20-Something Business Trends: The High School Graduate

Make money or go to school?By Graham Lutz 

I didn’t go to college … well, I did for a bit but then I fired all my teachers and got married and started some businesses.

During that time frame, I got more bad looks, condescending talks, and college vs. high school stats than I could ever imagine. Most of them from my friends’ parents who “knew better.” I’m sure they truly believed that they were doing the right thing by encouraging me to go to college, but I think they are a bit misinformed and biased.

It may be because I’m part of this trend, but I feel as though I am seeing it time and time again. Entrepreneurial kid goes off to college at the urging of parents and friends, just to find himself (or herself) bored and uninterested. I am sure that most of them find themselves torn between what they feel is right and what they have been told.

 Today I want to address the 4 most undiscussed and misunderstood arguments against college.

1. 4 Lost Years — That is, if you finish college in 4 years. The average today for a bachelor’s degrees is 5.2 years. Thinking like a business owner, imagine how productive you could be in 4 years! Thinking how the “go to school, get a good job (with a soft ‘j’), and save money” crowd does, imagine how much money you could make in 5 working years. If you get a sales job, it could easily be $30k-$50k per year, with the 5-year total between $150k-$250k!

2. Post-College Earnings — It is a well known fact that college grads earn an average of 62% more over the course of their careers than non college grads. What I believe is that people misunderstand the causal relationship of that earning discrepancy to the education itself. Most say the college education is what makes the difference. I submit that those who go to college are generally more intelligent, more motivated, and more ambitious (i.e. more likely to succeed with or without college). As Forbes.com says, “the profitability of higher education is a self-fulfilling prophecy.”

3. Learning is Not Confined to a University Campus! — That’s right. You can learn anywhere. In fact, I believe I have learned more since leaving school than I did in all the years prior. If you are truly motivated to learn, nothing can stop you. With the Internet, you have access to infinite information. No one ever said learning has to stop when you’re done with formal education.

4. Other People Did Great! — All I know is that if one other person did it, so can I and so can you. You just need to look to others who have accomplished great things without college:

  • John D. Rockefeller
  • Bill Gates
  • Michael Dell
  • Larry Ellison

This is just to name a few, and not to mention people like Ryan Allis, the 22-year old entrepreneur, founder and CEO of iContact, and author of Zero to One Million: How to Build a Company to $1 Million in Sales. You can view his Blog here.

Let me know what you guys think. I’d love to hear everyone’s opinion on why they went or didn’t go to college!

* * * * *

Graham Lutz, the Young Capitalist If you liked this article, you can check out more from Graham Lutz at OneThousandaMonth.com.

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  1. I’m struggling with buyer’s remorse for my college education. I’m a young entrepreneur, just finished my BA at a very good private school in spring 2006.

    From 2002-2006, I spent upwards of $125K on my college education. A good investment, right?

    Well, as an experiment, the spring of my freshman year, I invested a measly $500 in my favorite company, Apple. Today, that $500 is worth $10,111. Had I invested my college tuition in AAPL, I would now (4 and half years later), be worth $2.5M… A YEAR OUT OF COLLEGE. That’s more in less than five years than the average person with a BA makes in their life!

    I know it’s a skewed way of looking at it, and that I got a lot out of my college education, but it’s still incredibly frustrating. I’m thinking about becoming a financial nihilist. Anyway…

  2. I think it can depend on college costs. If you go to a state school (and there are plenty of good ones) and get decent scholarships, college isn’t very expensive. For some people (myself included) this can be a great way to delay decision-making about what you want to do. Of course, I’m near the end of my college career and still don’t know, but I think that still has some validity.

    Overall I agree with you – if entrepreneurship is your goal, a college degree has less value. Still might be worth it, though.

  3. I came close to dropping out of college after my second year. I was working for a company out in the States during my summer holidays, and I realised that I was learning so much more from that practical experience than I ever would on my degree.

    I asked everyone I knew why they thought it was worth doing a degree, and although everyone was sure it was important, no-one could really explain to me why.

    I did finish my degree, because I’d already put in two years, and only had nine months to go. But it still does seem that the most important thing I’ve got from it is the ability to impress others with my first in maths.

    It did force me to learn to think, and started to teach me how I learn, but I’m not sure that was worth three years of work.

    I’m just starting a business up now, and I’m certainly finding the sales experience I got from that summer job more useful than what I learnt doing the degree.

