Thoughts on college?

[Allan Foote]

As a young and eager investor I consider myself very blessed and fortunate to be where I am and have the people around me that I do. I currently live in San Antonio, but just finished my first year of College up in Utah. I have a mentor who has found tremendous success from flipping,renting and investing down here. My goal is to soak up as much information, from him and other sources, as possible before I start investing on my own. He has not only offered me a job to help me truly understand how things work in this field but has even offered to help finance my first investment when that time comes. This individual did not attend college because it didn’t really fit him and fortunately, like I mentioned, he has found a lot of success and wealth. Currently my plans are still to attend and finish up College, hopefully getting a degree in the field of real estate. I wish to make a full time living out of flipping and investing. The issue is I can’t help but wonder if college is really the “right” path. I have done a lot of thinking about the pros and the cons of both paths. The main pro of finishing College would be the coveted degree I could attain that would hopefully provide a safety net incase disaster struck, however, college is expensive and many will get a degree only to realize it isn’t doing them much good. I think the biggest Pros of not finishing college currently are the time and freedom I have (no obligations to family or spouse) along with the resources I have available, the biggest con is obviously the lack of a backup plan.

Sorry for the lengthy backstory but I am curious to hear from you guys about the paths you took and what you would recommend! Did you attend college? If so, were you happy that you did? If you didn’t, do you wish you would have? Thanks so much!

[Aaron Bihl]

@Allan Foote

This is a tough question, and one that I personally go back and forth on a ton.  I have a bachelors degree and a masters degree and have paid upwards for 40K back in loans and neither of those degrees are necessary for what I do now.   

A few of my thoughts below...

Student Loans - 

Students loans are very real and I didn't realize this when I was 18 and had no clue what I wanted to do with my life.  I remember before going to college student loans were talked about like a thing that everyone has and its normal to graduate with up to 100k in debt and it doesn't matter as long as you follow your dreams.  Luckily, I ended up at an affordable school and only had a little bit of debt (40K after both degrees).  When you are graduating high school debt is talked about like its not a real thing, but is very much is.  The degrees I graduated with led to high paying jobs but paying off debt still sucks. 

College-

College was one of the most fun times of my life and also very formative.  I still look back on college and think about how fun it was and also a lot of what I did in college has set the framework for my current life.  In that way I think it is great. 

Is it necessary? 

If you know what you want to do and it doesn't require a specific degree, I would say its not needed.  Most paths with real estate or anything entrepreneurial don't require degrees.  But it can also be a really fun time and a great place to figure out your life a grow up. 

Would I do it again?

Probably.  But it would look different.  If I were to start over knowing what I know now I would have worked more during college.  At 18 you can become a licensed real estate agent, or probably work or be involved in whatever side of investing you want.  Also, if I wasn't concerned about the social aspect of college I would likely start working and pursue a degree online.  All that being said, I'm still kicking around the idea of getting an MBA, or going to seminary, or both.  I think I value knowledge and the accessibility of knowledge a lot but I don't that it necessarily adds any value practically. 

All that to be said...I'm in San Antonio and if you want to grab coffee or lunch or something and need someone to bounce ideas off of let me know.

[Drew Heiss]

College is over rated. Work for your mentor then go do it.

[Christian Hutchinson]

Originally posted by @George W.:

Originally posted by @Jamie Atkinson:

A lot of talk about STEM, learning a trade, MBAs, and the like, but what about a good ole liberal arts degree?

I'm dismayed by the general deemphasis on the humanities.  

Conventional thinking has evolved regarding folks paying through the nose for pedigree and miring themselves in debt as they begin adulthood.  Rightly so.  Pedigree and the cost to attain it is increasingly a bad idea for most folks.  

However, we should be careful not to throw out the baby with the bathwater, so to speak.  Who'll be left amongst us to put all of our great economic and scientific advances into a proper historical context? Google won't help us.  Food for thought.  

Lots of great points but college is not for every single person. Do you think with artificial intelligence, there will be a day where computers outpace man in scientific discoveries? 

I understand you didn't go to college so you take the default position its a binary choice "to go or not go". You have chosen not to go, and its an exercise for yourself justifying your actions; its not.

Which I said in my last posts.  This about placement on the value-chain.  Lets take some really good comparisons:

HVAC Technician vs HVAC Engineer (Mechanical)

So Median pay is $87K for the Engineer its $47K for the Technician.
Trade School costs money and will get you to various levels of certs in 6-18 months.  Or a local union offers you a slot and they offer you a training wage of $14/hr mixed between classroom and job-sites. So its co-op basically. You get $2/hr wage increases as you move up the program, and finish at the final wage of $26/hr in two years. Then if you get your card/journeyman you get more.

