As the cost of higher education continues to balloon each year rising above inflation, the mantra, ‘learn to earn’ stands out.
For millions of incoming freshman and continuing graduates, it is becoming harder to see the system as a place of opportunity and talent and instead where the wealthiest through legacy admissions are admitted.
Higher education should strive to get the bottom 90% millionaires, instead of the top 1% billionaires. As the most subsidized sector/entity, it can help every student in any possible way, especially since higher education and obtaining a degree are the most powerful tools for upward mobility and higher earnings potential.
Yet is too much time spent in the classroom for business students and eventually aspiring business managers harmful or shall I say, unprofitable up to a certain point?
As a student myself, I am a firm believer that learning to earn is the most logical, reasonable, and proven way towards building economic security, financial success, happiness, support, and financial health. Yet everything comes with a cost and sometimes more time in the books doesn’t equate to more success outside especially if the fundamentals such as people skills aren’t in check.
Since starting to write about my personal finance journey amid the worsening days of the pandemic in 2020, I’ve always pledged to keep all my content free without a paywall. Economic security is a right, not an option.
Success on its own is a different story since it means different things to everyone. Thank goodness no one has the same definition and it isn’t a one size fits all approach, except for the way business students may see it which can be harmful to their potential.
To many, economic security is part of their success since in order to sleep at night, be independent, have a nest egg, and emergency savings fund to rely on if something hits the fan, you must feel supported financially and emotionally. Counting every dollar and sitting on eggshells isn’t an enjoyable or comforting feeling. And if there’s one thing for sure, Americans love to feel comfortable and end up forgetting to plan for the worst, and hope for the best.
Taking care of yourself doesn’t require as much work as we may think. It starts with getting adequate rest, fuel, and movement daily to help our earnings and potential skyrocket. After all, better health = more wealth. And no, you cannot substitute cleaner eating or more dumbells and treadmills for less sleep. All parts need each other to balance the equation.
If you don’t have time to sleep, you won’t earn either. Luckily, this isn’t always the case with traditional learning through an institutionalized industrial approach in order to earn, especially since most of us can confirm we learn more outside of the classroom from others than inside a textbook.
One for All or All for One
In the education system, we all have a motive. To do well and get a return on investment to benefit our future selves. Up to a certain level, it can be considered a choice up to the student to attend or not but in order to guarantee and see some path towards a brighter future, we choose the so-called ‘safe’ and secure path to college. A degree is an economic premium that cannot be replaced. It’s always something to fall back on.
In the last year alone, that sentiment has flipped, and not only are quit rates higher in the professional landscape, but amongst teens and tweens, venturing off, traveling and exploring taking off gap years, and simply being more creative as innovators have become popularized and quite an enticing option. In the last year alone, there has been an influx of influencers, IPOs, college dropouts, and self-made entrepreneurial teens thanks to the massive amount of capital fundraising, work-life prioritization, earnings potential, interest in the markets, and froth in this speculative market.
Against the backdrop of rising interest rates, inflation, and geopolitical concerns, investment rounds, M&A activity, and capital fundraising have dramatically cooled this year, only about a third of what was already raised at this time last year nearing ~$300 billion in invested capital. With the volatile on and off sell-off so far this year with various headwinds from inflation to the Fed’s tightening cycle and geopolitical concerns with the Russia-Ukrain crisis, high-flying tech stocks, entrepreneurialism, and self-employment have all been reconsidered and evaluated.
Last week I read a story in the news on massive regret surrounding quit rates. If there’s something certain, it is uncertainty. It reminds me of the start of the pandemic when Millennials desperately wanted to move out of their childhood home and buy some land of their own while interest rates were still low and inventory was plentiful on the market until a few months later they quickly realized the added non-recoupable costs, headache, and realization of the largest rushed financed decision of their lives.
This is a similar realization many aspirational ‘learn all the time, all my life’ kind of students of the classroom are coming to terms with within the workplace. Personally, I’ve always considered myself a student of life, not just the classroom and it’s benefited me greatly. Moderation is essential in life.
