This week, the blog posts will get a bit personal (okay, a whole lot personal) where you get to learn a lot about, me! Not like, my age, favorite food, favorite color, worst day ever, worst ex ever, etc. but rather, stories that have deeper meanings.
The tuition price hikes
Student loan debt has reached $1,480,680,630,177 (holy shit, I can't even afford to read off that number, what makes you think I can afford a 4-year tuition?) as I'm writing this post. An almost 150% increase in student loan debt in the past decade.
You ask students who are 17 - 19 years old to make on average $37,172 debt decisions to pay for a tuition. Keep in mind, that's just tuition, we have housing costs, transportation, supplies, and food to worry about for the next few years, so our final bill can be, eh, a lot more. It's not something that should be handled lightly, let alone, a decision to be made by a human who does not know how to "limpiar his/her own culo" (translation: wipe his/her own ass.)
We're too young
Students don't comprehend what exactly they're getting themselves into or how they'll pay back their loans in the future. Some come in with the belief that as soon as those 4 years are up, they'll find success. While this "happily ever after" ending sounds euphoric, it can become your worst financial nightmare. Especially if you shoot for a masters, Ph.D., etc. A personal finance blogger pal of mine, J-Haste over at moneylifewax.com/ discusses how he and his wife are tackling $300,000 in student loans. Make no mistake, while $300K is a lot to pay back, Haste and his wife are killing it in paying their loans back. Granted, they were able to accomplish this since they became financially savvy and planned out their future ahead with the help of mentors. Talk about being woke.
Nonetheless, this is certainly a burden I would not have taken at all. Which takes me to my first reason.
1. The price tag to go to school had no to little ROI (and it's also expensive as hell)
If you're like me, you come from a lower income class family with no hopes or chance of you ever paying for college out of pocket with no problem. Granted, you could win scholarships, but scholarships are awarded to at least 1% of students entering university that year. FAFSA can help, but it always manages to kick a students ass by being a pain, a gamble, and everything filed has got to be 110% accurate, you might run into a mistake made on your application at some point, or a B.S reason as to why you couldn't receive your aid, potentially losing you $1,000's in federal student aid. It's just a few complaints I've heard from close peers.
BUT FOR A SECOND, let's just assume I took out a loan, saw value to going to school, and went off to my 4-year long vacation away from home. It takes anywhere from 12 - 20 years to repay your student loans entirely, with interest. Some loans are cool, where they ask you to pay them back after you're done with your 4-year long party (I'm actually starting to regret not going to college) and some BITE your ass and ask to pay them back while you're in school. In hindsight, you'll always be coughing up money on a monthly basis to pay back an education you received a decade ago. Money that could have been used for rent, vacations, or investments. That has a much larger return on investment.
Return on investment that MAKES SENSE
Pulling out a loan to purchase a McDonald's franchise (somewhere around $1.1 - $2 million) is worth going into debt for, you know very well that the initial investment will generate plenty more millions in the future. On average, a McDonald's franchise makes around $2.5 million in revenue, in that same year, you made your initial investment, come next year, you will make your initial investment again. BUT! the McDonald's example is a bit extreme, let's view something more reasonable, practical, and attainable. Let's place $10,000 on Netflix stock 5 years ago, the price of maybe one semester of a 4-year college, that $10,000 grew to $182,000 five years later. Let's place another "tuition price tag" of $10,000 on to Facebook, that grew into $84,000 and some change, $10,000 in Visa and you'd get $32,240something, the point is, your tuition money could have been placed elsewhere that would have made you a lot more cash in those hypothetical 4 years had you never gone to College. It's money you would not have made had you gone through the process of getting an education and finding a job right afterward. Now, if Y'all excuse me... I'm getting my education from Hamburger University, the institution for McDonald's.
The counter-argument folks have when it comes to going into debt for your degree is usually something along the lines of "you go to school to get a safe, secure, less labor-intensive, and a higher paying job" and to that I say... yeah... that's sorta true...
