Elon Musk is easily one of the most intelligent and captivating individuals on earth. From founding companies like PayPal, Tesla and SpaceX, there's no doubt that he's made a tremendous contribution to the world we live in. While he's impacted the lives of millions of people with his life changing products and services, I have to say that personally he’s taught me an invaluable lesson when it comes to becoming wealthy. Simply put, he taught me one of the key factors that’s required to be rich!
Now you may be thinking, “I didn't know Elon Musk was a financial consultant amongst all the other things that he does in a daily basis” and I wish that I had personal access to him to be able to pick his brain but unfortunately I've had to learn this very important money lesson from him in a more indirect manner. But, before I explain exactly what this money making factor is, let me first start off by sharing with you how I stumbled upon this financial gem.
In early December, I was catching up on some finance news when I came across an article with the headline “Elon Musk on the problem with corporate America: Too many MBAs”. This headline immediately caught my attention. Before I even read the article, I felt personally attacked. Now I don't have an MBA but I do have a master’s degree so without diving into the details I figured Elon Musk was attacking people who had pursued extensive post-secondary education.
I probably felt victimized in this way because besides this article, I'd also come across another one of his videos where he blatantly said that you “don't need college to learn”. In fact, he doubles down on this statement when he says that employees at his company Tesla don't require a college or university degree to work there. At the core, Musk is much more worried about what knowledge and experiences employees bring to the table than the pieces of wallpaper that they paid thousands of dollars to obtain.
Moments after having this initial reaction, I thought to myself, “Well, Elon Musk does have some formal education therefore he can't be totally against the formal education system at large, can he?” Before I continue, I need to say that I am a huge fan of Elon Musk and everything that is doing to move our world forward. In fact, I think part of this kinship comes from the fact that he lived in Canada for a short while and studied at Queens University. Now I didn't personally go to Queens University but I did party there a time or two so I feel like this is where the connection between him and I stems from (If only some of his genius would have rubbed off on me when I had made those road trips down to Kingston!)
Now after this initial impression, I did eventually read the whole article and have to say that my reaction was definitely not warranted based on with the points he was trying to get at in his statement. Essentially, Musk was getting at the point that companies should spend more energy innovating and improving their products and services and less on creating PowerPoints and spreadsheets that keep the company and it’s key players away from the core of their businesses. As someone who has sat through hundreds of PowerPoint presentations I definitely agree that they have their drawbacks (on top of putting you asleep).
After reading this article, I began to wonder how much value formal education still has in our world especially when someone like Elon Musk doesn't even require it at his company (which I'm guessing many people would simply die to work at). Taking this thought one step further, it made me question how much, Elon’s formal education even contributed to his overall business success.
Elon’s Educational Background
You may or may not be aware that Elon Musk actually holds multiple degrees in economics and physics and while he is a businessman and an innovator, it can be quite hard to tie these two degrees directly to his current business offerings. In fact, the closest tie of his formal education to his current companies is the fact that he was enrolled in an energy physics program at Stanford University which you could definitely link to his SpaceX business. However, I can’t fail to mention that he was only enrolled in this program for two days before he dropped out, therefore I doubt that those two days really contributed much to his ability to build a company like SpaceX.
So how did Elon Musk create companies like PayPal, Tesla, and SpaceX amongst many others without formal education? The secret to his success comes down to his own self-edification. In fact, ever since Elon was young, he has been a big proponent of self learning. For instance, at the age of 10 he taught himself computer programming simply by reading through computer manuals and in another instance, he ripped through a six month coding book in just three days.
In fact, when asked what was the basis for his extreme intelligence and ability to work in so many different industries, he summarized his level of competency and knowledge in just three words “I read books”. However you could read a ton of books and never really get anywhere with all that information, which is why beyond just reading books, Elon Musk practices the 30/70 rule. This rule states that you should be learning 30% of the time and applying 70% of the time and in the case of young Elon reading about computer programming, the application came in the creation of a video game called Blastar which he then sold for $500.
While this example of self-edification was a small win, his independent pursuit of information really bared fruit after he started to study how to build rockets. This knowledge would be the foundation upon which SpaceX would be formed. After borrowing a couple textbooks from his friend, he started to study everything he could about rockets while also consulting industry professionals. As we’ve seen in recent years, he's been able to successfully launch these crafts into outer space and revolutionize the space exploration field as a whole.
Formal vs. Self-Education
As you can see, Elon Musk has dipped his toes into both the formal and self education worlds and as such I think it's worth going over what the difference is between the two and the pros and cons of each. Formal education, generally gives you the skills you need to do a particular job. An example of this would be a student taking a law program in order to become a lawyer. The pros of this approach to edification is that the path to income is generally quite linear. You study for a set period of time and once you get your degree you can often get a job after graduation (unless you’re me). The other benefit is that because formal education is widely accepted as being the common life path for most people, there is very little judgement that you'll get for pursuing post secondary learning.
Unfortunately, there are also downsides to pursuing this type of education. The first, is that it can be very expensive. In the United States for example, you can easily accumulate a student debt of over $100,000 to obtain a four year bachelor’s degree. Moreover, college and university curricula often struggle to remain up-to-date meaning that as a student you could be learning theories and applications that aren’t timely meaning that in a way you're learning obsolete information.
