Personal Development » financial planning

Where to Find the Best CD Rates

Shaun — Thu, 12 Mar 2009 00:30:51 +0000

With the stock market showing it’s adventurous side, and its obvious fondness for doing jig-jags and riding roller coasters, many people are looking to find a new way to put their money to work without needing to buy stock. Have no fear, the CD rates are here.

A CD is an FDIC insured place to put your money. You can put the money in a CD for a set period of time, and collect it with the interest (usually pretty high) at the end of the agreed period.

So you want to find the best CD rates out there? Me too. The best I’ve found are:

BankRate.com
MoneyAisle.com
MonitorBankRates.com
Bankaholic.com

There are, of course, dozens of websites that provide similar services. Even mine that I linked to above explains how you can find the best CD rates. Just keep looking, and you’ll be sure to find them — no need to worry about your credit.

Online savings is fantastic for people who have found one of the many real online jobs. In that case, you can make all of your banking completely automatic and electronic.

Three Problems With an Online Savings Account

Shaun — Thu, 19 Feb 2009 20:20:48 +0000

Do you remember the traditional bank down the street that you put your savings into for years? The women behind the customer service desk wore dark blue skirts and jackets and the men had on gray flannel suits. Behind them was a counter with tellers who would take your deposits and hand you your withdrawals. And everything was done with a smile.

That bank with its solid oak doors was as solid as a rock. Your deposits cleared into your account the very next business day.

Then one day in 2009, you were on the Internet and you saw something called, “Online Savings Accounts.” All you had to do was have your paycheck directly deposited into a virtual bank and everything would be taken care of. Your account statement appeared instantly on your monitor with a click of your mouse.

Better yet, that online savings account offered you interest that you couldn’t find at your bank down the corner; sometimes the rates were as high as 2.5 % for this online savings account, and you could actually do your banking in your pajamas and slippers. It all seemed so simple and efficient.

But problems began to occur. As you started to put money into your online savings account and take money out, things you never thought of happened. This online account was not as wonderful as it seemed.

For one, there was no customer service when you had a question. If there was a toll free number listed on the website, it was shown way down at the bottom of the page, as if this online bank were trying to hide it from you. That sent you a bad message to begin with.

When you dialed the number there was only an automated menu and maybe a number to hit to get to a real live human being. If a choice was given for person to person service, it was the last choice on the menu and most of the time an automated voice told you there was a fifteen minute wait or the system was overloaded and asked you to call back. When a voice did pick up on the other end, they couldn’t access your account without a pin number that you lost a long time ago.

You had checks to deposit other then payroll checks. There were days when you wondered what happened to the check that you mailed in for deposit into your online savings account. Why was it taking so long to clear? The FAQ’s section on the online bank’s website did mention that checks had to be received in a mail room, processed, deposited into your account and then it took a day if deposited before two in the afternoon for money to be cleared through the Federal Reserve Clearing House. Who was getting the interest on that money while you waited to see if it showed up on your online statement?

Sometimes, you needed to pull money out of your savings account and you were set up with a checking account that also worked online. But once again, the high-yield online savings account reviews took another two to three days to make the transfer from your savings account to your checking account. In the meantime, your mother had advanced you the money until you had access. This was not good every time an emergency arose.

One day your PC pulled the online savings account website up, and the biggest problem of all occurred. The screen told you that the webpage could not be accessed and one of the reasons noted was that the site was having technical difficulties and was down. There was no mention of when it would come back up.It appeared that getting your hands on your money was not so easy at times.

This online bank was sure saving a lot of money by not having a real office with real people. And the extra point or two in interest amounted to very little because you weren’t Donald Trump and your account was not earning interest on a whole lot of money to begin with. Then there was the time the realtor would only take a cashier’s check. How were you supposed to get a cashier’s check delivered into your dining room over the Internet? Bill Gates hadn’t figured that out yet.

Everyday the three big problems seemed to outweigh the advantages. You missed those oak doors and those people with papers and pens, didn’t you?

