Best Advice For a Pre-College Young Person

Times have changed significantly and the unfortunate truth for many young people today is that the world their parents grew up in no longer exists.  That’s unfortunate because their parents are almost as clueless on how to attack “life” as they are.  Things like a college degree used to open many doors for you. Now it’s more likely to close doors for you by loading you with a mountain of debt and few skills that employers want.

While you are in Middle School and High School, almost every adult around you tells you that you must go to college. Quite often what most people think you need to do with your life, is wrong. Few understand this, but now you can too.

This is not a be all, end all pierce of advice, but it will give you an edge over 99% of anyone even  close to being college aged. If you are a parent reading this and have a child or children nearing college, read this over and if you agree, pass it on.

The following points are in no particular order, but are all important. I’m not telling you what to do here, just offering you a different view on these important topics. Take it as it is.

You Should Probably Skip College: If you really have no idea what you want to do in life, you should probably avoid college.

The vast majority of college degrees are massively over priced and often leave people with $30,000-$100,000 of debt on average. This amount of debt can completely cripple your ability to get started early in life.  Gone are the days where you can get a degree and use it to get paid more than you would have without it. Outside professions such a medicine, programming, engineering, and law, a degree is likely to be completely useless for you. You need to understand that there are many, many other professions that you can pursue in life and at the least, you should do some research and consider them before you hand over four years or more of your life and tens of thousands of dollars in tuition. Unless you want to go into a “Professional Field” you are probably wasting your time in college…(continued at the bottom of this article)

Easily Avoid Wasting Money : Don’t get more than two credit cards and never run a higher balance than $500 total between them both. Do not finance any car you can’t afford to put 50% down on. If you truly just can’t go without a nice car, LEASE and do not buy. Your tastes, goals, and desires will see the most significant changes until you hit your late 20s. That same car you want now, you won’t want in 3 years. And you won’t want the huge payment. Lease, stay under your miles, and give it back after you learn how much a car really costs you while you own it. Buy clothes as least often as possible and buy the cheapest you can put up with. H&M is a great choice. Do not buy any designer clothes what so ever, you can’t afford them. Clothes, cars, credit, avoid these three things and you’ll be better off than 90% of people your age…(continued at the bottom of this article)

Re-Examine Your Understanding of Love & Relationships: Understand that your perception of what love is has been largely shaped by pop culture and the media. You need to start thinking for yourself and questioning things that most people believe. The common narrative is that you should “experiment” while you are young and be “free.” Meaning, date as many people as you want without a care. Young women are encouraged to not be “slut” shamed and young men are often given social accolade if they date many women.

If you’re a young person, you can’t tell me you don’t feel that most people your age think and act this way. Realize, that they are doing this on an almost unconscious level. They are just following the herd.

The truth is that it is extremely difficult to find someone who is “good.” Or in other words, someone you’d consider marrying. You have to realize that time is precious and your youth is extremely limited.

I’m not saying don’t date around, if that’s what you want. I’m just offering a different take here, which is to simply value yourself and your time more. If you know your worth and where you are going in life, you’ll probably want someone great to come along with you that also knows their worth.

Just realize that someone who is trying to build a future for themselves and is working their ass off to do it, likely isn’t going out 3-4 nights a week partying and hooking up with people without care. You will attract what you are most of the time, so if you want someone who can be a lifelong partner, you will also need to be one yourself.

Approach Earning a Living More Intelligently: Recall that I didn’t say don’t go to college. I said don’t go unless you know what you want to do, which is the whole point. You need to figure out what you want to do.

Instead of burning money and time away in college while you try to “figure it out”, within 1-2 years you can take the time you need to explore the world and see what you like. Instead of sitting in a classroom learning about ultimately useless information, you can sit down and think about what you’re good at and what you enjoy doing. Try to find some kind of common ground between these two things.

Then take real action and get yourself up in the morning and go seek out new things based off your skills. You should try to get a job somewhere that you feel you might like. It’s not going to be a great job, and that’s okay. You need to just get your feet wet and see what the real world is like. Even a “bad” job, like perhaps working at Starbucks, will teach you things like customer service, being on time for work, dealing with co workers, dealing with a boss, dealing with things you have to do and don’t want to, and learning how a business and organization runs.