  4. I’m loving this! Thanks guys!

    Nick – I’m frustrated for you! Life Preserver looks like an awesome service, I’m going to show it to my parents!

    Travis – If you don’t know what you want to do, why spend ANY money become an expert at something you dont really care about just to find out you want to do the exact opposite? I say get yourself a sales job after high school. Chances are, you’ll figure out what you want to do sooner, you’ll make some good money, and you’ll have a skill that will keep you employed your whole life. If you can sell, you’ll always have opportunities.

  5. @Graham: I see your point, and I agree, but I don’t think that applies to everyone (but then, almost nothing does).

    For me, college has been valuable. True, I don’t plan to have a career in what my major is (finance), but it has shown me lots of possibilities, and given me skills that will be valuable no matter what I end up doing. There’s also the social aspect to consider – college is often a great place to meet like-minded people, grow socially, etc.

    I also think college can provide a good environment for a person to mature as a person. I don’t think I would have done well by taking a job right out of high school – I doubt I was mature enough then to succeed, and I honestly think college has been a great environment for me to mature, learn, grow, etc. Again, not the case for everyone, but I think it applies to some people.

    I do hate the fact that for many people, the piece of paper (degree) is all that matters. To me, that is NOT the value in going to college, but sadly that’s not the case for most people.

    Lastly, I met my wife in college. That trumps everything else for me, and I suspect you’d agree.

  6. I sure do agree! It would be worth 10 years in school for that! I met my wife in Highschool, So I did get ONE good thing from it.

    I’ll have to disagree with with argument that people mature in college. In most cases (notice I said MOST cases) people are in school on their parents dime, so they spend 4 or more years with all the authority to do whatever the please with little to no responsibility for their actions. If you ask me, that’s a recipe for disaster.

  7. I went to college for two months. What I learned from this is that $8000 takes a long time to pay back, and there are a lot of cool bars on King Street in Toronto.

    My husband got his Honors degree in Sociology. Getting your degree in Sociology is kind of like getting your degree in Burger Flipping. Now he’s back in school ten years later taking something called “Web Development Essentials”. They’re actually teaching him how to build a network and how to write a database for rabbit breeders and why handing in your homework is really, really important.

    I’m not a huge fan of higher education.

    We now run a business that has absolutely nothing to do with what either of us went to school for, based on information gleaned from books and the internet and generally living life. It really is like that scene in Good Will Hunting where Matt Damon’s character talks about what you can learn for “a buck fifty in late charges from the public library”. I wish more people realized this.

  8. I’m a Naomi Dunford Fan.

  9. Thank you, Graham. I think that would be a great saying for a t-shirt. I might be a little biased, though. By the way? Your site rocks.

  10. Travis, Graham, Namoi, John, Nick – you all wrote very interesting comments with respect to the opportunity cost of higher education. Each of you provided valid points to support your point of view. However, I think you are missing the bigger picture. College degrees serve two main purposes. One, a BS/BA differentiates the holder from 80 percent of the applications field. Second, the holder of a sheepskin demonstrates a determination to finish what they start as well as a willingness to invest aporie in themselves. Both are good things and worthy of respect and accelerated wealth. However, you five are cut from a different mold – you’re entrepreneurs. I submit you were born with a different tempo – one that does not need or benefit from higher education. Your life experiences are a classroom in and of itself. Therefore, it would be an error in judgment to view others in your contextyou are different and special. Most individuals who go to college benefit from the specialized differentiation and have no appetite for risk and are quite happy with a 30 year gig and gold watch.

    Consider yourself lucky, you guys are special.

  11. @ Neal – I think you raise a good point. Entrepreneurs are different from a lot of other people. I, for one, am completely unemployable and for that and a host of other reasons, running my own business is a good option for me.

    My husband’s best friend, however, is an accountant. He would have dropped dead from a heart attack at 27 if he’d had to deal with kind of uncertainty we faced. In my own marriage even, it took a long time for my husband to realize that we had mitigated as much risk as we could and were ready to quit our day jobs.

    As easy as it is for entrepreneurs to toot the work-from-home horn, the modern world would fall apart without big companies. I’m not going to get my cell phone service from the guy down the street who works in his garage. If everyone worked from their basement, I’d have a pretty hard time feeding my book addiction. And that library Matt Damon was talking about? I never heard of the Toronto Public Library being run by some guy above a store.

    Good points, and thanks for taking the time to comment.