Even if someone spends 5 years at University, assuming they made $0 (which is rare) and spent $100K+, which is again rare, that means you didn't work, and paid for tuition, fees, food, housing completely using Student Loans. You come out ahead in going to college in 10 years.  Because a Technician gets paid based on hourly output, and the wages paid is fairly fixed.  IF the Technician multiples themselves via a business of course they make more money. But that's a small percentage of people entering the trades.  I see Engineers working until they are 70 all the time. Tradesman typically cant make it that long, or significantly cut back their work after a certain age (50s).

Most trade schools run about $15K-$18K for a year. If you get a union/organization to train you of course its cheaper.  But thats no different than my buddy who had his company repay his 15% of his loans every year as long as he performed a certain level. Or another went into finance and got a scholarship from a Utility Company, and then had Internships paying $25/hr every summer.

Then of course people will say STEM has a return on investment always. Which yes, it does.  But I have a "Liberal Arts Degree" that often gets made fun of.  But I moved into a technical field where I leverage the knowledge regularly (couple Accounting, Systems, Database courses go a long way). Then in my Real Estate business same thing.  I work in Data Management/Governance and Analytics.  But I made $20K-$30K a year while I was in college for 6 years, I ended with $22K in debt (I went to Community College first). I make over 6 figures now in my 9 to 5, plus I have 15 properties, then a limo service. I graduated college in Dec 2008, started off at $9/hr, then jumped to $15.50/hr in 2 years, $48K 2 years later, $70K two year later, and 2 years after that six figures. Also from 2009-2016 I was a Guardsman in the ANG and earned money(in addition to my 9 to 5 wages) that way (plus a signing bonus).  

The moral of the story is basically there is more than one way to skin a cat. When people are debating this topic its often anecdotal, and emotional no true data backs up people's claims of what is being made in the trades, from BLS, IRS, or even Census Data which tracks job profiles of top 10% earning households at the Census Tract, or Zipcode level. Saying you will go into debt $100K+to get some viewed low wage earning degree ex. Underwater Water Basketweaving, or Gender Studies (favorite catch all for this comparison).  Versus paid training in a skill trade making $55K in 9 months (which is rarely the case) Only 5% of people attending undergrad leave with more than $100K in loans. Even more, when looking at what jobs make up what income brackets in density look at this study (2014 so little dated), Laborers are low on the scale and Truckers range greatly up and down the scale. But are less frequency as they move up the income scale. The trades are a great tool to potentially create a robust business, but it will not get you into the top 10% of household earners which is about $160K nationally or $180k in my state of Michigan or $270K in NJ (your state).

AI and Productivity tools have been disrupting the labor market sign Eli Whitney created the cotton gin. In 1915 Henry Ford employed 1400 people with his famous $5/day wage (who met the requirements lol) who had to complete this arduous process of nailing together fabricated parts. Well someone invented a nail a gun, 2 years later he needed only 300 people and he didn't need a to pay them $5/day anymore. I have literally installed an ERP system that allowed organizations to reduce their headcount from 100 people in support staff (clerks, accountants, admins, etc) to maybe 40-60 people in 3 years. I am working on a project at a Fortune 25 company that will reduce headcount of 300 people on go-live. This ranges from warehouse workers to people doing reporting (financial and operational) on inventory.  The classic "mailroom" job at many companies are gone.  Before companies needed hundreds on people to distribute communications across multiple work-sites in a small area. Today 5-10 people manage all the communication applications for organizations with 10,000+ people. If anyone remembers Cadillac's Commercial a few years back of the dancing robots people felt it was tone deaf because those robots put lots of people out of work.  My wife's uncle programs these type of machines at $95/hr (advanced degree in Physics) and he drives all over Michigan, OH, and Ontario servicing them. It wasn't only blue collar workers wiped out, but millwrights too. 

Anything thats a repeatable process will be wiped out by AI. Thats call centers agents, or even entry level accountants.  Robots/Machines will wipe out jobs always.  A friend of ours is an anesthesiologist makes about, $400K, well his hospital employed over a dozen.  Because of monitoring and medical technology on shift they have one doctor monitoring machines of patient vitals throughout the facility, another making rounds, and another to respond to emergencies/codes. They cut their needs for a high-cost, critical role in half almost and each remaining doctor got a nice little bump in pay. 

[George W.]

Originally posted by @Christian Hutchinson:

Originally posted by @George W.:

Originally posted by @Jamie Atkinson:

A lot of talk about STEM, learning a trade, MBAs, and the like, but what about a good ole liberal arts degree?

