At 55 years old, Dr. Lin has been practicing dentistry for close to 30 years.  He grew up in Oakland and attended UC Berkeley for undergrad thanks to his stellar academic record.  When he graduated, Dr. Lin’s parents gave him three choices of what to do with his life: 1) Dentist, 2) Doctor, or 3) Lawyer.  Not very pleased with his limited choices, Dr. Lin choice the “easiest” of the three and became a Dentist by going to UCSF.

I first met Dr. Lin at an SF Giant’s baseball game our respective private bankers invited us to.  Despite the 20 year age gap, we connected immediately through a common interest in the stock markets.  Dr. Lin kept on telling me to buy dividend stocks such as BP and Coco Cola because they were “risk-free” investments with a guaranteed dividend return.  It’s how his mother got rich, and it’s how he is getting rich now.  Given any investment enough time, and chances are, things will turn out alright.

When I asked Dr. Lin about why he invested so much of his net worth in dividend stocks, he responded, “I’ve got two college age sons, and they are expensive!”

HUNDREDS OF THOUSANDS OF DOLLARS FOR COLLEGE TUITION

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Part of my goal during sabbatical is to explore other opportunities. I’ve been in the private sector for 13 years and I’m looking to do something else. I’ve been fortunate to save a good chunk of change during this period of intense capitalism. Furthermore, with the creation of an online business to keep food on the table, there’s no need to do anything just for money anymore.

A key reason why I loved getting my MBA part-time for three years was because I didn’t have to worry about getting good grades. I already had the “dream job” many MBA grads aspired to land – working as a Vice President at a major investment bank. Going to graduate school was purely for the sake of learning and meeting interesting people in various fields of work.

Once you make enough money to feel comfortable, making more money no longer becomes interesting. What I’m more interested in is further self-actualization, service, and giving back to the community.

A LIFE IN ACADEMIA

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Pick any private school.  The cost is about $200,000 over four years.  These figures don’t surprise anybody anymore given the ever rising application volume to storied institutions such as Harvard, Yale, and Princeton.  That said, there have to be some who believe $200,000 for a private school is a hard pill to swallow over an excellent public school for just $40,000.

With an estimate 17% of people aged 20 through 24 unemployed, swallowing a bowling ball may be easier than finding a desirable job post graduation.  Let’s say you are one of the unlucky few who can’t find a job after a $200,000 education.  Does it really matter? Let’s think about why it doesn’t really matter from the eyes of several recent graduates.

THE BOY WHO WAS FORCED TO GO

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As a pro public school guy, my ears always perk up every time friends talk about choosing private high schools and colleges for their kids in San Francisco. Like many large cities in America, San Francisco faces the same dichotomy of a deteriorating public school system that is a result of years of underfunding and a rising private school system that is difficult to gain admission to due to an undersupply of positions.

The only solution is to raise taxes to raise salaries to attract even better public school teachers. We just aren’t paying our educators enough, and that’s a travesty. The biggest irony in large cities like Manhattan and San Francisco is that those who pay the most taxes are homeowners, yet many homeowners send their children to private schools. If we can better focus on raising taxes on people who use the services, we’d have a much stronger system. But logic never wins when it comes to politics, power, and greed.

I’ve always heard about wealthy parents buying their kid’s way into the best schools, but I never got exact dollar amounts until recently. Clearly every parent wants what’s best for their kids, hence tuition’s inelasticity no matter how much people complain. Education is the key to reducing the wealth gap.

The following conversations were had at a bar after an afternoon of tennis at a private club. Please keep them between you and me. I am dirt poor compared to these guys, but at least I can kick their asses on the court. They are the top 0.1% income earners, which is a world of difference from even the top 1%. Hopefully you’ll keep an open mind when reading this post and come up with some solutions!

There will inevitably be someone in a net worth related article comment how he or she isn’t doing so great due to all of his or her student loans. Because so much of wealth creation is about having the right positive mindset, I fear folks burdened by heavy student loans may be dragged down by a defeatist mentality.

I’d like to change this mindset by placing a specific value on our higher education. The older I get, the more I realize education is the most valuable asset of all. Education is what will break the poverty cycle. Education will provide the means for people to become better communicators, better employees, better entrepreneurs, and better citizens. Yet curiously, we pay our high school educators some of the lowest wages and charge exorbitant private college tuition. Sounds like a good business to own!

Nobody spends money on things that aren’t worth its value unless they are being extorted. The item might lose value over time, but at the time of purchase the value is worth exactly its price. So when someone comes to me and says they have a negative net worth of $30,000 due to $35,000 in student debt, I’m going to counteract their belief by asking what they spent on their college tuition to come up with its value.