The college decision. "Education vs. Knowledge"

[Kung Fu Steve]

Quick thought sparks questions:

It is perfectly normal and common for someone to spend $40,000 per year for four years of college (total of $160,000) for a degree that gets them a job that
pays them $28,000 per year (Which after 4 years equals $112,000). Which got me thinking, is the current education being provided and distributed giving a negative return on investment?

Keep in mind I am not talking about the value of "finding yourself" or "making
contacts" that everyone so invariably argues about... Anyone have thoughts or
examples?

 

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[DeletedUser394]

Well if you get one of those 'Liberal Arts' degrees I could see that happening.

If you get a real degree then at least you have a backup plan if you ever need it.


I'm really only going for 4 reasons.

1. It's free
2. To have fun
3. To challenge myself (I want to take math and physics)
4. Backup Plan

In Canada, the average tuition is right around $4,000-$7,000/year which is very reasonable. I would never spend $40,000/year on a school, unless I already had the money.

'is the current education being provided and distributed giving a negative return on investment?'
,
Depends entirely upon what you take. If you want to be a doctor, then you obviously need to go to school. Same for most lawyers (although technically you can do it yourself if you are smart enough.)

Is it worth it to an entrepreneur? Probably not.

 

[Graves]

It gives a positive return on investment (There was a site named Payscale that surved thousands of students and made some calculations), and I guess it can actually be a very lucrative investment if someone gets financial aid.
The intrinsic value of the degree is shit (80% of what is learned at school has 0 market value), but the percieved value is high because our society is credential obsessed. Kind of like buying an overpriced asset while knowing it will still rise due to external factors.

 

[Rickson9]

Quick thought sparks questions:

It is perfectly normal and common for someone to spend $40,000 per year for four years of college (total of $160,000) for a degree that gets them a job that
pays them $28,000 per year (Which after 4 years equals $112,000). Which got me thinking, is the current education being provided and distributed giving a negative return on investment?

Keep in mind I am not talking about the value of "finding yourself" or "making
contacts" that everyone so invariably argues about... Anyone have thoughts or
examples?

My thought is that the answer is highly dependent on the individual in question. For some individuals, conventional education is a positive return on investment since the return they would get from other endeavours would be far worse.

For others, the education may be a negative return on investment because they are more suited to other things.

For example, for an individual who is not entrepreneural (like myself), it is a good investment because pursuing something that I am not predisposed to (ie. running a business) would be worse for me in all aspects of my life. For another individual who is highly entrepreneural (ie. talented seller, driven to work dozens of hours a week, etc.) it would be a bad investment.

Just my 2 cents.

Best regards.

 

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[Graves]

For example, for an individual who is not entrepreneural (like myself), it is a good investment because pursuing something that I am not predisposed to (ie. running a business) would be worse for me in all aspects of my life.

Well, investing isn't entrepreneurship, but it's still pretty entrepreneurial, isn't it ? :>

 

[Bozigian]

In Canada, the average tuition is right around $4,000-$7,000/year which is very reasonable. I would never spend $40,000/year on a school, unless I already had the money.

Are you serious?

I would rather go to school in Canada then

 

[Graves]

Are you serious?

I would rather go to school in Canada then

I think it's only for Canadian citizens, international tuition can be pretty expensive

 

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[CommonCents]

Best Value Colleges | Great Schools, Great Prices | Top National Universities | US News Best Colleges

US News has a bunch of rankings info.

If I were to do it all over again, I'd get my CPA & JD focusing on biz/M&A/corp law etc.. A helluva combo for a lifetime entrepreneur. A solid base in accounting and have a solid law base is a great investment for your career IMHO. This knowledge applies to any entrepreneur in any field that wants to start/run/buy/sell businesses. I've learned them beyond my general biz degree, but the hard way in real life!

 

[Graves]

If I were to do it all over again, I'd get my CPA & JD focusing on biz/M&A/corp law etc..

Can't I just go on amazon and buy myself a shelf of textbooks ?

