Education is the foundation of success. No surprise there. What may be a surprise is that despite the proven benefits, 30% of American college students drop out every year. The New York Times has called this a “dropout crisis.”
In Europe, the situation isn’t much different: dropout rates range from 41% in Norway to 19% in the United Kingdom.
Part of the reason for these bleak numbers is that getting a degree is a highly time-consuming, and in some countries, increasingly expensive endeavor. The challenges associated with traditional academia have led many to believe a good education is simply out of reach due to the high expense.
But in reality, putting money toward learning new skills should not be considered an expense. It’s an investment—a life-long and highly profitable investment at that.
The rising cost of tuition has made it a riskier endeavor than in the past, but the numbers show that even a traditional education is still well worth the money for most people. And with the rise of the edtech industry, there are so many more options besides taking on huge student loans to earn a four-year degree.
Right now, in fact, you’re a few clicks away from learning almost anything you want for free or for a small fee.
This is especially true in entrepreneurship, where investing in new knowledge is one of the smartest things you can do. Yes, of course, we’re biased on this point, as a provider of online courses ourselves. This is part of our business, and full disclosure, we’ll be going into detail on some of our course offerings and costs below.
Even so, in this article, we wanted to make the case for exactly how investing in your education can foster your future success, and why we think it’s so important.
Why Education Is a High-Growth, Low-Risk Investment
When you’re starting a new online business, you will likely need a lot of infrastructure: hosting, software, a computer, and more. If you’re starting an ecommerce business, you’ll need an ecommerce platform, shipping and logistics software, and more. Even if you’re just starting a consulting business, you’ll need website hosting, accounting and marketing software, and more.
All of these costs are important, but one thing that is truly essential to your success is your capacity to make smart decisions. That comes from either experience or knowledge.
If you don’t have much experience yet, there’s not a lot you can do about it. But if you aren’t knowledgeable, well, you can easily fix that by educating yourself. That means learning new information that you can put to use to solve real world problems.
In short, education is what helps someone make a smart decision.
An educated entrepreneur—whether through traditional studies or through online education courses—will better understand what decision will push them closer to their end goal.
Given the impact education has on your success, it’s not something you can’t afford to take for granted. You can’t see the time and money you spend educating yourself as an expenditure, but as a high-growth investment with long-term returns.
Think about the returns on traditional financial investments. The return for a US Treasury bond currently ranges between 1.5% and 2.3%, while the average stock return has been calculated at 10% per year.
Now consider the returns of an investment in education. Let’s say you take a $2,000 course that teaches you how to start an ecommerce business.
Considering that 50% of US-based retail businesses make at least $100,000 a year, let’s imagine that after one year of running your ecommerce business, you make $100,000 from it.
That represents a 4,900%, return on your investment—and that’s just for one year.
Let’s be clear: While there’s no way to guarantee such results, with the right combination of knowledge, starting conditions, and dedication, you can parlay an education into a far greater return than you’d ever see in an actual investment vehicle.
Warren Buffett, the famed investor and head of Berkshire Hathaway has always been a huge believer in the value of an education. He once said in a Forbes interview that, “Ultimately, there’s one investment that supersedes all others: Invest in yourself. Nobody can take away what you’ve got in yourself, and everybody has potential they haven’t used yet.”
How to Know When (and How Much) to Invest
Every year, there’s a seemingly endless number of courses being launched on just about every subject imaginable, and you can expect an even higher number of courses offered online in the future.
This reality, while great for the course creators, only makes your life more confusing. Given the large number of courses available, you will be tempted to enroll in a lot of them, and spend hundreds (if not thousands) of dollars, when it may not be the smartest thing to do.
Worse yet, you may feel like you need to take a lot of courses that will cost you a lot of money, and become overwhelmed, taking no action. That’s not good either.
You want to invest in a course at the right time—when the need to learn a new skill exceeds the costs of your lack of knowledge.
One good rule of thumb to consider is that if you are thinking of hiring a freelancer or consultant to help you with a given subject—one you’re clueless about—then that’s the right time to invest in a course.
You may still end up hiring someone to help you, but at least you will be more knowledgeable and will be able to understand what the expert is doing and how you can best use their work.
