Book review of The Millionaire Mind by Thomas Stanley

The reason I am so critical of the system which produces todays university graduates, is mainly down to this book, and undeniable evidence I have witnessed in my own life. Being clever, going to university and getting high grades is not a guarantee of future wealth. A long time it might have been, but not any more. The mind of a millionaire is not focussed on passing ritualistic university tests (which are part of a process which collectively earns the universities billions of pounds per year). The mind of a millionaire is focussed on creating wealth. This means: frugality, choosing an earning strategy very carefully, and being willing to work hard in the real world, in order to become wealthy.

I recently re-read this book, and I was reminded of just how good it is, and why I live my life the way I do; saving up thousands of pounds every year, looking for profitable investments, and living frugally. To me this is the 3rd best financial book I ever read, and currently only one of 3 books that I give an absolutely top financial rating to. It gives hope that one may become wealthy if they practice the right financial habits. Many people think they are not clever enough to be millionaires, or their education is not good enough, yet this book shows that academic success and financial success are 2 different things.

Stanley questioned many millionaires, and kept good records of the results. The millionaires studied said that they found out that hard work was more important than genetic intellect, in achieving their level of success.

On page 152, Stanley gives the case of champion world war II fighter plane pilot, Major Erich Hartmann who shot down 352 planes during the war, far more than most other pilots who were usually lucky just to get one. His mentor was Paule Rossman, a crippled fighter pilot who shot down more planes than his comrades despite his disability. His mentor realized he was physically disadvantaged compared to his opponents, so he planned his attack strategy very carefully beforehand. Stanley says millionaires also pick their battles carefully, and choose the most profitable opportunities. He says that too many occupations are filled with clever people, therefore highly qualified university graduates have a difficult time finding work. It's better to choose a vocation where there are fewer competitors. Stanley says "where you will fight is much more important in winning than what you do once the dogfight begins".

Chapter 2 of the book briefly parodies many get rich quick schemes and wealth seeking strategies in America, and says the best way to find out how millionaires became rich, is to ask them. This is what makes the book so valuable, as it is composed of the results of data gathered from interviews with real millionaires.

Many millionaires were heavily criticized at one time or more, but ignored their critics and went on to become successful anyway.

The importance of morals is explained and the example is given of an intelligent, highly academically qualified prisoner who applied to be a math tutor to the children of millionaires, but was rightly turned away due to his untrustworthiness. Stanley says "smart" people are many times seen to have a halo by a lot of people, but they are not automatically better than everybody else in every area, and some of these smart people lack integrity. Stanley says academically smart people can find that their careers are filled with other highly qualified competitors, and so end up hating their vocations. Pg 78 says that the ability to get high grades in school, only seems to relate well to an ability to do well in aptitude and academic tests. Life is a marathon, and doing well or badly in school does not automatically relate to how you will perform in real life. No matter how badly you are doing or have done in life, don't stop believing that you will eventually cross that finish line.

The book says the stock  market is invested in by millionaires, but the money originally came from the cashflow created from living below ones means.

Chapter 3 says that at school, many millionaires did badly. They learned to work hard in the real world, to overcome this. The book Successful Intelligence by Robert Sternberg is quoted, as it details how successful people learned to work hard as they knew their brains would not match the top students unaided. Low scores on tests of inert intelligence don't preclude intelligence, neither do high scores guarantee it. Sternberg's book shows how successful people responded to earlier failure by outworking and eventually outperforming the so-called intellectually gifted. Hard work is a better predictor of success than grade school experiences. I actually did buy Sternberg's book as a result, and it inspired me that I do not have to be a genius in order to create wealth; I just have to work for it.

On page 158, The case is given of "Doctor Heart" who saved millions into an investment fund, but then a get rich quick seminar by a "finance guru"  convinced him to invest his money in a new scheme. The guru lost all his money. It shows how important it is to get good financial advice and that even clever people who are financially well off, can be fooled by cheap scams. These schemes always sound excellent, but are never anything more than scams.

