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05-09-2014, 11:40 PM
An honorable member of the Coffee Shop Has Just Posted the Following:
STAY OUT OF COLLEGE
Felix Salmon has put together a terrific interactive graphic that lets you measure out the lifetime returns of various educational choices. You should definitely go play with it.
That said, I don’t think Felix’s analysis on the featured charts page is correct. His very first piece of advice is “Don’t be a fool, stay in school.” This is based on the fact that the median lifetime earnings of a person with a four-year college degree are significantly higher than those of someone who doesn’t go to college.
That’s true as far as it goes. A male with a four-year arts degree has $1.5 million of lifetime earnings over the 26 years following high school. The high school graduate has $1.1 million.
Here’s the thing about that: the extra $400,000 in lifetime earnings comes about after an initial investment in education of $95,000 in the years immediately following high school.
That is not a bad return on investment. It’s equivalent to around 5.7% compounded annually.
But there are better opportunities available. Specifically, the return on investing in financial markets is likely to be better than the return on investing in college.
Charles Schwab currently forecasts that the long-term return on the S&P 500 will be 7.4% compounded annually. Over 26 years, that amounts to around $608,000.
Which means that you would do better to avoid college and instead invest the money you would spend on college in a low-cost index fund.
Even if you took a more conservative approach that mixed stocks, bonds and cash-equivalents, you would still likely be able to beat the return on college.
Don’t be a fool: stay out of school.
http://johncarney.tumblr.com/post/96...out-of-college (http://johncarney.tumblr.com/post/96706154560/stay-out-of-college)
Click here to view the whole thread at www.sammyboy.com (http://www.sammyboy.com/showthread.php?189499-LHL-read-this-before-NDR-speech&goto=newpost).
STAY OUT OF COLLEGE
Felix Salmon has put together a terrific interactive graphic that lets you measure out the lifetime returns of various educational choices. You should definitely go play with it.
That said, I don’t think Felix’s analysis on the featured charts page is correct. His very first piece of advice is “Don’t be a fool, stay in school.” This is based on the fact that the median lifetime earnings of a person with a four-year college degree are significantly higher than those of someone who doesn’t go to college.
That’s true as far as it goes. A male with a four-year arts degree has $1.5 million of lifetime earnings over the 26 years following high school. The high school graduate has $1.1 million.
Here’s the thing about that: the extra $400,000 in lifetime earnings comes about after an initial investment in education of $95,000 in the years immediately following high school.
That is not a bad return on investment. It’s equivalent to around 5.7% compounded annually.
But there are better opportunities available. Specifically, the return on investing in financial markets is likely to be better than the return on investing in college.
Charles Schwab currently forecasts that the long-term return on the S&P 500 will be 7.4% compounded annually. Over 26 years, that amounts to around $608,000.
Which means that you would do better to avoid college and instead invest the money you would spend on college in a low-cost index fund.
Even if you took a more conservative approach that mixed stocks, bonds and cash-equivalents, you would still likely be able to beat the return on college.
Don’t be a fool: stay out of school.
http://johncarney.tumblr.com/post/96...out-of-college (http://johncarney.tumblr.com/post/96706154560/stay-out-of-college)
Click here to view the whole thread at www.sammyboy.com (http://www.sammyboy.com/showthread.php?189499-LHL-read-this-before-NDR-speech&goto=newpost).