I purposely refrain from talking about politics on this blog, but something is happening in New York State (and other states in the US) that deserves your consideration. It concerns your right to learn and to use what you learn to benefit yourself and other people.

Regulating What You Can Learn

In April, regulators in New York State decided that yoga teacher training programs are “vocational training” programs, and are requiring these programs by force of law to register with the state or face a $50,000 fine. The licensing process takes 8+ months, and the state gets to decide what kind of education is “appropriate” for yoga teacher training. Current programs are being shut down via cease-and-desist letters from the state threatening legal action if the studio refuses to comply.

As I talked about in my post about Absence Blindness, what regulators fail to consider is all of the programs and all of the schools that simply will not open or be available because of this regulation. Many/most yoga studios rely on teacher training programs for the majority of their revenue – shut down the programs, and you shut down the studios, reducing availability of quality yoga instruction and eliminating the ability of yoga teachers to provide valuable instruction to willing students.

Yoga is centuries old, but now that it’s a $6BN industry, the government wants to get a cut, and it’s willing to destroy lives and livelihoods to do so. According to this memo by Ms. Carole W. Yates, the Director of the New York State Education Department Bureau of Proprietary School Supervision:

“If the student would expect to learn skills which may be used in an occupation at a later point, whether employed or self employed, then the training needs to be regulated by our bureau.”

This statement, my friends, is the most egregious and dangerous use of political power I’ve seen in quite some time. If you value your right to learn, it’s in your best interest to do what you can to fight this noxious idea in your own locale. If history has shown anything about political power, it’s that it tends to grow unless consistently and strongly kept in check.

Fight for your Right to Learn

This is not just about yoga – it’s about your right to learn marketable skills. By this definition, any source of practical knowledge that you can potentially use at any time in the future to improve your valuable skills and knowledge is subject to government regulation and approval. (Note: consistent enforcement of this regulation would require all publishers to comply as well – business / self-improvement books teach “skills which may be used in an occupation at a later point, whether employed or self employed.”)

I firmly believe that every individual should have the right to learn (1) whatever they want, (2) from whoever they want, (3) at a mutually agreed-upon price, and (4) apply that knowledge to the best of their ability to benefit themselves and others, without any interference from any governmental or regulatory body whatsoever.

What You Can Do Right Now

1. If you’re in the US, contact your Senators and Representatives about this issue. To educate yourself on the details, read this page, which is constantly being updated with new information as the situation progresses. Use this page to find your Senators or Representatives. Tell your congressional representatives to (1) speak to the Senators and Representatives from New York State about this issue; (2) actively reject all infringements on a person’s right to teach and learn in their own state.

2. Let your thoughts be heard. Write an e-mail or make a phone call to the NYS regulators below. Be courteous and polite (remember the Golden Trifecta: appreciation, courtesy, and respect), but be clear that this position is neither wise nor acceptable. People should always be able to learn from or teach whomever they agree to work with, without governmental or regulatory interference.

Carole W. Yates
Director (and author of the memo), Bureau of Proprietary School Supervision
518-474-3969
cyates at mail.nysed.gov

Edward G. Kramer
Supervising Investigator, Bureau of Proprietary School Supervision
212-643-4760
ekramer at mail.nysed.gov

3. Always remember that governmental power ultimately comes from one and only one source: physical compulsory force. Government provides many benefits for our society in the form of protection: police, military, and justice system. The governmental monopoly on the legitimate use of force is the best way to keep order in society, but it is open to abuse when that power is extended into domains in which its use is not legitimate.

In the case of this legislation, imagine a regulator walking into a yoga studio forcing compliance with this regulation at the point of a gun. It’s unnecessary and outrageous, and the only way to prevent this abuse of power is to take a moment stand up for your right to teach and learn.

(Captain America is a trademark of Marvel Comics.)

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Defend Your Right to Learn

If you’re on Twitter, feel free to follow me at @joshkaufman. Twitter is where I publish links to things worth reading, short quotes, progress on my personal experiments, and other updates that aren’t long enough for a blog post. In addition, it’s often faster to reach me on Twitter than e-mail if you have a quick question.