Well, if not, then check out my article about finding the best online savings account. =p

Why You Shouldn’t Sell Those Stocks

Shaun — Sat, 04 Oct 2008 01:25:12 +0000

George W. Bush, John McCain, Sarah Palin, Joe Biden and Barack Obama all agree that more government is necessary to correct the already highly-regulated financial industry. They’ve agreed to spend a little under a trillion dollars, regardless of the vast amount of public outcry; Washington and the financial industry are scared silly.

During such an emotional time, it’s easy for us to lose our minds. That’s the worst thing you can do. When it comes to money, your best bet is to rely on your mind through reason and rationality. Using fear in this situation will do nothing but force you along a path of seeing your fears realized — losing your shirt.

And most importantly, don’t dump the money out of your investments because they took a dip. Don’t even do it if you think we’re about to see a 5-10 year “depression” — read below for the reasons.

Look Who’s Buying

Warren Buffet just came out and bought a 5 billion dollar stake in the financial firm Goldman Sachs. That’s five billion dollars he spent buying into the system that other are scrambling to leave.

His investing philosophy is nothing but the most basic, common sense: buy low. Buy a deal. When you see a deal, buy it. If it doesn’t surge in within 12 months, it will within 24. Just make sure you’re buying into a good company that will weather the storm, and you’re good to go.

Unfortunately, most people are completely ignoring what the money mogul is doing, and are just acting on the hype of the media. Whatever you do, remember: the media’s income SOARS during financial rough times. They eat crisis for breakfast. They love it when we become frightened and are glued to the TV sets. There’s a reason they’re encouraging pandemonium.

But to the point: if Buffet is doing it, that’s at least a little evidence that there’s some justification for it rooted in long-forgotten common sense. Of course, you shouldn’t blindly follow Buffet, as brilliant as he might be. The actual justification is found below.

Selling Now Messes Everything Up

If you sell now, you’re guaranteeing that you lose money. That’s a promise. If Wall Street recovers, you’ll know how to make money online. Actually, no you won’t. But pulling out now means you can’t make money with the crisis — it makes your losses concrete and unavoidable. This means you are giving yourself a 100% guarantee that you’ve lost during the crisis. That’s not a guarantee anyone can afford.

And your actions won’t just impact you. No, there’s even more of an impact: the economy gets weaker.

The market gets weaker the more people focus on selling as opposed to buying. Demand drops. Prices drop even more. Value plummets. It’s the old bank-scare — fear literally carves it’s deathly way through the finances of an entire institution, or, in this situation, the nation.

On the other hand, the cheap stocks can help you — but not if you are the one making them cheap. Read below for the why factor.

Don’t Let Current Value Matter

Remember, current value of your stocks don’t matter unless you’re a day trader. Do you buy and sell every day? Are you focusing purely on the short-game? If you’re looking for money in the long-haul, then bailing yourself out now is the worst thing you can possibly do.

Remember, the value of your stocks ONLY impacts your lifestyle when you sell them or when you receive money from them. That’s it. Period. For example:

John buys $10,000 in stocks in Potatoes Inc on a Monday. On Tuesday, the stock market takes a 30% dip. John looks concerned. Five years later, though, the economy is fine, and John finally cashes his stocks in. He had to wait 5 years. But, he didn’t lose his $3,000 that he would have if he’d jumped ship.

Also, he had no negative impacts at all. It was like nothing happened in terms of his lifestyle. Why? Because the value of those stocks didn’t matter when they were low, because he agreed to not sell out of fear. They didn’t matter because he decided to wait — even if it would be a few years. John refused to allow fear to cheat him out of his retirement.

Values WILL Come Back

Wall Street will recover. It might take a year, it might take two — it might even take a decade. If Civilization doesn’t collapse back into Stone Age 2, then Wall Street WILL come back. This means that, if you diversified, you should be just fine. You just have to wait. Patience is a virtue.

During the Great Depression, some people got rich. Read that again — the history books never mention this. Some saw that stock values collapsed, so they took their money from elsewhere, picked companies that would come back after the depression, and put their money in them. They became filthy rich. And you can do the exact same thing.

