The Average Net Worth of People With and Without a Doctorate
Written by
Jamela Adam
Edited by
Rebekah Evans
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Doctorate degrees carry a lot of weight on a resume, but what do they actually do for your financial life? Are people with doctorates really that much better off when it comes to net worth?
Here’s how much net worth differs between those with a doctorate and those without.
How Much Is Earned With and Without a Doctorate?
According to data from the U.S. Career Institute, people with a doctoral degree earn around $4 million throughout their careers. That’s a full million dollars more than what many people with a master’s degree or bachelor’s degree earn in their lifetime. And it’s nearly double what someone with only a high school diploma or less can expect to make.
That difference in earning potential can make a pretty big difference over time, especially when it comes to savings and building net worth.
Net Worth Isn’t the Same as Income
It’s important to note that income and net worth aren’t the same. Income is how much you earn. Net worth is how much you actually keep after paying off everything you owe. Someone can make six figures and still have a low or even negative net worth if they’re spending it all.
That said, higher income makes it a lot easier to build wealth. The more you earn, the more room you have to save, invest, pay off debt and prepare for the future.
For example, if someone with a doctorate earns around $4 million over a 30-year career, that averages out to about $133,000 per year. If they start saving just 10% of their income in their early 30s (roughly $13,000 a year) and invest it with a 6% average annual return, they could build a net worth of over $1.1 million by retirement if they don’t have any debt.
On the other hand, someone earning half that amount, around $66,000 a year, saving the same 10% would end up with about $550,000 over the same timeframe.
Doctorate Holders Have More Options
With more income, doctoral holders can take advantage of opportunities others might not be able to. They’re more likely to:
- Max out their retirement accounts
- Pay off student loans quicker
- Invest in real estate or the stock market
- Build an emergency fund faster
But having a doctorate doesn’t automatically mean someone is wealthy. It’ll still come down to how they use their income and how they prepare for the long term.
Why Do People With Doctorates Get Paid More?
According to Brookings, less than 2% of U.S. adults have a doctoral degree. That rarity makes it more valuable in certain industries. Employers are often willing to pay more for someone with that level of education and expertise, especially in fields like academia, healthcare, law and research. Though people with a doctorate have a median income of 4 million, top earners of this group make slightly over 8 million in their lifetime.
Is It Worth Getting a Doctorate?
You may be able to earn a higher salary and achieve financial freedom faster with a doctoral degree. But remember that getting a doctorate will take lots of time, money and energy. Depending on where you live, the tuition can be expensive and depending on the field, it might take years before you see a solid financial return.
If you’re planning to work in a field where a doctorate is highly valued, it could absolutely be worth it. But you’ll want to think beyond the salary you could potentially earn. Consider whether the degree aligns with your career goals, your interests and your long-term financial plans.
In other words, if you’re thinking about pursuing a doctorate, make sure you’re doing it for the right reasons. The financial benefits can be huge, but only if you take advantage of them.
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