As expected, this morning’s article caused a lively discussion here at Get Rich Slowly. It also sparked a lot of complaints. Many folks — both those who agreed with the piece and those who disagreed — pointed out that they come here specifically because GRS tends to steer clear of political debates.
Just to make it clear: Get Rich Slowly is apolitial. Individual articles (and/or authors) may have a political slant — as was the case this morning — but the site itself is neither liberal nor conservative, Republican or Democrat. In the past, GRS has featured articles about why religion is an important part of personal finance, about financial security for unmarried couples, about food stamps — about a variety of issues from all sides of the political spectrum. The appearance of one article by one author does not represent a change in the site’s direction.
That said: You’re right. One of the reasons I love this site is because it tends to stay clear of politics. I loathe how political discourse is conducted in the U.S., and the last thing I want to do is make GRS a part of that. Our discussion this morning was civil and stimulating, but I’m not sure I want to steer the site back into the political arena for a l-o-n-g time. Sound fair?
Having said that, let’s look at some recent non-political personal-finance articles from around the web.
The always-outspoken Financial Samurai recently ranted that a college degree will set you free. I’m a huge proponent of education. Why? Because the stats are overwhelming. Sure, there are individual instances in which an advanced degree goes for naught, but for most folks, the value of a college education is clear. Don’t believe me? Take a gander at the graph FS included in his article:
As I prepare to travel more, I fret over phone charges while in other countries. I’d love to have access to my iPhone — including data — but I know that roaming can be costly. The New York Times recently published a piece on how to beat roaming fees while traveling abroad, which contains some good tips, and a link to National Geographic’s Cellular Abroad products. I’ll have to check those out.
Elsewhere, yesterday two of my colleagues at Time Moneyland noted that experts don’t always have expertise. Gary Belsky and Tom Gilovich write that this is a problem, especially when the experts appear confident: “We tend to follow the most sure-minded among us, regardless of how reliable we know their views to be.” Spot on! And this is true not just with money, but in all things. People will gladly follow somebody who is confident but wrong while ignoring somebody who is right but perhaps less vocal. Remember: Nobody cares more about your money than you do. Never put blind faith in anyone.
Finally, Trent at The Simple Dollar argues that money is not the root of all evil. “Having money isn’t evil,” he writes. “Earning money isn’t evil. Exploiting people to acquire that money is, however, and spending it wantonly in ways that don’t bring value into anyone else’s life is probably also evil.” I happen to agree with Trent: Money isn’t the root of all evil — but politics might be!
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So many of these “college is/isn’t worth it” arguments are just very poorly constructed. First, there is self-selection. I.e., smart, internally-motivated people go to college and would do well even if they didn’t. In other words, the populations are not the same. Second, we never get a cost/benefit analysis with the real options that exist. What about trade schools for welding, HVAC, or truck driving? Third, all majors are not created equal. The people who are doing all the complaining lately are those who are working in call centers having spent four years and at least $60K to get an undergraduate degree in some social science or humanity, and, by the way, those fields are the majority at large state universities.
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I think you are saying that there are exceptions to the rule, or outliers. This is true of any set of statistics, and difficult to quantify in a meaningful way (to, for example, address the issues you brought up).
What is true, however, is the trend. -In general-, it seems to be beneficial to have a better education, no matter how many outlier-type arguments you bring to the table. There will always be outliers.
Also, the graph is showing an integration over recent history, not predicting the future. You might go get a Ph.D. in the next few years and be completely unable to find a job (even in a field that is hiring Ph.D.s today).
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Actually I think the arguement is the opposite. On average those that go to college will have more job talent (intelligence, organizational skills, drive, etc) than those that don’t. Those that go to graduate school have higher average talent than those that simply get a BA/BS. If there were no such thing as college the same people who have a PhD would have higher average achievement and pay than those that don’t.
And the other point about resolution is valid. Engineers and scientists make a LOT more money on average than someone with a BA in history or art. Simply lumping all of them together as having a Bachelors degree doesn’t make much sense to me.
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I disagree with you Shara, I’ve met **SOME** people who went to college just because it was the thing to do. They barely made it through college.
