Topic: Why College?

Earlier this year I talked with you guys about the importance of intelligence/education in determining your success in life and in creating wealth for you and your family.  We talked about how smart people wind up earning more than people who are not as smart.  We talked about how educated people wind up earning more than uneducated people.  We talked about how, unfortunately, people who are not gifted with natural intelligence have to work harder to attain the same level of success.  It might not seem too fair for dumb people (like me) but hey, nobody ever said life was fair.  This is a very important topic, I believe, to your overall happiness so I wanted to cover that topic again and support my observations with some supporting facts.

Many of the tenets in Dad’s Bible have to do with learning, growing, and constantly seeking out knowledge.  A few quotes I’ve heard over the years support this (and I like them):

• If you are not growing you are dying. 
• In 10 years you will become the people you hang around and the books you’ve read. 
• Children learn what they live.
• If it was easy, everyone would be doing it.

Of course, everything on Wikipedia is subject to change but several great graphics and illustrations supporting all kinds of education-related topics in this article:

https://en.wikipedia.org/wiki/Educational_attainment_in_the_United_States

One important thing we have discussed in all areas of your life is don’t take things for granted.  Don’t take education for granted.  Not everyone gets it.  There are plenty of people on earth who are uneducated for a variety of reasons.  Ignorance, laziness, stubbornness, not physically/mentally capable, lack of funds, etc.  You are not one of those people.  Since day one you have had every opportunity to attain whatever education you will need to be a successful, contributing member of society.  You’ve been taught and incented to take advantage of this.  Why?  Because I understand the importance of setting yourself up for a happy, fruitful life relies heavily on being educated.  Being educated will provide you with the ability to do what you want to do in life and will provide you with some insurance against what life might throw your way.

Each of you is also smart.  Some are more book smart than the others are.  Some are more street smart than the others are.  Regardless, I bet you money if I had each of you do an IQ test you would all score above average.  I have taken one once and I was above average.  I’m not bragging.  But I’m letting you know that you have no excuse not to take the great opportunity the gene pool has given you and use it to your advantage.

Is it easy?  NO!  Like I said most people don’t take the road less traveled because it is much easier to take the easy path.  If it were easy everyone would be doing it.

• Around 88% of people over the age of 25 have a high school diploma
• Around 61% of people who start college finish.
• Around 32% of people over the age of  25 have a bachelor’s degree.
• 12% a masters degree
• 3% a doctorate or professional degree

It should be easier for you guys.  We are making sure you can at least get a basic bachelor’s degree.  You will be able to go to school and get something that the majority of people on earth do not have FOR FREE.  All you have to do is work hard.  All you have to do is delay some gratification now to learn things now that you can apply for a lifetime.  Invest in yourself.  Don’t want to work as hard?  Fine, don’t expect me to support that lifestyle.  I’ll pay less and you’ll pay more.  Go flunk out.  Fine too, you don’t care enough to warrant me investing more money in you.  You just wasted a great opportunity.

So don’t take for granted the opportunity you have.  To earn something that no one can ever take away from you.  The greatest wealth creation tool you will ever have in your life.  What is it?  Your ability to earn money on earth by using an education/skill that you have learned.  You can lose many things in life but having the ability to continually turn your education into new money is a darn important one.  

The road to financial success involves:

• Earn It – Earn money and as much as you can for as long as you can.  Always have one or more streams of income coming in.
• Save It – Save the money you earn.  Always set aside some amount of money from what you earn.
• Spend It Wisely – Spend less than you make.  Plenty of people overspend and go into debt.  It won’t matter how much you earn and save if you spend everything you ever make.
• Invest It Wisely – Learn how to invest your money so that it grows over time.  Compound interest is one of the most powerful wealth-builders on earth.   Bad investing is one of the worst.

If you do each one of these things well you’ll be good.  Like many things in life a balanced approach wins.  If you do two (or more) well you’ll be much better off.

Don’t believe me on any of this?  Let’s look at some facts from someone besides me.

