Schools, Degree's, College Debt Could Have Bought A House.

The debt we have from schools, and college could have bought and paid for our home today, that's right, no note, no mortgage.

If a college student would have invested part of their college loan money, in silver, 5 years ago they could have bought multiple homes, and maybe rented a few of them out. My point here is not that someone should have invested in silver, but the fact that putting our eggs in one basket may not be a solid solution. We should empower the younger generation, not set them up for overwhelming debt and possible failure.

School money or loans spent is no different, if people consider them an investment do the loans justify the return on the debt incurred? Or can it be paid off in a reasonable time, along with all the other debts incurred?

This information is directed at the US market and educational system.

Although I think education is important, the reality and philosophies are that today's educational system teaches very little to survive in real life situations. Think about what is being taught, do we feel empowered, or do we feel lost, in debt and indentured for life.

Some people are $100,000 of dollars in debt they can't get out of because loans are available easily, at low interest.

Although people make a choice on their own accord, they really don't understand the long term implications because of how they have been indoctrinated, since the early days of schooling.

Schools seem to teach us how to regurgitate a decaying system, one that is currently failing, on all levels.

Do people actually take the time to step outside the box and see what is transpiring, or are they so brainwashed do they continue to the point of overwhelming debt and no job security?

We need to really change the current system for ourselves and the newer generation.

reply to post by Realtruth


I hope this thread gets some attention.


Alot of my buddies are still paying student loans and don't work in jobs they went to school for.
Some of my buddies don't make the money I do either even though they have a better education then me.

Seeing other people in similiar situations is why I never saw education as a good investment.
Investment being the key word.

A piece of paper never guarantees you a job....it does usually give you debts though.

I prefer to just work my butt off and let that show for itself.

reply to post by Realtruth


I couldn't agree more. Below is a repost from my intro a bit back.

I am always being told, “You need to stop changing your major! At least get a degree.” In return, I always ask them, “Why? I love learning and I go where my mind takes me”. I dropped out of High School, joined the Military and have not stopped going to school since. Now retired and living comfortably, next to debt free and still attending class.

I see a course that looks interesting and take it. Art, labor related courses like welding and plumbing, History, PoliSci, Computing…heck, even Meditation. All of my classes I attend are bought and paid for right up front. I do each class/course separately when I can afford it and do not take another until it is finished. I have not used my GI bill as yet and will probably do so when I settle on a major. If ever.

I say, College does not necessarily equal knowledge. Some (not all) of the folk I hang with are nearing or have their PhD or Masters. Yet they constantly display ignorance concerning life without even realizing it. Many would burn water attempting to cook, can’t build a simple storage shelf in their house and almost to a tee, will look at someone and make an immediate assumption about that individual. They’re annoyed that a plumber or electrician makes more than they do.

One guy I knew made six figures as an IT manager. When the economy took a turn for the worst back in 2001, he was laid off. He refused to take a job that paid less than what he was making before. I had done many odd jobs for him on house his and car, we hung out on the weekends, BBQ’ed, drank beer and talked sports, politics and of course, girls. ;-) One day he was having problems with his laptop and the problem sounded familiar so I asked if I could look at it. He agreed, but you could definitely see the look of, “Yea, right…you? Fix my computer?” on his face. Now mind you, I consider myself a Neanderthal when it comes to computers. (Use the edge of the laptop when driving tent stakes, not flat. It’ll last longer that way. Anyways, I went to the help tab, typed the problem in search and viola! Fixed. The guys mind was so in the weeds that he failed to look for an easy answer first and work from there. He was impressed (Why? I really didn’t do anything special) I looked at him and asked him how his job search was going? He ranted about how no one was willing to pay him what he was worth. He had a degree after all. I then asked him what additional schooling he had done to update his resume. He looked dumbfounded and said…”I have a degree, what don’t you understand?” Three years later and a depleted bank account, he eventually took a job that pays half of what he made, and still moans about it. His moaning about how he got screwed over became so much that I rarely see him anymore, and when I do, it’s still ongoing. Oh…and he still hasn’t updated his educational resume. Last I heard, his wife left him as well. So much for the entitlement mentality.

I run into people like this all the time. Clueless people, who think a degree is the end all, be all. But when it comes to life, they are a box of rocks. Supposedly “smart” people with a buttload of debt. I will admit that there are a few who are well rounded common sense individuals, and they definitely have my utmost respect.