Trying to talk to them is like talking to a wall of bricks. They have no love of learning and they lack common sense. They also think their education is complete because they have a 4 year degree.
Education is a life learning process. I do believe motivated, intelligent, innovative, social people will succeed with or without college. My dad had a college degree but he was violent towards me and my mom.
She eventually divorced him. We like to think that education makes people better but some people go through the system and don’t come out any better, to them a college credit is like a trophy.
Our society likes to think that education strips away ignorance and to a large degree it does, I do think that in this day and age you need education beyond a high school degree.
But having had a father who was highly educated, I have to look for other characteristics in a person beyond a college degree. I don’t automatically respect a person or like them just because they have a college degree.
I don’t think that people are better just because they have a college degree.
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I beg to differ with the idea that only those who go to college are intelligent and successful. I know many people who aren’t college educated but who have found financial stability because they are intelligent and hard working.
For some, college wasn’t their thing. They went into the trades, or found another niche where they did very well because they were smart, disciplined and willing to learn new things. Others didn’t have the financial resources to go to college, but made the most of the brains the Almighty and/or biology gave them to balance income and spending to achieve financial success.
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I missed the part where I said “all” or ‘every”. I said “average”, as in statistical representation.
There are plenty of educated idiots and street smart but non-degreed people. But if you add up the raw talent at any level of educational achievement you will see significant differences.
The significance is that you wind up with correlary instead of causation. If it’s correlary then the degree isn’t what RESULTS in average higher pay, simply that the caliber of people with higher pay also have degrees.
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Yeah, which is why mine is purposefully so well constructed, it’s literally bullet proof!
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This entire discussion has bothered me because it is built on a false assumption that it’s education that is making people more competitive in the job market.
Correlation is not causation. The degree/career success correlation is also explained by access to school and jobs (which is a social divide), or if you prefer it is explained by ambition and motivation (also socially determined as well).
Pretending that more education better prepares anyone for a career is obvious nonsense to anyone who has endured a doctoral program.
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As someone who has endured a doctoral program, I respectfully disagree. The time I spent on my M.S. and Ph.D. was in no way a waste; I could not have been “prepared” for my career by a B.S. + ten years of experience.
Also, I come from a lower-class background, and do not have college-educated parents. I don’t think ambition and motivation are as socially-determined as you do.
Finally, you use an interesting (yet accurate) set of words in saying “The degree/career success correlation is also explained…”. The key being “also,” since the correlation is so complex.
Two anecdotes do not make a statistic (nor cancel each other out, in our case), of course. The point is that it comes down to the individual. A graph (like the one above) shows the general trend, but there are always outliers (as I said above).
No need to get bent out of shape. Just look at the trend and move on. It doesn’t apply to everyone.
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If we instead did the same income distribution based on SAT scores or IQ scores wouldn’t the outcome, distribution of income nearly look the same?
In Sweden my birth country 50 % of higher education students come from the top 10 percentile (parents income) mainly from the professional, entrepreneurial, CEO/business classes. This has held true since 1921.
You say that you come from a lower class background it then means that you are an outlier since you succeeded in getting a PhD. You have what is called intrinsic motivation and not the ingrained and for many generation trained “deliberate practice” as well training in being able to delay gratification as has the upper 10 %. The ability to delay gratification is the single most important factor in later life success, it is one of the very few predictors that can be measured at a very early age and shows remarkable consistency over time.
The lack of deliberate practice and lack of capability in delaying gratification is probably why the US school system is failing to achieve results dispite the highest spending per capita in the world (both in actual figures as well as power purchasing adjusted) especially for minority and lower income persons.
I’m not a social Darwinist that believes this is set for all times but it has to be adreesed from a sociology cultural perspective and not from an socio economic perspective. The changing of cultural values is extremely hard and in a country as diverse as the US with such focus on racial and/or minority politics it’s very, very difficult. In Sweden it used to be “easy” since the norm is so narrow and the Swede’s accept no, and I mean no, deviation from main stream norm. You were socially shunned ad ostracized if you didn’t conform. Sweden don’t need laws since Swedes act according to norms and not according to laws. Sweden therefore seem extremely liberal because it laws appear liberal but as a matter of fact Sweden is ultra conservative (not from a religious perspective but from what is socially acceptable). One of the main reasons why I choose to move her and become a US citizen.
