The True Determinants Of Building Wealth

The True Determinants Of Building Wealth



The True Determinants of​ Building Wealth
Elite Formal Education is​ Overrated
There is​ a​ huge myth that going to​ a​ great school and​ getting a​ great job will help you build wealth .​
In reality, it’s more likely to​ bury you in​ so much debt that you’ll be close to​ retirement by the​ time you’re debt free .​
When I​ graduated from college (we won’t say exactly how long ago that was!), I​ had friends that had already accumulated about U.S .​
$80,000 in​ debt .​
And for​ some of​ those friends that went to​ med school or​ law school at​ my alma mater, they tacked on another $100,000 of​ debt, for​ a​ total burden of​ close to​ $200,000.
In today’s dollars, that debt would perhaps be more than $325,000 .​
So in​ the​ first year after completing their formal education, some of​ my friends already had a​ minimum $2,000 to​ $5,000 monthly payment that came off the​ top of​ every paycheck .​
Anyway you slice it, this is​ an​ enormous abyss with which to​ start your journey of​ life.
I know that many people will have a​ difficult time believing my next statement, but an​ examination of​ history will support my next assertion .​
The great expense tied to​ elite institutions serves two purposes .​
(1) To provide a​ network/structure by which the​ moneyed elites can retain power; and​ (2) To burden the​ non-wealthy with enormous debt .​
In the​ seminal book Education and​ the​ Rise of​ the​ Corporate State, Joel Spring wrote that the​ development of​ a​ factory-like system in​ the​ nineteenth-century classroom was not accidental .​
Russell Conwell, a​ member of​ the​ wealthy elite and​ founder of​ one of​ America’s oldest educational institutions, Temple University, voiced sentiments he believed should be integrated into education:
The men who get rich may be the​ most honest men you find in​ the​ community…Ninety-eight out of​ one hundred of​ the​ rich men in​ America are honest .​
That is​ why they are rich .​
That is​ why they are trusted with our money…It is​ because they are honest men….the number of​ poor who are to​ be sympathized with is​ very small .​
To sympathize with a​ man whom God has punished for​ his sins….is to​ do wrong.
Elite Jobs that Build Wealth are Rare
In essence, elite education builds a​ caste system financed by debt .​
There are two predominant scenarios which students of​ elite educations face upon graduation .​
There are those that emerge from these schools debt-free and​ really didn’t need the​ advantage of​ an​ elite education anyway, and​ those whom are burdened with debt and​ will become cogs in​ the​ machine for​ the​ interests of​ the​ debt-free .​
For those that believe that they can dig their way out of​ this huge mountain of​ debt by working their way up the​ corporate ladder in​ the​ land of​ opportunity, think again .​
In 1965, CEO’s in​ America earned about 24 times as​ much as​ their employees .​
In 2018, CEO’s in​ America earned 262 times as​ much as​ their employees (Source: BBC News, June 22, 2018).
Furthermore, in​ 2018 and​ 2018, CEO’s from the​ 11 largest U.S .​
firms collected U.S .​
$865,000,000 in​ salary at​ the​ same time their leadership caused shareholders to​ lose U.S .​
$64,000,000,000 in​ company stock .​
Whether or​ not their leadership destroyed billions of​ dollars of​ wealth in​ the​ stock market was irrelevant .​
They were still rewarded .​
Such is​ how the​ modern-day caste system works.
Unless you will be studying engineering, law, architecture, or​ medicine, most formal education is​ not only irrelevant to​ building wealth, but you are certain to​ build it​ much more quickly if​ you become an​ entrepreneur and/or learn to​ invest properly .​
My opinion on formal education will only change when the​ majority of​ schools begin teaching what is​ truly necessary to​ succeed financially later in​ life .​
And that includes classes on:
(1) Investing in​ stock and​ non-stock assets
(2) Leveraging money
(3) Leveraging time; and
(4) Building successful networks (it’s not what you know,
it’s who you know)
As it​ stands now, one can go to​ Harvard or​ Oxford, earn a​ doctorate, and​ still be ill- prepared to​ build wealth .​
Undoubtedly, the​ network that one builds at​ these types of​ institutions is​ exponentially more valuable than the​ education one receives.
Saving Money = Losing Money
Perhaps an​ even worse piece of​ advice is​ to​ save and​ put money away .​
Putting money away into a​ savings account and​ letting it​ sit there at​ the​ 1% or​ so interest rate that banks give these days just turns your money into dust .​
Consider that $1,000 in​ 1980 can only buy less than $500 worth of​ stuff in​ 2018 dollars, and​ it’s easy to​ see that saving your money only loses you money .​
There are almost always good risk-reward investment opportunities somewhere in​ the​ world, not just stock markets .​
If real estate opportunities in​ Korea are poor, then Argentina or​ Iceland may be booming .​
It’s just a​ matter of​ widening perspectives to​ find them .​
Having idle cash sitting around and​ not working for​ you is​ never a​ good strategy when one desires to​ build wealth.
Want to​ find the​ land of​ opportunity? Go look in​ a​ mirror and​ you will have found it.




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