Credentials versus Accomplishments

Here's a great piece from the Wisdom Journal on credentials versus accomplishments. Basically the discussion centers around which is more valuable -- education in a subject or success in it.

As it pertains to personal finance, here are the extremes of these two options:

• A financial planner who has every professional certification and degree you can imagine but he's either not doing well financially himself or is so young that he hasn't had an opportunity to apply what he's learned (and so it's impossible to tell whether or not his advice works for him.)
• An "average" guy with some to little formal education on finances but has learned on his own, applied the principles, and now is well-off/wealthy.

The question is, which would you rather listen to?

The Wisdom Journal prefers accomplishments. Their thoughts:

The fact is, credentials and accomplishments are very different, and given the choice, I’d much rather listen to someone who had been there and successfully done that, than someone who read about it and passed a government test. With information literally at your fingertips, we can find out much the same information that credentialed “experts” have anyway. The Internet is the great equalizer to a certain degree. Besides, in my personal opinion, credentials are less important when compared to what someone has actually accomplished.

Would you rather listen to the endless droning of a certified, chartered, CPA, MBA, PhD, ABCDEFG or to someone who has been in your shoes and can recount to you their struggles with debt, with their free-spending spouse, with living by a budget, with losing a job, with trying to decide which insurance plan is best?

Well said! It's the essence of what I was trying to say when I wrote Reminder: Why You Shouldn't Listen to Me. The summary of that (and what is still true today) is that you shouldn't read Free Money Finance if you're looking for thinking from someone with a educational background in personal finance (credentials) but you should read if you're wanting to hear from a person who's applied what he's talking about and has reaps the financial rewards from it (accomplishments.)

I covered this theme in different ways when I wrote Do You Expect Your Financial Advisors to Practice What They Preach? and My Thoughts on Using Financial Planners (Or "Why I Don't Go to a Fat Doctor"). FYI, the latter piece still gets some people irked. ;-)

I agree with the Wisdom Journal -- I'll take accomplishments over credentials any day. Sure, it's great if someone has both (which is what you'd really like to find), but if it's one or the other, mark me down for listening to the person who has done it, not the one with head knowledge but little proof of success.

This is one thing that makes me wonder about following the advice of many mainstream writers (I'm talking primarily about those who write for newspapers, magazines, and the web as well as those who report on radio and TV.) When they expose some of their own personal finance issues, almost always it's something scary (such as $30,000 in credit card debt, earning minimum wage, etc.) I wonder why anyone would listen to them regarding personal finances. I guess it's because they are reporting after talking to other "experts" (who are also likely to have dubious qualifications accomplishment-wise) and thus are presenting knowledge. Still, it's often clear by what they say/write that they don't really "get it" and are simply spewing facts given by someone else.

This is one reason I read blogs so much (on various topics, not just finances). I try to find real people who have had success in the same area I'm trying to have success and see what they say. Then I can apply what works for me and get similar results. Besides, if you need more specifics you can email them or leave comments (BTW, much of the value here at FMF is from the comments, so I MUST say a great big THANK YOU to those who comment here regularly), which is pretty cool IMO. Try doing that with a reporter you see on the nightly news.

I haven't shared my net worth with an exact number for personal and privacy reasons, but regular readers know that I'm doing ok (and some readers have actually developed a pretty close estimate of my net worth by piecing together comments here and there). So if you want to know how to grow a high net worth, keep reading. I'm not all the way home (based on where I want to be), but I'm well ahead of a large majority of Americans. I don't say this to brag (how can I brag since you don't know who I am?) but to give you the confidence that the financial principles I advocate are the ones I have used personally to develop a substantial net worth.

That said, there are issues that I have not been through and can not comment on from experience. I've never been deep in debt and worked my way out of it (like Dave Ramsey.) I've never been through retirement so I can't comment on it based on accomplishments. I'm not still "trying to figure out personal finances" so I don't write from that perspective (though I do remember being in that situation.) But there are other blogs on these issues and they cover them quite nicely. In addition, I have counseled hundreds of individuals over the years, so I've walked through many of these issues (especially the debt ones) time and time again and can write about them from that personal experience.

Ok, enough blabbering from me -- time for your thoughts. What's your take on the accomplishments versus credentials debate?

Comments

[Tyler]

"I'll take accomplishments over credentials any day"

So how does one get accomplishments/experience if no one gives them a shot because they dont have accomplishments/ experience? Seems like a 'chicken/egg' problem to me.

