Nah, that advice is still correct. The 4-year degree provides a huge benefit over not having it.
It’s just that a lot of people don’t realize just how much shittier not having a degree in 2024 is compared to not having a degree in 1974.
So while the baseline has gotten worse, and the actual benefit of college has shrunk, it’s still easily worth the 4 year commitment and the tuition/opportunity cost.
Counter-point: not everyone is cut out for a four-year degree*. Some people are better suited for trade schools. My wife worked at a university and saw a number of students that were attending just because family wanted them to, but their heart wasn’t in it. Often they’d drop out with student debt and no degree to show for it.
a number of students that were attending just because family wanted them to, but their heart wasn’t in it
There are probably an even higher percentage of those in trade schools or entry level trades roles. You can’t compare the worst outcomes in one category with the best outcomes in another, and should instead compare medians.
Right now trade schools are actually providing a better cost to income ratio than college.
It’s anecdotal but my friends in the Boston area were all making 120-150 in salary plus bonus before I was even out of school and I started in software at 65k and didn’t break into that level for another 4 years. Now I make 230 but they’ve all got houses and decked out retirement funds from having that good money when they were much younger. That extra 20-30k/yr in 401k and IRA funds with 5-6 years more growth time in the market isn’t something to shake a stick at.
Yeah the break even point is like the early 30’s, even among people who are killing it in either path.10 years of $100k+ in your 20’s won’t be able to build up enough of a buffer against $200k+ after 30, when retirement ages are around 60.
It’s actually harrowing how little I have in retirement savings compared to them. I spent the first 6 years of my career paying off loans and only contributing up to my employers match. I was illiquid for multiple large economic events while they had cash laying around. They could buy cars when interest was zero. They had a house to refi when interest was zero. I feel like a millennial describing boomers but these are guys in their 30s who went to trade school.
For me to catch up I have to put money almost entirely in taxable accounts where their money and returns are shielded from taxes. They were actually able to use a Roth for many years where I was only real able to max one out for two years before my promotion put me out of eligibility.
The earlier you are in a market, the better off you are and trades put you into the market almost 10 years earlier than someone taking 4 years of college and then having 4-6 years of loan payments
There’s also a lot of things that people ignored from this advice. No one said get literally any degree, art majors have been the source of unemployment jokes since before I was born. No one also said take 5-7 years or more to get the degree either.
Go to a four year college so you can get the best jobs.
Oh wow that’s a good one! There was a time where it worked out great the vast majority of the time. Not so much now, definitely aged like milk
Nah, that advice is still correct. The 4-year degree provides a huge benefit over not having it.
It’s just that a lot of people don’t realize just how much shittier not having a degree in 2024 is compared to not having a degree in 1974.
So while the baseline has gotten worse, and the actual benefit of college has shrunk, it’s still easily worth the 4 year commitment and the tuition/opportunity cost.
For average lifetime earnings.
So for some it may not provide a big help.
Counter-point: not everyone is cut out for a four-year degree*. Some people are better suited for trade schools. My wife worked at a university and saw a number of students that were attending just because family wanted them to, but their heart wasn’t in it. Often they’d drop out with student debt and no degree to show for it.
*or at least when they’re young
There are probably an even higher percentage of those in trade schools or entry level trades roles. You can’t compare the worst outcomes in one category with the best outcomes in another, and should instead compare medians.
Right now trade schools are actually providing a better cost to income ratio than college.
It’s anecdotal but my friends in the Boston area were all making 120-150 in salary plus bonus before I was even out of school and I started in software at 65k and didn’t break into that level for another 4 years. Now I make 230 but they’ve all got houses and decked out retirement funds from having that good money when they were much younger. That extra 20-30k/yr in 401k and IRA funds with 5-6 years more growth time in the market isn’t something to shake a stick at.
Yeah the break even point is like the early 30’s, even among people who are killing it in either path.10 years of $100k+ in your 20’s won’t be able to build up enough of a buffer against $200k+ after 30, when retirement ages are around 60.
It’s actually harrowing how little I have in retirement savings compared to them. I spent the first 6 years of my career paying off loans and only contributing up to my employers match. I was illiquid for multiple large economic events while they had cash laying around. They could buy cars when interest was zero. They had a house to refi when interest was zero. I feel like a millennial describing boomers but these are guys in their 30s who went to trade school.
For me to catch up I have to put money almost entirely in taxable accounts where their money and returns are shielded from taxes. They were actually able to use a Roth for many years where I was only real able to max one out for two years before my promotion put me out of eligibility.
The earlier you are in a market, the better off you are and trades put you into the market almost 10 years earlier than someone taking 4 years of college and then having 4-6 years of loan payments
There’s also a lot of things that people ignored from this advice. No one said get literally any degree, art majors have been the source of unemployment jokes since before I was born. No one also said take 5-7 years or more to get the degree either.
Skip the line with a blue badge at amazon (not financial advice)