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Batch Book Buyer & Complete Business Library

The Batch Book Buyer and Complete Business Library pages have been updated to reflect the changes to the Recommended Reading List. If you’re interested in purchasing multiple books from the reading list, this will make the process quick and easy. Special thanks to Samina for helping with the coding on this project!

PMBA Community

In related PMBA news, the PMBA Community now has over 900 members globally! The quality of the discussions is fantastic, and everyone involved is welcoming and helpful. If you’re not yet a member, please join us – we’ll break 1000 before we know it! Special thanks to the PMBA Community moderator Shantanu Deshmukh for making the PMBA Community a great place to ask questions and share experiences.

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PMBA Site Update

Get Excited and Make Things. If there’s any single sentence that summarizes how to succeed in pretty much any area of human life, this is it. If you’re excited about something and focus the majority of your time and energy on creating something of value, nothing can hold you back for long.

Two important questions for you to ponder:

• What are you excited about?
• What are you making?

What to do if you’re stuck..

If you don’t have an answer to either of these questions, ask the counterfactual form of the question:

• What would it look like if you were excited about something?
• What would it look like if you started making something?

The conditional form of these questions is also useful:

• If you were excited about something, what would it be?
• If you were making something, what would it be?

The path forward is remarkably simple: answer these questions, get excited, and start making things. It doesn’t really matter where you begin, as long as you start and keep going.

(Hat tips to Tom Fishburne and Matt Jones.)

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Get Excited and Make (Useful) Things

It’s almost impossible to learn anything new if you think you already know everything:

Nan-in, a Japanese master during the Meiji era (1868-1912), received a university professor who came to inquire about Zen.

Nan-in served tea. He poured his visitor’s cup full, and then kept on pouring. The professor watched the overflow until he no longer could restrain himself. “It is overfull. No more will go in!”

“Like this cup,” Nan-in said, “you are full of your own opinions and speculations. How can I show you Zen unless you first empty your cup?”

Rejecting the Unfamiliar

J.D. Roth of Get Rich Slowly recently wrote a fantastic post about Fail-Safe Investing, a PMBA-recommended personal finance book. The investing methodology Fail-Safe Investing recommends is deceptively simple: there aren’t many moving parts, and 3/4 of the recommended portfolio is deeply counterintuitive. (The recommended portfolio is 25% total stock market index, 25% long-term treasury bonds, 25% cash/money-market, and 25% physical gold bullion.)

It’s not immediately obvious why Browne’s “Permanent Portfolio” is constructed in this way: you have to be willing to study it in more detail to understand why. (Here’s the short version: each of these assets fluctuates independently of each other in response to changing and unpredictable market conditions. At any point in time, at least one (potentially two or even three) of these assets will have decreased in value, but the others will have increased at least enough to compensate, if not allow the portfolio as a whole to increase in value.)

What’s even more interesting than JD’s post is the comments section. Almost immediately, readers started exclaiming that there is no way they’d ever consider holding that much gold, or that someone would have to be crazy to purchase long-term treasury bonds when they’re so obviously overpriced right now. Most of the commentators offered “improvements” to the portfolio without understanding the choices behind it, even though it was the first time they’d heard of the new strategy. Instead of learning more, they assumed what they already knew was better. Conspicuously absent was any comment like “I don’t fully understand these recommendations – can anyone explain or point me to more information?”

Seek First to Understand

J.D.’s reader’s aren’t unique – I regularly get comments and e-mails from first-time readers who believe that there’s simply no way a person can learn how to become a successful businessperson without getting an MBA.

In Stephen Covey’s 7 Habits of Highly Effective People (a previous PMBA recommendation), the fifth habit is “seek first to understand, then be understood.” This has always been my favorite of Covey’s seven habits because it’s a nice summary of the teacup parable – if your first impulse when faced with new information is to reject or “improve” upon it without first taking the time to understand it, learning something new will always be harder than it has to be.

Keep your head empty enough to continually fill it with something new, and you’ll go far in this world.

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Preconceived Notions and the Power of an Empty Cup

When Kelsey and I moved to New York City, we made a game of identifying the “rules” of living in New York. Every place has its own little quirks and implicit rules about how things work, and searching for them is quite fun.