Whether MBAs’ intentions are to obtain as much educational experience, accolades, and titles as possible to boost earnings potential decades down the line or they simply love learning through the books is hard to tell yet whichever decision students embark upon, it isn’t always lining up to their expectations, especially for MBAs according to a study below. You cannot help but predict what business students are looking for with more experience.
MBA Nay or May?
As a current 3rd-year undergraduate student, I’ve found I work, learn, and create the most in and outside of the classroom. With a blend of internships, independent studies, and classroom experience, it creates a thriving environment.
I’m thankful to be a part of a school inside NYU that prioritizes experimentation and exploration. Sticking to the textbooks all day to only memorize information that goes in one ear out the other isn’t my jam and according to this study, it may be the most advantageous approach for students to adopt, specifically MBAs.
According to a new white paper circulated by the National Bureau of Economic Research, U.S. executives with a business degree are more likely to oversee declining pay at their businesses and reduce the pay of their employees’ wages. Alongside this, profits, sales, investments, and productivity decline as well.
This is not something many indebted MBA students look forward to hearing. Although inflation fueled by the pandemic’s bottlenecks in the supply chain can be to blame for the wage-price spiral, this paper states these downward earnings and productivity trends have been spotted in Danish companies in years prior to the pandemic as well.
Furthermore, wages at companies that hired managers with business qualifications fell by 6% within five years as labor share of profits dropped 5 percentage points according to economists Daron Acemoglu, Daniel le Maire, and Alex He.
Business managers on average show no greater ability to increase sales or profits according to the paper and it even states there is not much benefit to hiring someone with a business degree.
“Our evidence suggests that business managers are not more productive. Firms appointing business managers are not on differential trends and do not enjoy higher sales, productivity, investment, or employment growth following their accession.”
Why managers with MBAs may not be smarter with their money or team
Sometimes too much of anything is not valuable. Diminishing marginal returns anyone?
When you think of leaders in senior positions, heads of companies, and those leading the world, it is certain they have experience either in their current industry, running a company, or a similar position, but what about their extensive educational experience?
Beyond a Bachelor’s Degree, you’ll be surprised by what you find. Oftentimes the higher the corporate ladder one has climbed, the more diverse experience leaders will have over titles and degrees from various entities.
When considering founders and entrepreneurs, it’s a totally different ballgame. Although I’m sure there is a wide mix of older and younger founders with some as young as with only a HS degree and others with a Ph.D. both hitting their goals, it is important to note that an important role you strive for doesn’t only consider what’s written on paper. The seat needs to be filled with someone with strong morals, character, dedication, personality, and reliability, not a robot or genius. People don’t choose your work, they choose you.
Everyone is a work in progress and if you can admit and aspire to grow each day, you own the golden mindset. Business is personal after all. If you want a real MBA class, feel free to go through the in-depth treasuries and archive on my site. It may return a higher ROI overtime.
As I always say, above-average wealth, happiness, and success are more dependent on luck, timing, and networks than anything. About 80% of it comes from those 3 areas. The most successful people didn’t rely on their exceptional natural talent nor were they always the best and brightest in their fields. They stayed consistent, curious, and dedicated, focused on their mission.
If you can learn that at school and not be indebted for the rest of your life, then an MBA and beyond may be worth pursuing. If it puts your finances in jeopardy, weigh the pros and cons. Neither is worse or better. As personal finance goes, it is completely personal with no one size fits all approach.
Ultimately, the lesson here that can be applied anywhere is that we should never be reliant on one thing. Not one partner, place, or thing. Just because you have this title or attended an institution with a prestigious brand that signals wealth and perceived value, doesn’t mean you as a person have grown and tested yourself the real way. You need to drill that investment in yourself each and every day. No one will do it for you.
EQ > IQ for leaders matters most and takes patience since anything else can be learned in a 2 hr 1/2 bootcamp.
Psychological comfort, focusing on people and soft skills, and branching out with an open generalist mindset will serve you far better than a close-minded specialist mindset being really good at a little.
Life is unfair and it’s hard to tell if something directly paid off or not but as long as you are gaining experience in a variety of places, staying open, curious, meeting everyone, and making sure to at least take the most popular class, “Science of Happiness” before you graduate, you will be best prepared for life.
I can’t guarantee it will be easy but that’s what makes it exciting.