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Imagine a business school that is able to give all its education away for FREE, FOREVER! Is it a dream? Is it possible? Could a truly FI business school exist?
Giving education away forever
At the moment the Rebel Business School goes out and sells its courses to councils, Housing Associations and corporate sponsors, and then it gives all the education away to the people that need it the most. We call it our Robin Hood Business model, and it relies on our ability to go out and sell courses to keep things going.
If we stop selling courses, we stop being able to help people because the financial reserves that allow us to pay for the team, travel and other things are finite.
The concept I have started to explore over the last few weeks since I started to write about businesses becoming FI has been to develop a fully financially free business school that could give all its education away forever for free.
What would it take to achieve this?
Applying the 4% rule to a business school
One of the main principles that the whole financial independence movement is built upon is the 4% rule. The rule (or guideline) says that if you have a lump sum invested in an index fund you can live off 4% of this amount forever without burning into the capital.
So if you wanted to live on £20,000 a year, you would need £500,000 invested in low-cost index funds to support that lifestyle. For more on the 4% rule read Mr Money Mustache's article in addition to my own.
If you take this principle and apply it to a business school, there is a lump sum of money that, if invested, would perpetually create an income that would allow a school to give away its education forever.
If we were able to got £10m invested, it would give the school an annual income of £400,000 to pay for the building and staff, and be able to give away all its education and work for free forever.
This idea has really inspired me! Especially after we spent a week in Poland working on the Rebel Business School company vision and mission in January 2019!
The Rebel mission and delivering it
We are building a world without start-up loans where everybody is free to start a business.
Give away free alternative business advice delivered with compassion and energy to empower people to change their lives.
This got me really thinking. Could we build a financially independent company that didn't have to make money by getting startups to take business loans at high interest rates, that didn't have to sell overprices consultancy and that had the interests of the people it helps at the heart of it?
It is possible. The maths is the maths: start investing and saving, and build investments that are big enough to allow you to work forever for free.
Imagine a business school that helped 100 people a year on year-long programmes to grow their own business (without debt) and create wealth in their communities. Those businesses would spin out, making profit, building cool products and services that help the world, and hiring people that inspire more and more.
When you give to a charity you are giving money to achieve a certain thing. The money goes to helping someone and then the money is GONE. The money is used and the charity needs to go out and raise more money to keep doing the good work it does.
What if we could break the charitable work cycle by using the concepts and principles of financial independence to create something that would perpetually do good. Give once to it and it uses the money to do good for the next 7 generations.
Universities call it an endowment
Universities around the world receive gifts and pledges from previous gradutates that they put into what they call an endowment. The endowment is a pot of money that is invested by the university to create long term stability. Some use it to reduce fees and some seem to just hoard money!
The wealthiest university in the world is Harvard, with $36 billion invested! Yes 36 BILLION! If you applied the 4% rule to that amount then you would have $1 billion, 440 million to spend EVERY YEAR!
Side note: This actually bent my brain a little working this out! As soon as you go into the billions the numbers of zeros is outrageous!
My mind immediately says, "Why is everything Harvard does not free forever with this kind of money in the bank?" Why are they still raising money and charging students ridiculous amounts of money for places there? Why?
How is education not free for EVERYONE already? What are the universities doing with all that money? I find it incredible!
The average cost of going to a private non-profit college in the USA is $34,740. I don't get it. Why are they still charging if they have more money than they need?
What am I trying to say here? Universities do seem to do what we are talking about but they seem to do it in a way where they have the cash and still charge ridiculous fees for going to their college.
Can you imagine anyone running a FI household like this?
Duke University pays its basketball coach $9,000,000 a year! For one member of staff! And they are on the list of most expensive places to go to University! They have an endowment of $8.5 billion! And yet they are still on the list of most expensive universities to go to!!!??? It does not add up!
Does anyone else think the system has gone crazy and is broken?
This needs shaking up!
Business advice from someone who doesn't run a business or make money
When I first went to get business advice myself for starting my own business about 12+ years ago, nearly all of the advisors that I could find had either never run a business or worked for a charity! I was getting what turned out to be very average advice from people who had never done it before.
This experience in the UK inspired me to create a foundational principle at the Rebel Business School, which is, "If we are going to give out business advice then we should have run a business and made money."
Everyone told me the Rebel Business School had to be a community interest company (CIC), non-profit or charity, and that if I didn't do that then it would not work. One of the things I am most proud of is that I didn't follow the traditional advice and I built a business that makes money and does good.
It is amazing how many charities and non-profits, banks or accountancy firms give out startup advice without any of their people ever having done it.
Thinking long term
At the Greece Chautauqua last year I was listening to JL Collins speaking about investing for the long term and how his thinking had changed over the last few years beyond the money for his lifetime and to being a steward of the money for his daughter. Then thinking beyond his daughter and thinking out seven generations into the future and being a steward of the money so that it helped generation after generation.
This got me thinking. Instead of doing good one workshop at a time, what if we could set it up so the nest egg for the business school stewarded the next 7 generations of students through the doors without them ever having to pay for it?
Suddenly the money needed to do this doesn't look like a lot, compared to the impact you could have. Helping 100 people a year for the next 100 years to grow businesses and impact thousands of lives.
Suddenly what we are building is a self-sustaining business school that can help people every year without charging them a single dime!
What are the challenges?
I would love your help thinking through the challenges with this model! What might go wrong? How could it be taken advantage of? How might it miss the mark?
The challenges I can see at the moment are:
I would love you to leave me a comment below and tell me the problems you see with my plan! That is how plans get stronger.
How do you get the money?
How do you get the money to do this kind of thing? Well, I have three ideas so far for how we could make this work:
There are lots of different ways we could raise the money to be able to make this happen.
Shaking up education
My whole journey into helping people start business started with a conversation about how traditional education (whether for adults or kids) doesn't actually teach us what we need to be successful!
When I look at the skills I use on a day-to-day basis to be a full functioning adult, they are: time management, organising, project planning, presenting, influence, sales, networking, financial skills, investing and more.
Did I learn any of those at school/college?
The skills I use today to operate businesses, work with people and have fun have been developed by reading books, going on alternative training courses that I have paid for myself, and working out what the opposite is of what everyone else is doing. None of them came from school.
(Slight side note: Mr Kimber, your maths classes were excellent.)
An independent business school that cared only about the students it supported, not about grades or exams - just about their genuine happiness and success in life.
Growth versus sustainability - scale
The current trend in business today is to immediately ask the question, "How do you scale?" I still haven't worked out if I want to scale it or not. Maybe it is enough that we have an FI business school that helps 1000 people each year in person for free forever?
Maybe scale would come from putting the courses online and giving them all away for free? This is something I haven't figured out yet but would love your ideas on. I have built Rebel Business School by just wanting to do cool stuff and we figure the rest out on the way. My current plan is to get one up and running and figure out the rest on the journey!
The FI Business School
I would love your help please. Tell what I am not seeing, tell me where this could go wrong, tell me what you would do if you were me! Write me ideas, thoughts and comments.
I would love your help strengthening the idea and helping me think it through please. Write me a comment below and let me know what you think.
I don't think the FI Business School is a dream. I think it is something we could build in the next few years...…………….