I saw a Statistic that said 14% of the millionaires in US are teachers, second only to managers and ahead of lawyers and doctors.
Given this and what you know about teachers, what percentage of teachers do you think are millionaires?
About same? Higher? Lower? Write down the first thought that comes to your mind.
My preconceived notion, based on what I can selectively recall, is there are far fewer millionaires among teachers compared to rest of population. In other words, while 14% of the millionaires are teachers, far fewer proportion of teachers are millionaires.
Until I did the math.
P( Teacher | Millionaire) = P( T | M ) = 0.14
What we want is given someone is a teacher, how likely is that teacher a millionaire, that is what is P(M | T).
P(M | T) = P(T | M) X P(M) / P(T)
To compute this we need
- What proportion of US population are teachers , P(T)
- What proportion of US population are millionaires, P(M)
Data from US Census says, there are 7.2 million teachers and 8.6 million people are millionaires.
That means P (M | T) is 16.8%, or one in six teacher is a millionaire.
That does correct the stereotype I had about teachers.
Does this mean if you became a teacher (and you are not already a millionaire) then your chances of becoming a millionaire is 16.7%?
46% of the millionaire teachers reported they got there through inheritance. A good portion reported having second income through working spouse. Few more became teachers after becoming millionaires because they had the financial flexibility to do whatever they liked. Taking these numbers out, that means only 4 to 8% of the teachers became millionaires because of the profession.
That is still a high number and includes a broad class of teachers including college professors.
So there you have it. One in six teachers in US are millionaires but if you want to become a millionaire by choosing teaching profession your chances are less than one in twenty.