 

[CommonCents]

If you feel that is best for you, then do that. More power to you! I just stated my opinion based on my experience. Life isn't one size fits all

 

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[ZDS]

Spending 40,000/year a college means you are either at an Ivy League, or going to an expensive school that isn't worth it.

University of Texas, which is for example, the 8th ranked Computer Science school in the nation, costs 4800/semester for In state tuition.


I would never pay 40k/year for school, but I think a decent state school is an absolutely worth it investment.

1. You have an absolute ton of free time in college to work on your businesses.

2. You develop your main social network in college. This is the perfect time to surround your self with like minded individuals.

3. Allows you to grow up. It takes a hell of a individual to jump straight from HS to the "real world" with out a stepping stone.

4. Enjoyable - Life is about consumption. If you have studied Economics, think of it like the Golden Rule. There is a reason people don't save 100% of there money. Going to college will likely not slow you down in your business pursuits

5. Student loans aren't that bad. I'm entrepreneurial. You know what I plan on doing with my student loans? Paying them off over the next 30 years with a minimum payment. Yes, over the course of the next 30 years I will be paying roughly double, so my 30,000 dollars in student loans ends up at 60,000, but here is the catch:

In 30 years, if I'm worrying about 30,000 - 60,000 dollars, I've done something wrong with my life, or gotten off track somewhere. Even if I just take a job and quit the fast lane gig(which I have absolutely no intention of doing), 30,000 dollars over the course of 30 years is negligible.

I get a lot more out of cheap payments now, versus killing my self to pay it off quickly. I know I can get a much better return off the money I would be investing to pay off student loans.


Sorry, I digressed. But as i'm nearing the end of my college experience, I felt like I had some value I could provide to members of the forum!

 

[DeletedUser394]

Are you serious?

I would rather go to school in Canada then

I think it's only for Canadian citizens, international tuition can be pretty expensive

That's probably right.

For college (2 years between high school and university) costs residents only $120 per semester (You even get a tax break of $600 just for that haha), but costs international students $6,000/semester.

I imagine it's the same for uni.

 

[Sparlin]

I'm glad I went to college because it opened doors that high school alone wouldn't. Apart from that, it broadened my perspective on life and helped me appreciate things I would have never discovered on my own. My belief is that people need to be better students of history, strive to find truth rather than opinion (everyone should take a basic class in logic, that was an eye opener), and live a goal oriented life. A college education can help to accomplish these things. It's the goal part that trips most people up. Do you set your own or fulfill the ones other set for you?

That's why entrepreneurship should be strongly encouraged along with a well rounded education. Being an entrepreneur is an expression of an independent mindset and a means to escape dependency on those who cannot guarantee your financial security. Even if you can't guarantee your own future, your experience will make you stronger and enable you to adapt when adverse times come.

Sorry, I'm not trying to sound high brow. These are just principles I've learned here and in life. That's why I'm grateful for this forum.

Edit: Just like in college, I didn't always read the assignments. I should have read Steve's first post. Still I think it was worth the money and time. Knowledge and life experience justifies expense in my mind.

 

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[ChrisRempel]

I was considering this exact question the other day.

In terms of ROI I think it's too subjective to really say one way or the other. And yes, obviously we need doctors and other professionals in this world, and they'd sure as hell better be educated before they start operating on people

But it begins to get a bit more gray as we move away from the careers that require specific educational milestones, etc. ROI at that point is really more a matter of opinion.

However, that's not what dawned on me the other day.

Here's what did:
----------------

I would venture to say that most middle-age to elderly people, when asked what the best time of their life was looking back, will probably say their college years. (Or that phase of life in general).

They're young, free, exploring the world - experiencing all the benefits of independence but WITHOUT a majority of the responsibility.

College/UNI is that "holy transition" to adulthood. And everything that comes with it. (For some reason I'm reminded of the Genie and the Lamp. "Infinite cosmic powers... itty bitty living space").

So maybe the better question is this...

What brought you more happiness?

a) Your College Years, at a cost of $60Kish?
b) OR Your $450,000 House, $60,000 Car, $80K/yr lifestyle, etc?

