(by reader identified only to me)
As my regular readers know, I am open to publishing "Guest Posts" from readers, even where I don't always agree. It keeps the blog alive. I decided, "why not?" and I'm publishing this guest post although I disagree with the logic behind nearly each assertion.
I have run into this line of thinking over and over again (both inside and outside of the frum world, a la Rich Dad, Poor Dad) and figure a healthy discussion might be of use. I am saving my own commentary for an upcoming post. (Which can be hard to do because I have very strong feelings regarding the subjects at hand! But I do have a carpool line to get in soon).
Additionally, I have another guest post on the subject of Jews, Jobs, and Employment. Watch for it in the coming days!
Question: are we BTs in the corporate/professional world falling prey to the "get good education/grades = get a good job = get a good salary = good lifestyle & retire" mentality?
In other words - there is a POV which says that w/o a proper secular education, BTs aren't seeting their FFB kids up for financial success - before we get into that - look at the above equation - that is an employee mindset - what about the entrepreneur mindset?!
The question really is - do we want to raise our kids with a employee mindset? If so, then secular education is a must [although it could still be argued]. I would propose that if we really want to set our kids up for financial success - teach them an entrepreneurial mindset! Why?
#1 - it doesn't require an MBA.
requires a knack/skill for how to create & deliver value
employees only get rich on IPOs, stock options, etc - that died with the .com bust.
employees can be financially comfortable - but @ what cost to work/life balance?
#3 - it seems the entrepreneur path:
is most like the traditional "old world" Jewish professions: baker, blacksmith, wagon driver, farmer, etc
avoided secular education & anti-semitic issues
frum education teaches the linear & critical thinking skills necessary for entrepreneurship
math & english can easily be made up for as an adult - look at people from India, China etc who have ESL - english as a 2nd language - its true they know math & science, but I believe they are taught how to think vs the American secular system which emphasizes memorization.
the secular world advocates the advantages of entrepreneurship.
they are now saying the rules have changed - the formula of "get good education/grades = get a good job = get a good salary = good lifestyle & retire" is "old school" & has changed thanks to the advent/advancement of technology and the global economy.Back to an employee mentality - there are many skills that can be learned [programming, networking, graphic arts, plumbing, electrical engineering, etc] where the FFB could get a BA from an accredited Yeshiva - then either apprentice [plumber, electrician] or self learn [[programming, networking, graphic arts] with a sort of certification attached.
I believe the economic downfall is due to a lack of entrepreneurship - we forgot how to provide real value [another article unto itself
in summary- our "Orthonomic" challenges would be solved if:
we taught our children how to be entrepreneurs.
taught proper saving habits, living beneath your means [get rid of keeping up with the Goldbergs mentality] & no credit cards [except for emergency [tow car example]].
reduced the costs of simchas to a set $$$ amount in a community
created virtual learning to reduce tuition costs
38 comments:
Rich Dad, Poor Dad, is a terribly book, and it has been torn apart many times over in the personal finance blog o sphere.
Now, speaking as the child of small business owners (my father is a realtor; my mother owns an independent toy store), I think many people have confused ideas about entrepreneurship.
1. Most entrepreneurs don't get rich. I know many, many small business owners; most of them draw about $40,000 a year in salary.
2. By starting a small business (particularly if you are not working another job) you are taking a tremendous risk. Small businesses have incredibly high failure rates.
3. For the amount of money you make, the per-hour salaries are very low. My mother's store is open 8 hours a day, 6 days a week. She needs to get there early to open, stay late to close, and she comes home and does bookkeeping and ordering for several more hours.
4. No time off. Most small business owners don't earn money if they don't work. There are no sick days. You can't easily take time off to go on vacation. If you're serving people outside the frum community, you're not going to get chagim off.
5. It is very hard to move back into the labor market, particularly into a decently paying position. Most hiring managers don't understand well the skill set a small business owner needs, and they don't understand how to use a former (or current) small business owner as an employee. It can be very hard to transition between the two.
Most people who don't have experience with small business ownership are unaware of the unique demands of it. The post you're presented, as well as the book your recommended are highly unrealistic about the challenges and realities of small business ownership.
Thanks for your comments Margaret. My parents are also small business owners.
