A while ago, I took a risk on this blog … I gave some potentially risky, dangerous, damned GREAT advice!
I suggested – controversially, I would think – that college-age kids should skip Making Money 101 (you know, the standard “save your money, buy some mutual funds” and so on steps) and start to find ways to create new money …
… and, the BEST way that I know how to do that is by starting your own business!
And, the best kind of business for college-age millionaire-wannabe’s to start is an internet business (but, any business will do … even a car wash). But, I’ll let you read that post to find out why …
For now, I want to answer this question from Josh:
Would you suggest someone in Alex’s position to possibly skip college and just work on money making 201, saving years that would be used on Money Making 201 activities? Sometimes I think this is what I should have done.
Well, you could – and, I know of others who would suggest that since there’s more money to be made in business than in college, why not skip those years altogether and avoid the wasted time and loans?
But, what if you don’t succeed with the business/es (I did suggest that you plan on at least a couple of failures)?
Well, if you skipped college, that would have been high-risk advice from me …
…. but, since you took my advice and STAYED IN COLLEGE the business failure/s didn’t change your life … my advice only changed how you spent your time and your money during college: instead of drinking and partying – as much 🙂 – you ‘played’ at business and learned something and PERHAPS even become a millionaire in the process!
What could be wrong with that?
But, where’s the benefit (besides the obvious learning experience and the lack of damage to liver and brain cells that would have no doubt occurred if you had chosen the party-and-drink-your-way-through-college-route)?
Well, while you were hunkered down working on your various businesses, you were actually learning some very valuable Making Money 101 lessons in disguise!
Even though I told you to skip Making Money 101, you were actually (by necessity) learning the most valuable Making Money 101 lesson of all: delayed gratification.
Assuming that you followed the strategy that I outlined in my earlier post you kept:
… living like a penniless college kid, mooching off family and friends like any ‘normal’ college kid does, while you’re busy investing 99% of what you earn.
This is invaluable advice (even if I do say so, myself). Why?
Because, in the event that Plan A failed, and your businesses do not make you rich while you are still in College – or at least get you started on the path – you are well-placed to move straight into Plan B:
That’s it? Well, not quite ….
Because you have just become a Frugal Graduate: while most of your peers are already on the path to credit card debt, consumer debt, car debt, and all sorts of bad spending habits you are still in the habit of NOT spending (and certainly not borrowing, unless it’s for your latest venture) money.
So Plan B is simple: Graduate, get a job, and keep living like a College grunge as long as you can possibly can.
You hold out and invest 99% of your money, then 98%, then 90%, then 80% …. but you refuse to buckle at anything less than investing 33%, and only then after a long-and-hard-fought battle against the tide of consumerism that is inevitably going to wash over you.
You keep investing that money in a mixture of real-estate, stocks, and more small businesses (if you have the stomach to keep trying after failure-upon-failure, since this is the ‘worst case scenario’ Plan B) and …
… repeat until rich!
Under this strategy, wealth will come, but I cannot predict the time frame: that is a function of how long and how well you hold up against the tide of consumerism and how fruitful your investments (particularly your businesses) turn out to be.
But, I can tell you this: if you are starting college now, or soon … this is the only financial advice that you will ever really need (conventional wisdom and mom-and-pop financial advice be damned!) …
… if you have the guts to go with it, and the stamina and foresight to stick with it.
And, the rest of us who are already too old, can simply envy you, because time is more valuable than money.
I guess you can’t put a price on a secure safety net like a college education.
It probably all but guarantees you a good enough job to keep you above the poverty line, allowing for extra money to invest and build wealth with.
If you’re an entrepreneur you shouldn’t be investing hundreds of thousands of dollars and just about all of your time in a very simple “safety net” that provides little value but a little initial boost to your resume. The truth of college in terms of its actual real-world value is that it is NOT very valuable, and by the time you are in your 30s and 40s people will be focusing on your work experience/ethic and much less on your college background(unless that is what you have focused on much of your life, which will garner you even less respect in the business world).
Now, sure, not everyone can skip college and make a successful business. Not everyone can make a successful business no matter what time in their life or what resources you give them. Luckily, not everyone DESIRES to make a business nor does everyone ASPIRE to be an entrepreneur or WANT to skip college. Nor will everyone that does any of the above actually go through with it. For the small percentage of those that are ambitious. confident, and risk-taking enough, it then comes down to sheer intelligence, energy, perseverance, and of course the other oft-cited characteristics of success.
College is a very expensive buy-in to a network and a little line on a piece of paper of your resume that acts as a “safety net”, something you can fall back on even if you’re an abject failure in your working years. But if you’re ready for the real world now and don’t need the “college experience”, as most people think they must have or are completely entitled to, than don’t be bent by social pressures: Screw it, just go for it. In the long-run you’ll be having more fun and happiness than your colleagues, who spend their life looking back on the glory days of college