Do you need a bachelor’s degree in finance to be a successful investor?
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I’m reading Robert Kiyosaki’s book "Rich Dad Poor Dad" and he often emphasizes the importance of fiancial education as a stepping stone to achieving financial independence.
Is self-educating oneself outside of school by reading up about investing sufficient to have a chance at investing successfully? Or does one have to get a university education in finance and work in the field of finance to be a successful investor?
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Rabbit said:
There are times and places where formal education will, and will not, be the deciding edge.
Many of the wealthiest souls on this globe right now do NOT have formal financial education, some scarsely have formal education.
A person of limited imagination, charisma, or common social clout will need that tool.
Something written nearly 3,000 years ago (as commonly translated much more recently) is amazingly correct:
I returned, and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understaning, not yet favor to men of skill; but time and chance happeneth to them all. (Ecclesiastes 9:11)
Consider that if Bill Gates were to apply to Microsoft today with his education, he might only rate a minor programmer’s post, or that if Warren Buffett were today applying to Berkshire Hathaway, he might get to help out in the mail room as a temp.
July 26th, 2009 at 10:41 am -
Brendan Prewitt said:
I have to disagree with having a formal education in finance to be successful. I currently am pursuing my bachelors in a financial analysis program and have to say that I have learned very little that has helped me. I am not saying that the program is not a good program, as it is definitely a rigorous program, but I am simply saying this because I have done a lot of research and studying on my own. Much of what you learn in a classroom setting is theoretical, which, in my opinion, means very little to actual investing. I strongly believe that any motivated individual can gain a strong understanding of the markets on their own by reading about investing and practicing in virtual accounts. I personally am enrolled in the program solely for the piece of paper, as much of what we have "learned" is solely review for me. A strong education can help a beginner, but nothing can replace experience, especially in the financial markets, and experience is something that cannot be taught, it must be learned through practice. Anyone can purchase the textbook that is used in the classroom setting and can read and memorize it, so the only time there is an advantage to the classroom setting is if there is practical experience learned or if the instructor shares practical knowledge. Last I knew, nearly 75% of investment clubs (typically organized by non-financial professionals) beat the market, which just goes to prove that you can successfully trade and invest without the financial degree that says you can do so. Just my opinion, I hope it helps.
Best of luck,
Brendan Prewitt
July 26th, 2009 at 10:41 am -
Bob said:
Actually, knowing too much theory can blind you to reality.
I’m sure that the book meant PRACTICAL financial education that you get from reading and talking to successful investors. Understanding how markets work is a good thing.
Long Term Capital Management had two Nobel prize winners on it’s board when it blew up. They created mathematical models involving partial differential equations that were elegant, but that did not really describe how markets work in day-to-day in real life.
The fact is, it not complicated. It is hard. But that’s not the same thing. It’s hard because you have to control your emotions and stick to your plan.
July 26th, 2009 at 10:41 am -
jeff410 said:
If you just want to invest for your own personal purposes there are personal finance courses and books that will help a great deal. If you’re investing in mutual funds you have professional management. And if you have a 401k you have professional advice available to you. You should also consider using an investment advisor if only just for tuneup. A few hours worth of advice.. A degree in finance for personal investing is really a waste of time and money. The objectives of a degree are totally different. It is geared toward institutional investing. Not retail personal investing. Many of the things that are taught in a degree program are things a retail investor would never use and never have access to. Having said that, investing is to a large extent is an intuitive skill. More art than science.
July 26th, 2009 at 10:41 am -
Shelomo said:
You do not need an official education, but you do have to be level headed, logical, humble and understand certain fundamental financial concepts. It is also a good idea to read a good financial newspaper daily.
July 26th, 2009 at 10:41 am