People you went to high school with may even look down on you. But guess what? While they sit in class, running up thousands upon thousands in debt, and gaining few employable skills, you’re literally get paid, and gaining skills.

And the thing is, if you work hard, you WILL move up. You have no idea how many people don’t mind staying right where they are at their jobs and put in minimal effort. Hard workers who go all out are rare and management will nearly always take notice of them. I personally started working with special needs teens and adults part time when I was 17. I think I got paid like $9.50 an hour or something like that. By the time I was 19, two years later, I was able to land another part time side job working with those same teens and adults where I made $20 an hour. I was then able to use that part time job as a strong reference to land a full time job where I made about $16 an hour after college. I ended up leaving that job to start my own businesses, which I still do to this day, but had I kept going there was a fairly straight forward path to move my way up to 50-60,000 a year. Above that would take some hard work, but it was achievable.

And this was all in a field that I knew I didn’t want to pursue for the rest of my life and wasn’t passionate about.

Ultimately you just want to make as much money as you can, doing something you don’t mind or enjoy, that allows you to live the life you’ll be overall happy with. Odds are, this is more achievable without a degree, especially in our current economy.

Understand the Current State of the United States: You need to understand the world around you so you can make sense of it and plan accordingly. The American Middle Class has been gutted and will continue to shrink year after year. Most people who have been lucky not to lose their jobs, haven’t seen a wage increase in years. And the trend isn’t going to reverse. It’s going to take at least a decade before we see any situation that could see a resurgence of the Middle Class.

Yet, a new survey shows that most Americans (63%) may not have enough money in savings to cover an unexpected $500 car repair or a $1,000 hospital emergency room visit. According to the poll from Bankrate.com, only 37% said they would be able to take the money directly from savings; the rest suggested they would cut expenses, use their credit cards or borrow money.

Source = http://fortune.com/2016/01/06/savings-unexpected-expenses/

The reason people have no money is because they aren’t getting paid. It’s as simple as that. If 63% of Americans have almost no money in savings, and most of the people you know are going to college, then what does that tell you?

I can’t do all the heavy lifting for you, I can only provide you with a factual foundation for you to use in your own thinking and application. Do the research yourself, the U.S. economy is in bad shape. Few understand this. Understand it and use it as a lens to examine choices you make in your own life.

Learn to Take Care of Yourself: The Government cannot and will not save you. The best it can do is raise minimum wage, which won’t help you but I’ll cover that another time. Unless you have rich parents, they can’t help you either. They are probably just trying to get by themselves.

No one is going help you besides you. No one is going to provide a living for you so you can live on your own. No one is going to give you a home and money to raise a family. You need to go and get these things for yourself.

Treat your time as important and figure something out as soon as you can. As soon as you graduate high school or beforehand, you should make it a top goal to figure out how to provide a living for yourself. “I’m going to get a degree and get a job” simply isn’t good enough.

You Probably Should Skip College (cont): Unless you want to be a professional of some kind such as a Doctor, Lawyer, or Engineer, going to college will likely be a bad choice for you. You will spend four years of your life gaining few skills that employers want and you will take on a lot of debt.

College on average costs you $25,000-$50,000 in dollars. But you have to remember that on top of the dollar cost, you’re also spending your time. You have to earn a living for yourself if you ever want to live on your own and start a family. Every single day you aren’t earning money is a day you’ll never get back. How many people with full time jobs do you know that could stop working for a year? Not many. How about two? How about four? Ask someone you know who is young and who works if they think they should take four years off work. They will look at you like you’re crazy.

Take the average college graduate, with $30,000 of debt…

Seven in 10 seniors (68%) who graduated from public and nonprofit colleges in 2015 had student loan debt, with an average of $30,100 per borrower. This represents a 4% increase from the average debt of 2014 graduates.

Source = http://ticas.org/posd/map-state-data

The average young college graduate, between the ages of 21 and 24, makes just under $18/hour, or $36,000 a year, according to new data that EPI is set to release later this month. As an average, that figure is probably skewed a little high, said Bivens.

Since 2000, grads have actually seen their pay fall from $18.41 an hour to $17.94, according to the new EPI data.

A lot of college graduates wind up “underemployed” in jobs that don’t require a degree, said Bivens. The unemployment rate for young college graduates was 8.5 percent, according to a 2014 report from EPI, but the underemployment rate was nearly double that.

