Most Are Not Smart Enough for College

“More than half” of economic success comes from inheritances, to include inherited traits and inherited cash.

https://www.stlouisfed.org/news-releases/2018/03/06/demographics-of-wealth-essay-series-1-of-3-financial-head-start-may-begin-at-birth

Less than half of the economic success you achieve comes from your decisions or capabilities, per world renowned economists at the Federal Reserve. While it is important, only a small proportion of the average person’s economic success in life is attributable to educational achievements.

People attend college for any number of reasons. The most common economic justification for the investment is the expectation of higher lifetime earnings.

This Federal Reserve economic analysis challenges that fundamental argument essentially debunking the myth that a lack of formal higher education is what obstructs the progress of economically disadvantaged people.

Now and over the last couple decades, student loan default rates are rising, which speaks to the mismatch in expectations versus economic realities. If only people knew alternatives earlier.

Wish I Knew This Earlier

College generally means —

  • delayed earnings or opportunity costs,
  • massive debt, and
  • no legislative guarantee of higher paying employment. In fact there’s no legislative guarantee of lower paying employment.

To overcome the burden of debt and overcome the delay in earnings, income must be much higher — that’s the only way the mathematics can work.

However, the data is out and is being affirmed by numerous economists that even for the people who are able to achieve the higher income necessary to justify college, less than half of their economic success can be attributed to their own capabilities, much less attending college itself.

In effect, most people should expect lower economic success if you attend college, because without inheritances and inherited traits, most of us are not exactly ‘smart enough’ to defy the mathematics that put the odds of economic success out of favor when college is used like most people use it (e.g., while young, high cost, etc).

And let’s be clear here. When the economists discuss the advantages of inherited traits, they are not meaning to convey the advantages of inherited height or weight, or personality traits. Instead, they overtly describe the impact of ethnicity, racial preferences in the American economy, and racial oppression which in some form or another has long been made illegal in this country for hundreds of years — see Civil Rights Act of 1866.

Defying the odds to economically win and beat the lethal triad of racial oppression, delayed earnings, and massive amounts of debt while young requires much more than mere training and human intelligence, according to the data presented.

Conversely, a small fraction of people are certainly capable of defying the mathematical odds.

Earn THREE Times More Yearly Than the TOTAL Cost of College

But these cases merit closer examination.

What is certainly the case: be  your best, but not for yourself. Be your best, for your children.

Your success and achievements, or lack thereof, are more likely to impact your children over any impact on yourself.

Author: pH14 Plan Staff

pH14 Plan is an economic development model for all U.S. households' participation. You can support this research by subscribing for more access.

Leave a Reply