Want to see a real-life example? We’ve already talked about it — Warren Buffet is going to make billions upon billions because people are scared stiff. Buffet is going back to the basic, basic principle that we’ve heard over, and over and over:

Buy Low.
Sell High.

Settling for anything less will destroy your finances, weaken the economy and help nothing. Don’t abandon your mind during financial hard times. Instead, focus on expanding.

So buy Stocks. They’re cheap. Don’t let fear control your finances.

5 Reasons You Should Get Rich

Shaun — Fri, 19 Sep 2008 06:24:25 +0000

Society often sends us mixed messages about having money. For years, Hollywood has painted “the old rich guy” as miserly, greedy, miserable, loveless and outrageously evil. Most of the time the message we are given about money are clichés like, “There are more important things than money.” This is obviously true. Money isn’t inherently good. It’s pointless in and of itself.

But we aren’t talking about money in and of itself. Is it okay for you to amass wealth? Is it moral to own a BMW? To have a bank account with enough funds to allow three other people to retire? Shouldn’t you give your money away when you spend it? Aren’t you an evil, unfulfilled person when you do well?

You aren’t evil if you are financially well off. It’s perfectly moral to be rich. In fact, it’s part of the American Dream. If you believe serving others is the foundation of morality, it’s still moral; wealth almost automatically ends up helping others. That’s just how the economy works.

Below are five reasons I support the idea of building wealth here at Personal Development.

1. You’ve Earned It

As we discuss in Why Some People Always Succeed, success comes to those who focus on creation. Always making things better, trying new ideas, focusing on productivity; the creator nearly always succeeds in the long run.

On a similar note, the opposite individual will not succeed. Short of winning the lottery, lazy, uncreative people never become wealth. They never build a passive system of income (something I’ll be writing about in the future). People who don’t create won’t win.

This means one fact: if you’ve built your wealth, you deserve it. With a few exceptions (an inheritance, the lottery), those who have built wealth did so by helping society as a whole, strengthening the economy, creating jobs and helping others.

Reality rewards creators. There’s a reason high-paying jobs are high paying. CEOs, investors, webmasters, managers, business owners, authors – all of these individuals build wealth through creation.

If you end up rich, chances are you’ve earned it and then some.

2. Don’t Worry, Be Happy

One of the most puzzling myths in our culture is as ironic as it is puzzling. Western society is the richest society in the history of the world, yet it’s uncommon at all for individuals who live in the relative luxury to make claims such as, “Money doesn’t buy happiness.” Of course, they are absolutely right. Money is a tool, and can’t guarantee happiness. There are many rich people who are unhappy. There are also many poor who are unhappy as well.

This doesn’t mean, however, that money can’t increase your happiness. Money isn’t everything, but of course it helps.

SmartMoney Magazine actually wrote a bit about this in one of their recent articles:

“It may not be comforting to folks who aren’t minting cash, but the rich really are different.”There’s no group in America that’s happier than the wealthy,” says Taylor, of the Harrison Group. Roughly 70 percent of millionaires say that money “created” more happiness for them, he notes.”

Interesting word choice, isn’t it? Money “created” happiness for people who created money. Creation is one of the fundamental “purposes” of all persons. I’ll be talking about this in the future, so make sure to subscribe at the end of this article.

In the end, it should be fairly obvious why creating significant wealth can lead to at least an increase in happiness. You don’t have to worry about credit card debt, making the mortgage payments, saving enough to stay in style. Money makes life easier.

3. Being Rich Doesn’t Harm Others

There seems to be a rather baffling view when it comes to money. Perhaps we should blame it on the educational system; the view could be extinguished with a healthy dose of basic high-school level economics. The view is this: If someone is rich, that means someone else has to be extra poor. This simply doesn’t reflect the way the economy works.

