Lessons from MontanaJune 8, 2008
A person who just finished the book (Jeff) emailed me with an interesting perspective. Jeff grew up in rural Montana. Each of the four children in his family had jobs early in life. Jeff speaks of a family upbringing that included little money and the resulting necessity of early part-time employment (7th grade). He believes that this experience was a powerful force in the way he handles money now as an adult. Necessity made him thrifty and successful with money.
One study, directly related to Jeff’s experience, never made it into the book — but perhaps I should have included it. Robert Harris, a finance faculty member at Darden, and I conducted a study about five years ago in which we attempted to determine why some of our MBA students went on to be highly financially successful, while others less so. Our sample included 200 of our MBA students that graduated 25 years ago. Darden is a highly selective MBA program and there is more homogeneity in career aspirations than you would find in the general public so you have to keep that in mind when interpreting the results.
I will spare you the methodological details. Here is what we found. Prestige of one’s undergraduate institution did not matter (same result that Levitt finds in Freakonomics). Undergraduate GPA did not matter very much. What did matter? Intelligence (as measured by a standardized test) did matter. Participation in athletics mattered. Smart jocks it seems do in fact become more wealthy. If you were into music (band etc.) this was bad sign for your future financial success. But also, and perhaps more striking, was a result we found concerning early-life employment. The earlier you had your first part-time job (regardless of the wealth of your family) the more likely you were to be financially successful later in life. We were surprised by the magnitude (importance) of this result. The lessons of rural Montana also seem to hold for kids from across the U.S. Is it possible that kids who are destined to be financially successful later in life just want that part time job in 7th grade more than other kids do? Sure. But it is also highly plausible that these kids are learning something valuable from the experience, something that sticks with them for the rest of their lives.