I would NEVER go into business to "Get Rich." You have a better chance of going broke.
I would NEVER go into business thinking that it is the key to having control over your schedule. There are a lot of demands and those demands will more likely control you.
That said, there are a lot of reasons to go into business for yourself.
Again, it's an issue of one size does not fit all. Not everyone is cut out to work for someone else and not everyone is cut out to be an entrepeneur. I suspect that far more people can be good employees than can be good entrepeneurs. Nor, as has been pointed out, is working for yourself without tremendous sacrifice and tremendous risk. It is not a get rich quick scheme like the author suggests. The guest post is rather simplistic. I also strongly disagree with a notion that if someone plans to be self-employed, they can forego getting a good secular education. There also is no discussion of how to be a good entrepeneur.
In the last post on a vocational school I asked what the kids would write about if reading wasn't a component of the education? Same here, what will you sell without the prerequisite of an education? Yes, there are businesses you can go into without the degree. But, plenty of small business owners not only have the degree, but they also spent plenty of time learning their trade in a position of employment.
I'm really getting tired of these posts about how you truly don't need education to make a good parnassa - doesn't anyone realize that NOT EVERYONE HAS THE SKILLSET OR RISK TOLERANCE NECESSARY TO BECOME AN ENTREPENEUR?!
Bald Guy:
Although not everyone has the skillset or risk tolerance to become an entrepreneur, that does not mean that an education or even a good education will lead to a good parnassa. Maybe you have missed all the recent news articles about people with advanced degrees not being able to get jobs. Add to that the pressure of the tens, if not hundreds of thousands of dollars a good education costs and people are finding themselves in a quite a difficult situation.
Again: while entrepreneurship is not for everyone, a good education does not mean a good parnassa either.
Saying everyone should be an entrepeneur is like saying everyone should be a star athlete. It's great money and probably very satisfying for the few who have the talent and drive, but many people would starve. What we need to do is expose children to a range of options and give them a solid broad-based education to help them figure out where their talents lie and give them the skills to develop and use those talents, whatever career path that may lead them down, whether as a professional, a craftsperson, a skilled tradesperson or as an entrepenuer.
"employees only get rich on IPOs, stock options, etc - that died with the .com bust."
This sentence makes absolutely no sense- employees never get raises? Retirement contributions? Employees never get rich by saving more and spending less?
And I have a news flash for the author- startups are alive and well here in Israel (don't know about the states really). My husband is an entrepreneur- but he works 18 hours a day, travels way too much and only got to where he is after getting degrees in computer science, math and physics and putting in 13 years in the IDF.
I think it's criminal to claim that secular education isn't necessary to making a decent living today. What if your kids don't want to be a baker or a blacksmith? What if they want to be a software engineer or a pediatrician- both very respectable careers for frum Jews? Why force them to play catchup like Indian and Chinese immigrants when they have a right to free education for kindergarten?
You're living in a dream world and only for your children it will probably end more like a nightmare.
sorry, that was supposed to be "from kindergarten"
Entrepreneurship is a fine thing, but it's not magic pixie dust that generates guaranteed wealth (or even guaranteed middle-class-ness).
An entrepreneur who is selling goods or services to the non-frum community needs to be able to understand their needs. While you don't need an MBA to get that understanding, I think that for most fields, FFB entrepreneurs who have spent their entire education inside a frum bubble are not going to understand their non-frum customers as well as their non-frum competitors in the same business.
(Of course you can also be an entrepreneur selling stuff within the frum world, but that's not a general solution--the whole community can't subsist on "taking in each other's laundry".)
My rejoinder to this poster's la-la-land fantasy is a quote from Bill Gates, our favorite college-dropout-turned-entrepreneur: "When you hear success stories about people who quit college, it may be tempting to believe that education doesn't matter for the entrepreneurially minded. But unless a person has an idea that's very time-critical, and is concerned that he or she might never have as good an idea ever again, it's probably better to finish."
'Nuff said.
Buried in the gross overgeneralizations in this post, there may be some kernals of truth. For those kids who are cut out to be entrepeneurs, are they given the skills and encouragement? Are school days too long preventing teens from getting jobs working in small businesses? Are some of the role up your sleeves and get your hands dirty types of work required by many startup and small mom and pop businesses discouraged?
