Is a college degree necessary for wealth?
It’s long been believed that having earned a college degree was a necessary prerequisite for wealth building. And, to be honest, the statistics have, for the most part, backed that up. Reports have shown that those with a bachelor’s degree earn 66% more money than those whose highest educational achievement was earning a high school diploma.
However, it’s important to look beyond the numbers. First, statistics don’t necessarily apply to you and your situation. Just because the average person may earn more after earning a college degree doesn’t mean that you will. Second, keep in mind that these types of statistics by their nature are always indicative of past events. Times are changing, and it appears that the value of an education in the form of a college degree is decreasing and will continue to over the coming years and decades.
Third and perhaps most importantly, the amount of loans that students have been accruing has been increasing exponentially over the years. Just from 1992-2012, the average amount that a student had borrowed in earning that education doubled to $27,000. Today, the situation, which has reached $1.6 trillion in total loans, is being described as a “crisis.” Student loan debt is the most powerful indicator that the value of a degree is decreasing while the money that you’d save by not taking out loans is money that can often be better used to invest in yourself.
Importance of Investing in Yourself
Yes, investing is important in building any sort of wealth. This is true for investing in things such as real estate or the opening of a business as well as with passive investing. It’s also true for yourself. However, you can invest in yourself in different ways than going to college, in ways that focus on taking in information that’s often more directly relevant to your goals. The most important thing to keep in mind is that you still need an education. That is an absolute must. But this can be outside of a classroom. Teach yourself what you need to learn. All of the information is out there. You can learn quite a lot about wealth building and other aspects of the world on your own.
Many discount the achievements of actors, musicians, and athletes who have achieved success without earning a degree, oftentimes simply saying that they were lucky. But they’re neglecting to take into consideration all of the training, practicing and studying that these individuals engaged in to achieve that success. It may not have been in a college classroom, but the amount of self-education that they engaged in was significant. This is also true of some who have achieved success in the business world after entering but not graduating from college. Two examples of this are Bill Gates and Mark Zuckerberg.
College Doesn’t Prepare for the Real World
Another important thing to keep in mind is that the college system doesn’t prepare you for many aspects of the real world.
One way that this is done is by schools showing a preponderance for memorizing. Yes, this is an important skill, but it’s not as important as schools make it out to be. Also, how you succeed in college, how you achieve a 4.0 GPA, will not translate as well into real-life settings as many had hoped for or, worse, expected. People in power, the ones already with wealth, behave differently than college professors do, and there is no simple, easy-to-follow path to excelling in that system like there is at college.
Schools are also set up to teach students how to be disciplined and obedient, not how to be go-getters who engage in much more active wealth-building activities. In many cases, those who don’t draw within the lines are the ones who achieve the most success in life despite colleges giving the impression that the opposite is true, leading to surprise as graduates attempt to take what they learned into the real world.
Simply put, earning an A in school entails a different skill set than earning an A in real life. In fact, earning an A in real life can often be an elusive goal as it’s just not simple to determine exactly what success is like in the real world. It’d probably be best to get away from that type of thinking altogether.
Being a Self-Starter
An increase in self-starters in the world over the past several years has also indicated that earning a degree is not necessary to achieve success. For example, if you want to enter the real estate market or engage in passive investing, the only thing that’s important is how much knowledge you have.
Of course, there will be situations where getting a license or even earning a college degree will ultimately be necessary. A real estate license can provide enough benefits for you that you’ll want to make the sacrifices to get one. Conversely, if your life goal is to be a doctor, there’s not really a viable path to that specific goal without entering and succeeding in the college system. With that said, several other ways of earning money are accessible to you without you ever having needed to step foot in a college classroom.
It’s also important to look at the world as it relates to COVID-19. This has and will continue to change the world around us. We must adapt to these changing circumstances, both as it relates to COVID-19 and as it relates to events that haven’t happened yet and that cannot be predicted. You must have a mindset of rolling with changing times, and this is another skill set that is not normally taught in college settings.
The bottom line is that maybe attending and graduating from college is ultimately the most effective way for you to reach your goals. However, in many cases, it is not. It’s important to take the entire picture in mind as you make this decision while remembering that a college degree is absolutely not necessary for wealth.
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.