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In her recent keynote before college graduates at the University of Baltimore, Federal Reserve Chairman Janet Yellen noted, “Economists are not certain about many things. But we are quite certain that a college diploma or an advanced degree is a key to economic success.”

This comment made me think about my Dad who never went to college.

I understand that times have changed. Still, my Dad died a millionaire and it seems to me that the qualities that allowed him to be a financial success remain relevant today–even amidst the most educated U.S. generation in history. In fact, with so many college-educated Millennials out there competing for the same relatively few jobs requiring a degree, his qualities might be more important than ever.

My Dad worked hard. In addition to his day job, he worked weekends and some nights in a second and sometimes a third job most of his working life. He was a diligent saver who listened to investing advice from a pro he trusted. He knew how money worked and how to make money work for him. That was his key to economic success—not a college education. Despite his lack or formal education, he made himself financially literate and it paid off.

In her keynote, Yellen talked about many of the advantages of education: “Research also shows that a college or graduate degree typically leads to a happier, healthier, and longer life.” She is right , of course. But is higher education the reason? Or is it just that more people who go to college possess these attributes? And does that mean those who do not go to college are doomed to shorter, miserable lives?

Of course not. Young people who opt for a trade or to start a small business instead of going to college can still stack the deck in their favor by working hard and saving diligently—no matter their job choice.

Writer Nicolas Wyman makes a strong case for bringing back vocational training to the high school curriculum to accommodate students “who are more mechanical or artistic, who learn by doing and would thrive in the studio, workshop or shop floor. “Almost 40% of students who begin four-year college programs don’t complete them, which translates into a whole lot of wasted time, wasted money, and burdensome student loan debt,” Wyman writes. “Of those who do finish college, one-third or more will end up in jobs they could have had without a four-year degree.”

In The Millionaire Next Door authors Thomas Stanley and William Danko argue that understanding how money works is the key to becoming a millionaire—college or not. That knowledge coupled with the discipline to delay gratification and the ability to work hard, be persistent, be frugal and patient is key to becoming a millionaire, they say.

When I present these findings to high school students, letting them know that most millionaires work in ordinary jobs like welding contractors, owners of mobile-home parks and paving contractors, they are stunned. They mostly believe that saving $1 million requires a glamorous job in sports or entertainment, or on Wall Street or in Silicon Valley.

In focusing on the value of a college or advanced degree, Yellen wasn’t wrong. But she missed a golden opportunity to explain that financial literacy–knowing how to save and invest, understanding and employing the miracle of compound savings and living beneath or at least within your means –are all “keys” to preserving and growing your economic success – essential skills for economic success even if you have a college degree in your pocket.

Respectfully, I think Ms. Yellen missed a great opportunity during this keynote to really help these graduates thrive in adult life by not stressing the importance of understanding how to manage the money you earn wisely.  I wish she had told them about the miracle of compound saving. I think they would have listened to her – or at the very least – it would have sparked a lively conversation at the graduation celebrations with their proud parents.

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Written by Susan Beacham
Susan Beacham founded Money Savvy Generation in 1999 after almost two decades in private banking and investment management complemented by considerable time teaching at the elementary level.

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