Is College A Waste? It’s Shaqademic.

May 18, 2012

Kangol makes mortarboards now?

 

Now it’s getting out of hand.

Earlier this week, retired professional basketball player and current professional dilettante Shaquille O’Neal earned a college degree. A doctorate, no less. For some reason, people are regarding this as a comment on the importance of education, rather than the publicity stunt that it is.

The story goes like this: Shaq left Louisiana State University after his junior year, and promised his mama he’d go back and complete his degree one day. Motherhood, the de facto 21st century American pastime…add some apple pie and we’ve got ourselves a pretty compelling political ad. Making America Stronger. A Better Future For Everyone. Standing Together On The Precipice Of History.

Education is important. Fine, you win that point. So is food, but no one will argue that a sticky bun from a vending machine is of comparable worth to a grilled skinless turkey breast.

In other words, no, education isn’t always important. Sometimes – a lot of the time – it’s a net negative, given that the time and resources spent earning that degree could have been spent doing something more productive and/or less expensive. An English degree and a computer science degree aren’t equivalent, similar, or even mutually intelligible. Same goes for the holders of those degrees, and their career prospects.

What’s Shaq’s degree in? It doesn’t matter. When you’re already worth hundreds of millions of dollars, the rules change. Earning a degree can’t possibly mean to Shaq what it means to your typical college student who’s working retail and eating cold pasta. It’s more like John F. Kennedy Jr.’s law degree – some slight form of validation for the degree holder.

What’s the purpose behind a college degree? That’s not a rhetorical question. Every answer we’ve ever heard has incorporated some combination of the following:

A. So you can earn more money.
B. To enrich your mind.

Okay. Can you put a price tag on either answer? The standard armchair analysis of A. is that people with college degrees earn an average of an extra million dollars or whatever over people who don’t.

Before we return to our regularly scheduled programming, let’s tear a hole in that one once and for all, shall we? For every board-certified neurosurgeon who earns a cumulative $10 million more in his career over a non-collegian, there are 9 liberal arts majors who might as well have started working right out of high school for all the difference going to college made. 

What about B. then?

Don’t say that that’s a philistine concern, an education is priceless, and that you can’t attach a dollar figure to the process of enriching minds. Colleges do. In fact, it’s all they do. Enriching minds is as reducible to dollars and cents as anything else is.

Degrees are becoming inanimate versions of miniature dogs. Most of them are little more than conversation pieces to conspicuously show off to (and elicit comments from) other people.

This is only the latest in Shaq’s arsenal of degrees. He finished up his Louisiana State bachelor’s in 2000, and received an MBA in 2005. The former is in “general studies”, while he got the latter online from the University of Phoenix. Shaq’s new doctorin’ degree might be the most laughable of all. It’s in “human resource management”, from a school whose 2nd-most illustrious graduate is Miss Rhode Island 2008.

None of his degrees is in the traditional trivium or quadrivium, the classical underpinnings of a liberal education, so we can assume that Shaq’s B.A., MBA and Ph.D were earned less for mind-enrichment and more for financial reasons.

Yes, because Shaq is going to list those degrees on his résumé the next time he puts on a tie and applies for a job. Is anyone living in anything approaching reality here? Shaq and his mom certainly aren’t. Over the last 2 decades she’s enjoyed financial well-being light-years beyond what she had imagined, back when Shaq was an infant and his loser biological father was imprisoned for drug possession. All because her son was the single most devastating low-post force in the history of basketball. She needs Shaq to do coursework too? What the hell for?

This isn’t a comment on Shaq. It’s a comment on how The Importance of Education is being taken to preposterous levels. A college degree, bachelor’s or advanced, couldn’t mean less to someone whose non-academic skills can translate into money. On a smaller scale, it’s like a guy with an aptitude for installing appliances wasting thousands of dollars and several valuable appliance-installing years languishing in college. How can it not be better to do what you’re good at? Parents, maybe you can use that college fund to go on that Fijian vacation after all.

