Resources for Questions About College in the 21st Century

If you have children who want to attend college, or children whom you want to attend college (there is a difference), you'll need to be as prepared as possible to navigate the increasingly complicated process of making the college decision. Economist Gary North has prepared a webpage with an assortment of very helpful and thought-provoking links. Check it out HERE.

Math is Important for Home-Grown Jobs

You don't have to go far to find that many young people have few if any math skills. Try giving a young cashier $20.06 for a bill that's $14.56 so that you can get a fiver plus two quarters back. They'll usually give you a look like you came from Mars. They'll have no idea why you're doing what you're doing until they type in the amount tendered and receive instructions from the computerized cash register telling them how much change to give you.

That lack of math skills is why many people are calling for increased math study in American schools. But another good reason is that while there are some jobs available in our still-struggling manufacturing sector, they require workers who are good at math. These jobs are open, right now, and need smart young people to fill them. In most cases, no college degree is required. But you've got to be able to do math.

The Evidence Piles Up Against Attending College

I'm not saying no one should go to college. Here's what I say in Thriving in the 21st Century:

You now know that the greatest amount of job growth is predicted in areas that don’t require college, that most kids who attend college don’t graduate in four years and many don’t graduate at all, that college is getting more expensive by the minute and that borrowing to pay those high college costs can have lifelong consequences. You also know now that having a college degree does not guarantee a high income…or any income at all.


Knowing these things, if you still think your child should go to college, please think hard about the following questions and whether you can answer “yes” to most of them:



• Is your child very intelligent and hardworking?

• Does your child have his/her heart set on a career that can only be accessed with a college diploma in hand?

• Of the careers that require at least some college education, is your child interested in one that offers the best return on the considerable college investment?

• Has your child thoroughly researched the chosen career, including talking to employers in the field to see what kind of education they require, and graduates in the chosen program to see if they’re a) employed and b) satisfied?

• Is your child’s choice of major/career one that’s likely to be in demand by employers? (Just because a college offers a major doesn’t necessarily mean that major is in demand by employers. There’s no correlation between number of majors and number of available jobs.)

• Is your child’s choice of major/career one that can be used in more than one industry? (Example: business administration)

• Is your child’s choice of major/career one that will be difficult or impossible to off-shore (as opposed to an area of study that’s currently being chosen by millions of smart young people from China and India)?

• Does your child’s chosen college or university have a reputation for academic excellence?

• Will your child be able to graduate debt-free? In an economy where wages are stagnating and periods of unemployment or time between careers is common, living debt-free will be a major asset as well as a source of emotional peace.

• If your child will need some student loan funding, does he or she plan to earn a degree that is likely to help them earn enough to pay back their debt within a few years (there are no guarantees)?



Regarding the last question, keep in mind that the debt will have to be paid back during a time when wages most likely will continue to stagnate. As a result, college loan repayments could eat up the lion’s share of your child’s future paychecks.

“Yes” answers to most of these questions indicate that you have a child who is motivated to go to college and willing to do what it takes to earn a degree in a field with good prospects for personal satisfaction as well as employment. If you don’t have enough money saved up for the entire four (or more) years, consider sending your child for two years of general education courses at a community college, after which your child can transfer to a four-year college. This is a time-honored plan, and for good reason: it saves a lot of money on tuition and room and board, plus you’ll send a more mature person off to college. Also, if your child’s chosen field of study will require graduate courses, the money you save by sending him/her to community college the first two years can help defray the cost of graduate studies later on.

If you can’t answer “yes” to most of the questions listed above, consider whether college is really the answer for your child. Try to ignore the common wisdom of the 20th century that was drummed into your head, the refrain that insisted that the only sure route to success requires a college diploma, because times have changed.

So I'm not against college, but I think it's clear that college is not for everyone or even for most people. Between its high cost and the questionable need for a degree for employment in areas of job growth, there's a lot of evidence on my side, and it's piling up:

More college grads are settling for low-wage jobs

More college grads are having trouble paying back their student loans

An economist argues that college is not a bubble, it's a "tax-subsidized failure"

See what I mean?

Accepting Reality

I began writing Thriving in the 21st Century because I was trying to figure out what was going on as I watched the industry that my husband had worked in for 30 years move overseas, leaving him without work or an income. I also wanted to know how to prepare our children for this new economy we have found ourselves in.

Six years later, I'm ready for the future and I feel like my kids are prepared for it too. But I meet other parents who, once they start putting together the pieces of their own experiences and those of their friends and relatives, become pessimistic about what's going on and what it means for our children's future.

If that's how you feel, you need a dose of reality tinged with optimism. Check out Seth Godin's posts on this topic (Post 1 and Post 2) and you'll feel better.

