If not education then what makes you rich?
Definitely its not luck
I was reading through the book “Think and Grow Rich” it says, “that much of what is taught in schools is of no value whatsoever in connection with business of earning a living or accumulating riches.”
It kind of sounds repetitive to my ears. Lot of self-help gurus promote same philosophy stressing that formal education doesn’t contribute to the monetary success.
Then what is it?
I somewhat agree with the fact that education alone doesn’t contribute to accumulating wealth. However, there is a strong correlation between education and money.
On an average people with higher education level earn higher wages in comparison to people with lower level of education.
Of course, correlation doesn’t mean causation. A perfect example of this would be a rooster crowing in the morning doesn’t mean that it causes the sunrise.
Likewise, having education alone is not enough to make you rich but it certainly gives you an advantage over others.
Factors other than education that contributes to financial success.
Choice of Profession
I had an intense conversation with my friend on this matter who is not happy with his compensation but he enjoys what he is doing.
He feels he is a failure and is looking to make a career switch. In fact, he is earning more than average person but he still feels highly dissatisfied.
The reality is that when it comes to money people get emotional. They don’t want to get paid less than what they think they deserve.
Some professions are likely to pay more than others and the pay difference can be considerably high. If you are like most others who consider money over passion than you should look for a job which pays you more and you can pursue your passion in your free time.
This article can ease you in making choice between money or passion.
Natural Ability
Everyone is different and possess unique abilities. Discovering your strengths and areas where you are good at can help you to find the right fit. People blindly follow the trend or someone they admire rather than finding out their own talent.
Some people are born with natural talent and they have the ability to grasp the skill much quicker than others. Suppose someone is a good singer then they may not require a formal degree or education rather need to learn ways to leverage their skill to make money.
Having natural ability doesn’t mean you don’t have to practice or work hard its just that you have an edge over others.
There are skills which are mistaken by people as natural ability while those are the skills that can be learn and develop with practice. Mastering these skills will help you to make more money than others.
Communication skills
It’s not a hidden secret how communication skills can boost your earnings and growth. People admire those who have good communication skills and look up to them as leaders.
If you can’t communicate and talk to other people and get across your ideas, you’re giving up your potential. You have to learn to communicate in life — it’s enormously important. — Warren Buffett
Punctuality
It takes nothing to be on time. Even if you are not good at what you do and you make effort to be on time this will improve your credibility and trust.
Remember “Time is money” so by being punctual you are saving time and therefore money.
Reading
You can argue that reading is not a skill but an activity. I consider reading an essential skill and is the most common method of learning. Generally, people who engage in reading are smarter and make more money than average person.
According to research in book “The Rich Habits” by Thomas Corley, 85 percent of self-made millionaires read two or more books per month.
Critical Thinking
Dictionary definition of Critical thinking is — the objective analysis and evaluation of an issue in order to form a judgement.
Lot of employers rate critical thinking as highly desirable trait. A report published in 2016 by Foundations of Young Australians (FYA) shows that people with higher critical thinking and problem solving abilities get a higher pay premium.
Financial Literacy
Financial literacy plays significant role in building wealth. Despite of high-income people with low financial literacy struggle to accumulate wealth.
Schools are not equipped and don’t include financial literacy in their curriculum and hence students struggle to understand how to manage money. They are left on family and society and in case they come from financially illiterate families then its hard for them to develop these skills.
Managing money is lot complex than it appears. Today it’s all about lifestyle. We are spending a lot of money on goods which are unnecessary. Presence of products such as credit cards and BNPL on one hand provides great opportunity to make big purchases but on the other hand it can spoil your spending habits.
Here are four basic principles that can help you to improve your overall financial health.
- Live below your means
- Save before you spend
- Learn to invest
- Look for ways to increase your income
Geographic Location
Every year millions of people migrate from low-income countries to higher income countries looking for better work opportunities and improved lifestyle. Average income in rich country is lot higher than that of poor country. It can significantly impact your overall status of wealth.
I worked for 8 years in India as Business Analyst before I moved to Australia. There is hardly any change in my role but there is substantial amount of change in my earnings. Its incredible how you can get more money for doing same amount of work.
In fact, work culture in Australia is better than that of India. I had to slog more hours and work odd shift timings to keep my job which is not the case here.
Family Background
Parents with accumulated wealth are likely to pass on the wealth to their child as inheritance. Rich parents tend to spend a lot of money on child’s education and development.
This results in providing better quality of education and developing high cognitive skills which fetch them higher earnings.
Final Thoughts
By choice or by force we all are driven by common purpose called Money. We all want to earn money so that we can live comfortable life. Keep in mind that not everyone on this planet is going to become super rich but most of us can definitely take steps to improve our financial status.
Formal education alone might not be enough to make you rich but it can improve your chances to earn more money than average person.
Education has helped me in shaping my life & career and to reach at the level where I am today. I am making more money than most people in the job market in Australia.
Although, it’s not essential to have a college degree to become rich but based on my experience I would highly recommend having a degree in higher education along with focus on other factors mentioned above.
To end as Jim Rohn said
Formal education will make you a living; self-education will make you a fortune.