The reality of what graduates might experience after university is exposed on Page 203, when Stanley gives the true story of a man he met working at the local photocopying store. The man behind the counter was very interested in what Stanley was photocopying, and it turned out that he was a lawyer!! Because competition is so fierce for lawyers, even though he he is self-employed as the owner of his own law firm, he has to take another job just so he can pay his bills! There were more than 70 pages filled with listings for lawyers in the local yellow pages for that city alone, so with all that competition we can see that even the most educated will have severe difficulty finding work! As Stanley quotes "he's intelligent; he passed the bar exam, he went to an accredited law school. So what? He's just one of thousands of attorneys listed with 74 pages of other very smart competitors". It just goes to show just how tough life is for graduates and that they are not necessarily going to have an easy, well paying life after they have graduated. I myself have met many well qualified graduates in the UK who are working in  very low paid jobs, or who can't find any job at all as the competition is so fierce. These days, everyone seems to have a degree, so why would any employer pay an extremely high premium for it? The majority of my views about the current state of graduates and the role of university were formed by reading this book. In my own life, I have seen that there are too many graduates and not enough jobs to go around. I do not believe that there is a good enough chance of becoming wealthy by having a university degree, when compared to what has to be invested into it. Most people do go to university in the hope that it will get them a better paying job (in spite of what some might say), so we need to accept the truth and look critically at the real likelihood of that happening. Its like a lottery with the odds stacked against you. There is no guaranteed job for anyone who is taking a degree, which makes it a risk as to whether you get a high paying job, or any job at all.  The amount of time and money invested into university and the debt incurred are some of the reasons why I believe most graduates (but not all) will be worse off financially if they go to university. Many news outlets have run stories about how highly educated graduates cannot find work. All that studying for nothing, yet someone like Sir Richard Branson who has no degree, is one of the richest men in the world. An article in The Daily Mail (14th Aug 2009) entitled "we've made the grade so where are our jobs" is an example of what graduates, even the brightest from the best schools, have to look forward to. I have made clear the financial disadvantage of being a graduate, many times in my blog.

As a criticism of the book, sometimes it throws so much data at you that its hard to know if its really relevant or not. I think that there's too much data for even the author to keep full track of. On page 218 the story is given of some millionaire homeowners who regularly  go to a certain hardware store to purchase DIY stuff. This shows that some  millionaires do their own DIY work, and it is not a hindrance to their wealth. BUT on page 387, it says DIY might be a waste of time which could be spent building wealth; "there is strong evidence that do-it-yourself activities are substitutes to building wealth". So, the evidence here is contradictory. The real life stories and examples of millionaires provide good emotional anecdotes which help to even out the amount of data thrown at the reader.

On pg 261 the theme of frugality and long term planning is summed up when it says:  "to build wealth one may likely have to forgo realizing a high income for many years". Choosing a spouse who is financially aware can also have a positive effect on your wealth. Most millionaires look to the future and compute the lifetime  costs and benefits of activities likely to save money. Using discount coupons to buy food is something that many millionaires like to do. The example is given of Mrs Point, on page 301, who uses coupons in the shops, yet has an extensive investment portfolio and is richer than her neighbors. They think she is having trouble making ends meet, but the reality of her frugal lifestyle means she is building wealth at a far greater rate.

On page 350 it says "there is a strong correlation between net worth and the proportion of one's wealth that is invested in real estate". This means that investing in property is historically a good thing in general. No reason why that should change now. If the numbers make sense, and you can afford the property then go for it.

Also, page 388 shows that 2 thirds of  millionaires studied gave money to charity, so it appears to show how generous rich people are.

The Millionaire Mind is a stellar attempt to show that many millionaires are not the perfect humans a layman would imagine them to be. They are not the best of the best, or the best looking among us, with perfect grades at school and a distinguished family background. They are not the beautiful people. They are more likely to be the underdog like the injured fighter pilot Paul Rossmann, who learned to win by avoiding highly dangerous dog fights filled with competitors and instead devised an alternative strategy which proved to be vastly superior. Stanley says: "He won because he selected the target, the time, the place, the altitude, the angle of attack. He was proactive". Many of the millionaires surveyed said that if they were one of the beautiful people they didn't think they would have become so successful because they would not have needed to be so very careful in selecting the opportunities most likely to make them wealthy

A truly excellent book with great stories and examples of becoming wealthy which is sometimes bogged down by an overload of factual data. It still stands head and shoulders way above most other financial books. It shows that being clever cannot compare to good planning and hard work. Getting rich, is a marathon that everybody is allowed to race.

Moneyseeker3000 rating: 5 stars out of 5

Investing in university graduation

Now the Wall Street Journal is reporting that university graduates do not earn that much more than non-graduates over their lifetimes. This is an American publication, and I actually thought American graduates had an easier time than British graduates, and were more highly compensated because they pay far more for their education than in England. Clearly this is not the case. A source from the report estimated that the actual lifetime-earnings advantage for college graduates is a mere $279,893!!

There is a big debate about the worth of a university degree at the forum on MoneySavingExpert.

Being a graduate now, is much different from being a graduate in the past, as this Guardian article shows. Wes Streeting, president of the National Union of Students, said: "People are feeling incredibly angry. They have debts in excess of £20,000 after being told they would get a job at the end of their degree and earn more money. Instead they're just heavily indebted."