An “economy” is basically money flow. It’s a question of how money moves from one person to the next. Just being “rich” doesn’t mean that the poor have less money, or that someone else will be struggling. There are several reasons for this, including more than even those listed below. The few listed below are just the tip of the economic ice-burg for why every economy simply benefits from the wealthy.

No Cap. Put simply, there’s no reason to think that because someone has two dollars that someone else is two dollars short. The reasoning is simple: the impact of every dollar is much, much bigger than the “static” amount of money that exists.

For example, I have a couple of hundred in my wallet. By the end of week, I’ll have spent it and someone else will have it. Next week, another person will have the hundred. After that, another person will have the money, and so on and so forth. This means that the “real” impact of every dollar is much, much greater than whatever is sitting in my wallet.

If I have ten bucks or a thousand bucks, in a few weeks someone else will have it regardless. This is money-flow. Rich people aren’t financial black holes, sucking money from the economy. If anything, the rich are often the creators that we talked about in Why Some People Always Succeed.

New Business. If everyone is barely scraping by, paycheck to paycheck, new businesses won’t be created; there wouldn’t be enough money saved up to handle the necessary costs. “Risky” ideas that only venture capitalists would support will never happen, period. Eventually, the economy will collapse without growth.

This means the exact opposite happens with the wealthy, supposing a free enterprising system like the one in the United States and a lot of Europe; the wealthy can launch businesses much quicker. The same goes for you. The more you have the more you can create. The more you create the more the economy benefits.

Jobs, business, choice; these are the end result of creators doing what they do best: create, build,
produce and achieve.

In short, if you are wealthy, it’s not because you are evil and want to suck money away from everyone else while laughing evilly on the way to the bank. Creators always end up creation creations which in turn cause more creation.

4. Got Money? Give More

In an odd paradox, the “super poor” often get more money due to some people having a boat-load of money. The lower and middle classes are usually focusing on making ends meet, as we talked about in “Save Money or Make Money.”

One of the consequences of working just to stay afloat is that there is rarely enough to pass on through charity. Almost all of the inheritance will go to making sure the kids and family have a little to make it on. Almost all of the week’s earnings go to food, transportation (I spent $4.08 on gas, today), housing and other basic expenses.

Now take a look back at someone like Warren Buffet. When he dies almost the whole 50+ billion are going to charity. The same goes for Bill Gates and a slew of others. There’s a reason hospitals name wings of new buildings after successful individuals, there’s a reason we see scholarships named in the honor of a rich person: being rich means you can help in a big way.

This isn’t to suggest that I’m trying to paint wealth as something purely selfless. Of course it’s selfish to make money. And that’s a good thing. Just read below.

5. Everyone is “Selfish”

This is the part where we’ll focus on the personal development side of the entire idea. Nearly everyone in popular culture claims to support “selflessness” while condemning anything done for “profit” or “selfishness.” The idea that “selfishness” = “evil” is so entrenched in our culture and society that challenging is considered absurd.

A few months ago I watched a video on YouTube where a young philosopher was attempting to explain why selfishness can certainly be justified. A video response to the philosopher showed someone passionately against what was being argued. The entire response looked something like this: “You can’t just be selfish! I mean, it’s just that it…just, well, it just sounds so selfish.” There wasn’t a reason given.

The truth is, everyone is “selfish” to a certain degree. I’ll be writing a more detailed article explaining this in the future, but for now, let’s just take a step back and look at, well, everyone.

TV is not necessary; neither are computers, snacks, desserts, “fun books”, most magazines or nearly every hobby in existence. Is it wrong to utilize these things, or take these actions? It would be hard-pressed to find anyone who would suggest so. Even still, these things are certainly selfish.

There’s nothing wrong with enjoying oneself. We’ll be going into more detail about this in future articles so make sure to subscribe. I’d love to see your thoughts, so stay tuned.

Being rich doesn’t require that anyone is harmed. Wealth is built through helping others. Creators deserve to be wealthy; creators have earned their wealth. Having wealth means you are more able to help others.

Bottom line: whether you want to help others or help yourself, being wealthy gives you more potential for doing accomplishing your goals.

