Eric Sprott is not high on pension funds. The Toronto-based billionaire investment wheeler-dealer thinks young workers are better off investing money in something other than a corporate pension plan. And, he says, don’t invest that money big-time in real estate or other conventional piggy banks either.
Sprott’s route to success is gold and silver. He is the number one champion of gold and silver in this country. “Everything I see going on in the world tells me they are going to go higher.”
His belief in gold is so strong that he applied to federal regulators last year to establish his own bank, which would make no loans and would allow customers to hold their deposits in gold.
Sprott also says young people might be better off in the long run, financially speaking, joining the workforce right after Grade 12 rather than pursuing a university degree—especially if it results in a general education with no guarantee of the kind of income earned by, say, physicians.
This is not what you heard from your high school guidance counsellor.
Now, Sprott obviously believes in a university education. His philanthropy paved the way for Carleton’s Sprott School of Business, and his name graces a number of programs on Canadian campuses. But he is appalled at the cost of university tuition and the need for student loans.
A high school graduate who immediately starts working—and saving—has the potential to accumulate a bigger retirement nest egg than someone who spends four years racking up student loans in university and then another four years scrimping to pay them off instead of saving, Sprott says. “You may lose eight years of savings,” he says. “Eight years of savings at this point in your career is incredibly important when you allow for compounding over 40 years of a working career.”
Tuitions have far outpaced inflation, Sprott says, while wages for student summer jobs have shrunk. That fact is part of the reason he’s donated to Carleton. His money has gone to student aid—bursaries and scholarships—which helps students make up some of the difference.
Do you like what Sprott says? Do you want to work for him? There are a few things you should know: “Once you get into a business, it’s your own ability to use all the assets you have that determines where you’re going,” Sprott says, “and a lot of that has nothing to do with your schooling per se. It might have more to do with character and personality and intuitiveness.”