In this video we critically analyze the financial returns to a college education. Most high school graduates are encouraged to pursue a college degree as this will open up greater career opportunities allowing them to make more money. However, 40% of recent college graduates end up working in a job that does not require a college education. With tuition costs increasing every year, high school students should think very carefully before making a decision to enroll in a college education.
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What's up guys and welcome back to wall street millennial on this channel, we cover all things stocks and investing in today's video we're going to be looking at a somewhat controversial topic facing many young americans today in most parts of today's society, when a teenager graduates from High school, they have a choice to make. They can do one of a number of different things with their life. They could start working immediately, becoming productive for society and financially independent. They can choose to go to vocational school building, up useful skills and knowledge so that they can fill important and in-demand jobs in their economy, or they can go to college where they embark on a years-long journey to acquire a deep understanding of an academic topic of Interest to them, the third option going to college also holds the promise of potentially rewarding years of hard work, with higher wages or better job security after the degree is earned.
However, in recent years and decades, the notion that a college degree will automatically lead to better wages or more prestigious job prospects has been challenged. According to the new york fed about 40 percent of new college graduates, work in a job that typically does not require a college degree that refers to jobs where the majority of people working them say that having a college degree is not necessary to work that job. That could include anything from waiting tables working as a lifeguard, working construction, etc. Just imagine spending tens of thousands of dollars in four years of your youth pursuing a degree to end up with a 40 chance of falling into the category where your degree doesn't make any difference in what job you end up in even worse, if you go to A private school tuition and fees could add up to 300 dollars over the course of four years.
So is it all worth it to answer that question? We'll mainly consider job prospects over the decades following a young adult's college years, we'll consider both an average scenario and an optimistic scenario for both going to harvard university and not going to college at all. Finally, we'll consider factors outside of jobs and wages and conclude with a list of pros and cons for college versus no college in this video we'll just consider a harvard college education, because this video is for entertainment purposes only and it's not a formal study. So without further ado, let's consider our hypothetical harvard graduate here's a relatively optimistic scenario for a harvard new grad. Let's say that this student was a hard worker and throughout high school, got good grades, especially in math and science subjects in their first year at harvard they took several of the main introductory courses in various subjects, including cs50, the introductory computer science class economics 10.
The introductory economics class, one of the many first-year math classes and an elective after completing cs50, they decide to major in computer science and go on to take classes such as cs121 cs, 124 and cs181. At the same time, they join a couple of different student groups. Eventually becoming heavily involved with one or two of them, by the end of their four years at harvard they've built up an impressive resume with a high gpa in demand software engineering skills and a track record of being able to handle many commitments at any. Given time. As a result, they are able to land a prestigious job at one of the major tech companies in silicon valley, their first year, compensation comes out to 120 000 a year and that pay increases by about twenty thousand dollars a year until it reaches five hundred thousand Dollars a year at age, forty at this point: let's suppose they decide to focus less on their career and more towards their personal and family life and their earnings do not increase thereafter. Still, this puts them comfortably within the top 10 percent of earners in the us, but not quite in the top 1 percent. Financially, they are said to have a very good life. Now, let's consider a more typical outcome for a harvard new grad.
This student was also a hard worker and excelled in all subjects in high school in their first year at harvard. They also took the typical first semester, intro courses. They decided to study one of harvard's, most popular majors economics throughout their four years. They work hard and earn decent grades in the subject and also engage in a number of student activities by the end of their college years.
They have a gpa and resume that puts them in the middle of the pack, among harvard economics majors. They apply for the typical job openings that harvard economics majors would apply for including entry-level positions as investment bankers, equity research, analysts at the big wall street banks, perhaps some consulting jobs and maybe a small number of opportunities at hedge funds and private equity shops. After enduring a brutal recruiting season, they finally land a job at a mid-tier sell-side research company. As an analyst, the pay is about 80 000 a year in new york city.
