What If My Kid…? (A Guide To Odds)

http://rationalconspiracy.com/2012/06/04/what-if-my-kid-a-guide-to-odds/

by apsec112 • 14 years ago

25 21 14 years ago

1 in 11 chance of being a millionaire? That must be far too high? Then there would be 31 million millionaires in the country, or about the population of California.

Edit: and then he says 1 in 120 of earning $400k or more... so that does that work with 1 in 11 being a millionaire?

sardonicbryan• 14 years ago

Well, I'd imagine most people earning $400K or more in a year are millionaires. Income <> net worth.

drinkzima2• 14 years ago

Only 5M US millionaires. So math problems somewhere: http://www.cnbc.com/id/47631154

cperciva• 14 years ago

That link is talking about people with $1M in investible assets; I'm guessing the original link is counting people with $1M net worth.

bcherry• 14 years ago

According to the WSJ[1], there were 3.1 millionaires in the US in 2010. I'm not sure what he means by "in a random year", but perhaps it means that 1/11 people become a millionaire at some point in their life (even if they don't stay one for long)? Or, he's off by a factor of ten (the coincidence of 3.1MM vs 31MM is hard to discount).

Becoming a millionaire doesn't require an annual income of $400k/yr. Most millionaires probably make far less, (150-250k?), and become millionaires from savings over many years.

[1] http://blogs.wsj.com/wealth/2011/06/22/u-s-has-record-number...

ChuckMcM2• 14 years ago

"Merrill and Capgemini define millionaires as individuals with $1 million or more in investible assets, not including primary home, collectibles, consumables and consumer durables."

So not including your home, or things you can sell like your car, or collectible ginsu knife set. I guess they do include your self managed IRA though, since that is 'investible.'

ChuckMcM2• 14 years ago

Defining 'millionaire' is always dicey depending on who you talk to. In order of strictness:

   $1M or more in adjusted gross income on tax return
   $1M or more in gross income (before adjustments)
   $1M or more in 'liquid' net worth (cash or cash equivalents)
   $1M or more in total net worth.

I know a number of folks who would call themselves a 'millionaire before taxes' which is to say their stock options would give them more than a million dollars when exercised, but since in California you end up withholding 51% for taxes you probably end up with less than a million. There are also folks who bought a house earlier and it has appreciated to be 'worth' more than a million but if they sold it and bought another one they wouldn't want to pay the property taxes on a million dollar house.

And of course a million doesn't go as far as it used to. If you have a couple of kids in elementary school and are planning to pay for their college education, well that's going to be nearly 1/2 million right there depending on school.

Note that there is no dichotomy between more people are millionaires than ones that earn over $400k per year. You can earn $100K per year and invest $20K per year and end up with $1M in savings in 20 years. But it is a long road.

apsec1122• 14 years ago

Here’s the source I used: http://www.theatlantic.com/business/archive/2011/05/chart-of...

Thinking more deeply about this, I’ve adjusted the number to 1 in 15, since almost all kids (~25% of the population) are part of someone else’s household, and so would be counted as “millionaires” even though they had no control over the assets.

rmk22• 14 years ago

Am I the only one who was expecting an article about the likelihood of congenital disorders and/or genetics here?

It's still a good article, mind you, I guess I was just hoping it wouldn't just be about "success" and "money", but rather about the most fundamental worry, i.e. "What if my kid gets or has X...?"

Then again, this seems more in line with the usual HN topics... ;)

apsec1122• 14 years ago

Good comment - I'm actually planning another article on the topic you suggest. I'll call it "A Guide to Risks", should be out in a week or so.

rmk22• 14 years ago

Lovely, I'll be looking forward to that! :)

I really like how you divided it up so one actually gets an understanding of the magnitude and what "1 in x" can be likened to.

kyt• 14 years ago

I think people want to know conditional probabilities. eg. P(My child graduates college|I have engineering degree from Stanford). I assume most children of HN readers have a greater than 33% chance of graduating college.

brey• 14 years ago

these numbers are not all comparable.

1/30 chance of being gay means there's a genetic dice being thrown (as far as we understand).

a 1/2500 'chance' of working for google does not have the same degree of randomness. not everyone in the US applied to work for google. on the same rationale, pick a random convenience store with three employees - you have a 1 / 100 million 'chance' of working there.

it's like being surprised at any given bridge hand because the chance you were dealt that particular one is one in a trillion. you have to get -some- bridge hand. people generally work -somewhere-. the numbers are meaningless without prior selection.

bawllz• 14 years ago

Born gay? That's quite the can of worms you just cracked there...

raldi• 14 years ago

I'd like to see some negative scenarios mixed into that list:

* Gets kidnapped

* Gets struck by lightning

* Is a victim of a terrorist act

* Dies in a plane crash

* Dies in a car accident

It would help illustrate how we spend so much time worrying about such infinitesimally unlikely nightmares.

B-Con• 14 years ago

I did some spot checking. In general, the odds seem lowish. Some are surprisingly reasonable, some seem absurd. I would've liked to see sources.

Below I assume a U.S. population of 300 - 310 million (rounding as convenient).

> Goes to law school: 1 in 80

That's about 3 million people.

It's vague wording. Does it mean going to graduate law school? Being accepted? Or does it just mean have a declared major of law at some point? I can accept the latter, as ambitious / high-earning jobs generally have an over-abundance of declared majors by freshmen/sophomores (who change their major every semester). But I don't think that many people actually get into graduate law school, or else they would rival business majors (the most popular major).

> Works as a Google engineer: 1 in 2,500

That means Google has employed 124,000 engineers over it's modest 14 years. Currently they only employee 33,000 (according to Wikipedia), and I can't imagine more than 1/3 of those being engineers (consider marketing, finance, managers, maintenance staff, sales, support, etc). And they only really grew in size in the past 8 or 9 years. They'd have to have always had over 2/3 of their staff as engineers and be turning over an entire fresh set of employees every year to have a chance at making those odds.

> Plays in the NFL: 1 in 15,000

At first I thought this sounded low, but not necessarily: This would mean we have about 21,000 NFL players, past or present. There are 32 teams and I counted 91 players on the Giants' roster (seriously, 91!?), so that estimates to about 3,000 players active. That means we have a full 7 independent generations worth of NFL players alive. Considering that a lot of players only play for a year or two and that even those with long careers usually retire by 40, this actually seems reasonable.

> CEO of Fortune 500 company: 1 in 60,000

There are 500 companies on the list, and year-to-year most of them stay the same. That means we have 5,000 present or past such CEOs in our country. No more than 500 can be active at any time, so we have a full 10 sets of CEOs alive. From a survey (http://www.forbes.com/2003/03/31/cx_wt_0401exec.html) of the top 100 companies, it looks like the the average time spent as CEO is only 3 or 4 years and the average age achieved is 50. Assuming a lifespan of 80, that checks out even if the vast majority of the Fortune 500 list remains static.

cdcarter• 14 years ago

I'm more of a minority in terms of my SAT score than my identity as homosexual. That's oddly striking.

dice• 14 years ago

Can you imagine WBC protesters with "God hates smart people" signs?

drpgq• 14 years ago

Wasn't there something recently in the news about the majority of children being born in the US being minorities soon? I take it that's not what he means, but if you were born today, there would be a lot higher odds than 1 in 3.5 of being non-white.

westicle• 14 years ago

If the majority of children being born are minorities, then logically all children being born are minorities.

Mind bending!

What If My Kid…? (A Guide To Odds)

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