Shaq’s degrees might be ludicrous, but that doesn’t mean they were free. He spent $1,060 per credit hour to earn the Ph.D. Which required 54 credits. Shaq used to make enough to cover that, several times per game. He’s earning degrees out of a need for stimulation. Not that there’s anything wrong with stimulation, but a regular person who followed Shaq’s lead would be committing several months’ wages (and several years’ time) to that pursuit.

Actually, who are we kidding? They’d be borrowing from federally guaranteed student lenders and we all know it.

Look, Shaq can do whatever he wants. And has. Rich people have options. He’s been a TV analyst, recording artist, movie star, pretend cop (Miami Beach reserve police officer), and commercial spokesman. None of which required him to do anything academic. The glorification of education in all its empty versions is part of the problem. Instead of a Ph.D. with no intrinsic nor extrinsic value, let’s see Shaq go to trade school and learn to be an aircraft machinist. Which would be just as ridiculous, but significantly cheaper.

(Epilog: Here are even more stories about educated fools who borrowed tens of thousands of dollars to go to college. Some of them each owe more than $100,000. Lots of them dropped out. One is even a state representative who now waits tables. At least one is “following her dreams” by moving back in with Mom and Dad in the dismal little farm town she initially tried to escape from. And zero of them thought about how much this was going to cost and how long it was going to take to pay it all back. But yeah, you keep believing that going to college is the only way to get ahead. Knock yourself out.)

This article is featured in:

**The Totally Money Blog Carnival #69: Telling it Like it Is**

Filed Under: Education Tagged With: , , , ,

Preventative Maintenance, Your New Best Friend

May 9, 2012

WARNING: Never mind the graphic images. Once this gal’s voice enters your head, it ain’t coming out anytime soon.

 

When your humble blogger was a Cub Scout, his pack watched an anti-smoking film that contained his first exposure to tracheotomy. The video featured a guy smoking a cigarette through a hole in his neck, which was followed by a helpful if nauseating cross-section diagram that showed how surgeons somehow detached the patient’s windpipe from his blackened larynx and had it connect to the outside world at a point of contact somewhere near his Adam’s apple. If the description sickens you, you should have seen the video.

The happy result is that no one in that church basement ever lit up a cigarette.

Which of course is a lie. Most of those kids ended up becoming high school classmates, and several turned into pack-a-day smokers. One of the adults in charge of the Cub Scout meeting smoked during the video, never reasoning that a) maybe it’d have been better to have instead smoked after the kids went home and b) him lighting up in front of everyone sent a louder message than did the recorded image of a cancer patient.

This is a personal finance website, and this isn’t an anti-smoking screed: hell, the more you smoke the more elbow room the rest of us eventually enjoy. But there’s a point to be made.

Look at our cover girl, Terrie, 51. Doing a 180º isn’t going to make a difference at this point. She can lead the healthiest lifestyle imaginable: eat a whole foods diet, drink nothing but ionized water, run 5 miles every morning (notwithstanding that she now has the lung capacity of a web-footed salamander), and it won’t matter. Nothing’s going to regrow the hair, or the lower jaw, or the throat flesh. She’s a casualty waiting to happen, and might even be dead by the time you read this. People who are dumb enough to smoke, largely don’t care.

For another example, this one from personal knowledge, here’s a family friend who smoked himself to death. His house had more full ashtrays than ours has electrical outlets. The end came a few months after the picture was taken, but 3 years after he’d had the first lung removed. (They don’t remove a second lung.) A fresh start, such as it was, and this was how he expressed his gratitude to the surgeons who prolonged his life.

The same problem of exacerbation applies to finances, too. Making a $900 payment on the credit card you owe $19,489.34 on means next to nothing. It’s like coughing up something black one morning, seeing the face of God in the mucous, then deciding that from this day forward that you’re only going to smoke menthols.

