Higher Education = More Work and Crappy Return.

One thing the article I posted last week does not cover is this: realizing that a large portion of this is not just big screen tv’s or jewellery and cars that people can’t really afford, but that it is educational debt. It’s interesting how we’ve created a society where most often, the ‘smartest’ people are saddled with the biggest debt.  

          Think about it.

You spend 4-10 years getting a post secondary education they are up to their eye-balls in debt = Age 22-28 into the workforce

You spend the first 10 years of their career trying to pay for it. It makes zero sense = Age 32-38 finally out of debt

You’ve lost the first 15-20 years of all your disposable income when others have been plugging along working, for what?

You earn maybe another $50K a year to just lose half to taxes?

Then lucky you, you spend the next 20 years in a panic trying to make up for lost time climbing the ladder while everyone else just plugged along working.

So you make another $1,000,000 taxable dollars that your less educated peer made with a lesser salary.

Woohoo.  

It makes NO sense to me. Listen, I’m not saying go work at the Quickie Mart Einstein, and I am absolutely not saying don’t get a post-secondary education, what I’m saying is do it without taking on debt. Do whatever it takes to pay for your education as you go, work summers, evenings and weekends if that’s what it takes. Then bingo, the gift of making $50K more a year has it’s benefits, and those benefits can be seen right away.

Here’s the alternative.

Graduate from high school.

Work your tail off going to trade school, college or University for however long you’d like.

Graduate at 22 DEBT FREE.

Spend the next 30 years in a lower tax bracket, investing the money that you would have used to pay interest and minimum payments on your school loan, if you had one.

Rough numbers with average yields, by my calculations translate to over $15,000,000 compared to the $1,000,000 above.

Hmmmmmm. Which one is better? What can I say, I’m one of those ‘educated people’, but I was lucky enough to not ever take a student loan, so my money has always been mine, and continues to be that way. Consider this if you are going to be a student, are one with debt, or you are a parent. Higher Education = More Work and Crappy Return.

Cheers,

          Julie

Debt in Canada

The Bank of Canada is concerned about Canadian debt.  Many Canadians are taking out debts other than mortgages, using their homes as collateral.  

The fact that Canadians are in debt is fantastic. Let’s face it, those who are going to make the most money will do it by using other people’s money, and taking on debt like mortgages outside of their own home; smart debt.

But the fact that the average Canadian has over $25,000 in debt outside of mortgages makes me want to vomit. Knowing as well that it will take YEARS for those people to climb out of that level of debt, it amazes me that people take on debt so willingly to impress their friends, neighbours, family and sometimes to make themselves just feel better or worthy. It’s a sad state of affairs we’ve got ourselves in. 

This article makes an important point, that with oober low interest rates right now people, and with people borderline being able to carry the payments, things don’t look good for the future. Shouldn’t Canadian’s minds be still very fresh with the awareness that we were lucky enough to not get nailed with the sub-prime bottom out in the US? And yet, we continue to spend money without being entitled to it. Such and interesting phenomena.

Cheers,

          Julie