The Middle Class Life Style Is Putting You In Debt?

[dawnwes]

I had to go back through all the posts to find the root of your position. You seem disenchanted with the higher education system in the U.S. I only have a single data point which is me from 30 years ago. I graduated from college a much more educated individual, in more ways than book smarts. Maybe that was because I went to the Naval Academy and we focused on a lot more than book smarts.

I would like to find out if their is any data to support your hypothesis or if it is anecdotal. I looked and failed to find anything to counter your argument. All I have to offer is what I have offered already: my megacorp has thousands of open req's for engineers that we cannot fill due to a lack of qualified applicants. And yes, a BS is required to apply. Not sure how one could become a mechanical engineer without going to college.

Standing by for data.

Tom

No, that was true of my liberal arts college as well.

[dawnwes]

1. You can provide your kids with a full ride ONLY if they pick the degrees you agree to.

2. You discourage college if the degree is in something useless

Of course you can't force anything down a person's throat but parenting is key. You have to establish a belief system before they head to college(as in reinforce the notion that x,y,z degrees are useless since youth, use real life examples, encourage child to engage more in math and science).

Too many parents just let the schools do their thing and have their child pick what they "like".

If your child is bad at school(terrible grades, skipping classes, smoking, drinking, partying) then you are SOL and just let it go. Perhaps sending this child to a third world country is a good option.

Wow, I have a very different philosophy on education. My parenting is far different. I want them to have some sort of passion for what they do and be able to make a living that they can live on, but they do NOT have to go for riches and wealth and jobs they can't wait for weekends so they can get away from them.

Now, we do have a set amount of $$ we can contribute, and that dictates where they can go. If they choose something more, they have to cover the difference.

THAT is what we have instilled in them since they were young. They WILL go to college if they are able, and they can have XX amount of money to do that.

Thankfully our local 4 year school is a drivable distance, affordable, and a decently ranked school.

[amastewa93]

Usually, you go to college for one of two reasons:
1. For the money the job will make you - so the loan payback won't likely be that difficult
2. You are really passionate about the topic

Either way, kids have possibilities as far as school goes. There aren't many jobs you can get with just a high school diploma anymore though. You at least need some kind of further certification, associates or bachelor's degree. Some jobs, like counseling, require a master's. College is a hard decision to make for anyone, but they should make the choice to go and what they want to go for. You're always their parents, but you can't choose what they'll do for the rest of their life, especially if it doesn't make them happy.

[corn18]

How do you ensure that your daughters will get an engineering degree? What if they want to get a degree in something else?

The only condition I have placed on them is that I will not pay $60,000 a year for them to explore their options WRT a major. If they are uncertain what they want to study, then I will only pay up to in-state costs. If I got the sense that they truly loved liberal arts and the best college for that costs $60,000 a year, I wouldn't say no.

And I make them get a loan for the max amount they can each year (which is only $5,500 the first year). If they maintain a 2.0, I pay the loan. If they don't, I stop paying for college and they now have a student loan in their name they have to pay off. Then they have to pay their own way if they want to continue.

I can see that the way we have raised our two children has had a significant impact on what they want to study. I'm a total geek. I talk about Higgs bosons and the impact of quantum computing on Moore's Law. I am also a crazy Ohio State fan. My youngest is thinking about attending Ohio State to study chemical engineering. You'd think that would make me proud and I am, but in fact, I am worried she might struggle with finding her true passion. I truly hope she isn't going in this direction to make me happy.

Tom

[dawnwes]

The only condition I have placed on them is that I will not pay $60,000 a year for them to explore their options WRT a major. If they are uncertain what they want to study, then I will only pay up to in-state costs. If I got the sense that they truly loved liberal arts and the best college for that costs $60,000 a year, I wouldn't say no.

And I make them get a loan for the max amount they can each year (which is only $5,500 the first year). If they maintain a 2.0, I pay the loan. If they don't, I stop paying for college and they now have a student loan in their name they have to pay off. Then they have to pay their own way if they want to continue.