The prospect of job advancement in the competitive industry is bleak, but five years into the job. They break above the six figure mark by the time they are aged 50. They are making about 130 000 a year. Most of that goes to paying new york taxes and rent.
As we can see, our two hypothetical harvard graduates took on very different paths. Of course, there are countless other potential paths that harvard students could take, but these are two of the common ones. Now, let's consider a typical high school graduate, who decides not to go to college this high school graduate did well in high school, but for whatever reason they decide not to go to college. Perhaps they don't have the money to pay for tuition or they need to support their family as soon as possible.
In any case, they immediately start working at a local business as a sales associate, the pay is low and there is little career advancement at the business that they work after 10 years. They take an opportunity to advance their career and start making 50 000 a year. Very little of it is tax and their living expenses are low. They are able to support a family and have a good life. Finally, we'll consider an optimistic scenario for a high school grad who doesn't go to college. This person doesn't have the money to go to college but wants to maximize their earning potential anyways. After doing some research, they decide to attend a vocational school for two years at vocational school. They learn about plumbing codes in the u.s, how to cut and solder, copper pipe, how commercial and residential plumbing systems work and more.
They eventually earn all the necessary licenses to start working as a plumber for local plumbing contractors, starting out they earn on commission making anywhere from 20 to 40 an hour on the job. Their total annual pay in the first five years is around forty thousand dollars. After five or ten years, they're an expert in their field and start taking on their own contractor jobs, rather than splitting the pay with their company by taking all the profit of each job that they do, they boost their earnings above fifty thousand dollars a year after Another five or ten years they have so much experience in plumbing that they feel comfortable, hiring one or two younger plumbers as employees. They also decide to move to another city where plumbers are in high demand and pay per job is significantly higher.
They end up charging up to 200 per hour of contracting work. Business is good and they hire more employees to take on more jobs by the time they reach their mid-fifties. They have ten employees and do two million dollars worth of contracting jobs a year after paying the employees, their wages, they're left with five hundred thousand dollars of profit per year. So there we have it our four hypothetical trajectories for a young adult the optimistic harvard software engineering scenario, the more typical economics, major scenario, the high school degree, retail worker and the high school degree plumber and entrepreneur.
All four of them worked hard to build up their careers, but the harvard graduates had to pay more than three hundred thousand dollars for their degrees, in addition to missing out on four years of earnings in a non-college job. In the end, the harvard economics major makes just enough money to live in a humble apartment in new york city, paying most of their income to taxes, student loans and elevated, rent and other living expenses. In contrast, the high school graduate retail worker makes a much lower salary, but also pays much less in taxes, rent and living expenses. In the end, their standards of living are similar.
The software engineer from harvard and the plumber, who started their own small business both make about the same amount of money, especially when considering student loan payments for the harvard graduate in many ways going to harvard ended up putting our hypothetical young adults in the same place. Financially, as not going to college at all, our analysis so far doesn't consider many other important issues, including the fact that many college graduates, including those from other colleges like harvard won't even be able to land a better job than if they hadn't gone to college. At all, certain majors have much more competitive job markets than others, with some subjects having such little supply of jobs and so much demand from college grads that wages aren't much more than minimum wage along with ever increasing tuitions. Whether or not it is worth it to go to college is something that high school students need to think about. Now, more than ever, there are infinitely many different reasons why it might make sense to do something after high school other than go to college, and for those who do go to college, it will be increasingly important not to judge others based on whether or not they Decide to pursue higher education. What to do after high school is one of the most impactful decisions of your life, and the consequences of that decision should be weighed carefully. Alright guys that wraps it up for this video, if you like the content, make sure to like subscribe and share. This video also leave a comment saying what you think about the state of college education in today's society and make sure to check out our second channel.
The economic outlook in the meantime, thank you so much for watching and we'll see you in the next video wall street millennial, signing out.
People need to stop thinking about their life & career as a straight line – there are pros & cons to every choice, but don't assume you can't change direction at any time in your life. And similarly, don't fall into the trap of other people's prejudices – plenty of plumbers make extremely good money within a few years of starting because they are in a critical market & do excellent work. (a quality tradesperson is worth their weight in gold, believe me!)
