Personal Finance

Opinion: A College Degree Won’t Make You Wealthy These Days (If It Ever Did)

Expertise: Mortgages & Creative Financing, Buying & Selling Houses, Personal Finance, Real Estate Investing Basics
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Calm asian student girl sitting at desk resting after studying

We aren’t saving for our daughter’s college education. Matter of fact, we had a 529 set up and we cashed it out. (And yes, I’ll tell you what we did with it here in a minute).

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Now call me crazy, but for our family, this is the best choice. It’s not that I don’t believe in the value of a good college education. I agree with my colleague G. Brian Davis that college can be an important step to building lifetime wealth.

However, to be a great investor, a college degree is not required. I will say I've made a lot of money (and traded less time for dollars) flipping properties and my banker has never once asked me if I have a college degree.

Simply, I just don’t believe that going to college is the key to being wealthy.

Related: Opinion: Going to College Is Still an Important Step to Building Lifetime Wealth

College Isn’t for Everyone

For starters, not everyone is ready for college when they graduate high school. Maybe they don’t know what major they want to pursue or maybe they are wholly unprepared for the classroom experience. I was a straight-A student in high school yet racked up my first C in freshman chemistry. I didn’t adjust well going from a class of 25 to 500!

Wide Angle View Of High School Students Sitting At Desks In Classroom Using Laptops

According to the National Association of Scholars, there are many other reasons why a college education may not be right for many:

  • Not everyone can afford to go to college to begin with. College tuition prices have soared in the past 20 years. Although there are so many ways to pay for a college education, most students will have to take out debt to cover their tuition bills in an amount that may be a crushing blow to their ability to generate wealth later in life. Case in point: I have one previous colleague who has racked up $182,000 in debt (they are not a doctor or vet) yet makes $55,000 annually. That debt alone is crushing their ability to get ahead.
  • Even if you do go, if you don’t finish, it will be a waste of time. In 2006, 50% of students did not finish in six years. And if you took on debt, this is like paying a mortgage on a home that you don’t have a title to.
  • Even if you don’t incur a lot of debt to attend school, experts argue that you may be paying too much for too little of an education. There are many open-source and online programs that are cheaper, or even free, that rival many four-year programs. My friend’s husband is a serial entrepreneur, and he made his first million by having a great idea, not a great degree.
  • By going to college, a student delays their opportunity to earn an income, creating an opportunity cost. For some degree-holders, this is worth it (doctors, lawyers, engineers, etc.). However, many employers aren’t requiring a four-year degree anymore, instead of looking for aptitude and entering their teams in specific training and certificate programs. My brother-in-law (and several of his friends) are well on their way to financial independence by getting a certificate in a hospital software program. And there are many other companies that no longer require a college degree.
  • College culture can produce toxic habits in young adults that can impact their earning potential. This is especially true if they can’t kick the bad habits. With the advent of social media, a “bad night in college” documented on social media can ruin a student’s earning potential for years to come. Such behavior is not limited to the college campus, either.

Related: Parents: Stop Contributing to 529 Plans for College. Use This Superior Method Instead.

Wealth Lessons Are Not Learned in College

Just because someone doesn’t attend college, doesn’t mean that their path to wealth is doomed. What really deters me from pushing the requirement of a four-year degree on my daughter is that currently, the skills she needs to learn in order to create wealth and keep wealth are not taught in our school system. And I hope this changes!

Take, for instance, me. I hold a dual undergrad, two advanced degrees, board certifications, and more initials after my name than in my name (and I have a pretty long legal name)—yet I don’t work in my field of training anymore (sound familiar?).

Let’s hypothesize that my college education was critical in some fashion to my path to wealth. I ask why? Who here took a college course on how to create a household budget? How to save your hard-earned salary? Invest in a 401(k)—or invest at all?

I know I didn’t.

In a podcast I recently hosted with two partners of mine, we recanted our financial independence stories. What was common across all three stories was our abilities to buck the traditional narrative (college, marriage, house, kids) and learn what it actually takes to create value, save, live below our means, and invest.

Related: Is a College Education Financially Worth It—Or Is It a Giant Scam?

So, What Is Our Plan?

