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What stops a FIRE path person from attending college a little later in life? I retired in my 20s and could’ve easily signed up for classes.
If the kid is bored - work more hours and make more money.
Again, it's about the type of job. Any job is better than school that teaches you nothing if those are the only options, but it's a sad state of affairs when that turns out to be the case.
I would be much more in support of a late blogger's proposal to have the government give everyone $100,000 at age 13 and let them choose to go to school now or work and then go back to school later. I am certain I would have flourished under that type of system, but a lot of people don't do well managing lump sums of money and the system without checks and balances might be harmful to a subset of the population that would fritter it away "celebrity style". Perhaps a more moderate solution is to have a flexible "super-library" or democratic school instead of the current "authoritarian school" and allow students to explore their own interests. But there is nothing to be "enjoyed" about being either an adolescent or a young adult in a system that is designed not to give you opportunity but to force you to sit on the sidelines so that you don't compete with the powers that be.
I would submit that by age 25-30 an intelligent young person with a little guidance could have a net worth of $500,000+ and no debt. This could essentially make them self sustaining for life...and rich by 40-50 if they hold on to a few basic principles. The person would also be young enough to still attend college if they so choose.
I would submit that this contradicts common experience. Warren Buffett gave each of his children $100,000 with the stipulation that they wouldn't get any more. His youngest son, Peter, noted that he watched his brother and sister go through their windfall quickly.
Look at many entertainers and most professional athletes, who at least earned their pay, but had fortunes completely out of proportion with their skill at handling money: broke.
The best you could reasonably hope for is a recipient who'll hoard the money, afraid of losing it.
And by the way, why is a huge windfall or a college education the only option on the table? No education should cost $200,000, and largesse such as a used car or co-signing a first loan or providing moving help and expenses would be far more helpful for a young person. Not a fortune they have no idea how to handle--and that could make them a target for fortune hunters.
Again, it's about the type of job. Any job is better than school that teaches you nothing if those are the only options, but it's a sad state of affairs when that turns out to be the case.
I would be much more in support of a late blogger's proposal to have the government give everyone $100,000 at age 13 and let them choose to go to school now or work and then go back to school later. I am certain I would have flourished under that type of system, but a lot of people don't do well managing lump sums of money and the system without checks and balances might be harmful to a subset of the population that would fritter it away "celebrity style". Perhaps a more moderate solution is to have a flexible "super-library" or democratic school instead of the current "authoritarian school" and allow students to explore their own interests. But there is nothing to be "enjoyed" about being either an adolescent or a young adult in a system that is designed not to give you opportunity but to force you to sit on the sidelines so that you don't compete with the powers that be.
If we'd asked ourselves what we'd do with $100,000 each birthday during our teenage years, I wouldn't be surprised if it changed each year. Perfect reason not to make this money available to someone at a young age, with or without restrictions. It's less about the parent having it or not having it (I'm sure they'd know if they did, and could afford such a thing) and more about the regret the child would have to live with if he or she had a change of heart, found a stronger passion, or had a great idea later in life that could have been paid for with this and actually earn a return on that sum.
"Could giving an 18 year old $200k be a better investment than college?"
It all depends on the major and course of study. Giving an 18 year-old two cents and having them forgo college would be a better investment than majoring in one of the numerous worthless degree tracks that colleges offer today. But if we are talking about majors that actually have demand in the job market like engineering, computer science, accounting, and applied mathematics, then no, going to college would be better than handing an 18 year-old $200K without a doubt.
Colleges are churning out STEM graduates at a rate of two to three per available job. I'm not a practicing engineer anymore because the layoffs were killing me.
If we'd asked ourselves what we'd do with $100,000 each birthday during our teenage years, I wouldn't be surprised if it changed each year. Perfect reason not to make this money available to someone at a young age, with or without restrictions. It's less about the parent having it or not having it (I'm sure they'd know if they did, and could afford such a thing) and more about the regret the child would have to live with if he or she had a change of heart, found a stronger passion, or had a great idea later in life that could have been paid for with this and actually earn a return on that sum.
The system we have right now is set up to trap people into debt early in life and most take decades to get out of it. It isn't clear to me how that is any better than a system that causes people to "regret" what they did with the money in their teens.
There has to be a better way. In particular, we need to move away from the assumption of an adversarial job market model that assumes that giving jobs to one group of people means making it difficult for another group of people. And I don't mean jobs in general, I mean specific jobs - including many that currently require college degrees.
A sufficient set of restrictions can prevent a young person from frittering away the money, which would essentially amount to creating an annuity combined with restrictions on credit that prevent a person from taking a loan or credit based on the annuity income.
The system we have right now is set up to trap people into debt early in life and most take decades to get out of it. It isn't clear to me how that is any better than a system that causes people to "regret" what they did with the money in their teens.
There has to be a better way. In particular, we need to move away from the assumption of an adversarial job market model that assumes that giving jobs to one group of people means making it difficult for another group of people. And I don't mean jobs in general, I mean specific jobs - including many that currently require college degrees.
A sufficient set of restrictions can prevent a young person from frittering away the money, which would essentially amount to creating an annuity combined with restrictions on credit that prevent a person from taking a loan or credit based on the annuity income.
Quote:
Originally Posted by ddm2k
It's a lose/lose because a lump sum of $200k for an 18 year old is a waste. Two scenarios:
1. Unrestricted money: It gets enjoyed rather than invested, and every job requiring work or every college program requiring delayed gratification seems like a "bad deal".
2. Restricted money: If it's use-restricted for education, it might not get used at all, and it would be $200k that could still be in my accounts untouched.
Take it year by year. If the kid is in college, see if you qualify for grants, is your child working during the semester, does the employer offer tuition assistance, etc. Get a loan to float the cost, then pay it off with the reimbursement check. Loans in child's name only, but coach them along the way to make sure the numbers will add up come reimbursement time, that the entire cost of the semester is covered by the benefit.
In my post (#35) I wouldn't advise anyone to take a loan if they knew that it wouldn't be reimbursed at the end of the semester. Each loan would be satisfied while still in grace. If you can't make that work, find a cheaper college, or seek work full-time at some entry level job at a company that provides tuition assistance. A call center. A cell phone store. STARBUCKS. It doesn't matter.
And if you don't want to go, don't go. If you find a lucrative field that doesn't require a degree (lineman, railroad, trade, etc.) then just go straight into whatever you want to do.
For a few kids it would work, for most it wouldnt. Better to find a smaller low end house to give them so they could escape rent starting out. Or probably better to lease it to them cheap so they cant lose it. But again with this age group, they could lose it through a bad marriage, etc. Again just depends on the individual. Some kids are pretty darn mature, but most arent.
Location: Formerly Pleasanton Ca, now in Marietta Ga
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Quote:
Originally Posted by eddiehaskell
Obviously. But $200k for a person on that path could put them decades ahead of their peers.
As much as I give you a hard time about your posts, I like this idea but with a lot of caveats. If they are given a good financial education and goals are set with some rewards or bonuses as the prove themselves, I like it. But not the 200k all at once. Without a good foundation it will be lost.
God forbid he becomes arrogant and thinks he special because he owns a house earlier than his peers when in fact it was just given to him.
Like than one poster on cd who bragged how knowledgeable he was as a real estate investor and how he was so far ahead of his peers. We then find he didn’t earn the house, his dad bought him a condo with the understanding he was not to sell it. He did anyway and used the money to but the house. For some reason he felt he had earned the house.
It’s like the give a man a fish versus teaching him to fish concept.
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