Is College Such a Bad ROI?

In just a few weeks, Syd will be cruising the halls of high school as she strategically executes a plan for the next four years of her life.  It doesn’t seem so long ago that she was in the 6th grade, performing miserably and I was fretting about getting her on the right track.  Back then she was writing below her grade level.  In a few weeks, she will taking honors English, Algebra and Physics.

And the end goal?  College, of course.

But according to James Altucher, a financial columnist for Daily Finance, I’m better off taking the $200,000 in college money that I’d spend on her and invest it in bonds at 3 percent over the next 49 years.  Assuming I would hand off $200,000 to Syd to sock away at age 18, she’d amass $851,000 (or $851,243.89 – I learned that in college) by the time she reached 67 years of age.  And I would have to leave it to her because I’d be 94-years-old and most likely, well….dead.

The alternatives?  Altucher has some suggestions.  He writes that parents can give their kids $20,000 to start one to five businesses.  I’m all for that, obviously.  Syd, who is creating her fourth business now with her new business partner, Jeremiah, will have six years of business experience before leaving high school.  The problem is the majority of kids graduating from high school have no business experience, knowledge or training.  Of current CEOs/entrepreneurs some 95 percent have bachelor degrees, so there has to be some connection between a college education and the business community.  Oh, and let’s not forget our fabulous economic state and the fact that only 17 out of 100 high school students actually have jobs.

Now I know I’m no whiz, but if my teen wasn’t able to get a job and acquire those skill sets, and didn’t have real-world experience running a business prior to graduating high school, I’d rethink the $20,000 investment.  Half of all new businesses fail and the average entrepreneur starts 2.3 businesses before they get one that they can stick with.  The chance of you losing that $20,000 is rather high; but, if you invest it in bonds at 3 percent over the next 49 years, you’ll have $85,124.39 to spend on Depends.

Altucher also recommends in lieu of college you can have your kid travel the world, volunteer, get a job or just grab some books and read.  These will give your kid time to age so that when they decide to pursue a degree as an adult, they can fork over their own money to pay for it.  And, according to Altucher the costs you will pay to have your kid travel the globe while you toil at work each day would be far less than the cost of a higher education.

If it all boiled down to simple ROI, there would be a lot of things we wouldn’t do.  I know I wouldn’t be driving my car or go to the movies or take a vacation or buy half the things I do.  But, that’s not the case – for any of us.

Altucher’s article, Seven Reasons Not to Send Your Kid to College.

Success to you.

Melissa

Biz in a Boxx

Tagged as: business for kids, entrepreneurs, Entreprenuership Small Business Global Business Education, kid business, kids business, kids business ideas, young entrepreneur, young entrepreneurs, youth entrepreneurs