If most elementary education was done through the 6th grade when minds are young and sharp, teaching languages, math, arts, music, etc with the final 5 years in college level courses, we wouldn't need colleges, except for extended degrees and education.

No wonder we are all so dumb. Lets teach 1st graders the alphabet and to read.

Are you serious? My 2 year old grandchild already knows half the presidents, the alphabet and is learning to read.

Our current educational system is a mess.

reply to post by Realtruth


There are certainly too many folks in college today who are pushed there for the wrong reasons. However, statistically, college graduates make considerably more over a lifetime than non graduates. I believe that is changing, but thats how it works right now.

I would take the other approach. Get an education and lose the house. This notion of home ownership is one of the most foolish mores in our society. Why? Take a look at the current price of real estate. Folks who were banking on the increased value of their home to fund retirement have been hammered. Those in the market are doing well. Our society is completely geared around this status of owning a home and it is total bs.

I'm presently looking to sell my house and don't think I will ever buy another one. It is much easier to rent someone elses problem, be it a house or apartment. As far as the morgage deduction, do a very thorough job of listing what you pay for in the maintenance of your house, including taxes and insurance. Just keep a record of everything you would not have to purchase were you to rent and you will discover over the year that the amount at least equals and in some years should you have a major problem, dwarfs the mortgage interest deduction that they are in the process of eliminating or reducing in any event.

If you are looking for the most practicle solution, go to a quality college that does not cost a fortune. Take jobs along the way to help you pay for it, if that means it takes you 6 years, so be it. Graduate, get a job and live in an apartment or rented house.

Do something that makes you want to get up in the morning and don't buy into the marketing driven rubbish that is our popular culture.

This is a great thread. There are millions of college students around the world who were promised all sorts of job opportunities when they finish their studies. But you know what? The economy didnt hold up its end of the bargain. We held up ours...we got our degrees. But now where are all these jobs we were told we'd get if we had this magical piece of paper?

Sometimes I think it would have been much better for me to not go to college and simply lie on my resume that I did. Has anyones employer really checked?

A resume, a degree, these are just ways to get your foot in the door? Why take on so much debt when making up a degree is easier, cheaper and better for your liver? Lying on your resume is free after all and you're probably going to lie on it anyway, college degree or not.

Besides, all the money us students are paying for on student loans for our worthless degrees could be money circulating around the economy. Aren't young people the ones with the most disposable income? Why not void all govt loans and allow young people to buy homes, cars, gasoline, food and other things that make our economy successful?

Nothing wrong with owning a home or homes, but one has to remember basic economics.

Anything that does not produce income is a liability, hence a home someone is living in is a liability and not an investment no matter how much the value increases.

So yes, you are correct, in that owning a home does deplete or take money to run, even if you own it outright. The trick is not to get into a huge mortgage that cannot be sustained in bad times.

Originally posted by dolphinfan

reply to post by Realtruth

 

his notion of home ownership is one of the most foolish mores in our society. Why? Take a look at the current price of real estate. Folks who were banking on the increased value of their home to fund retirement have been hammered. Those in the market are doing well. Our society is completely geared around this status of owning a home and it is total bs.

Originally posted by Realtruth
The debt we have from schools, and college could have bought and paid for our home today, that's right, no note, no mortgage.

Great. So rather than an education I can possibly use to adapt and change my circumstances and get new and different jobs as the market demands, I know how to fix manual transmissions and I own a house that's losing 8 percent of its value (if I'm lucky) a year, essentially scrubbing out any kind of savings I managed to accumulate.

Good plan!

$10 an hour does not buy a house in California. Maybe $25 an hour, and thats all you'd own. Got to have a degreed education for many jobs. Can't be an engineer without that piece of paper. Point being, got to spend the money to make the money to have the money. (In most cases, there are the exceptions as always)

If you read the entire thread, you will see that I commented that a house is a liability even if you own it, which means it produces nothing. A home is not an investment, consider is shelter only, that is the ultimate scam in the world today. Unless an investment produces money that you can use for re-investment, consider it a liability.

This is my whole point, we are not being taught this in schools early on, but we are being taught to accumulate debt and liabilities, without questioning.

