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

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

#661

Post by dsjoerg »

FalcorTheDog wrote: post #302
dsjoerg wrote: post #90

Earlier quoted context omitted.

that's effectively only ~4 observations then (100/24). i wouldn't want to make a very important life decision based on data from only 4 observations. with only 4 observations, "common sense" and other forms of first-principles reasoning are much more important than the 4 data points. also one should consider data from other countries and other historical eras.

It's not though. There are ~75 24-year windows you can use between 1913 and today. I suspect you will find similar results with almost all of those windows. Obviously past performance is not an indicator of the future, but 75 data points is a pretty decent amount of data.

Those 75 data points are not independent observations, because the windows overlap so much. Remember that using "year" as the granularity is arbitrary anyway; if we had daily, hourly or by-the-minute data going back to 1913, then we could have more "data points" but we would not have any better insight or statistical significance into the original question.

My point is that having 100 years of investment data is much more like having 4 data points than it is like having 75 or 75 *12 (if you cut the years into months). Even though you literally have 75 data points, they are pretty close to a copy-paste of each other; not statistically independent.

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

#662

Post by pokemongoaway »

chillwaves wrote: post #56
pokemongoaway wrote: post #50

Earlier quoted context omitted.

So you're arguing that everyone should pay for it and go to it until we make it free? Why can't we argue using the reality college tuition payers have today? Instead of arguing from a fairy tale reality for high tuition payers...

Because the argument is society reaps the benefit of an educated populace, secondly yes, everyone should pay for qualified individuals to go to college, as most or much of the civilized world does. That does not mean free college for everyone. There would still be a stringent entrance exam. It means free college for those who are qualified. Contrast that to the system now where college is seen as just another marketi…

This logic requires your definition of educational systems to be inherently beneficial and also financially a net-win for graduates. If you turn this around and say that educational systems don't always produce better workers than the self-taught and the apprentices, then we must say they are not necessarily "better than nothing." Which is why it is super reasonable for many of us not to want our tax money going to them!

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

#663

Post by pokemongoaway »

alkonaut wrote: post #497
madengr wrote: post #291

Earlier quoted context omitted.

Spending more does not help. Spending per pupil in Washington, DC is possibly the highest in the nation, with the most abysmal performance.

> Spending more does not help. Spending per pupil in Washington, DC is possibly the highest in the nation, with the most abysmal performance. Perhaps even more needs to be spent, or the money is spent the wrong way? It would otherwise seem as though DC students are impossible to teach - which seems odd.

This seems like a very common line of thinking on the "liberal" & "democrat" side of the "debates." That in situations that already have money being spent on them - and are not going to plan - all of the best solutions involve spending more...

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

#664

Post by alkonaut »

pokemongoaway wrote: post #663
alkonaut wrote: post #497

Earlier quoted context omitted.

> Spending more does not help. Spending per pupil in Washington, DC is possibly the highest in the nation, with the most abysmal performance. Perhaps even more needs to be spent, or the money is spent the wrong way? It would otherwise seem as though DC students are impossible to teach - which seems odd.

This seems like a very common line of thinking on the "liberal" & "democrat" side of the "debates." That in situations that already have money being spent on them - and are not going to plan - all of the best solutions involve spending more...

The solution might be spending differently or changing other things that are budget neutral, such as the curriculum.

But in 90% of cases throwing money at it will help most problems a politician will face. More teachers or better teachers is doable without more money but it's hard. That means you need better school administrators that will attract and develop good teachers - but it's the same argument again - how will you get those?

The objection might be that it's not the most efficient use of money - which depending on your political views might be more or less terrible.

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

#665

Post by rebootthesystem »

sobani wrote: post #619
matwood wrote: post #536

Earlier quoted context omitted.

What other options are you presenting though? I keep seeing really expensive school vs. no school when in fact there is a wide sliding scale. If someone can get into a top tier school, then by all means try to make it work. But most people will not go to a top tier school, so they should be going to local colleges. Too many kids only see college as a 4 year party away from their parents, and to my dismay many parents…

Read reboot's last sentence again: Then do the research and find out how much more you might earn if you pay $300K for your degree rather than $100K. So the suggested alternative to a 300K college is a 100K college.