When you look at the different course options available, you will see a huge range, from a few dollars to more than $1,000. The costs often depend on the perks that these courses offer their students, including:
- Access to an exclusive community for accountability and support
- Personal coaching
- Discounts on software
- The experience of the teacher
- The outcomes promised
- The uniqueness of the syllabus
- How actionable the lessons are
The more perks you get, the more the course will likely cost.
When considering the costs, think about the amount of support you will need to learn that new skill. If you feel you need accountability and coaching, you can expect to pay more for a course. On the other hand, if your goal is to learn just the basics, you can expect to pay for a simpler, possibly free course.
Our ecommerce course Start & Scale, for example, has six modules with dozens of high-quality videos, five bonuses worth thousands of dollars, and access to a high-level Facebook group.
Here’s a quick overview of everything included in the course:
We’ll be the first to admit that this is certainly an upper-tier course, and as such, it won’t be for everyone. Not everyone needs it and not everyone can afford it at this stage. That’s why we also offer a ton of free and less expensive resources—it’s super important to us to make sure Foundr’s support is accessible in some form to everyone, regardless of where you are in your journey.
At the end of the day, the right amount to spend can be summarized with another rule of thumb:
If you want to become an expert on a topic, then you should expect to spend more money. If you want to become knowledgeable, but not a practitioner, then you should expect to spend less money.
For example, if you want to start a successful business, then a course that provides the psychological support, hands-on guidance, and actionable syllabus that will help you achieve your outcome will require a time and money investment.
We recommend that when spending money on online education, you think of the cost relative to what you can realistically gain in the longer term as a result. Or on the other hand, what it would cost you to outsource or hire for the skill you’ll be learning. The right course can very quickly make up for its cost in terms of monthly revenue gains, especially if there’s hands-on guidance and support that comes with it.
Where to Go for Online Education
In 2020, the edtech industry is expected to reach a value of $252 billion. Given that the global education expenditure market is valued at $5 trillion, this number is surely about to grow even more.
With such profits to be made, it’s no surprise there are thousands of new platforms and software providers that offer courses to anyone with access to the Internet.
On one hand, you have platforms like Udacity that let you learn topics as complex as advanced autonomous driving from one of its pioneers, Sebastian Thrun. He also happens to be one of the co-founders of the company, but there’s a ton of top-level expertise accessible on the platform.
These two platforms resemble traditional education, given they teach complex topics on the web, often taken directly from university curricula. Most courses will be theory-driven and not outcome-driven, something that can deter entrepreneurs looking for tactical skills they can use in their businesses. But there’s still a lot of deep knowledge available here.
You also have education and media companies like Foundr, which partner with experienced entrepreneurs (e.g., Gretta van Riel, Alexa von Tobel, etc.) to provide a platform where they can directly share their knowledge and experience, typically at a cost to users.
These platforms, at least in the case of Foundr, tend to focus on the interests of entrepreneurs who need to learn real-life skills they can apply in the short term.
But no matter where you take your course, what’s truly important for your entrepreneurial success is that you are learning from people who’ve walked the talk—practitioners and not self-promoting gurus. You’re looking for people who have proven success in their areas of expertise.
The other feature we recommend you prioritize is community support. We’re constantly hearing from our students and former students that the network of other entrepreneurs available through online courses can be worth the cost alone. You can learn from each other, network, and even hold each other accountable.
Time to Invest in Your Education
Scarcity is a fact of life. We never have enough money, enough time, or enough energy to do what we set out to do.
But given the vast and growing availability of online education, the lack of money or time needn’t be an excuse. Even the most expensive courses typically offer payment plans, and few are completely out reach for most entrepreneurs. And knowledge can truly change the direction of your life.
You can also take most courses by spending a small amount of time every day: while commuting, exercising, or before bed. Better yet, you can cut distractions (television, social media) and use that time for your education and investing in your future.
Finally, remember that the most successful people in the world, people like Jeff Bezos and Elon Musk, have the same 24 hours in a day. The key is to learn to prioritize your time based on your goals.
If you’re an entrepreneur trying to launch or grow your online business, then it’s time you take your education seriously.
Investing in yourself is the best investment you could ever make. And you will thank yourself once you reach your destination.
Are you looking to improve your entrepreneurial skills? If so, what type of course are you thinking of taking? We want to hear from you, leave your comments below!