We were touring an old castle, a stone fortress built by the Crusaders from the ruins of a Roman temple built 1000 years earlier. The fortress was built with limestone and marble blocks, half a ton apiece, transported dozens and even hundreds of miles over land and sea.

I had the same two thoughts I have every time I see a monumental structure like this: “What an immense human achievement!” And… “Boy, the person that funded this was really, really rich!”

I voiced this second thought to Osama, our archeologist/guide. He said, “Don’t forget. They had free labor. They had slaves.”

I’ve heard this said as a rationale for slavery more times than I can count. But it’s not true. Slave labor may be cheap, but it’s hardly free. A slave owner has to provide food and clothing and shelter to his slaves. And teach them the skills they need. And treat them when they get sick.

I kept thinking about this during the rest of the tour. And my thinking was that in purely economic terms – from the point of view of the guy who’s paying for it – there’s not much difference between slave labor and wage labor.

For centuries, most laborers were paid little more than what they needed for the basics: food, clothing, shelter. In other words, a worker received subsistence wages – a salary that was roughly equivalent to what it cost to employee him.

All this began to change – a bit – during the Industrial Revolution. There was suddenly such a huge demand for labor, skilled and unskilled, that some wages began to rise above the subsistence level. Especially for those with technical skills.

Today, in the industrialized West, unskilled laborers are usually paid a salary that leaves little or nothing for saving. But what constitutes subsistence is much more than it used to be. The real improvement has been in the wages of skilled and even some semi-skilled workers. They can make enough to cover the basics and buy some modest luxuries and even save a little, if they try.

This increase in worker compensation was the result of widespread industrialization. It was partly a matter of scientific development, but also a matter of an expansion of capital in the private sector. Growing industries created growing profits. And that led to the growth of banking and other forms of capital investment.

I thought some more about that and then I had this thought:

At base, there are only three ways to participate in an economy: as a laborer, as a merchant, or as a capitalist.

 That was true 2000 years ago. And it’s true today.

* You can make money as a laborer: i.e., a worker.

* You can make money as a merchant: i.e., a businessperson.

* You can make money as a capitalist: i.e., a banker.

There are grades and variations of each one, but these are the core three.

(Well, you can also make money through robbery, bribery, and extortion – but we are not talking about government jobs here.)

Workers make money by working. This seems redundant, but it needs to be understood. As a worker, you are essentially trading your time or dollars. You can make extra money in two ways: by working more hours (if you are paid by the hour) or by doing more work per hour (if you are paid piecemeal).

Businesspeople make money by trading things. Working more hours and/or doing more work per hour can have a positive effect on how much money they make. But the real determinant is profit.

A businessperson makes a profit by selling things at a higher price than it cost him to make or acquire them. If he fails to do this, he will lose money. Thus, the businessperson’s primary ability to make money depends on his ability to buy and sell. Buying and selling prices are partly determined by supply and demand. But the businessperson that buys cheap and sells dear can make money even when the economy is difficult.

The primary difference between a worker and a businessperson is that the worker earns his money as salary, which is a legal contract, and the businessperson’s income is determined by profit, for which there are no guarantees.

The third way to make money is to act as a banker. A banker is someone that comes to the economic table with capital – i.e., a store of money that he is willing, under the right circumstances, to lend or to invest.

Like the worker and the businessperson, a banker has the potential to make more money by spending more time banking. And like the worker, the amount of money he makes is backed up by a legal contract. But unlike the businessperson, the primary factor in how much the banker makes depends on supply and demand.

Generally speaking, banking is easier than working and simpler than running a business. If you have money to lend, there will always be someone that wants to borrow it. If you lend conservatively (with sufficient collateral) to someone that really wants to borrow it, you can charge a high-interest rate. You can also have the borrower sign a legally binding document guaranteeing you a fixed return. Like a worker, you have the advantage of earning your money by contract. And like a merchant, there is no limit to the profit you can make when supply is limited and demand is strong.

