THCC Episode 158 – Degree Insurance: Guaranteed Income After You Graduate 

Brad Baldridge 0:00
Guaranteed income after you graduate. Learn more about Degree Insurance now.

Presenter 0:06
You have kids, they grow up, and before you know it, it's time to plan for college. Where do you start? How much is it going to cost? Will you qualify for financial aid? Should you be looking into scholarships? When will you be able to retire? What about student loans? The list of questions is never-ending. The good news is all the answers are right here. Welcome to the Taming the High Cost of College podcast. Here is your host certified financial planner, Brad Baldridge.

Brad Baldridge 0:36
Hello, and welcome to Taming the High Cost of College. I'm your host, Brad Baldridge. Today's interview with Wade Eyerly, we talk about insurance. This is a new type of insurance that's out there that helps colleges guarantee that you will have a decent income once you graduate from college. Now not everybody who graduates from college will have a decent income and that's where the insurance comes into play. And they will actually provide that income that that person missed because of their inability to find the appropriate work. Later in the interview, we talk about different earning potentials. Then we talk about STEM and liberal arts, and how that works out. Alright, let's go ahead and jump into the interview.

Today I'm talking to Wade Eyerly. He is the CEO and founder of Degree Insurance. Welcome, Wade.

Wade Eyerly 1:29
Thanks for having me. I appreciate it.

Brad Baldridge 1:32
All right. So can you tell us a little bit more about Degree Insurance? It's relatively innovative, I've not seen this type of stuff before and I've been looking for it, obviously, because of the podcast, etc. So what is Degree Insurance? And why did you feel it needed to be started?

Wade Eyerly 1:48
Yeah, well, I appreciate it. A few years ago, I was running an airline. And I sat on the board of a school board of high school in Bridgeport, Connecticut. And we took kids that are a couple years behind in the sixth grade or so got them caught up and into college. Now it's kind of addition, and we use a lot of Teach for America teachers. We're really proud of what we were doing. And the entrepreneur in me wanted to tell the story of how we're altering life's trajection, trajectory with education, right? What happens to these kids from impoverished background, household incomes under $35,000 a year like, what do we, what's happening to these kids after they get them into college? And the startling answer was 80, to 90% of those kids are expected to drop out in the first two years. That's the part I didn't know. And it shifted me from proud of the work that we were doing, to I don't know how to describe it, immediately embarrassed or ashamed. We weren't helping as many kids as we were materially harming, right? Going to college, getting into college is not the past the American dream, right? Graduating is. And it's a subtle, but pretty important distinction. And so if we just got kids into college, we enabled them to take out debt, we actively made them poorer, that we were doing harm where we thought we were doing good. So if 80% of your kids are going to drop out, you're doing more harm than good. So I set out to change that and to figure out why kids are dropping out. And 8 out of the 10 top reasons students and their families will give you for why they drop out or variations on the phrase, we couldn't afford it. And that's true for so many kids, but it's also the mask we wear, right? It's the safe answer for why you drop out of college. It's what you tell when you don't want to tell what else is there. The reality is maybe not all, but the vast majority of those kids who dropped out could have borrowed more money to go to school.

Brad Baldridge 3:44
Right

Wade Eyerly 3:45
The federal government would have extended them more credit. This we know this drives the 1.7 trillion in student loans that we like to talk about. Right?

Brad Baldridge 3:53
Right.

Wade Eyerly 3:53
So we know they can borrow more money. What it really means, what they're saying is they don't think it's worth borrowing money anymore. And that was the interesting piece. It's a crisis of confidence. It's a place where the risk they take the cost that is up front, front load doesn't seem to match the benefit on the back end. And yet we know empirically, the data is very clear that college works. If a college degree were a stock in the stock market, right? Buying that degree would outperform the S&P 500 by 2.4 times and simultaneously be the most consistent performer in history. It is quite literally the best thing you can do with money.

Brad Baldridge 4:36
Right.

