Personal Finance 101: Degree is necessary or just skip the degree?

I think there is no end to this debate, right? 

Someone pointed out to me that if they study and complete a degree, their starting pay may be just RM2,500. Maybe lower if the company somehow believes that they can still get great people by paying lower and maybe higher if the company has good margins and wants to attract quality applicants to propel the business growth higher.

Salary versus revenue?

Let’s understand the fact that the person usually contributes 10 times if not higher in terms of revenue to the company. I mean… if you pay someone RM2,500 but this someone gives your company just RM5,000 revenue, perhaps better do not hire the extra person yeah. Now, hiring a top sales person may mean doubling his / her base pay but the truth is, the extra amount the person can give the company is likely to be way higher versus an average performer earning half the pay of this high performer yeah. If I am the hirer, I would hire all top performers instead.

Starting pay low?

These days, after SPM and without a diploma or a degree, if we are to enter the retail industry and we work additional over-time or if there are some incentives etc, we may also earn RM2,500 per month too. On one hand, studying an extra 4-5 years and earn starting pay of RM2,500 while on the other hand, just start immediately and maybe start earning RM2,500 just a few months down the road. Does this mean we should just start working after SPM then? I do not know. Do decide by yourself because even in investment, there’s no such thing as the only way. There are many successful ways too. 

I shall add to this. Let me share my POV as someone who has a degree and later on, an MBA too. 

I have friends who earn RM7-8k via GRAB these days. Not easy yeah but they could somehow still do it. Once upon a time a good friend earned 12k per month! Good salary even if these riders / driver have no degree, as long as they are willing to work hard. However, there’s a catch. They will ALWAYS be earning a similar amount for a very long time and this is also dependent on the number of driver / riders too. If we split the same cake among more people, the slice will become smaller. Of course, we can also bake a bigger cake. However, extraordinary incomes will not happen anymore. The days of super growth is over.

What happens to the fresh grad depends on the fresh grad

A fresh grad will need to learn the ropes, improve, enhance, upskill, have the right attitude and in fact they may even found that they could do it better if they become an entrepreneur or they can rise the corporate ladder until they become a lead, then a manager and later on a Creative Director or even pivot and become the CMO. There is no limit and it will depend on them versus having to depend on what the company will control. However, there is NO guarantee. One could make it, one may not. Somehow similar to property investment right. 🙂 

I can enter the corporate world without a degree…

Can you enter the corporate world without a degree? Of course you could. Not for all roles because some roles will require a degree for example. However the pay will be lower than a fresh grad and the road up is far longer too. Sometimes, that opportunity may also not be present as the company expected you to remain in the same role for a very long time. Please do take a look at most of the higher paying jobs these days and the requirements.

Truth is, they are not likely hiring you because of your degree but the requirements remain the same because the current employees all have a degree and it does not make sense to hire one without and paying them similar pay yeah.

It costs so much more money for a degree

Really depends on whether we see that as a cost or is that an investment. For those with parents who could pay, do not be lazy yeah. For those without, then PTPTN is an option. Just remember to pay back after that and stop becoming a useless person who thinks this debt does not need to be repaid. That’s my tax money!! Except for the technical disciplines where the qualification is compulsory, the rest would really depend on the individual and not that piece of paper alone yeah.

Even if one graduated from the top university, it is likely that this degree will be looked at during the first job. The second job would already depend on your work experience, skills and knowledge yeah. Hardly anyone hiring for a manager decide based on the university degree and not the skills, knowledge and experience.

It’s a choice. Make it work. 

Last but not least, stick to the choice we make and make it work. Earn good money from ride hailing? Invest them and make the money work for you. Remember yeah, if we are using time to exchange for money, it meant that sooner or later, we will reach a ceiling. Please do not tell the ride-hailing driver to drive faster or drive longer. This will be dangerous or impacting his / her health in the long run. Just save the earnings, invest them so that the future is brighter.

If we earn good money from the corporate world? Invest them. Aiya… driving that RM85,000 non-national car does not make you richer lah. If you think it makes you look good, just remember there are many others driving RM100,000 cars these days. If you cannot beat them, no point in trying to look good just versus those who drive national branded cars lah. Haha. For what…?

Earn good profits from business? Reinvest them to grow the business further. Good days do not last forever just as bad days may be temporary.

Degree or no degree? My advice remains to complete that so that we always have an extra edge since 500,000 people graduate from SPM every year but only 50,000 will graduate with a degree 3-4 years later. You choose whether you like to be the minority or the majority yeah. Happy making that choice whichever it may be. 

Please share with people you care.

Original article written in May 2024. Edited and Expanded today.

Happy investing and please do share your thoughts. Thank you!

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