Usually, when we talk about the economics of making money, we talk about all sorts of factors that complicate our thinking. Of these complications, thinking that there are dozens, if not hundreds, of jobs available is the most confounding.

Consider only the types of jobs you can have: You can be a farmer or a scientist or a doctor or a lawyer. You can be a plumber or a sheet metal worker or a retail salesperson. You can be skilled, unskilled, or semi-skilled. You can be experienced or inexperienced. You can be an entry-level worker or a manager or a senior VP. But at base, you are a worker. And if you understand that, you can understand why most workers never make enough money to acquire wealth. It’s because they spend their lives trying to make more money as a worker, instead of thinking about how they can take on other jobs.

That’s what we’ll talk about in Lesson 2.

7 Politically Incorrect Questions I’m Afraid to Ask

1. We know that money doesn’t buy happiness. So why do we assume that increasing the income of poor people will make them happier?
2. We know that if someone doesn’t want to learn, it’s impossible to teach them anything – and that if someone does want to learn, it’s impossible to stop them. So why do so many believe that we can improve education by improving schools rather than motivating students?
3. We know that one of the very few ways to enjoy life is to work hard and well on things we value. So why do so many spend their careers at jobs they hate in the hopes of gaining happiness later when they stop working?
4. We know that it is difficult to get homeless people off the streets. Providing shelters doesn’t seem to help. Neither do incentive systems. Is it possible that they are on the streets because they want to be?
5. We know that there has never been a Communist state in modern history that has improved the lives of its citizens. In fact, they have all resulted in stagnant or collapsing economies and the abridgment of freedoms. So why do so many (nearly 50%) of our college students believe that Communism is a viable economic and political system?
6. We know that war is fundamentally reductive. By its very nature, it is designed to reduce populations (particularly of young people), destroy infrastructure, cripple industry, and disrupt political, social, and economic institutions. Whatever its purported goals are, the end result is always less of everything. So why do so many believe it is a smart solution to political, social, and economic problems?
7. We know that ideology makes sense only in the abstract and that real-life advancements are made by pragmatism. So why would anyone want to be an ideologue?

I hadn’t read Harper’s in years. Like 20 or 30 years. I remembered it as a magazine of intelligently written essays about meaningful subjects. Reading it, I felt like I was using my time wisely.

In the Fort Lauderdale airport waiting for our Emirates flight to Dubai, I picked up two magazines. One was a special issue of Time on “The Science of Good and Evil.” The other was the most recent issue of Harper’s, with the irresistibly titled cover story “Is Poverty Necessary?”

As I began reading, I was trying to remember whether the magazine had a political slant. I got my first hint in the first sentence of the second paragraph. The author, Marilynne Robinson, writes, “Back then [in 1989], I shared the American assumption that such things [as environmental risks in England] were dealt with responsibly, or at least rationally, at least in the West outside the United States.”

She then tells us that “in order to understand all this, [she] read classical economics, using Marx’s Capital as an annotated bibliography.” And she wasn’t kidding.

The argument that ensues is largely based on Progress and Poverty by Henry George, an obscure American economist, published in 1879. George, Robinson says, argued that “the wage of a worker should be a share in the value his or her labor creates.” And that “this excess of value should be a resource of the community.”

I didn’t bother to find out if that was an accurate summation. If it was, I can understand George’s obscurity. Neither of those two statements makes any sense. The value of something is not a fixed thing. It’s not even a real thing. The value of anything – a product, a service, an idea, or a living being – can be established only by what someone is willing to pay for it. And that can be influenced only by supply and demand.

You can decide that your bike is worth (has a value of) $150. But if no one is willing to pay $150 for it, guess what? You are wrong. Could it be worth $150 one day? Sure. And if you are willing to wait and see, you’ll find out. But what it’s worth then doesn’t change the fact that what it’s worth now is less than you think.

Likewise, you can decide that an hour of your labor is worth $50 or $500. But again, if no one is willing to pay you that much, you are wrong.

