Is it worth sending your kids to college? The case for saving money and “living a little.”
James Altucher doesn’t think you should send your kids to college. A diploma is a costly piece of paper, and over at DailyFinance.com, he argues the cash would be better spent elsewhere.
Here are his big reasons why it’s a waste of money:
- More kids are squeezing four years into five. This means an extra year of tuition.
- Tuition is nine times higher now than it was in 1976. Compare that to health care (seven times higher) and inflation (three times higher), and there’s an obvious scam going on here. Educators have recognized the perceived value of a diploma and are running with it.
- A non-graduate makes about $800,000 less than a graduate does in his life time, but that’s okay because…
- You make that much and then some by putting the $200,000 you would have spent on tuition into any bonds that return 3 percent.
- Intelligent, high-achieving kids would probably make more money by getting started earlier anyway.
- Debt. It’s increased $1,000 a year for the last decade to hit $23,000. And total student loans are up to $75 billion across the nation.
His alternatives? Start a business. Travel. Work. Volunteer. Teach yourself with books. Altucher broke the news to his own daughters earlier this week that they would definitely not be going to college. ”I’ll give my kids $20,000; go off and start three or four different businesses, and heck, fail at all of them,” he says. “That’s a life experience; that’s a learning experience… Everybody should just relax. Save money; make money. That should be the focus.”
Altucher’s assumption is that 18- to 22-year-olds don’t actually learn anything in college—they party instead. If that’s the case, what’s the guarantee that they’ll work hard and start their own business?
To Altucher, it’s all about business and money. But, as we recently learned, money doesn’t buy happiness.