I can see that the way we have raised our two children has had a significant impact on what they want to study. I'm a total geek. I talk about Higgs bosons and the impact of quantum computing on Moore's Law. I am also a crazy Ohio State fan. My youngest is thinking about attending Ohio State to study chemical engineering. You'd think that would make me proud and I am, but in fact, I am worried she might struggle with finding her true passion. I truly hope she isn't going in this direction to make me happy.

Tom

I think that is reasonable. I don't have a GPA requirement but I know my middle and younger son don't want low GPAs and are capable, so I am not sure I need to verbalize it. It seems to be internal. My oldest, as I have said, has LDs, so I would never want to push GPA. I just want him to do his best and hope it is enough to keep him going at CC.

My undergraduate alma mater is now $48K per year with tuition, room, and board. That doesn't even include books. I know my kids can't go there without scholarships, loans, or something other than our $$.

[Singuy]

I know my parenting philosophy is definitely different and may even seem indoctrinating/harsh but it's a matter of preparing the child for that middle class life(lol back on topic?)

Tuition nowadays are no joke. Each year(including the cost of living) can be at least 30-40k. If a student isn't focus, then it's very easy to become a 6th year senior (now you have to add in opportunity cost).

I understand the passion bit, but passion doesn't buy you a house/food/debt free life (yes yes, I know youtube stars, basketball stars, whatever your example going to be has made it big).

I believe a lot of 17-23 yr olds have zero clue what they want to do in life. They are mainly exploring majors/parties/their sexuality/identity/other bs at a cost of 30k/year.

I also believe that people mainly hates their job NOT because of the major they picked, but because they have no other choice(NOT picking a good major) and ends up stuck doing something lame and boring with low pay.

I treat college as a tool to help me get a high paying job, not an expensive and long vacation. My parents were pretty strict and had me focused like a straight arrow.

My major was pharmacy, graduated 24yo making 120k/year. If I have a time machine, I would travel back and try to graduate at 22. My wife was less focused but eventually stumbled into becoming an optometrist. Because she was less focused, she lost 2 years of money making opportunity AND racked up more loans. If you add opportunity cost, her lack of focus cost us about 400k! Like I said, school is no joke. The longer you take, the crappier the major, the worst off you become. Good luck starting that middle class life with 100k worth of debt flipping burgers (oh sorry, with a college degree you are a manager at MCD). I know this sounds extremely condescending, but I am tired of seeing kids throwing their lives away. I have numerous young(early to late 20s) pharmacy technicians who graduated with a bunch of nothing ends up making 13 dollars/hour for the rest of their lives.

And yes yes, it's not always about the money right? Yeah I think my job is meh and she is not ecstatic about hers either. We have very little passion for what we do(I rather be a youtube star, even started my own channel. The wife wants to be a pet store owner). But work first, play second. We are almost reaching a net worth of 1million before our first child is born next year at 32yo with 0 debt (if you combine frugality and high income, a lot can be accomplished in a very short amount of time). So on a very terrible work day, I am still not crying about my job. We also were NOT lucky. Any student can replicate what we have done with zero problem.

Just like Dave Ramsey, I blame the parents for not directing their kids in the right direction. It's now a very competitive world with too many people with a college education not able to find a job. Honestly if you are not meant for school, then go FLIP BURGERs (or practice a trade like plumbing). I have a thread about becoming a millionaire on minimum wage, maybe an 18yo can try that.

[LivingAlmostLarge]

I'm more like Tom. Hoping to pay for a 4 year degree in state free with strings of grades for sure. Without a doubt grades are attached because they are capable of at least C. Not a 2.0 because I don't want any failing classes. If you show up at most classes a C is entirely possible.

That being said would I encourage a liberal arts or private school? Absolutely if they had a purpose and it was a better fit and hopefully not more expensive. But there are many assumptions being made for a 5 and 3 year old. Tom and others are closer to the finish line of paying for college. They are in a different boat having seen their kids through high school. You never know what will happen in 10 or 15 years.

I've been on long enough to watch DisneySteve post his journey (9 years I think I've been reading) about college for his kid. Besides the point he'll tell you didn't they spend $30k on a baht mitvah? Probably some here would think them crazy, but they had been saving since birth.