Save Money or Make Money?

Shaun — Mon, 15 Sep 2008 07:58:53 +0000

Bad financial decisions undermine happiness, break up marriages and ruin lives. They’re also avoidable with the most fundamental point of most personal financiers: “live below your means!”

True. Everyone should live below their means, in a way. But the expression is wrong headed because it implies focusing on “living below” rather than “earning more.”

This article will argue that rather than focusing on spending less than we earn we should focus on earning more than we spend. — for example, we should try to make money online. Semantics aside, this attitudinal difference is vital for long term material success.

The Perspective of a Miser

The perspective of the miser is someone who has determined that they’ll make ends meet by making it easier to meet them. Skimping out, drinking water, smaller meals, slower internet, hunting for cheaper gas; these are “defensive personal finance” measures.

Of course, these measures do work. That’s a given. You are most certainly going to have an easier time when it comes to paying the bills if the bills are smaller — this is especially true if you make money online.

“Making ends meet” is the art of making sure your financial income is the same or better than your outgo. As long as your needs and your earnings are at least matched up, you’re good to go.

Sort of.

If you focus exclusively on “making ends meet” you’ll be working harder in the long run. The reasoning is simple: your needs are relatively static. You need food, housing and transportation. Your income is typically also fairly static: you get a paycheck.

Focusing on “saving” your way to real success within a long period of time is possible with almost any income. It just costs more in terms of lifestyle. For the lower-class, investing means smaller meals or some other inconvenience.

Is there a better way to focus? Absolutely. But first, let’s do a background look at a specific kind of individual: the creator.

The Perspective of a Creator

There are dozens if not hundreds of “personality type” quizzes that can be found online. I admit, I’m often a sucker for them. But the profound difference between people isn’t usually listed in the test results because not any one personality typically succeeds. You can do well as an extrovert, an introvert, someone who focuses on sensing or someone who focuses on intuition. Almost any personality can succeed by focusing on its strengths.

But there is one way to almost guarantee success, and that is to adapt the personality of a creator.

A creator is someone who simply can’t function with the “same-old, same-old” and demands creating solutions and increasing efficiency at everything.

A creator is someone who feels like every action they take must bring about both short-term and long-term results.

A creator is someone who feels like wasting time and effort is a great crime, and seeks to maximize his or her time on earth.

For a more comprehensive analysis of the creator personality, read Why Some People Always Succeed. I detail exactly what I mean by a “creator.” The article is a must-read for anyone who’s tired of not reaping the benefits of financial success.

Choose Now: More Pain or More Money?

What I’m about to say does not mean you shouldn’t try to cut expenses for the sake of your budget. This is a necessity for most people. If you’re at a place where you need to drink water when you eat out, that’s perfectly fine and you should certainly do so.

The following is simply the proposal of a different perspective.

Warren Buffet didn’t become Warren Buffet because he only drank water at McDonald’s. (Though, to be fair, Buffet does routinely shop at Sam’s Club, a discount warehouse. Not the usual for a guy worth 50+ billion dollars.)

Steve Jobs didn’t become Steve Jobs because his car had above-average fuel efficiency.

No, the successful don’t get that way by skipping meals, or eating cheaper. That’s a way to make ends meet. It’s important for many (or most) people. But it’s not a good long-term game plan. It’s the best way to live in regards to the next round of bills.

The key to financial success isn’t about scrimping and cutting costs. That’s how you stop yourself from going bankrupt. Not going bankrupt is a lot different than being successful.

How to Make Money

There are always principles to how any function operates. Just ask a mathematician. These principles work in business, personal development, personal finance, basketball, style; you name it, there are principles. Here are some of the essential principles of building wealth:

Become a Creator. Creators create where ever they go. They walk into a room and have to make one thing better before they leave. They spend all day focusing on productivity. They don’t get hung up on email, or funny vids on YouTube. They can’t help but rise to the top.

