Getting ahead based on merit is the ideal scenario. Having success given to you based on anything else strips away the satisfaction of earning what you deserve.
Since 2020, however, there seems to be a growing “war on merit.” The San Francisco School Board voted to end Lowell High School’s entrance exam so that every student could attend in the name of opportunity and equality. As a public school, I understand the rationale.
Over on the east coast, Virginia’s Thomas Jefferson High School also decided to eliminate its entrance exam. TJ, as the school is commonly known, is also a public school and is consistently ranked one of the top high schools in the nation.
Growing up in Northern Virginia, I never considered applying to TJ. My parents didn’t push me nor did I have a particularly keen interest in math or science.
I just remember losing a tennis match to TJ’s #1 player, who went on to attend Harvey Mudd College. He’s now a computer engineer at a tech firm and probably makes about $500,000 a year.
The National Merit Scholarship Scandal
In a surprising investigation, it was discovered TJ school officials supposedly withheld telling ~1,200 students over five years that they had received National Merit Commended designations. It doesn’t seem like the media is talking about this potential scandal either.
The National Merit Scholarship Program is a national academic competition for high school students to provide financial aid to attend college. The program is ranked in order of Scholarship Winners, Finalists, Semifinalists, and Commended Students.
Generally, the top 3%-4% of PSAT scorers receive Commended student status, or about 35,000 students. Only if you score in the top 1% of PSAT takers in your state are you designated a Semifinalist. You can then submit an essay as part of your application to become a winner.
While Commended students are not eligible to compete for the official National Merit Scholarship, they do become candidates for special merit scholarship awards offered by statewide agencies and corporate sponsors.
Why Withhold Telling About A Student’s Commended Status?
When asked to explain their actions, TJ school officials said they didn’t want to hurt the feelings of other students who didn’t win the award. One school official said it was an administrative error. While another said they wanted more equal outcomes for students.
As a high school tennis teacher for three years, equal outcome for students is an impossibility. I don’t want to hurt any of my student athlete’s feelings either. However, we all understand every student has different levels of talent and work ethic. As a result, at the beginning of each season, we host tryouts.
Those who make the team then compete in a round-robin tournament to see who can win the most matches. The more matches a player wins, the higher up on the team ladder they rank. From this ladder, my fellow coach and I determine our singles and doubles lineup.
The process worked well and no students complained. I did experience some lobbying from two mothers who thought their sons deserved to be ranked higher. As a solution, I made the sons play each other mid-season to settle the dispute.
In the end, we won back-to-back Northern California Sectional championships by using merit as a guide. Not bad for a school that had never won one since it was founded in 1975.
The Desire For Equal Outcomes Can Prove Costly For Top Students
I understand the desire for all kids to get participation trophies. Nobody wants their kid to feel hurt or left out, even if they are not the best. As a parent to a three-year-old and five-year-old, I’m constantly trying to encourage kids to be inclusive during playdates.
I also understand not everybody has the same opportunity to study hard to get better grades and test scores. If a student comes from a low-income, single-parent household it may be harder to compete against a student from a high-income, dual-parent household.
However, not notifying the kids of their academic achievements does not seem right. Being recognized as any one of the four levels of National Merit may help with receiving scholarships. With the egregious cost of college tuition today, any amount of money helps!
As a parent trying to instill in my kids the importance of hard work, grit, and determination, I’m concerned everything I’m teaching might be for nothing. Why bother working so hard if schools won’t recognize academic excellence?
Instead of studying so much to get good grades and test scores, I’d rather spend the next 15 years exploring the world with my kids! As untethered parents with no jobs, it’d be fun to travel throughout the year instead of only during school holidays. Getting B’s is good enough!
The future is always changing. Parents as well as all adults looking to achieve financial independence need to learn how to adapt if merit continues to be suppressed.
How To Survive The War On Merit
Here are six ways to navigate a more complex reward system that is beginning to deemphasize merit-based performance. The last thing you want is to work extremely hard only to get rejected because of who you are.