Wade Eyerly 4:37
Right? So it works very, very well. The average student in America is going to borrow $7,000 a year. Gonna take five years to graduate now we all think of college as a four-year experience. it takes five on average to graduate. They're gonna finish then $35,000 in debt, and the terrifying piece, they're going to take 21 years to pay back those loans, right. It takes them a generation to pay back those loans and that's sounds horrible, and college costs too much, and all of those things are true. But the reality is that that student is going to earn because they have got a degree $2.4 million over the term on average, again, these are all averages, right? And the payments $181 a month on average. So would you pay $181 to earn 2.4 million? The answer is yes. And you do it every time and twice on Sunday, right? There's no scenario where that doesn't make sense to do. Right. The problem is, and what really comes up is that no individual is an average, your students not an average, you're not an average. So the question is, how do we take the risk away, the risk of you being of the college degree is somehow not performing for you, in particular, right, where it doesn't perform that same level. And the reality is, the thing that determines whether or not your college degree pays off, is none of the things you think, it's not where you go to school, it's not your GPA, it's not where you get published and who you studied under, and all of those things that we like to think. Those things matter, but they're marginally. The thing that is really determinant on the performance and the ROI of your college degree, like did you earn more than you put up as a high school graduate is very simply the state of the macro economy and the year you graduate? Right? If you start college 2005, your junior year, Apple unveils the iPhone and unlocks tremendous amount of economic potential smartphones, apps, all of it. Your senior year, Lehman Brothers is Boston, there's no jobs, right, we enter the Great Recession. Either one of those two things is more predictive of your lifetime earnings than anything you did in college. So what we learn is that higher ed and in a crass way almost is like a roulette wheel, where nine out of 10 basis pay off, because nine years out of 10 in the United States are good years economically. One in 10 is the housing crisis, or a pandemic, or 911, or one out of 10 is a down year. Graduating in that down year is disastrous. You anchor your market rate at a low point. And while the economy rebounds, you get a 3% annual wage increase or whatever. And so they'll send a family back for a generation by graduating in the wrong the wealthy effectively already knows. So they self insure in a down economy, graduate enrollments spike. Because if education, if a college degree is a roulette wheel, what are the odds are nine out of 10 spaces are going to pay off, then good advice would be borrow as much as you can, by which we mean go to the best school you can, put it on read and spin. Right? And five years from now, when you graduate, it's likely fair.

In the event that it doesn't what's the right response? Well, the odds are still the same. So borrow more money and spin the wheel again is the right play. The problem is, first generation students, first generation Americans, underrepresented minorities, the Pell-eligible poor like I was, often don't have that chance that they can't they got to work now. Right? They did it right. They put their time in they got their degree, they can't double down. For those people graduating the wrong year really does set a family back for a generation. Their kids will be saying, 'Hey, Mom, Hey, Dad, I just got into state, can you cosign my loans?' And they're going to be saying, 'I'm still paying on mine, and it didn't work for me.' Right? And you start to see the narrative emerge that we hear very commonly now, though, is college worth it? College isn't worth it, Bill Gates and didn't need a degree and all that kind of stuff. And the reality is, you can point to outliers, a college degree won't change is unlikely to change your upside, right, the maximum that you can earn. But it most definitely changes the downside, right. It's a safety net. It's the floor of what you could earn. When you look at, look at economic downturns, look at the Great Recession. Right? Same story we were talking about before. Unemployment nationally goes to 10%. Black unemployment hit 17%. The unemployment rate for someone with a college graduate peaks at 5. The single best thing you can do in an economic downturn is actually have a degree to prevent yourself and your family from feeling the pain of that downtime. You look at the pandemic and Raj Chetty at Oxford and stuff that talks about patient recovery. So basically, in the pandemic, if you had a college degree, you worked from home, if you didn't experience layoffs worse than the Great Depression. But the breakpoint was again, the college degree. Having that degree, like I said, doesn't, might not materially alter your upside, but it definitely changes your downside.

Brad Baldridge 9:45
Right.