Dump the Shackles. Society is filled with weird beliefs and presumptions that are simply foolhardy. I’ll be writing more about the following specifically, so make sure to subscribe. Each of these shackles, if believed, can destroy your financial future, period. Thee following “shackles” are completely wrong:
1. You aren’t self employed.
2. Not everyone can be rich.
3. Wealth “just happens” to some people.
4. You can’t “get rich quick”, and anyone who says so is a scammer.
5. You can’t do well without a college degree.
6. You shouldn’t focus on money.

Build a Network. Remember, an economy is a social structure. Making money requires other people. If people like you, they’re more likely to give you breaks, do business or help you out. Besides, networking can’t hurt you.

Passive. Income. A passive income is an income that’s going to come in even if you decide to take a 6-month break. Investments, owning a “hands-free” business, a website; all of these are fantastic ways of building your income. The great thing about a passive income is that it always grows. You can only move up.

Thinking beyond the culture norms, networking, focusing on a long-term income model, constantly looking for creative ways to be productive are all vital elements of building wealth. Master one, and your income will increase over the long run. Master them all and nothing can stop you.

Don’t focus on being a miser. Focus on being a creator. Don’t focus on scrimping your way to the top. Just build your way there.

Don’t Go Into Debt for College

Shaun — Tue, 09 Sep 2008 22:13:06 +0000

Our culture is inundated by common and outlandish beliefs regarding college that simply aren’t true. These myths don’t just waste the time of literally millions of students, but often completely ruin thousands of lives by forcing young adults to start their lives tens-of-thousands of dollars in debt; many never pay their debt off, and are forced to literally live their entire lives in borderline poverty.

“The debt is just short term”, “it’s the only way to get the job you want”, “you’ll never make any money without a degree” are common college myths. Let’s discuss the most important: whether a college degree is worth going into debt over, and what the alternatives to college debt are.

College Is Expensive

Education costs are spiraling out of control. A recent report by CNN’s Money Magazine even quotes the former U.S. Department of Education’s Commission on the Future of Higher Education as saying:

“If college costs continue to escalate at this rate, you may reach a point where the investment simply isn’t worth it.”

Have you reached the point where spending the money simply isn’t worth it? How do you know when you’ve reached that point?

It doesn’t take a PhD (pardon the irony) to acknowledge the incredibly increasing costs of a college degree. Money Magazine reports that the college costs are increasing four times the rate of inflation.

Private institutions charge an average of over $20,000 per year for tuition alone, meaning lifestyle costs aren’t factored in yet. All in all, going to school can cost up to $50-100,000. In order to understand this number, let’s take a step back and analyze three factors.

College Debt Ruins Lives

These aren’t just scary numbers; behind every debt statistic are thousands ruined lives. Take Kristin Cole, for example, as reported by The Seattle Post-Intelligencer:

Kristin Cole, 30, who graduated from Michigan State University’s law school and lives in Grand Rapids, Mich., owes $150,000 in private and government-backed student loans. Her monthly payment of $660, which consumes a quarter of her take-home pay, is scheduled to jump to $800 in a year or so, confronting her with stark financial choices.

“I could never buy a house. I can’t travel. I can’t do anything,” she said. “I feel like a prisoner.”

The college myth proclaims that the debt is just short-lived. For many, this simply isn’t true. SmartMoney reports:

Vickie Hampton, an associate professor of financial planning at Texas Tech University, knows that being well educated can make you poor. A colleague of hers, she says, racked up more than $100,000 in debt while earning a Ph.D. in English. “There’s very little probability of her paying that off in her lifetime!” Hampton says.

Lifelong-debt is no laughing matter. College debt is destructive on two levels:

Current funds. A portion of your paycheck will go to the debt, meaning a house, nice car and everyday luxuries simply might not be open to you for years.
Future Funds. A dollar of debt is an anti-investment. Over the course of one’s life, investing $1 at 18 or so means having roughly $10 at retirement given 5-8% return. This means that spending $100,000 for college is actually spending $1,000,000 in terms of actual spending money later on. That’s without factoring in interest, meaning the actual figure is much higher.

