5 Things College Doesn’t Teach, But Should

5-ways-college-doesnt-prepare-you-for-the-real-worldFor most students, college is an amazing experience. I’m certainly no exception — I’ll never forget the great times I had with my friends there. Post-college, however, a different kind of hangover sets in.

After leaving the fantasyland of college, many young people are woefully unprepared for life in the real world. A college education, for all of its merits, completely neglects some key skills that all people need to learn if they’re going to be successful.

Here are five ways college doesn’t prepare kids for the real world.

1. College doesn’t teach kids personal finance.

One day at college, a couple of my friends returned to our dilapidated rental house with fresh Chase Bank t-shirts and matching beer mugs. (I’m not sure if they were designed to be beer mugs or not, but that’s what they were used for.)

“All we had to do,” they said, “was fill out a credit card application.” Obviously, the lure of free made-in-China megabank-branded swag was more than enough to get the deal done.

A few weeks later, both of my friends received shiny new plastic cards with $1,000 monthly spending limits and 15% annual interest rates. These guys were generally not to be trusted with a six pack of non-premium beer, let alone a credit card. Yet banks were all too willing to extend credit to them, or should I say, to prey on them.

Thus began several years of credit problems for my friends. Not too long after, I bore witness to several calls from banks and collection agencies wondering why, oh why, didn’t these 19 year-old kids didn’t pay their bills. I even knew one guy who declared bankruptcy at the age of 22 because of his crippling credit card debt!

I doubt these stories are unique. Colleges and universities across the country routinely allow credit card issuers to set up shop on their campuses. Even worse, however, is the fact that colleges do nothing to teach kids about the dangers of debt.

Perhaps there’s a good reason for the lack of personal finance education, considering the average U.S. student loan debt was $29,400 for the class of 2012. At the very least, colleges are complicit in the $1.2 trillion debt scheme. They’ll happily accept your money, but they won’t teach you about it.

Imagine if the first day of freshman year, colleges were obligated to disclose the average student loan debt that graduates leave the school with?

At my school, every student was required to take an expository writing class, meet certain math requirements, and many programs even forced students to take at least one foreign language course. Yet not one of us was ever asked to learn about personal finance. Most of us left school with no idea how to create a budget, refinance a loan, or avoid debt.

These basic finance skills would have served students far better than the majority of the courses, and in my opinion, should become a prerequisite at every college and university nationwide. In fact, they should be taught in high school as well, but that’s another story for another day.

2. College doesn’t teach kids to sell or negotiate.

If you majored in marketing, you may have gotten a cursory explanation of what makes a good salesperson. But even then, you probably learned nothing about actually selling.

Like personal finance, selling is a skill that nearly all successful people have mastered. Selling also isn’t taught to most college students. Those that do go on to be good salespeople are forced to learn the ropes through a combination of research, mentoring, and trial and error, all on their own. Sadly, most people never learn to sell, and it severely limits their earning potential.

Selling has an undeserved stigma amongst many in academia. Professors may think selling is beneath them, or that most kids won’t actually use the skill. They’re wrong. Selling is involved in nearly every aspect of business.

  • If you’re looking for a job, you’re selling yourself to a company.
  • If you want to create a new project, you have to sell it to your boss.
  • If you want more customers, you have to sell to them.
  • If you need a loan, you have to sell yourself to the bank.
  • If you want a promotion, you have to sell someone on the fact that you deserve it.

Selling is everywhere. If you can sell, you can work anywhere in the world, and do almost anything. Kids should have to learn this before they graduate college.

Negotiating is closely related to selling, and college kids don’t learn how to negotiate, either. Normally the price of something as expensive as college could be negotiated, but it isn’t, and thus it makes sense why colleges don’t require kids to learn how to haggle. Imagine millions of students pitching schools on why their education isn’t worth the cost, and they refuse to pay that much? That would be a beautiful thing.

3. College doesn’t teach kids how to get a job or start a business.

You’d think that for $150K, college grads would at least know exactly how to put their education to use, right? Wrong.

Most kids graduate without a clue about:

  • What makes a great résumé
  • How and where to market your résumé
  • How to create a kick-ass LinkedIn profile
  • How to network with the right people on LinkedIn
  • How to nail a first job interview, and follow-up interviews
  • How to negotiate a salary
  • How to get a promotion, and advance in your career

Shouldn’t all of these topics be wrapped up in a required exit course for seniors called something like “Getting a Job 101”?

And then there’s entrepreneurship, which is all but completely ignored in college:

  • How to find your niche
  • How to start a business
  • How to find your first customer
  • How to grow an email list
  • How to write marketing copy
  • How to get to your first $1 million in sales
  • How to scale and grow your business to $10 million and beyond

Even in business school, these topics are barely touched upon. That’s a shame, and kids deserve better.