Wade Eyerly 9:45
So you're protecting yourself from experiencing that pain to degree then in some form its own insurance, right. It's macroeconomic risk insurance. Well, what we do is we look at that and we say, okay, for these students who are dropping out, what is it they're missing, what they're missing is that confidence that it's going to pay off. Well, you were I, wouldn't be able to buy a home if it wouldn't make sense as an investment as something you did with cash. If it could, the home could just burn tomorrow and it'd be gone, wiped out three times your net worth or whatever it is, you wouldn't do it combined. So, so homeowners insurance creates the opportunity for us to buy homes. The same thing really holds true here. Where else in your life, would you counsel someone you love to borrow 10 or 20 times their net worth? Make a single investment with it, and then just hope, hope that it works? Right? You wouldn't do it if it was Amazon stock, you wouldn't do it if it was Bitcoin, I care what you believe, and it's not a good investment strategy. Right? And so along the way, so we get away with because it works so well. Well, right now, those students somewhere along the way, are losing confidence that it's going to work, they're afraid the home is gonna burn down. What if I graduate in the wrong year? What if they don't like my degree? What if, what if, what if, what if? And so they drop out, and they say, 'Hey, I'm 10 grand in debt. And I'm going to end up a bartender anyway.' Being a bartender with 20 grand in debt isn't better off, right, so I'm just gonna drop out. What they don't know and no one will tell, is that a bartender with a college degree is employed more often and at a higher rate, and more consistently than one without, it just still works. Right? A degree is a signal that the market uses, and the signal is still very strong. So we know it works. We know empirically, it works. So what we have done is built an insurance to protect against the largest uninsured investment you or your family will likely ever make. And that is your college degree, the long answer to a short question, but..

Brad Baldridge 9:45
Right, absolutely. So I guess tell us more about this, then. So Degree Insurance is essentially an insurance. And again, it's generally it's provided through a college, so you're not going to be able to go buy it directly. But so what is Degree Insurance? How does it work?

Wade Eyerly 12:00
Yeah, so we guarantee how much money you're gonna make in the five years after you graduate. That's the period where the college ROI really shows up. And what we're guaranteeing is, yeah, there's something you would have earned as a high school graduate without a degree. And I don't know what that number is, but let's call it 11 or 12 bucks an hour in Amazon warehouse, right? With inflation, those numbers are changing, but let's call it that. That's roughly 23 to 24 grand a year. And it's not unreasonable to think that high school graduate could go earned 23 to 24 grand. So when we go to college, we're trying to buy is a greater earnings level. Now, there are some students out there that are going to be you know, the modern equivalent of Victorian era, gentlemen farms that are going because it's a luxury and they can better themselves and the rest. For most of us, we're going to make more money, we want to earn more. And so that's what we're trying to get. That's the ROI. That's the return on investment we're looking for. So if you're gonna make 24 grand a year without a degree, what are you trying to make with a degree? Well, I'm studying, insert your major here, I'm studying Business. And I'm hoping to make 40, what we're going to guarantee is the difference, really the distance between that 24 and that 40. So we sell it to a college college buys, they use it to recruit, retain students, they use it to tell your your student, 'Hey, if you go here will guarantee your salary for five years after you graduate.' So yeah, you might end up pretty $35,000 in debt, right? That's the average we talked about earlier. But we're going to guarantee your salary, we're going to guarantee you make $35,000 a year, let's say. So what happens as the student can change their majors as often as they want, just like that, that's part of the expected college career, as you take the Gen Ed, you're gonna figure out who you are be exposed to new things. We don't expect you to know what you want to be 17 or 18. And so, but now they know what it means is they change majors, right? Well, I was an econ major, and I had to be a philosophy major, but I only have 36, you can still make that choice. You don't do salary seeking. But now you know what the impact of that decision is, right? So students make their decisions, they figure out what they're gonna study, they study it, they graduate, and then for five years, they're gonna send us their tax returns. It's objective, it's verifiable. It's third party, you know what it says when you send it to us. And we said you were gonna make 36, you only made 32, we're gonna end up cutting me a check for the difference. So we cover you across that whole five-year period. It's cumulative coverage. So you're gonna get a single check at the end of that period. And if college didn't work for you, you're going to get a chance to reset. Whether that reset means pay down your loans, whether it means you're gonna go to graduate school, whether it means you're going to pay off that high interest car loan you had to get because college didn't work the way you thought it would, right? We give you that chance to reset. So what it does is it makes sure that the investment you're making can't fail you. Right, it's a hedge. That's where you get the term hedge and hedge funds because they make investments with a protected downside. And your degree is just the largest uninsured investment you'll ever make. So we've built a hedge for that.

