If you want to be rich and successful you need to go to college and get the
most prestigious degree possible right well whether this is true or not the
reality is that this advice has been disseminated to the masses and
unfortunately these words of wisdom have not made as many people rich as one
would imagine but why is that well in this video I will share with you seven
reasons education keeps you poor and if you're new to the channel then hit the
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millions of students in the United States and across the world have been
sold the dream that if they study hard and get the right degree they will land
a job that will absolve them of all their financial worries in life in fact
this is the mentality I had not too long ago and after spending tens of thousands
of dollars on my education I soon came to realize that while education has a
purpose it may not be the key to building true wealth in fact in many
cases formal education can hinder your financial progress and I believed it to
be true for the following seven reasons reason number one education doesn't
improve your financial IQ take a moment to think about your experience through
the education system you probably took classes in math and science and while
these subjects may have been relevant to your future career one subject that for
sure would provide value throughout the course of your life is financial
education sadly most students are never taught even the most basic financial
principles like budgeting or the financial impact of taking on debt in
fact the school system just assumes that you will naturally adopt these skills
over the course of your life but this is simply not the case take the example of
highly skilled professions like medical doctors or lawyers sure they know a
whole lot about medicine or law but that doesn't mean that they know anything
about money even my profession of accounting there are many people I know
that simply cannot figure out how to track their spending or manage their
debt yet they can prepare financial reports for major businesses the reason
most professionals lock this financial IQ is because school does not place any
importance on money management skills and the truth is that it doesn't matter
how many years of school you injure or how many degrees you acquire until you
put in the time and energy to learn how to manage your money you will always be
living a suboptimal financial life for those
who never got a financial education which is most of us what's the solution
I can't speak for everyone but one strategy that helped me out was reading
and listening to books on finance and money management in fact the book that
started it all for me was I will teach you to be rich by Ramin
Sethi right now you can get the audio book yourself for free today by signing
up for a 30-day free trial with audible using the link I've left it in the
description then if that book isn't enough for just $15 a month you can sign
up on a full membership and continue to raise your financial IQ
reason number two formal education is the only education most people pursue if
you've completed college you will know that amazing feeling you get when you
walk across the stage and receive your hard-earned degree but what's better is
the idea that there are no more classes to attend or exams to write essentially
you're free well this is all well and good the sad reality is that when most
people's formal education ends sodas are learning in general you see for so many
people in the world education equates to that degree that they pay tens of
thousands of dollars to acquire which they hope to exchange for a good-paying
job but the truth is that education is about so much more than that it's about
gaining and applying new knowledge that will help you see the progress you
desire in life well most people obtain this knowledge through formal avenues
there are certainly many other ways to learn for instance you can listen to
audiobooks or read you can find mentors who can share their experiences and
wisdom with you you can even take online classes and
learn through YouTube videos probably the biggest mistake that holds people
back financially is allowing their learning to end once college is over in
my eyes this is just the start of what should be a lifelong journey of
Education reason number three more education means more attachment to your
future job let's face it school was designed to train you on how to be an
employee and the more time and money you invested in this training the more
likely you will be to hold on to the outcome of your efforts otherwise known
as your job so like most people you will join the workforce and keep that job or
a similar role for the rest of your life working away with only one brain and one
set of hands but quite frankly no that becomes rich works this way truly
wealthy people are those who leverage the minds and bodies of others which
allows them to work thousands if not millions of hours a day now not everyone
can build a large business and employ thousands of people but luckily there's
a solution that you can implement today to start growing your wealth what I
recommend is to start looking into businesses you can build while holding
down your nine-to-five job the Internet has created a world of opportunity for
online business which many are quite viable and very lucrative and as you
start to form this business you should also leverage the power of investing
allow your money to work for you the same way you put in work at your job
each and every day with these two simple steps you will start to see your income