But the college myth proclaims that it’s a necessary evil. Without that degree, you’ll be financially backward for the rest of your life, so goes the myth. This simply isn’t true as we discussed earlier in the article Most Don’t Need a College Degree.

So what are the alternatives to college debt? Is there a way of getting the degree without racking up the costs? Remember, debt is always a choice because there are always alternatives to debt.

Alternatives to College Debt

Debt is most certainly not the only option when it comes to paying for college. If anything, college debt should be the last option. I personally chose to go completely without debt — I’d choose no degree over substantial debt for a degree.

As far as the actual alternatives:

State Schools — State schools average a little over $6,000 per year, with private institutions at over $20,000. Less prestigious? Probably not $50,000+ worth.
Community College — Community colleges can be extraordinarily cheap because they serve in the function that a real college should: to give anyone and everyone an education. No elitism, just a cheap education. Don’t think that it’s so less prestigious that you can’t make it in the real world; some places, including Stanford, accept some community college students.
Pay-As-You-Go — This seems to be a forgot method. Paying for a year, taking a year off, saving money and paying for another year. It might take a few extra years, but the end result is absolutely no debt. Oddly enough, this can actually be much, much cheaper than going into debt.
Scholarships — There are literally tens-of-billions of dollars in scholarships. The VFW, Target, Wal Mart, Coke, almost every company and organization gives out scholarships. If you have a great writing ability, there’s almost no excuse for not making use of the scholarships. In the next article I’ll show how you can search for your own using online databases, so make sure to subscribe.
Don’t Get a Degree — I’ll be one of the few who would actually suggest this: statistically, most of the readers of this article don’t need a degree to become successful. Most people don’t have a degree, and if you decide that entrepreneurship is for you that’s another reason to not worry about the expense. Instead of paying for your degree, you could save the 50k and put it towards starting your own debt-free business.

Significant debt isn’t necessary to get a degree. Using the methods above, one can completely skip the decades of having the debt on the back of one’s mind. Debt destroy’s lives and ironically destroy’s one’s ability to succeed, if the debt is large enough. Don’t go into debt for college unless absolutely necessary.

I’ll be writing more about rethinking popular college beliefs, including specific ways to find great scholarships regardless of your skills or portfolios. Make sure to subscribe below!

Most Don’t Need a College Degree

Shaun — Sun, 07 Sep 2008 03:53:46 +0000

For years, I told friends and family that I wouldn’t go to college if it wasn’t required in order to practice law. When I decided that law wasn’t for me, I seriously considered giving up on college altogether.

My reasoning was fairly simple, though the reaction I get from most people is something along the lines of: “What? You can’t be serious! A college education is the only way to make money! People without degrees fail!” Heeding this fear-mongering myth, many students my age are spending $50,000+ each on their degrees; some will spend more with graduate and post-graduate studies. But is it worth it?

College has become a kind of a rat-race; the value of a degree is often based on social perception rather than concrete education. The nicer the college one is accepted to, the better one looks, the more likely one is to get a job — at least, thus goes the general belief. This is actually not entirely true, as we’ll be discussing in a bit.

College Isn’t Necessary for Most

Of course, a degree is sometimes necessary. Doctors, lawyers, engineers; many occupations require a degree. But you don’t need a business degree to get into business. You don’t need a degree in web design to get into web design. You don’t need a degree in philosophy to flip burgers. Just kidding!

Degrees can certainly be helpful, but for most it’s simply not needed. Jobs that require degrees are a minority, not a majority of jobs.

Bottom line: chances are, you don’t need a degree. But, in some industries, most individuals have one. The only question is: did the workers in the industry really need the degrees or did the workers just end up with one? This of course, begs another question…

…What Are Employers Actually Looking For?

My father is a businessman, working years in sales and management. He worked his way from the bottom to the top, mastering every step of the journey until finally owning his own business, an oldies radio station in a resort community nestled in the Ozark Mountains.