Unemployment is higher for uneducated people:

Median incomes are higher for educated people:

• Average US – $33,517
• Less Than 9th Grade – $15,461
• High School Dropout – $18,990
• High School Graduate – $28,763
• Some College – $35,073
• Associates Degree – $39,015
• Bachelors Degree – $50,916
• Master’s Degree – $61,698
• Professional Degree – $88,530
• Doctorate Degree – $73,853

Smart people do indeed have it easier…promise!  I’m not smart.  I’m not dumb either…but not super smart.  I have had to work harder than someone smarter than me to attain the same level.  Hard work CAN create a sliding scale.  I’ve worked very hard in life to slide my scale.  It worked.  We’ll wind up towards the upper end of the upper-middle class due to hard work.  We’ve done this even on a single income.  I’ve been able to earn what a typical upper-middle-class family might earn (many of those having dual incomes).  Heck, I’ve earned more.  That didn’t come easy I promise.  I’ve always tried to outwork/out learn others.  I didn’t do this just to do it.  I did it so that you guys would have a Mom at home to raise you right.  Your Mom and I had our plan.  It was an investment in your future.

I don’t put a lot of stock in societal classes but I do know it is good to be towards the top versus near the bottom.  Education level and social classes generally match closely.  Education alone isn’t the reason people move up and down social classes.  But people delaying gratification to invest in themselves to make themselves better (and more valuable) is a key trait that when combined with education IS THE REASON.

• Upper Class – Usually the Top 1% of the wealth (multi-millionaire) and earnings ($500k year).  Usually highly educated and Ivy League-educated.
• Upper Middle Class – Usually the top 2-15% of the wealth (near $1 million) and earnings ($100k year).  Usually highly educated and usually with professional (or higher-level degrees).
• Lower Middle Class – Usually the top 16-48% of wealth and earnings (around $35k-$75k).  Usually college-educated or skilled craftsman.
• Working Class – Usually the top 49-80% of wealth and earnings (around  $16k-$30k).  Usually high school educated.
• Lower Class – Usually the top 81-100% of wealth and earnings ($16k or less).  Usually some high school education.

We are solidly in the Upper Middle Class.  It hasn’t been easy at times but it is nice to be there.  I promise.  Many of life’s problems are much easier to solve being where we are.  I promise.  I grew up in Lower Middle Class (potentially Working Class).  It wasn’t horrible, but you didn’t see me stick around there (if that is any indication of how it was).  Life is just easier and less stressful when you are educated and build some wealth.  Dave Ramsey’s book is called Financial Peace for a reason.

So if a Dad wants the best for his kids he better send them all to Harvard…RIGHT!?!?!?  Uh…no!  ROI…Return On Investment.  I believe that if you go to get a basic college education that you’ll be set up to be a normal working stiff.  Go find a life partner who is also college-educated and who can work and you’ll be a working stiff that winds up in the upper-middle class.  So our structure is to provide you with that.  I’m publicly educated from Springfield, TN.  The Yellow Jackets are not known to have pumped out Harvard graduates.  Nonetheless, I’ve put my normal old education alongside some hard work and carved out a nice little life.  I’ve had plenty of highly educated Vanderbilt MBAs work for me and alongside me.  I’ve outworked, out-performed, and out-earned many of them.  I promise they paid a lot more to earn their college education than I did.  I took a lot of my education for granted.  I could have spent a lot less on school than I did and gotten the same education I got (maybe even better).  Gran and Golfball helped me out a ton.  They paid for a lot of my college.  They did not in any way however make me ever reconcile how very expensive it was…which is why I graduated with college debt.  I know a ton of people in America today who will graduate thousands and thousands of dollars in debt.  Getting an education is important.  Paying too much for education is unwise.  Paying for anything…ever…with money you don’t have (going into debt) is…never…wise!  Don’t do it.  That is why I structure our college deal the way I do.  If you want to get a good, basic education you will be able to do that and graduate with no debt to your name.  If you want to get a good basic education and want to do it in another state you’ll pay more to live in another state and you’ll pay for that.  So your question to yourself should be: “Is it worth x dollars more to live in x state to go to school”.  If you want to go to a big-name private school you will pay more to go there.  Same question: “Is it worth x dollars more to go to x school”.  The answer to each of these questions can have many answers some are related to money and others may relate to other things (where you want to live, what you want to study, what you want to be, etc.).  Regardless, they all have to be answered.  For me, it is all about the return on investment.  What are you going to earn when you come out of school using the education you have gained.  What is it going to cost for you to get the education to be able to gain that income?  The ultimate goal should be to pay as little as possible for that education and then try to earn as much as you can with that education.  Remember this is an investment…an investment in yourself.  You never want to overpay for an investment.  It would make no sense to buy a stock that is worth $100 for $1,000.  No one would do that.  But people do it every day with their education.  Only you can answer these questions.  Only you know what path or what goals you have.  I’m here to provide a basic opportunity to make sure you are on the right path.  The rest of your ROI (and the hard work) is up to you.