It would be interested in knowing if the percentage of business owners is different among the OJ population than in the general population.
It would be interested in knowing if the percentage of business owners is different among the OJ population than in the general population.
No demographics that I know of, but if I were venturing a guess amongst primary breadwinners in RW communities, I think the rate of self-employment would likely be greater than the general population. If we are looking at the rates amongst secondary breadwinners or those with side jobs, I think we would see an even higher rate of self-employment.
In MO communities, the rate of self-employment probably mirrors that of general society. If I was taking a guess, I would guess that BT's in both MO and RW communities mirror the rates in general society.
As for this: Are school days too long preventing teens from getting jobs working in small businesses? Are some of the role up your sleeves and get your hands dirty types of work required by many startup and small mom and pop businesses discouraged?
I this YES, YES, and YES would be the answer.
In additional to all the other points made in the comments above, the guest poster clearly does not know anything about education in China or India or any other foreign country. America is hardly the worldwide leader in rote memorization!
One of the biggest critiques of Chinese education and other similar foreign systems is that it is all about rote memorization (including related to math or science), culminating in high pressure exams at the end of secondary school (which determines if you can go on to college, advanced education, etc.). Our educational system introduces far more opportunities for creative problem solving.
Beyond that, Chinese students must learn LANGUAGE. They simply do not learn ENGLISH as their primary language, because they write CHINESE and speak a dialect of it! The fact that adults can learn english as a second language (and let's face it, fluency is severely compromised by delaying introduction of a second language after the age of 10), has nothing to do with what foreign students learn in their own native countries. Due to the complexity of the character-based written system and the differences in spoken dialects, Chinese students spend a tremendous amount of time copying and learning characters!
I appreciate the effort to include alternate viewpoints on the blog and to stimulate discussion. But if the discussion is simply "Wow, your guest poster doesn't really know very much about the topic," I'm not sure how productive that is...
Entreprenurship and being an employee and/or being a professional are not mutually exclusive. Often the most valued and highly compensated employees are those with the best sales or customer services skills or those with the vision and creativity to see a new market niche and how to fill it, or better yet, create the market.
Many professionals are small business owners, whether as a solo or a member of a partnership, including lawyers, accountants, architects, dentists, drs., etc. Knowing how to run a businesses and how to get and keep clients is key.
The poster states "math & english can easily be made up for as an adult - look at people from India, China etc who have ESL - english as a 2nd language - its true they know math & science, but I believe they are taught how to think vs the American secular system which emphasizes memorization." Yikes. For many, math and english cannot be made up for as an adult. The asian immigrant example doesn't work because either immigrants come here already knowing english or having vauable scientific or engineering skills (and, yes that means math) or its the second generation -- brought up to highly value secular education that succeed so well. The comment about secular education focusing on memorization is sorely outdated. There is no more memorization in secular education than in jewish religious education. Of course, some memorization is necessary -- multiplication tables, the table of periodic elements, geography, etc. and that is fine as long as its combined with the concepts.
I appreciate the effort to include alternate viewpoints on the blog and to stimulate discussion. But if the discussion is simply "Wow, your guest poster doesn't really know very much about the topic," I'm not sure how productive that is...
Just give me time to post some thoughts.
"are we BTs in the corporate/professional world falling prey to the "get good education/grades = get a good job = get a good salary = good lifestyle & retire" mentality?"
I see so many chareidi-type BTs emulating FFBs to the max, even the traits that aren't so admirable. Why can't we admit that BTs are not inferior to FFBs and don't have to copy them in every way???
Entreprenuership doesn't provide a risk-adjusted return. I've ran and sold a business, it's a LONG hard slog, the tax system screws you, and the lack of stability early on is a killer. The S&P 500 rises faster than the GDP growth rate, meaning the profits in the 500 largest firms (more or less) grows at a faster clip than the overall economy (adjusted for survivorship bias, etc). Successful businesses make money.
Does running a business require an "MBA?" That depends, you want to have a funded Startup with investment capital? It doesn't require an MBA, it requires an MBA from Stanford, Harvard, Penn, Yale, or MIT. If you want to run a business without seed capital from investors, better be able to build it up. Want to bootstrap off clients? Sure, can be done, some will make more than a day job, some less, but unless you have a real product/service and a staff, you aren't likely to make much more consulting on a 1099 than you are working on a W-2... maybe more, but not 20x.