One evening, as we were exploring the East Village, we came across a little stand that specialized in mixing fresh fruit and vegetable juices. We were thirsty, so we went in to see what they had. We chose a 8oz bottle to go – it didn’t have a price tag on it, but we expected the cost to be reasonable.

That little bottle of juice ended up costing over $9. (It was good, but not that good.)

Not long after our juice adventure, we were picking up some groceries from the local market, and decided that cookies and ice cream sounded like a good complement to the movie we planned on watching that evening. There was no price tag on the cookies, but we expected the cost to be reasonable. That package of cookies cost $8. As it turns out, the same package of cookies from another store less than two blocks away cost $4.

That’s when we formulated one of our rules of New York: “if it doesn’t have a price tag clearly displayed, don’t buy it.” If you don’t know what something actually costs before you decide to purchase it, it often costs you much more than it’s worth.

The Price of a College Education

“Price is what you pay. Value is what you get.” – Warren Buffett

In the market of goods and services, college education is unique in the respect that people typically assume that no price is too high to pay for a “quality education.” According to FinAid.org, a college financial aid website, the average cumulative debt for a student who has just completed an undergraduate degree is $22,500. For students who choose to pursue an MBA program after undergrad, total average cumulative debt is $41,687.

The implicit (and sometimes explicit) assumption is that any amount of money spent on higher education is money well spent, since it will always improve your ability to get a high-paying job after graduation. As a recent New York Times article points out, many recent graduates are finding out the hard way that this assumption isn’t quite true:

“You often hear the quote that you can’t put a price on ignorance,” said Ezra Kazee, who has $29,000 in student debt and has been unable to find a job since graduating from Winona State University in Minnesota last May. “But with the way higher education is going, ignorance is looking more and more affordable every day.”

An oft-quoted pro-higher education statistic is that college graduates will make $1 million more than non-graduates over the course of their working life. As a recent article in Forbes points out, this statistic is very misleading:

Like many good cons, this one contains a kernel of truth. Census figures show that college grads earn an average of $57,500 a year, which is 82% more than the $31,600 high school alumni make. Multiply the $25,900 difference by the 40 years the average person works and, sure enough, it comes to a tad over $1 million.

But anybody who has gotten a passing grade in statistics knows what’s wrong with this line of argument. A correlation between B.A.s and incomes is not proof of cause and effect. It may reflect nothing more than the fact that the economy rewards smart people and smart people are likely to go to college. To cite the extreme and obvious example: Bill Gates is rich because he knows how to run a business, not because he matriculated at Harvard. Finishing his degree wouldn’t have increased his income.

All the while students have been lulled into thinking of the extra $1 million that will be theirs, they have been forced to disgorge an ever larger fraction of it in pursuit of the degree. While the premium that college grads earn over high schoolers has remained relatively constant over the past five years, the cost of acquiring a degree has risen at twice the rate of inflation, dramatically undermining any value a sheepskin adds.

Offsetting that million-dollar income discrepancy is the $46,700 four-year cost of tuition, fees, books, room and board at a public school and $99,900 at a private one–even after financial aid, scholarships and grants. Add all this to the equation and college grads don’t pull even with high school grads in lifetime income until age 33 on average, the College Board says. Even that doesn’t include the $125,000 in pay students forgo over four years.

Whenever you take out a large loan for any reason, you’re essentially mortgaging your future earnings. Starting your independent life tens of thousands of dollars in debt (before factoring in things like car payments, housing, wedding-related costs, etc) is a major burden that most college students simply don’t consider before enrollment.

The primary reason people spend decades working in jobs they hate is to pay off personal debt. Fortunately, you have a choice in how you go about educating yourself – a choice that can save you hundreds of thousands of dollars over the course of your life.

9 Ways to Get a Valuable Practical Education Without Mortgaging Your Life

1. Recognize that most of the value of a higher education degree is in social signaling. It’s true that many employers will screen out your resume if you don’t have at least a bachelors degree. It’s a short-sighted policy, but it’s a reality, so the best thing to do is find ways to obtain a bachelors degree as quickly and inexpensively as possible. Reputable online accredited colleges like Excelsior offer test-out options, minimizing your time investment and cost.

