{"id":132329,"date":"2020-11-25T10:00:51","date_gmt":"2020-11-25T17:00:51","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=132329"},"modified":"2024-02-14T15:36:41","modified_gmt":"2024-02-14T22:36:41","slug":"opinion-college-wealth","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/opinion-college-wealth","title":{"rendered":"Opinion: A College Degree Won&#8217;t Make You Wealthy These Days (If It Ever Did)"},"content":{"rendered":"<p><iframe loading=\"lazy\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC5744736726\" width=\"100%\" height=\"200\" frameborder=\"0\" scrolling=\"no\"><\/iframe><\/p>\n<p>We aren\u2019t saving for our daughter\u2019s college education.\u00a0Matter of fact, we had a 529 set up and we cashed it out. (And yes, I\u2019ll tell you what we did with it here in a minute).<\/p>\n<p>Now call me crazy, but for our family, this is the best choice. It\u2019s not that I don\u2019t believe in the value of a good college education. I agree with my colleague <a href=\"https:\/\/www.biggerpockets.com\/blog\/contributors\/g-briandavis\" target=\"_blank\" rel=\"noopener noreferrer\">G. Brian Davis<\/a> that college can be an important step to building lifetime wealth.<\/p>\n<p>However, to be a great investor, a college degree is not required. I will say I\u2019ve 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.<\/p>\n<p>Simply, I just don\u2019t believe that going to college is <em>the key<\/em> to being wealthy.<\/p>\n<p><strong><em>Related:<\/em><\/strong><em> <a href=\"https:\/\/www.biggerpockets.com\/blog\/opinioncollege-important-step-building-lifetime-wealth\" target=\"_blank\">Opinion: Going to College Is Still an Important Step to Building Lifetime Wealth<\/a><\/em><\/p>\n<h2>College Isn\u2019t for Everyone<\/h2>\n<p>For starters, not everyone is ready for college when they graduate high school. Maybe they don\u2019t 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\u2019t adjust well going from a class of 25 to 500!<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-116249 size-main-slider\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/09\/high-school-classroom-702x336.jpg\" alt=\"Wide Angle View Of High School Students Sitting At Desks In Classroom Using Laptops\" width=\"702\" height=\"336\" title=\"\"><\/p>\n<p>According to the National Association of Scholars, there are many <a href=\"https:\/\/www.nas.org\/blogs\/article\/10_reasons_not_to_go_to_college\" target=\"_blank\" rel=\"noopener noreferrer\">other reasons<\/a> why a college education may not be right for many:<\/p>\n<ul>\n<li><strong>Not everyone can afford to go to college to begin with. <\/strong>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.<\/li>\n<li><strong>Even if you do go, if you don\u2019t finish, it will be a waste of time.<\/strong> 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\u2019t have a title to.<\/li>\n<li><strong>Even if you don\u2019t incur a lot of debt to attend school, experts argue that you may be paying too much for too little of an education. <\/strong>There are many open-source and online programs that are cheaper, or even free, that rival many four-year programs. My friend\u2019s husband is a serial entrepreneur, and he made his first million by having a great idea, not a great degree.<\/li>\n<li><strong>By going to college, a student delays their opportunity to earn an income, creating an opportunity cost. <\/strong>For some degree-holders, this is worth it (doctors, lawyers, engineers, etc.). However, many employers aren\u2019t 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 <a href=\"https:\/\/www.cnbc.com\/2019\/01\/25\/8-companies-offering-work-from-home-jobs-that-dont-require-a-degree.html\" target=\"_blank\" rel=\"noopener noreferrer\">companies that no longer require a college degree<\/a>.<\/li>\n<li><strong>College culture can produce toxic habits in young adults that can impact their earning potential.<\/strong> This is especially true if they can\u2019t kick the bad habits. With the advent of social media, a \u201cbad night in college\u201d documented on social media can ruin a student\u2019s earning potential for years to come. Such behavior is not limited to the college campus, either.<\/li>\n<\/ul>\n<p><em><strong>Related:<\/strong> <a href=\"https:\/\/www.biggerpockets.com\/blog\/stop-contributing-529-plans\" target=\"_blank\" rel=\"noopener noreferrer\">Parents: Stop Contributing to 529 Plans for College. Use This Superior Method Instead.<\/a><\/em><\/p>\n<h2>Wealth Lessons Are Not Learned in College<\/h2>\n<p>Just because someone doesn&#8217;t attend college, doesn\u2019t 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!<\/p>\n<p>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)\u2014yet I don\u2019t work in my field of training anymore (sound familiar?).<\/p>\n<p>Let\u2019s 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)\u2014or invest at all?<\/p>\n<p>I know I didn\u2019t.<\/p>\n<p>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.