A note from Larry: How a weakening economy will impact College Admissions and Your Teen's Future.
Follow Tigerway's Founder Larry on Youtube @LarryCheungCFA to understand where the economy is heading
Note to All Families: As you or your teens start planning for college (or are already attending college) and begin the journey for learning good financial habits and strong personal finance skills, we strongly encourage you to subscribe to Tigerway Founder Larry’s Youtube channel where he covers macro economics, investing, and the outlook for the economy in the coming years. For students who truly want to get financially ahead later in life, we believe there is no better resource than to learn from a Chartered Financial Analyst (CFA).
Students work hard for one reason, and one reason only: to secure a better future for themselves and their families. Understand the economic landscape that we are in, and choose a major that is aligned with where the U.S. economy is heading. Subscribe to the channel right now.
This email is written by Larry. Periodically, I will write to you about the State of the Economy. For more frequent updates, subscribe to my Youtube channel above.
Dear Tigerway Team Members, Parents, and Prospective Families,
I am witnessing something disturbing happening in the economy, and what I’m about to share has implications for your teen’s future.
To put it simply, we are entering a recession (if we aren’t already in one). The Federal Reserve recently put it best in their latest press conference called the November Federal Open Market Committee (FOMC): we are entering a period of “below-trend” growth.
That’s just a fancy way of saying that the economy (job market) is going to see (much) tougher days ahead.
I’m not going to sugarcoat it - we are about to see a couple things happen and some of them are taking place as we speak:
Consumer confidence for many households is going to be relatively fragile
The market value of homes will fall for many Americans
The unemployment rate is likely to rise from here.
The difficulty for college graduates to find a job will increase from here
The competition for the same jobs that are available in the marketplace will increase
Yet, despite all these major headwinds that good families in the U.S. have to go through, they have to contend with another even more serious problem.
The fact that College tuition inflation is compounding on a more expensive tuition base, while real inflation-adjusted wages for most Americans have fallen.
Because of this structural issue in higher education, some families are finding college to be more and more difficult to afford.
You can see this confirmed here on Bloomberg.
Yet, in such a developed and mature economy like the U.S., it is my firm opinion (and our official opinion at Tigerway) that securing a college degree at a high-ranked school along with studying a promising major is one of the surest and highest-probability chances of moving up the social ladder.
This is creating a situation that must be closely considered. Here are my observations:
Students who enter a top-ranked college and study an in-demand major will position themselves for the scarcest opportunties in the marketplace
Students who get “accepted” into a good college but do not have the academic fundamental strength to thrive on campus will later forgo the best career opportunties to their peers.
This is why strong grades in school and strong SAT/ACT scores are so important. This is why families who understand the big picture see the immense value of tutoring/coaching for their children.
Students who get into a college whose career recruiting strength isn’t recognized in the marketplace will end up having a very challenging time securing desired job placements compared to their peers at other schools.
In my opinion, the U.S. public school system is setting up a cohort of students to succeed and thrive in the new economy.
Another (larger) cohort of high school students are left to find direction on their own as the student:teacher ratio is now at historical highs, given staff shortages and budget cuts at many of the public U.S. high schools.
See here as an example of the plot against the average High School teen:
The U.S. has many of its colleges adopting a test-optional policy. As we know, this means only the most motivated students will attempt to shine on this exam. This ends up creating a cycle where stronger students have stronger profiles to show colleges. Meanwhile, students with softer grades and softer profiles have their opportunity set squeezed out from them (even though the landscape “feels” more equal).
While standards are being LOWERED at the high school level, standards to get INTO highly desired jobs after college graduation is increasing. This is a disastrous recipe that leads to immense issues down the road.
As a Chartered Financial Analyst, I recently received this email letting industry practitioners know that now Juniors in college will be able to take the CFA Level 1 Exam (previously you had to at least be a Senior in college).
My Program Officer Jasmine Ngo will highlight this in a separate email later this week, but I want you to think about the following considerations.
The CFA Level 1 Exam has a pass rate of between 30% and 40%. This first exam (out of 3) is a strong signal to finance employers that the candidate is well versed in this area.
My question to you is this: if someone went test optional in high school, and has weak academic fundamentals, how are they supposed to be able to pass this test as a junior in college?
I repeat: How are the students, who were given a free pass, in high school supposed to pass these credentialing exams?
The answer? They won’t.
Their more advanced peers will though. This is because their academic foundational skills prepared them for this.
The current system has made many students unprepared for the rigors that lay ahead.
The only cohort of students who have a higher chance of passing this exam (the CFA just being one example) are those with strong academic fundamentals. The Students who treated every challenge as an obstacle to overcome, not a challenge to avoid.
At Tigerway, my mission is to help you understand the big picture.
We’ve helped thousands of students get higher SAT scores and get into good colleges.
But to me, that is not enough. I want you to be successful. I want you to recession-proof your future.
I want you to see the big picture. I want you to understand what is happening in the economy as we speak.
And I want YOU to be on the winning side of the economic transformation that is happening as you read this email.
Share this email with friends and family. Give us a call if you want to discuss taking your teen’s academic skills to the next level.
In emails that I personally write (like this one), I will make no attempt to push you to make any decision.
You know what is best for your teen.
Make sure to subscribe to my Youtube Channel to stay on top of markets and how to get ahead in life.
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