Brad Baldridge 15:02
Right, exactly. And of course, like all insurance, there's terms and conditions so that

Wade Eyerly 15:10
Oh, yeah

Brad Baldridge 15:10
It's quote unquote fair to both parties where people aren't intentionally skipping work because they feel like they can get a payout some other way. So, can you talk a little bit about the typical rules? Like

Wade Eyerly 15:23
Yeah

Brad Baldridge 15:23
Well, I went on to grad school. So my income is zero. So now I'm going to just collect on this insurance, obviously, that's probably not going to work. So what, tell us how that works.

Wade Eyerly 15:34
Yeah, so you have to take a job inside the United States. And the real reason there is we just don't have data on what a good job is in Nairobi, or Tokyo or wherever else. So you can still go take a job overseas, you just take your risk back on yourself, right, but the income guarantee is here for you, you got to take a job in United States. You can't commit a felony, right, changes your employability, right, changes who's willing to hire you. And in the event that you do Teach for America, or Peace Corps or graduate school, like you said, we actually just pause your coverage in those areas, we don't want you to lose anything, we don't want you to have, I would hate for someone to say I would have gone to grad school, but I had this insurance, I didn't want to lose, I didn't wanna lose my ability. So what we do is you got usually you got five consecutive years of coverage. But if you're gonna go do Teach For America for a year, or graduate school rails, we just pause that year, we pick you up on the other side, right, and so you still got five years of coverage. But when you're doing that non-salary seeking thing, when you're on it, doing church missionary service, or you know, Job Corps America, or whatever it is, which is posture coverage, and pick you up on the other side, it's pretty easy.

Brad Baldridge 16:37
Right? So then, I guess the other important thing to realize is this is provided by the colleges. So they kind of negotiate as far as how much what the guarantee level is going to be, as you mentioned, by major so when engineering major who tends to have a higher salary might be guaranteed at 45,000. Whereas a teaching major might be guaranteed at 35,000, let's say.

Wade Eyerly 17:01
That's right.

Brad Baldridge 17:02
So those numbers are, the colleges make those decisions. And

Wade Eyerly 17:06
No, we make that decision

Brad Baldridge 17:07
Well, you make that decision, but the colleges decide and pay the premium typically.

Wade Eyerly 17:14
That's right, the college pays the premium, and extends then that offer to all the students, right. So there's nothing for the students to buy, the university is the one standing behind essentially, their product. The reason we all shop at Costco or Nordstrom is because you can take back anything, right? College is the one place where you can't return the product if it didn't perform as intended. So we give you that same kind of financial security.

Brad Baldridge 17:38
Right. So in the end, this is kind of a new idea, and people are interested in it. And you want it that means you need to ask for it at the colleges and or fine colleges that are offering it. Unfortunately, at this point, it's not something that you can do independent of the college.

Wade Eyerly 17:56
That's right, you gotta go to, the college has to be the buyer. And there's a good reason for that. If a Hispanic woman is going to make 88 cents on the dollar to a white male with the same degree from the same institution, I don't want to sell her a product that cost her more and gives her less coverage. Right?