<\/p>\n<p><em><strong>Related:<\/strong> <a href=\"https:\/\/www.biggerpockets.com\/blog\/is-college-worth-it-or-scam\" target=\"_blank\" rel=\"noopener noreferrer\">Is a College Education Financially Worth It\u2014Or Is It a Giant Scam?<\/a><\/em><\/p>\n<h2>So, What Is Our Plan?<\/h2>\n<p>I did not <em>need<\/em> 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:<\/p>\n<ul>\n<li>Learn how to create value<\/li>\n<li>Store that value (save)<\/li>\n<li>Live below your means<\/li>\n<li>Invest the difference wisely<\/li>\n<\/ul>\n<p>And I am not naive enough to think that she won\u2019t need an education to make this happen, be it from us or a program to help her close her learning gaps. However, I don\u2019t believe it has to be a four-year degree where she (or we) goes massively into debt to make it happen.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-123686\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2020\/03\/empty-college-library.jpg\" alt=\"modern library: empty reading room with tables\" width=\"702\" height=\"336\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2020\/03\/empty-college-library.jpg 702w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2020\/03\/empty-college-library-300x144.jpg 300w\" sizes=\"auto, (max-width: 702px) 100vw, 702px\" \/><\/p>\n<p>As such, here is our plan to help our daughter learn these critical skills:<\/p>\n<ul>\n<li>We are looking at ways to alternatively school our child, add in an <a href=\"https:\/\/www.time4learning.com\/homeschooling-styles\/unschooling.html\" target=\"_blank\" rel=\"noopener noreferrer\">unschooling<\/a> curriculum, and teach her all of those financial lessons we wished our parents taught us growing up.<\/li>\n<\/ul>\n<ul>\n<li>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 <a href=\"https:\/\/www.actonacademy.org\/\" target=\"_blank\" rel=\"noopener noreferrer\">Acton Academy<\/a> or other open-source education models.<\/li>\n<\/ul>\n<ul>\n<li>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.<\/li>\n<\/ul>\n<ul>\n<li>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\u2019s lives in the meantime. In fact, she\u2019s invested in two properties with me already! She is also learning how to run the business at the same time.<\/li>\n<\/ul>\n<ul>\n<li>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\u2019t even imagine what fields will be open to her, but here are just a few that are open now that don\u2019t require a degree:\n<ul>\n<li>Computer programming<\/li>\n<li>Sales (i.e., SalesForce, SalesLoft, etc.)<\/li>\n<li>Apprenticeships<\/li>\n<li>Military<\/li>\n<li>Investing<\/li>\n<li>Fields we haven\u2019t even dreamed of yet!<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>Regardless, we know that the life skills she needs to be truly wealthy are learned early, often, and not in school.<\/p>\n<h2>Wrapping It Up<\/h2>\n<p>I\u2019m 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\u2019t guarantee wealth.<\/p>\n<p>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.<\/p>\n<p>I know many of you are dying to know what we did with the 529 plan we cashed out.<\/p>\n<p>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\u2014along with all of the financial wisdom we can teach her\u2014to launch her investing career.<\/p>\n<p>Either way, she wins.<\/p>\n<p><a href=\"https:\/\/www.biggerpockets.com\/store\/wealth-magazine-one-year?utm_source=blog\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-123232 size-full\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2020\/03\/Blog-700x120-v2.jpg\" alt=\"Blog ad for Wealth magazine\" width=\"700\" height=\"120\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2020\/03\/Blog-700x120-v2.jpg 700w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2020\/03\/Blog-700x120-v2-300x51.jpg 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/a><\/p>\n<p><em>Are you cashing out your child&#8217;s college fund or sitting tight?<\/em><\/p>\n<p><strong>Tell us your thoughts on the value of a college degree in the comments.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Is a four-year degree really the key to wealth? Here&#8217;s why we aren&#8217;t saving for our daughter&#8217;s college education. <\/p>\n","protected":false},"author":214306,"featured_media":119132,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7119,7358],"tags":[],"class_list":["post-132329","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-biggerpockets-daily","category-investing-stories"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/132329","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/214306"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=132329"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/132329\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/119132"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=132329"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=132329"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=132329"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}