rise over time which will ensure you aren't held down by these single income
lifestyle that most people are living reason number four educated people think
they know everything one of the most important concepts when it comes to
learning can be linked to a very famous quote by the Greek philosopher Socrates
when he said I am the wisest man alive for I know one thing and that is that I
know nothing probably the wisest man of his era
Socrates knew that while being very educated he was barely scratching the
surface of all there was to know sadly many people because of their formal
education seem to think that they know all they will ever need to succeed in
life what's worse is that these people tend to judge those who dropped out of
college or have less formal education than they do as a result they devalue
the advice or knowledge that these people can offer them when in fact these
lessons may be more valuable than any edification College could provide for
instance perhaps a person who dropped out of college to use their time to
start and grow an online business that is making them millions of dollars a
year wouldn't that be someone you would want
to talk to if you were trying to increase your own wealth ultimately
while formal education can improve your knowledge it can also make you closed
off to other avenues of learning which can hinder your progress towards your
dream rich lifestyle reason number five formal education leads to student debt I
think we can all agree that the prices for college have become quite ludicrous
and paying for this education is almost always done using
in fact as a 20-19 69 percent of all college students in the United States
took out some amount of student loans to pay tuition and according to a recent
study the average college graduate in the United States leaves school with 37
thousand one hundred and seventy two dollars in student loans nearly triple
the average of two decades earlier now I wish you could say that paying down the
step would be quick but unfortunately that's not the case according to
Glassdoor the average entry-level position in the United States for a
college graduate is $28,000 when you factor the cost of living against this
meager salary the potential that paid on the student loan in a reasonable time
frame is almost impossible it's for this reason that the average debt repayment
period for a student loan are between 20,000 and $40,000 is 20 years think
about this for a second assuming you live until 80 you'll be making payments
towards your student debt for a quarter of your life and these statistics don't
even take into account students who obtain graduate level or extended levels
of formal education which will only make the debt load worse therefore when it
comes to gaining formal education and student debt this is a money trap that
will keep you poor for years to come reason number six educated people are
prone to taking on more debt we just went over the fact that formal education
can put you in a serious amount of student debt and what we often see is
that those who find themselves owning the bank tens of thousands of dollars
after they have borrowed money for school are more susceptible to taking on
other forms of debt and this makes sense they're already drowning in debt so why
not add to it by buying a new TV or car while they're at it
this behavior is known as the what the hell effect which suggests that falling
off the wagon causes a feeling of failure which leads to more indulgence
this effect makes spending $500 on a new television seem like not as big of a
deal if you already owe the bank a hundred thousand dollars in student
loans however as small of a component as these
subsequent debts making your overall debt balanced each one still pushes you
further and further away from achieving your future rich life reason number 7
educated people pay more tax in August 2011 Warren Buffett
an opinion piece in the New York Times in which he wrote about his 2010 federal
tax rate of seventeen point four percent compared to the 36 percent average rate
paid by the twenty other workers in his office now you may wonder what this has
to do with being educated but as I previously mentioned in this video most
people who gain a formal education earned their income via a job and being
an employee subjects' you to the maximum amount of tax possible do be frank most
tax laws in the world were made to optimize tax revenue from employees
since they make up the largest part of the workforce and this means that those
with extensive education are paying the price
unfortunately the tax burden that educated people face is only getting
worse as the middle and lower classes are taxed more while the rich are taxed
too less in fact for the first time on record in 2018 the 400 wealthiest
Americans paid a lower total tax rate spanning federal state and local taxes
than any other income group but things weren't always as pleek for the educated
class in the 1950s and 60s a wealthy paid vastly higher tax rates in the
middle of poor class however over time the tax laws have changed dramatically
with many of the modifications improving the tax consequences of the rich and
worsening them for everyone else this is why in order to achieve financial
prosperity you need to really assess your monetary decisions and the value
you will gain from attaining a formal education whereas the degree used to
mean access to an amazing salary and career with a little to no debt attached
it is now a debt sentence with much less upside and has shown a lot more tax
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