Ultimately, my hope is that we do more to serve the financially disadvantaged across all races. It is the lack of resources that makes it harder to compete equally, not what someone looks like.
1) Understand your gatekeepers
If you are not financially independent yet, then you will have to succumb to a gatekeeper. A gatekeeper is someone who decides whether you get in, get paid, and get promoted. The better you can understand the ethos of your gatekeepers, the greater your chance of getting embraced by the gatekeepers.
Thomas Jefferson High School had a 2019-20 student enrollment that was 71.5 percent Asian, 19.48 percent non-Hispanic White, 2.6 percent Hispanic or Latino, 1.72 percent Black, and 4.70 percent other. In other words, TJ students mostly consist of minorities.
Hence, it would be logical to assume TJ school officials would also reflect the diversity of the school. Further, it would also be logical to assume TJ school officials would be proud to promote the academic achievements of its students. So why didn’t they?
Have a look at the tweet by TJ Principle, Ann Bonitatibus. Despite over 70 percent of TJ’s student population being of Asian descent, there’s not one Asian person in the picture. Hence, be careful to make logical assumptions. Here are their bios.
People will naturally fight for their own kind and subtly fight against people of different backgrounds. No matter how unbiased you think you are, just look at the people you socialize with. The racial makeup of voters closely mimics a politician’s race as well.
With not one Asian TJ school official, it should come as no surprise the officials supported hiding the National Merit announcements from the mostly Asian recipients.
2) Assimilate with the gatekeepers
You might be a proud and honorable person. But don’t let honor and pride get in the way of achieving financial independence. To get ahead, you must assimilate with the people in power.
If the boss’s favorite sport is pickleball, you should turn into a pickleball fanatic. If they donate to a charity that supports banning cars, you should ride your bike to work. By currying favor with the gatekeepers, you reduce your chances of getting discriminated against.
The thing about most gatekeepers is that even though they might virtue signal about equality for all, they will unlikely give up their own opportunity for someone else. The rich and powerful get richer and more powerful by helping each other.
If college administrators really believed in helping marginalized groups, they would eliminate legacy admissions and dramatically expand enrollment. But they don’t due to the desire for status.
3) Have a concurrent backup plan
You might think you’re doing a good job assimilating with the gatekeepers. However, unless you’re a relative or close friend, you never really know for sure whether you are part of their crowd. What people say publicly versus behind closed doors can be very different things. Just ask ex-Clippers owner Don Sterling.
Hence, you can never fully count on the gatekeeper to accept you based on merit. Neither can you count on full transparency.
If you are an excellent student applying to school, your backup should include schools that solely accept its students based on their achievements, not on their identities. For example, in addition to Stanford, you should also apply to UCLA and Berkeley.
As a parent, you create career insurance for your children by owning a private business. This way, you can always offer your child a job in case they can’t get into a good school and can’t get a good job.
Besides owning your own private business, you can also own a rental property portfolio that needs managing. This way, your child not only has a place to live, but they also have an important job.
4) Become an entrepreneur
One of the main reasons why I left my banking job in 2012 was because there was a breakdown between performance and pay. Instead of complaining, I devised a way out.
The higher you go at work, the more political it becomes. If you haven’t built a support network from those in charge, your chances of ascending to the top are slim-to-none. Your bosses will always give you a reason for why you aren’t getting promoted and paid.
If you are not getting rewarded based on merit at work, then the logical solution is to go off on your own. If you truly believe in your abilities, then you are willing to take a leap of faith. Try out entrepreneurship for three years, and if you can’t succeed, then go back to work.
One of the greatest things about the internet is that it weakens the power held by gatekeepers. Anybody can start a website in under an hour for cheap. All information can be accessed for free. You don’t even need subject matter expertise to make money online.
The traditional way of going to college and getting a job is fine. But for those groups of people who are not looked upon favorably by the elites, becoming an entrepreneur is one of your best bets. Bypassing the gatekeepers is the reason why so many restaurants, convenience stores, and other small businesses are owned by minorities.