I think what you decide now can easily change. Of course maybe college will be free by the time my kids go. LOL

[Singuy]

That being said would I encourage a liberal arts or private school? Absolutely if they had a purpose and it was a better fit and hopefully not more expensive. But there are many assumptions being made for a 5 and 3 year old. Tom and others are closer to the finish line of paying for college. They are in a different boat having seen their kids through high school. You never know what will happen in 10 or 15 years.

I argue that it is expensive. Any child who wasted time in a university is expensive. The opportunity cost is astronomical (as explained, 2 wasted years cost us 400k).

Just 2 years wasted (assuming making 50k/year after graduation)

= 10k-20k/year tuition x 2 (remember this is beyond the first 4 years, in which your scholarships/grants are running out).
+ 50k/year x2 opportunity cost

=150k

If the child graduate just on time vs 2 years late, it's the difference between having a house vs not having a house.

How many people do you know ends up with some degree, works a little bit for 13 dollars/hr for 3 years, then decide to go back to school for something serious (in which they literally have to start all over again)?
Even if you compare this child to someone who decided to flip burgers at 18, the opportunity cost is ridiculous.

Child went and got a communications degree:
4 years of college at 20k/year (-80k)
3 years of making 27k/year (+81k)
3 years of college again at 20k/year (-60k)
4 years of professional school at 40k/year (-160k)
finally making 120k/year.

Now you are 36, probably married with kids and a

Total cost : negative 219k


Child who went to MCD
18k/year x 14 years
= net positive 252000

Total difference to make it up

Child who went to MCD is 471k ahead of the college student. Not to mention it's 18 years of your life to have a net negative of 219k.

This is to compare to someone working at MCD.

Now if you compare to if the same child made the RIGHT decision the first time.


Child with a Dental degree
college 20k x4 years
Dental school 40k x 4 years
Making 120k/year x 6 years

Total: 480k net positive at 36yo

Difference of 699k compared to child with no direction. This is literally the difference between a struggling professional drowning in student debt while raising children vs a family with their mortgage and student loans all paid off.

I can pin this as another reason it's hard to maintain a middle class lifestyle..wasting valuable time!

[LivingAlmostLarge]

You are probably right about opportunity cost. BUT something you didn't factor is that most Dentist, Drs, etc honestly have already lost the GAME. If the world was only about money, getting ahead, debt, etc then they wasted 4 years of time getting a degree that doesn't guarantee a salary above $100k.

Truth is Mr Money Mustache has always said the most economical thing is to become an engineer get done in 4 years with a master's and go to work. Then as a master's level engineer it's very possibly to start like him around $70k and end up making $120k from years 22-30. Which if you live and save like you were mentioning the engineer would come way out ahead of the Dr, Dentist, etc. Why? The earliest years are the most valuable for saving and they will walk out with no debt because as a engineer you can Co-op and work and earn credits.

The real truth is graduate school in any disciple typically puts you behind the 8 ball and is a waste of time/money/early retirement. No MD is ahead of where we are at the same age, and most aren't even in a real job before Mr Money Mustache retired at 29. Most are still paying down debt by 36 when probably many engineers who focused could be done working.

Plus some engineers consult and are able to work part-time unlike drs. They aren't free to choose to work three months on and 1 year off. They could pick to work 2 days as well.

So apples to apples graduate school puts you behind. But it does put you ahead of people who spent a lot for "degrees" that pay less. But if you were a social worker/teacher/entry level anything and you used community college, then a year or two at public university and lived cheap. Then spent the next 10 years of your life working and living cheap in a low cost of living area? I would have to be with pensions still in place for many of those government jobs they end up retiring earlier than a dr, dentist, etc with a better lifestyle. My mom is classic example of a social worker with a very large retirement.

[Singuy]

You are probably right about opportunity cost. BUT something you didn't factor is that most Dentist, Drs, etc honestly have already lost the GAME. If the world was only about money, getting ahead, debt, etc then they wasted 4 years of time getting a degree that doesn't guarantee a salary above $100k.

Truth is Mr Money Mustache has always said the most economical thing is to become an engineer get done in 4 years with a master's and go to work. Then as a master's level engineer it's very possibly to start like him around $70k and end up making $120k from years 22-30. Which if you live and save like you were mentioning the engineer would come way out ahead of the Dr, Dentist, etc. Why? The earliest years are the most valuable for saving and they will walk out with no debt because as a engineer you can Co-op and work and earn credits.