Brad Baldridge 18:11
Right

Wade Eyerly 18:12
That seems terrible. So instead, what we do is we do a group policy, we cover everybody. And then it doesn't matter who gets caught in the safety net. So a safety net is supposed to catch the people that are wobbliest on the tightrope, right, that's what it's there for. And we all believe we're going to cross the tightrope, and we're going to do just fine. But in the event you don't, you want the safety net there? Well, there are people who are going to carry disproportionate risk going to college, first generation students is an example. Right? It doesn't cost more, but it costs maybe a higher percentage of discretionary income, it's a greater risk, sometimes they don't see the same level of rewards. What we do is we give everyone the same safety net, so those people are disproportionately likely to fall into the safety net. But that's okay. That's as it should be. Everybody's better off for having had the safety net there.

Brad Baldridge 19:00
Right.

Wade Eyerly 19:01
So that's why we sell it to the colleges.

Brad Baldridge 19:02
Right, exactly. So because this is insurance, you touched on homeowners insurance a while ago, but just kind of clarify that, this is a form of insurance, which means a good chunk of the people out there are gonna say, 'Well, I had this insurance, and I never claimed I never got any benefit from it.' Just like your homeowners insurance, right? Nobody says, Oh, I hope my house burns down. So I can make a claim on my homeowners. Most families will pay, 600 to 800, 1000 a year for their homeowners insurance, and not make a claim ever, or go 20 or 30 years between claims.

Wade Eyerly 19:41
Yeah, the best case scenario with all insurance that you never have to use, right? You don't want to end up in the safety net. You want to end up across the title. You want to have made it. So like all insurance, you hope you never use it. Nobody gets up on the 31st of the month and says, 'Gosh, I gotta get in a car wreck today or I'm never gonna see my money on that on that car insurance. You know?

Brad Baldridge 20:00
Right.

Wade Eyerly 20:01
Exactly, you hope you never get in a wreck. Same thing here, the hope is getting a college degree is gonna work really well, it's gonna pay off just like the day you signed up, right? And it's going to work and your career is gonna go great, and you're never going to need it. That's the best outcome for you and for me, right? But in the event that it happens to fail, we're gonna pick you back up and give you a chance to reset, start over. That's really what a safety net does the same way as your example with the the homeowners insurance, you hope your home never burns down. Nobody's ever disappointed that they didn't make a claim against their fire insurance, you know?

Brad Baldridge 20:35
Right.

Wade Eyerly 20:36
So, but the one guy, you know, in 30 years whose home did actually burn down, you're really glad they got to rebuild, you feel for him. And we're going to do the same thing here, we're just extending it to college students all across the country. Right? And when somebody makes a claim, you'll be glad to them, but they got a chance to reset.

Brad Baldridge 20:54
Right, exactly. And I think that's flipping back around to that just like, your home is not likely to burn down. And that's why you can pay relatively small amounts of money, even though your claim could be hundreds of 1000s of dollars. But is, in essence, a lot of people pay small amounts, only a few people collect the big check. It's kind of in that works the same way here, which kind of leads us to going back to the statistics, where there's a good chance, a typical average college graduate, is going to beat the benchmarks that you're putting out there. So I think that the data we've talked about, you're willing to consider reliable and base your career and your company on it. Can you speak to that a little bit about what kind of success rates or odds versus dispersion like, right, the average, the average musician makes X, but a rock star makes hundreds of millions? So, you know, kind of that same dispersion idea?

Wade Eyerly 22:01
Yeah, so we, we actually produce some of our own rankings that are kind of interesting, because we use this, if you if you have an average or a median, exit salary of X, but the variance is really wide, it doesn't tell you very much, right? So you might we tell you, you're gonna earn 45, and you might make 12, but you might make 90, actually isn't useful information very much. But if we tell you're gonna make 45, and you might make 42, and you might make 48. And you can on that 45, right, like, you know, you're gonna get there. So we in our own sort of internal rankings, we use that variance to punish those schools with wide variance and benefit those with with shallow areas. So because you need that information to make sense, right, it helps make the decision all the way along. So as ask me the question again, I'm sorry,

Brad Baldridge 22:51
Right? Just that concept of variance, right? Can you give us some ideas of where we see variance and where we don't?