Heres a selection of news articles about what graduates are going through:

• 90% of small and medium businesses not planning to hire graduates - The Guardian
• Many graduates not getting jobs through recruiting "milk rounds" - The Guardian
• Graduates in 2009 are having a hard time getting a job - MSNBC
• Is this the worst time to graduate, ever? - The Daily Beast
• McDonalds is planning to offer it's own PhD - The Financial Times
• Graduate nurses can't find jobs - Allnurses.com
• Graduate sues her university, because she can't find a job - CNN.com
• UK universities say their budgets should not be cut by the government - BBC
• University applications are surging - BBC
• UK graduates will only earn £100k more, in their lifetime - BBC

I have realised for quite a while that a degree is not a good investment for most people. Even though I am a graduate myself, I have long suspected that  nowadays, graduates ultimately end up with less money overall, due to:

• The lost opportunity to earn money for years, while they study.
• Prices for all investments going up over the years, whilst they are studying.
• High government student loan debts.
• High commercial student loan debts.
• Having to compete with all the other graduates when they graduate.
• Having to compete with all the experienced non-graduates, when they graduate.
• Gaps in employment, i.e redundancies.
• No guarantee of getting any job.
• Lack of financial knowledge.
• Statistically, only a few graduates make "the big money" after leaving university.
• Businesses make more profit by employing, or outsourcing, graduates from poorer countries like India, who will work harder for much less compensation. This results in less opportunities for graduates.
• Higher tax rates for graduates if they do earn a "high" salary.

Books like The Millionaire Next Door and The Millionaire Mind show that having a degree is not a guarantee that you will be successful in the real world. If there are a lot of graduates, they will all have to fight for the same job opportunities, so their chances of success reduce. Amazingly, right now in England, more people are applying to university than ever before, so the problem will only get worse.

The studies that were done in the past, showing that graduates earn significantly more, were done a long time ago.They were flawed by not accounting for other common factors such as student debt, redundancies,  taxes, and much other stuff that happens all the time in the real world.

I'm not jealous of people who have a degree, because I have one myself (I'd probably be richer by now if I didn't, lol), and it's not sour grapes because I didn't attend an "Oxbridge" university. I'm just telling it like it is. I am not saying that people should not go to university, I'm just saying don't expect it to make you super-rich (or even rich), because that's what I hoped would happen to me when I did my university degree. I thought that with my mathematical degree and high grades, it wouldn't be long before I was earning 100k. I deserved it right, because I really did work for it. It never happened. As I long suspected, I was not the only one to be duped by such a ridiculous fantasy. In the real world, you have to drag yourself up by your own efforts and in the majority of cases, a degree does not provide the extra push that it should.

Robbed by the universities

Investing in a university degree only benefits the universities. Higher education is now a billion pound industry which has made many universities rich. Students are being robbed by the universities. They happily take money from students, and from the government, all the while promising a golden ticket to success. Nowadays, when many graduates go out into the real world their best hope is to find work in a bar, and still they find it a struggle to even get menial work! All that time, money, and effort wasted.

I have shown evidence in many of my previous posts of why I believe university is a bad investment.

Many universities, including the top institutions such as Oxford and Cambridge, actually use multiple choice examination papers, which saves them time and money.  The quality of graduates, even from the highest universities, is frequently lamented by employers, and it seems many students only attend university because they can't think of anything else to do with their lives.

The university lecturers hoodwink students into thinking that their investment of time, money, and effort will definitely pay off. Meanwhile, economic turmoil rages outside, in the real world of work. Even though they are fully aware that graduates are unable to find work, the lecturers still say to the students "don't worry, it won't happen to you".  The statistics say: oh yes it probably will.

University is the land of make believe, when it comes to investing. Statistically, only a few graduates make the big money after university. For the vast majority, it is a terrible investment which will never pay off. In this way, students are being robbed by the universities.

There are now so many graduates, that a degree qualification is devalued. The situation is so bad that there has been talk of employers thinking of only giving Phd graduates a chance to get a job. A Phd is an extra 3 years of study!! This would be an investment of 8 years assuming you pass all exams the first time around, (2 years A=Level + 3 years degree + 3 years Phd). This is a loss of £200k earnings (£25k x 8), also, student debt would be well over £25k. So, this means a Phd graduate would enter the job market almost a quarter of a million pounds behind a non-graduate. The government has claimed a degree would give graduates 100k more over their careers than a non-graduate, but by the above calculations, this would still leave them around £150k behind. Most graduates, even Phd graduates cannot find a job at all, especially not a graduate level job, so the reality is more likely to be that graduates will slip further and further behind non-graduates. Rather than earning £100k more than non-graduates, they are far more likely to earn £100k less, as they will not have had a chance to gain industry experience, or invest in things such as property. Plus they are deep in debt; being well over 25k in debt  with no job, is no joke. Government funded student loans have excellent repayment terms, but most students also take out hefty commercial loans, and you know what happens if you can't pay those off.

The daily mail ran a story on how the majority of recent graduates find it increasingly difficult to find a decent job.

