GUEST POST: Take (One Of The) Two And Call Me In The Morning

NOTE: Last week we received the following post, unsolicited, from a physician and avid reader who asked to remain anonymous. We agreed that it was so far beyond fantastic, we weren’t sure how to react.
You need to understand: people submit multiple guest posts to us every week, almost all of them garbage. This one was beautifully written, concise, loaded with practical if uncomfortable advice, and he even annotated it. Finally, someone who took our guest post guidelines to heart. With no further introduction, here it is:


empty lab coat


My father-in-law is a brilliant farmer with no post-secondary education. I always wondered why he didn’t blink when I told him 4 years ago how much medical school was going to cost. He finances $350,000 tractors and $500,000 combines with debt, and I never understood why. Now I do. $150,000 in student debt at 3% to finance an M.D. is a leveraged investment made to acquire an asset. As such, it’s not a liability.

Wait a second, guest poster/avid CYC reader/slow-learning doctor. I thought guest posts on CYC are rare, and I thought guest authors had to be adamant about avoiding student debt.

You’re right; they are rare. And no, you don’t have to shun student debt before you can author a guest post on CYC. You must, however, understand its role in creating wealth. The CYC principals do. So do most wealthy people who own educational assets. This makes CYC unique in a sea of debt-hating bloggers who incessantly try to convince you that life’s number one priority is to flog your debt into submission. Remain calm, ignore them, and read on.

If you’re thinking about borrowing money to attend an institution that charges (insert average in-state tuition here) to learn (insert pointless degree here), stop. Especially if you were planning on using a government hand-out under the guise of a loan to get drunk and attend your classes hung-over in the back row. Educational choices are an opportunity to apply CYC’s fundamentals: analyze your options and divide them into distinct categories – assets and liabilities. Buy one of the two, sell the other, and call me in the morning.

Sheeple all over America are being fed the same rotten advice by the graying shepherd: “Nothing is going to have as great an impact on your success in life as your education,” and “the best job qualification you can have is a college degree or advanced training.” This sounds like a government with a pathological urge to over-spend on non-assets. It gets better. Without commenting on what type of college graduates should be trained, Mr. Obama wants to “see America have the highest proportion of college graduates in the world” by the end of the decade. That most government student loans don’t incorporate criteria regarding your proposed field of study exposes the truth that Uncle Sam is in the business of giving away money to students, not lending it. As young Americans are herded towards this 2020 target, we need individuals in political office like this financial stud, who was scorned for his modest choice in vehicle by a journalistic coward. Vote for men (and women) like this. The political momentum behind a federal bailout for over-extended student debtors is gathering steam. You can already hear the shouts across the crowded collegiate bar: “I’ve got this round boys, Obama’s going to pay for it anyway.” It’s funny, because it’s true. And millions of Americans bleat a version of the same thing every day.

Take, for example, the college-educated car-scrubber-turned-paper-runner Landon Crider, or eager-beaver Megan Parker, both interviewed in a recent New York Times article narrating the tragic plight of the overeducated. Instead of reading CYC and heeding Kincaid’s and McFarlane’s pleas, Ms. Parker chose to borrow $100,000 to land a job as – wait for it – a receptionist, commanding an annual salary of $37,000. Working as a receptionist from 9-5 is a perfectly admirable way to put food on the table. However, going into 6-figure debt for the opportunity to answer phones for lawyers indicates that Ms. Parker savors the life of a wage-slave (commonly referred to as “employee” by most 21st-century masters). Her boss understands this, and uses it to his advantage (good for him). In the interview, he said “‘College graduates are just more career-oriented.’” Allow me to translate: “They’ll work for far less money than they should to pursue the noble goal of ‘getting ahead.’ Plus, all my employees have a massive student debt load so they can’t quit.’” Even a journalist picked up on the problem with a degree-only law firm, but she still wrote about her subjects’ poor choices with a tone that suggests the predicament is a human rights violation.¹ Guess who she voted for? Not this guy.

Contrary to what you’ve been told, education is not an asset as a stand-alone entity. Shares of a whale-oil company ceased to be assets when light-bulbs began illuminating streets and homes. For an education to be an asset (and thus an attractive investment), it must exist in a market that gives it tangible value. This guarantees a stream of cash flows related to the initial investment. All other measures of educational value are in terms of personal fulfillment. If you’re searching for answers to ultimate questions in a class called Big Questions² with 127 other budding debt-slaves, stop calling it an “investment” and don’t borrow money to do it. Besides, you’ll only find true fulfillment in other, more Messianic sources. In your undergraduate years, for example, major in Biochemistry and Biomedical Sciences³ or something else useful. You remain free to minor in Music Cognition, Communications Studies, or whatever else you want. Heck, pull out all the stops and take an elective in Personal Finance instead of Philosophies of War and Peace.

To really go against the grain, try the seemingly foreign concepts of working and saving for things. If Steve Boedefeld and Zack Tolmie did it, you can too. According to the author of the article, not borrowing money to acquire liabilities is enough of an accomplishment to be distinguished as a “rare species.” Congratulations, you two. Be like Steve and Zack. Buck the trend and complete your undergraduate studies debt-free.

That sounds like a lot of work.

Right. Most things worth having are.

Every course offering in your college’s academic calendar is not a ticket to prosperity. Search for a program that satisfies this basic investment criterion before you borrow to pay for it: it must result in a positive return on investment for the useful life of the asset. In other words, find out if there are jobs in your field of interest that will pay off your debt before you retire (or default). Such analysis is mandatory before leveraging debt. Make time to read and understand the difference between an intelligent choice in higher education and a wasteful one by digesting what CYC thinks about my fellow Canadian or about this money pit.

Based on data collected by the American Association of Medical Colleges, U.S. medical school graduates carry an average of $166,750 in student debt. Following 4 years of medical school, Graduate Medical Education prepares residents for independent practice and lasts 3-7 years, depending on specialty choice. The GME training salaries are far less than most people think: resident physicians earn a median salary of $49,651 in their first year of residency. For the customary (and recently-capped) 80-hour work week, it works out to approximately $12.67 per hour ($49,651 per year/[80 hours per week × 49 weeks per work year]). Remember that, the next time you decide to spit on, swear at, and berate us for being part of the 1%.⁴ After residency, most physicians typically earn well over $150,000 per year for the remainder of their careers doing what they went to school to do. Plus, it’s a rewarding job that contributes to humanity and advances civilization.

You’re just fortunate that you’ve found a job you like that pays well.

You’re right, I am extremely fortunate. But I don’t like my job; I love my job. You’re indignant, I understand. That’s because you’re currently pursuing a Women’s Studies major to work beside Ms. Parker. It’s not too late to identify a different field with an attractive return, and switch. Don’t drown in sunk costs. If you’re weighing your options, your job before borrowing to finance an education is to discern an asset from a liability. Don’t avoid debt as a matter of principle.

If this sounds like the same advice CYC gives on regarding all prospective investments, it is. Why should your education be any different?

Keep reading this blog. Buy the book.


¹ The author of the article even challenges her readers to “consider” in the second paragraph. For long-time CYC readers, you know why this is a no-no. For new CYC readers, don’t consider reading about this weak word, read all about this weak word here.

² The courses of study referenced in this post are actually current undergraduate courses listed by my college in the academic calendar.

³ Your guest author’s course of undergraduate study. This serves as an example, not as a template. Market conditions change and vary regionally. Please decipher the basic premise.

⁴ Common on the floors of academic teaching hospitals. We usually respond with “Thank you.” Less often, we respond with an order to switch from orally to rectally administered medication, because, well, the pen is mightier than the sword. runs on the Genesis Framework

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