praying for prosperity, the great ones are solving problems," Siebold writes.

"The hero [middle class people] are waiting for may be God, government, their boss or their spouse. It's the average person's level of thinking that breeds this approach to life and living while the clock keeps ticking away."

4. Average people think the road to riches is paved with formal education. Rich people believe in acquiring specific knowledge.

"Many world-class performers have little formal education, and have amassed their wealth through the acquisition and subsequent sale of specific knowledge," he writes.

"Meanwhile, the masses are convinced that master's degrees and doctorates are the way to wealth, mostly because they are trapped in the linear line of thought that holds them back from higher levels of consciousness...The wealthy aren't interested in the means, only the end."

5. Average people long for the good old days. Rich people dream of the future.

"Self-made millionaires get rich because they're willing to bet on themselves and project their dreams, goals and ideas into an unknown future," Siebold writes.

"People who believe their best days are behind them rarely get rich, and often struggle with unhappiness and depression."

6. Average people see money through the eyes of emotion. Rich people think about money logically.

"An ordinarily smart, well-educated and otherwise successful person can be instantly transformed into a fear-based, scarcity driven thinker whose greatest financial aspiration is to retire comfortably," he writes.

"The world class sees money for what it is and what it's not, through the eyes of logic. The great ones know money is a critical tool that presents options and opportunities."

7. Average people earn money doing things they don't love. Rich people follow their passion.

"To the average person, it looks like the rich are working all the time," Siebold says. "But one of the smartest strategies of the world class is doing what they love and finding a way to get paid for it."

On the other hand, middle class take jobs they don't enjoy "because they need the money and they've been trained in school and conditioned by society to live in a linear thinking world that equates earning money with physical or mental effort."

8. Average people set low expectations so they're never disappointed. Rich people are up for the challenge.

"Psychologists and other mental health experts often advise people to set low expectations for their life to ensure they are not disappointed," Siebold writes.

"No one would ever strike it rich and live their dreams without huge expectations."

9. Average people believe you have to DO something to get rich. Rich people believe you have to BE something to get rich.

"That's why people like Donald Trump go from millionaire to nine billion dollars in debt and come back richer than ever," he writes.

"While the masses are fixated on the doing and the immediate results of their actions, the great ones are learning and growing from every experience, whether it's a success or a failure, knowing their true reward is becoming a human success machine that eventually produces outstanding results."

10. Average people believe you need money to make money. Rich people use other people's money.

Linear thought might tell people to make money in order to earn more, but Siebold says the rich aren't afraid to fund their future from other people's pockets.

"Rich people know not being solvent enough to personally afford something is not relevant. The real question is, 'Is this worth buying, investing in, or pursuing?'" he writes.

 11. Average people believe the markets are driven by logic and strategy. Rich people know they're driven by emotion and greed.

Investing successfully in the stock market isn't just about a fancy math formula.

"The rich know that the primary emotions that drive financial markets are fear and greed, and they factor this into all trades and trends they observe," Siebold writes.

"This knowledge of human nature and its overlapping impact on trading give them strategic advantage in building greater wealth through leverage."

12. Average people live beyond their means. Rich people live below theirs.

"Here's how to live below your means and tap into the secret wealthy people have used for centuries: Get rich so you can afford to," he writes.

"The rich live below their means, not because they're so savvy, but because they make so much money that they can afford to live like royalty while still having a king's ransom socked away for the future."

13. Average people teach their children how to survive. Rich people teach their kids to get rich.

Rich parents teach their kids from an early age about the world of "haves" and "have-nots," Siebold says. Even he admits many people have argued that he's supporting the idea of elitism.

He disagrees.

"[People] say parents are teaching their kids to look down on the masses because they're poor. This isn't true," he writes. "What they're teaching their kids is to see the world through the eyes of objective reality––the way society really is."

If children understand wealth early on, they'll be more likely to strive for it later in life.

14. Average people let money stress them out. Rich people find peace of mind in wealth.

The reason wealthy people earn more wealth is that they're not afraid to admit that money can solve most problems, Siebold says.

"[The middle class] sees money as a never-ending necessary evil that must be endured as part of life. The world class sees money as the great liberator, and with enough of it, they are able to purchase financial peace of mind."

15. Average people would rather be entertained than educated. Rich people would rather be educated than entertained.

While the rich don't put much stock in furthering wealth through formal education, they appreciate the power of learning long after college is over, Siebold says.

"Walk into a wealthy person's home and one of the first things you'll see is an extensive library of books they've used to educate themselves on how to become more successful," he writes.

"The middle class reads novels, tabloids and entertainment magazines."

16. Average people think rich people are snobs. Rich people just want to surround themselves with like-minded people.

The negative money mentality poisoning the middle class is what keeps the rich hanging out with the rich, he says.

"[Rich people] can't afford the messages of doom and gloom," he writes. "This is often misinterpreted by the masses as snobbery.

Labeling the world class as snobs is another way the middle class finds to feel better bout themselves and their chosen path of mediocrity."

17. Average people focus on saving. Rich people focus on earning.

Siebold theorizes that the wealthy focus on what they'll gain by taking risks, rather than how to save what they have.

"The masses are so focused on clipping coupons and living frugally they miss major opportunities," he writes.

"Even in the midst of a cash flow crisis, the rich reject the nickle and dime thinking of the masses. They are the masters of focusing their mental energy where it belongs: on the big money."

18. Average people play it safe with money. Rich people know when to take risks.

"Leverage is the watchword of the rich," Siebold writes.

"Every investor loses money on occasion, but the world class knows no matter what happens, they will aways be able to earn more." 

19. Average people love to be comfortable. Rich people find comfort in uncertainty.

For the most part, it takes guts to take the risks necessary to make it as a millionaire––a challenge most middle class thinkers aren't comfortable living with.

"Physical, psychological, and emotional comfort is the primary goal of the middle class mindset," Siebold writes.

World class thinkers learn early on that becoming a millionaire isn't easy and the need for comfort can be devastating. They learn to be comfortable while operating in a state of ongoing uncertainty."

20. Average people never make the connection between money and health. Rich people know money can save your life.

While the middle class squabbles over the virtues of Obamacare and their company's health plan, the super wealthy are enrolled in a super elite "boutique medical care" association, Siebold says.

"They pay a substantial yearly membership fee that guarantees them 24-hour access to a private physician who only serves a small group of members," he writes.

"Some wealthy neighborhoods have implemented this strategy and even require the physician to live in the neighborhood."

21. Average people believe they must choose between a great family and being rich. Rich people know you can have it all.

The idea the wealth must come at the expense of family time is nothing but a "cop-out", Siebold says.

"The masses have been brainwashed to believe it's an either/or equation," he writes. "The rich know you can have anything you want if you approach the challenge with a mindset rooted in love and abundance."

From Steve Siebold, author of "How Rich People Think"