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Your post is terrible and filled with emotion, not logic. Investments denote a return, again of you proposed the ROI that you get with a basic bachelors degree to a financial advisor, he'd laugh you out of his office. First of all a trader school is just that; it is not a college. Secondly burger chains like in n out pay kids a starting wage of $10/hr, health bennies and promote from within. Within 10 years a 30 year old can be a regional manager at In N Out making over 100k, meanwhile you'll owe 100k in student loans trying to find a job paying 35k; not a wise investment at all.
I had to laugh at this one...
ALL of your posts are based on emotion and completely devoid of facts and logic.
That financial advisor that would "laugh you out of his or her office" that you keep referring to ( the one that would have AT LEAST a BA/BS and more likely an MS/MBA) would absolutely tell their clients to invest in a college education because the "facts" that you keep ignoring clearly show the lifetime earnings potential of a college graduate FAR outstrip those of a high school graduate.
How many kids do you think really make it to regional manager of a burger chain to make 100k? There can only be a limited number of regional/district managers. I would also love to see how many regional managers are lacking at least a BA/BS. Here is how much one can expect to make at In n Out
You have made so many logical errors in your previous posts regarding return on investment, how much one could "save" on a 25 K salary etc it's really hard to take these posts seriously.
Don't want to spend the money to go to college? Don't...no one is forcing you. You can't become a teacher though, just choose a different job.
Careers by definition require specialized education that can only be obtained through formal education.
Careers typically offer intangible rewards in terms of job satisfaction over more mundane tasks in addition to generally higher salaries.
Statistically speaking, there is a correlation between level of education and lifetime earnings. The more educated you are, the more money you earn. Even if you go into massive debt, you will still earn more money than you ever could have without your degree. It's a lifetime investment.
I think that is a myth. To steal a famous quote, "there are lies, damn lies and statistics."
I mean lets just recap what has already been posted in this thread, using your own term "massive debt" as a barometer.
Say an 18 year old kid goes to college and then grad school, and after 6 or 7 years comes out of school with an mba, but also 160k in debt. His first job pays 52K/year. So right away he is 110k "upside down" starting off his life at 24 or 25 in the hole.
That same 18 year old has a friend who started working at Best Buy right outta high school making$9.50/hr. He is a hard worker and is getting small promotions and pay raises every year and a half, eventually being promoted to store manager in 5 years, paying 48k/year. So, here is making close to 50 grand a year at 24 years old, not only debt free, but also having saved up 25 grand over those 4 years. In less than 10 years he will have almost 250k saved up, while his debt riddled mba friend is climbing the corporate ladder, but in the whole over 100k.
So, you're saying you're not worth $10k/year. Well there ya go.
I decided that I was worth that, when I went to college. I graduated with honors, and did absolutely nothing with my degree. That was intentional. I went to college specifically because I was interested in the course of study. I went to college specifically for the experience of college life, of the particular, unique comeraderie that can only come from living on campus. Yes, I could have moved out of the home, gotten a full time job, and earned my way to financial success without a degree.
But I was selfish, and just plain didn't WANNA. I wanted a college degree. I wanted to know that even if I flipped burgers for the rest of my life, I was doing so with a college diploma hanging from my walls. It was something that made me proud. It made my family proud as well.
I paid $10k/year for 4 years, got my B.S., and paid off my student loan by the time I was 28. The only "emotion" in my post, is the emotion of self-satisfaction with a job well done, on my part.
Also, if you're going to criticize someone's post, you might want to double check your own posts to make sure they're flawless next time.
With all due respect, another word immediately comes to mind: stupid. Why put yourself 10k in debt all for self gratification, where is the logic in that? So, by your own admission it was all to satisfy your ego. Um......okay.
I think that is a myth. To steal a famous quote, "there are lies, damn lies and statistics."
I mean lets just recap what has already been posted in this thread, using your own term "massive debt" as a barometer.
Say an 18 year old kid goes to college and then grad school, and after 6 or 7 years comes out of school with an mba, but also 160k in debt. His first job pays 52K/year. So right away he is 110k "upside down" starting off his life at 24 or 25 in the hole.
That same 18 year old has a friend who started working at Best Buy right outta high school making$9.50/hr. He is a hard worker and is getting small promotions and pay raises every year and a half, eventually being promoted to store manager in 5 years, paying 48k/year. So, here is making close to 50 grand a year at 24 years old, not only debt free, but also having saved up 25 grand over those 4 years. In less than 10 years he will have almost 250k saved up, while his debt riddled mba friend is climbing the corporate ladder, but in the whole over 100k.
