Entitlement Mentality Is A Sneaky Wealth Destroyer, Be Careful

After a 3-year COVID pause, student loan interest will resume starting on Sept. 1, 2023, and payments will be due starting in October,” according to the Department Of Education. “We will notify borrowers well before payments restart.”

Given the pandemic was officially declared over on May 11, 2023, it makes sense that student loan debt should start to be paid back. But of course, not everyone agrees.

Some people believe that a 3-year pause in paying back student loans is not good enough. Instead, they feel entitled to have their debt forgiven. This type of entitlement mentality is a huge crutch that may prevent them from becoming financially independent.

Let’s look at an example of entitlement mentality in action from a Twitter user.

Surprised To Have To Pay Back Student Loans

Below is a tweet by a woman who lives in New York City. I’ve greyed out the name to focus on the message. Let’s call her Patty and how having entitlement mentality can destroy her wealth-building potential.

Paying $1,298.83 a month in student loans is a lot! But on the bright side, at least her rent is affordable for the city.

Patty’s comment about “how do you expect Americans to pay this” is strange since she is the one who took out the loans. Of course she is the one who should pay back the lender. Who else?

If I borrow money from a bank to buy a house, I’m not going to act shocked that I have to pay the money back after a pause. I would feel fortunate I was able to get a mortgage in the first place to live in a new house. And when I finally pay off my mortgage, I will feel proud to have fulfilled my obligation.

The same logic goes for taking out student loans. Students should feel grateful an institution lent them money to go to college. Otherwise, they wouldn’t be able to go to college! Education is an incredibly valuable as you will see from the data below.

A College Degree Is A Valuable Asset

A college degree is valuable because the average lifetime income for a college graduate is far higher than the average lifetime income for a high school-only graduate.

According to 2022 data from the Federal Reserve Bank of New York, the median annual wage for a full-time worker aged 22 to 27 with a high school diploma is $30,000. For a full-time worker with a bachelor’s degree, it’s $52,000. That’s a $22,000 a year, or 73% difference!

According to The Association Of Public & Land-Grant Universities, the lifetime earnings for a person with a Bachelor’s degree is $2,268,000 versus only $1,304,000 for a person with a high school diploma.

Expensive Private University Tuition

Given Patty’s student loan monthly payment is $1,298.83, she must have taken out between $100,000 – $200,000 in student loans.

Although $100,000 – $200,000 is a lot to borrow for a college education, so long as Patty finishes college, the return on her college investment should be greater with enough time.

Given this logic, I naturally looked up where she went to school and what she studied. The school(s) must be pretty fancy to rack up so much student debt!

Ah hah! Patty got a B.S. from Champlain College, a private college I have not heard of. She then got a Master of Fine Arts in Writing from Columbia University, an Ivy League university.

Champlain College’s tuition this year is $45,100, which is actually $10,000 – $15,000 a year cheaper than other private colleges. However, getting a Writing MFA from Columbia costs $76,177 for tuition and fees alone this year.

Given her student loan monthly payment amount, we can assume she did not get a lot of grants or scholarships.

Going to private college is one thing. But to then take on debt to study writing is a suboptimal financial move. The median income earned by Ivy League graduates already isn’t much higher than non-Ivy League graduates.

Your Profession Matters More If You Take On Student Debt

After fourteen years of writing online and publishing a couple of books, I know that being a professional writer is hard. The pay is low and the rejection rate is high. If I had no other sources of income, it would be extremely difficult to provide for a family of four here in San Francisco.

It would have been better if Patty had gone to a cheaper state school, got a higher-paying day job, and wrote on the side. But what’s done is done. We can only learn from this example.

As a parent who went to a public university, this type of situation Patty faces is a big worry for my children.

What if my kids go to private grade school for 13 years and then get shut out from a top 50 university? What if they then insist on taking on student debt to attend an expensive private university, only to end up being underpaid or underemployed?

As a Financial Samurai, I can’t help but focus on the Return On Investment (ROI) of most financial expenditures. Paying for college and spending all that time getting degrees are two of the biggest investments one can make.

Entitlement mentality may have a way of sneaking up on children who grow up in secure homes. However, if my children cannot understand the importance of honoring their debt obligations, I feel like I will have failed as a parent.

Most people do not have such privileges to attend two private universities and pursue a career in writing in one of America’s most expensive cities.

Feeling Entitled To Free Money Will Hurt Your Wealth

I understand that everybody loves to get something for free. Even I sometimes have a difficult time saying no to a rubber chicken lunch until I calculate the value of my time.

But when it comes to borrowing money, whether from a friend or an institution, not paying a lender back is dishonorable. Our entire banking system would collapse if everybody felt this way because interest rates would surge even higher. Only the rich and connected would be able to get loans.

Instead, we must honor the contract. Another party decided to take a risk on us. We read and understood the terms of the loan. If we received a three-year reprieve, then we should be thankful. And when it’s time to pay back our debt, we should do so in earnest.

Once you adopt an entitlement mentality, it might rob you of a brighter and wealthier future. If you keep expecting everything to be given, you will eventually be disappointed because not everybody will agree with your entitlement.

Examples Of How Entitlement Could Get You In Trouble

• Not studying as hard in high school because you expect to get into a college based on your identity and legacy status. But the year you apply the admissions office decides to focus more on merit.

• Not practicing your interview skills because you expect to get a well-paying job because your mom used to be a Senior VP at the company. But the year you apply the hiring policy moves away from nepotism.

• Not saving enough for retirement because you expect Social Security to pay for all your retirement expenses. But in your 60s the government pushes back the full-retirement age by five years.

• Not building passive investment income streams because you expect your job to always be there. But a recession hits and your boss decides to save his secret crush and let you go.

• Not marketing your product because you expect everybody to support you work once it’s launched. But your product flops because the world is an incredibly noisy place where even the best works go unnoticed without a lot of promotion.

Nothing Is Given, Everything Is Earned

“Nothing is given, everything is earned” is a better mentality to have. If you adopt this mentality then you will approach life from a position of strength.

When entitlement mentality takes hold, you might end up doing curious things such as complaining about paying back student loan debt while posting on Twitter how you turned down five job offers, wrote a bestselling book, and built a dedicated library in your NYC apartment!

Yes, this is the same Patty. Entitlement mentality can really reduce one’s self-awareness, and ultimately, one’s wealth. It may be the same reason why no matter how rich some people get, they will always believe they are part of the middle class.

Without feeling entitled, if nobody gives you a leg up, no problem. You never expected any help in the first place. Instead of always waiting for something to happen to you, you take action to get what you want.

In the off chance something fortuitous happens, such as getting a 3-year reprieve from paying back your student loans, you will incredibly grateful. And the more grateful you are, the happier you’ll feel.

Reader Questions And Suggestions

How do we reduce entitlement mentality? Is entitlement mentality the reason why future generations tend to squander the hard work and good fortune of previous generations? What goes on in privileged people’s heads why they expect more things for free?

Pick up a copy of How To Engineer Your Layoff if you want to learn how to negotiate a severance and be free with money in your pocket. Negotiating a severance was my #1 catalyst to leave a well-paying job in 2012 and never return. Use the code “saveten” to save $10 at checkout.

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