This is the problem that Robinson runs into later in advocating government-mandated minimum wages. Because governments operate on the basis of force, they can indeed determine prices. Taxes and tariffs are ways to determine the prices of goods. And minimum wage laws can determine the prices of human labor.

But here’s the problem: There is a difference – a big difference – between the price of something and its value. This is at the core of what’s wrong with people that believe in government solutions to economic problems. The use of force can raise and lower prices. And the use of force – via tariffs, embargoes, and sanctions – can even influence the supply of goods and services. But force can never determine demand. Because demand depends on value. And only the free will of the market can determine that.

This should not be a surprise to anyone that’s spent more than a few hours thinking about economics. Nor should it nonplus anyone that has studied the history of wealth redistribution.

It doesn’t work logically because the premises are wrong. It doesn’t work theoretically because the most important facts are wrong. And it doesn’t work practically because it completely ignores human psychology.

When I read an essay like Robinson’s – a well-articulated but profoundly bad idea about economics – I wonder what level of exposure the author has ever had with the actual dynamic of a real business. My best guess is that they have spent a lifetime in academia. Or worked for the government or a non-profit. But what are the chances that they have ever worked for an actual business whose survival depended on creating value?

I’d say next to none.

In Robinson’s mind, the world is a place that has 99% poor and struggling people and 1% rich folks. She looks at all the wealth that these rich people have and she thinks, “Why don’t we simply move some of that wealth from the 1% to the 99% and get rid of all this poverty?”

Just distribute all that wealth equitably and poverty will go away.

It takes an amazing amount of ignorance to believe that.

Distributing wealth, no matter how you do it, will never eradicate poverty because it cannot.

The problem with poverty is an insufficiency in the production of wealth. And an insufficiency in the creation of wealth is caused by an insufficiency in the production of profit.

Do you want to know how to get rid of poverty?

Create something – a product or service – whose value is greater than what it cost you. Then sell it. This produces what is known as a profit. Profit is unnatural and difficult to produce. But it is the only thing that can get rid of poverty – your own poverty and anyone else’s that you want to devote those profits to.

Many of my Libertarian colleagues, who are among my smartest friends, don’t believe in going to college. A recent essay by James Altucher on his blog – titled “Seven Reasons Not to Go to College (and a Solution)” – is an example.

I’ve always argued in favor of college. And my argument went something like this: Most kids can only learn so much in high school because their hormones are raging 23 hours a day. And also, let’s face it, most of us are idiots at that age. Still, if you apply yourself and have good teachers, you can get a very solid base. If you have that, and you continue to have the drive to learn, it’s quite possible that you can develop expertise in certain specific skills (even law, if you live in California). Then you can get a great job or start a business and make great money and all of that.

But that’s very different from being well educated. Well educated means – in my book – that you have a superior level of competence in life’s three essential skills: thinking, writing, and speaking.

The first of those skills – thinking – is a sine qua non as far as being well educated is concerned. But learning how to think well isn’t something you are likely to do in high school. Unless, that is, you are brilliant and go to a school populated with brilliant teachers and students. (I suspect this was true for my friends who are anti-college.) For the rest of us, high school is an emotionally and sometimes physically challenged gauntlet of horrible situations and even more horrible people acting at their worst. There is a nearly zero chance to be able to learn how to think at a high degree of competence in such an environment.

The same can be said for the slightly less difficult skills of speaking and writing – which are essentially two versions of one skill: rhetoric.

But you can, if you apply yourself, learn to think and articulate your thoughts in college. In college you have – or can have, if you want – the freedom and privacy to do so… and plenty of smart and thoughtful people around to help you.

Having said that, I would admit that 90% of those that go to college don’t learn these skills. They waste their time doing the sort of idiotic things they did in high school. And perhaps that’s okay, because they are probably going to spend the rest of their lives being thoughtless and rhetorically impaired.

So… for the 10% that go to college to learn, it is worth every penny they pay and every hour they spend.

That was and still is, to some degree, my argument.

