College Decision: Consider Opportunity Cost and Income-Generating Skills

Consider the irreversible impact and opportunity cost of going to college before choosing a path for future potential.

### Is College Worth It? A Critical Analysis for Teens and Parents
* 🎓 The video addresses the common societal pressure for young adults to **attend college without questioning the decision-making process**.
* 💰 It emphasizes the importance of considering the **opportunity cost of attending college**, including the **lost income potential** and **direct costs**.
* 📚 The speaker challenges the traditional notion that a college degree is necessary for success, especially in **income-generating fields**.
* 🏫 He suggests that education should be more aligned with business needs, focusing on **practical skills** rather than **general education**.
* 💼 The video promotes a **skills-based approach to education**, highlighting the importance of **income-generating skills** in various fields.
* 🤔 It encourages viewers to critically evaluate their future paths, considering **where they want to be in four years** and **which option will get them there**.
* 📈 The speaker shares a real-life example of a young man who **dropped out of college, entered sales, and achieved financial success**.
* 🎯 The video concludes by emphasizing the need for **self-education and continuous learning**, rather than relying solely on **formal degrees**.

this video is for every 17-year-old, 16-year-old, 18-year-old, 19-year-old who's considering going to college or quitting college right now. Should I spend the next four years going to college? Hopefully, I can equip the parents and the kids to make a call with as little societal pressure as possible. When I lived in Austin, my next-door neighbor was 18 years old. He was at this important decision in his life where he was deciding whether he was going to go to college. And I knew his parents. And it's kind of interesting because I sit halfway between his parents and him. So I kind of have both sides. He decided to enroll at Pepperdine. After a semester, he didn't really like it. And I think a lot of it was because it was just kind of expected that he'd go to college there. I had developed a rapport with him. And you know, he used to work out with me at my home gym after school and whatnot. And so I was like, Hey man, let's go for a walk.

and I think we walked for about an hour, and we just walked around the neighborhood. And I'm pretty sure that that conversation significantly shifted the trajectory of his life. There we go. All right. The reason most people go to college is because that is what's expected. They don't think about the decision, they just do it because it feels like the next natural path. It's the same thing for having kids and getting married and buying a house. But let's not get into that. He went from going to Pepperdine to dropping out. His friends, his family, his friend's parents started looking at him different. He was like the troubled child. He was like, I don't know about him. Two years later, he now has $250,000 saved up as a 20-year-old, makes $200,000 a year right now as a sales guy. What I want to do is break down the split in the road of two different lives that he could have lived or that you could live or that somebody that you know who's facing the decision.

could go through, and I'll tell you how the conversation I had with him went. What's up, man? So I said, Listen, you're at a crossroads right now. We have crossroads every day in our lives. I was like, But some crossroads are bigger than others, and when you're trying to make a decision, you have to think: How reversible is this decision? And how much long-term impact does it have? If I'm choosing between Chinese and Mexican for lunch, it's a split in the road, and it's really not going to affect much for me down the road. Choosing to go and commit four years of my life, between 50 and 200,000 of money, and the lost income that I would have made during that period of time, those are very big irreversible decisions and they need to be treated with the same amount of respect. A lot of people don't because they make that decision because their parents are selling them to, which seems like the overused one, but realistically because they don't want to be the kid who did it.

wrong who didn't do what they were supposed to do, and didn't do the next natural step. That's a terrible reason to go to college. I would like you to approach it with a decision-making framework that makes sense. So it starts with, and this is me telling him this, I was like, What problem are you solving? He's like, Well, I want to make money. So the question is, four years from now, if you have a degree and you lost the money and you lost the earning potential you had during those four years, is that you more able to generate income than an alternative you? Because what we have to analyze is not the cost of college, but the opportunity cost of going to college. The opportunity cost is the loss of potential gain from other alternatives when one alternative is chosen. So when we choose to go to college, there's an opportunity cost that exists, and it is the single greatest cost that people do not take into consideration. It's the cost of not doing of what you could have done in the meantime. One is it's going