Even older graduates who graduated many years ago and actually had a job, such as architects and quantity surveyors, are having to join the dole queue. So, don't think that even if a graduate has been established in a chosen field for many years, their job security becomes "safe". They are prone to redundancies and long periods of unemployment just like everybody else.

The BBC website has a good discussion area on whether a degree is a good investment.

I am not against the idea of education and learning, I'm just saying that university is too expensive in terms of time and effort for what the end result is. There are some professions for which a degree is essential such as being a doctor or dentist, and these have a far better chance of being a good investment, but for most degree courses, prepare to get robbed by the universities. If you enjoy learning and believe in becoming educated, find ways of gaining your knowledge, in cheaper, faster ways.

The following blog article I came across at GenerationX Finance, gives a whole range of financial educaton courses you can take online for free. You can learn, without being robbed by the universities.

The university industry

I'm going to have another rant at how university is not such a good investment. I know someone who got a first class degree in Maths and Business Computing 2 years ago, and has just decided to "invest" thousands of pounds in a masters degree. He has been completely unemployed since graduating, and the masters degree will only produce more debt and mental anguish once he completes it and finds no one willing to throw jobs with 100k salaries at him.

Rather than studying good financial and investment techniques (which actually wouldn't be much use without a job or access to funds), certain people still persist in the belief that a university degree will solve all of their financial and self-esteem woes. In contrast, I've turned my back on education, even though I have a degree, and I spend my time looking for good investments in the real world.

The BBC website showed how UK universities generate billions of pounds for the economy. And there was me thinking that university was supposed to be about learning. It seems it has now become a way to fleece innocent trusting people out of their money, by giving them overpriced education and not telling them about the unlikelihood of most graduates earning a high salary, or even getting a job,  afterwards. Graduates are under more stress than ever.

The book The Millionaire Mind, has shaped lots of my thinking about the role and usefulness of a university degree. Amongst other things, the book generally says that graduates are not guaranteed steady jobs after leaving university.

Its so hard for graduates to get jobs now that they are resorting to paying recruitment companies  to try to find them unpaid intern-ship work! This certainly casts significant doubt on the governments recent claim that graduates will alledgedly earn 100k more than non-graduates over their lifetime.

A recent news article says graduates can only be expected to earn £2,500 more than non graduates. Remember that the average UK degree will put a recent graduate 175k behind a bus driver in the financial race. Here is how: A non graduate bus driver's total earnings of 25k per year, over 6 years, comes to 150k. In contrast, a student spends his years like this:  2 years of A-level = (-50k), 3 years of university = (-75k), at least 1 year of unemployment after graduating (-25k),  add approximate student debt (-25k). This comes to a graduate balance sheet of -£175,000!

As you can see, a graduate earning £2.5k per year more than a non-graduate bus driver is nowhere near enough to make up the difference. There is also the "opportunity cost" that is missed, as the bus driver can buy investment properties sooner, so in fact the head-start of the non-graduate may be too much to catch up with. Non-graduates can find find better paying work than bus drivers, so the difference is probably even more pronounced in reality. Current conditions are showing that graduates are unlikely to find any job, and will be lucky to gain employment stacking shelves. To say that graduates earn £2.5k more is probably highly optimistic, and in reality they probably earn a lot less.

A small percentage of the UK population are high earners, i.e well in excess of 50k. Some graduates will reach this level, but it is only a few people, and is quite frankly like a lottery, and this is after years of study. I know many graduates who are right now stacking the shelves in the local supermarket.

People mainly go to university to improve their employment and career prospects, but this way no longer works. Like an old tribal raindance, people still believe in it, and sacrifice their time and money for it. I actually think that graduates generally earn significantly less in total lifetime earnings, than the average non-graduate. University is an industry which makes the lecturers, student landlords, and student shops rich. For most students, it is a bad investment.

This brilliant article shows why it can pay to skip university.

YMJ

In September, Channel 4 showed a program called Young Middle class and Jobless. It was all about how professional workers and recent graduates are having a horrible time in the job market right now.

It showed experienced workers who have recently been made redundant and now cannot find any job at all. One guy earned 85k per year, but was deep in debt with no savings. Many of these professionals were in debt with no savings, and had to apply for jobseekers allowance

It showed that right now, many graduates are not getting any jobs. One guy had a First Class degree from Oxford University, yet he was not able to get any job at all!!

You can watch the show here:
Channel 4: Young Middle class and jobless

Review Links:
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Review: Prospects graduate forum
Orange TV blog review

So, the problem of job security is real. Even being a graduate will not help you in most cases. I have said for a long time that graduates are not guaranteed jobs for life, and financially, university is not a good investment for most people.

Graduate Misery

The financial news site This is Money, sadly reported that one in four students who graduated in 2005 are still jobless. Forty-three per cent of the graduates had resorted to stacking shelves, pouring pints and other stop-gap jobs. For the graduates that did get jobs, 4 years after university the average pay was around £24k.