Even in the fairly implausible scenario where someone makes it to store manager in 5 years without any education - here goes
Year 1 = $19,760 total salary ($9.50/hr)
Year 2 = $22,880 ($11/hr)
Year 3 = $26,315 ($12.65/hr)
Year 4 = $31,200 ($15/hr)
Year 5 = $48,000 total salary ($23/hr)
Not sure exactly how they are going to save up $25,000 in the first 4 years - but I'll even roll with it.
Say from there out he's very fortunate and gets a 5% increase per year.
Year 6 = $50,232 ($24.15)
Year 7 = $52,749 ($25.36)
Year 8 = $55,370 ($26.62)
Year 9 = $58,178 ($27.97)
Year 10= $61,048 ($29.35)
Total 10 year earnings = $425,732 + $25,000 savings = $450,732
Now lets be realistic with an MBA grad - here are 2010 stats
Salaries Strong for Recent Business Grads - BusinessWeek (http://www.businessweek.com/bschools/blogs/mba_admissions/archives/2010/07/salaries_strong_for_recent_business_grads.html - broken link)
Average starting salary for MBA = $66,000 starting salary, $7k signing bonus, $7k annual bonus
He doesn't start earning until year 7. With a 15 year loan and your $160k heavy debt number that will be about $11k per year going to his cost of education. I'll also give him the 5% annual raise - although keep in mind he's coming in as an entry level MBA and typically he'll also have more chance for promotion out of this entry level.
Year 7 = $66,000 + $7,000 bonus = $73,000 - $11,000 = $62,000 final
Year 8 = $69,300 + $7,000 bonus = $76,300 - $11,000 = $65,300 final
Year 9 = $72,765 + $7,000 bonus = $79,765 - $11,000 = $68,765 final
Year 10 = $76,403 + $7,000 bonus = $83,403 - $11,000 = $72,403 final
So even with obtaining an education and having to pay for this at the end of year 10 the final total compensation for the MBA is $268,468 + the $8,000 signing bonus or $276,468
I know what you are thinking now - aha, got you!
After 10 years the HS grad has made $450,732 vs $268,468 for the MBA. That's a difference of $182,264 so that is clearly the better path.
However, keep in mind that if you add the salary ($198,387) and the savings ($25,000) from those 6 years while the MBA was in school you get $223,387. So in just 4 years the MBA has shaved off around $41,000 of the difference ($223,387 after year 6 vs $198,387 after year 10), despite paying $11,000 a year in education costs.
Which brings me to the fallacy that you are falling for. Your are taking the cost of education and deducting it immediately from the year 1 salary and saying "look, you start in the whole by a large dollar"
It just doesn't work that way. If you look at a financial statement you'll see something called "Current portion of long term debt". Similar concept. On that salary year they only have to pay the debt service from that year.
However, as you can see the MBA is gaining fast and isn't even 30 yet. What do you think happens when they hit 40 and the student loan is 100% paid off? The salary difference then is going to be pure with no offset.
That pure difference will be factored in for the next 25 years.
So let's just keep it static to the above. In the years where both were working the MBA out earned the HS grad by about $10k per year and after 10 years (4 years into the loan) was behind $198,387 in lifetime earnings.
Stats show this gap widens drastically - but even if it doesn't here is what happens.
For the next 11 years paying the loan, another $110,000 comes off the difference. So at roughly age 40 this lifetime earnings gap is down to $88,387. Since the loan is satisfied there is no longer an $11,000 deduction every year making the MBA now outearn by $21,000 per year.
At age 45 that $88,387 advantage for the HS grad turns into a $16,613 advantage for the MBA.
From 45-65 you have a 20 year period of earning an additional $21,000 per year. That is $420,000.
So even looking at that the MBA makes out at close to $450,000 more in career earnings - despite going against a relatively quickly prosperous HS grad with good savings, despite having a very high cost of education and despite starting out average and pretty much staying there his whole life.
Throw in that his company probably has better vacation, 401k match, medical benefits, etc the difference is most likely much more vast.
When looking at the investment of education you can't assume that the first year out of college tells the story - it's definitely a long run play
I think that is a myth. To steal a famous quote, "there are lies, damn lies and statistics."
I mean lets just recap what has already been posted in this thread, using your own term "massive debt" as a barometer.
Say an 18 year old kid goes to college and then grad school, and after 6 or 7 years comes out of school with an mba, but also 160k in debt. His first job pays 52K/year. So right away he is 110k "upside down" starting off his life at 24 or 25 in the hole.