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Actually not really. If you go to college, you are ahead of 70% of Americans over 25 who didn’t go. A company would rather hire someone with the same pay with a college degree than without, ceteris paribas.
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Something is up with your link to “this morning’s article”. It sends me to an article from 2006.
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I’d respect you posting that article this morning if at least you’d post a follow up with the opposing opinion. To make one venture into a political argument, and then say you won’t post another in a lonnnng time pretty much takes a very one sided political stance.
I would have been in ffavor of no political articles, but it’d be only fair if you posted the other side
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There’s no such thing as an apolitical discussion of money.
ALL that politics is is a society-wide discussion of how various resources should be allocated – and which forces are used for that purpose.
You can’t talk about finance without talking about resources, allocation, and force.
Party politics? Well, I suppose you can skirt it. Kind of. If you try. Of much more concern to me is why it is so important to try.
Let me unpack that: if we decide that we’re all going to avoid discussing how to share resources, we’ll still have to share them. All we’ve prevented is the discussion. So what will people do if they can’t talk about it?
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The problem with the goal of keeping things apolitical is the fact that it’s ultimately impossible. Your political perspective doesn’t exist in a vacuum, it is just a manifestation of your life philosophy and perspectives as a whole person. As such it will be reflected in more than just your specific political positions. JD, you and I have never had a real political discussion. But I bet I could peg many of your beliefs pretty closely and you could peg many of mine just based on a history of non-political conversations that directly relate to this site. I think that is true of a number of regular readers and posters. I understand your goal of keeping things overtly non-political. It keeps things more civil as people nip at the edges rather than feel they’ve been given full rein to opine. But don’t think that your political perspective doesn’t paint the tone with a broad brush. I have noticed it on more than one occasion and I doubt I’m the only one.
In the future, if you post a piece like you did this morning I would suggest trying to post them in pairs, allowing both sides to be considered. Rather than pretend political perspective don’t exist just do your best to fairly represent both sides (I’d suggest the Costco magazine as a reference as many of those arguements are enlightening and very respectful). And if you can’t find a staff writer who could have provided a counter arguement to this morning’s post then that illustrates the point I just made.
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I think this morning’s post was just great and I hope to see more articles like this that educate the public about economic realities beyond the bias of extremism and propaganda.
It seems that we have a huge sector of people in America who have been brainwashed to sacrifice belief in reality in the name of ideology: people who don’t believe in evolution, in the science of global warming, and that believe that exterminating the poor will bring America to a new age greatness, This is wrong and deluded.
Economics is a social science, which is different from the hard sciences, but it’s still a science, and as such it aims for empirical proof above partisan ideologies.
I’d like more science in this blog, please. Truth is liberating and empowering.
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Oh and I hope you don’t fall for the traps of the mainstream media that gives voice to fanatics, lunatics and extremists just to appear “fair and balanced” . That’s just incorporating lunacy as a part of rational discourse. And it is wrong.
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Hi, I’m new to GRS. I wasn’t sure when reading this morning’s post what your take on politics was, but I didn’t finish reading it. About 1/3 of the way in I thought, it wasn’t for me and moved down the list. Thanks for letting us know where you stand. I’m glad you didn’t post other side. Let sleeping dogs lie.
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If you didn’t finish reading, how did you draw a conclusion? Through prejudice? Activate Lollercoaster, passenger load full, speed 102% maximum voltage
http://4.bp.blogspot.com/_ZVzpJ2M2IWM/SUK7j6lo_VI/AAAAAAAAAug/VaarFFk0BdY/s400/lollercoaster0.gif
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I wonder about the college statistics. How much of it comes out of the fact that people who come from middle and upper-middle class families where education is valued are more likely to end up with good jobs and spend less time unemployed?
Is it really that going to college makes these people more successful, or is it that people who were already on a success-bound path because of their background are more likely to go to college?
