It has been nine years since I graduated from seminary, fifteen years since graduating from College, and twenty-five years since graduating from high school. Throughout high school, my teachers, guidance counselors, and classmates drummed into my head the idea that if you want to have a happy life, you have to make a lot of money. If you want to make a lot of money, you have to get a college education. Though I have that college education, having a BS and an MDiv, my base pay is that of a high school drop out. The idea sold to me in high school was false. The idea of higher education was a false means to achieve the ends I wanted. Yet, I and those like me are not without hope. There are ways of making money, achieving success, and having happiness in life that are not tied to having higher education.
Education is Not Necessary For Financial Well Being
Let us compare my own financial story with a fictional high school dropout. In July of 1990, this dropout, whose name is Joe, got a job as a fry chef at McBurgoo’s restaurant for $4.25 per hour. Despite the job being minimum wage, Joe still lived at home and didn’t have many expenses. He started putting aside $50 per month in a savings account at 0.1% interest. By July of 1993, Joe had built up a savings of $1,852. Joe, not being satisfied with the rate of return, decided to invest his savings in a mutual fund at 6% interest.
In July 1990, I went to University on student aid, acquiring debt. In July 1991, I dropped out and got a job, but did not save anything. In 1993, I returned to University acquiring more debt.
After three years at home, Joe’s parents kicked him out. Joe and two friends found an apartment to share. Since the rent was split three ways, Joe was still able to set aside $50 per month and pay living expenses. Joe kept working hard at McBurgoo’s for minimum wage. By July of 1996, Joe’s mutual fund was worth $4,150.
I dropped out of University again in 1997 to work. While working, I did not save anything. By this point, I had around $6,500 of student loan debt.
After three years of dealing with roommates moving in and out of the apartment, Joe found an apartment of his own. By this time, he got a raise at McBurgoo’s. The $7.15 per hour was not enough to support Joe’s former lifestyle when he had roommates; so, he cut his cable, rode a bike to work, and ate ramen noodles to reduce living expenses. He did not cut the $50 per month that he had been setting aside. By July of 1999, the mutual fund was worth $6,932.
In 1998, I took on more debt to finish my BS by June of 2000.
After September 11, 2001, Joe’s mutual fund took a huge hit in value. Joe, taking the opportunity of buying shares at a low price, kept saving $50 per month. In 2002, Joe got married. His wife Jill added an additional low wage income to help pay the bills. By July 2005, the fund was worth $14,248.
I went to seminary in January 2002. I did not acquire debt while going to seminary. I got married to my lovely wife, who also had undergraduate and graduate degree debt. After graduating with an MDiv, I found the job market highly competitive. The only place willing to hire me was State government. The pay was low, but the benefits were good.
By July 2011, Jill got tired of living in an apartment. Joe looked at his mutual fund, which by that time was worth $24,722. The fund was enough for a 20% down payment on a $120,000 house. After house hunting, they decided upon a $100,000 house. They got first time home buyers assistance of $5,000. They put 20% down, which left them with $9,722 in the account for an emergency fund.
By 2010, my wife and I had close to $70,000 in student loan debt. We had no emergency fund. We could not make a down payment on a house.
During each tax season, Joe and Jill usually worried about the taxes they would have to pay on the mutual fund. Yet, their low income usually allowed them a refund. In January of 2012, Joe and Jill decided to set up the mutual fund as an IRA. They started putting $125 per month in the fund. By July 2040, they will have their house paid off and an IRA worth $170,308.
In 2013, I set up a Deferred Compensation account at my job. I initially contributed $50 per month to the account. In 2014, my wife and I set up mutual funds to which we contributed $50 per month for around a year. We used a USDA Rural Housing Loan to buy a $90,000 house without a down payment. In 2015, I increased the contribution to my Deferred Comp account to 10% of my income. I also increased what we set aside for our mutual funds to $75 per month. I may be promoted to a better paying position sometime in the next few years. My wife may also go back to work. By 2024, my loans will be forgiven for public service. By that time my wife’s loans may also be forgiven; however, forgiven loans are a taxable benefit. By July 2040, if we don’t have to use any of the funds for an emergency, and if we continue contributing at least $125 per month at 9% interest, our retirement savings may be worth $149,021. Our house will be paid off by 2044.
Who is financially better off? Is the high school dropout financially better off than I with my Masters degree? Yes. My education failed me in two respects. First, from Kindergarten through graduate school, no teacher told me about saving money, compound interest, emergency funds, or retirement planning. Second, my education did not have a good return on its investment. The fictitious Joe had a much better financial return on his investment. Fortunately, I’ve learned to save before it was too late.
Mind you, a college education can improve one’s chances of getting a good paying career (I am thankful for all that I learned in college and seminary); yet, it is not a guarantee. With or without a college education, a savings plan is necessary for financial well being.
Financial Well Being is Not Necessary For Happiness.
Down to the last day, even to the last hour now. I’m an old man, lonely, unloved, sick, hurting, tired of living. I’m ready for the hereafter, it has to be better than this. I own the tall glass building in which I sit. 97 percent of the company housed in it below me. In the land around it half a mile in three directions the 2000 people who work here and the other 20,000 who do not. And I own the pipeline under the land that brings gas to the building from my fields in Texas. And I own the utility lines that deliver electricity. And I lease the satellite unseen miles above by which I once barked commands to my empire flung far around the world. My assets exceed $11 billion. I own silver in Nevada and copper in Montana and coffee in Kenya and coal in Angola and rubber in Malaysia and natural gas in Texas and crude oil in Indonesia and steel in China.
My company owns companies that produce electricity and make computers and build dams and print paperbacks and broadcast signals to my satellite. I have subsidiaries with divisions in more countries than anyone can find. I once owned all the appropriate toys, the yachts, the jets, the bonds. The homes in Europe, farms in Argentina, an island in the Pacific, thoroughbreds, even a hockey team.
But I’ve grown too old for toys. The money is the root of my misery. I had three families, three ex-wives who bore seven children, six of whom are still alive and doing all they can to torment me. To the best of my knowledge I fathered all seven and buried one. I should say his mother buried him. I was out of the country. I’m estranged from all the wives and all the children. They’re gathered here today because I’m dying and it’s time to divide the money (John Grisham, The Testament).
Although this quote is from a fictional novel, it illustrates the point that wealth does not guarantee happiness. Money is merely a means of exchange. Its usage reveals the hearts of its spenders. Human beings are relational creatures. We find happiness in successful relationships, whether to a brother, sister, mother, father, boyfriend, girlfriend, husband, or wife. We find our greatest happiness when we are in a relationship with our Creator, who made us to find joy in Him.