But I’m starting to change my mind.

The first reason (and James makes this point in his essay) is that if you are in college to learn anything technical or anything business related (anything except liberal arts), you are wasting your time. Because anything you learn will be outdated or simply useless when you get into the “real world.” You’ll get a job and you’ll have to learn on the job.

The second reason is that if you do go to college to learn how to think and articulate your thoughts, you are going to be in liberal arts. But liberal arts programs these days are factories for idiotic group-think ideas like Socialism and identity politics. It’s actually impossible to learn those subjects and learn to think at the same time because the two activities are antithetical.

And there’s a third reason (and James mentions this, too). College is absurdly expensive. Way more expensive than it should be.

I’m not in favor of Bernie’s and AOC’s solution – free college – because this would do absolutely no good. The 90% of the college population would learn less not more if they went for free. (You don’t value what you don’t pay for.) As for the 10% that can’t afford it… I’d be in favor of giving them whatever financial aid they can’t get. (Most of those with financial aid do pretty well.)

But here’s the thing…

I think the current state of college education is on its way out. Young people today are more than equipped to learn online. Not just to access information and listen to lectures, but to interact with professors and coevals in all sorts of ways. And they can do that without leaving home. They can do it at their own pace. And at a fraction of the current costs.

I believe that in the next 10 years, there will be all sorts of online universities that will offer a perfectly good college education (good enough for the 90% at least) for a fifth of what kids are paying now. There will also emerge all sorts of online programs to teach kids specific skills and technical knowledge much more efficiently. They will provide certificates rather than diplomas, but that will be good enough for most careers that they might want to pursue.

It’s too often said – and I’ve been guilty of contributing to this myth – that the only realistic way to become wealthy is to go into business for yourself.

While it’s true that reaching billionaire status is almost always the result of owning large blocks of stock in a business you own and run, you can certainly become a millionaire and even a multimillionaire as an employee. I know that to be true from personal experience.

Even an ordinary employee can become wealthy simply by earning a decent income and saving a good portion of it.

Consider this: If you can save $10,000 a year over an average career length of 40 years and invest it in a stock portfolio earning an unexemplary 9% ROI, you will retire with a net worth of $3.3 million.

Does $10,000 a year sound like too much? Does $6,000 a year – $500 a month – sound more doable?

That will give you a retirement nest egg of $2.2 million. Not bad, right?

And there are ways to do much better than that, which  I’ll get to in a minute.

Here’s the thing: The secret to getting rich as an employee is to save as aggressively as you can while you nudge up your yearly compensation.

There are 4 simple ways to gradually increase your income:

1. Shine immediately. Show your supervisor, from day one, that you are smart, ambitious, loyal, and talented. Make it clear to him that you are going to work your ass off to help him accomplish his goals.
2. Be the guy everyone wants to work with. Make your fellow employees – as well as the big bosses – feel like you are someone that can get the right things done… in the right way… with a positive attitude.
3. Embrace the dawn. Never be late. As Jeffrey J. Fox observed, “Arriving to work late signals you don’t like your job very much. Even if you prefer to come in late and stay late, staying late sends the signal that you can’t keep up or your personal life is poor.”
4. Understand the most important facts about business. The lifeblood of business is profit. And the long-term success of any business depends on creating continuous value for its customers.

Do these four things and you will become known as (because it will be true) an exceptional employee. Your superiors will trust you to show up and do good work, all the while aiming to make their jobs easier and the company’s profits higher. You will be given regular opportunities to take on more challenging work. Accept those challenges and you’ll have no problem earning enough to save $6,000 to $10,000 a year.

If your idea of “rich” is more than several million dollars, you can do that too as an employee. You merely have to upgrade your reputation from exceptional to invaluable.

What is an invaluable employee?