to cost you money because you actually got to spend money to do it. The second way it costs you money is that you're not going to earn what you probably could earn full time working. If that's what you wanted to do, you got two sides there. If you spent four years versus starting a business, and then four years later, the opportunity cost is the business you could have started and what you would have four years later. So I'm walking with him, and we're this is like a one-hour really in-depth like this is probably deeper than he and I have been because I'm still this neighbor from across the street that like makes money on the internet, right, but his parents like trusted me enough to be like, you know, I know that you have a lot of influence over our son, and like we just want you to know that like we know you do, and so like please be careful. And I was like, I'm aware he's in good hands. Don't be afraid for what I'm going to tell your son. I was like, listen, if you

want to make money then you need income-generating skills. Do you think your philosophy degree, your sociology degree, your psychology degree, your economics degree, even which is still a little more useful, is gonna give you actual skills to make money? He was like, I don't know. And so I'm here to tell you what actually makes money. There's this lie that has been sold that you need to learn general education. I can tell you ancient Chinese literature has never impacted my ability to make money. Aztec culture, don't know anything about it, but it's classes and they somehow fool kids into thinking that if they take this class, they're now somehow going to be more equipped to add value to the marketplace. If Alex were redoing the education system, the majors would be in accordance to the departments of a business. You'd have marketing and it would have the actual ways to market, which is creating the materials of marketing and how to distribute it. You'd have sales, how to get strangers to give you money, delivery portion, which would be either physical

products delivery or services delivery. Which would be customer experience, customer success, or it'd be technical electrician, plumber, lawnmower, whatever it is. So then you have the actual technical component of the services delivered, and then you have the supporting services, which are like finance, HR, legal. Those would be the things that people should major in because those are the things that you're gonna get hired to do. Google stopped requiring college degree. Big tech corporations have stopped it because they realized it too that it's not value additive. If I'm a doctor or a lawyer, you need a degree, sure, but for the 99% of people who don't fall into six careers that you have to have one, people were like, Alex, you went to Vanderbilt. I graduated a year early, so I tried to get out as fast as I possibly could. One of the regrets that I have is that I could have started sooner, and the reason why I didn't drop out of college is because I was too, too scared to disappoint my

father, if you're gonna do it eventually, you might as well do it now. When I see the guys who are starting at 18, I'm like, man, I wish I had started then rather than 23. I would have five more years. Zooming back out, I'm walking in the street, we're talking together, and I told him this line. I said, The world doesn't need another 3-1 business degree from Pepperdine, another B student who graduates because he didn't really give a right. He would just do good enough that he would get through. And this is what he brought up. He's like, But what about like the social experience of college? I was like, So do you think that if you don't go to college, you're not going to be able to party with people who are your age? I was like, real talk. And he was like, Well, like kind of. If the problem to be solved is to socialize, there are way more efficient ways to socialize you than spending 200,000.

not making income. You can work all day and then make my objective for this period of time to have fun. Then work all day and then literally go out every single night and you'll end up debt-free with savings and have a hell of a crazy four stories. And that's fine if that's what you want to do. I was like, is that what you want to do? He's like, no. And I think at some point in the conversation, he's like, I kind of want to do what you do. And I was like, well, then you got to learn the skills that I had to start five years older than you to start learning, right? And the first thing was you had to learn how to sell. Let's just go down that path. If you're watching this, you're like, well, I don't like sales. I told you all the other departments that you could focus on. If you're like, you know what, I like being behind a camera, then cool. What do you think behind a camera means in a business? Behind a camera means you're

making content, you're making commercials. Pick one. That's what video is used for, right? If you're like, I like writing words, what do you think writing words are used for in business? They're used to sell or deliver, that's it. Or legal, to protect people from selling and delivering. I like dealing with people. It's like, well, it depends. Are you a little bit more aggressive? You might like sales. If you're a little bit more passive-ish, and I'm not saying it's a bad thing, you might like more of like the HR, or you might like recruiting, you might like selling people rather than selling products. Different ways to thinking about it. And so you can take your skills and then bucket them into which of these departments make more sense, and then that's what I'm going to focus on. Zooming back out, so I said, now we need to look at your 3-1 degree, $200,000 of debt, four years later, versus four years from now, you're gonna have saved money this whole period of time, so he's

living with four guys because i was like, dude, you're living cheap, that's how this works, so he saves a lot of money, which is why he has 250,000 saved up at 20. that's not from alex doing anything like he worked for it, he worked for it, he saved every dollar that he made. and what do you think he's gonna be able to do in four years, some people start his own thing with a ton of capital and skills as we're walking through these four years, what do we think happens now. he's like, i really like sales now. he happened to have liked sales, the blessing that he got was he had a mentor, which obviously was me. i could see his personality, i was like, dude, i think you'd do well here, and he did, like he did well. but if he was that camera guy and he really liked more of that stuff, or if he was really techy, i would have been like, dude, go start coding, and so all of like, you have this base skill and it's like, where do i want