Most highly successful businesspeople earning six-figures have completely unrelated degrees to their current job or no degree at all – there are a lot more universities & degrees out there than just Harvard, Stanford, etc. Try overseas – plenty of more affordable degrees & some life experience as an added bonus! If college is too expensive then look for another way to get there – don't self-eliminate based on what you hear in the media or online.
The ultimate benefit of a college/university degree is the core skills it teaches you – critical thinking, analysis, articulating & arguing a point, research & reporting, etc. You get this with an arts degree or a medical degree – the specialist knowledge is on top of this. The number of graduates who walk into a job straight from college is as low now as it was in the 80s & 90s – the important thing is what you do with the skills you learn, no different to a plumber or a manager at Starbucks. And the value you get from a degree will most likely be in a completely different way to just 'getting a job' – look at what a bunch of 'dropouts' managed to do in Silicon Valley with the skills they got from a few years of college.
A lot of people get shamed into going to college. The ability to think wisely is either an innate skill or something garnered through experience. As said below, life has no guarantees.
major university is for STEM fields, science technology engineering and math. you'd also go for law and medicine. outside of those fields you don't need major university like Harvard's. You can stay local at your state college. degrees outside those fields are worthless and you're an idiot if you take them. you also have to first figure out if you're an academic type or a skill or trade type. all in all as a former homeless guy, get some sort of education or job training after high school it is worth it. a GED gets you nothing.
People that work in finance have a bonus structure that comparable to their base salary. The plumber going from employee to entrepreneur is not a good comparison since that same concept could be applied to any one in any of the other occupations. Computer programmer making 80K in 5 yrs start your own company just invent something every one will use, instant millionaire. Analyst in an bank making 80K in 5 yrs start your own consultancy and start charging 300 an hr. Being your own boss is essentially more profitable than being an employee, but guess what most businesses fail in the first few years of opening.
Person starting own business will always have the potential to make more money than working for someone else. Plumber example (who did study the trade for 2 years, so he is not a simple high school graduate) used here started his own business, and WHAT prevented software or economy graduates to start their own business, like IT firm or hedge fund?? Graduates would know how to run their business better than non-graduates.
Also, there is a huge difference of working with your hands and working with your brain, going through sewage leak, with actual shit coming out of the pipe at 3 am because its an emergency, VS sitting in the office in a clean environment, not worrying about the weather unless you are thinking about investing into corn futures. Some things money can not buy.
I can give a more extreme, drastic example, a girl can drop out even from high school and become independent escort worker, making 300 cash an hour, or she can go to university and become an accountant and earn 43 dollars before tax (numbers used are from Toronto). Thats like 10 times less, ignoring university costs. Is it worth going to university now according to this channel?
Would you like your sister to chose that path (assuming you do not hate your sister)? Job is a job, not judging any one, i try my best to provide work for both:) but for a lot of people its not something they have to even think about.
This video is shit and I usually like most of the stuff here.
Comparing an average teen taking the path to becoming a self-made millionaire plumber to someone getting into a high demand tech field isn't anywhere near an apples to apples comparison.
First.
The number of plumbers in the US is ~.5 million.
The number of tech workers is ~3-4 million.
Based on that number alone you can't expect people to drop out of school and become successful plumbers since that would drive plumbing wages down due to a diluted labor market.
Second.
You have to compare the people who actually make it owning their plumbing business "successfully". Yes, someone may be a plumber but they might not be business savvy enough call the shots and make it. If you take that percentage of plumbers against the average tech worker then you'll have a much different comparison.
It's almost as ridiculous as comparing a poor student who didn't study shit and go straight to the NBA out of high school vs a proven profession.