Wade Eyerly 22:58
Well, every college, every major is going to have different sets of variance based on the majors, right? Very good programs will have high exit salaries, but it's not just that exit. And that median exit, it's how likely you are to hit that that matters. So I told an example, I repeated this anecdote a couple of times. But my dad's best friend, when I was a kid, I asked him what he studied, and he told me sociology, and I was 10, or 11. But I asked him why. And he said, Oh, I had the highest exit salary of any major at this at the college. And even at 10 or 11. I thought really, because, you know, you hear maybe a doctor or a lawyer, and they're all rich or whatever. It's true in either case, but you would hear that grown up, and I'd never heard you got to be a sociologist, then you just really meant to coin, people just really pay a lot for sociology. And we got back in the car, and my dad said, yeah, there was an NFL quarterback, famous one who was a sociology major out of that school. And it made sense, right, that the variance was really huge. Most people were making 25, but one guy made 50 million bucks, right? And so then the average is real high. Right? And it was a lesson to me as a kid, you got to be careful about six statistics that you're using. We spent four years here, collecting data using public, publicly available datasets. Everyone you can imagine title for data, the first destination reports that schools develop all the data they send back to the Department of Education, on how their students fare when they graduate, how long it takes them to get a job, what kind of jobs they get by major etc. We looked at a bunch of state datasets that were like your state unemployment insurance as a percentage of your salary. Right? So the state knows what your salary is every for everybody works. And we looked at datasets of where those people then had gone to school and what they've studied and when they graduated, and now we were able to piece together then, right? What's the growth rate of salaries what happens not just you know, when you graduate, but who gets promoted faster, right? And what happens in years two and three and four or five. And that allowed us to give it a period of coverage, instead of saying your first job out will be X, we're able to say we're going to cover you for five years, we're really going to give you a chance to reset, a meaningful chance to reset. And we have some proprietary datasets we pulled in and we pull all that together, we build our actuarial tables. And that's really kind of how we do it. So every school gets a single premium. So it's the same cost per student, because you don't know it's up to 18, what you're actually going to graduate. And then we give them the different coverage levels based on major, very, very similar.

Brad Baldridge 25:28
Right. But I think along those same variance lines, from a parent perspective, I think there's this, and maybe they're not really thinking a lot, as the hard science and the idea of variable incomes, and all that kind of stuff where they're really, but they have this gut reaction around majors that lead to obvious careers as compared to majors that lead to potential, but not necessarily a great job, like a nursing degree, or an education degree, had you straight to nurse or teacher. There that resume reliable, there's lots of data on what those types of careers pay, etc, etc. And then, as you meant, a sociology degree or a psychology degree or liberal arts of various types often pay well in the long run. But in the short run, it's not a clear path to X career with Y salary.

Wade Eyerly 26:33
Yeah, I mean, we graduate 27,000 philosophy majors a year in the United States. And there are 27,000 working philosophers in the United States total. But every year, we got 27,000 new philosophy, because that's true of a lot of majors, they have 35,000 French majors here, there aren't 35,000 jobs in the country that require French. In fact, the most common job that requires French speaking in America is teaching French to more students who will then sit in that same cycle, right? But it doesn't mean these things aren't worth studying. Right? And you're absolutely right, a lot of parents will think, 'Oh, my kid needs to study STEM,' and STEM remunerates hire on the way out of college, and they're not wrong, but they missed something in that sort of story. So if you, I run an insurance company, we're a startup, and if I needed to hire a new coder, right, a new computer science graduate, I can hire a kid just graduated, and I know exactly what they could do, because their degrees as computer science, right? They went into college and they couldn't come they came out, now they can, I know what they can do. And I can pay them a market rate. Because I know exactly what they're gonna do. If I hire an English major, right, I don't know exactly what he or she is good at. I know, they're smart. I know, they're creative. I know, they can write, I know they can problem solve and other critical thinkers. But that's none of those are the task oriented skill set that I'm going to need to hire them for. So I'm going to hire them at a lower rate. And then I'm going to, but they get promoted much faster, and they get promoted faster, because I'm not training them on the task I need done. Right. So they're getting better better at the thing that they can do. So 10 years into your career, a STEM major, a liberal arts major can earn the same amount. Right? But if you look at a lifetime earnings curve, the liberal arts major never catches up, because there's this lag in the first few years, where they're earning less. So if you think, 'Hey, I need to make you know, $75,000 a year to support my family.' Both of those degree choices, liberal arts, or engineering, or STEM or whatever, are fine paths to get there. And it's likely that you don't need to earn that in your first years after you graduate. Right? They call it a starter home for a reason, right? And so, and if you find you're going to be much happier as an English major, right, then that might be a much better path for you, money doesn't equal happiness. But there's a lot of data that says after $60,000 a year, under 60 grand a year, increased sort of remuneration, increased salary does actually increase happiness. But after that, it has no effect. Once your needs are met, right, you got ability to save a little bit, you can buy a new car when you need, you know, whatever it is, a speeding ticket doesn't throw off your family balance sheet for four months