Self-education, on the other hand, leans on the more practical side of learning. For example, you may start to learn a given craft from a mentor or can shadow someone as they perform their day-to-day activities in their careers. The benefits of this type of learning include the fact that they're generally a lot less expensive than formal education and that you're not limited to learning subjects that are only offered at public institutions. Expanding on this point, the chances end up being much greater that what you are learning through self-education will be closely aligned to your interests.
The downside, however, is that it can often be harder to gain access to this type of education such as in a situation where you can't find a suitable mentor or your access to very niche pieces of information is limited.
As you can see, both types of education have their strengths and weaknesses however one is definitely more prevalent in society than the other and I think that because of this, many people limit the extent to which they can succeed financially.
Why Few People Succeed Financially
You see, most people rely only on formal education to gain their skills and expertise. You and probably most of your friends and family, attended some sort of post-secondary institution to gain the skills that you needed to get the job that you’re currently in. Again, this is definitely a reliable strategy when you want to start earning an income without taking on too much risk however it doesn't necessarily put you in the best position if you want to become wealthy.
First off, getting a degree that many other people possess will result in you having a very similar skillset to those around you. Because of this, it's going to take a lot longer for you to get your first job or move jobs later in your career simply because of how much supply there is in the market. Not to mention, if you have all the same skills as those around you, then standing out and earning a promotion will be that much more challenging.
Now, this is probably not news to many of you reading this which begs the next question of why the majority of people do not pursue self education and here are a few reasons that I was able to come up with.
The Aversion To Self-Education
The first reason people don't pursue self education is that there's no certification attached to it. This means that after you’re done educating yourself, there's nothing that you can show an employer that will be able to give them assurance that you have the knowledge and skills that you say you do. In fact, I think this ability to check an employer’s box is the only real value you get out of completing a post-secondary program other than maybe being able to take a picture with it alongside your parents.
The next cause of aversion to self-edification is that it takes discipline and commitment which quite frankly a lot of people lack. It takes a special type of person to come home after a long day of school or work and then fire up their computer to continue their learning in other areas that interest them.
Then, there's the fact that many people simply have an aversion to the common methods of self- education. What I mean by this is that if you were told to read as a kid, either by your teacher or your parents, and you really didn't enjoy it then chances are as an adult you won't want to crack open a book in pursuit of new knowledge. The same goes for taking online courses. If you've been in class all day listening to a professor drone on about some boring topic then you likely won't be that excited to be going home to watch more lectures even if the topic is a lot more interesting to you.
Finally, self-education can be limited to your access to channels that can offer you the information that you need did further your knowledge. For instance, it may be challenging to find a mentor in more specific fields of interest which will ultimately limit your ability to gain more knowledge that can help you get ahead.
Even with these roadblocks considered, self-education is something that we should all be striving for as it gives you the ability to learn more niche knowledge that you can use not only to satisfy your own educational thirst but also to differentiate yourself in either the business or employment world.
My Formal Education Experience
If you're reading this and you feel as if formal education hasn't got you as far as you thought it would then you're not alone. I too struggled with the limitations of formal education from the day that I graduated from university. Getting my first job was no cakewalk and in fact after searching for a job for a few months after getting my degree I decided to put a pause on my search and instead enrolled in a master’s program. As I mentioned above, being one in a sea of many others with the same credentials as yourself is never going to serve you well in a competitive job market and this was the this situation I found myself in. Luckily, by extending my education and getting two professional designations, getting jobs started to become a little bit easier. However, shortly after, everything re-baselined and I was once again in the midst of a crowd that had all the same accreditations that I did and again scaling the corporate ladder and increasing my income became an uphill battle. This is when I truly dove into my self education journey.
My Self-Education Journey
For the past five years, I have been totally obsessed with online business. In general, the idea of making money outside of a 9-5 job intrigues me and being someone who would classify themselves as not being afraid to be seen as an outsider, I figured this was a perfect path for me to pursue in my downtime. From trying to sell items on Amazon, to opening up a dropshipping store, my pursuit of online income was relentless and in most cases unsuccessful. Then I decided to double down on making money online and started to cultivate some skills that I could use to put a YouTube channel together. My self-education included how to set up a recording studio for my voice overs, how to use animation software, how to edit and upload videos to YouTube and how to run the blog that you're reading right now. Not to mention the student became the teacher when I decided to start making online courses which have been financially fruitful not just for myself but my students as well.
Upon reflection, I could never have pursued this alternate means of making money through a classroom setting. To my understanding, there's no four year degree on how to make videos on YouTube or how to build and market a course through Teachable. Admittedly, learning these skills felt more like fun than it did work and that is another overlooked aspect of self-education that should be highlighted.
Therefore, while Elon Musk didn't come to my class and teach me how to be rich, by learning more about his personal success story and how he has been able to build numerous successful companies he taught me one important lesson and I think it can be summarized very well by this Jim Rohn quote “ Formal education will make you a living, self-education will make you a fortune”