Financial Success and Formal Education

[j_p]

I was interested to see if there is a relationship between investing success and having an education in say university, trade, other. And also in terms of generation, maybe in the past it was easier without an education but getting more difficult now to get started.
There are many stories about the multi millionaire high school drop out and not needing an education. Obviously having an education or not in no way stops you from been a successful investor; but does it actually increase your chances of becoming financially independent (or starting down that path) having that extra education.

To get the ball rolling.
I'm under 30, been to uni (and currently studying again), have one IP and have a job making about 75k-85k

(or maybe someone with forum smarts would be interested in starting some kind of poll)

 

[TonyY]

The only relationship between investing and having a uni degree is the job. I could be a successful investor without studying but for my job I would have to earn some decent money. Other than that to me uni has no other relationship, if you must be educated self educate yourself on whatever you want to learn.

What do you study?

 

[Ace in the Hole]

I think education in general is the key, preferrably gained through real life experiences.
Whether it's formal education or self education, some form of continual education is important.
In my opinion, formal education is too broad and slow if you have specific goals you want to achieve, self education is so much faster and efficient.

 

[j_p]

I originally went down the computing path, however realised I didn't like it hence a change.
I'm not convinced its as simple as higher income, there are many high paying jobs that don't require uni education. I would have thought a relationship could more be formed around the attitude of 4 years hard work to get somewhere, if uni grads are more likely to become investors or wanting to live it up after "hard work" at uni.

 

[Peter_Tersteeg]

I see a lot of people with different educational backgrounds. I can't really say that going to Uni is an inidcator of investment success or not. A university education does tend to lead to a higher income which would be and advantage.

I have seen plenty of people with above average incomes spend it on lifestyle, and plenty of average or below average income people make the most of what they have to become very successful.

 

[TonyY]

I think education in general is the key, preferrably gained through real life experiences.
Whether it's formal education or self education, some form of continual education is important.
In my opinion, formal education is too broad and slow if you have specific goals you want to achieve, self education is so much faster and efficient.

Agreed.
Couldn't have said it better.

 

[Aaron_C]

Formal education is just a commodity these days. However, the good thing about education is not the 'earning potential' for a 'job' (no one gets rich in a salary) but whether it teaches you to be articulate and use your intelligence wisely.

 

[Indifference]

It isn't necessarily what you earn, but rather what you keep & how you keep it that matters.

I'm not sure that a Uni degree correlates strongly with financial success as many entrepreneurs never finished college (some did after financial success). It is however a doorway to better base earning potential.... however, if you don't keep it, then it doesn't translate into "financial success" but rather "financial stupidity". You know the type, flash car, flash house, flash clothes and a debt associated with almost every item....

For the record, my "formal education" has actually been a hindrance on my path towards financial success. In my experience, it has been the INFORMAL learning that has proven valuable.

 

[BayView]

I never went to Uni - didn't even finish Year 12 (did about 1/3 and left to pursue golf).

However; the odds are in favour of the better educated and better employed individual - potentially more income to throw at investments,

And most folk who are better educated (and who then move into a solid career of employment) - not yer career Uni bludger - are already of the right mindset and ethic to be successful anyway.

 

[VYBerlinaV8]

My investing has been helped dramatically by having a high income, and this is partly due to having a couple of specialised uni degrees.

The uni degrees haven't helped at all with the investing, though.

To me it's all about putting together pieces of the puzzle. Formal education is part of it. If I had my time over, I would still do my time at uni. Going to uni (even doing a tough degree) is still much easier than working a professional job, and it sets you up to be able to access higher income.

 

[pinkboy]

I dont believe there is too much correlation between education and investing. The only education you need is the specifics of investing. I dont believe a doctor or dentist degree will help near as much as attending half a dozen free seminars, reading investing books, brushing up your knowlege on the ATO website and actually walking the streets and getting to know an area and analysing its data off ABS etc.

Grade 12 Education: Tick
Degree: Tick
Trade: Tick (x2)

Any of them help with the specifics with investing? No.

Bit like running my company. I have not attended a single management course ever in my life. Everything so far I have winged it! I guess it has got me to where I am today at least!

My properties, well I never done a singe piece of research on any of them. They either fell in my lap, or just pot luck came along - so I would say my investing strategy is kinda like walking up a aisle in a shopping centre with a kid and just picking things off the shelf and putting them in a trolley!

pinkboy

 

[HiEquity]

Warning - massive generalisation - but I generally find uni educated people have more accurate BS filters overall, which seems to be a result of greater knowledge of what constitutes a reputable source of information. But there are a million exceptions to that!

And there are people who come out so cynical as a result of their learning that it limits their achievement - just like the joke about the economist walking past a $100 note in the street because he knew it couldn't have actually been there because if it was, someone would have picked it up.

I did three uni degrees across different disciplines and if I had my time again i would still have done three uni degrees (maybe different disciplines though). Not just for the income but for the learnings behind how these disciplines work and the standards of evidence sitting behind them.

I could have made money using other tactics without my uni education but I would have had to take greater risks (and potentially enjoyed greater rewards but there are a lot failures along that path too...). But my education has enriched my life enormously in so many other ways, which completely overwhelms those types of considerations.

