Last Updated on September 8, 2024 by Arurhose
Let me start by expressing my view: people should only attend university for the right course. Specifically, courses for careers and jobs within regulated industries, which require specific degrees. Some examples include lawyers, doctors, nurses, teachers, architects, engineers, etc. Another way of putting it, if you are going to university, take a degree that opens a career within a regulated industry. Anything STEM (Science, Technology, Engineering, Math) is a good path.
Some Benefits of University
With that out of the way, attending university has many benefits for all who start the process. Academic aside, many people go through University without University going through them. Many uni-developed skills are interpersonal, relationship building, and perseverance – learning how to start something, plan through it, and complete it. Since life is all about relationships, most of my long-term connections today come from my time in university, my friends, their wives, their children, and so on. The major benefit and reason for university is earning potential. Statistically, most people who go to higher education make more money than people who do not.
The potential for upward mobility for people who have achieved a higher education, usually within a University, is powerful. Many people who have degrees (depending on the field) earn far more than their counterparts without a certificate; however, there is an increase in the number of graduates entering the Workspace versus people who aren’t leaving due to situations like life expectancy, etc. The increased numbers of graduates dilute the power of degrees; so the benefit of earning a good salary is hindered by the large number of higher education holders.
Financial Trajectory vs Net Cost
If you don’t pick the right course, going to higher education can make it more difficult to achieve financial independence or at least take more time. It’s important to know where you want to go, have an idea of the outcome, and work your way back before deciding to begin. This is also true for financial independence (LEAN vs FAT) or anything substantial in life.
It’s essential to ask yourself what cost you must put into something before starting. With the amount of money universities are asking for, excluding other expenses, such as accommodation, transport, and so on, you’ll be taking on a substantial financial and time investment.
Looking at the top earning of people in your career path can help, as well how long it takes to get there. A UK degree costing on average 28k for three years (tuition costs only), with the average salary at 35k (gross – 29k net), means many years in debt. Then consider the cost of living, such as transport for work, food, utility bills, and the most significant expense, accommodation or mortgage; 29K doesn’t go very far. In addition, personal costs also share from the 29k, such as; starting a family/dating (it’s expensive!), saving money, big ambitions or dreams. It can be challenging.
A holistic view should have you asking: what will my chosen degree cost me time and money? How long will it take me to break even? What is my upward trajectory in ten years in my chosen field? What financial rewards are there in five to ten years, including lifestyle? Based on my FI number, How long will my career path support me reaching financial independence (FAT or LEAN)? Is this the most efficient way? Lastly consider how old you want to be when you achieve all the answers above, achieving financial freedom at a good age (one you decide best for you, not others) is just as important as being financially independent.
Non-Traditional Jobs
Let’s categorise jobs into three levels: base, mid, and tertiary, with non-traditional jobs in the tertiary/upper level. Many non-traditional jobs are beneficial to society, but not as critical, and usually the first ones to go. For example, going to school and coming out with a philosophy or media studies degree, having a profession as a soundboard operator for events, or being a DJ, etc. All these positions, though important, rely heavily on a good economy.
That said, I work within a non-traditional field myself. Many of you know I’m a Product Manager, and my role is important; however, my role is only somewhat crucial to my company compared to the people in manufacturing or computer developers. Suppose within my organisation there is a restructure and budget cuts. Middle and senior management are the first to go and further responsibility is given to others members. Uncut roles will be positions within labs, people with chemical engineering degrees who make the products that make my organisation money, people within IT running servers, etc. Without them, there is no business.
I attended university for three years and graduated with a Computing and Information Systems degree. I remember discussing with my wife, about our children not needing to go to university unless for the right course. This was very difficult for her to hear because she works in a regulated field that needs a degree and certificates (i.e medical, engineering etc) and has put in the time and effort. However, the world is changing and academic education should serve it’s primary purpose(s) and not us academics.