Originally posted by Blue Shift

Originally posted by Realtruth
The debt we have from schools, and college could have bought and paid for our home today, that's right, no note, no mortgage.

Great. So rather than an education I can possibly use to adapt and change my circumstances and get new and different jobs as the market demands, I know how to fix manual transmissions and I own a house that's losing 8 percent of its value (if I'm lucky) a year, essentially scrubbing out any kind of savings I managed to accumulate.

Good plan!

reply to post by dolphinfan


Home ownership is NOT foolish. Geez, I hope your not a financial advisor.

Homeownership is a way of building wealth, stability and retirement.

Those that bought during the "Bubble" are in trouble. But they bought for all the wrong reasons. They didn't make good financial decisions. Many bought "more home" than they could afford. Seduced by bankers with easy money and the "buy now or you'll be priced out forever" mentality.

BUT, lets take away the last 5 -7 years.

Homes should be purchased for "Long Term". Too many people thought they could buy and sell again and again over a short period of time.

Homes should be purchased as "housing". Not short term investments.

If you talk to folks who have owned their home for 15-30 years they have No complaints.
~ Homes nearly paid off.
~ Values still at least Twice what they paid.

Purchasing an investment property is also a good strategy.
"Let the renter pay the mortgage".

So please dolphin (are you in Florida?) I know Florida is probably the worst hit State in the county so I can understand your frustration, don't believe that purchasing real estate is a bad thing. It's not if done right and for the right reasons.

Dreams of an education, a good job, a family, a home, and financial stability are the foundation of the American dream, or at least it used to be. At $45,000 in debt with student loans and another year to go before I get my degree the dreams are seemingly out of reach for the moment. More student loans on the way to finish this year, and the total steadily rising, home ownership seems almost like a dream that I once had and now it is further away than I could of imagined. Student loans are easy to get as long as people keep in mind that they are just that...a loan, and when the degree is in hand, it's payback time. Whew!

reply to post by Realtruth


My wife just finished her 7 years and got a piece of paper saying she is a legal medical doctor. Then she had to pay another $1,000 for board testing and practice tests and all that crap. Now she is licensed and certified in the state of PA and it only will cost us $127,000 that we have left on student loans! We have been paying on them already while she was in school and we paid for 2 years of undergrad school also!! We will have spent almost $150,000 on schooling....Which in my mind is just rediculous....So for everyone else out there with tons of money owed in student loans....I FEEL YOUR PAIN!!!!

I also would like to add that this equates to around $1,000 a month....That is our payment plan now....So you can see what you can purchase with $1,000 a month for freaking schooling!!! That would be a decent house payment...

reply to post by Julie Washington


Real estate is a sound investment, but only if it generates income. Folks talk about the housing bubble as if it is a rare event. We typically have a housing bubble every 10-15 years, so depending on your circumstances, could well be a poor investment based on your health, age and retirement plans. There are plenty of folks who indeed have owned homes for 30 years, have them paid off and now have an asset. All of them have paid considerably more for the home than it is worth, even without the bubble, with 30 years of interest payments. From a pure investment perspective, the house you live in is not an attractive investment. What it is is a place where, because you need to make payments to have a roof over your head, you make them, hence accumulate wealth. A home that someone paid $300,000 for 30 years ago that is now paid off and worth $750,000 is not a good investment. He paid typically well over $600K for the home and thus generated $150K in wealth. When you factor in the insurance, property taxes and general up keep, it is a loser from an investment perspective.

Only when you ride the the bubble up and sell at the top is real estate a good investment when that real estate is your primary residence. You would do far better putting the money into equities or debt instruments over the 30 year period.

Originally posted by dolphinfan
reply to post by Julie Washington

 

Real estate is a sound investment, but only if it generates income. Folks talk about the housing bubble as if it is a rare event. We typically have a housing bubble every 10-15 years, so depending on your circumstances, could well be a poor investment based on your health, age and retirement plans. There are plenty of folks who indeed have owned homes for 30 years, have them paid off and now have an asset. All of them have paid considerably more for the home than it is worth, even without the bubble, with 30 years of interest payments. From a pure investment perspective, the house you live in is not an attractive investment. What it is is a place where, because you need to make payments to have a roof over your head, you make them, hence accumulate wealth. A home that someone paid $300,000 for 30 years ago that is now paid off and worth $750,000 is not a good investment. He paid typically well over $600K for the home and thus generated $150K in wealth. When you factor in the insurance, property taxes and general up keep, it is a loser from an investment perspective.