To a business, an invaluable employee is one that can make a critical contribution to the bottom line. All businesses need various skills and talents. But they mostly need, and mostly value, those that stimulate sales, increase customer retention, boost customer spending, and bring in a bigger profit. That includes:

* the profit makers – the CEOs, division heads, and profit center managers

* those that I call the inventors – employees that are responsible for developing successful new products and services

* those that generate revenue – i.e., employees with the marketing and selling jobs conduct your own investigation into your company’s sales and marketing programs. Talk to those who already have the kind of job you want. Ask questions. Show interest. Be thankful.

Volunteer to help them in your spare time. Be frank about your motivation: You don’t want to take their jobs, but you do want to learn how to do what they do so you can become more valuable to the business.

While you are doing that, make sure you get noticed by the higher-ups in the company. Don’t boast about what you’re doing… but don’t be shy either.

Eventually, you will surely be offered the job you want. And when that happens, grab it.

One final thing: When it comes time to negotiate your compensation as an invaluable employee, fight modestly for an increase in your base pay and assertively for incentive bonuses based on your performance.

As you rise to more senior levels, you may even have the opportunity to take home a share of the profits you are generating. When that happens, you may one day find yourself saving not $20,000 or $30,000 or even $40,000 a year. You may get to the point where you are able to save six figures.

And when that happens, you’ll have the startling revelation that you can retire early… if you want to. But you won’t.

I recently read about a study, carried out by researchers at Yale and Oxford and published in The Lancet, that discovered that “exercise is more important to your mental health than economic status.”

It took me a moment to comprehend that. Is it a question that people are asking? Is it a question that can provide useful answers? Is it a question that you can even study in a scientific way?

As it turns out, the study was based on an electronic survey. The researchers asked 1.2 million Americans: “How many times have you felt mentally unwell in the past 30 days, for example, due to stress, depression, or emotional problems?”

The participants were also asked about their income and physical activities.

The results?

Those that exercised regularly felt bad, on average, 35 days a year. Non-active participants felt bad 53 days a year.

But also: Physically active people felt just as good as inactive people who earn around $25,000 more a year.

There are many problems here.

First, surveys about behavior and feelings are virtually worthless because people aren’t honest in answering such questions.

Second, even if they try to be honest, they cannot accurately remember their behavior and feelings over long stretches of time.

Third, in concluding that exercise creates happiness, The Lancet(which is becoming famous for publishing bad science) is conflating correlation with causality. This is probably the most common error made in understanding studies.

Let’s look at that study again…

It found that people that exercised regularly reported that they felt happy on more days than sedentary people. But that doesn’t mean – at all – that exercise is the cause of that additional perception of happiness.

You can use the same data to come to the opposite conclusion: that happier people are more likely to exercise – i.e., that feeling happy causes exercise.

There are actually dozens if not hundreds of variables that affect happiness. Exercise is just one of them. And since this study was not controlled (did not consider all the other variables, since doing so would have been impossible), what you have here is correlation, not causation.

With a correlation, you can come to whatever conclusion you want. And I believe that the researchers in this case wanted to come to a positive conclusion about exercise.

But it’s much more likely that the study proved what is common sense: that mentally healthy and happy people tend to take better care of themselves in every way.

You can also come to the opposite conclusion regarding income. That for the same cohort of people (those that don’t exercise), making more money does indeed make you happier.

Every asset class has its own inherent ROI (return on investment) range.History suggests, for example,that it is 8% to 10% for stocks, 5% to 7% for corporate bond, 3% to 4% for municipal bonds, and 5% to 8% for rental real estate. The prudent wealth builder designs his investment strategy accordingly. Rather than trying to beat intrinsic ROIs, he accepts them and, if these do not suffice, finds alternative ways to achieve his goals.

The big mistake most wealth seekers make in regards to return is to try to “beat the market” – i.e., to strive for higher-than-average returns.

This is done for two reasons: ego satisfaction and ignorance. Getting higher ROIs than everyone else is a psychological trophy for those that believe it can be done. And the mainstream financial community does everything it can to encourage investors to believe they can. They themselves are motivated by ego (they have the secrets) and by greed (they make more money when investors pay them for advice on how to do it).