Lot of help that is, jerkface. I already have a $19,489.34 balance on my VISA card. (But only $8,593.32 on my MasterCard! Why can’t you look at the positive instead?)

Depending on your attitude, you’re going to find the following advice either patronizing or useful: You won’t get your hand bitten off the 20th time if you don’t put it in the leopard cage the 1st time.

Yeah. Habits start off annoying, and eventually become effortless. Whether it’s 20 minutes of yoga every morning, taking your dog for his daily constitutional, even something as mundane as brushing your teeth; you do it because you should, and soon enough you don’t think twice about it, to the point where omitting the repeated behavior becomes more of an inconvenience than performing it does.

You see what we did there? Substitute something negative (smoking, beating your kids, financing everyday purchases) in the list of habits in the preceding paragraph. If you habitually incur credit-card debt, or habitually squander a fixed ratio of your salary on gambling, it’ll feel awkward to start not doing so.

The number of 50-year-olds who overcame decades of financial stupidity to build lasting wealth is virtually zero. Gaining realization is something the younger and more impressionable folks do. So can you change? Probably not. But if you’re sincere about wanting to, the patented secret method is to simply do it. While financial trouble isn’t easy to dig out of, it’s at least possible to do so – unlike turning black lung tissue into pink.

If any of this resonates, or hits uncomfortably closely, congratulations! You’re a test case. Downsize. It’s only temporary, anyway. The luxury townhome you’re renting and can barely afford? Suck it up and take on a roommate. Don’t think of your lifestyle being cramped, think of the few hundred dollars a month you’re now receiving and weren’t before. Same goes for the Target “retail therapy” and peer pressure group dinner dates at restaurants you’d never frequent on your own.

No one wants to lay the foundation, but everyone wants to live in the penthouse. You can’t get there without the necessary intermediate steps. Building wealth, employing leverage, compounding your net worth – none of that works unless your net worth is positive in the first place.  Otherwise you’re just making a bad situation worse.

You can cut expenses. Not like that kook at The Simple Dollar who counts the thousandths of pennies it costs him each time he opens his fridge, but rather in large and impactful ways. You can find masses of cash in your portfolio that are just sitting there instead of being put to work – e.g. the savings account that you could easily turn into a money market account or a mutual fund. What the hell is stopping you?

Filed Under: Bad Examples, Capitalism, Consumer Debt, Education Tagged With: , , , ,

Financial Retard of the Fortnight

May 2, 2012

 

This isn't the subject of today's post. This is a guy with the same name, who got nailed on weapons charges and whom the good folks at BustedMugshots.com went to the trouble of photographing.

…In which we’re so incensed by a news story that someone else wrote, we have no choice but to comment on it.

 

Most financial truths are obvious: spend less than you earn, don’t waste your money, note where it’s going, economize where you can, et al. Those truths are so obvious that we barely mention them on this site. Let the other, less imaginative sites handle that.

 

We’re more interested in unconventional, even iconoclastic truths. There’s one that comes up time and again, that’s so important we’re thinking of putting it right up there with our mantra, Buy Assets, Sell Liabilities. 

 

On balance, higher education doesn’t pay off.

 

You don’t need our declaration to make it official. Think about your own life and those of those who surround you. The English literature graduate pouring coffee. The M.A. in philosophy who’s making $30,000 as a research assistant. The criminal justice major who can’t make ends meet selling real estate, which doesn’t even require a university education.

 

Most worthwhile jobs don’t. Some do, of course. But for every research physicist or medical dosimetrist who spent good money studying the hard sciences, there are multiple people who spent comparable money studying something less challenging and with less demand in the marketplace.

 

Oh, here we go again. Don’t you understand that education has an importance beyond dollars and cents?

 

Okay, then why isn’t it free?

 

It’s free in Australia.

 

No, it’s funded by taxpayers in Australia. Let’s rephrase the question: Why don’t college professors work pro bono, if it’s only about enriching young minds?