The Supposed College Advantage, UK-Style

Over in Great Britain, college is pushed as the way to make more money, just as it is here in the U.S. This article is typical of the hype. What's really interesting, however, are the comments. People are finally realizing that in the new global economy, not everyone will need a college degree, and most people can't afford one.

Teaching Children to be Frugal: A Necessary Skill for the 21st Century

(excerpted from Thriving in the 21st Century: Preparing Our Children for the New Economic Reality)

‘Tis a Gift to Be Frugal

Good old Ben also praised frugality:

In short, the Way to Wealth, if you desire it, is as plain as the way to market. It depends chiefly on two Words, INDUSTRY and FRUGALITY: i.e. Waste neither Time nor Money, but make the best Use of both. He that gets all he can honestly, and saves all he gets (necessary Expences excepted) will certainly become RICH: If that Being who governs the World, to whom all should look for a Blessing on their honest Endeavors, doth not in his wise Providence otherwise determine.

You’ll give your children a great advantage by training them to be frugal. The word “frugal” has negative connotations for some people, but even 200 years ago, smart people like Benjamin Franklin knew that being frugal is an asset. Let’s clarify what frugal means: being careful with expenditures, not buying things you don’t really need, and taking care of what you do have. It doesn’t mean being cheap; in fact, people who only buy cheap goods usually end up spending more time and money replacing those cheap goods when they fall apart. A frugal person can recognize quality, and knows that a quality item lasts much longer than its “cheap” counterpart. (See “Teaching Children to Recognize and Appreciate Quality” on page 364.)

To be frugal is to be thrifty. Thrift was once considered a positive attribute, falling out of favor when America became a society of consumers in the mid-20th century. But there are still frugal people around; their thriftiness helped some of them become rich.

Billionaire investor and philanthropist Sir John Templeton and his wife began married life by living very frugally. They cut expenses as low as possible, bought used furniture (items no one else bid on) at auctions, and only ate at restaurants when they could eat dinner for 50 cents (this was during the 1930s). They did these things in order to stick to their goal of saving 50% of their income. In The Templeton Plan, co-author James Ellison explains,

The fact is, however, that John Templeton was not poor even then. He had a good income and a solid investment portfolio that was steadily growing. Some acquaintances might have regarded his approach to money, housing and the conveniences of life as somewhat eccentric, if not socially unacceptable. After all, the circles that Templeton, the investment counselor, frequented were characterized by big money, big houses, big cars, and big consumer spending in general. But Templeton was not one to live by society’s more superficial values. He followed his own inner dictates and his developing religious beliefs. footnote

And so a radical philosophy of thrift became a deeply rooted part of Templeton’s way of life. He became convinced that success was closely connected to saving, a belief that he has never stopped practicing.

Templeton was not the only wealthy person whose fortune was due in part to thrift. In his ground-breaking books based on his study of American millionaires, Dr. Thomas J. Stanley wrote that despite the stereotype of the free-spending, luxurious millionaire lifestyle we see portrayed in movies and television shows, many millionaires are actually very careful about how they spend money. They also use strategies such as clipping coupons, refinishing and repairing possessions instead of buying everything new, and buying in bulk. In The Millionaire Mind, Dr. Stanley noted:

People in my audiences often ask why a millionaire would clip coupons. It’s not just to save fifty cents today—it’s how much can be saved and invested over a lifetime. The typical affluent family in America spends over $200 a week for food and household supplies. That’s more than $10,000 per year. During an adult lifetime in current dollars, it translates to between $400,000 and $600,000. If you cut off just 5 percent of this amount, between $20,000 and $30,000, and invest it in a top-ranked equity fund, given the rate of return during the past few years the amount earned would have been $500,000. (96)

I’m not suggesting that all or even many of our children will become wealthy by being frugal (though if you teach your child to be frugal and he grows up to be a millionaire, he’ll handle the money better than most would). But the frugal millionaires Stanley studied illustrate the wisdom of being frugal and investing the money saved by being that way.

Teaching frugality to our children will benefit them once they’re grown up and making their way in the global economy. They’ll learn to live simply, thus experiencing less financial stress in the future. In a world where they’ll often be between jobs, frugality could make the difference between financial stability and financial trouble. As writer Charles Jaffe once said, “It’s not your salary that makes you rich, it’s your spending habits.”

"The Economic Folly of a College Degree"

Finally, more people are admitting that a college degree is not the guarantee for future success that so many people thought it was. Take this op-ed piece, for instance. The author explains that even citizens of other countries are seeing that a college degree does not make a person smart or hardworking. I'm glad to see that more writers are sharing this information because, as I explain in Thriving in the 21st Century, most of our children will not need a college degree in the new economy.