I did not need any of my degrees to achieve my wealth. And with the way the world is changing and technology is advancing, neither will my daughter. To build wealth, you need to be able to do four critical things:

  • Learn how to create value
  • Store that value (save)
  • Live below your means
  • Invest the difference wisely

And I am not naive enough to think that she won’t need an education to make this happen, be it from us or a program to help her close her learning gaps. However, I don’t believe it has to be a four-year degree where she (or we) goes massively into debt to make it happen.

modern library: empty reading room with tables

As such, here is our plan to help our daughter learn these critical skills:

  • We are looking at ways to alternatively school our child, add in an unschooling curriculum, and teach her all of those financial lessons we wished our parents taught us growing up.
  • As our daughter grows, she will need to learn the ways of the world and business and we will pepper in support for her to supercharge her entrepreneurial skills through a program like Acton Academy or other open-source education models.
  • All the while, we are teaching her how to create value, save, budget, and invest for cash flow and growth through games like Monopoly, Cashflow for Kids, and The Abundance Game.
  • We are also involving her early in real-world investing, where she can tangibly see how she can put her money to work, earn passive income, save it, and invest it further and positively impact people’s lives in the meantime. In fact, she’s invested in two properties with me already! She is also learning how to run the business at the same time.
  • Looking forward 10+ years when she is ready to graduate high school, she will have a choice to go on to college if she chooses or enter the workforce in another capacity. I can’t even imagine what fields will be open to her, but here are just a few that are open now that don’t require a degree:
    • Computer programming
    • Sales (i.e., SalesForce, SalesLoft, etc.)
    • Apprenticeships
    • Military
    • Investing
    • Fields we haven’t even dreamed of yet!

Regardless, we know that the life skills she needs to be truly wealthy are learned early, often, and not in school.

Wrapping It Up

I’m not arguing that someone should not go to college if they have the drive and can afford to do so, only that going to college doesn’t guarantee wealth.

Creating wealth boils down to learning how to create value, save that value you created, live within your means, and trade that value creation for streams of income. This type of education is invaluable.

I know many of you are dying to know what we did with the 529 plan we cashed out.

Well, we bought our daughter a rental. One that cash flows and stands a reasonable chance of appreciating. She helps manage this house (yes, even at eight years old). By the time our daughter graduates high school, she can either sell it and pay for her college degree, if she chooses to go for one, or she now has a nest egg—along with all of the financial wisdom we can teach her—to launch her investing career.

Either way, she wins.

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Are you cashing out your child’s college fund or sitting tight?

Tell us your thoughts on the value of a college degree in the comments.

