Degree vs Experience

Two real life examples that I personally encountered:

I owned a construction company that erected large metal buildings, mostly for industrial use. One day as I was ordering a new building from my supplier we had some wait time and as we chatted he said that he had a chemist degree. I was surprised and asked him what he was doing selling metal buildings. His answer was, I have two daughters that want to go to college and my wife and I did not make enough money to provide a college education for my girls. He stated once you are a chemists that is about as far as you can go up the ladder and will probably make the same amount of money as the other guys. His decision was to quit the chemistry gig and sell metal buildings. According to him he loved his job as a salesman and was now making enough money to support his family.

I was in the office of an apartment building I owned and a lady came in with an application, the manager was out on property so I took the application and looked it over briefly and saw that she worked as a nanny and a part time photographer's assistant. Her income did not qualify her for the small apartment she was trying to rent. When faced with the fact she did not qualify she told me that she was graduating from Oklahoma University in a week as an artist. I asked her about her job chances upon graduation. She told me she had no offers and would continue in her current part time jobs and her parents would help her pay the rent. She also had a $40,000 student loan. What I asked her why she chose art as a degree, she said, my parents told me to choose something that I liked, which for me was art.

I agree with nearly everything The Dude and Wrye have commented on. By the way, I don't have a college degree either. We are home schooling our 8 year old son and when he is being taught roman numerals for example I simply tell him he needs to know it to pass this grade but unless he was to become a bookie, (super bowl) he would not need to know roman numerals. Many of the subjects are presented by academics that have little or no real world experience.

 

You can tell a lot about a persons education by the questions they ask. Three people were shown a brown disk shaped object.

Engineer : How was that made?

Accountant: How much does that cost?

Art Major: Would you like fries with that?

 

Right, I didn't say a degree is useless. According to family and ex-gf's, one of my annoying traits is that I over-explain and repeat myself. So, here I go...

I consider a college degree to be an investment. There's an investment of time and money to consider as well as an opportunity cost. The opportunity cost of course being whatever you could have been doing as an alternative to going to college.

One consideration is your profile among college students. If you fit the profile of someone who most likely won't finish, then you shouldn't bother. Don't fight your statistical destiny, just pick something else to do. In this case, a vocational program can be a great choice. You'll start earning faster and your school debt will be lower. The college crowd will eventually catch up to you in career earnings, but you'll be fine if you stick to the ABC's of money and career management.

If you fit the profile of being born into a well-off family, then do whatever you like. You'll be fine no matter what you do.

If you got accepted into an Ivy League school or equivalent, then you'll be fine no matter what you do. Lots of the examples of people who bailed on school only to later become major success stories were ditching ivy league schools.

If you were raised in a solid middle-class family, stable upbringing, good grades and looking at a state school, then you'll probably be fine. Go to a public university or a vocational school, you'll do fine either way.

That last point is a major wrinkle for life in the US. There's a lot of room for error. If you stick with the crowd and don't make critical mistakes, then you can do quite well despite making lots of wrong-turns. This is where my other arguments hit some serious head-winds. There is a well-worn advice chain which can go from parents -> high school counselor -> college counselor -> career mentors -> simple financial advice -> stable partner -> which can keep you on a life script which can see you all the way through a good retirement. This life script doesn't require a lot of thought. In fact, the more you try to think it, the more you'll likely screw it up. As Warren Buffet / Charlie Munger says "don't try to be smart, just try not to be be stupid." You don't (and shouldn't) try to optimize for the best. Just try to stick to the middle of that margin of error and you'll be fine.

The problem people are the edge cases, radicals and those who can walk into a potential dumpster fire without thinking something could go wrong.

If you're that middle class student looking at going to a private school (not ivy league) which will set you back with debt which nearly cracks six figures, then you might be walking into a major problem. If your life dream is to be an elementary school teacher, that's great, but shop around for good prices on that education. The ROI of a more expensive school might not make sense for your desired path.

If you're an American citizen and want to save money on your education, then community colleges are great options. They are crazy cheap, many with beautiful campuses, diverse student body (with students of all ages) and lots of interesting classes.

Don't go to a cheap school abroad because you think you might save money. Better to just follow the crowd in your home country. If there is any path forward in your home country, then follow that path.

