Posted by: seanmalstrom | December 30, 2015

Email: Re: Financial Literacy

Master Malstrom-

My brother recently sent his son off to college. He attended a “parent’s orientation” event where the school dean told them not to question their child’s choice of major. These 18-year-old kids were now “adults” and he was informed it was important they learn on their own and make their own mistakes. He was told that as a parent his only role was to be supportive of his child no matter what. This is not the first time I have heard this story.

I find this very odd. We live in the age of helicopter parents where people hover over their kids obsessively, preventing them from ever skinning a knee or stubbing a toe. Yet somehow a parent is not supposed to give their child any guidance or wisdom in making serious life choices such as college? My nephew has consigned himself to 6-figure debt by age 22(!!!) and his dad is supposed to just stay out of it? What kind of nonsense is this?

The reality is if you don’t give children any guidance someone else will be happy to do it for you. College professors have no trouble brainwashing all kinds of nonsense and mythology into your kid’s head. Colleges also know the longer children stay enrolled the more money the school makes. Switching majors and studying subjects aimlessly is a good recipe for a decade-long cash-cow-student who keeps the government loan money rolling in.

Throughout our culture there is this idea that parents should not be ‘controlling’ or that they have no right to dictate anything to their kids. You see this in movies and TV all the time; a kid has an overbearing and controlling parent who is portrayed as detrimental to the child’s life. In the end the parent either learns to respect the ‘superior wisdom’ of the kid (HA!) or it ends in some kind of tragedy.

My job involves working with rich people, and what I see is that rich and successful people do not do this. They don’t let their kids study bad subjects or avoid getting a real job. They put their kids to work, getting valuable experience, and make sure they pick a commercially viable major. They don’t let their kids study slacker subjects, teach them how to handle money, and how to invest. They know if they let their kids ‘follow their heart’ they will end up as useless bums who will drain away the family wealth. The rich are not immune to culture, however. I see some of them really struggle with this. They are anxious about being too-controlling and forcing their kids to follow in their footsteps, or take over the family business.

Ultimately parents who refuse to criticize their children’s choices or give them any guidance are narcissists. They’d rather pat themselves on their back for being noble and non-controlling than give their children tools to succeed.


Right. They are children and need parental guidance. This can be both good and bad. The problem is that most parents are NOT financially educated. Many are academically educated. “Just take anything in school, and you will get a job.” Not all jobs are the same. It is more than just the money too.

What people do not realize is that there is a human need to be useful to society. If you do not have value to society, even if you are making money, your soul will scream. The reason for all the Social Justice Warriors is because they all chose crappy degrees which is why they became crappy people. You do not see plumbers or electricians rage at political rallies because they satisfied both in money and in emotion. The emotional value differs with men and women because (gasp!) men and women are different. Men who are outside doing hard work feel mentally good because they, at the very least, feel like a man. I have heard of female chemical engineers quitting their job to be a hair salonist because as a hair salonist, they get to be ‘girly’. A chemical engineer has to wear jumpsuits all the time and many women psychologically have that ‘need’ to be a woman. “OMG!” reader shouts at this blog. “Malstrom is sexist!” I’m just pointing out what I’m observing.

What you are describing, emailer, is how EVIL these colleges are (talking about US ones). The college degree is the most important financial investment someone will make. Actually, that is wrong. The choice of a spouse is the most important financial investment one will make.

Here is a note to those reading who have taken college degrees that… didn’t exactly pave out in the end. Do not be upset or enraged by reading any of the above. Do not beat yourself up. You are not alone. However, you absolutely must pin yourself down on the financial board of where you are. What marketable skills do you have? Most likely, you are ‘worthless’. This being ‘worthless’ will keep eating away at you. The solution is to do bite the bullet, go get a marketable skill, and do so NOW before it is too late. Once you get too old, no one will let you re-invent yourself.

Here is an easy tip to choosing a college major: if it is boring and hard, it probably has high value. If it is fun and/or easy, it probably has low value.

Alert! Alert! More important than ever is to consider the global competition for any position. If you get an engineering degree in the US, you have to compete with engineers from all over the world. However, you won’t be able to compete in those foreigners’ countries. Unfair, right? Yep. This also goes for computer science and any type of job where physical presence isn’t exactly needed.

What is the supply and demand for any type of job? You want to choose a job that has low supply and high demand (with increasing demand trend line). My recommendation is to be on the good side of automation.

Financial education isn’t really about making businesses or investing. It is about a new type of decision making based off of financial values. The financial values are very different from academic values (e.g. middle class values). The middle class is gone. You choose either to be rich or poor. Make your choice.



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