I'm dismayed by the general deemphasis on the humanities.  

Conventional thinking has evolved regarding folks paying through the nose for pedigree and miring themselves in debt as they begin adulthood.  Rightly so.  Pedigree and the cost to attain it is increasingly a bad idea for most folks.  

However, we should be careful not to throw out the baby with the bathwater, so to speak.  Who'll be left amongst us to put all of our great economic and scientific advances into a proper historical context? Google won't help us.  Food for thought.  

Lots of great points but college is not for every single person. Do you think with artificial intelligence, there will be a day where computers outpace man in scientific discoveries? 

I understand you didn't go to college so you take the default position its a binary choice "to go or not go". You have chosen not to go, and its an exercise for yourself justifying your actions; its not.

Which I said in my last posts.  This about placement on the value-chain.  Lets take some really good comparisons:

HVAC Technician vs HVAC Engineer (Mechanical)

So Median pay is $87K for the Engineer its $47K for the Technician.
Trade School costs money and will get you to various levels of certs in 6-18 months.  Or a local union offers you a slot and they offer you a training wage of $14/hr mixed between classroom and job-sites. So its co-op basically. You get $2/hr wage increases as you move up the program, and finish at the final wage of $26/hr in two years. Then if you get your card/journeyman you get more.

Even if someone spends 5 years at University, assuming they made $0 (which is rare) and spent $100K+, which is again rare, that means you didn't work, and paid for tuition, fees, food, housing completely using Student Loans. You come out ahead in going to college in 10 years.  Because a Technician gets paid based on hourly output, and the wages paid is fairly fixed.  IF the Technician multiples themselves via a business of course they make more money. But that's a small percentage of people entering the trades.  I see Engineers working until they are 70 all the time. Tradesman typically cant make it that long, or significantly cut back their work after a certain age (50s).

Most trade schools run about $15K-$18K for a year. If you get a union/organization to train you of course its cheaper.  But thats no different than my buddy who had his company repay his 15% of his loans every year as long as he performed a certain level. Or another went into finance and got a scholarship from a Utility Company, and then had Internships paying $25/hr every summer.

Then of course people will say STEM has a return on investment always. Which yes, it does.  But I have a "Liberal Arts Degree" that often gets made fun of.  But I moved into a technical field where I leverage the knowledge regularly (couple Accounting, Systems, Database courses go a long way). Then in my Real Estate business same thing.  I work in Data Management/Governance and Analytics.  But I made $20K-$30K a year while I was in college for 6 years, I ended with $22K in debt (I went to Community College first). I make over 6 figures now in my 9 to 5, plus I have 15 properties, then a limo service. I graduated college in Dec 2008, started off at $9/hr, then jumped to $15.50/hr in 2 years, $48K 2 years later, $70K two year later, and 2 years after that six figures. Also from 2009-2016 I was a Guardsman in the ANG and earned money(in addition to my 9 to 5 wages) that way (plus a signing bonus).  

The moral of the story is basically there is more than one way to skin a cat. When people are debating this topic its often anecdotal, and emotional no true data backs up people's claims of what is being made in the trades, from BLS, IRS, or even Census Data which tracks job profiles of top 10% earning households at the Census Tract, or Zipcode level. Saying you will go into debt $100K+to get some viewed low wage earning degree ex. Underwater Water Basketweaving, or Gender Studies (favorite catch all for this comparison).  Versus paid training in a skill trade making $55K in 9 months (which is rarely the case) Only 5% of people attending undergrad leave with more than $100K in loans. Even more, when looking at what jobs make up what income brackets in density look at this study (2014 so little dated), Laborers are low on the scale and Truckers range greatly up and down the scale. But are less frequency as they move up the income scale. The trades are a great tool to potentially create a robust business, but it will not get you into the top 10% of household earners which is about $160K nationally or $180k in my state of Michigan or $270K in NJ (your state).

AI and Productivity tools have been disrupting the labor market sign Eli Whitney created the cotton gin. In 1915 Henry Ford employed 1400 people with his famous $5/day wage (who met the requirements lol) who had to complete this arduous process of nailing together fabricated parts. Well someone invented a nail a gun, 2 years later he needed only 300 people and he didn't need a to pay them $5/day anymore. I have literally installed an ERP system that allowed organizations to reduce their headcount from 100 people in support staff (clerks, accountants, admins, etc) to maybe 40-60 people in 3 years. I am working on a project at a Fortune 25 company that will reduce headcount of 300 people on go-live. This ranges from warehouse workers to people doing reporting (financial and operational) on inventory.  The classic "mailroom" job at many companies are gone.  Before companies needed hundreds on people to distribute communications across multiple work-sites in a small area. Today 5-10 people manage all the communication applications for organizations with 10,000+ people. If anyone remembers Cadillac's Commercial a few years back of the dancing robots people felt it was tone deaf because those robots put lots of people out of work.  My wife's uncle programs these type of machines at $95/hr (advanced degree in Physics) and he drives all over Michigan, OH, and Ontario servicing them. It wasn't only blue collar workers wiped out, but millwrights too. 