2. The age of job security and freedom is over (and don't expect any rising wages or raises either)
While it's true you have jobs that are less labor intensive, there is still some underlying problems. Many moons ago, an employee would find this one company to work for, receive a 401K plan with the company, slave away for 40 - 50 years, place money aside, retire, and die. TODAY! The world moves SUPER rapidly, companies are constantly being sold off or acquired by different companies, some folks move into different industries/fields just for the sake of new experiences, or you're simply laid off for any lame ass reason given to you. Not much security there if you ask me. As far as getting a raise, you'll have to provide A LOT of value to your employer to earn your raise. Sure, you're better off in comparison to the person earning an hourly salary, working under the intense heat or cold, you can find a job a lot easier in comparison to someone who doesn't have a degree. You still hear many sob stories about how folks have been working their butt off and have not gotten a raised. I'm talking about folks who have been at it for years in an attempt to earn an extra $1,000 every month.
See the beginning sentence I used? "You SLAVE away for 40 - 50 years" meaning you're working anywhere between Monday - Friday for 8 hours, maybe more, with a 27 - 40-minute long commute. If you stop working, you stop making money, and if you can't make money, then you can't pay for groceries, bills, housing, etc. Of course, some companies offer benefits, but they are slowly diminishing year over year. You don't or barely have any free time or freedom, time for things you would like to do, spend time with family or friends, pursue different hobbies, learn a new language or skill. You are constantly occupied. Your time used is determined by your boss/employer. There is no "you time." Okay, the lack of freedom and free time, the slow increasing wages/raises, and the little bit of job security are all turnoffs or reasons to evade college to earn credentials to obtain a corporate job. But sure enough, the money should entice me or you, right?
3. If you work hard, follow your passion, LEARN, and have a talent/strength then you are automatically profitable.
IF, by tomorrow, I walk into work and I'm told "sorry Jimmy, I have got to let you go" (which I highly doubt) I will return to social media marketing and management, my blog, dividends/investments, and eBay reselling will continue making me an income. If the economy is bad or suddenly goes sour, and there aren't businesses looking for fancy marketing and maintenance on their social media platforms, no one is buying anything on eBay for awhile, stocks slowly lose value, then I have bonds and silver I'm invested in that go up during economic hardships, I could place my cash into a Dow 30 component which pays good dividends during the hardship. Point is, I have a plan B, C, D, E, F... up to Z. What I'm trying to say is that a piece of paper does not correlate with how much I can or cannot earn, it is the work ethic, the knowledge you possess in your large noggin of yours, the talent, burning passion, the specialization, and how you USE that knowledge to leverage in life.
Granted, I had to teach myself A LOT of material prior to investing, prior to opening my mouth to any business on social media, prior to selling an item on eBay. But if you ask me if I'm happy now, I'll respond with "yes, I am" ask me 10 years down the road "are you happy?" I'm 120% sure I'll respond with "yes, I am." In comparison to a miserable "no, I'm not" had I gone to school or graduating and earning a job. On the other hand, I practically set my own schedule, work my own hours, and work whenever I want/please. This is freedom that I wish for everyone to obtain, work diligently, become creative in monetizing your talent/passion, and it will feel as if you do what you love, where it does not feel like work.
College isn't entirely bad, I highly encourage it if you feel the need to become a doctor, lawyer, engineer, and so forth. I'd like to go back to school so I could get my PsyD. and help the mentally weak by being a psychologist. Just not now, not with this sort of price tag.
I truly believe that at some point, college tuition will be this overvalued thing that no one can pay for or pay back, that will lead a swift collapse on price and cause another economic recession. Just how the housing market crashed back in 2008, this is no different. Kids are given debt to pay their education, debt that is hard to pay back in the future, slowly freezing economic stimulation, suddenly you have millions of kids who default on their loans, another million who can't attend school, job openings that no one can take, and a sudden downfall in GDP.
What are your reasons for going (or not going to school?) I'd like to know. Comment below or shoot me an email.