For the latest example of someone putting his faith in the wrong place, meet the grossly overeducated Andrew Slocum. He’s a junior high school librarian. Last year, at the age of 36, the married father of a 4-year-old spent $10,000 on an “advanced teaching certificate”. Whatever its other merits, this piece of paper qualified him for an annual $3000 raise; in the same way that having a penis qualifies him to be an Army Ranger. The certificate didn’t guarantee him anything.

An advanced teaching certificate is not to be confused with, say, a bachelor’s degree in corporate finance. The latter is a requisite for a career that the degreeholder wouldn’t otherwise be able to enter. The former allowed Mr. Slocum to do the same job he always did, with a possible salary increase simply for holding the piece of paper itself. The certificate had, and has, zero intrinsic value.

Unless you count the $10,000 it cost.

(Without the increase Mr. Slocum was hoping for), he reckons his family would be losing $60,000 over the course of their careers.

Only in academia can a $10,000 investment pay -6 times itself and still have people defending it.

Mr. Slocum has spent his entire adult life in schools, which is of course where he spent his entire pre-adult life. Education for its own sake is the ultimate comfort zone. “I’ve endured 16 years in a classroom. Now that I can go anywhere I want, I think I’ll…spend my life in a classroom.” Mr. Slocum had it out at a school board meeting.

He talked of his sacrifices: vacations, hard-earned cash and perhaps the most valuable — time with family and friends.

Oh, you whiny little princess.
Another fundamental truth: life, especially your financial life, is about results, not effort. Who’s a bigger net contributor: the guy who spends 80 hours a week digging postholes in the hot sun and then filling them up, or the woman who spends 4 seconds unlocking the doors to Target every morning so people can buy what they need?

 

All of it was for naught, Slocum said. Although he received his education raise this school year per the district contract, Slocum said he’s been wary about spending any of it. Instead, he’s been saving it, just in case he’d have to give it back.

Slocum is still saddled with $25,000 in student loan debt from his undergraduate and master’s degrees.

 

You really can’t make this stuff up. Multiply Mr. Slocum’s case by tens of millions, and you’ll have a better idea of where North American society is headed.

 

He earned the undergraduate and master’s degrees more than a decade ago, and is still carrying a balance equal to 5 months’ salary. 5 years ago, he decided to reproduce, because having a child you can’t afford is a great way to get back on track.

 

Again, poor and struggling people are poor largely because they choose to be. Mortgaging your future to cough up $10,000 for an enhancement in your education that might pay off is a retarded bet. Especially when you’ve already flushed $25,000+ down an education hole that’s got you in the position where you are today.

 

Somewhere within a couple blocks of Mr. Slocum’s house is a long-haul truck driver who makes comparable money and doesn’t have that educational albatross around his neck. One (more expensive) neighborhood over is a low-voltage electrician who tangibly improves people’s lives, and who instead of spending $10,000 on a useless certificate, spent it on a down payment for a second house. Which he now rents out for more than the mortgage payment, uses as a tax deduction, and passively finances his vacations with.

 

Mrs. Slocum, a $38,652-a-year teacher, encapsulates her family’s dilemma far better than we could:

 

“(The school board is) basically penalizing us for pursuing higher education. What kind of message does that send to the kids?”

 

Oh, that’s a rhetorical question? We answered it above. In bold.

 

“This is the first time I’ve felt embarrassed to be a teacher because I have to beg for the salary I deserve,” (Mr. Slocum) said, addressing School Board members.

News flash: whether you’re a butcher, drilling rig supervisor, baker, librarian, or candlestick maker, you don’t deserve a damn thing. A smart person would know that. An educated person wouldn’t necessarily.

Coda:  The story mentions that to secure the $10,000, Mr. Slocum had to raid his son’s college fund. That might be the best thing that could happen to that kid.

Filed Under: Bad Examples, Education Tagged With: , , , ,
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