For example, go the route of a CNA if you can't afford the university nursing route. This is also a good route if you aren't sure that school is the right path for you. Getting a CNA certification is cheap and easy. You can gain work experience and work your way up the certification ladder.

You can apply this same format to all sorts of fields. One high paying job we have discussed is software programmer. You can go to a "coding bootcamp" for less than a year and pay that debt back in the same time it takes for your college bound buddies to land their first job out of their 4+ years of college. By that time, you have the experience and your college buddies may never catch up in career earnings.

If you want to go abroad, then examine your reasons for doing so. Most likely the better route would be to take a year off from life scripting and then go back to your home country to rejoin the rat race.

Here's a potential life script. Let's say that you land a software development gig for 100K and live frugal. How long might you have to work at that job before you could retire in the Philippines at a career call-center agent level?. If you have the will and play your cards right, I bet you could do this in maybe 6 - 7 years (school, pay off school, save 200K, live off the savings). Then you could easily add to that savings in your retirement as you desire by taking on consulting work.

You can do a lot in one year, but a career can span 30+ years. It's better to understand compound interest and getting it working at 30 than to muddle through and to be without that platform at 40. So, you do have time to screw around, but the earlier you start doing things right (not by being smart, but by not being stupid) the more options you have for screwing around later.

Options at all stages is important. You work hard at the beginning to give yourself options later. But you have options at the beginning as well (taking into account all of the above.) Where are the better options for education? For a US citizen, that's not the Philippines. Go to the US and figure out what you can do. There are no shortcuts and even if there were, those shortcuts wouldn't go through the Philippines.

Most of the other examples we talked about are just edge cases. A kid starting out today doesn't need to think in terms of specific examples. I think if you follow the above, then you'll do fine. And that's not because of great advice I have. Just follow the crowd and focus on not being stupid.

 

Rule #1. The exceptions do not invalidate the rule.
Rule #2. There will always be exceptions, but they are statistically a minority.
When you plan, you don't plan to get rich by winning the lottery, as those odds are very long. Education is one of the surest ways to a better salary and that is a fact.

https://www.bls.gov/opub/ted/2017/h...-weekly-earnings-of-718-in-second-quarter.htm


There is a good analysis here of the various options that is balanced in my opinion.

https://www.moneycrashers.com/college-degree-worth-it/

As with any investment, larger investments typically take longer to pay off, but once they are paid off you are in a better place over time.

 

For me, working while getting a degree provided the greatest learning. Granted it took longer but for those of us that didn’t have sufficient funds for school it was a necessity. Work experience can be a great teacher, particularly if you are working in your desired degree field. Then once you earn your degree the total experience can perhaps be helpful in joining a top company with maybe an attractive salary.

 

This is nothing new. One could argue that the homeless are also retired. You have to tie some quality around life, too. I like to reference statistics because many times people attribute greater significance to the outliers than they should. Happy to be corrected, but I'd like to see some statics around quality of life and statistical significance of the FIRE population. As with almost any endeavor there will be successful people. If I used my experience, my college was paid off after 4 years, but it wasn't near as expensive as it is today. There are certainly good certificate jobs (MRI, Electrician,Elevator repairman, Plumber, etc) so a degree isn't the only way to make a decent living. My point is somethings are more of a sure bet than others. I'm not saying everyone needs a college degree, it's just a good starting point. In the end, you need to look at the end of the story. Not just 18 years into it, which by the way seems high to me and may include those nice trade schools that have had a rough run in the last couple of years.

This shows that college is more than just a training ground, it's also a place to prove oneself. Kind of sounds like basic training but at a cost. Using your logic, FIRE and pushing to the left a bit we should all start working at 15, so we can retire earlier.

I think you are statistically an exception. How many expats your age in population? How many people want to work in a sh*t hole to maximize their income? How many expats living in the Philippines? I'm sure there are lots of other things that are fairly unique with how you chose to live your life. I'll bet if we look at your choices in life you are a rarity, statistically speaking. Motivation, passion, character are things not found in everyone. Anything that shows value to a potential employer is a good thing to have. Pay is a function of supply and demand. The Philippines is a golden example of this. World population is 7.7 billion, US population is 325 million, I'll leave it for you to do the math to find out how exceptional you are.

If you have the 10 qualities below you could be an exceptional person. No mention of a college degree.

The 10 Qualities of Exceptional People
https://www.entrepreneur.com/article/246347