Money Wiseguys Interview with Gene W. Kelly

MWG: Let's bring on our guest. We're very excited to have on the program Gene Kelly, who's the founder and CEO of the Accelerated Training Institute, owner of a Napa Valley winery. Curious how his winery held up in the off quake? Well, it's author of The College Myth. Mr. Gene Kelly, how are you doing?

Gene: I'm doing great. To answer your question about Napa, we were definitely shaken, but I'd like to say not stirred. We worked on through it.

MWG:  Ah, well perfect. Perfect. Oh boy, that was a scary thing up there. I know a lot of people were affected. But we're really glad to have you on the program here. So, you're certainly critical of college system, you know? You're thinking that possibly it is broken. Tell me your opinion right now of the college system, and if indeed it is broken here in the U.S.

Gene: Well, first off, let me say I'm a believer in higher education. I'm a believer in lifetime learning. You have to keep investing in yourself. The question on the table is, is college the best way for everyone to be educated. And I'll give you a solid no on that, because it's not one size fits all. And, if the promise that was laid on the table is go to college, get a good job, that is definitely broken, especially when you consider the massive debt that these students are walking out of school with. Debts—it's delaying their life choices, whether that be getting married, buying a first house, having kids, it's delaying parents' life choices because they have to defer retirement. It drains a lot of their savings. So, college—the way it's being served up today with "No Child Left Behind", everybody's got to go to college, you're a failure if you don't. And the dollars aren't adding up. That is broken. And, I'm here to ring the bell, sound the horn, and get attention to this matter. Get people talking again. That's why I wrote the book, The College Myth, and I'm so passionate about this, you can get the book on Amazon, but you can also get it free because I want to get this conversation going.

MWG: Yeah, yeah. Cool. Well, we do too. We're anxious to have this. Let's talk about who is it, then, that might be better served not getting a college degree. Because, you say you are a fan of higher education, and for some people that is the right path. You want to be an engineer? Well, you're going to have to go to school. And, that's part of the process, and that's going to be a part of the process. But that can be a great career. Who are you speaking when you say not everyone should go to school?

Gene:  Well, myself... I myself went to a trade school. I went to trade school and learned systematic processes for analyzing how systems fail. I've been able to apply that to business, I've been able to apply that to many different areas. So, I was the type of kid—I was your C+ student. But I became the millionaire next door, too. And, the reason was I wasn't locked in to just one path; I was able to find my way in life. And, I think that first off, I'm not sure everybody out of the shoot ought to go to college. A few should that are very clear on their path. But most people don't know what they "want to do when they grow up." So, they don't know the path, and so they start investing. The push is right to college. Well, a gap here would be a wonderful thing. Full disclosure here. My son graduated from high school and was accepted to all the universities he applied to. I had him take a gap year and travel the world with me, filming interviews with business people, and I made him edit the book, The College Myth: Why You Shouldn't Go to College If You Want to Be Successful. Now, he's a kid that's on a path for international business management, and so he ended up at a university, and now he's overseas studying. But first, he was working, learning, meeting business people, finding out what he wants to do. There is a massive amount of debt that is immediately handed to a student when they sign up. And let's look at where all this came from. We had the No Child Left Behind a number of years ago. And so, just like the housing bubble, it became a bubble because of easy debt, and everybody should own a house. The same thing has happened now in the college bubble. Everyone can go to college—just sign your initials three places, and now take on this debt. And we have a trillion of debt out there that is not going to return to the students today financially the way it was in our fathers' generation. And, college has gone up 2,000% in the last 30 years! The costs just keep rising, and the value proposition keeps declining. That's part of the problem. And so, whether a person goes to college or whether they select a trade—and by the way, many of the trades' lifetime value return better than someone today that has a Bachelor's or Master's degree, long term. I just saw a study out of the state of Idaho, where their electricians are making over $44 an hour, and lifetime earnings they placed it above their average person that had an MBA. So, if the goal is earning money, then college isn't the only solution. In fact, it's a lie—if I just tell you, come get your certificate, walk out the door, and suddenly you're going to have a great job. That's just not the case.