Case in point: Years ago, I made a speech to a room full of affluent investors about an opportunity to make 12% to 25% on a leveraged real estate deal. As early investors, this range of returns was possible.

A large, bald-headed man in the back stood up and interrupted me.

He said he wouldn’t think of investing in my idea. “Unless you can give me a 10-to-1 return, I’m not interested in what you have to say,” he announced.

A few people applauded him.

The coveted “10-bagger.” What investor hasn’t dreamed of that?

The thing is, none of the successful, long-term investors I know advocate or follow this strategy. More importantly, most of the tens of thousands of investors that do chase huge returns live to regret it.

The average stock market return over 100 years is 8% to 10%, depending on how you crunch the numbers. If you accept that and invest conservatively, you can expect to earn that much, over the long run, from stocks. But investors that try to beat at 8% to 10% fail to reach that goal. Countless studies indicate that they get returns of about 3%.

The dream of getting 1000% returns are touted by two groups of people: investment professionals that achieve those numbers very occasionally but make their big money by selling the dream, and inexperienced investors like the man who interrupted me.

Like my bald-headed critic, you may think that 8% to 10% returns are boring. If you do, I can only say this: You are wrong. And this idea will eventually make you poorer than you are today.

But there is a more important reason to accept intrinsic ROIs. It forces you to accept reality. When you calculate the future growth of your investments realistically, you may discover that your current portfolio of stocks and bonds will not get you to where you want to be. Realizing this, you must make a decision: Accept and adjust to a future of lesser wealth or search out other activities – which almost always require more time and effort than stock and bond investments – where you can earn higher intrinsic ROIs.

The intrinsic ROI for real estate in the USA is about 4%. But if you invest in income-producing real estate by buying rental properties at discount prices, you can expect to earn 6% to 8% a year. And if you leverage those investments with mortgages, you can expect to earn 8% to 12%. And if you take it one step further by improving those properties and raising rents accordingly, the intrinsic ROI will be in the 12% to 16% range – sometimes even higher.

Yes, rental income requires more time and work. But if you are willing to take that extra time and do that extra work, you won’t have to abandon your goal of achieving greater wealth in the future.

* In this series of essays, I’m trying to make a book about wealth building that is based on the discoveries and observations I’ve made over the years: What wealth is, what it’s not, how it can be acquired, and how it is usually lost.

I should have said something…

He began, 25 years ago, as an accounting executive with a German partner of ours. Bright and ambitious, he rose quickly through the ranks to head of marketing, head of operations, and then COO, working with the company’s founder to break through the $100 million barrier in less than 10 years. When the founder retired, he took over as CEO and steered the company profitably for another 12 or 13 years.

Then, two years ago, he told me he was going to retire. “Bad idea,” I thought. But I didn’t say anything. I didn’t want to rain on his parade.

So he retired. The company threw him a big “goodbye” party, and I was one of dozens of colleagues from all over the world who flew in to help him celebrate.

A few weeks ago, he emailed to let me know that he and his wife would be vacationing in South Florida. I was eager to catch up with him, so we made a date to meet at The Green Owl, my favorite breakfast spot in Delray Beach.

“How’s retirement going?” I asked, as the waitress plunked down two cups of coffee on the table.

He shook his head.

“What?”

His was a story I’d heard many times.

Before he retired, he was the man. He was not just the big boss. He was the guy you went to when you had a problem you couldn’t solve. The business thrived on his ideas and his energy.  So when he announced his retirement, the company’s top execs were in a panic. They tried to convince him to at least keep working with them as a consultant.

As a courtesy, he stayed an extra two months to make sure that everything was buttoned up. And he told them that after he’d had some time to enjoy retirement, he’d be happy to talk about that attractive consulting gig.

It wasn’t long before he realized that he missed the problem solving he had always been so good at. So he contacted his former fans at the company.

Much to his surprise, they weren’t so eager to talk to him. And when he managed to nail them down to a meet up, they politely hedged for an hour and wished him well, but he left without a consulting job.