The real truth is graduate school in any disciple typically puts you behind the 8 ball and is a waste of time/money/early retirement. No MD is ahead of where we are at the same age, and most aren't even in a real job before Mr Money Mustache retired at 29. Most are still paying down debt by 36 when probably many engineers who focused could be done working.

Plus some engineers consult and are able to work part-time unlike drs. They aren't free to choose to work three months on and 1 year off. They could pick to work 2 days as well.

So apples to apples graduate school puts you behind. But it does put you ahead of people who spent a lot for "degrees" that pay less. But if you were a social worker/teacher/entry level anything and you used community college, then a year or two at public university and lived cheap. Then spent the next 10 years of your life working and living cheap in a low cost of living area? I would have to be with pensions still in place for many of those government jobs they end up retiring earlier than a dr, dentist, etc with a better lifestyle. My mom is classic example of a social worker with a very large retirement.

Wait how do you get a masters in 4 years? Thought it would take at least 5 years(assuming you have no AP/IB classes). Also you lost me with how engineers start out at 70k, and ends up making 120k from age 22-30? If it's 22-30 years worked, then Dentist has plenty of time to make up the difference. Not to mention you are assuming the engineer's pay will increase over time and the dentist's pay will stay the same overtime(decrease against inflation).

Also I don't believe professional schools is a waste of time and money vs engineering. It is more or less a different avenue to live your life. Of course we can sit here and calculate the major that gives you the best bang for the buck but the difference is not going to be -290k vs +400k.


Some professional schools are a waste for the price(like pharmacy), but there are many MDs/Dentists/ODs who break 200-300k/year and the sky is the limit for them (if they have any business sense). My example of a Dentist making 120k is highly unlikely, but I also wanted to be extremely conservative with my numbers before the naysayers flame my numbers.

[amastewa93]

When it comes to school, I don't think that debt should be the first thing on your mind. There are always ways to pay for school, especially if they did well in high school. I went to a private university that cost me about $60,000 a year, but I only came out with $24,000 in loans (a brand new car). There is assistance out there is accruing debt is really a concern.
Fast Web (it's a website) has scholarships, grants and even help on finding the right university. If you're really concerned about the money aspect of college (for kids or yourself), put in the work to make it a little cheaper for yourself. There are a ton of scholarships that go unused each year.

[Weird Tolkienish Figure]

I can pin this as another reason it's hard to maintain a middle class lifestyle..wasting valuable time!

Hard compared to what?

[Singuy]

Hard compared to what?

Hard compared to someone who didn't waste time in college due to good major selecting. The calculation I did clearly puts the time waster at a great disadvantage.

[Weird Tolkienish Figure]

Hard compared to someone who didn't waste time in college due to good major selecting. The calculation I did clearly puts the time waster at a great disadvantage.

I live a middle class life, we certainly do all have our struggles. I have my share.

Is it hard compared to being filthy rich? Probably, on the other hand, I know a lot of rich people who are messed up. I wouldn't want their life. I know a rich, divorced couple where the wife had a drug addiction and her dad (source of the money) ran their kid's life. The entire family was messed up, kids are druggies, daughter totaled 3 $40K BMW cars. Dad made the son in law sign a prenup.

But they took a nice Caribbean vacation every year, had a brand new lexus, Macbook for Xmas etc. every year.

Never once found myself envying them.

Is it harder being middle class here than in other countries? Debatable I guess if you include other industrialized countries, although Americans always seem to have the biggest houses and most toys and gadgets. Would 500 more square feet of house make up the difference? Maybe a few more gadgets?

Is it hard compared to living in a third world country? Hard compared to being a cancer patient or a victim of abuse? Hard compared to fighting in the military? Is it hard compared to being born with a disability.?

I saw a movie about girls living as conjoined twins. Is middle class life hard compared to them?

I just think in all this whining and self pity (woe is us, the middle class needs to go to work to afford our suburban homes), some perspective is needed.

[amastewa93]

Perspective is a good thing to have and I think everything is based on perspective. "Hard" is different for everyone.