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On average, skipping college and investing tuition costs nets a higher return

erikrood.com

631–640 of 669 posts

Re: On average, skipping college and investing tuition costs nets a higher return

#631

Earlier quoted context omitted.

I can't understand the paradox that as tuition increased, tenured professor jobs became more scarce and other professor jobs lower paying. I guess fancy facilities and less gov't subsidy helps explain. It's gotten to the point that you might consider the alternative of starting a higher education co-op to hire associate professors and frustrated, underemployed phds while minimizing tuition by meeting in un-fancy loca…

While a great idea for learning and purely academic purposes, a degree from such a co-op would mean nothing to potential employers. Actually, it would mean nothing to anyone. At least in the U.S., an institution must be accredited for the degree to mean anything at all. That said, I would definitely join such a co-op as I feel the knowledge is more important than the paperwork anyways.

Why offer a degree when a BA in English isn't worth the paper it's printed on to employers? This is about knowledge, as you say. An affordable, liberal education, not a pipeline to Goldman Sachs.

For those seeking ROI, boot camps are already providing a compelling vocational alternative.

Re: On average, skipping college and investing tuition costs nets a higher return

#632
post #606

Earlier quoted context omitted.

I can't understand the paradox that as tuition increased, tenured professor jobs became more scarce and other professor jobs lower paying. I guess fancy facilities and less gov't subsidy helps explain. It's gotten to the point that you might consider the alternative of starting a higher education co-op to hire associate professors and frustrated, underemployed phds while minimizing tuition by meeting in un-fancy loca…

The increase in tuition (and fees) make up for budget shortfalls everywhere (fancy facilities are actually not all that big of a deal if you crunch the numbers). At the same time, getting rid of tenured positions is a decent means of cutting costs to try to address the same shortfall.

Sounds like a death spiral. My father got a PhD in history so he could be a professor. If he couldn't expect that, he would have gone to business school, reducing the demand for history professors and so on until there's none left. You get it.

Re: On average, skipping college and investing tuition costs nets a higher return

#633

Earlier quoted context omitted.

You know that 7.1% average doesn't mean 7.1% every year. Anyone that didn't panic sell during the crash has recovered. There are ways to handle the risk of a crash. #1 is to not play the high risk-high reward game if you are near retirement or already in retirement. You can't handle big swings at that point, since recovery could take 10 years and you're already 70. #2 is to have a liquid emergency fund, so you don't…

> Anyone that didn't panic sell during the crash has recovered. What does 500 shares of Pets.com sell for these days? All the people who had pensions heavily invested in Bear Stearns High-Grade Structured Credit Enhanced Leveraged Fund came out OK after a bit of time? --- Investment carries risk at all levels. The longer you play the market, the more likely it is that you'll get burned at some point. Professional inv…

If you are heavily invested in a single stock, whether it's Pets.com, Bear Stearns, or Tesla, then you aren't aiming for average returns. Index funds are a low effort way to spread risk and are simple to use.

The real problem is that most people lack the discipline to avoid panic selling or to avoid chasing bigger wins.

Re: On average, skipping college and investing tuition costs nets a higher return

#634
post #601

Earlier quoted context omitted.

Both of the investments I referenced were solid until they weren't. My adult life has seen 3 major market crashes and a terrible recession. I've watched neighborhoods go into foreclosures on 80% of their homes. I've had friends go unemployed for over a year. When I see people spread investment advice as if there's no downside, I have to shake my head. There's money to be made in the market, but it's not without risk.…

> Both of the investments I referenced were solid until they weren't. No they weren't, not even close. Investing all your money in one company (whether Pets.com, McDonald's, or any other) is not, and has never been, "solid". Also, the words " leveraged hedge fund" should tip you off that that wasn't a low-risk investment. > When I see people spread investment advice as if there's no downside... Seriously? No true sco…

> Seriously? No true scotsman... err investor... would imply that the stock market is risk-free.

...

> But the argument is that investing passively in a well-diversified index shifts most of that risk away from total loss--as in your examples--and into more manageable risks, e.g. waiting for the market to recover.

So you're saying that the only risk is that you might have to wait a few years to see your money again. That's plain and simply not true. The risk is that you can lose all of your money. It's spelled out in every prospectus, just like it spells out that things like turnover costs are not accounted for in any marketing you've received.

> By the way, I'm interested to know what you propose I do with, say, an unexpected year-end bonus. Put it in a bank account earning -2% real interest?

My advice is don't put money in places you don't understand. When people give you the impression that there's no downside to a particular investment they don't understand it either. If all you understand is that a savings account won't lose money, then put it in a savings account, but remember that FDIC is limited insurance.

Re: On average, skipping college and investing tuition costs nets a higher return

#635
post #409

Earlier quoted context omitted.

> Wasting four years is a huge cost. At college I: learned calculus, computer programming, advanced mathematics, urban planning, how to communicate like a grown up, and those are just the big topics. I also took acting classes and learned social skills and made lifelong friends. When I graduated, a professor arranged my first professional job which was an order of magnitude better than any blue collar gig I had ever…

Hi! While we're trading anecdotes, allow me to share mine to counter your point. I skipped my bachelor's degree entirely - I simply don't have one. I am currently a graduate student in one of the best universities for cryptography. I have absolutely no debt and I earn about $300k per year. I've finished all coursework and I'm currently working on research for my thesis. I have a good understanding of computer science…

Out of curiosity, how difficult was it for you to enroll in graduate school without a bachelor's degree?

