Like most people, I thought that most millionaires were CEOs or top executives. Go big or go home, right?
But then I read this article in the Wall Street Journal and found out that I was wrong.
Apparently only 6-7% of the world’s millionaires are CEOs or executives.
Ok, I thought, so which grade is most likely to get you into the millionaires club?
Probably medical school, right? Or maybe law? Or a business degree?
No, no and no.
It turns out that the most common degree among millionaires …
Followed by … NO DEGREE!
* Cue Record Scratch *
Wait what After spending 14 years in the engineering trenches before becoming financially independent, I knew engineering was lucrative, but I didn’t know it was The lucrative.
But there it was, staring at me from the telegraph. 22% of the world’s richest people graduate from engineering! And a whopping 32% of this group had no graduation!
The most common road to millionaire status isn’t through becoming a Big Shot CEO or an executive. Either through engineering or by foregoing a degree and the path to management. Which, when you think about it, makes sense. Since there is only 1 CEO per company and a handful of top executives, there are far more engineers and managers.
So if engineering is the most valuable degree and you can make it to the top of the management ladder without a degree, are most college / university degrees useless?
Our readers seem to believe so, as the number of people in the comments reacts to Wanderer’s post on student debt:
“I encouraged my children to go to business schools” – Shaun Undem
“I can see the next generation (probably after Gen Z) stopping a trend of not seeing college as their first choice after high school.” – Bryan
“In America, going to college has become a ‘lifestyle’ statement and has almost nothing to do with education.” -Invoice
“I dropped out of university … I got an entry-level job as a data entry clerk and worked my way up … Retired at 44, with a 7-digit FAT FIRE ETF portfolio and 6-digit income from that portfolio. I wouldn’t go back to college even if they paid me. “–Dave
“We need a new mechanism or a new ‘set of rules’ to train our children on how to properly review a college or university ‘product’ for the best long-term ROI on results.” –ImmigrantOnFIRE
Then why are we still being brainwashed to pay for an expensive degree?
In the 1940s, less than 5% of the US population had a college degree, so they were your golden tickets to the good life. But now with nearly 40% of the population graduated, college graduates are no longer uncommon, and not only that, tuition fees have skyrocketed. Is the next generation just throwing their (and parents) money away by graduating? Or worse, when they run into massive debts that they can never repay?
Now I know some of you are going to say that graduation isn’t just about getting a job or making a big, fat paycheck. And on top of that, I say, hey, I didn’t know that the kids from Musk, Bezos or Buffets were reading this blog! If you have a wealthy parent or spouse to support you, use your degree to “expand your mind” or “philosophize about life”. Mom / Dad / Spouse’s bank will pay the bill even if you have no hope of ever paying it back.
For the rest of us, a degree is a means to an end – a job. And if graduation doesn’t get us a higher paying job in that area, why should we pay for it?
Wouldn’t we be better off paying for a cheaper trade certification and making money in just two years, like our reader BlueCollarFIRE?
Or like my friend Alan Donegan from Rebel Business School, who managed to build a lucrative business without a university degree and retired early?
I understand that not everyone can run their own successful business. It’s a lot of work, and in many cases more work than a full-time job. There is also no proven, reproducible blueprint, and results can vary. Since most of us go through the public school system, our brains are trained to follow a rather straight and narrow path so that being entrepreneurs does not come naturally to us.
Graduating may be worthwhile, but before you spend hundreds of thousands of dollars on it, here are some things to consider:
Can you find a paid internship as a student?
If the answer is no (and getting paid in books, food, or * giggle * exposure doesn’t count) then it’s a very strong sign that there isn’t enough demand in the job market for this degree. A paid internship proves that the skill you are working towards is a hot commodity. High demand and low supply mean high wages. You want to be there.
Until someone finds a way to pay for rent and groceries with hugs and feelings, money should be your number one priority when it comes to getting a degree.
The best thing about my degree in computer engineering is the co-op / internship program. Although my undergraduate studies stretched from 4 to 5 years, I was able to pay for my tuition and housing costs with the money I earned in school and I learned invaluable interviewing skills. By the time I graduated, I had 2 years of work experience and this helped me beat the competition and get a full time job.
POT stands for Pay Over Tuition and is the metric I used to choose a major when comparing different grades (see Chapter 4 in our book for more details on the POT formula).
What surprised me while researching this chapter was that the highest salary degrees like doctor or lawyer don’t offer the best value. Indeed, because of the time and cost associated with these programs, an associate degree proves itself to be an associate degree in professions such as: B. Plumbing, as a much better investment. That completely contradicted everything my culture teaches me. If you’re not a doctor, engineer, or lawyer, you can be a prostitute too. Hey, at least the prostitute wasn’t in student debt, MOM!
If you’re looking to pay for a degree, make sure it’s worth it. Calculate the POT of the degree you are considering before selling your hard earned cash.
If your POT is low and it is taking you more than 10 years to repay your loan, you are shooting yourself in the foot.
Of course there are always exceptions to the rule. I’m sure you know someone who got a “worthless” degree and is doing fine. Great. Good for you. If you want to take advantage of this opportunity, this is your prerogative. Statistically, trying to survive in the job market where supply far exceeds demand for your skills is a loss of financial gambling.
Never make financial decisions based on your feelings, just math. Feelings change. Not math.
If it’s a worthless degree, don’t pay for it. Get a craft certificate or work your way up from an entry-level job into management. You save time and money.
What do you think? Are most university / college degrees worthless? Why did you choose your degree or why did you skip one?
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