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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

#81

Post by ThrustVectoring »

vowelless wrote: post #68
staticelf wrote: post #47

Earlier quoted context omitted.

What about... offering college for free like the rest of the modern world? Then you would only have to worry about living costs and those loans are pretty small. I could pay off mine in like 4-5 years if I really wanted to. Plus, then people still could get an education even if their parents didn't save up for you. What about as a society/culture you start telling people that the country should offer education for fr…

On the other hand, one should wonder why college is so expensive in the US in the first place. Even without any subsidies, non-American tuition is a fraction of the cost of the big universities in the US. Why? Why are book so expensive here? Why is so much money spent on buildings, stadiums and hiring football coaches? The highest paid public employee in 39 states in the US is a college sports coach! [1] Throwing mor…

College is expensive because debt is cheap because of the expansion of pensions and retirement accounts as a proportion of the economy.

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

#83

Post by ma2rten »

staticelf wrote: post #47
krakensden wrote: post #46

As a culture, we really need to stop telling 17 year olds to not worry about money, go to college, and figure something out. There is always someone ready with a romantic appeal to a classical education, and it is so frustrating for me. Wasting four years is a huge cost. Years, decades of debt is a huge cost. Going to college with no plan about money? The costs are assured. Plus, the degrees people are actually getti…

What about... offering college for free like the rest of the modern world? Then you would only have to worry about living costs and those loans are pretty small. I could pay off mine in like 4-5 years if I really wanted to. Plus, then people still could get an education even if their parents didn't save up for you. What about as a society/culture you start telling people that the country should offer education for fr…

like the rest of the modern world

Many countries outside of Europe have tuition fees. Do we really have to label those countries as not part of the modern world?

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

#84

Post by smt88 »

pfarnsworth wrote: post #40

My tuition costs in 1995 were $2500/year for an engineering degree. So given the numbers the OP used, he would be wrong. In today's environment, however, I might be inclined to agree. When I went to school, I could get a minimum wage job for the summer, and pay for tuition and dorm fees for the year. Education costs are wildly out of whack and something needs to be done to cut down these costs, because at this rate,…

You should check the ROI on starting a business. That's one of the most common ways to lose your entire investment.

If your kids are smart, they'll likely have little trouble going somewhere for free. Even Norway or Germany would be options.

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

#85

Post by kelnos »

eqmvii wrote: post #45
twic wrote: post #36

Earlier quoted context omitted.

This is the kicker. Similarly, the stock market outperforms property on the regular, but banks won't lend you hundreds of thousands of beans to get involved in the stock market, when they'll fall over themselves to give you a mortgage.

Because repossessing property is (statistically speaking) more likely to work out for the bank than repossessing whatever random stocks an investor decided were a sure thing. That's why margin accounts aren't available to everyone, and margin calls kick in to protect the investment firm before total loss. Housing is volatile, but stocks are significantly more so, and with significantly more near-total losses over tim…

In addition to that, the bank knows what they get back if you default on your loan: your house. If you want to invest in the market, the bank has no idea what stocks or funds you'll be investing in, and can't even remotely guess at what they'll get back if you default.

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

#86

Post by vilmosi »

madsbuch wrote: post #61

In Denmark the cost of a masters degree is negative 45487.64 USD (That is, you get paid). And so it should be (at least!) in all countries.

I doubt it's negative. You can make that money working at McDonald's in Denmark in 3 years.

I still think college is worth it long term, but it's not really a negative cost, it's an investment.

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

#87

Post by smsm42 »

ue_ wrote: post #55
krakensden wrote: post #46

As a culture, we really need to stop telling 17 year olds to not worry about money, go to college, and figure something out. There is always someone ready with a romantic appeal to a classical education, and it is so frustrating for me. Wasting four years is a huge cost. Years, decades of debt is a huge cost. Going to college with no plan about money? The costs are assured. Plus, the degrees people are actually getti…

I'm in university right now, and the reason why I'm here is mainly so that I can get a degree in order to get hired for a job in the field I want. My parents probably got me into it beacuse of the appeal of classical education but also the fact that they want me to get a job, too. Is there any solution to getting a job without a degree? Especially in those technical subjects such as electronic engineering (what I'm d…

I've interviewed many people for starting position in software. I've looked at their degree only if there's literally nothing else to look at, and even then it wasn't a major sign. I've seen many people with degrees that are useless, and many people who were very skilled and who I don't even know whether they have a degree and what it is worth.

It goes like this: 1. Experience 2. Experience 3. Experience 4. Knowledge 5. Some interviewing skills won't hurt too, since somehow interviewer needs to get to know you a bit 6. Problem-solving skills .... 20. Degree.

NB: for bigger companies, it may be different as you need to pass HR screen which may do checkboxing. Fortunately, many are smart enough not to do that, but some do.

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

#88

Post by rileymat2 »

heynk wrote: post #11

Definitely an interesting thought experiment. This article assumes 7.1% annually, and gets that by choosing an arbitrary start and end date of stock returns. In reality, it seems to be more like ~4%, which makes this conclusion much different. http://www.nytimes.com/interactive/2011/01/02/business/20110...

4% is inflation adjusted, it is not clear to me which is correct to compare to payscale numbers.

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

#89

Post by ThrustVectoring »

Alex3917 wrote: post #71

Skipping all of school has even higher returns. If you just invested all the money that would normally go to pay for your K-12 school and college each year, then by age 25 or so you'd have enough money to retire. The problem is that even if your parents home school you, they're generally not allowed to just not pay millage.

The core problem is that K-12 schooling largely isn't for the benefit of children, but for the state. That's why the state pays for it and not private tutoring in child-lead learning. It's awfully convenient to have a populace indoctrinated into a shared set of cultural norms.

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

#90

Post by dsjoerg »

brians wrote: post #17
dsjoerg wrote: post #10

This article doesn't explain why we should believe that stockmarket performance, going forward, will be anything like the S&P's performance from 1993 to now. It's also not clear why we should believe the Payscale College ROI figures. I clicked around a bunch and couldn't find any description of their actual methodology for computing it. In particular, before we can take it seriously we need to know how well they've d…

Well, you could repeat it for all the 24-year periods from 1917 through now. I wouldn't expect very different results, though accounting for college deferments will be fun.

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.

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