Some of both? I see lots of people with unmarketable college degrees unable to find quality work, and others who may have never finished college get good jobs because they have marketable skills. Granted, all the people in my sample of college drop-outs could have finished but left to take jobs at software startups and such. Others got a college degree because someone told them it was a good idea, but never learned to do anything particularly valuable and are having a tough time getting jobs better than $12/hour administrative positions, despite the degree.
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Was the post political or economic? The basis of the post discusses a theory of why austerity is bad for the economy right now. What it did not put forth is that economics is a soft science based on theory, hard science is the 1+1=2 stuff. I think it would have been good to present the argument for the opposing view each side has some very valid points neither side I think possess the magic pill needed to fix the problem .No matter what happens we are going to endure more pain before this is over most do not want to hear of or bring this subject up .Some of that pain will be the result of unknown unknowns Rumsfeld was right ( I know that is controversial in itself).The situation is to complex to suggest “do this ” and the problem will be solved many decisions good and bad will be made going forward during a long and complicated process to right the economy and put our fiscal house in order.Most people do not understand the basics of economics perhaps they would be better served if they where educated in the various theory’s of economics so that they would better understand the basis for the current arguments that are taking place .Good for you J.D. for having the courage to publish this one of the major differences between current and past events is that people now have a much greater opportunity to educate themselves on a subject than ever before.
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Whew! No politics=good article! : )
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The idea that “college sets you free” is false, statistically speaking. Average college grads leave with more than $20k in debt. That is not freedom, that is a ball and chain.
If you want to look justify a pro-college stance with stats, then you should at least consider ALL the stats.
Obviously, these are all just averages…you and I are not average, right?
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What’s the big deal with $20k of debt (on average). If the average weekly income is $400 more for a BS vs a HS degree, that’s almost $20k more income per year. Even when you consider the lost income while going to school, it will likely only take 5-10 years to catch up and surpass the total life earnings.
In my case, I took the 8 year route (MS) and graduated with over $30k of debt. I paid that off in two years, and ten years after graduation my house is paid off and I’m half way to retirement, much of which I attribute to the initial salary differential, which has widened over the years. Whenever I found myself out of work, I found another for more pay within 1-4 weeks.
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Good to hang today JD! I didn’t realize you published this post before lunch, otherwise I would have said “thanks” during! How’d you put it up so fast? If you need any help with a guest post while you are away, I’d be happy to help contribute.
Best,
Sam
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Sam, you know WordPress lets you schedule posts, right?
Good to meet you today! And sure, send me one of your 41 pre-written posts. I’ll slot it in.
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As much as I agree that a Masters / PhD gives you a competitive advantage and higher earnings over your lifetime, I think the graphed data is incomplete. I would be interested in seeing a comparison of earnings *net* of the cost to obtain the degree(s).
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JD,
Thanks tons for running Sarah’s article this morning. Can I be honest? If she keeps up the tone of her first two articles, I can’t get enough of her opinions.
I’m beyond the basics of personal finance — I’ve made a budget (sticking to it is a different issue), am on the way to establishing a comfortable emergency fund, live frugally, don’t have CC debt, invest in my 401k, yada yada. But I have a car note and a ton of student loan debt (at good rates, though
)
So reading about budgets and the debt snowball is bo-ring. So is reading about ways to save on laundry soap and toothpaste. I don’t need to squeeze every last dime out of my budget. (Although, I wouldn’t mind learning about extreme couponing.)
I’m ready for the grown-up stuff. For instance, my student loans are at rates low enough where it may not make that much sense to bust my hump to pay them off. If I had loans at 0% interest, should I pay more than I have to? Heck no. It makes more sense to stretch out the payments as long as possible, because paying the same monthly payment in 2025 results in paying on my loan with cheaper dollars than the same amount today. (As Sarah mentioned, inflation is a debtor’s friend.)