MWG: Yeah. You know, we see where American manufacturing is really kind of struggling simply because of this. I think you can maybe throw out more stats out there, because American manufacturing, I believe there's a lot of vacant positions out there. And even on the trades and transportation utility side of the market—do you know any stats out there of how many jobs are available, and how many can't be filled right now?

Gene: The last one I saw was over 315,000 good-paying jobs in manufacturing and services that are related to the trades. This situation's going to get a lot worse because we'll be greying America, and all the people, the boomers retiring and so on... we need thousands upon thousands of people to replace the plumbers, the electricians, the welders, the machinists. I mean, who is going to do this work? You're not going to be exporting your plumbing jobs to India any time soon. You need a plumber here. You need an electrician here. These jobs—rebuilding America's infrastructure—needs to happen here. And, as you know, with the low energy costs, many of manufacturers are re-onshore their manufacturing because it's lower costs for transportation, better control, potentially better work force, better tax benefits potentially, and so on. And they can't find the workers. So, there's a huge opportunity here for people in the trades.

MWG Yeah, that's a skills gap. And, you know, when you have manufacturing—315,000 jobs available today—I mean, if we had more skilled workers out there like you said, you can go to college, you can get that nice little degree, but you might not get that available manufacturing job out there. So, maybe a trade school looks more attractive going forward. And this is only going to get better for the availability of jobs, but it's getting worse because we can't fill the positions. Do you see that, as well?

Gene: Oh yeah. I mean, I have friends that are in their 70s and 80s that are being called out of retirement to work as welders, because you can't find people that are importing welders. A lot of this again, I look for major points of turns in the overall economy, and so on. And back a number of years, America decided that we were going to be information knowledge workers, and that was what we're going to train our workforce to be. So, we can get rid of all those dirty jobs, and so on, and we're going to be knowledge workers. Well, a little thing called the internet came along, and the internet allowed the outsourcing of all those knowledge worker positions—software writing, accounting aspects, so on and so on—overseas. And now, literally, our workers are competing in those soft skills with several billion people that want those jobs, speak multiple languages, work hard, and are willing to do it for potentially pennies on the dollar compared to a U.S. worker. So, that failed.

Meanwhile, we shut down all the trade schools, all the shops in the high schools, we drove everyone to college. And the sad part of that is now they come out of school, and they got their degree, and they've got debt, and they're ready to go to work, but they can't answer the 3 questions that I say every business owner wants to know, which is: What do you know? (which is applicable to our business). Number 2: What experience do you have that's applicable to our business? And number 3: What can you do for me? How are you going to help us make money? And, most of the students don't have the life skills to do that. So, even if someone had been taking our trade schools course and became an electrician or a plumber or welder or blacksmith, whatever, and paid for their own way through school, and exit without debt, now they have that additional knowledge and skills and real-life experience that they can bring to a business. Then the college can amplify some of those things. So, even if there's someone that enters the trade—I entered the trades. I was a welder. I was a machinist. That's just a point where you can pick up the ball or run with it in life. As long as you're willing to take personal responsibility and continue to invest in yourself, you can go anywhere you want still in this country. And, that's part of what made me successful. But it started with the trades and the skills that I learned there, and the ability to think through process. So, again, I'm ringing the bell. I want to talk about this. I want families to talk about this because they feel bad, "Oh we didn't send our kid to college, we can't afford it!" Talk to them first! Maybe it's not what they need to do now, and maybe it's not what they need to do ever.

MWG Welcome back, folks. MoneyWiseGuys here for you today. We're talking college. Whether it makes sense for everybody, or not. We're talking to Gene Kelly, the founder and CEO of the Accelerated Training Institute, author of The College Myth. Now, as kids are approaching college, and maybe parents are listening to this interview, Gene, and they're going, "OK, I see that maybe college isn't for everyone, and I might have a kid that for a particular reason I think he or she shouldn't go." How do you have that conversation? What does that conversation look like with the child? And, how do you get away from it coming off sounding like, hey kid, don't worry about college, you don't need it anymore?

