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 2006, CEO's in America earned 262 times as much as their employees (Source: BBC News, June 22, 2006).

Furthermore, in 2005 and 2006, 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 2006 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.