A bigger problem, startups without capital involve people toiling away 7 days/week for little to no pay while starting a business... that's fine if you are 22 without student loans, that's NOT fine if you are 25 with 3 kids and a pregnant wife...
Individuals can go and build a business, but planned entreprenuership is hard.
Those traditional "Jewish" fields? Those weren't Jewish fields, those were the jobs held by poor landless peasants in Russia, Jew or Gentile, stop watching Fiddler on the Roof and reading crappy (but fun) books for economic advice. (BTW: I actually recommend people read Rich Dad/Poor Dad, because while the stories are exaggerated and clearly not a finance book, the idea of wealth generating assets, etc., is different from what you read in CNN Money, and it's nice to get different ideas.
"I appreciate the effort to include alternate viewpoints on the blog and to stimulate discussion. But if the discussion is simply "Wow, your guest poster doesn't really know very much about the topic," I'm not sure how productive that is.."
I completely agree with offwinger. If you would like the inside story of how starting a startup works from the ground up, I'm happy to share our family's experience.
As others have pointed out, Asian entrepreneurs in the U.S. are succeeding despite an education of rote memorization; the guest poster has the strengths and weaknesses of U.S. vs. Asian education systems exactly backward. In any case, these are the outliers, the people smart enough or crazy enough to move 8,000 miles from home and start a business. There are Americans making a fortune in China - it's the opposite side of the same coin, and a terrible example for making generalizations.
A solid classical education is statistically a very good bet - and keep in mind that many of the most successful entrepreneurs started out as corporate employees first. You can also be quite entrepreneurial within larger organizations - in many cases, you have to be - providing both opportunities for personal and financial growth and lowered risk.
That said, there is a kernel of truth to the post, too. Too many of us steer our children and ourselves into "safe" occupations with limited upsides. Entrepreneurship 101 ought to be a required course in our high schools. The community needs more people who own revenue-generating assets, and there are so many people who really would thrive with more personal control on the type of work they're doing, more ownership, and even more risk. However, I would make this mandatory for everyone, if only to disabuse the idiots of the notion that owning a business is automatically more lucrative than "working for the man." I'm really tired of talking otherwise sensible people out of real estate or multi-level marketing "opportunities" simply because they were never exposed to basic finance and risk/reward calculations.
Abbi-I'd love a guest post (orthonomics at gmail dot com).
I can attest to the fact that a high level of education does not necessarily translate into high level of income. However, I still believe there is value to education for quality of life beyond gaining more disposable income. I know that is heretical to say in today's frum climate in which you can allow just about anything that "really" is assur like college, the internet, money laundering (kidding!) for the sake of paranassa. But this was not always the attitude in the yeshivishe world. See http://kallahmagazine.blogspot.com/2008/06/what-justifies-yeshiva-bachurs-study-at.html
For everyone making the negative comments about this not being a useful post, it does bring up some interesting questions and a different perspective. I don't think I've seen the issue of entrepreneurship discussed on this board before. I, for one, would love to hear more specific, concrete information and examples about how this is taught (if it can be taught) or at least fostered and some real life examples and success stories in today's economy and how this applies in the frum community. Most of the successful small entrepreneurs I know started off very small from work they did in their teens and had a passion for. For example, someone spent their summers during high school and college working for someone else painting houses. After college, he started his own house painting business, starting small with one truck and some ladders. Now in his late 30's he has several crews and does about 300 houses a year (I'm guessing at about 8 -10K per job, that means at least 1000 profit per house). Another person loved working on cars, got a job helping after school at a garage, saved up and rented a small garage with just two bays. Gradually he expanded his business and has a repair shop with 6 bays, 5 employees and is always busy.
From my own experience and the experiences of many of my friends the entrepreneurship mindset is what has many of our community currently unemployed. I have conducted several workshops and reviewed dozens of resumes and can honestly say that the reality is that I would hire a non OJ with 2-3 years of experience over an FFB with 5+ years of experience. I can hardly get any of the recruiters at my company to look at the resumes I send them!