Your assessment of college/university is for a regular college. Ivy universities (like Harvard) are in a another league. In your video, you can just delete the word "Harvard" and it would be correct. It could be any college and get the same numbers for your scenarios. Adding the Harvard name to your scenario actually makes your video wrong, and under estimates all of the numbers. People have to understand that you can be financially successful with or without a college degree. However, you have a better chance WITH one. College degrees will open doors that aren't even an option for those without one. More people are financially successful with a college degree. That's just a fact. Of course, becoming successful requires you to work your ass off, with or without a degree. There no replacing sweat and tears, no matter what job you have.
I went to college dropped out after a year, it depends on what you want to do when your older if you wish to become a lawyer or teacher then yes go to college for instance.
I dropped from university in fourth year, feeling it was unnecessary to care about something so meaningless. I was eventually able to get good paying job, yes, but… I am socially usually in group of intelligent people, everyone have some degree in something, then there is me and it is humiliating.
Proud to say I went to Columbia and graduated summa cum laude with a degree in Classical Greek and Philosophy. With that degree I could have gotten into ANY law or business school I had applied to. Ultimately I went on to earn my PhD in Classics at Berkeley and was lucky enough to get a job as a professor thereafter. Never imagined that college was supposed to be a "glorified trade school" and through my study of the ancient Greeks and Romans and the European philosophical tradition acquainted my mind with deeply nourishing ideas and values. Besides that I was able to live most of my 20s in New York City having marvelous adventures and cultural experiences. It would be impossible for me to PRICE the value of my degree in terms of earning potential or any other such metric. I consider what flowed from that experience absolutely PRICELESS!
This video is so misleading. Here are a couple points why this info is inaccurate on what he presented:
1. If you go study at a target school (Harvard, Columbia, Standford, etc.) and you land a job in FAANG, Finance, STEM, etc. at top companies you will be making a lot of money more than 150k per year.
2. You can still go to a regular college and be able to land the same job as point 1, however you will need to work extra hard to land the interviews and then land the job itself.
3. College is only worth it if you are starting out and already are planning ahead of what career path you wanna go to, refer to point 1 of the careers I mean. This is bc these careers are guaranteed to pay well and honestly your major doesn't matter when applying to these jobs.
Conclusion: College is only worth it if you plan on a career that is secured like I stated before, other than that you're wasting time and energy going for anything besides that. The only other options I can think of would be Law, Nursing, etc. but those tend be to a lot of years compared to some careers that only take 4 years and you make bank right away.
Yes College is worth it. Just make sure its a degree that makes money. Not business management degrees unless you get a masters but even then you need to carry a minor in finance or accounting…..dumbasses.
University is only worth it, if you go to a top uni for core subjects ie maths/engineering/finance/economics/law/sciences – then get into an investment bank/top law firm/engineering firm and make big money early. Although being highly educated doesn’t necessarily make you intelligent, people will think you’re smart for the rest of your life and will thus give you opportunities + the networks you get.
I'm going for an engineering degree right now, and I'm hating my life. I hate the school, I hate the professors, and I hate all the bs that I have to put up with. Waste of my money and time, but I'm almost done …
I left school with average grades. Been working for 8 years in retail supporting myself but currently study Law (away to enter 4th year). If nothing else I feel like I haven't stagnated, sometimes the illusion of progress is enough. Wish me luck lads.
Top Harvard is not fair, if you give a company to a plumber give a startup to Programmer, he would be $1M+ easily.
Also running a company and being an employee are completely different things, most people won't be able to transition properly.
depends.. main burden of getting some value out of educational institution is on student, having a clear and realistic plan for endgame helps with that.
imho too many people go to colleges and universities, average consumer just need to be somewhat literate to read adds for great deals 😀
TLDR: There is an inherent value in being educated, without dollar bills that college really helps with. Stop treating it like a money-making scheme…
The last scenario was a little too crazy IMO, topgrad at Harvard landing IB/Consulting jobs is much more likely than an average plumber building a 2M business. If a plumber wants to build a large business like that he will need to know accounting, marketing, management, law etc… which are taught… you guessed it… at college… Nevermind the plumber to facing competition from existing firms with economics of scale advantages.