5) Maintain long-term friendships
Accept that in addition to merit, great connections make getting ahead easier.
As a 45-year-old man, the majority of my friends now have 20+ years of experience in their respective fields. Many are Managing Directors at major Wall Street firms. Some are partners at top law firms. A couple are CEOs of publicly-traded companies. While several have Ph.Ds and run academic departments.
With these types of long-term friendships, I can ask for help when needed. Hence, I encourage you to make a consistent effort to connect with others over the years. This means sending them annual holiday cards, going out for lunch once a quarter, picking up the phone to chat, and showing interest in the things they care about.
All of your friends will naturally gain more seniority in their respective fields over time. The greater the friends you have, the easier it is for you and your children to survive any war on merit.
6) Develop a thoughtful personality
If you’re always helpful, you will likely have an overflow of people wanting to help you in the future. If you’re always asking for something first, then most people will stay clear of you.
Developing high emotional intelligence and a thoughtful personality will help you even if you aren’t the best performer. Because at the end of the day, people like helping people they like. Not all of us can be born beautiful. But all of us can work on how we treat others.
Every day I get lots of questions from people who have never left a comment on one of my 2,500+ posts. They don’t spend time introducing themselves. Instead, they just fire away as if I’m their private wealth manager.
But if a reader introduces themselves and writes they bought How To Engineer Your Layoff or Buy This, Not That, I will most certainly respond. They showed an interest in something I spent years creating.
Be thoughtful about how you treat others. The more thoughtful you are, the more people will want to help you succeed.
7) Get so rich merit doesn’t matter
So far we’ve discussed strategies for succeeding in a declining merit-based environment if you are not yet rich. You might be a HENRY looking to build your fortune.
But there’s a point where you may have so much money merit doesn’t really matter anymore. You have enough money where you can do as you please and your children will always be fine.
The amount of money where merit starts to not matter is likely when you have at least $1 million in liquid assets per person. With $1 million in liquid assets, you can generate between $30,000 – $50,000 in passive income with relatively low risk. Most people can survive just fine on $30,000 – $50,000 without having to do any work.
If you want to live in a higher-cost area or you have more luxurious tastes, then you might need at least $3 million in liquid assets per person where merit starts to matter less. $3 million in investments can generate between $90,000 – $150,000 a year in passive income. $3 million is also the definition of a real millionaire today thanks to inflation.
There’s just one thing to be aware of if you’re trying to go for this strategy. No matter how rich you get, as a parent, you still want your kids to succeed on their own merit. Deep down, you will feel guilty paving their path to success with gold bricks and a massive trust fund.
In order to buy your kid’s way through the front door at universities like Harvard, you need to donate at least $10 million. Back in the 1980s, the price of admission only had a $1 million hurdle. Hence, if you want to bypass merit, you can do so by getting extraordinarily wealthy!
Hard Work Is Still Worth It
Although it’s a bummer that merit is no longer as rewarded as it once was, I’m still going to push my children to work hard. Having a good work ethic will help them when things inevitably get tough in all aspects of life.
One of the ways I’m going to encourage my kids to work hard is by continuing to work hard myself. Showing is far more effective than telling.
At the end of the day, all of us really want is to be properly rewarded based on our efforts. I have yet to meet someone who feels good about receiving something they don’t deserve.
Equal opportunity is a worthwhile goal. The opportunity for anybody interested in learning about personal finance is a big reason why I write on Financial Samurai.
You will build more wealth over the years compared to those who don’t read Financial Samurai and other personal finance sites. However, I don’t believe you will all end up multi-millionaires with yachts parked in the South of France. It would be nice! But it’s simply not reality.
Reader Questions And Suggestions
Readers, do you think there is a war on merit? If so, what are some strategies to help you and your children survive such a war? How is it possible to engineer equal outcomes for students?
Pick up a copy of Buy This, Not That, my instant Wall Street Journal bestseller. The book helps you make more optimal investment decisions so you can live a better, more fulfilling life. The more you learn, the more you can earn.
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