Borrowing: Student loans – Part I

As stated before, the most precious asset you will ever own is none other than your own body/mind. Investing time and money into upgrading this most valuable asset of yours through higher education is therefore one of the smartest things you can ever do. However, as it is with any asset, you have to make sure that you invest intelligently so that the time and money you forego now will pay off handsomely the future.

The crux of the matter is this: the investment we are talking about here is not the college degree in itself, but rather in the ability of your body/mind to add value to society. The widely accepted notion that if you can only get a college degree, the entire world will suddenly be at your feet is very dangerous and guarantees massive malinvestment. The reason is simple; this notion will get you to waste all that time and money doing the bare minimum that is needed to get your hands on a little roll of paper with your name on it instead of really using this opportunity to upgrade your body/mind.

When I was at university, the vast majority of people sharing my dorm were there solely for the purpose of getting their hands on this little roll of paper with as little effort as at all possible. As a result, they skipped most of their classes, spent most of the day watching movies and TV series downloaded from the peer-to-peer university network and even drank away the money their parents gave them to buy textbooks. Yes, in the end most of these people got their degrees (eventually), but I’m sure that their ability to actually add value to society increased only marginally (if at all).

I have to emphasize again that a degree is nothing but a piece of paper with some stuff written on it. It actually has a striking resemblance to the little pieces of paper with stuff written on them we use to buy stuff with (fiat money). These pieces of paper only have value because society believes they have value, but, as central banks print more and more of them, their value gradually gets diluted and inflation results.

The very same thing happens to college degrees. As more and more people flock to colleges for the sole purpose of getting hold of one of these pieces of paper, the number of degrees in circulation increases and, because the focus is firmly on the piece of paper rather than education itself, the value of the actual people behind most degrees is going down with time. Therefore, just like fiat money, our college degrees are now being devalued at a very high rate and the rather obvious result is that the “educated” youth of today are in deep trouble.

The next post will further dissect the root of this trouble and examine some possible solutions.

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