What Warren Buffett Can Teach Us About Finding the Right School
Over the last few months I have been rebuilding my website. It’s something I’ve wanted to do for quite a while, but as a non-techie the task seemed overwhelming. Plus I’ve always been more focused on the parts of my job that I love the most – research and talking with families about college.
Eventually, and probably so he didn’t have to listen to me talk about it anymore, my husband agreed to help me with the rebuild. But being the communications and process fanatic that he is, he insisted I take the opportunity to plan exactly what I wanted the new site to be – and identify my core message.
The first part was easy. I wanted to bring more of the content to the forefront so everyone that takes time to visit my site is able to quickly come away with something valuable and useful.
The second part was a little bit more challenging. It wasn’t so much that I didn’t have a message, I have lots of messages that I love to share, but the act of distilling everything you have to say about your passion into tiny, scannable snippets is really difficult! It felt a lot like writing a college essay!
“In other words, Harvard isn’t valuable in isolation. If you dislike the experience so much you can’t bring yourself to study, transfer before graduation, or graduate at the bottom of the class, the value you extract is debatable.”
In the end I realized my message is very similar to the principle of value investing. Yes, I did just say value investing, but let me explain!
Value investing is the investment strategy that Warren Buffet used to become one of the world’s wealthiest individuals.
In a nutshell (and in very basic terms as I’m in no way an investment sage), value investing is about applying rigorous analysis to identify securities (e.g. stocks) that are underpriced with the idea that they will realize full value over time. It’s not about buying the lowest priced stocks on the market anymore than it is about buying the most expensive. It’s about investing in the most valuable…the best bargains. Goes to show what you can learn when your husband leaves his investing books lying around!
But to bring it back to something more familiar to most of us, it’s very much the same with buying a home. Before buying a new house most people conduct extensive research – research that goes far beyond price, location and size. They begin by assessing their own needs, projecting as far into the future as possible; then go in search of properties that not only fulfill those needs and pass a rigorous inspection, but come at a fair (and ideally favorable) price with room for appreciation…all while making difficult distinctions between various ‘comparables’.
And that’s exactly the way the college search should be!
Like a house, college is about much more than location, rankings, and fun.
Now obviously schools aren’t the same as stocks or houses – and that poses some unique challenges when trying to differentiate. Whereas a stock or a house is fundamentally the same no matter who purchases it; college is a bit different.
College is less of a “thing” and more a string of interactions, experiences, connections, and impacts. Sure there are rankings, buildings and graduation statistics, and those should absolutely be assessed as part of the due diligence process, but they only make up a small part of the bigger picture. They can only go so far in predicting how any one individual will fare, and what they will experience, once on campus.
Take me and my husband for example. We attended the same university for many of the same “brick and mortar” reasons, but our experiences and feelings (about those experiences) couldn’t be more different. We both did the same level of surface research and, as such, both took more of a chance than a strategic decision. One of us paid a heavier prices for that than the other.
In other words, Harvard isn’t valuable in isolation. If you dislike the experience so much you can’t bring yourself to study, transfer before graduation, or graduate at the bottom of the class, the value you extract is debatable.
So the question becomes, how can you assess the value of a given school?
For me it begins with a shift in the way we think about the college decision. As I’ve talked about in other posts many of us have a tendency to look at colleges like products on a shelf. We look at the branding, tour the buildings, review some key statistics, test the idea on friends and family, and try to project how useful the degree will be in the immediate aftermath.
And that is exactly what we should do…to start!
But once we start to move from a broad target list to a short-list we need to find a way to differentiate similar schools to find the best values.
We need to isolate each schools value proposition – that is, what they purport to offer that is unique, and how that is going to move you toward your goals. This applies even if your goals are still a bit uncertain.
For the better part of this year I’ve been working on developing a model to help students actually quantify this next phase – to be able to directly compare their informed gut-feel with a view based on analysis. I plan to have it ready for my workshops in the spring of 2017!
The model is based on a series of deeper questions; questions that go beyond the typical surface analysis of the five pillars (geographic, academic, financial, extra-curricular, social). I want to give students an easy way to identify the likely long-term impacts of their decision…the value part of their college investment.
The key to a wise college investment is to remember that only you can make it! (photo courtesy of Tachina Lee via Unsplash.com)
What are you truly getting in return!?
To give you an idea of what I mean, I want to give you a few question for each pillar – questions that you may not have considered while assessing schools, but that form part of the long-term value of your college choice:
Geographic: how will the location of your school impact the time you can spend with family and friends long after graduation? Will you be okay if your best job opportunities are across the country from your parents, or leaving your friends behind to return home after four years? Will you find it hard to settle later in life if you never have an adventure away from home?
Financial: How much debt are you willing to take on? How much can you expect to earn in the early years after college? Will your debt hinder your ability to follow your passions…will that be worth it?
Academics: what does the alumni network look like within your preferred area of study? Are the alumni active on campus, as mentors, and have a track record of helping students land jobs? What will the school offer you 15-years down the road; perhaps when you lose your job or want to change careers? Are the professors accessible and experienced in your desired field?
Social: who are your classmates and what are their ambitions? If you were to become the average of the five people you spend the most time with, what would that look like?*
Extra-Curricular: how will you fill your free time? You will likely have more free hours in your day than you will have at any other point in your life other than perhaps retirement.
As I close I just want to say that there are no right answers to these questions. It’s all a matter of personal preference and can only come from knowing yourself and how you thrive in the world.
But what I do want you to take away from this post is that college isn’t a next year thing, a four-year thing, or even a six-year thing. Whether the money comes from your own pocket, a scholarship, a grant, a forgivable loan, or a money tree, it’s a massive investment and you have a right to expect consistent returns over a long-term horizon. But only you can determine what type of returns will give your investment true value.
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Until next time – keep smiling! You’ve got this!
* I must give credit to Jim Rohn for his quote on the five people with whom you spend the most time.