He kept at them for a while, identifying a half-dozen specific ways he could help them cut expenses and increase profits. They demurred. Finally, he reached out to the founder, his longtime partner in building up the business. “Sorry. I don’t call the shots anymore,” the founder explained.

So here he was, 18 months into his glorious retirement, unable to get back to doing what he did best. And feeling that he had devoted his best years to building a successful business that was now scorning him.

I should have said something…

In fact, I should have sent him one of the essays I’ve written about this subject.

Retirement has indisputable attractions. But as I learned the three times I tried and failed to retire, it also has three unexpected consequences.

* When you retire, you give up your active income. Without an active income, you are dependent entirely on passive income. When you are dependent on passive income, you are more likely to make unwise, wealth-damaging investment decisions.

* Unless you have a fair amount of brain damage, spending four or five hours on the golf course is not a pleasant way to spend your day. Likewise for shuffleboard, board games, and other activities that seem like a lot of fun when you have a full-time job.

* If you do retire and decide you’ve made a mistake, it’s difficult to come back. For one thing, nobody really wants you back. (Although they may pretend otherwise.) The current management of the company you left will see you as an old timer with old ideas that will clog things up and get in the way. And they are probably right. Things change fast today. Six months of being away will put you one step behind. A year of being out of the trenches will set you back by a mile. And two years? Forget it. It will be obvious, even to you.

Is there a solution?

Yes. In fact, there are three.

1. If you own the business, don’t retire. Let other people run it. But don’t give up the captain’s wheel until you are on a walker.
2. If you don’t own the business but have serious skills, create a retirement job for yourself long before you retire. Figure out something useful you can do that you would now, as a senior executive, pay for. And enlist all your clients, including the business you work for, before you retire.
3. If you have a regular job with a regular business, start a side business now. Work it nights and weekends till it’s giving you whatever extra income you need for retirement. Then, when you want to, you can quit.

A huge mistake many, if not most, direct response marketers make is to pay scant attention to the offer.

Many years ago, a colleague of mine and I developed a protocol for reviewing and revising marketing copy ( the “Peer Review”), that is used today by businesses all over the world.

It was a low-stress, time-efficient, non-critical way to identify weak copy and make good copy better.

Recently, I introduced a similar strategy for reviewing and improving direct response offers. (The offer is essentially the proposition you make to the buyer at the end of the sales pitch: “Here’s what you get. Here’s the price. These are the terms. And here’s the guarantee.”)

Although they say “copy is king,” anyone that understands how direct marketing works knows that of the three elements that comprise a sales promotion, the first in importance is media (the list you go to). The offer is second. King Copy is third.

That’s why I’ve always urged my clients, employees, and marketing protégés to devote as much time to the offer as they do to the copy. I’ve sung that song for many years, but I was usually singing into the wind. To change behavior, you need to give people more than a good idea. You have to give them an instruction manual.

So here’s a preliminary instruction manual for the Offer Review:

* Enlist. 4 to 6 people to participate, including the copywriter.

* Circulate. the draft of the promotion, including the existing offer, so they can read it before the review.

* Refresh. Ask the reviewers to skim the promo again at the beginning of the meeting, so that both the copy and the offer are fresh in their minds.

* Rate. After they’ve finished skimming the promotion, ask them to rate the offer, from 1 to 4, based on how compelling it feels to them.

1 – Not very interesting.

2 – I’m thinking about it.

3 – It sounds good.

4 – This is too good to say no!

* Discuss.  Allow everyone to explain his/her rating. Have a short, general discussion of the copy’s strengths and weaknesses and how that affected their feelings about the offer.

* Question. Ask, “After reading the promotion, what possible objections or doubts might the prospect have at this stage? Enumerate them.” Then ask, “What can we do in terms of the offer that can answer these questions and/or overcome these objections?”

* Challenge. Ask, “How else can we strengthen this offer? How can we make it absolutely irresistible to our prospective buyers?”