4. College doesn’t teach kids about cutting edge anything.

Back in 2000, my university barely even had an Information Technology (I.T.) program. Even more embarrassing, the small amount of classes the school offered were borderline useless. Instead, I learned everything about web design, development, and content at my job and on my own.

Little has changed these days. Unless a student is involved in a scientific research program, odds are their curriculum will be many years behind the curve.

Things move really fast out in the real world, certainly several times faster than they move in higher education. I recognize how difficult it is for a massive educational institution to keep up, when many multibillion dollar for-profit public companies can’t. But they should at least try really hard.

Instead, many schools remain mired in the traditional approach of teaching the same old stuff, year after year. And as usual, it’s the students that suffer.

5. College doesn’t teach kids about investing.

If you major in finance, you’ll learn the basics of investing. Probably not much you can actually put to direct use in your own life, but you’ll at least understand how different investment vehicles work.

The other 90-something percent of students graduate without a single clue about how to invest their money. Here are just a smattering of important things that all young people should know, but likely don’t:

  • The differences between mutual funds and ETFs
  • Why 401(k)s are usually a scam
  • The different tax advantages of a Roth IRA and Traditional IRA
  • The current 10-Year Treasury yield, what it means, and where it’s going
  • What the Federal Reserve is, and its massive effect on the markets
  • What separates a good stock from a bad one
  • The dangers of penny stocks
  • The dark side of the financial newsletter industry
  • How to avoid big investment losses
  • How to build a diversified portfolio based on your specific risk tolerance

I could go on and on. I’ve spent the last eight years working in financial media, and I can tell you first hand that even seasoned investors fail to grasp the concepts above. So recent college grads really don’t have a chance.

What else do you think should be required for students to learn in college? I’d love to you hear from you, so leave a comment on this post or on Facebook.

Also, if you like this and other posts, please share them! I really appreciate it. Thanks!

The 4 Best Alternatives to College

the-four-best-alternatives-to-collegeI’ve been getting some great feedback on Facebook regarding my first two posts examining the true value of a college education (see Part 1 and Part 2). Today, I want to take a closer look at what I feel are the best current alternatives to college, and even some potential new paths that might be available to my kids as they reach college age in about 15 years.

College Alternative #1: Free and Low Cost Education Programs

I already outlined some of the free options available yesterday, so I won’t get into them again. Instead, I want to think about possible alternatives that may emerge over the next decade or so.

Looking into the future is difficult, but I can imagine a couple of scenarios:

  1. Low (or no) cost co-op programs run by the companies themselves – Some colleges already do this (Drexel, for example), but a combination of work and study seems like a really great formula for success to me. Imagine if some brave companies actually started running these programs themselves? It’d be a home run. They could screen young applicants, train them up in the subjects that really matter to them (think Writing Effective Emails 101, or How to Sell), and give them on-the-job training in a variety of roles they might be suited for. Isn’t this a better strategy than blindly hiring 21 year-olds with liberal arts degrees?
  2. High schools that train kids to work, not prepare them for more school – About of third of high school graduates don’t enter college, and they leave high school woefully unprepared for the real world. What if true alternative high schools existed that trained kids to actually work? (I know that vo-tech schools already exist, but these still do a poor job of preparing kids for the real world. They don’t reach kids personal finance or how to sell, for example.) I’m talking real training for kids that want to enter the workforce immediately, and get them fully prepared for living on their own.

College Alternative #2: Give the Kid a Business

As I wrote yesterday, it costs about $150K on average to send a kid through a four-year college (and most kids don’t finish in four years). For that money, parents could buy a decent business instead and have their kid run it.

Of course, that means your child needs to be smart, responsible, and hard-working. I don’t know many 18 year-olds who meet all those requirements, but they do exist. You could also always negotiate an arrangement where the former owner of the business trains your kid for a year a two before they take over, possibly with an opt-out if the kid doesn’t like the work.

If you already own a family business, that’s even better. The only problem is, most kids don’t want to go into the family business. Whether out of spite, teenage rebellion, a general dislike for the industry and work, or sheer laziness, kids just don’t want to seem to follow in their parents’ footsteps. I’ve seen many scenarios like this play out, even in some very lucrative fields. So while providing a family business opportunity sounds good in theory, there’s no guarantee your child will go for it.

College Alternative #3: Trade School

I know many people who’ve had great success becoming electricians, plumbers, etc. after foregoing college to enter trade school. Many of these professions are always in demand, and unlike college, trade school teaches people real-world skills that are directly used on the job.