How can I help someone get a job when they went to Touro in the 90's for business, have a 4 month certificate in IT from Pace, worked at IDT for 7 years in Sales and now want a job as a software engineer?
I am not exaggerating, this is a typical request I get. There is very little career path, progression or development of skills.
The hardest one's to help, and these are the one's I see most often, are the entrepreneurs who now want to get into the workforce and hope to get paid $100K+ because that was what they were able to make in a good year on their own.
Our best bet as a community, and this I am taking from a look at my own situation and the situations of many of my friends, is to force our kids to get a proper education, proper internships and experiences, look for growing fields with high potential and to always develop their skills. Many of my friends and I have lost their jobs over the past few years, I have lost mine 3 times in the past 5 years, but BH because of our Hishtadlus we were employable and able to find new jobs relatively quickly.
Thinking: What field are you in with you and your friends losing their jobs every few years? IT?
The growing areas of the future where more kids need to be directed is life sciences/biotech and alternative energy. However, these often need advanced degrees.
According to the U.S. Small Business Administration, over 50% of small businesses fail in the first five years.
1: Good luck tring to find a job with a "certificate".
2: (It seems to me that) The poster is looking to get "rich" or "comfortable", not "able to pay tuition". Looking at it from his/her perspective, it makes sense to either get rich, or strike out & not pay tuition (after all, you are bankrupt) than have to struggle with "work/life balance"
Man this post made me angry.
I hate personal attacks, but reading this post was difficult and further emphasized for me the need for a strong secular education.
The entire attitude of this post is wrong. As someone who has a strong secular education and is married to a woman with a strong secular education, I can attest to the fact that it's quite possible to do very well working for others. We both have very good jobs and make good salaries. And I would note that the level of risk we took on to get and maintain our jobs/salaries is negligible.
This post comes from the same mindset I encounter routinely from yeshiva bochurs when asked what I do. Namely, "Oh, I could be doing that if I wasn't learning. I always had a knack for that." Great, you and everyone else has a knack. Get someone to hire you based on a knack. What all these people lack - and what the post seems to forget - is the incredible dedication, hard work, education, and skills that are required to make a living whether one is working for someone else or self-employed. The jobs/salaries that my wife and I have are the product of YEARS of hard work and making the right decisions no matter how difficult they are.
It's a complete fallacy that "working for yourself = rich" to use the same laughable equation the post has regarding working for others. My uncle runs his own business and I worked for him for several years as his business is in the same field as I am. My uncle worked for others for over 20 years, got an MBA and other advanced degrees, and had tons of contacts and experience before going into business for himself. Now, over 25 years later is he FINALLY comfortable and successful. Still, he's by no means "rich." And you know what? He works like a dog, hardly ever takes vacation, and has stress knowing it's all on him and that the next venture might fail and he could lose a significant amount of money. The idea that someone can magically put up a sign and customers will come is just fantasy.
Furthermore, this kind of mindset leads to the arrests for tax evasion and fraud we have seen recently. At a minimum, secular education is needed to keep one abreast of taxes, permits, employment law, etc. And besides, what job doesn't require some degree of secular education? I never read a gemara on how to bake bread or cakes or how to sew garments or fix plumbing or cars.
As for getting a degree from a yeshiva, unless they have a serious program that teaches real skills, you're kidding yourself. In the secular world, degrees matters. Maybe in the frum world you hire yossele even though he has no degree, but in the real world degrees matter, resumes matter, skill sets matter, and proper English matters. Having a degree from a top institution opens doors. Having one from a lesser known school doesn't. I used to be in the math/science fields and it's simply not true that "calculus is the same everywhere." The top schools teach it better, teach it in more depth, and force you to complete more difficult work so your knowledge is deeper.
Anyone can program. It's really not all that difficult. But, find me someone who understands algorithms - someone who understands different ways of approaching a problem and proving a solution works and will work within certain bounds. The degree you get will determine whether you can program or whether you can solve problems. And the difference in salary between the two is astronomical.
Maybe more thoughts later.
Any discussion along these lines needs to include an analysis of the current administration's planned interference in the economy, including the imposition of new regulations, obligations, and taxes on small business owners.