That same 18 year old has a friend who started working at Best Buy right outta high school making$9.50/hr. He is a hard worker and is getting small promotions and pay raises every year and a half, eventually being promoted to store manager in 5 years, paying 48k/year. So, here is making close to 50 grand a year at 24 years old, not only debt free, but also having saved up 25 grand over those 4 years. In less than 10 years he will have almost 250k saved up, while his debt riddled mba friend is climbing the corporate ladder, but in the whole over 100k.
You continue to use this same misguided "logic" with more than a little fuzzy math...
Lets recap...
9.50/hr translates into a yearly salary of just under 20k....BEFORE TAXES AND "LIFE"
So your mythical hardworking high school grad "takes home" about 15K to be generous...
He then pays for his apartment, groceries, car, gas, insurance....whoops...looks like he is "Upside down" before he even gets started, never mind "saving 25K" LOL
NOT IN THE REAL WORLD MY FRIEND
Never mind the fact that the likelihood of a 23 yo getting a store manager position at 48 K WITHOUT A DEGREE is somewhere between slim and none...and even if by some magical happenstance he gets that mythical managers job, saving 250K on a 48 to 60K job in 10 years???
Not happening...unless he lives in his mother's basement and never pays a dime for you know, food, clothing, gas, car etc....
Even in the fairly implausible scenario where someone makes it to store manager in 5 years without any education - here goes
Year 1 = $19,760 total salary ($9.50/hr)
Year 2 = $22,880 ($11/hr)
Year 3 = $26,315 ($12.65/hr)
Year 4 = $31,200 ($15/hr)
Year 5 = $48,000 total salary ($23/hr)
Not sure exactly how they are going to save up $25,000 in the first 4 years - but I'll even roll with it.
Say from there out he's very fortunate and gets a 5% increase per year.
Year 6 = $50,232 ($24.15)
Year 7 = $52,749 ($25.36)
Year 8 = $55,370 ($26.62)
Year 9 = $58,178 ($27.97)
Year 10= $61,048 ($29.35)
Total 10 year earnings = $425,732 + $25,000 savings = $450,732
Now lets be realistic with an MBA grad - here are 2010 stats
Salaries Strong for Recent Business Grads - BusinessWeek (http://www.businessweek.com/bschools/blogs/mba_admissions/archives/2010/07/salaries_strong_for_recent_business_grads.html - broken link)
Average starting salary for MBA = $66,000 starting salary, $7k signing bonus, $7k annual bonus
He doesn't start earning until year 7. With a 15 year loan and your $160k heavy debt number that will be about $11k per year going to his cost of education. I'll also give him the 5% annual raise - although keep in mind he's coming in as an entry level MBA and typically he'll also have more chance for promotion out of this entry level.
Year 7 = $66,000 + $7,000 bonus = $73,000 - $11,000 = $62,000 final
Year 8 = $69,300 + $7,000 bonus = $76,300 - $11,000 = $65,300 final
Year 9 = $72,765 + $7,000 bonus = $79,765 - $11,000 = $68,765 final
Year 10 = $76,403 + $7,000 bonus = $83,403 - $11,000 = $72,403 final
So even with obtaining an education and having to pay for this at the end of year 10 the final total compensation for the MBA is $268,468 + the $8,000 signing bonus or $276,468
I know what you are thinking now - aha, got you!
After 10 years the HS grad has made $450,732 vs $268,468 for the MBA. That's a difference of $182,264 so that is clearly the better path.
However, keep in mind that if you add the salary ($198,387) and the savings ($25,000) from those 6 years while the MBA was in school you get $223,387. So in just 4 years the MBA has shaved off around $41,000 of the difference ($223,387 after year 6 vs $198,387 after year 10), despite paying $11,000 a year in education costs.
Which brings me to the fallacy that you are falling for. Your are taking the cost of education and deducting it immediately from the year 1 salary and saying "look, you start in the whole by a large dollar"
It just doesn't work that way. If you look at a financial statement you'll see something called "Current portion of long term debt". Similar concept. On that salary year they only have to pay the debt service from that year.
However, as you can see the MBA is gaining fast and isn't even 30 yet. What do you think happens when they hit 40 and the student loan is 100% paid off? The salary difference then is going to be pure with no offset.
That pure difference will be factored in for the next 25 years.
So let's just keep it static to the above. In the years where both were working the MBA out earned the HS grad by about $10k per year and after 10 years (4 years into the loan) was behind $198,387 in lifetime earnings.
