I Spent $60k on College

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This Week’s Recap

Inflation data for April came back at 8.3% slightly lower than the March value of 8.5%. Markets didn’t take kindly to this news as we saw the Nasdaq and S&P continue to slide with the Dow notching a 1,200 point fall on Wednesday. Despite the still high inflation number, it was slightly lower than the previous value and is hopefully a sign that inflation is beginning to decline.

With this continued pullback I have been increasing my buys in the market. People often begin to sell and take their money out during times like these, but the best strategy believe it or not is to double down on your contributions (for those with a long time horizon). The data behind this was covered by Market Sentiment in his latest email which you can read here.

To wrap it up, I bought some QQQ this week and am keeping an eye on Facebook, Google, and Amazon.

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“Invest for the long haul. Don’t get too greedy and don’t get too scared.” - Shelby M.C. Davis

As some of you might have seen, I graduated college this last week with a Bachelor of Science in mechanical engineering from Texas A&M University (Gig'em!). With all the talk on social media trashing college, I wanted to weigh in and give my experience after attending one of the largest institutions in the United States.

The best way to do this is a list of the pros and cons. Afterwards, I’ll wrap it up with a few tips in case you are planning on going to school or sending off a kid of your own.

Pros

Networking - College provides a very unique opportunity to meet new people. Whether it’s in classes, at organization events, or just at the local bar, it’s a prime environment for making connections. The majority of these people share the same mindset and have some sort of drive to be successful in their careers. Of course, there are exceptions to this (I’ve met plenty of them). When done correctly, you’ll leave school with not only a degree but with a long list of people you can leverage later on in your career. I’ve without a doubt met some of my best friends over the last 5 years. While our nights of roaming the bars at 2 am are over, the plan for starting our own company is just beginning.

Having a Fail-Safe Option - I feel like this isn’t said enough but having a degree is something you can always fall back on. No one said you have to go work in the field you studied. For example, I have a friend who is pursuing ministry after he graduates. He told me “even if it doesn’t work out I can always get a normal engineering job.” Essentially getting a respected degree is an insurance policy you can always claim if your NFT project flops or e-com brand crashes and burns.

Earning Potential - Some will argue with me on this, but the data shows that those with a college education earn more over their lifetime. Careers in medicine, law, and engineering have some of the highest annual salaries of any profession. Now, I know plenty of people who have skipped school or have other educations and are still crushing the game, but for this email I’m giving the general idea. Personally, in my first year of work I will come close to earning 6 figures, with (most) weekends off, paid vacation, and solid benefits.

Cons

Expensive - One of the most depressing parts of my college experience was logging into the payment portal to see how much I owed for tuition each semester. While I think a degree is worth it, I’m not for sure if it’s worth the almost $6,000 I paid each semester. This isn’t including other expenses like rent, food, entertainment, etc. It adds up quickly and is one of the hardest parts of college. Thankfully there are ways to ease some of the financial burden. I’ll cover those in the tips sections.

Irrelevant Classes (Prereqs) - A number of the classes I paid for were irrelevant to my career choice. For example, with the route I’m going I likely won't ever need to use a differential equation. While it was a required, it’s hard to not look at that class as money wasted. Not to mention many institutions require basic classes in political science and history. These subjects have their place but aren’t anything one can’t learn in high school. Nonetheless, colleges will charge an arm and a leg to remind you of when the light bulb was invented.

Degree Choice - One thing I won’t promote is paying thousands of dollars for a degree that doesn’t have a decent earning potential. I’ve seen people go $60k in debt for a degree that is going to make them $45k a year. As with the stock market, one needs to evaluate the opportunity cost of investing in a degree. It needs to make financial sense to sacrifice years of your life and thousands of your hard-earned dollars. Going to school for “the experience” and getting a degree that won’t land you a job in the real world isn’t worth it. Here’s a chart projecting starting salaries of Bachelor degree graduates for different profession in 2022.

Tips

Scholarships - Don’t be the lazy person who doesn’t fill out scholarships. I remember dreading going home as a senior in high school knowing I had to complete more applications. Thankfully, the time spent writing essays was worth it. The scholarships I received covered over half of my usual tuition. The recurring ones are great, but you should still apply to as many as possible before and throughout your college career.

Raising Animals - In Texas, kids can being showing livestock in 3rd grade and continue until they graduate high school. This opportunity isn’t available to everyone, but I’d recommend looking into your local 4-H or FFA club to see if this exists in your area. I raised commercial heifers (cows) and goats in 4-H, and showed/sold them at the local fair each year. This might sound “county” or “hick” but you realize the potential when a rabbit sells for $6,000.

Prepaid College Savings Plans - For those who might be sending a kid to college in the future I would recommend looking into prepaid college (credits) and 529 college savings plans. I was able to take advantage of these thanks to my parents setting them up and they definitely came in clutch. My personal knowledge on these isn’t the best so here’s a link to read more. 529 college savings and prepaid college plans.

Prerequisite Classes - As I mentioned earlier there are a number of basic classes that can be taken in high school or at community colleges and transferred into another institution. This is one I didn’t do but would have saved me a lot of money.

Summary

Despite failing more engineering tests than I can remember, I enjoyed my time in college and think it was a worth it. That said, I hope education costs don’t keep increasing at their current rate. College isn’t for everyone, and there is nothing wrong with that, but when done correctly it’s a good investment.

For those who might be looking at furthering their education or exploring it for a loved one, I hope you found this helpful and consider sharing!

Till next time, Cade

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Nothing in this email is intended to serve as financial advice. Do your own research. Thanks for reading, if you have any questions, comments, suggestions, etc. about the email send me a DM on twitter. See you soon!