Source = http://www.huffingtonpost.com/2015/05/12/college-grad-starting-salary_n_7265090.html

If you figure an average rate of interest on that $30,000 of debt, the payment would likely be in the $250-$300 range, over 10-15 years.

Someone who earns around $36,000 a year will probably take home roughly $2200 per month after taxes. I say roughly because some states tax more or less than others.

That $250-$300 college debt payment for 10-15 years is like having your take home pay taxed an additional 10%+.

In a world where people are working extra jobs and cutting back spending to make ends meet, $2200 barely gets you by. You need every cent of that.

$36,000 in salary can be achieved without a college degree with some work, not even a crazy amount.

Consider this alternative, what if instead of going to college, you went straight into the work force and took the best job you could get in an industry where you skills can compound and you can move up?

There are plenty.

What if for four years you stayed at home with your parents and saved as much money as possible?

After four years you could easily have saved up $30,000 in cash working an average level full time “starter” job as long as you didn’t spend your money foolishly and your parents didn’t ask for rent.

After four years, if you took your job seriously and gave it good effort, you’ll have four years of work experience and accumulated skill that you can use to search for a better paying job.

While you would have work experience and cash on hand, the college grad would have a negative net worth, debt, and no work experience at all, and likely few skills that employers would want.

Don’t think for a second that a majority of college grads wouldn’t go back in time right now and do exactly what I just described.

Recall…

A lot of college graduates wind up “underemployed” in jobs that don’t require a degree

They would switch in a second.

Again, this is just my opinion and advice. If your mom is a Doctor and you like what she does and want to go to Med school, then go. If your dad is an engineer earning a great salary and you’ve been to his job and like what he does and want to do it yourself, then do it.

But if you really have no idea what you want to do, you really should probably avoid college.

Take at least a year off to figure it out.

Easily Avoid Wasting Money (cont): As you grow your tastes will change as well as your priorities. The older you get, the more you will know what you want, generally speaking. During your youth, you absolutely need to avoid taking on any kind of major debt. This mainly will be large credit card charges and car loans, the only types of credit you’ll really be able to get your hands on. Young people mostly waste their money on cars, clothes/fashion, food, going out, and expensive vacationing.

Don’t believe the lie that having many credit cards builds your credit, it doesn’t. Credit is mainly determined by how much money you make, how much debt you have, how long you’ve had your credit, and whether you make your payments on time. Note that no where does that include how often you use your card(s). Charging up balances and paying them off will not help your credit. The best thing for your credit is literally to have the least amount of debt possible. Do you really think someone with a bunch of credit cards with balances will have better credit than someone with one or no cards and no debt?

You can and should have at least one card for emergencies and for purchases where carrying cash around wouldn’t be a great idea, but don’t open more than two. Keep your balances below $600 TOTAL at all times.

As far as cars go, buy something used, low key, and reliable that isn’t a complete beater but isn’t too expensive. You shouldn’t need to spend more than $15,000 total.

If you are a car person and just HAVE to drive a “nice” car, then follow this advice to the letter. Lease the car. If you’re young, your tastes will change within 3 years, I guarantee it. Leases are cheaper than purchases and you basically just pay the depreciation on the car. If you finance the car, you are now 100% liable for paying off the entire car loan. Sure you can trade it in or sell it, but you will lose a ton of cash in the process and the car may have lost so much value that you can’t even sell it for enough to cover the loan.

Understand that cars are not an investment. They literally lose value every single month. You are not “throwing” your money away by leasing, far from it. Throwing money away is spending it on completely useless things. You need a car to use, so your lease payment is taking care of that.

Other than cars or credit cards, without income or collateral you aren’t going to be extended any type of major credit. If you can just avoid blowing money on cars and charging up credit cards, there isn’t a whole lot of damage that you can do. Even if you spent 100% of your income in cash for say, two years straight, at the end of the two years, yeah you’d have no cash, but you also would have no debt because you paid cash.

In fact, just avoid credit at all costs in general and you will be better off than 95% of your peers.

End notes

I hope this at least gave you a perspective you didn’t get from anyone else while you were in school grade school. If you have any questions, feel free to ask below and if I can I will answer. I’d also recommend checking back here for more specific advice as I like to write about business and current events when I can.

 

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