to apply it if you're like I don't know, you're never going to know because how would you know, you know, by starting, and then you'll gain context to make the decision later. All you know is the experiences you have, and so all you have to do is just always look around every so often, be like, have I learned everything that I'm going to learn from this branch, and if you've learned everything you're going to learn, then at that point you can make the pivot, right? But if you're like, dude, there's still a lot for me to learn, do I want to learn, is it the direction I want to keep going? I remember when I did my first years of consulting, I looked down the road 25 years, and I was like, I don't want that life. This is a hack that I will give you for very big decisions, is that you want to keep thinking on it, keep chewing on it, keep digesting it until you can get into a single statement, which is for him four years from now given the cost, which of these

two paths will give me the most potential for my future, and he was like well, I think the other one, and I was like then what are you gonna do. So he decided to drop out, and he ended up going to sales, and he was terrified in the beginning. He sucked at sales because he had never done it before. Of course, he would suck, and of course, you will suck too because you haven't done it. But how do you think you get good? You start by sucking, and then you suck less. That's how it works until eventually you look back after hundreds and hundreds and thousands of repetitions, and you're like oh, I'm actually pretty good at this. And it's reasonable that you'd be good because you've done it a thousand times. He likes sales; it's probably gonna be the direction that he takes directly in his life. He's like what do I need to learn now? So I was like okay, how do you move up? It's like uh, I could start a business. I was like yeah. I was like what are you what skills.

are gonna need to start a business. I gotta know how to market. I was like, well, you already learned how to cold call. Like, that's your first acquisition channel. We got that handled, which is why I put them there. It's like, okay, so I have that so I can get customers. All right, and I know how to sell, so I got that. I was like, what are you going to deliver? It's like, well, I really do like teaching sales. So I was like, well, who have you taught sales to? He's like, I guess I have. I was like, hmm, sounds like a skill you need to have. He's got to learn the skill of how to transfer a skill from himself to somebody else. What are the other skills he's going to have to learn? Well, he's going to have to learn how to do finances. He's going to have to get contracts set up so you can have services agreements, things like that. But again, these are all googleable things that you can do. You can figure those things out.

in a couple days, it's not a big deal for the parents who are watching, and the kids who are watching this at home are trying to make the decision, is do I think that four years from now with 50 to 200,000 in absolute cost, and probably higher than that, an opportunity cost of the cost of the path not taken, which of these two paths will lead me closer to where I want to go, and if the goal is to make income, then you have to look at that 200,000 and all the things you could buy with that 200,000 in four years of time, and think, is there another way that I could reverse engineer four years to get me to where I want to go, or if you just really like the technical expertise that you have, you go super deep on the technical expertise, and then you bolt on one additional skill. This is the one skill I will give you that you need to bolt on to instantly give yourself the lift in whatever career you have. You gotta learn how to deal with

people, you gotta learn how to manage, you gotta learn how to lead. You're like, that sounds like the soft stuff, and it is, but it's also how you're gonna get promoted, it's how you get respect, it's how you gain influence. And you also realize that the technical thing that you're really good at is probably not the thing you're gonna be doing in the business. You just gotta know it well enough to teach it to somebody else. His parents came to me after like I talked to him, and they're like, Alex, can you please just tell me again on why he should be you're like telling him to quit college. I was like, I'm not telling him to quit college, I'm telling him to make the best decision for where he wants to be in four years. I'm not telling him not to get educated, I'm telling him to get super educated in the thing that he wants to do. The best people in the world, anything, learn for themselves, they are self-taught. If you can adopt that

mentality. Then the world is your oyster because you realize that you can learn whatever you want whenever you want. You don't need a certification or permission to do that. Which of these paths four years from now, given the opportunity cost, is going to get me furthest towards my goal. Here we go. All right, what's up, man? What's up? What's up? So I was responding to the comments that you had that they didn't think that you were real. So this is to my YouTube audience to know that Jacob is indeed a real person. Can you confirm that you lived as my neighbor next to my house and that we did work out every day after school? Yep. And then how are you now? I am 20. I still can't drink yet. Tough life. Um, so you're in sales now, right? What are you making right now? I'll probably hit 2.50. Nice to be king. And then how much money you have saved up? 210. Okay. So over, I, it was I thought