While I worked in his office I had the opportunity to talk with several millionaires and a great many other successful businessmen. Small talk, when involving at least one teen, almost always gravitates toward the topic of college plans so it was no surprise when the topic came up with these individuals as well.

Surprisingly, nearly all of the successful people smirked at the idea that a college education is necessary to succeed in business. “Nobody,” they said, “cares if you went to Harvard. Your boss just wants to know: do you know how to do your job? If so, you’ll do fine. Period.” It’s no wonder that they had their position, as some had degrees in business, and couldn’t point to a single place where the degree was helpful.

As the old adage goes, “Good help is hard to find.” It’s true. In some regions, over-employment is wrecking havoc on businesses; there aren’t enough workers to go around. Any young individual who knows how to get the job will not be looking for a job.

This isn’t to say that unemployment isn’t also a problem. Any business owner or manager can tell you that it’s easy to have plenty of applications but few individuals with what it takes to get the job done up to standard. We may or may not have an unemployment problem, but there’s always going to be a shortage of great workers who desire excellence and apply themselves in everything they do.

Of course, having a degree can certainly help you even get the interview when applying for a job. More on that below.

Why Degrees Help Your Salary

There’s an incredibly strong correlation between having a degree and having a high paying job. Note: that’s a correlation. This doesn’t mean that the only reason those with a degree are getting paid more is actually the degree.

After all, who’s more likely to go to college and graduate with the degree, a self-starter or someone with little work ethic? The correlation is largely caused because self-starters are already more likely to attend college in the first place and would have been likely to succeed anyway.

Along those same lines, in order to understand exactly how a college education will help you earn more, we need to see when and how that happens. We know the degree probably isn’t going to magically give you a higher wage. We know the degree isn’t going to mean that you will master your profession; a degree won’t do the work for you.

The degree can increase your lifetime earnings by:

Giving You an Interview – By opening up jobs that you wouldn’t have had the resume to otherwise even send in an application. Basically, a 4-year, $50,000-150,000 resume stuffer.
Giving You “Experience” – By giving you knowledge of the field, you’re more likely to start with higher wages than someone without a degree. Basically, it gives you a head start. But is it a four-year head-start? That’s a gamble.
Giving you the Access to the Field – Of course, there are some fields that one simply needs the degree to enter, period. Law and medicine are two classic examples.

It can’t be denied that college can be helpful and is often vital to getting a job in a highly competitive field. But looking at the actual root of this helpfulness can bring us to much cheaper and less risky alternative.

Like what?

Several months ago I read the story of a budding businessman who wanted a job with a high-class firm that was simply out of his reach. But he got in. How did he do it? The same way you can: Offer to “intern”, free of charge, for a month. That’s an almost guaranteed way to land any job. It’s a way of getting past the “must pay employees” law that exists: offer to work for free.

Once your employer sees that you mean business (no pun intended), there’s no way they’ll let you leave. Think this sounds expensive? College is much worse. A month without pay might mean a $4,000 cost to you. College would take four years and at least $50,000, without scholarships.

Sometimes “oddball” alternatives get the same results with $40,000 and four years to spare.

Let’s Be Smart About This

A friend of mine recently told me the story from when she worked at McDonald’s back when she was still in high school. Someone came along and applied for a job. Under “educational experience”, the individual listed a 6 year degree in Calligraphy.

They hung the application on the wall and had quite a few chuckles.

They laughed because the degree was absurd and stereotypical. There are precious few things one can do with a degree in Calligraphy. Spending $50,000 was probably a bad choice. The individual could have simply learned the trade without the degree, and saved thousands.

Don’t go to a degree it isn’t necessary. If it is necessary, and you can make your money back with a typical job in the field you’ll be getting your education in, then go for the degree. Just rationally analyze your situation, your goals and the necessity of the degree, and you’ll be fine.

Find time to browse through the absolute student’s marketplace where one can sell used college textbooks through the sell back program at Valorebooks.com!

This is part of a series of articles on Rethinking College. Make sure to read the other articles in the series to learn more about how to make rational choices about a college education.