Do you have to spend money to learn something?  Heck no!  I’ve self-taught myself all kinds of stuff over the years.  Lots of reading and research on whatever topic I needed information on.  I never sat in class to learn computers, database design, programming, basement framing, lawn care management, aquariums, pets, engines, relationships, investing, money, etc.  I learned it because I needed those skills to move forward towards my goals.  I figured out how to learn what I needed to know and learned it.  I didn’t pay some overpriced university jack squat for them to teach me ¼ of what I wound up learning myself.  Today the answer to any question you have is a web browser away.  No books to go check out.  No class to go take.  No master to go apprentice alongside for years.  Just find a good source for the information you seek and learn it.  Of course, there are many idiots out there giving bad advice to anyone who will listen but hopefully, we’ve taught you to be smart about things like that too. 

I’ll tell you a little about another self-taught man I have great respect for.  My granddad, Pipa, is a pretty darn good representation of how to self-educate.  I grew up around Pipa and Granny a ton.  My cousins and I would be out at their house all the time, or going to tractor pulls or antique tractor shows or camping.  As I grew up I remember thinking Pipa could do anything.  He could/would take random stuff he would find laying around his farm and use it to fix something or get something running or whatever.  I’ve seen him take engines apart, put the nuts and bolts in an old coffee can, and then put it back together again.  I’ve seen cars or tractors break down and he would go grab some part off of some other tractor or car (or whole engines) and get whatever it was running again without ever setting foot off his property.  He had cows, farms, rental properties, tools, garages, barns, gardens, he camped/fished, he had all kind of heavy machinery for his business that he worked on and kept running all by himself.  If his truck broke down he’d fix it.  If he needed a new something for whatever new hobby he was into he would just build it.  He has kept a small army of antique tractors running over the years.  He built a mini-rod pulling tractor and named it “Odds and Ends”.  He built most everything on it with stuff he had from around his farm and we went to tractor pulls all over TN and KY where my 60+-year-old granddad would smack the young guys around with their fancy ‘bought’ equipment.  I never even thought about all this until later in life.  I never really thought about the fact that this man probably never made it to high school.  You just didn’t back then.  You worked as soon as you could work.  One day I was riding with him somewhere to pick up some part he needed from some neighbor.  He left a note and misspelled a very, very simple word.  It was right then that it hit me that pretty much everything this man knew he had learned probably just by doing it.  No formal education whatsoever.  His father before him was entrepreneurial and was quite a wood craftsman, they owned stores and property.  I’m guessing Pipa learned a lot (and about how to be self-taught) from his father.  I’ve tried to apply this in my own life.  If I want to do something I just start trying to figure out how to do it…and ultimately usually wind up doing it.  Thanks to Pipa for being such a freakin’ rock star example in that category.

So if you still don’t believe me?  If you still don’t think the statistics are right.  You are still not a believer that education is important.  Take a look around you.  Look at your own life.  Look around at your own family and friends.  Look at Mimi and Pops, look at Gran and Golfball, look at your parents.  Look around at your classmates, co-workers, and social circles.  Look at single-income families, look at dual-income families.  Look at people who went to Vanderbilt vs. people who went to Vol State Community College.  Look at how hard people work (lazy and hard workers).  Look at people with high IQs and low IQs.  You’ll see smart lazy people, smart hard-working people, lazy dumb people, hard-working dumb people.  All kinds of people with all kinds of different things going on.  You’ll see all this right before your very eyes all day long.  I often say we live in a bubble, surrounded often by people just like us.  You guys also go to a downtown church and public schools.  So you are exposed to plenty outside our little bubble.  That is by design.  Look around and decide where you want to be in your own life.  Is being poor okay?  Are you a go-getter and not gonna stop until you are in the 1%?  I promise that education and knowledge will determine all that…and will likely determine how happy you are each day in life. 

So why am I always harping about getting good grades, getting a job, getting into the best school you can, what do you want to be when you grow up?  Because I want you to have the best life you can have and I promise these things are the way you get there.

Love you so much!

Dad

[originally published] 1/16/2016