Traditional Jobs
These are jobs that keep the economy going. Traditional jobs include plumbers, locksmiths, electricians, masonry workers, sewage cleaners, electric grid workers, nurses, lawyers etc. During the Lock-downs, many people could not work except if you were working in a traditional or blue-collar position. Traditional job holders within medicine, people within IT (at this point is now traditional) worked through the Lock-downs. If in doubt, look at the Lock-downs as a litmus test to what roles and positions society considers important and heavily valued.
I want my children to have trade skills, such as plumbing, being an electrician, and so on (base-level). In addition to any trade skill, they can pick up a degree that is valued by society at large, something traditional, most likely within STEM.
So, what does this have to do with being financially independent? Well, it boils down to the cost (debt, interest on debt, time) of what you put into achieving a degree versus the outcomes you get from it (lifestyle, financial benefit, opportunities, status) – Net Value. The Net value will help you decide if you’re making the best choice on your path to FI.
Is There A Better Way?
The best approach to upward mobility from an academic and work perspective is apprenticeships. Apprenticeships enable you to gain work experience and, at the same time, understand a company, an industry, work politics, what it’s like to work within your particular niche or know if you want to continue on your chosen path while, getting a small salary and qualification.
Apprenticeships can be hard to find; if you have a mentor or parents who can guide you early, you’re very fortunate, alternatively you can go into voluntary work for a business, about ten hours a week. Find a company that accepts voluntary work and share your free skills and services for learning experience. It’s important to point out voluntary work is not an apprenticeship; but it can be similar in helping you gain experience and build relationships. It is also possible to do voluntary work while pursuing a qualification/certification(s) in parallel if needed.
One of the most important aspects of the apprenticeship route is guidance and relationship building, even if you start and don’t finish. In an apprenticeship you should build relationships with those who can guide you into how and what to do, it will be very beneficial in opening different doors and avenues.
An apprenticeship, though hard to find is all about clearly defining where you want to be, and getting there through guidance and efficient life costs (money and time). Very similar to understanding how to get your financial independence number – your apprenticeship should complement your financial goals.
The Future Work Economy
I’ve talked about relationship building through this post, mostly because I believe we are entering more into an idea and more importantly a relationship-based economy. A people-based economy, an economy less based on ability and technical skill. I’m inclined to this position due to our increasing dependence on technology to do our jobs and live our lives.
The future will lean heavily on relationships; to an extent, and in many ways, it’s always been like that. Technology integration today is so deep that it’s de-skilling and creating a huge dependence. An elementary example is literacy, spelling, and essential mathematical ability compared to the past. Many of us use calculators and spell checkers; even handwriting is declining due to keyboards. With the rise of Artificial Intelligence, skills for traditional roles and positions will lean on AI, further de-skilling professionals in those positions (legal, architecture, medical, and so on) to rely on AI for secondary and auxiliary tasks.
A key takeaway to help with any kind of relationship building is; adding value to someone or something.
Building Wealth Requires Planning
So is University worth it? Yes for the right course. Then after that, most people want to be wealthy to live the life they desire. Being wealthy and being rich are not the same, just as being poor and poverty are different. Building wealth takes time, vision, planning, discipline, and patience. It’s usually very intentional, with adjustments on the way and little pivots. Financial independence comes with being intentional.
I had a friend who introduced me to bouldering. Before each climb at the base, he told me to know my path and which way I wanted to go before I began. He told me that the amount of energy you have is limited. You want to avoid going up three-quarters of your climb and then finding out your route isn’t possible. You’d have to return to a specific point, see, and change the path. He told me that my energy would drain, my arms and legs would tire, and I would drop. I had to be intentional. I often like to think of his lessons and finite energy, which for me, is time, years, and life.
If the value of higher education will add a net positive and efficiently improve your ability to gain financial independence, do it. Make sure you ask yourself the difficult questions and perform your due diligence. Compare alternative routes, such as apprenticeships, certifications, and experience (volunteering).
Build good relationships by adding value to work and people’s lives beyond any job description, role or responsibilities. Life is all about relationships, so be intentional about adding value and relationships. That said, the most important relationship you will ever have, directly affecting your ability to achieve financial independence more than any other, is the person you choose to marry, something to discuss in the future.
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