I want to add the following:
I'm all for entrepreneurship. What I am against, however, is the constant denigration of secular education in our communities. You want to promote and boost entrepreneurship? Great. But, don't do it by claiming secular education is unnecessary or obsolete or leads to a lack of financial success.
As for teaching entrepreneurship, it can be done to an extent. I took some classes in it at college. It's really no more than a business class with the focus on innovation. The thing that can't be taught is the fact that people have different tolerances to risk. Some people throw caution to the wind and try something, no matter how crazy, and don't care if they fail. Others wouldn't start their own business if it had a 99% chance of being successful.
Some facts instead of suppositions would have been nice here. Because of the number of dialects spoken in India it is ENGLISH which is the primary language, and has been since around the time of the British Raj. The Asian schooling systems do NOT emphasis independent thinking but count on rote memorization and learning.
Re: "it seems the entrepreneur path:is most like the traditional "old world" Jewish professions: baker, blacksmith, wagon driver, farmer, etc
avoided secular education & anti-semitic issues." It should be noted that at the time that these professions were both available and necessary secular education for the masses was not available in large parts of the world, and/or where available did not go beyond 6th grade. A high school education was not universal and was available only to the upper classes, and only some of them. College was strictly the province of the upper, monied classes. The Jews did not freely choose these entrepreneurial professions--it was what was available, both to them and most of the secular world as well.
My parents owned their own business for many years. They made sure that all of us had a college education and beyond because they saw that education as a tool for NOT having to be in business. They worked long hours and no, they weren't "rolling in dough."
Employees don't make much money?
Depends on the level of education, the skills attained, the field and the drive of the employee. Those in our neighborhood who "made it big" in business, with only one exception, all began their working lives as employees, got experience in how the business world works and yes, had college degrees as well.
It would be interested in knowing if the percentage of business owners is different among the OJ population than in the general population.
October 14, 2009 4:56 PM
a friend of mine once analyzed this type of statement saying since chassidim generally dont have education skills (refering to another post by orthonomics) they have to go into business, which is why you (supposedly) have a high number of "rich" chassidim vs "rich" MO (and other jews; or for that matter the general us population). since more chassidim are self made businessmen, there is a higher number of them (not necessarily %age) who are very successful.
which leads me to say:
2. many entrepreneurs are really just "buying" themselves a job by starting their own business.
Why is there a fear in our community of education. We are a people that has always prided itself on education. Our entire religious system of laws and traditions is a written series of discourse between well educated men (educated in the sciences, arts, literature, history, culture, etc...).
Since when is knowledge the enemy?
There are entrepreneurs and then there are entrepreneurs. :>)
Just wanted to second what others have written about the educational systems in much of Asia. The guest poster did not do his homework.
Also, my wife and I both do very well as employees.
OMG - I so disagree with this post.
One - education is needed. If you don't teach children math they will never learn how to think logically. By the time they are adults their brains are already wired and learning logical thinking = math becomes impossible. Same applies to communication skills. One must learn how to communicate well and properly, and learning English in school in childhood is a way to acquire that skill. It is true that those Chinese immigrants do not have a full grasp of an English language, but they learned how to communicate in their native language, so they are able to apply that skill in the professional environment.
Two - Not everyone has a personality to be a businessman. There are many professional people who are doctors, lawyers, scientists, engineers and etc. who are highly educated and make tons of money, but they are unable to run a successful business. Shortcutting these people by eliminating a path via higher education will force them to suffer in poverty and will remove the benefits of accomplishments of these individuals from our society.
Three - fields such as programming, arts and etc may not require a college degree, but without a full grasp of the secular society people with these skills will not be able to progress far, because they will not understand the assignments and will lag behind in their application. For example if I need to set up a web page to promote sales of rap songs it would be very stupid to hire a web designer who knows nothing about rap culture.
Four - I read Poor Dad, Rich Dad and he did not say that education is bad or that people shouldn't be employed. In fact he described how he had jobs in various sectors and how that provided him with education that enabled his making lots of money. What he claims is that specializing in one field is risky, while a specialist is very valuable in his field and very well paid, once that field is outgrown with modern technology and progress, this person is left behind without any other skill to fall back on.
JD2be - while it is true that people with degrees can't find jobs because of the recession, it is also true that many businesses are failing because of the same recession.
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