Even less-intensive trades like barbering require a lot of physical labor, but the rewards can be immense, particularly if the skill is parlayed into owning your own business.

College Alternative #4: Entrepreneurship

As an entrepreneur myself, this is my personal favorite option. Imagine allowing your kids to pursue their own focused education following high school. Reading books, taking free online courses, and connecting with like-minded young people online could put them on track to starting their own business.

They’ll probably fail early on, but so what? No entrepreneur has a 100% success rate (or anything approaching that), especially in their infancy. You live and learn, you try and fail, and try again.

I can’t imagine a more ultimately fulfilling path than starting multiple businesses. Beginning this process at age 18 gives kids a great chance to eventually execute a highly profitable venture that could benefit them for many, many years to come.

What ideas do you have for your kids (or future kids) that don’t involve traditional college?

Should I Send My Kids to College?

Is this little guy dreaming of how he'll put his college degree to use? I doubt it.
Is this little guy dreaming of how he’ll put his college degree to use? I doubt it.

I’m lucky enough to have two beautiful children. My daugher is two-and-a-half years old, and my son is almost six weeks. More than a few people have mentioned college savings accounts to me, and to be honest, I haven’t even considered putting money away for school for them. Here’s why.

College Is Probably Only Worth It If You Have Very Clear Goals.

If one or both of my kids want to be a doctor, lawyer, engineer, teacher, or something similar, then I’ll send them to college. Several years of traditional schooling is currently the only track to one of those professional careers.

If my kids don’t know what they want to do (the vast majority of young people fall into this boat), then I will either delay college for them until they figure it out, or encourage them to seek alternatives.

Note that I do not believe that college is the place to figure these things out. I’d rather my kids spend time reading, learning, and exploring on their own for a year or two after high school than waste time and money taking a slew of introductory college courses in massive lecture halls, memorizing and regurgitating information spoonfed to them.

In my experience, kids that don’t know what they want to do with their lives, yet attend college anyway, spend much more time partying, sleeping, and otherwise goofing off than they do on their studies. Which brings me to my next point.

For Far Too Many Kids, College Is a 4 to 5 Year Vacation That They Don’t Deserve.

If my kids don’t enter college with clear goals, and aren’t pursuing a professional career that necessitates college, then the college experience amounts to little more than a multi-year vacation. Indeed, most students have a great time at college — not surprising considering they’re living with a bunch of their best friends. But there is such a thing as too much fun, which I witnessed first hand. A number of kids I knew flunked out of school. Many others simply never finished their education, or stuck around seemingly forever.

We have some data to back up my anecdotal evidence: only 59% of first-time, full-time college students who entered a four-year college program in 2006 graduated within six years. That means 41% still didn’t finish after six years. In the financial world, these people would be known as “write-offs,” meaning it’s very safe to assume they will never actually finish.

It’s worth noting that the more selective a college is, the more likely its students are to graduate. This seems like common sense to me, because elite high school students tend to also be elite college students. However, there could be other factors at play, because selective schools tend to be more expensive (although that’s not always the case), meaning that parents will probably put a lot more pressure on their kids to succeed when much more money is at stake. And speaking of money…

Given the Skyrocketing Costs of College, Getting a Good Return on Investment Is Becoming Very Difficult.

College is extremely expensive. According to the latest College Board data:

A “moderate” college budget for an in-state public college for the 2014–2015 academic year averaged $23,410. A moderate budget at a private college averaged $46,272.

This total college budget includes tuition, room and board, and all the other wonderful fees that anyone who’s attended college can explain to you via an expletive-riddled tirade. So let’s pick a nice, round number, and budget $30,000 per year for my kids.

Remember when we discovered that only 59% of new college students graduate within six years? Well, fewer than 40% of new students graduate within the traditional four years. So odds are, it’ll take my kids more than for years to graduate, if they ever graduate at all.

Let’s say it takes them five years to finish school. That means a total investment of $150,000 each, plus five full years of time where they’re earning almost nothing. What’s more, they’re unlikely to gain much real-world experience during this period.

That’s a whole lot of time and money, so it better be worth it! Isn’t it possible that there’s a better way to invest in my kids? As it turns out, yes.

There Are Great Alternatives to College, and Many More Are Coming.

In recent years, no-cost online education options have exploded. Here are just a few resources at kids’ (and adults’) disposal:

  • Kahn Academy – Offers 100% free videos explaining over 2,400 different topics, from math to physics to computer programming to history. Most of these videos are produced by the very smartest people in the world, simply because they want to share knowledge with everyone, for free.
  • Code Academy – Learn virtually any type of computer programming for free. Enough said.
  • Coursera – Free online courses from the top colleges and universities around the world. Actual classes that students pay thousands of dollars for, except you get them for free.
  • MIT OpenCourseWare – Arguably the greatest technology school in history has put much of its curriculum online for free.
  • edX – Same deal, most MIT and Harvard courses are available here for free.