I also want to learn about tax policy. While it is true that nobody should spend money merely for the tax benefits, it is absolutely critical to understand the impact taxes have on personal finance. For instance, I have a choice between a Roth 401k and a traditional 401k. Should I pick the Roth or the traditional? All responses to that question begin with, “If you expect your tax rate in retirement to be greater than your tax rate today…” How the @#$@#% should I know what my tax rate in retirement is going to be? What I can tell you is that there are huge standard deductions and exemptions on earned (and interest) income. Today, a couple married filing jointly can have $26,400 in earned income before paying one cent in tax. (These are inflation adjusted, so they’ll increase substantially in 30 years.) So investing through a Roth just because I think tax *rates* are going up may not be the smartest thing to do. Seeing some different opinions on what might influence tax policy and the structure of our tax code would be hugely helpful. They might not be able to tell me what to do, but they can educate me.
I also want to learn more about economics. Why? See above about inflation. It can help me as a debtor, but hurt me as a saver. Discussing that shouldn’t be taboo. Second, every single piece of investment advice that I read starts out with, “assume an average annual return of X%.” But past performance is not indicative of future results! If we’re talking about investing in index funds (which is more or less segments of the whole economy) we need some understand of what drives the economy as a whole.
In summary, politics has a very real and direct affect on my wallet. When I’m shortsighted, I want to keep as much as possible of what I make. But, there’s another part of me who realizes that thought might be penny wise and pound foolish. I need to be educated beyond my comfort zone if we want to end up like Barbados instead of Jamaica.
Avoiding those issues does a disservice to your readers in the 2nd and 3rd stages. To me, discussing the above issues doesn’t make it a political discussion, but a philosophical one. And for those who can’t handle an adult post with a corresponding discussion, well, may I suggest they skip the comments?
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I think politics and religion divides people. Politics and religion is very group think, you vs. us. You’re either with us or you’re against us. I hate that type of thinking.
Politics and religion tend to have several fallacies. I find politics/religion a huge turn off and avoid it. Debating about those issues won’t make us into better people or a better country.
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And not debating them (politics, at least) will have an even stronger effect. How can you have a democracy with debate?
And, to tie into today’s post, how can you have a useful debate without educated minds? The value of a college education is way beyond the monetary. Spending four years learning to work with abstract ideas as well as specific knowledge opens and expands one’s mind in such a way which is very difficult to explain to someone who hasn’t had the experience.
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I felt like yesterday’s article was political as well, and even though I agreed with the point behind it, I didn’t like the tone of the article, and couldn’t get into it, which is unusual. I normally read the whole article no matter what on this site, and yesterday I just couldn’t bring myself to do it. I’m glad you are trying to let sleeping dogs lie though and not post the other side, another politically motivated article would have been way way too much!!! Also, I get that she felt strongly on the subject, but this whole site isn’t about that, and if you let her change the tone of your site again, you’ll definitely lose readers.
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I see nothing wrong with posting a well thought-out, reasoned article, even if winds up being somewhat political in nature, so long as it’s not being disrespectful of anyone. To pretend that politics don’t ultimately have an impact on our lives is to stick one’s head in the sand.
Publishing an article from ‘the other side’ is also fine, provided it’s also reasonable and well thought-out.
How can the two sides learn about one another’s viewpoints to find commonality if we can’t have a discussion?
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As a long time GRS reader… I think you should stay away from politics.. AFTER you get one article of the opposite economic position, for compensation. It’s all very nice to through out totally partisan views and then say, hey, let’s not talk politics, but it isn’t quite fair, is it?
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Not sure if I made this point clearly enough in my comment to the austerity post, but my issue not just that the post was politically biased, but that it also wasn’t very well-argued. Something that I disagree with doesn’t automatically mean it’s not well-argued or well-written, though I know it’s hard to resist that my own personal bias, but in general I would hope to at least learn something new about why someone has the position they do and how they see the world in a reasonable manner, and I hope to see at least an attempt on their part to do the same. That didn’t happen for me on that piece. If you’re going to be political, fine, it’s your blog and you can publish what you’d like, but I think you should still maintain the same high bar for quality as you do normally.
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Maybe you didn’t read carefully enough to understand where the writer was coming from, maybe you just got asked to post here to discredit the article, either way best wishes to you.
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El Nerdo and KWu,
I thought I’d mention that I strongly agree with the conclusion of Sarah’s article (austerity in a recession is counter-productive) but I also didn’t think she argued as well as she might have, it wasn’t as clean a piece as her previous ones.
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