So, lets add up the worth of a degree as an investment (again). 2 years A-level + 3 years degree + 4 years unemployment = 9 years. Is it worth sacrificing 9 years of your life to then only earn 24k, if you are lucky? Bus and train drivers earn more than that in a mere fraction of the time!

If you get lucky, or go to the very top universities, or do well in a useful course such as medicine, you of course have a much better chance to gain high paid employment quickly, but only a small percentage of graduates are in this bracket.

Hundreds of graduates are battling it out for every job. Graduate pay is low or non existent. The article mentions 24k salaries, but I know graduates who earn almost half that! Most graduates can only cry, and lament their wasted years and money. I know other graduates in so called 'good' subjects such as maths, engineering, and computing who still haven't found work, 2 years after graduating. This is the real world. If they wanted money, they should have sought elsewhere.

Here's a selection of readers quotes from the article:

• "It was only in the 60's where we were able to choose from a number of jobs as we left university - we shall never see those days again!"
• "It is a myth that having a degree will get you a better job, or indeed any job at all. That has certainly been my experience throughout my working life, and I studied not one of the "easy" options - but Engineering."
• "Most people realise 75% of the current degrees on offer in universities are as good as worthless in the real world."
• "I went to University and now I work. In the real world being degree-less is not a hindrance. I can see many of my non-Uni colleagues working up the ranks and doing well. Most Uni degrees are completely out of sync with real life. I think Government propaganda is to blame."
• "I don't understand why so many students opt for such useless degrees. Doesn't common sense tell them that getting into debt to obtain a certificate that will do nothing to enhance their employment prospects, is being stupid."

I am not against education, or university and I think that learning is a wonderful thing. All I am saying is that if you are going to university to make money, then you need to think about that plan very carefully beforehand.

Graduate Gloom

I've always been skeptical about the worth of a university degree as an investment. Now a Daily Mail article has reported that half of graduates since Labour came to power are still not earning above £15,000, and so cannot repay their student loans.

About 2 weeks ago a student came up to me in the street to ask for directions. He revealed he was studying for an MBA. He then asked me if I knew where to find any jobs as needed money and he had met with failure at the job centre. An MBA is supposed to be the highest business qualification you can get, yet it is not even a guarantee of future earnings. The book "The Millionaire Mind" by Thomas Stanley long ago documented the problems highly qualified people have, finding and retaining work.

We are about to experience one of the biggest recessions the world has ever known. Companies are cutting staffing numbers and reducing pay. More gloom lies ahead for graduates.

The Post Graduate

A new report urges graduates to seek low skilled work. Many city organizations are cutting graduate recruitment by over 40%. I spoke to a postman on his rounds last week, and he told me that he was was studying for his postgraduate masters degree in economics!

Aren't you worried about the economy, I asked? "Ha, ha, ha" he laughed, "I've been told by 3 companies that they will think about taking me on when I've finished my degree". I did not hold out much hope for him, for the following reasons: Official evidence, no contract has been signed, the fact that he wasn't given a firm offer. I wish him all the best, but the fact is that the financial sector has been hit hardest of all.

The BBC agrees that graduates face more competition.

University is a merry go round. There are now so many graduates that many employers are only recruiting from the top 5 universities. If you get top grades and get into a top university you will probably do quite well over time, as you will have many opportunities thrown your way. Statistically only a few people will reach these echelons, so like the lottery, the odds are stacked against you. Mr Postman did not go to a top university.

I am not completely against university, after all, I have a so-called good mathematical degree, I'm just saying that I believe that for the majority of people, it is a bad investment. If I had got a job rather than going to university, I could have bought more houses when they were cheaper, because the banks were lending like crazy. I would probably be richer than I am now, so I would never recommend going to university.

Our friend, Mr Postman is about to face what may be the worst graduate job market in history, with even top Oxford graduates failing to secure work. He would be better off working as a postman, and saving and investing his money.

Recession tales

America is reforming its banking system. Expect Britain to follow suit. Credit will never be as easily available as it was a few years ago. Therefore house prices cannot rise any time soon.

The economy is so bad that 400 people are battling for one job. McDonalds say they are receiving 2,200 job applications every day. Who said the economy was picking up? Absolutely no chance. Graduates are getting no jobs, low level workers are getting no jobs, and highly paid white collar workers are also facing unemployment hell.

There's a lovely story in This is Money about how hotel chain Travelodge is buying distressed hotels. They have a 100m war chest of cash and now they are buying cheaply. A quote from Travelodge is: 'What stopped negotiations moving forward on many of the sites were the excessive valuations placed on the properties. Over the last two months however it has become clear that expectations on value have moved in our direction, meaning some exciting opportunities are presenting themselves.' The lessons here are that 1) cash is king 2) buy cheap 3) Don't spend extra money doing extensive conversions, just rebrand the existing building and live with it.