Whitney is a real estate investor and personal finance trainer whose vision is to launch 10,000 families on the path toward financial independence. After purchasing her first rental in 2002, and hi...
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    Nicholas Whiteside New to Real Estate from Owensboro, KY
    Replied about 2 months ago
    I won’t make my kids go to college. I have 2 B.S. degrees and a Masters and make a third of what my wife, who only has a B.S., earns.
    Katie Rogers from Santa Barbara, California
    Replied about 2 months ago
    On average, people with higher levels of education make more money. This is an average. It does not mean that every single person will be average.
    Joshua Powell Real Estate Agent from Capital Region, NY
    Replied about 2 months ago
    As bartender and Real Estate agent, I've gone back and forth on whether going back to school would be worth while to me, and even with already having an Associates (so half the credits already there for a B. S.) it never seems worth it. It would take me a minimum of 2 years of going back to finish, assuming I pick a program that al my credit from associates would go towards, and about another $25k in tuition costs. On top of that, because I would be back in school I would have to cut down my hours at my current jobs. Then there is also the fact there's no guarantee I would even make more than I currently do right now (about $60k-$70k as a bartender and ~$40k on the real estate side of things). Obviously everyone's situation is different, but I was surprised when I did the math how much it DID NOT make sense to finish my degree lol. also depends what your goals are. Mine is get out of my W2 ASAp and go full time real investing/being an agent. This could be different for someone wanting to be a lawyer/accountant/engineer which will have an immediate high chance of a good income out the gate and looks to stay in there w2 for a long time.
    Eileen Lopez from Houston, TX
    Replied about 1 month ago
    We are on the exact same boat. I'm debating whether to go back to school or not, but its looking more like a no for me. I am thinking about getting my real estate license.
    Ross Williams Investor from Boston MA, Big Sky MT
    Replied about 2 months ago
    Just do real estate like you are already doing while getting your degree. You will meet instant future prospects/partners at school, which will pay for itself.
    Jack Griffis
    Replied about 2 months ago
    You don’t go to college just to earn more money. You go to college to become a more educated person. Additionally for many rewarding careers a BS is required whether it is actually needed or not. The rewards, or lack of, from college are totally in the eye of the beholder and not relevant to monetary gains.
    David Harris
    Replied about 2 months ago
    The last comment beat me to the punch. The author seems to totally miss the point of college - if you go - or send your kid, only because you think it will earn her more money, you only see it as a transaction. The reality, for some large percentage of students, is that it's the opportunity to grow as a person, develop maturity in terms of interaction with peers, learn for the sake of learning, and to perhaps open one's eyes to people not quite like they've found in their home community. Yes, it costs way too much nowadays - agree with that. And for some, the debt could be crushing and not worth it. That's why we've saved since our kids were babies, and giving them the "gift" of college before they start their work life. Whitney, think outside the box - you'll make a big mistake if you substitute only financial "chops" for your daughter, with a real education that she'll only get the chance for once. Would rethink that strategy.
    Ross Williams Investor from Boston MA, Big Sky MT
    Replied about 2 months ago
    What you learn in college academically is only part of the greater whole.
    X McDonald
    Replied about 2 months ago
    i understand and agree with everyone's perspectives as there's no right or wrong. it's a personal choice and it's different for everyone; where there's a will, there's a way.
    Wendi Roudybush
    Replied about 2 months ago
    What a great idea, to invest in property for her and then let her decide in 10 years what she'd like to do with the funds! I wouldn't have chosen to go to college, but my dad had passed away, and I received $600 a month from SS as long as I was in school full time and not married. I wanted that 600 bucks, which in the early 80's was enough to make the mortgage payment on the house I bought (with down payment help from Mom) at 19. But I've only had one brief job that required a degree - real estate has been a passion and source of income ever since; no degree required.
    Greg S. from San Francisco, CA
    Replied about 2 months ago
    Honestly, 99% of the reason I went to college was (1) for a feeling of accomplishment to do something that no one else in my family had done, and (2) every entry-level job in the fields I wanted to pursue required a minimum of a bachelor's degree. Oddly enough, the most important thing I learned in college? and human interaction - something that most are lacking in today's detached digital age, sadly.
    Katie Rogers from Santa Barbara, California
    Replied about 2 months ago
    If you do not come out of college with the ability to recognize propaganda and reject it, it was a waster of money.
    Byron Law from Lebanon, Indiana
    Replied about 2 months ago
    I view education as an investment. Like any investment, it is critical one do their due diligence and analyze the potential return on investment. Not just in financial terms, but educational, sociological, and other terms as well. Bottom line, do a deep dive, explore all the aspects, compare it against the alternatives and verify that it is actually going to be worth the various resources invested into the endeavor - BEFORE you make the investment. Go with the option that makes the most sense. If you cannot make sense of it, exercise some patience and wait until you can figure it out.
    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied about 2 months ago
    I definitely agree. College degrees can be worth it, particularly in a specialized and economically valued field (i.e. engineering). But oftentimes, there just not worth all the costs in tiem and money. (At least financially speaking, personal fulfillment is another matter.) I think a lot of people get confused and think correlation equals causation because college grads tend to earn more. Yes, but those who do better academically are usually the ones that go to college. It's a chicken or the egg thing, and it's almost certainly not the college that is causing the majority of that extra income.
    Katie Rogers from Santa Barbara, California
    Replied about 2 months ago
    Personal fulfillment is not the issue. College is supposed to be the place to get an education, the ability to think critically, recognize propaganda and reject. If we have learned nothing over the last many years, we have seen that a huge portion of the American adult population is highly susceptible to propaganda. If they also graduated from college, they wasted their money.
    Asia Jones Real Estate Professional from Lawrenceville, GA
    Replied about 2 months ago
    Great article, If I could do it all over again I would NOT go to college. Just my personal opinion, its over priced and unless you’re going into a field where its needed you don't really need a degree. I have a Graduate degree in entertainment business and an undergraduate degree in recording arts, totaling out roughly to about $200k in student loans. I now work in a field where a degree is not required. Very expensive lesson, but my goal is to use real estate to pay those student loans and show my kids that you don't need a degree to generate wealth.
    Katie Rogers from Santa Barbara, California
    Replied about 2 months ago
    Hopefully, you also learned to think. The ability to recognize propaganda and reject it, an ability far too many Americans apparently lack (or Qanon, etc would never have become a thing) is a very precious ability.