Only when you ride the the bubble up and sell at the top is real estate a good investment when that real estate is your primary residence. You would do far better putting the money into equities or debt instruments over the 30 year period.

Very well said. Its not as black and white as we think sometimes. Like all investments, a home as an investment is how you play the market. I think its more beneficial to rent because of the freedom of it. 30 years in one home seems like forever. Also, when your water heater goes out the landlord has to pay for it, not the "home owner".

Lets just take a look at that word "home owner". In reality everyone with a mortgage is still a renter. They just rent their home from the bank and are liable for all damages and repairs. In the end, they might....might make $100 grand but like you said, only if you sell on the up swing of the housing bubble.

Buying a home and thinking its yours, thinking youre guaranteed to make a profit is very dangerous thinking. Especially if you're drowining in college debt.

reply to post by Realtruth


The average person with a college degree earns a million dollars a more over their career then their non-degreed counterparts.

Do you own a million dollar house?

Originally posted by nixie_nox
reply to post by Realtruth

 

The average person with a college degree earns a million dollars a more over their career then their non-degreed counterparts.

Do you own a million dollar house?

This is a good point, since our egos are pumped up that we are going to be making lots of money, via our degrees then we should be able to afford a million dollar home. More food for our egos, this allows for people to justify buying things they may not be able to afford, if things should go south. Having a positive attitude is a good thing, but calculated risks are smart business moves.

Numbers don't lie.

Having or owning a million dollar home IMO is a useless asset or liability, however someone wants to view it, unless they have 10 million dollars in funding to back it up, then a million dollars is only 10% of their net worth.

Personally, I would much rather have multiple rentals, or properties producing income every month, and live in a modest home, this allows for future growth of assets and re-investment.

Nothing wrong with education or degrees, but the cost for them has gotten way out of line these days.

I have to apologize this is not the most positive thread I have written, but lately I am seeing so many of my close friends over-whelmed with debt that they cannot handle.

I am talking about people with Doctorate's and Masters degrees, that have come to me recently for advice, but unfortunately I could not help them since they were already in allot of debt, and only making enough to pay interest payments.

One friend in particular just had a mild heart-attack because of school debt and he is a teacher making good money, but saddled with secured debts.

Hence sight seems to be 20/20, but what we can do is learn from the mistakes, then guide our children on a more stable and financially sound path.

I think the key here is to know when to say, " I can't afford this amount", then look for alternative schools, or properties.

What ever happened to if you didn't have the cash you couldn't afford to buy it? Sigh.

I went to university in electrical engineering and finished several years ago. I enjoyed learning about it, and the cost of the degree was worth that alone. However, the degree is barely worth the paper it is printed on when it comes to the job market. (in exactly the same manner that the dollar becomes worth less when more are printed without anything to back it) Why? Because the value has been diluted by the sheer numbers of people that they are graduating, in all programs, not just mine.

You do NOT have to be smart to pass courses in school, and any idiot can do it if they actually put forth some effort. I've seen some extremely stupid people earn degrees, even graduate degrees. Then the trouble comes in that everybody is competing for those few jobs in their field, and even though one person might be a better and smarter worker, he or she has exactly the same piece of paper as the 90 IQ guy that just barely graduated.

I don't know if I'd recommend buying a house over schooling for people; it depends on the individual. It also depends on whether you have connections in the field you want to go to school in. Like I mentioned, I did engineering, but I have no connections in the field, so I'm currently working an extremely low-paying, manual labour job. And I got *that* through my neighbour.

I think a lot of people are frustrated with the way things are going. The economy sucks right now, making it difficult to find jobs. As I mentioned, degrees are being overproduced beyond the number of jobs available for the graduates. (other than a few fields like medicine) People are frustrated when they see people less qualified than themselves get better jobs than they can find themselves. (or at least people they perceive as less qualified) Nepotism seems to be a far safer bet than a degree these days.

Originally posted by DragonsDemesne
Nepotism seems to be a far safer bet than a degree these days.

You are 100% right here.

It's not how much you know, it's who you know.

I have run into this many times myself and it's very frustrating. I wish you luck in your endeavors, don't give up.