Brad Baldridge 29:09
Right

Wade Eyerly 29:09
Which is the case of a lot of people in America, including me growing up, then money is no longer sort of has any influence on your happiness quotient. So you can pick that path that's going to let you be happy. And it'll still get you to that same stable spot, which takes a couple years, right? It's just a different, different path. So that actually unlocks more students to maybe leave STEM and say, 'Okay, I'm gonna study this other thing that I love.' On the flip side, they might go, 'Yeah, true. But I'd rather take the early money...' Right? 'And so I'm going to study STEM.' So students still get to be students, still get to figure out who they are. But it's important to know that all those dynamics show up in the data.

Brad Baldridge 29:47
Absolutely. Well, I think another important thing to realize is, I'm not pro any one thing but I think there is a lot to be said for just studying and getting involved in a career path that you enjoy. And I don't know how and out there, fs anything I've ever seen any data around that, but I'd love to see, if you're doing what you love, do you get paid more, you tend to work harder and that you tend to be good at it. You know, if you're in a job you don't enjoy. I mean, I remember those days, right where you showed up, but certainly your heart wasn't in it, and your productivity wasn't very good. And you're, etc, etc. Whereas if you're doing what you love, now it's not work so much you work more, you think about it in the off hours, because you're excited about it. So are you aware if there's anything like that by chance?

Wade Eyerly 30:34
Yeah, Amy was nisky at Yale School of Management has a lot of writing on on the impact of what she calls being, like mission-oriented work, work that you sort of believe in. And its impact on happiness and earnings. And the rest, there is a body of research around exactly this around, happy workers or better workers more productive. So as a when you're running a company, you want to hire people who genuinely want to be there. Right? And so if you don't love numbers, then being an accountant is a tough 40-year slog, right?

Brad Baldridge 31:06
Right.

Wade Eyerly 31:06
But if if, but if you look at that, and it's like a detective solving a mystery, and you're like, I can't get these two columns to reconcile what am I missing? And you can get lost in that for hours on end, man, oh, man, I hope you become an accountant, you know, like, we those people, right? So there is definitely a lot to being happy in what you choose. That said, follow your passion or follow your bliss can be truly detrimental advice, right? Because you need a safety net, you need a floor still. The college degree actually enables it, right lets you do those things. Because you have a degree, you can take risks, or you go over and start a business or flip homes or do these other things. And if it doesn't work out whatever thing it was you wanted to do, your fallback position is not I'm a high school graduate, it's I'm a college graduate, your fallback position isn't 23 grand a year in Amazon warehouse, but instead, you know, 35 grand a year as a mortgage lender or whatever, it changes, the level of stability you can be certain about and part of that is because you never lose the degree. It's not like, 'Gosh, I take a risk now, what job will I have when I'm done?' Well, you're still going to be a graduate of Morehouse or a graduate of Lincoln, or a graduate of Tennessee, right? And so that doesn't go away, signal that that degree sends to the market is still just as valid. So it actually unlocks creativity, any degree, it doesn't matter. In fact, that signal is strong. Like I said, being a bartender, a bartender with a degree makes more money as employed more consistently all throughout?