Re: On average, skipping college and investing tuition costs nets a higher return

#636
post #609

Earlier quoted context omitted.

Private loans make up about 7% of student loans dispersed each year.

Is that current or always? I went to college 2007-2011 and the first two years everyone I knew got 5.5k and 6.5k loans from the government and then private loans for the rest. After the great recession no one could get private loans anymore and the government filled in the rest

Looking at the statistics, it looks like its been around that level for a while. Private loans make up a bit less than 10% of the overall outstanding student loan debt, not just new debt.

Re: On average, skipping college and investing tuition costs nets a higher return

#637
post #409

Earlier quoted context omitted.

Hi! While we're trading anecdotes, allow me to share mine to counter your point. I skipped my bachelor's degree entirely - I simply don't have one. I am currently a graduate student in one of the best universities for cryptography. I have absolutely no debt and I earn about $300k per year. I've finished all coursework and I'm currently working on research for my thesis. I have a good understanding of computer science…

Out of curiosity, how difficult was it for you to enroll in graduate school without a bachelor's degree?

It was difficult in the sense that it's very rare (but by no means unprecedented) for someone to do it, but it was not particularly difficult in the context of my background. In other words, I'd say it was more difficult to become the sort of candidate admission boards would consider making an exception for than it was to actually get them to make the exception.

Not having an undergraduate degree is virtually always a nonstarter for graduate admission committees, which means you need to bypass them. The only way you can realistically do this is by proving your ability to an influential professor who has the clout to overrule them, or at least make them seriously consider it. That means you'll be trying this at a research university, and (ironically) it also means that more prestigious universities will consider it, though they'd never advertise it of course.

Before I accepted an offer, I was well into the admission process at both Oxford and CMU (the latter of which invited me to apply), and both explicitly clarified that my background wouldn't be held against me.

Specifically, I applied by 1) appealing to specific professors at the universities I was interested in whose research I respected; 2) explaining my unorthodox background with forthright honesty, while asserting the context that would clarify skipping undergraduate as a sensible decision; 3) getting very strong reference letters from reputable clients and past coworkers of mine; and 4) demonstrating through the interview process and personal letter that I had developed an exceptional skillset as an autodidact.

I'm very happy with the route I took. It enabled me to earn far more much earlier than I otherwise could have and without any debt; it also allowed me to accomplish a very specific goal: to study a specialization at the graduate level and contribute original research without needing to work through courses I was uninterested in. That said, I do recognize this isn't really possible for most people.

Re: On average, skipping college and investing tuition costs nets a higher return

#638
post #513

Earlier quoted context omitted.

It means the education system is design to pump out workers rather than thinkers. Taking this to the logical conclusion, why teach science, history or sport in high schools? Low ROI. Stuff that! Why not make the coding bootcamp start at kindergarten. And why not let parents pay for such schools so they can choose the best ROI for their kid.

Well, why not? If those "thinkers" were really contributing something valuable, that will show up in ROI. If you don't agree with that measure, how do you propose to eliminate completely useless classes and make space for better alternatives? Do you just assume that any classes that are part of the status quo must be valuable?

Value for society != Roi

There are so many examples of this I don't know where to begin. Ok I'll start: Fracking.

Re: On average, skipping college and investing tuition costs nets a higher return

#639
post #351

Earlier quoted context omitted.

I come from one of your "paradise European countries with free higher education" and it's astounding to me that in the 21st century, people still fall for this "free lunch" fallacy. You do realize the education is not really "free", right? That word is such a red herring. It's just tying up resources in a way YOU like, at the expense of other people's preferences. Many people here, teachers and doctors included, are…

Yes of course, I am not retarded. But you maybe don't own a car, go much to the hospital etc. but I assume you don't want to privately fund those things? Education is just one other thing that is simply good for everyone and something you shouldn't have a less opportunity in because you had the "wrong" parents. But if you're from a paradise country as you say, I assume you enjoyed your free education and now just sim…

Wrong assumptions all around.

Listen, these are not novel concepts. The ideology of "grand social good trumps individual interests (and I decide what that good is)" has been tried repeatedly, around the world. Its long-term effect on human psyche and society are well documented (try some Solzenitsyn).

"Those who don't learn from history are doomed to repeat it."

But it's always "This time is different! NOW we finally have the RIGHT social formula!!". Well, I have some bad news for you, sunshine. I'm not "shitting on education for no good reason". The efficiency tradeoffs that come with increased system complexity are real, the break-even ROI points are real. Your wishful thinking notwithstanding.

Just google the people from my previous post, for god's sake.

Re: On average, skipping college and investing tuition costs nets a higher return

#640
post #606

Earlier quoted context omitted.

The increase in tuition (and fees) make up for budget shortfalls everywhere (fancy facilities are actually not all that big of a deal if you crunch the numbers). At the same time, getting rid of tenured positions is a decent means of cutting costs to try to address the same shortfall.

Sounds like a death spiral. My father got a PhD in history so he could be a professor. If he couldn't expect that, he would have gone to business school, reducing the demand for history professors and so on until there's none left. You get it.

At the moment, there is a surplus supply of PhDs. If, at some point, that gets corrected, things may change.

Though I should note that PhD students in history aren't major drivers of demand for professors of history - undergraduates are.

In the sciences, there's a bit more of an incentive to have lots of graduate students.

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