there's two i thought it was 250. i got the 250 mixed up so it's 210. what would you say has been the like the biggest mental mind shift change etc from uh from our talks in our chats that's a good question. [Laughter] well you decided not to go to college right. is that the walk that did it. i did i did go really aggressive on that walk to be fair. so you had now at that point been in school for a semester. what was the reason you decided to take that jump. i think that the the line that really hit when you said and i'm paraphrasing it it's mostly acceptable to fail at entrepreneurship because you're still in school and you're using it as a crutch. i think that that was like oh that's it yeah. so you were because you were dabbling on the side and you weren't succeeding at the entrepreneur thing which is what you really wanted to do and you were using college as a social

safety net to give yourself an excuse for why you weren't winning. Exactly. And so then you uh decided to go all in on it. Then we went all in. We did it all right. Say hi to me. You're in the closet. Say hi to Mozy Nation. So that is to confirm that Jacob is indeed a real person. Uh, with a real pulse and a real story. And if it worked for him, it could work for you. Thanks. I appreciate you. Go back to your sales calls. [Laughter] Jacob was lucky as hell that he just happened to have been my neighbor. Um, that's right, Jake. I could just tell that he was incredibly hungry. I knew that he had this really deep desire to prove himself. When I see something like that, I'm like cool. Like, and the way I tested that, I was like, shop after school every day. We'll work out. And I wanted to see if he would show up. And like clockwork, no matter what, every day he would text me. It wasn't like me.

having to text him or remind him. I knew that he had that desire and he would take as much as I was willing to give. If this video caused you to question a couple things or maybe even brought up more questions than it did answers because it opened up your mind to some things, what I'd recommend doing is watching this video. My video about how to analyze opportunities. And so if you're looking at, okay, maybe I don't do college but what path do I go on, that will give you the framework to make the decision on how you analyze opportunity in your life and a business that you might potentially start, etc. Hope you enjoy. They're like, when are you going to start like Hormoza University and like train these guys on the scales and maybe someday.

Why you should quit college.

Day Job: I invest and scale companies at Acquisition.com | Co-Owner, Skool.
Side Hustle: I make free content showing how we do it 


Alex Hormozi

Making the Decision to Attend College: A Life-Changing Crossroad

A personal story is shared about a young man's decision to drop out of college and the impact of that choice on his life.

The importance of considering the irreversible nature and long-term impact of the decision to attend college is emphasized, especially in terms of opportunity cost.

The conversation highlights the need for a decision-making framework that focuses on the problem being solved and the potential for generating income.

The Cost of College Education and Making Money

College education can cost money in two ways: the expenses of attending college and the missed opportunity to earn a full-time income.

The current education system may not provide the practical skills needed to make money, leading to a shift in focus towards majors that are directly related to business needs.

The social aspect of college can be obtained through more cost-efficient ways than spending a large sum on tuition fees.

Career Advice: Finding Your Professional Path

It's important to develop valuable skills like sales, content creation, or HR, depending on your interests and strengths.

Saving money and living frugally can provide a strong financial foundation for future career endeavors.

Having a mentor can be a blessing in finding the right professional path and leveraging your skills effectively.

Making Big Life Decisions and Gaining New Skills

When making big life decisions, it's important to continuously assess if you've learned all you can in your current situation before pivoting.

It's natural to struggle when learning something new, but improvement comes with practice and repetition.

When considering a new direction, identify the skills you need to learn and how to acquire them, whether it's through teaching, research, or seeking advice.

Considering the high cost of college, students need to weigh the future benefits against the opportunity cost.

It's important to focus on acquiring in-demand skills and the ability to work with people, rather than just obtaining a degree.

Self-education and skill-building can be valuable for personal and career growth, without always requiring a traditional college education.

Jacob's Decision to Leave College and Pursue Entrepreneurship

Jacob's major mindset shift came from realizing that he was using college as a crutch for his lack of success in entrepreneurship.

This realization led him to go all in on his entrepreneurial pursuits.

His determination and hunger to prove himself impressed others and ultimately led to his decision to leave college.