Stats show this gap widens drastically - but even if it doesn't here is what happens.
For the next 11 years paying the loan, another $110,000 comes off the difference. So at roughly age 40 this lifetime earnings gap is down to $88,387. Since the loan is satisfied there is no longer an $11,000 deduction every year making the MBA now outearn by $21,000 per year.
At age 45 that $88,387 advantage for the HS grad turns into a $16,613 advantage for the MBA.
From 45-65 you have a 20 year period of earning an additional $21,000 per year. That is $420,000.
So even looking at that the MBA makes out at close to $450,000 more in career earnings - despite going against a relatively quickly prosperous HS grad with good savings, despite having a very high cost of education and despite starting out average and pretty much staying there his whole life.
Throw in that his company probably has better vacation, 401k match, medical benefits, etc the difference is most likely much more vast.
When looking at the investment of education you can't assume that the first year out of college tells the story - it's definitely a long run play
Nice job +1
You did a whole lot more work and did a much more elegant job conveying the same thing I was getting at...
The OP refuses to acknowledge the incontrovertible fact that a college graduate will vastly out earn his high school graduate peer over a lifetime...
A college degree, for most folks, is the ultimate investment in one's earning potential for life.
You did a whole lot more work and did a much more elegant job conveying the same thing I was getting at...
The OP refuses to acknowledge the incontrovertible fact that a college graduate will vastly out earn his high school graduate peer over a lifetime...
A college degree, for most folks, is the ultimate investment in one's earning potential for life.
It goes back to what the degree is in. A degree in philosophy is not worth the time, effort, money, and sacrifice if someone who gets that degree is not going to get a masters degree that has more earning power, not unless you want a degree for the sake of having a college degree. If that's the case then by all means, go to school.
People are failing to say what type of degree can help you earn money. You can't just say get a bachelors degree in anything and you'll be better than someone who doesn't have one. Not necessarily true.
A degree in communications can lead to a job in.......???
A degree in philosophy can lead to a job in.....????
You get a degree in one of those areas, then you'll be working along side someone with only a high school diploma making the same 9 dollars an hour, and you won't be earning more than the typical high school graduate.
Also, people are failing to state that the United States, as well as the rest of the word, are in a depression/recession. When a company isn't doing that much hiring and is looking to save cost by keeping the lowest denominator of workers just to get by on a daily bases, then all of those new graduates with their degrees are going to be out of luck and on the unemployment line trying to line up something, even if it is part time and doesn't pay anything.
You can't just go to college and assume you'll get a 40,000 dollar job with a bachelors degree in whatever, not unless it's in a needed field like nursing.
Trade school would be a better bet for a lot of people. You go for a few years, learn a skill you can make money off of, and then you get yourself a job and make money.
Again, someone with a degree in English who doesn't know what to do next after graduating isn't going to make anything nor is going to command companies to hire him/her and pay that person 35,000-40,000 dollars a year. Someone who went to a two year tech school and can repair a damaged car, fixing the windshield, repair the damaged doors, etc., will be making more money than the person who has an English degree and is working at Starbucks selling coffee for 9 dollars an hour.
Why universities still dish out degrees that don't give people marketable skills is something I still don't know, besides them just wanting your money.
I think that is a myth. To steal a famous quote, "there are lies, damn lies and statistics."
I mean lets just recap what has already been posted in this thread, using your own term "massive debt" as a barometer.
Say an 18 year old kid goes to college and then grad school, and after 6 or 7 years comes out of school with an mba, but also 160k in debt. His first job pays 52K/year. So right away he is 110k "upside down" starting off his life at 24 or 25 in the hole.
That same 18 year old has a friend who started working at Best Buy right outta high school making$9.50/hr. He is a hard worker and is getting small promotions and pay raises every year and a half, eventually being promoted to store manager in 5 years, paying 48k/year. So, here is making close to 50 grand a year at 24 years old, not only debt free, but also having saved up 25 grand over those 4 years. In less than 10 years he will have almost 250k saved up, while his debt riddled mba friend is climbing the corporate ladder, but in the whole over 100k.
I am guessing you haven't seen the census data that I posted..
Who goes to school and gets an MBA right after graduation, with no work experience? Seriously, what is the train of thought in that?
The only thing that really matters is where you go to school, and to some extent, what you major in.
I graduated from college in 2008. I had over $15K in loans. I am 25 now, making over $100K, loans paid off, net worth over $175K.
And my friends from grammar / high school who went to lesser colleges? Truck driver for $10 / hr, Best Buy $8.50 / hr, etc etc.
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