@iced wrote:
@Anonymous wrote:
I've wondered about this and here I am still in college. If I were to borrow money for my degree or would I get a better return on my investment if I invested in something else like stock, bonds and real estate. On the lower end, I think education wins out. But what about the
Those who want a masters, PhD, or a doctor degree? Let's put a number to it. If you had 250k to invest in your education or 250k on another investment, which one would you get a better return on? Personally, because your high salary is tarnished by uncle same and let's be honest, he takes a bigger chunk when you make more money, maybe you'd be better investing it elsewhere. What are your options on this?
This question is too generalized. Needs more specifics.
As stated, what the degree is in matters. A Masters in English or Latin American Studies is not worth as much as Biology or Law. Where the degree is from only matters for some degrees. Some fields, such as law, tend to care where it's from because they're under the illusion there's some amount of pedigree to colleges. Many employers looking for STEM graduates, however, couldn't care less where the degree is from as long as it's not some as-seen-on-tv night school.
Investment and income also aren't equal in Sam's eyes. There's a name for the reason the slimy fat cat CEOs take lower figurehead salaries in exchange for generous equity-focused compensation plans, and it is Capital Gains. If I make $250k in salary, I'll be taxed through brackets ranging from 10% for the first $9,000 I make to 33% for the last $60,000 I make that year. If I make $250k in gains off of investments, I pay 15% (assuming a few things such as long-term gains and that the $250k was a majority of my total earnings for the year).
What would I do? Somewhere in the middle if I could do it all over again. Invest some of it and use some to start on getting a Bachelors in a STEM degree (because let's be honest, for most STEM fields you don't need more than a BS for a great job), but then shift to paying for school using profits from the investments. If I do it right, I wind up in the end with both the degree and some money left over. If science isn't your thing, open a business with it. There's more risk to that route, but if it does well you'll do well and then you open up even more tax loopholes and breaks to work the system with.
There is some pedigree to colleges and law schools. The best law schools get the best students. Oh sure, there are occasionally a few from Podunk Law whi shine, but when firms recruit from the top (or top regional) schools, 80-90% of the time they'll be right about the quality of their hires.
And while the STEM companies don't explicitly put academic pedigree as a selection criteria, believe me when I say it counts -- specially early in your career. For PhDs what matters is whose lab you came from (your advisor/PI) so the actual school is secondary. For degrees before the PhD, there is definitely a difference in quality of the graduates and if I had to take a shortcut when weeding through a thousand resumes, I would pay some attention to alma mater, that's for sure.
As for the OPs question, if we're talking about financial ROI, then I suggest learn a trade and become an electrician, or plumber, or high-skilled welder and invest the money to grow long term. If you invested that $250K conservatively at 20 you'll have a nice chunk of change by the time you're 55. And with a trade, you could be an independent contractor so you have flexibility.
My circle have talked about this a lot and while the parents wouldn't go so far as letting their kids not go to college, we think for folks who aren't particularly academically inclined, a trade wouldn't be a bad thing. We are all over-educated advanced-degree holders and 6- or 7-figure earners. We know the work and sacrifice required to get here (a freakin' ton) and we think the promise of a college education have been oversold.
