Skip to comments.'Investing' in College? It Pays to Think Like an Investor
Posted on 05/05/2012 6:05:43 AM PDT by SeekAndFind
College is the best investment you can make, President Obama told students last month at the University of Colorado.
As a metaphor for the benefits of education, that statement is fine. But taken as a claim about the financial returns of a college degree, it poses two problems.
The first is that students and their families still lack sufficient data to estimate long-term returns for specific college degrees the way investors do with stocks and bonds.
The second problem is one of investment risk. Stock investors can manage risk by buying a diverse basket of shares, but a college student bets on a single asset: himself.
That makes it crucial that students and their families understand the factors that affect the risk and return of a college investment in order to swing the math in their favor.
College brings higher pay: $1,053 a week for the median bachelor's degree holder last year, versus $638 for a high school graduate with no college, says the U.S. Bureau of Labor Statistics. Last year's unemployment rate was 4.9% for college grads versus 9.4% for those with no college.
The College Board, a not-for-profit association, calculated in a 2010 report (based on 2008 data) that a typical student who enters a four-year college at age 18 and borrows his way through earns enough by age 33 to make up for his costs, including foregone wages and loan interest.
If a bond paid for itself that quickly, the return would be between 5% and 6% a year. That's a handsome payoff; stocks have historically returned around 7% a year after inflation. And it says nothing of college's other benefits, such as enlightenment, fun and higher job satisfaction.
Two big caveats: The College Board math assumes everyone goes to a public college.
(Excerpt) Read more at online.wsj.com ...
Finding a spouse from a similar (or higher) socioeconomic background to marry, which probably has a greater affect on their lifetime earnings potential than anything they learned in college unless they took a very technical degree. The choice of a mate is critical to lifetime success.
Almost the last thing I’d advise someone to do is to get married at 22.
Go to an affordable state school, and major in something practical. Accounting, engineering, or any degree in which you learn a true skill will give one distinct advantages in maintaining gainful employment down the road.
You make a very, very good point.
My 1960s dad used to say that parents only sent their daughters to college to win a MRS degree. On many occasions, he was right.
If you wait until you graduate college to start looking... you are in for a world of hurt and disappointment because nearly all the “good” ones will have been snatched up and you will be left with nothing but the left overs and cast off’s of others (think players, divorcee's, and people who have already had kids with someone else). Plus the only place you can usually meet people after college is bars.. which is the LAST place you want to meet a potential spouse.
Think back on when you were young and you were picking teams for playing a sport...
Now picture someone having the “bright” idea of waiting till everyone else had picked their team before taking their turn at picking... and you will see the folly of waiting to long.
Now I am not advocating that anyone run out and get married to the first nice girl they meet at 16 either, but to purposely choose to wait past college to even start looking for a mate is pure folly. It become extremely difficult to meet people after you finish school besides bars and work, and bars are a terrible place to meet a potential spouse, and dating at work has it’s own challenges and potential pitfalls.
I agree with you. As someone once said: "You don't need no help bein' poor. You can be poor all by yourself."
One of the two pieces of advice I give to young men. The other is:
No matter how hot she looks to you, no matter how much you think you want her, there's a guy somewhere who's tired of putting up with her crap.
If she badmouths her ex, someday she will be badmouthing you.
If she can’t get along with her parents, it’s a bad sign.
Look at her mother. If you wouldn’t mind waking up next to something like that in 30 years, continue your pursuit.
Watch carefully how she treats those over whom she has power: employees, waiters, clerks, etc., and remember that once you are married and have children she will have power over YOU.
there are some very smart freepers here!
HAH! I got you there. 20+ years, 4 kids, every day it gets even better.
Granted it was an Irish bar on St. Patrick's Day .... but that's another story.