Anything thats a repeatable process will be wiped out by AI. Thats call centers agents, or even entry level accountants.  Robots/Machines will wipe out jobs always.  A friend of ours is an anesthesiologist makes about, $400K, well his hospital employed over a dozen.  Because of monitoring and medical technology on shift they have one doctor monitoring machines of patient vitals throughout the facility, another making rounds, and another to respond to emergencies/codes. They cut their needs for a high-cost, critical role in half almost and each remaining doctor got a nice little bump in pay. 

Great points on ai its definitely going to eliminate many jobs in the future. You sound like a very successful guy that's great what you've accomplished thus far. Now a couple of things here: 

trades aren't learned in 9months. I did go to school through the county it was not 15-18k. It was $700 a year for four years. $26/hr is like what a entry level mechanic makes here. I Currently get any benefits and as much overtime I want. A experienced licensed plumber makes much more but you clearly did so much research on paycheck. Also remember most trades guys do a ton of side work.

There is a lot more to be made here if you own a business. In NJ. Just like investing in real estate there is a lot of people who don't know how to run a business and would be better off working for someone else and that's your median!

Jumping back to REI here, it's not about what you make a year it is what you save. If I make $150k and save 50k to invest, I'm better off than someone who makes 200k and saves 25k. If you start young in the trades, don't go to college you can easily buy a property younger, fix it and move on. If your dti is too high from student loans that won't happen until your income is higher or your debt lower.

Also note the skills help you force equity. Like I said by the time I'm 30 I won't have to touch a tool anymore just have to deal with the business side of it.

[Jess White]

@Allan Foote It comes down to one thing. Self awareness. If you know that there is a very specific thing you want to do, I.e. Nurse, Doctor, Engineer. Great - go that route and get that specific degree. Congratulations, now you are an informed consumer and not a mindless rat going just to go.

However, if you want to get into real estate or you don’t know what you want to do. I would not waste a minute of my time on a university. I promise you that you do not need a degree to succeed in this business, and you can make it work in up and down markets.

The world is changing, and it’s changing fast. In the next three years, the time you would spend on a degree, you could secure your first 5-15 deals that would forever shape your life at such a young age. Go eat dirt, hustle, work for free, and follow this mentor and you can crush it. I promise you it’s waiting for you if you are willing to work and want it bad.

You can always go back to school. You never get your early 20’s back. Just remember, do what’s right for you. Only you know what’s the right path.

For all the opposing ideas that you make "connections" in college and so forth. You will make 10X connections actually working in REI and going to flip and construction sites as well as REA meetups. Go offer to work for free for a investor. Do the stuff they don't want to do, just so you can be around them and model their actions.

Life only gets more complex as time goes on. Take massive action while you are young and you will reap the benefits for the rest of your life.

Take care,

[Aaron Gordy]

I think its all about the hustle.

There are countless successful folks without college degrees. In Austin, one of the richest guys in the city doesn't have one: Michael Dell. But Jeff Bezos has an degree from Princeton. Warren Buffett has a Masters in Economics.

 I really don't think that one absolutely needs one to be rich as it has been proven many times that its not necessary. I have a masters and I feel like it has helped me a great deal though.  Have I ever used the degree to get a job? No, not really. I have been self employed and ran my own business for most of my adult life. My only beef is that I wasn't able to get started at a younger age and really understand the power of real estate or compound interest. 

I think that the idea of education being absolutely necessary to get ahead that is crammed down kids throats in school is bs. The stats do show though that folks with a college degree vs non college degree on average over a lifetime make more money. But who is average?? 

[Valerie Post]

Hi, @Dan Carroll

I am intrigued that you and your wife are Dave Ramsey preferred financial coaches! I graduated the school of hard knocks thanks to FPU and have wondered what the financial coaching program was like. I thought of it for myself as I would love to help others change their lives but I put it on hold while I am learning about real estate investing and passive income. (Every time I set out to educate others, I get educated!) Can you give me and idea of what you do and do you help advise people with passive income options, like real estate investing? 

Best wishes,

Valerie