The most unpopular time to buy property is the first and last quarter of each year. I don't know why, and I don't care. All I know is that there will be less competition at these times, so that must be the best time to buy. As far as buying property goes, I think 2011 should be a good time.

I was in Waterstones bookshop today and came across the book How to be a successful entrepreneur. It turns out the author has never run a business in her life, and is a university lecturer! Who is she to give advice on this? The best way to prove her knowledge is to make millions in business, then write a book. She does not know how to, which is why she remains a lecturer! This is why it's very important to be careful of who you take knowledge from. There are many similar life coaches and seminar gurus who make a good living from duping money seekers in this way.

Today I've been thinking about money and the mind. Everything starts from the mind, so a wealthy mindset is essential. At the same time a firm grip must be kept on reality, things like the recession should not be denied or minimised by positive thinking. The philosopher Emerson said it is good to think of castles rising into the sky but you must then build foundations under them.

One in five students fear bankruptcy

I went to the Business Start Up Event near Canary Wharf, yesterday, and I'm going again today. There were money seekers everywhere, so this is another way to examine the path to wealth. I even met Rachel Elnaugh from Dragons Den face to face. I encountered businesses offering get rich quick schemes, but there were also millionaires who were happy to share their secrets. I have prepared a massive write up about it, which I will post tomorrow.

For today, I'm going to have another expose of the hardship faced by university graduates.

A university degree is another falsehood touted by the government, as the perfect investment. I came across this article that shows that 1 in 5 students now are considering declaring themselves bankrupt due to the high cost of a university education.

The following comment by a reader of the article sums it up quite nicely:

This is another scandal to add to the list created by GB. There won't be a hope in hell for many of the current generation of graduates to even think about house purchase or starting a family for many years to come.It's now questionable as to whether it's worth going to university at all as there are no job guarantees at the end and many graduates end up with the same jobs as they would have got without a university degree.Schools need to wise up to this too as they push a university education to gullible pupils. I would advise anyone thinking about university to do their sums very carefully first. Having a degree is not the be all and end all it used to be.

- Janet, Chippenham Posted: 28 May 2009, 2:53pm

I couldn't have said it better myself. This situation has been going on for many, many, years and it is only now that the media is becoming interested in it. I am not against a university degree, I am just saying that it is not a guaranteed investment, so shouldn't be sold as one.

Poor graduates

A recent BBC news article reports that due to the economic downturn, many UK companies are no longer planning to employ graduates or school leavers. A spokesperson says that graduates need to sharpen their case for being picked! You would think that spending almost 6 years in education to get a degree would be enough for a very strong case!

The UK government has promoted the idea that half of the population should get a degree, but the facts as printed in The Guardian newspaper in October 2008 clearly shows that 1 in 3 graduates cannot find even a decent job, for many years after leaving university! Most students come out of university £20,000 in debt, but they are not able to even start repaying their loans for for up to 7 years afterwards! (To start paying off a student loan you need to earn at least 15k per year!).

The government has said in the past that graduates earn hundreds of thousands of pounds more than non-graduates during their lifetimes. As usual, this is another ridiculously blatant government lie, which is easily disproved by the facts and statistics. The Higher Education Careers Service says in the BBC article, that one of the options graduates should now consider, is starting their own business! This is a tacit admission that the education which took graduates years to achieve, and put them tens of thousands of pounds into debt was actually a waste of time, because anyone can start their own business.

Now, the government is saying that if graduates want to find jobs, they should consider leaving the country.

A few graduates get lucky and find rewarding, well paid work. But, on basis of weighing up all the facts, I'm starting to think that due to the time, cost, effort, and likelihood of employment afterwards, a degree might be one of the worst investments ever.

Jobs for The Grads

I was reading in a newspaper a few days ago, that the most popular application for graduates is now school teaching. This is because it's the only well paid job they have a realistic chance of getting. Teaching gives a salary in excess of 25k so I'm glad graduates are now seeing the light and focusing on a good steady income stream, which can be used for investment. Teaching has long been seen as an unpopular career, but the fact is that graduates now face a stark choice between teaching and the dole queue. I think that it is inevitable that teacher training courses will become oversubscribed and many graduates will not even be able to become a teacher.

The supermarket chain Aldi had an extremely high number of applicants for its graduate scheme, and that's because Aldi pays 40k per year, with a host of benefits. This is more than most private companies will pay. I've never seen a degree in Supermarket Sweeps, so clearly these applicants have degrees in completely unrelated subjects, and now want to leave it all behind to work in a supermarket! There were only about 100 positions available, and yet there are hundreds of thousands of graduates (including graduates from previous years). Its ridiculous to spend years studying, say History, and then forgetting all of the knowledge when you work in an unrelated field. That is how outdated the education system has become.