Also… Why do you Americans treat college as purely a business move to make money?? It's so fkn cringe…
I have a degree, and am working in the related industry… but I place a high value on understanding things like macroeconomics and politics when deciding how to vote. College also taught me how to do accounting and calculate mortgages, and I use that to manage my expenses… I've also learnt enough to do some coding and how to make presentations… these things are on top of ""soft skills" that I won't mention.
Wow…this video is so bad, it actually made me unsubscribe. This is horrible advice.
First of all, you need to include statistics. You just listed four possibilities. What you need to consider is, as an example, median net worth at age 50 for people who did and didn't go to college. You will be shocked by the answer.
And really–no discussion of job security, of being able to weather an economic downturn? Do you not remember the early days of Covid, when people without college educations were losing their service jobs, or being forced to work at a job that could get them infected, just to pay the bills? And people in Silicon Valley tech jobs were secure, working safe from home?
And think a little further into the future–what about automation? You really want to be without a college education as AI and robotics continue to make rapid advances?
This video was very poorly thought out. It sounded like someone who got rejected from Harvard, and just wanted to make themselves feel better.
If you want to self teach, search video "retrovision orbiter tutorial". See description. There is a link to download a sim made by a professor from London. And links to some HTML tutorials on space maneuvers. You will learn about orbital mechanics without math and with lots of fun.
Also if you have school kids and you want to keep them sharp in math buy "battletech a game of armored combat" tabletop game. It is like some chess with math. Use the videos fron "battletech fan" channel to teach your kid while reading the rulebook. Math becomes a tool to have fun.
a teenage son aspired to become a plumber after watching some adult sites….after watching this video i think his career choice ia not bad all ;))
I’m torn between the two. Computer science or becoming a welding and starting early. I’m pretty good with money just one year working part time in Homedepot I’ve managed to save around 12k while still in highschool not including investments. I want to start early just like a trade. Computer science though I can do it forever. Any advice on this?
The overwhelming majority of people in the top 1 percent did go to an elite school. It's not just about the quality of education but the network you can get while in these schools. With one phonecall you can get a massive seed fund for your startup, with one phonecall you can get a position at a Fortune 500 or a job overseas.
Yes they're expensive but if you play your cards right it can be really worth it.
Also, the numbers in the video are way off.
I'm actually pretty surprised that the scenarios stated in the video are pretty off from reality actually.
Scenario 1: The video says 120k from Harvard as a comp sci major. In Silicon Valley, interns get paid close to 120k a year with full-time getting paid way more even as a first-year out of college. Depending on which company, upwards of 300k is possible with the right firm, and capping at 500k is not usually what happens as a top programmer progresses in age or skills. Most utilize their Silicon Valley "network" effect and make way more in their latter years in life.
Scenario 2: 80k and 120k cap at 50 years old inside hedge funds? Unless you really suck at what you do, this will almost NEVER happen.
Scenario 4: Opening companies, hiring 10 employees sound glamourous, but consider this fact:
"approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more."
75% of all new business won't last up to 15 years. This college/high school dropout better be super motivated or has good people around him/her to help them succeed in their business.
Final words: One of the most important things Harvard offers is its name itself and the network surrounding it, this name shines even internationally if you move overseas. Very few college/high school dropouts have succeeded in the US. Let's not forget the hundreds out thousands of people living in the ghetto never got anywhere in life, they are the main source of the opioid crisis, and the chances are even slimmer if they move overseas.
Rather then come up with 4 hypothetical situations (I have no idea why you went this route), you should just look up the statistics. Here's 5 seconds worth of google searching, broken down for your pleasure. These are averages, of course.
In 2014,
workers without high-school diplomas earned $24,000 annually;
workers with high-school diplomas earned $30,500;
workers who completed some college earned $31,900 and
workers with a bachelor's degree earned $49,900.
Workers with a master's degree or higher earned $59,200.