Greetings Munchkins:
Your mom and I were chatting over a Peanut Buster Parfait and a Dilly Bar last week. (Dairy Queen, where else?)
The topic of discussion was once again, the "College Trap".
The assumption that society has swallowed over the past 40 years is essentially this: That if you hope to ever have a career where you can earn a reasonable living, and become a "well rounded" individual, you have to have a college degree. We've had a variety of discussions where we've covered why this is a false assumption. But there is yet an additional line of reasoning that we've not discussed, and that is the "earnings" vs. "wealth" discussion.
So, let's go there.
Many of your peers are graduating college with a debt load of $100K at 22 years of age. Most of them have degrees in fields where they can't find a job in their field of study. And for those that can find jobs outside of Starbucks, the average first year earnings for a college graduate is about $50K.
Let's do some math here using two examples.
Kid "A" follows the path set forth by secular society and goes off to college. While at college he is thoroughly indoctrinated to hate his country, his religion, and to think of his parents as ignorant boobs. He learns no skill set at college that can immediately be applied to earning a living. (He does however, learn how to become a professional protestor)
Kid "A" graduates with two pieces of paper. The first is a college degree which is essentially the credential that allows him admission into the Fortune 1,000 world. The second is a loan document which in effect enslaves him to that Fortune 1,000 company. Kid "A" has precisely zero wealth. He has earned no money during his four-year re-education camp. But he has amassed $100K in debt. So, in fact, at age 22, he has negative $100K in wealth.
Now this assumes that Kid "A" completes the college degree program. The dirty secret is this: Only 45% of kids that start college ever finish it. Roughly 2/3 of students who start college have not completed it within six years.
Remember, whether those kids finish college or not, they STILL owe the debt payment. Brutal.
But for the sake of this discussion, we're going to assume that Kid "A" completes his stint in the intellectual gulag.
Let's move on to Kid "B" who chooses to not go to college.
Kid "B" turns 18, goes into a trade, and earns $40K his first year, $45K his second year, $50K his third year, and $55K his fourth year. Kid "B" lives at home and doesn't pay rent. The money he would have paid for rent he saves for the downpayment on his first home. By the time his is 22, he should have been able to save between $60K and $100K. He has no expenses since he is still living at home. His only job is to learn his job/career and save and invest his earnings.
Note: Kid "B" has zero debt. Nor has kid "B" spent four years being indoctrinated to hate his country, his family, and his religion. Also, please realize that Kid "B" has not turned off the education switch. Kid "B" has been attending courses on-line for free. Kid "B" has been watching political debates on reputable networks. Kid "B" has continued to read the foundational texts upon which Western Civilization was built. (The Bible, The Iliad and The Odessey, Orwell, Sozhenitsyn, and C.S. Lewis to name a few) These are the very texts that traditional colleges no longer cover. Amazing.
Thus, Kid "B" is not only debt free, but Kid "B" has advanced himself morally and intellectually compared to Kid "A".
So, let's compare Kid "A" and Kid "B" at the age of say 23.
Kid "B" has zero debt, has launched his career, has advanced his intellectual capacity, and can buy his first home. He’s earning about $55K/year.
Kid "A" has massive debt, has not launched his career, has in most cases reversed his capacity to reason, and cannot buy his first home. He also will earn about $55K/year.
So, they both earn about the same at age 23. But the difference is that Kid “B” has no debt, and enough money to make a downpayment on his first home.
Kid “A” has no money and owes $100K to the bank.
So, Kid "A" is doomed to either live at home well into his 30's, or live knee deep with roommates so that he can afford to pay his college debt AND pay exorbitant rent.
Let’s dig a bit deeper into the financials.
Kid “A” owes $100K. And he’ll still owe at least $70K by the time he gets to be 30 years old.
Kid “B” on the other hand has already owned a home for five years. And his $300K home has been appreciating at 5% per year for those five years. So, at age 30 he has roughly $75K in equity in addition to what he was able to save and invest prior to age 30.
Meanwhile Kid “A” is still at least $50K in the hole, with no home to show for his troubles.
This is starting to look like a “no-brainer”.
The two scenarios I've just set forth don’t represent rocket science. Anyone willing to think can see that all of what you've just read is true. Why then do so many people buy into the college trap?
Well, of course you know dad has an opinion on that. Because dad has an opinion on EVERYTHING!! (c'mon man, you KNOW that's funny!)
Do you remember the term "shibbolleth?"
Let me define the term “Shibboleth”. A shibboleth is a custom, principle, or belief distinguishing a particular class or group of people, especially a long-standing one regarded as outmoded or no longer important:
Let me give an example of a shibboleth: Back in the ‘80’s, I assumed that driving to LA would be cheaper than flying. And in the ‘80’s, driving to LA was less expensive than flying.
But airline prices have dropped dramatically since the ‘80’s. So, it’s no longer safe to assume that driving is less expensive than flying. This is a classic example of a shibboleth.
The Japanese kept building battleships to fight WWII in the 1940’s because battleships worked when they defeated the Russians at the Battle of Tsusumi Straights in 1906. But the development of aircraft carriers in WWII made battleships obsolete. Which is a large part of the reason the Japanese were defeated by the Americans in WWII. The Americans built aircraft carriers. The Japanese kept building battleships.
I would suggest to you that we are living in the age of the educational shibboleth. People assume that a college degree in 2020 brings the same value as a college degree in 1980. This is demonstrably not true.
Whether you are talking about the quality of the education, or the cost of the education one thing is sure: it ain’t your grandfather’s college degree.
The college degree ought to be given the same scrutiny that you would give to any investment or large purchase decision. The question to be asked is this: “Is the return on time and money worth the investment of same?”
The answer isn’t always no. But for most people and most college programs, the answer is most assuredly a resounding “no”.
Peace Out,
Dad
Thanks so much John!
Amen Brother. Another Great truth and the truth sets us free.