Universities were originally founded to allow a few experts to teach their knowledge. The ethos was of the spread of knowledge and the advancement of the human race. Nowadays we have the Internet which we can learn information from, and the pace of knowledge changes all the time. I don't think we need universities as much as we used to, and there has even been recent government talk about cutting the length of a degree course from 3 years, to 2.

Universities have become big business and I was disgusted to read that the UK universities want to increase tuition fees even more. The top universities are actually using multiple choice exam papers marked by a computer for some courses. They are charging foreign students exorbitant amounts of money. All they care about is money. In America it is not uncommon for medical students to graduate with over one hundred thousand dollars in debt. Large amount of student debt seems to be the American way, and this is the business model UK universities now seem to be aiming for.

Sadly there still aren't enough jobs to go around after graduation time, so many graduates will remain unemployed. I was a graduate once, and to be honest, after weighing up all the strengths and weaknesses of it, I consider it to be a bad investment when I compare all of the other things I could have done with my time and money.

Graduate jobs are limited. The best jobs only have a few positions available. Employers are cutting wages, so graduate jobs don't pay that much anymore. Many graduates end up unemployed and deep in debt. A degree can take 7 years away from your earning and investment life thus: 2 years of A-Levels + 3 years undergraduate degree + 1 year masters degree + 1 year looking for work and not finding it. I would rather be a bus driver earning 25k for 7 years, because I would have earned 175k in that time (probably more, due to bank interest and investing), whereas the graduate would just have 20k of debt.

I agree with education, I just don't like the way universities do their business. As a unique way of gaining knowledge, university is an interesting option. As an investment, a degree, quite frankly, sucks. Recently qualified graduates who have slaved for years to earn their qualifications are now learning a new lesson. The lesson, is that there are no "jobs for the Grads".

600 to one

A recent news report showed 600 applicants going for one job. This shows that no matter what your level of skills, qualifications, experience, or how good your CV is, if you are a jobseeker in this (or any) competitive market you are currently in big trouble. It's far better to have your own (successful) business.

Employing the unemployable

In another amazingly stupid idea from the government, UK firms are being given financial incentives to employ: 1)University graduates. 2)Long term unemployed.

University graduates:

University graduates spend many years doing exams and expect high salaries. Unfortunately, from an employers point of view, high salary is a high risk and an expense they probably cannot afford. This is because:

• It costs the company a lot of money to pay one person a high salary.



• The higher the salary to a permanent employee, the higher the potential redundancy payment.



• A higher salary means higher pension payments to the employee.



• There is no guaranteed financial return on investment from employing a graduate.



• Supply and demand: there are many qualified, experienced and well educated people looking for work now, so its a no-brainer to find the best person you can, and pay them a beggars wage, as there are not many other options for the potential employee. Why would a company pay a high salary needlessly?
  

In short, paying anyone a high salary is a massive expenditure of money and risk for a company. Sometimes an employee can be worth the money and make more money than they cost to employ, but graduates can take years to reach this level of competence, and may never reach that level.

Far easier to employ cheap foreign labour. We are now in the midst of one of the biggest economic crises the world has ever seen, and anyone who thinks that struggling companies are going to stretch their limited finances to employ and overpay graduates, can dream on.

The funniest thing about the government's new graduate internship plan is that it is only 3 months long. Then it's back to unemployment street. If there are no jobs, then there are no jobs, so their internship is completely pointless.

According to the article in The Telegraph: "They will be paid at a rate only slightly higher than undergraduates' income from grants and loans". OK, lets work this one out. If students are graduating around 20k in debt after 3 years of university study that's about 7k per year income. That's £583 per month. Lets make that £600 so it's "slightly higher". That means this new government plan would see a few graduates being paid £600 per month for a mickey mouse internship. This would only be for 3 months! And who will pay for this? Certainly no business will be stupid enough to throw away any money on training people for only 3 months, who will probably never work for them again. At a possible salary of £600 per month (and it might even be far less than this), there's more money stacking supermarket shelves but with all the competition out there, graduates probably won't even get that.

Here's a comment from a recent university graduate on the BBC website which pretty much sums it all up: "I graduated in July 2008 with a languages degree and despite my best efforts I still find myself without work. I am beginning to feel increasingly despondent at my lack of success in securing a job and frustrated by the dearth of opportunities and provision for recent graduates. I have in previous years claimed Job seekers' Allowance but found the experience demoralising and for all intents and purposes rather useless. The proposal to offer internships seems to be a step in the right direction but still somewhat limited in efficacy as it holds no guarantee of a stable, long-term position".

