Here’s another article saying that if you don’t go to college you are missing out on $830,000 of income. Holy crap! With information like that, I better start saving now to send my future kids to super expensive colleges!
As you know, I’m not a fan of the “send everyone to college” mentality that has prevailed over the last few decades in America. There aren’t enough jobs for college graduates and we are setting our young people up for financial failure.
I’m not the only one that holds this opinion either. The president of South Korea noticed that his country has too many over-educated and underemployed young people. While Barack Obama’s response to that situation is to tell more kids to take out federal loans for a degree, Lee Myung Bak says skip college and go to work.
Even former NYC mayor Michael Bloomberg (someone I rarely agree with on anything) says that your average kid is better off becoming a plumber than going to Harvard.
We have plenty of allegorical examples of people who were incredibly intelligent, never got a college degree and ended up making hundreds of millions of dollars (Bill Gates, Mark Zuckerberg, Richard Branson, Simon Cowell, Michael Dell, Walt Disney, Henry Ford, Steve Jobs, Ty Warner, and Frank Lloyd Wright to name a few).
We also have some pretty interesting data about small business owners.
- 31% of small business owners don’t have a college degree
- 39% are either indifferent towards college degrees, feel they are not important, or believe they have no value
- 50% have staff without a college degree
- 62% of small business owners (that have staff without a college degree) do not notice a difference in performance between college educated and non-college educated employees.
A College Degree is Not Worth $830,000
I want to go back and address the original article claiming a college degree is worth $830,000. That’s false. The data may show college graduates make $830,000 more than people without degrees on average, but the degree itself is not $830,000. In fact, it’s not worth $0.83.
A college degree can’t do anything but sit there and look pretty on a wall.
The skills and experiences a person learns at college are what hold value, and it’s different for every single college graduate. The skills a person learns as an apprentice or at a trade school also hold value.
The key to earning a lot of money is not necessarily to go to college. The key is learning skills that make you valuable.
How to Make Money Without a Degree
The first step to making money is the same whether you go to college or not: learn something. You can learn in a classroom, or you can learn while you’re making minimum wage or even doing an unpaid internship. No matter what setting you choose, make sure you are learning as much as possible.
If you get a minimum wage job and just do enough to scrape by, you’ll always be earning minimum wage. The key is to master whatever you’re doing. Work hard. Learn how to do other people’s jobs around you. Study your industry when you aren’t at work. Hopefully as you are learning you are also getting promotions and/or raises. The more you learn, the better.
Eventually you’ll know enough and have enough skills to become an extremely valuable worker. You will know enough that you can run the whole dang place yourself. Then you have two decisions; either do your job for someone else and get paid a salary (become a manager) or start your own business (become a small business owner).
Let’s take fast food as an example. If you have an In-N-Out Burger in your hometown, you can probably get a job there for $10 an hour or more. You can learn to make burgers, run the fryers, make milkshakes, run the cash register, run the drive through, and more. Eventually, you may have an opportunity to become a manager.
Did you know managers at In-N-Out Burger make over $100,000 a year?!
So you can work your tail off as a manager for a few years, have enough money to buy some nice things and put a sizable amount into savings. A few more years down the line you might be ready to open your own In-N-Out Burger. Or you might take what you learned there and open your own restaurant. “Kevin’s House of Food” is a good name… I’m just saying.
How much does a restaurant owner make? Beats me, but you can bet it’s probably more than $100k a year they are paying the managers.
Flipping burgers is just one example. You can do the same with plumbing, carpentry, trading stocks, lawn mowing, or any other small business you can think of. None of these require a college degree, but they all require skills.
Another way to get rich is to get a college degree. Learn skills at a university, then go to work. Maybe you go back for a Master’s degree and command a 6-figure salary. Maybe you start your own company.
Get yourself some skills and the money will follow.
Kevin McKee is an entrepreneur, IT guru, and personal finance leader. In addition to his writing, Kevin is the head of IT at Buildingstars, Co-Founder of Padmission, and organizer of Laravel STL. He is also the creator of www.contributetoopensource.com. When he’s not working, Kevin enjoys podcasting about movies and spending time with his wife and four children.
A key problem is that a lot of employers won’t hire you without a degree. Period. And learning the skills you need may hinge on that job they won’t hire you for. That said, there’s no reason a person should go to an expensive school to get the same degree they could get at a state university. Do two years at a junior college then go to a state school. Sign up for internships where you earn no money but gain lots of skills. The problem is surviving while making no money, of course.
I agree that the value is in the skills, but skills can be learned at college (though not always). There are other forms of education that aren’t college. Auto mechanics and plumbers HAVE to go to some after-high-school training. Technical schools are a wonderful alternative to college. But you must get some education (hands-on or schooling) in order to get a skilled technical job.
As far as In-N-Out Burger managers making over $100k, there must not be many managers out there. When I worked at McDonald’s, we had dozens of managers–usually kids who had worked there for a few years and were late teens or early 20s. It’s a huge jump from $10 an hour to $100k a year. I wonder if those “managers” have MBAs or something. If they pay that much, it can’t be easy to become a manager.
For a technical field, the dysfunctional HR (they *all* are) look for the degree. If you don’t have a degree, you resume goes straight to the recycle bin.
It’s been that way for over 40 years that *I* know of, Kevin. Fortunately, I got my BACS in 1977 — which now comes with a different problem. I’ve bee battling age discrimination for over two decades now.
OTOH, only about 15% of the population has any interest in programming or engineering, according to research done by TI back in the early 80’s. They were trying to find out why sales of their popular pocket engineering calculators started to actually slump once the price when below about $100. Answer: Pretty much everybody who wanted one bought one about the time they hit $150. The increase between $150 and $100 was mostly engineers buying *two*.
If you want to land a desk job, you had best pony up for a degree. As the first poster mentioned, you can do that most economically by spending a couple of years at community college, then going to a state-funded college. Some fields now won’t consider you without a Master’s, and I have seen ads for programmers requiring a PhD (although those are *not* real job openings — they are H1-b “qualifiers”).
I’m seriously considering starting a company, and not hiring *anybody* under the age of 50.
I agree with you — your skills and dedication to be successful can really get you a long way and help you achieve your goals in life.
I agree going to college is not the right step for everyone. Its all about skills. With the right set of skills the sky really is the limit.
A few years back, theres this article saying that you can also work for free. To build up your portfolio which in effect boosts your chances of landing a job. So yeah, having a degree is not really necessary today.
Having a college degree doesn’t mean you will automatically make money, especially if it costs $830k!
The way to make money is no secret. It’s called “compounding interest”.
What stops people make money is the need for instant gratification and a lack of discipline. Make no mistake, there’s always a good reason to spend money!
It doesn’t matter how much you earn. Put 10% of every pay check into an investment (term deposit, managed fund, shares etc) religiously and never spend it! You’ll never miss that 10% and you’ll make a lot of money. Why don’t more people do it?