Wednesday, 14 March 2012

A common sense argument against college

Georgetown University have just done a study called The College Payoff.  This study highlights the advantages of obtaining a tertiary education.  In this same report Georgetown University took a personal dig at writer James Altucher about his arguments against college. 

Extract from The College Payoff:

James Altucher and others have been vocal that the costs of college change the equation and make going to college not worth it. In many media appearances, he has claimed that the $200,000-$250,000 that parents might spend on a college education could easily return over $2 million if it were invested long-term in stocks and bonds rather than spent on college. This argument contains several errors. To begin with, only a very small share of private colleges cost between $200,000-$250,000, and no public college costs this much; only 10% of 2008 Bachelor’s degree students had total costs (tuition, fees, books, room, board, transportation, and other expenses) of $50,000 or more per year.

A university naming people?  Could they not have said Many people instead of James Altucher and others?  One of the researchers must have had it in for James. They then went into the merits of college:

However, it is absurd to suggest that people with a high school education are likely to leave their investments untouched for 40 years, because, as we have just demonstrated, they are more likely to earn much less than their more highly educated counterparts and need the money...The median net worth of people approaching retirement with a Bachelor’s degree is four times higher than those with only a high school diploma.

My second problem is the proposition made by this paper that people with Bachelor's degrees are worth four times as much as people with a high school diploma.  Such a statistic is just an average but here has been worded to sound more like a rule.  Bill Gates has no degree and is richer than anybody with Bachelor's degree.  I know the point is that you are more likely, statistically speaking, to be richer with a degree than without, but it is not a rule or guarantee that you will.  

I myself have a postgraduate degree.  This qualification enabled me to get a relatively high paying job when I joined the workforce.  I saved hard, and this foundation in turn gave me cash to invest and give my business ambitions a real shot.  But when I think of it, I studied something I had no interest in: Commerce.  I enjoyed Economics and Commercial Law, but the Accountancy and Auditing part was hard to digest.  Completed degree in hand, applying it at work for eight hours (at minimum) a day at Ernst & Young led me to resign after just seven months.  Too much stress and lack of interest were the reasons.  I joined another corporate as a cost controller - at least this job was Auditing free - and continued to funnel my salary into my own interests.  So yes you could say university helped me, but in a very roundabout way.  

At the end of the day university taught me to be a good employee.  When I first ventured out on my own with an email bulletin business for example, my degree counted for nothing.  The equation when I started on this venture was simple: my costs were $100 per month and I had to garner as many subscribers as possible.  The advertisers and revenue would follow if I could just get those subscribers.  Nothing I formally studied however would tell me how to grow the subscriber base.  Did I need university for this?  Not at all in my case.  Whatever knowledge I did apply came from books and tutorials.

In fact, even much of the advice I read in many marketing books didn't work for me (though some of it did).  The bottom line was that no amount of education was going to prep me 100%.  I had to get out there, make mistakes and learn my own lessons.  And this I suspect is the case with absolutely anybody going into business or looking to make a fortune: you have to tread your own path and step into the unknown. 

Look, if you want to be an employee then university is a definite edge.  However it does not mean much if you want to be an entrepreneur or self-employed.  Some of the things you pick up at college can help, yes, but there are so many other ways to learn today.  Education doesn't have to be attained via an institution.  (Caution: Pick your websites, authors and sources carefully.)  This is why college dropouts can still become the richest of the rich, because university is more of an insurance policy; it is not a ticket to wealth.  Wealth requires resourcefulness, some courage to venture into the unknown and the will to act daily.

But the most compelling argument I have seen against college was not the citation of any stats or metrics (because there are admittedly very little), but rather this common sense argument made by James below:

At the end of the day we want to be happy. There are a million ways to get educated. To enjoy life. To enjoy your passions. To do the work on this planet that you were destined to do. God is not a high school guidance counselor. College is not a mandatory step to happiness. But it will give you debt, stress, indentured servitude (to pay down the debt), and ultimately limit your choices (because you will feel required to do what you majored in college).

The last few words in brackets especially mirror my belief.  In fact, I experienced it first hand.  The silliest thing to do is to continue with some soul-sapping job just because you studied for it for three or four years at university.  If you don't like the way you make your living, consider that it is eight hours a day, five days a week of your time.  You must have the common sense to make a career change.  Are you going to let four years at university dictate your life forever more?  You cannot sentence yourself to perpetual struggle due to a decision you made when you were an adolescent.  

Easier said than done
I know it's easy to rebel and say college isn't necessary, but which parent would be comfortable with turning their backs on college when their child is eighteen and they're at that decision-making point?  My advice to those finishing school is to still go to college if you can.  At the end of high school you probably still don't know what you want to do for a living, but unfortunately you have to pick something to study.  Choose something that stimulates you; do not choose based on which career pays the best salary.  If you want to be rich then you should be thinking of profits, not pay cheques - you become rich by being an entrepreneur or investor.  Earning a salary is the hard way to get rich.  By choosing a course that engages your intellect, you will at least gain some skills that you will want to use in some form or the other once you complete your degree.  So use college to gain a useful skill, not to get a piece of paper and a one way ticket to work for someone else.

In the same breath just know however that university or any college is just the beginning.  If you are unable to go to college, you can make another way forward - you are free by law to do so.  You can go to a tertiary institution and complete your studies, but for heaven's sake, do not let your degree set the mould for the rest of your life.

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