The Firstborn Is Going to College
By Neil Rose, CFA
Is College Still Worth It? Part 2
How is it he’s turning 18 today?
Son, it’s important to see college the right way, starting with what it isn’t.
Many today still look at college as a steppingstone and surefire ticket to a lifetime of better earnings. This has generally been the case, and study after study shows the data is irrefutable. But I suspect the earnings premium of college graduates is overstated, due to sample bias—the people who get degrees already tend to have favorable characteristics for earning relative to non-graduates—and occupational sorting: doctors, lawyers, CPAs, and other occupations requiring degrees only show up on one side.
Don’t believe the degree itself matters. It doesn’t, and this is truer by the day.
Before the internet, a college degree had signal value, especially degrees from prestigious schools. Employers had a stack of resumes to find candidates. Not much can be honestly gleaned from a single page, especially of a 22-year-old.
Employers leaned on grades and pedigrees to mitigate risk. College really mattered because of the informational void. That void is almost gone now. Anyone can see anyone else’s actual body of work online—and find red flags (be careful with social media).
Take Regency for example. Where a prospective analyst went to school matters very little to me. Instead, I would look at their blog and anywhere else they post their investment ideas. In those writeups I would have a window to their mind, their thoroughness and insight, how they piece together an idea, how they considered opposing views and disconfirming facts.
I could see if they had that certain mix of curiosity and monomaniacal passion, the kind that makes one investigate a thesis long into the night only to happily reject it yet feel satisfaction from leaving one less rock unturned.
You can’t buy what’s valuable, not even at the great private colleges that now cost over $90,000 per year. Speaking of the cost of college, its growth has long exceeded inflation to the point where price demands careful consideration.
Many in your graduating class will spend almost $400,000 on their undergraduate degree, financing most of it and creating financial drag into their 30s and maybe beyond. Many of those who went to college solely to become rich and thinking paying top dollar was the straightest way to get there will someday wish they took a more economical or business-like approach to it in considering public versus private, in-state versus out-of-state, and vocational or technical education rather than college.
For far less money and time, one could learn and develop valuable skills and a business of their own. All the electricians, mechanics, plumbers, and contractors I’ve met with their own business have done far better financially than almost any doctor or lawyer.
If the professions are your calling, great. Things are simpler on your way to a CPA, MD, JD, or PhD. The path is defined, and it starts with a college degree. Forget anything questioning college itself. Know the price of college doesn’t determine the likelihood of becoming a doctor.
Those looking to study business, computer science or certain other majors should really think twice. First and obvious is this: anything you can learn in a classroom you can learn more online and actually doing business or anything technology.
You’ll learn more about business with repetitions and from working with people, including mentors, customers, vendors, investors, and competitors. You’ll learn a tremendous amount watching people do things you’ll find dumb or unethical. You’ll see people hell bent on getting in their own way—and decide to do the opposite.
For computer science, the case against college is maybe more compelling, especially now that AI has changed everything. Instead of spending all that time in and out of the classroom on tedious code, you can build. Especially now in AI’s early days and with a world still operating on systems and software that will soon be up-ended by people your age who realize they don’t have to wait to build things.
The lines between the disciplines have blurred. Every job, team, and organization is a business. And every business is a technology business and a communications/marketing business, whether they like it or not.
College itself is not a golden ticket for these pursuits. College doesn’t entitle you to have a valuable product or service; it does not entitle you to happy customers, bosses, colleagues, and other stakeholders. It all depends on you and what you bring to the table.
But college can be gold, especially in ways money can’t buy. It was for me.
I learned things, but more importantly learned how to learn and how to cope with all the readings, papers, tests, deadlines—while working here and there and playing a sport that was essentially a full-time job.
There’s value to learning for learning’s sake. Education isn’t just for vocational use or in service of profits. College opened new worlds for me, including those within. I learned to learn and came to love it. I learned college is closer to the journey’s beginning than end.
And then there’s the people you meet there. College is the last time you’ll have so many friends your age, in proximity, sharing the same experience and fighting the same battles. It’s the last time so many people will care.
Invaluable for me was finding people my own age that truly impressed me. I found motivation and inspiration along with lifelong friends.
I found my wife there, your mom. There may be no better argument for college than having just the mere chance of meeting someone so special.
Now, you’re going to college, and I hope it becomes a special part of you, too.
One final piece of advice—and you should give me credit for stopping at one: reach.
Make the most of the unique opportunity college offers and the support surrounding you. Study what genuinely interests you, not just what seems most marketable. Say yes more often than no. Take risks, fail, and face rejection, the more the better.
Realize you’re in a good spot: you’ll never have to worry about food, shelter, or the basics. Not everyone has your kind of fallback position.
So, reach.
This material is for informational purposes only and does not constitute investment, tax, or legal advice.
About the Author
Neil Rose, CFA, is the founder and CEO of Regency Capital Management.