  12. I went to a Trade School got a ASS in Applied Electronics. That degree is just a peace of paper to hang on the wall. Yes I learned alot in those two years, but I believe that you can learn more with a job that is willing to teach you as you go. Needless to say I never found that in electronics.

    The best teacher is life. It keeps on teaching you even when you don’t want to learn.

  13. There’s pros and cons for college.
    Pros- networking, awaken your mind, learning, good teachers, degree
    Cons- costly unless you have FAFSA, 4 years, bad teachers, lost opportunity

  14. Hold your horses guys… (To me) College isnt a waste of time. College SAVES YOU TIME. It is experience in a nut shell… from Bill Gates’ experience, down to Naomi’s experience. Have you imagined what it would take to live the lifes of those M. Dells of the world? Eternity wouldn’t be enough. So, why not save some time and learn from Dell’s, Gates’ experience and mistakes and avoid them in the future? It will not save you only time but, I may add some money as well… which in some cases may turn up to be a hell more than the 100-120k € you have spent on College education.

    I believe its really on where you want to go… A school diploma as such, will give you the sales rep position… it may get you up to a sales rep supervisor, best case sales rep manager. But it flattens pretty soon – wont drive you higher. How many CEOs you know that have had no College education? And even if your goal is not withing corporate environment, i.e. iof you choose to go down the path of self employment, you can… but instantly you become a CEO – a CEO of your company. So you flatten your company’s potential simply because you remain “narrow minded”. Of course there are exeptions to the rule (the Bill Gates’ of this world). But how many high school grads start a business of their own and how many become Bill Gates’? To my knowledge millions to one digit figure. And bear in mind that (I think I read it on Fortune), the successfull people of this world have gone bankrupt on average 3 times before making it to top 10. Do you think you have the guts to go 3 times bankrupt?

    I finished college, and even went for a Master’s degree. I also tried the freelance path for 2 yrs, but dropped it cause I messed up in college (couldn’t handle both). In college, I saw many things that I was facing on everyday work as a freelance, which I was dealing on my own (some time succesfully, some times not). My decision was based on the fact that a college degree widens my chances for success. I can go down the corporate path, or down the self employment path. 4 years in total (BA and MSc) aren’t that bad to allow you all alternatives. Dont think that I excelled… I hardly managed to pass. I only excelled on the topics that were of my interest (Marketing Management). Dont ask me of the 4 stages of the Product Lifecycle Curve… I dont know them. But I know there is a PLC, that there are 4 stages and that I should identify where my product/service lies and what my next steps should be. To refresh my memory, I go back to my books, or these days wikipedia :)

    To sum up, I believe that college:
    - gives you more options (corporate environment – self employment)
    - develops your freelance skills to a higher level
    - gives you a structured method of thinking

    thanks for reading down here… your arguments welcome

  15. Hi Antony,

    Sadly, you won’t get an argument from me – I just don’t argue before 10 a.m. :)

    I think I have two main issues with higher education. One, it’s a very self-promoting industry. It’s like jewelery – it is said that you should spend 3 months worth of your salary on an engagement ring. Who says that? The diamond industry. It is also said that a college education is crucial. Who says that? The colleges.

    The other thing, and this is probably less the fault of the colleges and more the fault of people who blindly give dumb advice, is that I refuse to agree that college is the only way to succeed.

    You’re quite right – you can’t take a handful of successful people who never went to college and use that as an argument that college is a waste of time. Bill Gates and Michael Dell are exceptions to many rules, not just the higher education one. I can and do, however, use that handful of people as an argument that college is not the only way one can achieve success.

    And I agree – thank God for Wikipedia. :)

  16. Anthony – there are many things I disagree with about your comment, but none more than the idea that a college degree will land you the job of sales manager. Not in one million years will someone with a degree in sales and no experience EVER EVER EVER beat out an experienced salesperson for a job like that.

    I know 3 CEO’s without a college degree. How many CEO’s do you know, period? most people don’t know a lot.

    David – all the pros you mentioned can be accomplished outside of college and without the cons that come with it.

  17. It would be interesting to see how many of the world’s richest people actually went to college. Wonder what would have happened if Bill Gates had of gone to college instead of creating DOS and where would computers be now?

  18. Liked the article very much Graham. I honestly don’t think that college is essential to making a decent living. plenty of billionairies have made it on talent and entrepreneurship alone, and thee most famous is certainly Microsoft’s Bill Gates. A college dropout.

