Knowledge is Money

Growing up, I witnessed first-hand the value of an education, or more accurately, the struggle required to be financially successful without a formal education. My immediate family, mother, father, stepfather and grandparents did not have college degrees or specialized certifications.

Regardless, they all worked very hard and earned respectable livings. I hold the deepest respect for my family. Their example taught me about working hard and saving money setting the foundation for the financial successes my own family is enjoying today.

My parents didn’t have opportunities to gain formal education beyond high school yet they continually stressed the importance of an education. They knew without it, I’d have to work hard to do the best I could like they did. I understood clearly their point.

Today I believe it is almost impossible to earn a living the way my family did. The probability of building substantial wealth without some type of formal education or certifications is most likely very low. With more and more workers acquiring specialized skills, as well as many jobs being replaced by automation, advancement opportunities for unskilled laborers are decreasing.

Which brings me to what I firmly believe is an important financial truth to become a millionaire on a worker’s budget, knowledge is money. I am talking about knowledge in every sense of the word. From college degrees, to licenses, certifications and everything in between.

Without a lifelong pursuit of knowledge, becoming a millionaire will be a tough, if not impossible fight. Fortunately, my wife was raised with a similar emphasis on knowledge and feels the same way I do! This week’s featured pic is from 2005 when she finished up her Master’s degree while pregnant and raising our first child.

As if I needed more convincing about the importance of an education, when I entered college and joined Army ROTC, the military showed me first-hand how it values education and training.

After completing the program of instruction at a commissioning source and earning a bachelor’s degree, a cadet or candidate is commissioned a Second Lieutenant. Second Lieutenants are usually placed in charge of a platoon sized organization, typically around 40 people. A college degree and a few years training is all it takes to be a manager and leader of 40 people!

I was also able to see the premium placed on education when I rejoined the civilian workforce almost two years ago.
Generally speaking, senior management earned their position by attaining advanced degrees and certifications. This knowledge coupled with superb on the job performance helped them work their way up the corporate ladder.

Workers must continually seek knowledge regardless of how proficient they are in job performance. How many times have we seen this play out in our workplace? The worker who may be the best in their department for years but never sought any additional training or education is quickly passed by someone with less experience but better credentials.

While nirvana for most of us is to one day become self-employed, the fact is, most of us will need to rely on employment as our primary means to build wealth. We will find it hard to incrementally earn more at work and subsequently build wealth if we do not seek training, education and certifications.

I’ve talked about the direct cause and effect of the knowledge is money truth as it relates to job advancement and higher wages. I want to shift gears on some less tangible aspects of this truth.

Knowledge in simplest terms is information acquired through education or experience. Although I’ve emphasized formal education and certifications, I want to clearly restate that knowledge includes so much more!

My wife and I have been fortunate to build a successful investment portfolio of real estate and mutual funds. Neither of us have taken one formal class on financial management or real estate. We just went out seeking knowledge from books, the internet and trusted advisors to educate ourselves.

Put another way, pursuing knowledge is gathering information from someone who knows. This can be a real life advisor or web based materials, but above all, the information source must be reputable and accurate. In fact, the research to determine reputability and accuracy maybe just as important as finding information itself!

In today’s interconnected world, the web has made gathering multiple sources of information on a particular topic easy. That being said, I would recommend not relying entirely on the internet. Pick up a book, pick up the phone or meet an advisor in person but above all ensure the source is reputable!

I am a firm believer in doing it yourself for most home repairs whenever possible. The internet is the do it yourselfer’s playground. One can usually find a video on the internet that shows how to perform just about any task. There are also plenty of great web articles that can walk even the most unhandy handyman through repair jobs. Obvious implied task is owning a smartphone good enough that, when wedged under a kitchen sink, you can see or hear the instructions!

Do it yourself repair jobs will take two or three times longer than a pro, but it will save so much money. Eventually, after performing a repair several times, the do it yourselfer may even go as fast as a pro!

Knowledge of all sorts has one thing in common, it equals money. Both directly such as in the case of a job promotion due to acquiring additional certifications, as well as indirectly such as when we learn to do a repair job our self. Seeking knowledge is not something we pursue in the four or five years immediately following high school, this truth is a lifelong endeavor.

Next week I’ll continue to pull on the knowledge is money thread with some tips that have helped me over the years. If you’ve enjoyed reading blogs about financial truths, be sure to check out my new book “Millionaire on a Worker’s Budget: Five Financial Truths to Build Wealth” available for pre-order now by clicking here!

The commentary provided in this blog is for informational purposes only and is not intended to be a source of financial or investing advice.

The views, opinions and biases expressed in this blog are my own and do not reflect those of the U.S. Army or the Department of Defense.