I feel sorry for graduates, many of whom will have worked hard for their degree, entering one of the worse economic times in history, with little chance of getting any job, and possibly £20,000.00 or more worth of debt encasing their feet like cement blocks. The auction house Christies is currently making job cuts and one of the first things they did was to sack their 30 graduate trainees.

This is now one of the worst times in history to be a recent graduate. There are too many graduates chasing too few jobs.

Long term unemployed:

The long term unemployed, are people who have been unemployed for many months or years and are usually claiming benefits. This group of society have a bad reputation as lazy scroungers. This is not really a fair assessment of everyone, and I think some people are genuinely unlucky to be unemployed. Obviously this number will rise massively over the next 2 years, as the global financial crisis becomes even worse.

The governments plan is to give employers £2,500 for every person they train. But after this the companies will have to pay these people a salary out of their own finances. Its hard to see that happening, as businesses are currently laying people off, or having hiring freezes, or simply going bust. Why would they add to their misery by giving their money away to the long term unemployed? That's the governments job.

If you were an employer, would you want to employ someone who will do nothing in your business all day, cost you money to pay them a salary, and possibly even bring the company down? This may not be a fair assessment of all unemployed people, but employers will not take the risk, especially in this terrible economic climate.

In conclusion, the unemployable cannot be employed if there are no jobs, no matter how keen or well educated they are. At this moment in time, I would advise anyone to take the highest paying stable job they can find, no matter what it is. Now is not the time to be picky or proud, or to try to find the job you love. Now is the time to pay the rent, get a stable job if you can (such as a bus driver), and then budget, so you have the facilities to seek wealth.

Another insult for graduates

A recent article says that graduates are now being recommended by graduate advisers to take jobs working in bars and stacking supermarket shelves! I graduated from university many years ago with a mathematical degree, and I was shocked at how little work was out there for graduates. Just a few weeks ago when I was on a lunch break with my work colleagues in a supermarket, a shelf stacker came up to me and asked me if my organization had any job vacancies. He then said he had a high degree and a Masters in business and administration! This is a common scenario that I am seeing repeated again and again. Here are places where I have personally met many extremely well educated university graduates working: Stacking supermarket shelves, on the unemployment line, working for the royal mail, low paid civil servants. I never thought it was possible for this to happen to graduates but the investment of their time and effort is no longer valued or rewarded like it once was.

If you take a degree it means at least 5 years of study (A-Levels + degree) and you end up likely to come out over 25k in debt! In contrast, if you got a "normal" job such as a bus driver, you could earn around 25k per year immediately. If you are studying, you cannot invest money while prices are cheaper, because prices usually rise over time (inflation). In the example of a bus driver he/she could have earned £125k in 5 years, but the graduate could be -£25k in debt. This puts the bus driver £150k in front! To add insult to injury the graduate may not even be able to find any job, and may spend more money on extra education such as Masters degree, and still not find a job. When the graduate enters the real world, they are encumbered by debt, and are too far behind to catch up the bus driver non-graduate in earnings and investments. (if the bus driver is a money seeker) It is for this reason that I do not believe that the majority of modern degrees are a good financial investment! As for the education benefits of a degree, its nothing you can't learn on the Internet, and I should know, because I have a degree. A few graduates do get lucky and find the occasional job that pays way over the average, but this number is limited, and it is never in any business owner's best financial interest to overpay their staff.

Elsewhere in the world, leading restaurants are doubling their profits, proving that the financial crisis is not affecting everyone. Money can still be made, even in these times.

House prices continue to fall, and I, along with other savvy investors are waiting in the wings until at least 2010 to snap up a cheap bargain. I can't imagine who would want to buy a house right now. Recent graduates probably won't be buying or investing at this time, because they can't afford to.

Graduates facing tough times

6 million Chinese graduates are now looking for work. A similar situation concerning graduate jobs has been occurring in England for many years. In this day and age, going to university is no longer the great investment it was many years ago. Research shows that many graduates can't even get any job. More and more people are coming to the conclusion that it is no longer worth going to university.

With the global economy in downturn, things can only get worse for the time being. The average student leaves university with £20k debt, which is a massive amount. 1 in 3 graduates are unable to pay their loans for years after leaving university as they cannot find a job paying above 15k! The global downturn in the economy means that employers are shying away from employing expensive graduates. Big technology firms such as Google are increasingly using Eastern European programmers as their labour is much cheaper. School leavers are realising there are other options to going to university.

There is nothing wrong with learning, but if you want to educate yourself, you can do it quickly and simply by checking for information on the Internet, without spending years of your life and money on a university course which has no guaranteed return on investment. Times have changed, and top graduates are now going begging for jobs and still not finding them.

In this economic climate it is more important now than ever, to have a good strategy for wealth preservation and wealth building, and cheap, up to date education via the internet is a good way of doing this. Before you take any institutional education course, ask yourself who is being made more wealthy, them or you.