2. Recognize that higher education is not as useful if you plan on starting your own business. If you already have skills you can use to create value for other people, no one cares where you went to school. If your goal is to become an independent entrepreneur, you’re best served by investing your time in improving your skills and actually launching the business.

3. Recognize that all education (including higher education) is fundamentally self-education. Teachers, professors, and advisors can help guide your learning, but it’s always ultimately your responsibility to learn the material. If you’re capable of succeeding after graduating from a highly-selective private college, you’re capable of succeeding after graduating from a state college / community college / online program – or without graduating at all. In the words of Jeffrey Pfeffer, professor of organizational behavior at Stanford, “If you are good enough to get in, you obviously have enough talent to do well, regardless.”

4. Separate price from value. It’s common for people to associate high prices with high quality, but you can often find huge educational value by taking advantage of inexpensive resources. If you do your research, there are many ways to minimize your educational costs: borrowing books from the library, using the internet for research, taking online courses, volunteering as an assistant or apprentice, etc.

5. Self-finance as much as possible. The less debt you take on, the better – look into ways to generate income while learning, either by working a day job or running a side business to cover living expenses. Avoid the temptation to rack up credit card debt – find creative alternative ways to fund your education.

6. Minimize your living expenses. The less money you need to live on, the more resources you can devote to educational opportunities and tools while minimizing your total debt burden. Resist the temptation to keep up with your peers when it comes to material possessions: simple exercises like “100 Things” can help you realize that you can live a very rich life without much stuff.

7. Invest in quality tools and experiences. Trying to teach yourself on crappy tools doesn’t make sense – effective learning relies on fast and accurate feedback, and the friction created by poor tools is a very real drag on your ability to improve your skills. If you’re teaching yourself computer programming, get a good computer; if you’re learning a second language, find a way to live in a country where that language is the primary dialect. As a rule of thumb, get the best quality tools you can afford.

8. Focus on learning economically valuable skills. In the immortal words of Zig Ziglar: “You will get all you want in life if you help enough other people get what they want.” The more you increase your ability to create real value for other people in the real world, the more you’ll prosper, regardless of what aspect of life you choose to focus on. Don’t ignore less economically useful skills like philosophy and history, but avoid operating under the assumption that knowledge in these areas will somehow translate directly into income.

9. Focus on learning directly from practitioners. Find a few people who are already successfully doing what you want to do, then find or arrange some way to learn from them directly. The lessons practitioners teach you will always be the most valuable, and you’ll learn how to make your goals a reality by following their example.

Follow these tips, and you’ll be well on your way to obtaining a practical education without giving up your personal and financial freedom. Education is great, but education with freedom is even better.

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How to Get a Valuable Education Without Mortgaging Your Life

In Patterns That Work, I compiled a short list of patterns that describe how the vast majority of businesses make money:

• Product: make a physical product, then sell and deliver it for more than it cost.
• Service: provide a useful service, then charge a fee.
• Shared Resource: create a shared resource that can be used by many people (like a gym), then charge for access.
• Subscription: offer an ongoing subscription, then charge a recurring fee.
• Insurance: write an insurance policy against some specific bad thing happening, collect premium payments up-front, then pay out claims only when the bad thing happens.

After thinking about this subject a bit more, I thought of five more common patterns…

• Resale: acquire an asset, then sell the asset to another buyer at a higher price.
• Lease: acquire an asset, then allow another person to use that asset for a certain amount of time in exchange for a fee.
• Audience Aggregation: create and distribute information that appeals to a specific set of people, then sell access to that audience (advertising, direct mail, etc.) to an interested third-party.
• Commission: sell an asset you don’t own on behalf of a third-party, then collect a percentage of the sale price as a fee.
• Dividend: purchase an ownership stake in a business, then collect a corresponding portion of that business’ profit over time as a dividend.

You can describe 99% of all businesses – past and present – using one (or more) of these core patterns. If you want to create a successful new venture, start looking for ways to do one (or more) of these things.

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10 Time-Tested Ways to Make Money