A uni education is a massive privilege (which also needs to be earnt...) with a multitude of rewards in their own right and I encourage anyone at any stage in life to pursue it. But I also encourage people who have already done the uni thing to get out into the real world and start earning some real money. There are a lot of lifetime academics out there I do not wish to emulate. But equally, there are plenty of researchers at the cutting edge of the sciences (medical and physical etc) who live very fulfilled lives and whose work is of utmost importance to society. For them, meagre pay is a secondary consideration to the importance of their research and I'm glad there are lots of people like that.

 

[Ace in the Hole]

It's going to be very difficult to measure sucess of formally educated vs self educated.

I think it more comes down to burning desire to succeed and taking appropriate action, which governs success.
Being self educated, and from what I've seen, Uni educated people in general tend to be all theory and no action, or all talk and no action, there are exceptions.

It doesn't matter how smart or how much knowledge or how many degrees you have, it's all worth nothing if you don't take action and opportunity by using your knowledge to take advantage of market conditions.

 

[cimbom]

There is nothing wrong with pursuing an education for the sake of education itself. A sad mentality that is getting increasingly common (IMO anyway) is that many people think that having a degree will make you rich and successful in and of itself. Maybe in the 1800s when degree were rare but certainly not now.

I studied something that I was interested in and that I really enjoyed. Many teachers, my family and others thought I was crazy studying a discpline which had few jobs and was very competitive. Most jobs are also not very high paying but I was crazy enough that I thought it didn't matter. I persisted through low-paying freelance work, unpaid internships and lots and lots of rejections until I landed my first full-time permanent job almost two years after graduating. I had to move interstate for it too but I love what I do and actually make more money than I expected to.

I'm very glad I didn't persue some fancy name degree with the hope that it would some day make me rich.

 

[weg]

A switched on personality that has drive, ambition, confidence, and ability, has a much better chance of succeeding, be it in business, work, investment.

My experience is this type of personality considers carefully what thay need to do to learn specialized skills allowing them to earn a better income that help them with any wealth bulilding plans, which is why uni is often considered.

That's not to say all that do uni have high incomes and wealth building in mind - just more than there would be dropouts.

It does happen that school drop outs sometimes achieved great things but i think it's greatly overstated, when many lack focus and ambition, and the ability to see a project through - why they dropped out in the first place.

I will add, when I say school dropout I don't refer to the dropouts we saw years ago, when it was normal practice to leave school before year 12 to get a job, a time when many jobs did not require the same high educational requirements, but still allowed you to rise up the ranks and increase income moreso than now.

Many of those people did have positive traits for wealth building once the 'mental blocks' to achievement, and where they stood in the class system, were removed.

 

[Ace in the Hole]

A switched on personality that has drive, ambition, confidence, and ability, has a much better chance of succeeding, be it in business, work, investment.

Confidence and ability are the result of experience.
So that leaves drive and ambition.
These generally come from having goals.
It could be said that all you need are strong goals and if you commit to achieving them, by formulating a plan and taking the appropriate action, everything else will work out for you in one way or another.

 

[weg]

Confidence and ability are the result of experience.

I was referring more to a core confidence, where one has a strong belief in themselves.

Much the same with ability - having the intellectual capacity and personality traits to be able to undertake learning new things in a beneficial way.

Many people gain experience along the way, yet are still missing these.

 

[Ace in the Hole]

Yes, this is true.

It's strange why some people are naturally confident and some are not.
Must be a personality thing, although I don't think it is related to being an extrovert.

Personally, I'm very introverted and quite shy in person, but have a very high self belief and positive attitude with high success drive, strange.
Must be all those self help books I read when in my development years.
Although, something like public speaking would freeze me up and I'd do anything to avoid it, it's the reason I skipped school so many times, to avoid doing a speech in front of the class....

 

[pinkboy]

Yes, this is true.

It's strange why some people are naturally confident and some are not.
Must be a personality thing, although I don't think it is related to being an extrovert.

Personally, I'm very introverted and quite shy in person, but have a very high self belief and positive attitude with high success drive, strange.
Must be all those self help books I read when in my development years.
Although, something like public speaking would freeze me up and I'd do anything to avoid it, it's the reason I skipped school so many times, to avoid doing a speech in front of the class....

You just described me (minus the self help books + I attended every day of school due to being a boarding school boy)!

pinkboy

 

[HotRod]

I don't think they go hand in hand and it depends what you mean by financial success.

My son tutors a girl whose mother is high up in a mining company, works long hours and probably earns (guessing), $500K. He father is a doctor and probably earns the same. Are they financial successes, who knows? I would hazard a guess that they live for their jobs and need them to support their lifestyle (which is probably right as ther home is huge and filled with marble and all sorts of artwork in swanky Applecross on the river).

My wife on the other hand finished Year 12 and went straight to work in the state PS. She now has a large portfolio of property and earns almost three times as much as my day job. She was the driver, not me.

From the outside the first family will look very successful but they have traded their time with family for LOOOONG hours at work (my son's boss said they work about 80 hours a week and on weekends back at the office) to the detriment of family life.

My wife on the other hand, from the outside, looks like she has no goals and not successful (because she hasn't "worked" for 18 years). But she does work (running the property portfolio) for about 15-20 hours a week and runs a damn fine household and has time to spend with our kids and running between schools.

So, as I said I don't think they do correlate and looks can be deceiving depending on how you define "financial success".