[Lurker Carl]

Accomplishment. Anyone can obtain credentials.

Tyler, no one expects children to be proficient at calculus before they've learned to count. You gain experience by starting at the bottom with basic tasks and work towards more complex duties, accomplishments come as you hone skills and knowledge grows.

[FMF]

Tyler --

What Carl said...

[Smokin' Joe]

I'd put more weight in accomplishments. Paper champions are a dime a dozen in any industry. Schools are pumping out record numbers of degrees and certifications. Many young people have no work or life experience and will struggle for many years in learning to transition from the classroom to the real world.

[Tyler]

I agree that I would take accomplishments over certificates in most cases.

A few weeks ago I was a guest lecturer at a university and after the presentation I found myself thinking about how little these kids know- how little I knew at that time. How I was of little value to an organization at that point in time. How for some strange reason I was given a shot with nothing but a certificate.

A good friend of mine is a very successful FA. He started for a major firm right out of college. Someone had to hire him with nothing but certificates, and then, someone had to become his first client with nothing but certificates.

Your point Carl is correct I'm sure. I wonder though, how does one value people professionally who only have certificates? When all of us were first starting out our professional lives, all we had were certificates- chomping at the bit for an opportunity to accomplish.

[FMF]

Tyler --

I think recruiters attempt to look at accomplishments even when someone is fresh out of school. These could be:

*Grades - a GPA of 3.9 "beats" a 2.0)

*Extracurricular activities - both involvement and offices held while in school

*Work experience - what jobs have you held (summer and while in school) and what did you accomplish in them

I'm sure there are more, but you get the idea.

[Squirrelers]

The credentials will help you get an opportunity to create some accomplishments. If you don't have credentials in a specific endeavor, you may not get an opportunty.

That said, the "credentials" are often accomplisments, or reflect accomplishments. Let's say two people are going for a job - person A has an MBA, person B doesn't. They both have equivalent work experience. If I want to hire someone for less, I might go with person B. If I want to hire someone with the extra credential, I might have to pay more - and that would be person A.

The thing is, even though the past job experience may be identical, the credentials - or the process of obtaining said credential - indicates the potential/desire to obtain greater accomplishments going forward.

Hope this makes sense:)

Anyway, aside from comparable situations like this, I would first look at what someone has actually done. If one person has accomplished a lot but has minimal credentials, and the other person has accomplished little but has great credentials, I would go with the accomplishements. In-practice is better than on-paper.

[Rod Ferguson]

I agree - accomplishments over credentials, but since nobody is arguing the other side, I will :)

A case can be made for preferring credentials over accomplishments. For example, a person may have the experience of being financially successful in the 70's by placing money in savings accounts (when interest rates were in the double digits) and investing in Japanese companies (when the Nikkei was under 5,000 on it's way to 40,000). This is not exactly the advice you'd want to follow today if you wish to be financially successful. However, a person with credentials *should* have a broader understanding of the various methods of financial management; they should understand that depending on the environment, the "best" choices are made one way and not another. We all only have our own experiences, and those are driven by the lives we lead in the environments we live in. The whole idea of having credentials is to prove you have at least a cursory understanding of what is basically the condensed versions of several sucessful people's experiences.

Now, the question of what you have to know to get those credientials... well, that's another discussion :)

[jim]

It depends.

Just cause someone has money or is otherwise accomplished in some way doesn't mean they have any clue about things. Seriously. I can point you to a bank VP who has no clue how to handle his own money. He would appear to be very accomplished yet I think his financial advice would be worthless.

Some credentials actually matter. I trust legal advice from a bar certified lawyer over random people on the internet. I trust tax advice from a CPA over friends who own a business.

But of course credentials alone doesn't make you an expert or mean your opinions are correct. I'd like to see some useful knowledge behind the credential. Just cause my CPA says tax law works a certain way doesn't 100% ensure she's correct and lawyers can be wrong about things as well.

[FMF]

Jim --

In that example, I would ask to look at his finances. And if he was accomplished in them, then I'd let him comment on mine.

In other words, I wouldn't let accomplishment in one area (like career) sway me into thinking someone knew what they were talking about in another area (like personal finances.)

I understand that this can become blurry (imagine a successful CFP who has a low net worth), but you get what I'm saying.