Exactly. There are many mid-range colleges where a great education can be had for a lot less than $300K.

Here's a good article:

https://www.wsj.com/articles/do-elite-colleges-lead-to-highe...

Quote:

"What we found startled us. For STEM-related majors, average earnings don’t vary much among the college categories. For example, we find no statistically significant differences in average earnings for science majors between selective schools and either mid-tier or less-selective schools. Likewise, there’s no significant earnings difference between engineering graduates from selective and less-selective colleges, and only a marginally significant difference between selective and mid-tier colleges."

Another reality check quote from the same article:

"Our findings are crucial for families to understand because chasing a prestigious STEM degree can leave students burdened with huge amounts of unnecessary debt. Financial aid can certainly help, but for many families, the cost of education can still differ dramatically across schools. For example, if an engineering student chose to attend the University of Pennsylvania instead of Texas A&M, the average starting salary would differ by less than $1,000, but the tuition difference would be over $167,000. At that slightly higher salary, you’d have to work for more than 150 years before you make up for that vast tuition difference."

This is startling and should be considered by every single student and family engaged in choosing a school.

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

#666

Post by Tritrin »

Radim wrote: post #639
staticelf wrote: post #466

Earlier quoted context omitted.

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…

Did you actually reply to the staticelf's comment? From what I can tell your reply is:

>The efficiency tradeoffs that come with increased system complexity are real, the break-even ROI points are real.

But what do you mean by this concretely, are you saying that if we can find an financial deficit by offering college free then we should stop? Would you say that there is no other good offered by higher education than that measured in monetary gain for the individual & society?

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

#667

Post by matwood »

rebootthesystem wrote: post #665
sobani wrote: post #619

Earlier quoted context omitted.

Read reboot's last sentence again: Then do the research and find out how much more you might earn if you pay $300K for your degree rather than $100K. So the suggested alternative to a 300K college is a 100K college.

Exactly. There are many mid-range colleges where a great education can be had for a lot less than $300K. Here's a good article: https://www.wsj.com/articles/do-elite-colleges-lead-to-highe... Quote: "What we found startled us. For STEM-related majors, average earnings don’t vary much among the college categories. For example, we find no statistically significant differences in average earnings for science majors betw…

We're on the same page then :)

Something else not mentioned is that the education can be better better than the not top-tier schools because they are typically focused on teaching instead of research. In another thread I talked about my smallish college where the dept. chair on down rotated through teaching the into CS classes in addition to their higher level duties.

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

#668

Post by lodi »

Steeeve wrote: post #634
lodi wrote: post #601

Earlier quoted context omitted.

> 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.…

> The risk is that you can lose all of your money. It's spelled out in every prospectus...

If you buy equity in a single company, you could lose all of your money if they go bankrupt. Likewise, if you buy stock in 500 companies, they could all go bankrupt and you could lose all of your money, but the chances of that kind of "total loss" happening become astronomically low as your portfolio becomes more and more diversified.

So yes, there's technically a chance of losing all of your money even when buying well-diversified index funds, and therefore this risk is listed in all the relevant legal documents. But I'm not losing any sleep over this particular category of risk.

> When people give you the impression that there's no downside to a particular investment they don't understand it either.

Of course there's a downside; the fundamental property of all investments is that risk is intrinsically proportional to reward. As a somewhat-rewarding investment strategy, it's therefore somewhat-risky. Being "locked out" of your money for a presidential cycle is one of the major downsides that we've both identified in this strategy.

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

#669

Post by gozur88 »

akhilcacharya wrote: post #581
gozur88 wrote: post #336

Earlier quoted context omitted.

Meaning what, not going to college or going instead to the local State U?

Going to a State U instead of those elite Us

State U is just fine for a technical degree, but you're diminishingly unlikely to be a CEO of a large company you didn't start yourself. Or a partner in a big NYC corporate law firm.
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