Book Site Up and Running

Now that Thriving in the 21st Century has been published, you can read a couple of excerpts from the book, view the table of contents, and learn more about the book itself right here. Check it out!

Teens' Unemployment Rate Now 25%

Working teens get an education that they could never receive at school or home. They learn a variety of skills in addition to working for someone besides their parents. The pay is just a bonus. All teens should work.

But it's getting harder for them to find jobs. A recent study found that 1/4 of today's teens ages 16-19 can't find work. This is a shame, as they're missing out on learning so many things that they'll need to know as adults.

If your teen can't find a job, encourage him or her to create a job by finding unmet needs in your neighborhood. Many a teen has made good money by washing cars, walking dogs or watering gardens.

Takers or Makers?

In Thriving in the 21st Century, I ask the question, "Do you want your children to be producers or consumers?" This is a serious question. Given the changes in our economy, I think children trained to be producers will have the best chance of being able to support themselves as adults in the rapidly changing economy of the 21st century.

A recent article in The Wall Street Journal makes the same point, but gets very specific about why this concept is so important, and how our economy has been negatively affected by the shift from production to consumption. Instead of referring to producers and consumers, the author refers to "takers" and "makers," but the basic concept is the same: an economy that primarily consists of consumers is doomed.

Now Available: Thriving in the 21st Century

Thriving in the 21st Century: Preparing Our Children for the New Economic Reality is now available in print for $13.95 at Amazon and Barnes and Noble, as well as bookstores everywhere.

Here's a look at the Table of Contents:

Introduction

Section 1
How the American World of Work Has Changed
Technological Advances
Off-shoring
A Renewed Global Economy and Changing Living Standards
Learning From the Past
America’s History of Self-Sufficiency
What About the Schools?
Before We Begin
Likely Future Trends in the World of Work
Preparing Our Children for This New Economic Reality

Section 2
The Seven Strengths Your Children Will Need to Thrive in the 21st Century
Strength #1: Creativity and Innovation
Strength #2: Entrepreneurial/Self-Starter
Strength #3: Computer-Literate
Strength #4: Communication Skills
Strength #5: Empathy and Concern for Others
Strength #6: Self-Sufficiency and Practical Skills
Strength #7: Money Smarts

Section 3
Giving Our Children the Advantages of the Seven Strengths

Section 4
Careers
College
Self-Employment and Family Businesses

Conclusion
What Schools Don’t Do
What Parents Should Do
What Parents Should Not Do
What Parents Can Do

Appendix A: It’s OK for Children to Get Bored…Really!
Appendix B: Teaching Children to Recognize and Appreciate Quality
Appendix C: President Obama vs. the U.S. Bureau of Labor Statistics
Notes
Index

Stay tuned for excerpts!

Entrepreneurial Kids Finding Success

The high unemployment rate of the past few years has been particularly hard on teens, who are at the age where they're eager to get started on their working lives.

These teens decided to be proactive by starting their own businesses, and the results they've gotten will encourage your teens. Send them the article link; it may be just the inspiration needed to get going on a dream.

The Antidote to Unemployment

Unemployment rates continue to rise in all the largest American cities; the worst areas seem to be those hit hardest by the bursting of the housing bubble.

One of the best ways to counteract the loss of income due to losing your job is having a side business. Even a small regular income can make life much easier.

Do you have a side business? If not, why not start one and get your kids involved in it? It's a great way to prepare them for survival in a rapidly changing economy.

Real Wages Are Down

So we're off to a shaky start in 2011, with real wages down .5% last month. Actual wages remained the same, but thanks to inflation, higher consumer costs resulted in a decrease in real wages.

Two reminders here: wages are not increasing as they once were, and inflation is making it harder for people to stretch their dollars. This is why it's so important that we raise kids with money smarts. It's a life skill that's becoming more necessary all the time.

College Administrators Weigh In at Speech

Last week I spoke to a group of 75 parents up in Green Bay regarding Thriving in the 21st Century. My favorite part, as always, was talking with everyone afterwards.

The event was held at a tech college; one of the administrators there told me how they tailor the certificates they offer to the skills that local employers are looking for. She said she tried to get her children to look into obtaining those certificates, but they chose to go off to college instead and now she has three adult children back home with her again.

Another parent who happens to be a vice president of a nearby private college took issue with some of my comments regarding the need for college degrees in the new economy, but after a pleasant discussion we discovered that we're on the same page about many things. He even told me that he recently expelled two students for their own good, since they weren't doing well despite their best efforts. I told him I wish all college personnel had his ethics, because in researching my book I found that many college administrations pursue students without concern for whether they can do the work. It's all about the money.

BTW my book is now at the printers and should be out in early April. Look for excerpts to be posted here soon.