  19. I don’t think he was a college dropout. A “college dropout” is someone who just fades away and quits school due to failing or drugs or any other number of less important things. I think Bill Gates made and informed decision as to whether or not his time was best spent in classes learning from people who hadn’t done what they were teaching. Or, should he spend his time on something he was passionate about and good at? I don’t think he “quit” school, just like when you retire from a company, you’re not “quitting” per se.

    But you’re right all the way!

  20. I’m concerned that this seems to be an “either/or” debate. I dropped out of college (with a full scholarship) 28 years ago, when I was 18, because I felt college was “irrelevant”. I wanted to experience “the real world”.

    I got a job as a computer programmer based on my aptitude and started earning a good living. A few years later, I decided to go to college while I was working – my employer paid for it and the classes I took were very relevant to my “day job”. I ended up getting a degree in Business Administration and then a Masters in Project Management.

    I learned while I earned and applied what I was learning every day to my job. My bosses and co-workers all believed my success and insight “just came naturally”.

    Today, I’m 46, financially independent and starting my own business – while working on my PhD in Organizational Psychology.

    So, my advice is to do both and have it all – follow your dreams, become an entrepreneur, learn from your experience….and from relevant education. With today’s abundance of online education opportunities – it’s never been easier!!

  21. The problem with this is that it assumes you have enough education to go into business *without* college.

    For some people this is true. For a few others, they’re literate enough to do reading on their own and learn things. For many, many individuals who come through the US public school system today?

    Not a chance.

    The ones who most want to avoid college are the ones who cite reasons like “I hate math” and “writing papers is hard.” Those are the worst possible reasons not to go. If you can’t do math, how are you going to understand your financials? If you can’t write a 5-page paper for freshman composition (which many can’t, I know people who teach it) then how are you going to manage with business plans, advertising materials and formal correspondence?

    The best and brilliant probably don’t need college except so far as to have a good name to put on the resume or to pick up some specific skills for the job they want. Unfortunately, most of the population doesn’t fit into that category–coming out of high school they still don’t know how to basic things like spellchecking a paper before submitting it. They don’t know what plagiarism is. They certainly can’t communicate a solid rhetorical argument for why someone should invest in their company, or work out costing for their new product.

    Those people *need* college, and suggesting that they skip it is irresponsible. Unfortunately, the ones who really can skip it are the least likely to want to–because they’re the ones who got scholarships, enjoy their classes, really want to be learning more. Yeah, we should be expecting kids to come out of high school knowing all this, but the truth is pretty clear: they don’t, and they need all the help they can get.

  22. Graham, of course a college degree cannot guarantee u a sales manager position 100%… But consider this: I have hired 2 direct reportees for me during my career. On average I received 43 CVs for those 2 (entry level) openings. I am not in the HR business, so I should shortlist to 10 candidates x 45 mins interview, hence a full work day – bear in mind that I have other, more important priorities to take care of. Out of the 43 there were a couple with no college education at all. What would you recon? I may have crossed out the next Bill Gates – who knows… bottom line is however, that the non degree holder didnt even pass the doorstep. Dont go down the path of how many CEOs with/without degrees are out there… You know 3, I know 2 (2 / 2) so score is 1-0… so?

    I couldnt agree more with Liz. I am not suggesting that one should go to college period. My opinion is that someone should be openminded enough, set his high level goals beforehand and work on the alternatives. As Liz did, you can drop out of college and do it later on… or never do it because you became a zillionaire which I wish you so (is becoming a zillionaire the ultimate goal?). Its a dynamic, ever chaning environment and one should adapt as necessary (i.e. go to college, get an MBA, a PhD etc)… I simply believe that High School per se is not enough to help you a) decide if you need a College degree or not and b) give you a short boost career wise. Thus, instead of sitting around for a couple of years trying to sort things out with your self (you cant do that in 5 minutes), try that college thing. Dropout if you still feel that is a waste of time, but you cannot critisize and cross out something unless you try it.

  23. Susan – you’re basing your argument on the assumption that it is the school systems fault and no placing any responsibility on the kids going through it.

    Anthony – I can understand skipping the non-graduate resumes, so that is one reason not to rely on your resume to get you a job. as to the question of CEO, you asked me how many I knew that didn’t have a college degree. I personally know 3 and know of many more!

    Also, I think college is a bad place to “figure it out” and Yes, you CAN criticize and cross out something before you try it. (i.e. cross dressing is not something I will engage in.)

