Should I to University or jump right in

Question

Hi guys I’m 17 and from England, I’m really keen on building a rental property portfolio which I can grow into a business.

I’m now having to make the decision whether to go to university (to study a finance related degree because that’s what I’m passionate about) or to skip university and get a job at 18, allowing me to avoid student debt and maybe get into investing sooner.

The problem with this is maybe my income won’t be as high as it would with a career in finance, so the pace at which the portfolio grows will be slower.

Has anyone got any opinions on this, maybe some past experience or advice? It would be really appreciated.

Joe Sadusky · Answer

Hey @Henry Davis , This is a very tricky question and should be a decision that only you can make.

I can say that I have seen both sides of this particular scenario.

I went to college, got my Bachelors degree and left with over $100k in student loan debt, and got an average paying job that required a degree.

After working at my full time job for about a year, I was not going to be approved for a mortgage because I did not have my professional job for a substantial amount of time  (underwriting usually wants to see 2+ yrs) and my debt to income ratios were all out of whack.

Now I was fortunate enough to get into real estate by finding an off-market, way below market value house in close proximity to my job. I bought the property with cash however. It was $30k and I borrowed this money from family (I understand not everyone has this luxury or option). I also got a high interest personal loan (with the intent on paying it back quickly after doing a refi) for $25k for the necessary repairs for the property.

My intentions were to refi the property (since I knew there was plenty of equity in it) and then turn around and pay back the $30k in private money I had borrowed from Family and also the $25k high interest personal loan.

After I worked at my full time job for 2 years, I was able to do get approved for a refinance.  The refi allowed me to pay off the $55k I had invested into this property, pay off some of my student loan debt, and have cash left over for my next investment.

In summary, I used real estate leverage to my advantage since my student loan debt was crippling.

Depending on financial situations, it can be very tough getting approved for financing when you carry such large student loan debts.   BUT the double edged sword in my scenario was that I also would have not gotten my salary if I did not go to college. Without my decent salary, I also would have not gotten approved for the refi amount (or equivalent home purchase amount).

You need to do some soul searching and determine which direction is best for your future.  I do not regret going to college and all of the things that I learned and the job that I got because of my education.  I am now a professional licensed engineer and I am also able to do real estate and investing on the side to supplement my income.

I also have friends that were able to have decent paying trade jobs without the need to go to college.  Its all circumstantial.

Good Luck with whatever choices you make, but I think that no matter which way you go- there eventually be a way for you to get involved in real estate one way or another in your future :)

Henry Davis · Answer

@Jim Goebel

I agree with your point about thinking in the long term, but I’m still uncertain about how much student loan debt will delay my first investment. Is there a way to minimise/pay off student loan debt in a short period of time? Or do I have to grind out in my 20s saving vigorously.

Jim Goebel · Answer

@Henry Davis

School it up, man.  Too many people think the 'make money now' thing will work out and then reality bites them when 20 years later they have little prospects, no education to fall back on, etc.

Don't assume you'll be able to work out financing without an education and/or the ability to land and keep a W-2 (at least that's what we refer to them here in US) job.