That sort of put it in perspective for me a bit, when I considered that.

I've easily dropped over $100K in the last few years just on sports cars.

Are they fun? Yes.

Do they mean nearly as much to me as my sentimental memories of the post high-school years?

Not even a fraction thereof.

-Chris

 

[Runum]

ZDS is right about public universities in Texas. I am still paying on my student loans but it's at 2% interest. My kid is going to college for several reasons. One reason is to get some direction in life, experience, and connections. She finally made a decision on her major I can live with. She is transferring from a private university to a public one to major in fashion merchandising and marketing. I told her I want to hear about the stuff she learns. She has to do several internships, bravo. I want her working all kinds of fashion and marketing jobs and at different levels. The investment will definitely pay off for her but it would not for others.

 

[GlobalWealth]

Steve,
First of all, why are you asking this question? Are you contemplating college?

Secondly, if you are going to a $40k/y college, you damn well better start out better than $28k/y. That is ivy league tuition there, not your average state school.

For that kind of tuition, you could more realistically expect starting salary around $50-60k+, depending on your degree and specialty. Could be much, much higher.

Coming from someone who got his degrees as a full size adult, I can tell you it was worth it to me. When I was 19-20, I thought it was a complete waste of time and I would be better off working and getting started in business.

And at the time, I was 100% correct. I was not ready to be in college. Certainly I would have flunked out.

But after completing my degree, I now know what I didn't then know. I remember sitting in class thinking, "damn, I wish I would have known that X years ago when I was starting out".

Of course my business career was pretty successful in spite of the lack of the degree, but I do think I would have made fewer mistakes early on had I gained the education beforehand.

Is it necessary for business success? Absolutely not. But is it worth it, I think so. At least for me it was.

 

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[Anon3587x]

You learn strange things at a college campus lol.

I find myself thinking, " I never thought I'd learn that here"

 

[Rickson9]

Well, investing isn't entrepreneurship, but it's still pretty entrepreneurial, isn't it ? :>

Not really.

Investing + limited partnership or joint venture partnership is more entrepreneurship.

Investing for me is just selfish, but that's ok.

Best regards.

 

[sam22]

It is perfectly normal and common for someone to spend $40,000 per year for four years of college (total of $160,000) for a degree that gets them a job that
pays them $28,000 per year (Which after 4 years equals $112,000). Which got me thinking, is the current education being provided and distributed giving a negative return on investment?

I don't think it'd be 100% correct to say college has a negative ROI. Say it costs you $160,000 to start a business. But you only have $112,000 in revenue after four years. That's technically a negative ROI for those years. But if you become profitable in year 5 or 6, then that's equivalent to you getting a return on that $160k. It's the same with school - it takes a while to get a return and the ROI you do get is small - at least compared to being in the fastlane.

Having said that, as a current college student myself, I don't find much value in my college "education." Maybe I'll change my mind down the road.

As for meeting "like minded" people in college...sure there are stories about Mark Zuckerberg and what not. But 98-99% of the students I've met want a job or graduate degree after college or don't know what the heck they're gonna do.

 

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[Lights]

College is not the most popular choice except in the middle class group, but as time goes on, more lower-class people are into it. Not everyone graduates, and those that drop out are in debt.

I look it as this, if you have no children, then the hell with security... do what you want with your life.

You have 40-45 working yrs, you can easily suck 5 yrs of it into college (since the avg is not 4), and you have 35-40 yrs left... Time is essential and 5 yrs is a lifetime in my opinion, since 5 yrs ago I was 15. I was a lot different then than now. If I knew what I knew now, I would had told myself... "do this as much as you can.. then make a business."

College is nothing more than getting a nice job at 30-40 k these days, but if that doesn't make you happy, then screw college.

 

[deepestblue]

Generally speaking ur put through a conveyor belt: college - job - retirement. Unless there is some unusual motivation along the way that leads to taking action to break free from the crowds a person could spend their entire life on this conveyor belt.