Gene: Great question. There's a lot of different kids that I give, and I give those away in the book that is at, so they can go download that, read it, go get some tips on how to have that conversation. Part of it is that there's certain realities that parents have these days about money, and they often feel the pure pressure of not having the conversation, and just saying, "Oh, well figure it out." So, they delay their retirements. They borrow money that they may not be able to afford to borrow. And when you consider that half the college students graduate, period, and the average time it takes is 5.7 years to get a Bachelor's currently, those are bigger money conversations that they really should have with their kids. And, that is part of it. The money. The second part of it life. What kind of person are you? Do you enjoy being inside? Do you want to work in a cubicle? Are you good with that? Do you enjoy being outside? Do you want to work with your hands? Are you good with that? Again, there is not one size that fits all, and that's the biggest mistake that we've made in this country, is saying "No Child Left Behind" that implies that you're left behind if you don't go to college. So, having that conversation with a child I think is not one conversation, you're done. I think that that's an exploratory issue. And, again, I greatly encourage people to do things like internships, get part-time jobs, try the areas. When I was out of high school, I thought, "Well, gee, I'd like to be a veterinarian." I probably didn't have the grades to get into veterinary school, but I went and I worked for a veterinarian for a little bit. And, I shortly found out that, "You know, this isn't what I thought it was. This is not for me." Well, what if I had had the grades and the money, and gone off to 7 years of school, and became a veterinarian? I'd be stuck! I would owe my soul to the school on that kind of deal, and I'd have to be in that field. And, I've got nothing... you know, I think veterinarians are great, but not for me. So the same for the different students—have the conversation about their natural gifts, the things that they like to do, let them try as many things as they can.

And then, if you are going to college, if that is a right path, have a plan for it. Have a budget for it. Don't get just mesmerized by the big shiny different colleges—they may not actually provide the best value or even the best skill sets to get into the profession or field they want. In Israel—I've been over there many times because part of my background was in consulting in security worldwide—but they had their students come out of high school, they have a mandatory 3 years in the military for males, 2 years for females, then most of them take at least a year off and travel around the world. And, when they come back at age 22, 23, 24, and start university if that's the path they choose, they're mature and they're ready to do it. And, that might be something in this country we look at a little closer. Giving people the option to try some life skills, to learn different things, to do what they do—volunteer work, or whatever. But we all have to understand, colleges are a business just like everything else, and they have a created a system of demand—somewhat false demand—to make it very very desirable to get into their school, and pay them a lot of money, without, by the way, any kind of guarantee of a certain outcome. Would you agree?

MWG Right. No absolutely, I would agree. And, let's talk a little bit about the impact that college spending is having on parents and their retirements, because we see this all the time. We see families come in, and they're retired, and they're going through assets quickly. And then, we find out that they're going through their assets because they're paying for school for their kids. And they just simply can't afford it. Can you talk a little bit about that.

Gene: Yeah, I mean that is something that's really sad. When our parents went through college, many of them did it on G.I. bills or they paid a very small amount—I mean, relative terms to what the earning potential was. But now, a private university in California is essentially a quarter of a million dollars for 4 years. Wow. OK. What does it take for a family to save a quarter of a million dollars post tax? That is a big, big, big chunk of money. And so, if a family is going to send a child to college, I would strongly suggest they explore every avenue in order to so debt free. And, that may mean taking a longer path. It may mean the student working. It may mean going to an accelerated program like ours, where we teach job skills in a very short period of time, and they can go work as a plumber's apprentice, or electrician's apprentice, and earn twice what they're going to make at some fast food joint—maybe 3 times. So, it's a complicated answer, and one size does not fit all. But, I think that amount of money that is being charged today in direct correlation to the benefit that they can get in the marketplace is nothing short of fraud.

MWG Well, this is certainly a fascinating discussion to have. The fact that student loan debt has now exceeded a trillion dollar, this is a discussion that we have to have. As painful as it is, you have to have this discussion. And I think a more nuanced approach to college, and how you're going to spend your money certainly would be welcome here in the U.S. We really want to thank you for coming onto the program, Gene, and talking about this. I want to recommend if you're interested in this subject, you want to find out more, you can go to the website, and it's on that site that you can download the book, But we do really want to thank you, Gene Kelly, and sharing with us your insight. Thank you so much, Gene.

Gene: Appreciate it.