In our culture going to school is given a lot of respect. Dropouts face a sharp negative stigma. They're quitters. They're losers. They'll go nowhere in life. But is this really true? How big of a factor is college on success?
Here's a list of some of the dropouts that I personally admire :
Larry Ellison (Oracle)
Almost 1 in 5 of the US Presidents including Lincoln, Washington, Jackson, and Cleveland
John D. Rockafeller
Ray Kroc (billionaire founder of McDonalds)
Every one of those people dropped out of school before graduating college. They account for 4 out of 5 of the richest people in the US.
What does college really get you anyway? For one, it's a lot of fun. I basically considered it to be like summer camp. I got to live close to a lot of cool people with few obligations (other than class, which interfered occasionally). It's also a sheep herding school. It teaches people to be obedient and subservient - deadlines are the biggest priority.
There are two distinctions I want to make. First is that there are some professions where college is not only helpful, but is necessary. You can't become a doctor, a lawyer, or an investment banker without schooling. So if your passion is for one of those professions, I'm not suggesting you drop out.
The other distinction I need to make is that "College" is not equal to "Learning". It can be, but isn't by necessity. You'd be hard pressed to find a successful individual who isn't obsessed with learning. Knowledge IS power, but school isn't the best vehicle for that knowledge.
Well, going to school can't hurt, right?
Entrepreneurs are harmed by going to school. It conforms views and does not at all reward individuality or thinking outside of the box - two essential traits for entrepreneurs.
People generally go to school from ages 18-22, or even longer. These are PRIME years. When you're young you have the luxury of taking risks. You have few responsibilities, so if you go bust you can start over easily enough. Once you grow older and have a spouse and children, you may not have that luxury. College steals some of our most valuable years.
College-mongers just LOVE the statistics, don't they? So do I.
According to the college-mongers, an average person with a Bachelor's degree will earn 900k more in a lifetime than someone who never attended high school. First of all, I believe this is faulty logic because it's considering all the people who couldn't possibly get into school (most likely because they don't have a high level of capability). This article is intended for those who have the choice. But... let's go with it anyway, since it's the closest statistic I can find.
I did the math on what a college education REALLY costs.
Here were my assumptions :
- According to the College Board, tution prices for 2005-2006 are:
Private School - $21,235 (rising at a rate of 5.9% annually)
Public School - $5,491 (rising at a rate of 7.1% annually)
- According to historic prices, the average return on stock investments were 11% annually
I was curious to see what would happen if the enterprising 18 year old decided to invest his money rather than spend it on college. Would he be able to close the 900k lifetime gap?
I made an excel spreadsheet and plotted it out to retirement age of 64.
The individual considering private school made up the 900k difference by the age of 41. If he waited until he was 64, his tuition would have turned into 10.7mil. For you college-monger stat people, that's almost 12 times the earnings gap. Notably, he'd be able to live pretty nicely off his nearly $1.2mil in interest he'd earn yearly.
What about the public school hopeful? Surely he couldn't make up almost a million dollars in less wages, could he? Of course.
He could reach 900k and retire ten years early at 54 and enjoy the average 108k in yearly interest for the rest of his life. If he waited until 64, his tuition money would have turned into over 2.8million, leaving him with 300k in yearly interest to scrape by on.
Then I took it a step further - Would a college goer EVER have more money saved than someone who didn't go?
- The average college graduate earns $45,400 their first year out of college.
- The average high school graduate earns only $25,900 their first year out of high school.
To be more than fair I assumed two things. First, that the high school graduate spends 100% of his income on living expenses. Second, that the college graduate spends exactly as much as the high school graduate. In reality it would be a lot more, but I wanted to simulate them each having an equal standard of living.
I increased both salaries by 3% per year to account for inflation.
So what happened? The high school graduate who saved private school level money ALWAYS had more money than the college graduate, by at least $220k. The college graduate saved less than 1.3mil by retirement, only 12% of the high school grad.
The college graduate fared better against the high school graduate who only saved public school level tuition. By age 32, college graduate had reached the amount saved by the high school graduate. However, by age 50, the high school graduate was back in the lead and remained there. At retirement age he had more than twice what the college graduate had.
What does this all mean? It means that you need to THINK FOR YOURSELF (or follow my flow chart and let me do it for you), rather than assuming college is the right move. Personally, dropping out of college was the best move I ever made. My friend Phil has a successful business and a very happy life. My friend Elisia runs KittyRadio among other businesses, and is very happy and successful.
Unless going to college is going to teach you specific skills that you will need to follow out your passion in life, it is very likely that not going is a better option.