Brad Baldridge 32:43
Right

Wade Eyerly 32:43
Nothing about your college experience, at least formerly, it was probably about slinging drinks. And yet, it works there.

Brad Baldridge 32:51
So strange reference there. As far as college is, bartending, so

Wade Eyerly 32:58
Normally, you're not going to learn that right. So, so why does it work there? And the answer is, the market just respects the signal. Which means there is an element of studying those things that you enjoy, and you can still get to where you want to go. Right, I met a woman the other day had dinner at like a conference thing. And, you know, she's one of the foremost experts in national security policy, the United States, and she's an English major. Right. And she said, I needed it to build who I am and this base of knowledge. And you can learn from history and writing those lessons that we don't want to repeat. And it influences how she helps shape our national security policy. Fascinating take right, Steve Jobs, Apple founder, talked about the most important class he took in college was calligraphy. Because he learned to make things beautiful, and the value of taking the time to be a craftsman and to make even your words beautiful. And so when IBM had DOS, he had a graphic interface that let things be beautiful, because people want to interact with that. So there's a lot that you get to develop and study. But and we can unlock innovation and invention and creativity, because you have a safety net, because the floor is there, you can take new risks that you couldn't or wouldn't or it would be irresponsible to take without that safety net. Right?

Brad Baldridge 34:20
Absolutely. All right. So it was a great discussion around some of these things. If people are wanting to learn more about this newer idea of insurance and again, so this podcast could be less than two in the next six weeks. It also could be three or four years into the future. So this is kind of a newer idea. So can you tell us a little bit more about how we find it or what we'd ask for if we're a sophomore or a junior, and we're saying, 'Hey, I like that idea. I hope there's lots of that stuff around when we're picking a school.'

Wade Eyerly 34:58
degreeinsurance.co, dot C-O is the website and it's always going to be a repository and place that you can go to learn more. I think when you visit a college campus or you're talking to a school, you should be asking, are we going to get a guarantee? If not, why not? Do you guarantee that this is going to work? Because you could, because while it is new, those schools could offer this now. So if they don't, you should ask why they don't want to stand behind what they deliver, right? Why won't you guarantee it? And the reality is that not only could they, they should. And so I would be asking and every school visit every time you're not going to college, but are we going to get an income guarantee? Is there a guarantee that this works? And those folks in the next six weeks who listen to this, and then do it, they're probably going to get you know, 'What, I've never heard of that.' Because we're not in a lot of schools yet. But as time goes on that, you'll get more and more of that. And I do believe this will become the default setting, right? The same way that you and I expect to be able to return something to Amazon, or when you order shoes online, or when you walk into a Walmart, you know you can take it back, if brakes, didn't work, etc. I believe this will be the new default setting for education, but it's gonna take us a couple years to get there.

Brad Baldridge 36:09
Right, for sure. Well, I do really do appreciate it. And we'll put links in those things we've just mentioned. And it was great talking to you. Let's stay in touch.

Wade Eyerly 36:19
Thank you so much for having me on. It's been a real pleasure.

Brad Baldridge 36:22
All right. This ends our podcast today. As always, please leave us a review in iTunes or wherever you're getting your podcast. We'll see you again next week.

Presenter 36:36
Thank you for listening to the Taming the High Cost of College podcast. Now, it's time for you to take action. Head to tamingthehighcostofcollege.com for show notes, bonus content, and to leave feedback for Brad. The next step on your college journey starts now.

Brad Baldridge is a registered representative of Cambridge Investment Research and an investment advisor representative of Cambridge Investment Research Advisors, a registered investment advisor. Securities are offered through Cambridge Investment Research Incorporated, a broker dealer and member of FINRA and SIPC. Brad owns two companies: Baldridge Wealth Management and Baldridge College Solutions. The Baldridge companies are not affiliated with Cambridge Investment Research.

Transcribed by https://otter.ai