[Jay]

This is sort of like asking if you'd like a knowledgable employee or a hardworking employee. Unless you get a combination of both, you are going to run into problems - it's fundamentally NOT an either/or question. How you weight one vs. the other depends 100% on the circumstances. In predictable or low-complexity situations (e.g., cash register transaction or predictable economic cycle), you'd give preference to work ethic/achievers; in fast-moving, unpredictable circumstances (e.g., how do I sell the laest and greatest technology, this thing called the internet has just been invented...what do I do?), you're better off focusing on intelligence/credentials. In the end there's clearly no substitute for practical experience, but without some element of credentials/learning capability, you'll be reduced to a Detroit factory worker in no time at all.

[jim]

A problem with accomplishments is that its hard to tell what someones accomplishments are or even verify what their real success or experience is. If you're looking at a resume and trying to hire someone then you can compare years experience versus degrees. But if you walk into a consultants office then they may have a degree on the wall but they don't have a list of their accomplishments or their current net worth framed and hung up.

Even if you ask them, did that CFP get his $2M net worth by savy investing or was it mostly inherited?

[MBTN]

Keep in mind that a CFP credential has an experience component. You have to have three years of experience in financial planning to obtain a CFP. So there is no such thing as a CFP without some accomplishments.

Also, I really don't care if my financial planner's own personal finances are a mess. The only thing that matters is how they are managing MY finances. If he is making money for me and giving me good advice, then he can be a bankrupt homeless person for all I care! It's like deciding not to go to the best heart surgeon because he is overweight and smokes. What I care about is how many times he's done a triple bypass and what have the outcomes been.

[MBTN]

Also, people should consider that getting the credential IS an accomplishment. The requirements of many of these credentials require aptitude as well as hard work (going to classes, studying, continuing education, work experience). Anybody who can put in the time and effort to get some of them have certainly accomplished.

My brother is an accountant, so I got to see first hand what he had to do to get his CPA. From some of the comments, people make it sound like anybody who shows up can become a CPA. Anybody who was able to stick with it and get their CPA certain gets my respect.

Likewise, in my previous career I was an actuary, and I had to pass many exams to get my actuarial credentials. For those who aren't familiar, the actuarial exams are among the more grueling set of exams. There are about a dozen separate exams on subjects like calculus, statistics, insurance, pensions, finance, law, and so forth and they require literally hundreds of hours of studying just to prepare for one of them. The pass rate is less than 50% and very few people who start actually complete all of them. I made it 2/3 of the way and got my first level credential (Associate). Having experienced it myself, if I hear that somebody has completed them, I immediately have a great deal of respect for them for having worked to attain it. Doing so not only requires book learning, but also the perseverence, dedication, and mental strength to actually put in the time and effort to complete them. Anyone with FSA after their name has accomplished something that gets my attention in a big way!

[David]

Both have value. Credential is always at some level removed from the reality of the situation, but luck is more likely to play a role in accomplishment.

Even with a pattern of accomplishment, one has to be mindful of the role chance can play when you've a sufficiently large set. Someone who's successfully called the previous 10 coin flips sounds likely to be able to call the next... if he was the only one guessing. If there were 1023 others each calling out a different pattern of flips, there's nothing special about the guy with the 100% accuracy rate or his strategy.

[bobsmith]

why not both?

[Old Limey]

If you have graduated and are sending in an application for a job then credentials matter most of all. Without any credentials your application will likely end up in the trash. A 40 year old friend of mine lost his job in hi-tech and was out of work for 27 months before finally getting hired. His problems were not a lack of credentials but were rather non-applicable credentials for the jobs he was applying for, i.e a BS in Physchology for a senior job in computer software.

Once you have been hired then it's all about accomplishments and performance. At that point even the credentials don't matter a whole lot. Then, it's all about having the skills, experience, work habits, and knowledge to do a great job on every assignment. Once you can demonstrate your abilities to keep having successful outcomes on every project you are given the raises and promotions will come and you will never look back and will survive every cutback because by then you have a reputation - and that's what matters most of all.

[Benjamin Bloom, LUTCF, CLTC]

I am a firm believer in the power of credentials... (see below, haha)

Starting out, my career in financial services had several challenges.
I believe people found it hard to take me seriouly because of my age (25).
Earning two credentials in my first year gave me a certain amount of credibility.
I do not suggest that it is a replacement for accomplishment, because someone must have both to succeed.
The fact of the matter is that accomplishment usually comes over a long period of time.
I did not have the luxury to wait 5, 10, or 20 years to become a respected expert in my field.
So, credentials are at least in my case, a shortcut to career validation and advancement.

[Tony]

You need both. It's funny how most of the people on the accomplishments' side do not have any formal education.