* Finish the meeting with a recap of what the new test offer will be.

* Follow up with a note to everyone confirming what they will be testing.

This is just a first draft of the Offer Review. It will need to be refined through practice. But although it’s not perfect, it’s roughly right and should be very useful to any marketer that wants to achieve maximum results.

At my niece’s college graduation last week, one of her friends asked me whether I thought getting an MBA was worth it.

I have no problem articulating my opinions when I’m writing or speaking to the many. But when an individual asks for my thoughts, I’m reluctant to provide a definitive answer. Because results, as they say, do vary.

I don’t want to bump into the same person in 10 years and discover that I ruined his life by giving him bad advice.

My answer, therefore, was a moderated version of what I’ve been saying for many years: You definitely do not need an MBA to succeed in business. You may need an MBA to be accepted for certain jobs – to work for a large bank, accounting firm, business consulting firm, and so on. But for the most part, those are safe jobs for ambitious plodders. Not the kind of jobs I’d normally encourage anyone to pursue.

Many would not agree with me. I know parents that have encouraged if not begged their kids to get MBAs. And many of them, millennials, listened. MBA programs are proliferating, and the number of MBA graduates in the US has doubled to almost 200,000 in just a few years.

If you want to be a doctor and save lives, I find that admirable. If you want to be a lawyer and fight injustice, I admire that too. Anyone that dares to be a teacher deserves not just admiration but awe.

But I have a feeling that most people who pursue an MBA do it because they see it as a safe and predictable way to make a good income. That’s not a wise way to move into a career.

Let’s face it, most of the fun and the profit in a career comes from getting involved with an up-and-coming business and then rising to the top as it grows. To do that, you don’t need an MBA. In fact, as I have argued many times, you would probably be much better off with a much less expensive liberal arts degree.

Why?

Here’s how I explained it in an article titled “The Case for a Liberal Arts Education”:

A liberal arts education teaches you three skills: to think well, to write well, and to speak well. And in the corporate world – and in the entrepreneurial world as well – wealth is created by analyzing problems, figuring out solutions, and selling those solutions. In other words, a liberal arts education is tailor-made to give you the skills you need to succeed in business. And not just to do well. I’m talking about going all the way to the top.

 Businesses have one fundamental problem that presents itself endlessly in different disguises: how to sell products/services profitably. There are many, many solutions to this problem. Even in a specific situation on a specific day, there is always more than one. And the person who can regularly come up with solutions – and convince others that his solutions should be implemented – is the person who is going to get the rewards. The money. The power. The prestige.

 Yes, you can improve your thinking, writing, and speaking skills while enrolled in [an MBA program]. But it will happen indirectly and additionally. It won’t be what you are mainly concerned with. With a liberal arts education, you ensure that you will spend most of your time learning and practicing the very skills you will use later to get your ideas and solutions sold.

Of my three sons, only the third one got an MBA. He told me that it was valuable at the beginning of his career. (He became a copywriter for an investment publishing business.) But now, after less than five years, he uses very little of what he learned about business in his master’s program at the University of Denver.

Think of it this way: What skills and knowledge are you likely to acquire by spending two or three years on an MBA?

You will spend a fair amount of that time studying business management. But IMHO, business management cannot be taught. It can only be learned by experience.

You will also almost certainly take a few classes in business ethics. These are popular to the point of being requisites in many MBA programs today. But business ethics is a vacuous idea. There is only ethics. And that is something your parents either taught you or they didn’t. You can’t learn it in school.

What about accounting? The only accounting you need in business (if you are not an actual accountant – a dreadful occupation) you can learn on your own. Ditto how to read a P&L and a balance sheet. And basic statistics (which has helped me avoid all sorts of mistakes).

The bottom line: If you are mildly ambitious, moderately intelligent, and risk averse… by all means, get an MBA.

But if you want to work for a growing business, doing interesting projects, taking on exciting challenges, and eventually conquering some portion of the business world, skip the MBA path and devote those years to learning on the job.