Friday, October 12, 2007

Our Journey To Financial Freedom #2 - The Value of Higher Education

In early October, 2007, I announced that I had retired in my forties. So I now join my wife, who had stopped working earlier to be at home with our child. As promised, I am writing a series on "How We Did It," of which this is segment #2. For reference, our story is a boring one because we did it by working for established companies, spending less than we earn, and prudently investing our savings. There were no business start ups, lottery winnings, or inheritances involved. However, it worked for us. Read on if you still want to find out how.

Step #2 - Get A College Education

In hindsight, going to college for a Chemical Engineering degree has played an important part in being able to retire in my forties. Although my choice of a major was not part of a greater plan, it enabled me to get a great job at graduation, which also paid well. This eventually led to excellent experiences and personal development which led to promotions with significantly higher pay.

As background, I was planning to go to Medical School, when I started college. Therefore, my major was a backup option, in case I didn't pursue a medical degree. By the time I graduated, I needed a break from school and decided to work before applying to medical school. I never did apply to medical school and ended working in the industry my entire career and then retiring.

Here were my benefits and experiences from a college education that I think were important in our journey to financial freedom:

Greater breadth of opportunities. Many of the top companies came to campus to recruit future employees. Without a college degree, I wouldn't have been able to get many interviews with companies such as Exxon or DuPont.

Consideration for better paying entry level jobs. I'm not advocating that everyone should be engineers. However, if retiring early is a goal, college should be used as a financial spring board. Higher starting salaries lead to higher raises, or better salary offers when changing jobs.

Entry level jobs with higher future potential. Recruiters go to university campuses to find potential future leaders for their company. The entry level researchers or managers are expected to become the senior researchers and senior managers of the future.

Yes, but ...

Can't one do well with graduating from college? Some do, of course. A couple of notable examples are Bill Gates and Michael Dell, who dropped out of Harvard and the University of Texas, respectively, to start Microsoft and Dell. However, for most people, one's chances to do well significantly increase with going to college.

Is an Ivy League school going to be better than a state university? Since I graduated from Princeton, I can say yes, AND the advantage is only short lived, perhaps one to two years. After one is an experienced employee, the contributions and results at work matter much more than the school one attended.

Going to college no longer guarantees getting high paying job. Well, it never did. However, one can improve one's chances by graduating with excellent grades in a degree that prepares one for entering a profession.

Finally, while going to college has never guaranteed future financial success, it is unlikely I would have retired in my forties without a higher education. College was an important early step in Our Journey to Financial Freedom. I will also encourage my daughter to make college part of her wealth building plan.

Next segment: Getting The Most From Your Job

Here's the series:
  1. Our Childhood Preparation
  2. The Value Of Higher Education
  3. Making The Most Of My Job
  4. Lifestyle and Spending Choices
  5. Setting Goals, Developing Plans and Tracking Process
  6. Staying The Course
  7. How Luck Played A Role
  8. My Personal Finance Mind Tricks
  9. The Professionals We Used
  10. When Preparation Met Opportunity

For more on Reaping the Rewards , check back every Friday for a new segment.

Photo Credit:, Kenn Kiser

This is not financial or education advice. Please consult a professional advisor.

Copyright © 2007 Achievement Catalyst, LLC


Anonymous said...

Super Saver, the fact you achieved your goals in what you describe as a boring fashion is not boring in the least. I'm glad to hear a contrary voice that refutes all of the mass media messages that promote huge risk for instant gratification.

I consider your story an inspiration, as it is very much what I have planned for myself. I have about a 10 year setback to overcome from my own personal little dot bomb story. But I have turned it around and am on track to walk away from the corporate job in my mid 50s if I so desire.

Super Saver said...


Thanks for your comment and kind words. I'm glad to hear that there are others who practice a patient approach to wealth building.

Good luck on your journey to early retirement. It sounds like you have recoved well and have a good plan to getting there.

Financial Samurai said...

Howdie - Do you mind letting us know whether you retired in your early or late 40's? Pls shoot me an e-mail at if you can as I may miss this post.

good stuff and i'd like to follow!

I want to retire at 42.

Super Saver said...

Financial Samurai,

I retired in my late forties.

Good luck on achieving your goal of retiring at 42.

Financial Samurai said...

Good stuff super saver! I plan to focus like an animal to save up that $3 million cash nut so it can throw off $120,000 a year in interest income!

If you know of anybody who's applying to get an MBA, we're doing a $1,000 giveaway. Best, FS