06/23/2014 05:05 pm ET Updated Aug 23, 2014

Why We Should Always Be Conscious of Life's Limitations

There are many activities that we do in life, which we know provide value; like chopping the winter's supply of firewood, or growing vegetables in the garden. Likewise, there are certain jobs that provide tangible value, particularly in the food production industries. When you (or a farmer) puts a corn seed in the ground, you end up with some corn to eat.

However, some activities, jobs or industries do not provide such tangible value. In this post I will analyze a few of these, and will show how reality has begun to demonstrate that the only value they actually provide is largely imaginary, or you yourself could provide the same or better value if you just did the job yourself.

I will start with a somewhat controversial industry, at least in terms of whether it provides value or not i.e. Higher Education. Now, I know that I spoke in a previous post about this, but I would like to add in some new points here. My opening remark regarding the usefulness of higher education is that there are particular professions which require you to have a degree, like being a doctor. Acquiring a Doctorate of Medicine is a crucial requirement both as a needed job qualification and from a learning standpoint. While also true that you will learn a lot on the job, a lot is also learned earning the degree.

However, to be an Artist, Engineering Technician, Web Developer or Postmaster (all of which are high paying professions), there is no needed requirement of having a degree. There is a perception among many though, that in order to have a successful career, it is an absolute necessity to go to university or college. The other partially incorrect assumption about University is if you are not going there planning on being streamlined into a job (like a doctor), then you are going there to do as they say, 'learn how to learn'.

The reality is that with the alternative i.e. having a full-time job, you would also be provided with a framework for learning. Except that with a full-time job, you would be engaging in much more practical and applied learning. Another reality is that you can learn often just as much as University teaches you by just reading a book (for much less cost). Your reward for paying for your degree is largely the piece of paper you get at the end, but you have to decide if that bit of paper will provide you with an adequate level of value.

The second industry/profession I will look at is the brokerage advisory industry, along with Mutual Fund Industry, which both operate on the assumption that the advisors can give you a better direction on the markets than you can yourself. Mutual Funds lure people in by telling them that their money is safe with them, and that they will grow it faster than they could by investing for themselves.

The reality is that share advisors often only have a moderate understanding of the markets themselves. And Mutual Funds on the other hand have an average performance that trails many broad index funds (like the S & P 500). Of course there are exceptions to this rule, between 1977 and 1990, Peter Lynch's Megellan Fund averaged 29 percent year-on-year returns Dr. Carol Angle placed $30,000 in a Buffett Partnership in the late 50's, and today this has grown to a $300 million fortune in Berkshire Hathaway stock.

There are also surely many credible advisors out there who are better than most and do give valuable advise. The reality though, is that people are often just better with their money in the bank. But if people want a greater return than the bank can provide you with, and they don't want to do the adequate research for investing themselves, then they should I suggest be very stringent about who they select to manage their money. And if you are not happy with your share advisor (and would like to make your own decisions), I would suggest moving to an online brokerage, which happen to charge much less and are very easy to manage.

The third area I will look at is perhaps more criticized than any other for providing dubious value, i.e. the government. Election after election we see politicians campaign on the basis of all sorts of high promises, about how they will be able to enable so much change, and create a better society. The reality though, is that because the government (in OECD countries at least) is so big, it is very difficult to enact change. I would imagine it is a bit like trying to move a very large ship, in that you can have the best intentions, but it will only ever happen slowly.

In a similar tone, the same thing goes for industry -- good organizations (like for the beef industry), being that they are also like a large ship. Adding to this, I believe it is common with taxpayer or levy-funded organizations that their members get caught up in playing the political game. Radical moves rarely happen simply because the political game is all about appealing to the majority (and all too often the corporate) vote, which resides in the middle and/or rarely has radical views. The radical leaning people meanwhile, exist on the sidelines, and don't get elected.

The main point from the above is that people should be conscious of the world around them, and critically you should always understand about other people's (and activities) limitations. Politicians, Teachers, and Investment Advisors have both personal limitations and huge limitations within the confines of the organizational frameworks they operate in. As an individual it is always best for us to understand about the world, and how and why it operates; because by doing so we can make better decisions about how to live.