  24. Graham Lutz,

    Interesting post. I attended Southern New Hampshire University’s 3 Year integrated Bachelor of Science program in Business Administration between 1997 – 2000. http://www.snhu.edu/2220.asp

    I had worked for about nine years before I started my studies in America. After my graduation, I worked in Troy, Ohio, as an Cost Analyst. Back in Sweden I enrolled in an advanced vocational education and training course called International Project Coordinator for two years. For more information on this type of education, go here: http://ky.se/engelskainfo.html

    I started my own business together with two other individuals in 2006. It is a meeting place for entrepreneurs and business minded individuals. My long-range goals is to return to the Land of Opportunity and set up my “third place” called Blue Chip Café, Business Center & Community.

    All the Best,

    Martin Lindeskog – American in spirit.
    Gothenburg, Sweden
    http://Profile.To/Ego

  25. You forgot to add that those men who were successful without college degrees became successful because they are extremely smart. Just because they became billionaires without a degree doesn’t mean it’s easy.

  26. “Anonymous says” – priceless.

    Point out to me where I said it was easy? The whole point is that it’s NOT easy. College is easy. Anyone can finish college, it’s just a matter of ticks off the clock. It’s the path of least resistance.

  27. 1. 4 Lost Years —

    Only if the education you received was worthless

    2. Post-College Earnings —

    2 smart for school…

    3. Learning is Not Confined to a University Campus! —

    This is true for University students as well. There is much to be learned at off campus keg parties.

    4. Other People Did Great!

    Many more did poorly.

  28. First of all, how manly of you to post as “Joe Shmo.”

    1. Whether or not your education was worthless isn’t the point. The point is, it takes a lot of time and that is not a positive.

    2. Not quite sure what you’re getting at.

    3. yet ANOTHER reason not to waste your time. As fun as keg parties are, you can’t possible tell me that they add any value to your future.

    4. So you’re telling me that you will base your decisions on what the delinquents of our society did? Just a tip…not a good way to do things.

  29. My, my, what an interesting string.

    Graham, I love it that you said you “fired” your teachers. That’s a great way to look at college–as a business relationship that can be terminated or renegotiated. So often students start a program and fear that they have chosen the wrong major, the wrong school, even the wrong country for their degree. Kudos to you for having the courage, and the intellect, to move on with it on your own. I think that it’s important for students to remember that they are in control, but many times they feel like they are lost in the shuffle, and they end up with a degree they don’t even know how to use.

    Unfortunately, the world doesn’t always congratulate the brave, and some people who think they can become successful without first earning their degree are forced to find that out the hard way (usually on their parent’s couch). Please note that I said “earning” and not “getting” their degree. This, I believe, makes all the difference.

    We all know the kids who started their college campaign with the highest of hopes: get wasted and skip class as much as possible. Those same people somehow find a way to walk across the stage and get that little piece of paper (usually mailed several months later in true anticlimactic fassion) without too much hassle. They skate by. Just as they will find a job, maybe through a friend of a friend who knows a guy, and maybe they even have enough personality to keep it for a while. College didn’t make this person a “success” just as not going to college didn’t make you any more the wiser. You are who you are for a multitude of reasons. In short, college doesn’t define the person.

    When it comes down to it, we all have to find our own way. For me, college was a necessity. In fact, I’m addicted to higher education, and I know I won’t stop until someday a student can *hire* me as their professor. Truth be told, I loathe the sales industry. I’ve tried it, and I’m good at it, but I loathe it. I have absolutely no desire to start my own company or fight my way into the role of a CEO. I don’t think I’m an ideal candidate for the no-college clause.

    For many, a degree is a requirement (doctors, nurses, engineers, lawyers, teachers etc.). But, in the business world, I believe it has more to do with ambition, passion, charisma, and stick-to-itiveness. I like the idea of learning while earning, especially when you get your employer to foot the bill. Even top earners who’ve made their way in life without a degree decide to return to school for personal fullfilment. But, if you’re not equipped for the job in the first place, having a PhD won’t make you into a success…it’ll just make you poor.

    I hope that I’ve made some sense, but I honestly can think faster than I type on most occasions so I apologize if my point got lost in the verbosity. Let me just say this, there’s no straight shoot answer for this predicament. Some people must got to college to achieve their goals. Some people can do well, if not better, skipping college altogether. Others are destined for the lumpy confines of their parents’ sofa no matter if they owe $125k to the Dept. of Ed or not. Just like our taste in foods and politics, it’s all a matter of opinion.

    Good luck to all.

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