http://www.theatlantic.com/business/arc ... sm/239527/
Megan Mcardle wrote:In fact, we know of one culture that's very, very good at helping people build wealth: academia. Of course, academics start with a solid base: if you're a tenured professor, you are definitionally good at delaying gratification. But one thing you learn from financial reporting is that the ability to delay gratification in your career does not always translate into wise financial stewardship; there are lots and lots of doctors, lawyers, and MBAs who clearly had what it took to go through a long initiation process, and nonetheless manage to end up with no savings and a lifestyle that can't survive more than a few weeks of job loss or other financial distress. Academia pays modestly, and yet on average, tenured professors have quite a lot of wealth built up by the time they retire.
This is often attributed to TIAA-CREF, and sure, they're great. But having a great pension plan does not automatically make your workers wealthy--even the generous traditional defined-benefit plan will do no good if the worker spends everything they earn and arrives at retirement deeply in debt.
Academia produces wealth because academia stigmatizes conspicuous consumption. A professor with a jaguar can explain this as a personal eccentricity. A professor with a jaguar, a speedboat, a vacation home, a twice-yearly cruising habit, and a 5,000 square foot McMansion with a two-story atrium and a $1,000 a month heating bill, is going to get the fisheye from his colleagues. Yet many moderately successful salesmen would regard this as simply their due for working hard and succeeding--and would be reinforced in this by all the other salesmen with similar lifestyles. A professor's colleagues, who are apt to have a very good idea of what professors make, would be well aware that such a lifestyle represented very imprudent levels of debt and savings. Besides, academics, like journalists, have developed sour grapes to a high art: they quickly learn to regard expensive possessions as somewhat vulgar.
I'd be willing to bet that if you looked at places where academics don't predominantly socialize with other academics--full time professors at for-profit universities, or commuter schools, for example--you might well find that those professors have built less in the way of wealth than the average for their profession.
