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20: Is Higher Education Worth It?

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This week’s Weekly Wealth Widget was inspired by the following question from one of our listeners who is in the health field himself.

Hi Buck,

I’d be curious to know what your personal thoughts are on “higher” education.

“If you had to do it all over again, would you go to med school? Would you get an MBA? Would you get yourself an apprenticeship? Would you get a mentor? Would you learn about entrepreneurship on the job?

Street smart or book smart?

What do you tell your daughters?”

This is a great question! So let me back up by saying that my wife and I are both products of “brand” schools. She also has a masters degree and, of course, I am a medical school graduate.

We are your typical over-educated types who usually end up becoming the zombies of the white-collar work force.

I did 4 years of college, 4 years of medical school, and 7 years of post-graduate surgical training. I practiced for 8 years (2 of it part time) and, as of this writing, I no longer practice medicine.

I am a full time entrepreneur and investor (and podcaster of course!).

My wife went to Stanford and the London School of economics, racked up huge debt and now has a clothing line that has nothing to do with her education.

So…maybe the ROI on higher education isn’t always there?

In my case, however, I don’t think I would have done much different in hindsight. You see, I really did love medicine and surgery and I love having the body of knowledge that going to medical school gave to me.

Of course, medical school did not teach me much about entrepreneurship or money. But to be clear, business school doesn’t do that either–that’s a myth.

Business schools train people how to be managers. I’m not a manager—I employ managers.

What I am is a raging entrepreneur and entrepreneurship is not learned in school. You get the itch, and you make it happen.

The best education for an entrepreneur is the school of hard knocks.

The businesses you create as an entrepreneur often reflect your personal experiences and background. Three of my businesses are in healthcare because I know a lot about healthcare.

God forbid I had become an attorney, I would likely have created businesses involving the law.

The job of an entrepreneur is to see opportunities—to solve problems. Every successful business solves a problem. If you don’t see the inefficiencies in a system first hand, you are unlikely to come up with a solution that ends up a business.

So…for me, it all worked out well and higher education did indeed pay off.

Now, what do I tell my daughters? Well, I do know this. I have been part of several “masterminds” with people who are a lot more successful and wealthy than I am. Nevertheless, it is rare when anyone in the room has an academic pedigree that rivals mine.

The most successful people I know did not go to fancy schools and weren’t necessarily the best students. The common denominator amongst these people is that they are PASSIONATE about what they do.

My girls are little—8,4, and 2. What I want for them is to become passionate people. Sometimes it’s hard to find what you are passionate about when you are young and college is one way to discover what gets you excited.

But it’s not the only way. Most people get jobs based on what they pay. For young people, I would suggest trying out jobs in different fields and think of them as education rather than work.

Every kid is different so it’s hard to create a blanket recommendation. For example, I just talked my COO into letting her son NOT go to college? Why? Because the kid hates school and has been getting into trouble because he’s bored. On the other hand, he loves building things—he is passionate about construction.

Why would you send that kid to college to sit in a classroom? Instead, I suggested he spend the next 2 years doing a series of apprenticeships so that he can become the best contractor that he can be.

This topic isn’t discussed enough as it should be. As a society, we have created a collective script of the way life ought to be. “Go to school (including college), get a good job, and invest in the long run in a portfolio of stocks, bonds, and mutual funds.”

That conventional wisdom has lead to a lot of people slaving away during the week hating their jobs, hating their boss, but loving their paycheck.

That kind of life, regardless of financial reward, does not amount to wealth. Is that what you want for your children? Not me. I’m going to keep an open mind.