So instead of spending $150K to send my kids to college, they can learn literally the same exact things, in the same exact courses, online, for free. FREE. Did I mention all this stuff is free?

If college is strictly about learning, then it’s hard to justify paying for my kids’ education. As the online education world continues to evolve, we’re guaranteed to see even more free and low-cost options in the coming years.

When my kids reach college age in 15 years, will traditional college be necessary at all, or will a college degree still be the new high school diploma? Am I better off paying them $150K over five years to take a bunch of free online courses on their own, and design their own careers accordingly? I’d love to hear your thoughts.

Is College the New High School?

collegeOnce upon a time, only the academic and cultural elite went on to higher education — the rest of the pack simply went out and got jobs. I won’t argue whether things were better back then, but it’s clear that something big changed.

  • In 1967, about 25% of all 18 to 24 year-olds were actively attending college.
  • By 2012, that percentage grew to 41%.

Perhaps more tellingly, the vast majority of young people nowadays attend at least some sort of college:

  • 68.4% of 2014 high school graduates enrolled this past fall.
  • With the national high school graduation rate sitting at 81%, that means somewhere around 55% of all 18 to 19 year-old Americans are attending college.

This mass push to higher education has had huge ramifications on the job market. Increasingly, companies are requiring — or at least highly favoring — college degrees for jobs that traditionally didn’t need them (for example, most police forces now require a four-year criminal justice degree). What’s more, due to a shrinking pool of middle-class jobs, those with college degrees are competing for gigs that were normally reserved for those who weren’t college educated.

Thirty years ago, a high school diploma was all a kid needed to get most any decent entry level position. Nowadays, all that gets you is a McJob.

Of course, there are some exceptions to this trend. If a job seeker possesses highly specialized skills like computer programming, then the world is her oyster, regardless of her educational background. Trade schools, too, are a viable alternative to college, and just knowing how to fix things can lead to great opportunities. These, as noted, are exceptions, however. Most kids can’t code and have no idea how to fix a leaky sink.

So when almost everyone attends college, how much is a college degree worth? Is it simply the 2015 equivalent of a high school diploma in 1960? Is a bachelor’s degree the new bare minimum needed to get any sort of decent job?

The question then becomes, is college the new high school?

The Will to Prepare

Maybe if I researched plate spinning and practiced it for thousands of hours, I wouldn't suck at it.
Maybe if I researched plate spinning and practiced it for thousands of hours, I wouldn’t suck at it.
I don’t know about you, but every success I’ve had in my life has come as a result of preparation. This quote has always resonated with me accordingly:

“It’s not the will to win that matters — everyone has that. It’s the will to prepare to win that matters.”
–Paul “Bear” Bryant

The times I haven’t prepared correctly have mostly led to disasters, both personally and professionally. I used to think I could “wing it.” But as I get older, I realize that winging it really means you aren’t trying.

If you don’t care enough to prepare, then you don’t care enough to succeed.

Have You Tried Shutting Up?

shut-up-and-listenToday, I have a challenge for you. It’s really easy.

Just shut up.

That’s it. Shut up and listen.

Listen to your family. Listen to your friends. Listen to the sounds of nature, or your favorite music.

Listen to people who actually know what they’re talking about.

You can even listen to yourself. What is your conscience telling you?

Shut up and listen.

You might learn something.

The Difference Between Critics and Haters

Sometimes criticism can lead to fights, but that can be healthy too.
Sometimes criticism can lead to fights, but that can be healthy too.

Much of the time, criticism is good. After all, the only way to continually improve yourself — and your work — is to accept input from people.

Other times, however, criticism is worthless. Some people just want to bring you down, which means you can safely ignore just about everything they say.

The key, of course, is knowing the difference. Good criticism can sometimes seem too harsh, and bad criticism can be disguised disguised as trying to help. So here’s my quick guide to separating the good from the bad, so you know who to accept input from.

Good Critics Bad Critics (AKA Haters)
They care about you, your work, your cause, etc., and want to see you succeed. They don’t give a shit about you, or anyone else but themselves.
They tend to be close to you, or at least know you fairly well. They probably don’t know you, and certainly don’t understand you.
Their criticism is meant to help you. Their criticism is meant to hurt you.
Their criticism is based on their experiences, knowledge, and wisdom. Their criticism is based mostly upon their own shortcomings.
Their criticism is honest, straightforward, and constructive. Their criticism is mean, unfounded, and non-constructive.
You should seek advice from these people. You should completely ignore these people.