Re:Accounting for the Rise in College Tuition [pdf]
by garrettgrimsley on Wednesday December 23, 2015 @01:52AM
(#10782305)
Your median income figure appears to be wrong. I think that you might be using median household income rather than median per-capita income. The $680k (sic) figure is also in 1987 USD, and if you don't adjust for inflation then it throws your calculations off. See The College Payoff: Education, Occupations, Lifetime earnings [0] for a rigorous assessment. What you said about buying stock vs paying for college is interesting and something to consider.
[0] https://repository.library.georgetown.edu/handle/10822/55930...
Re:Accounting for the Rise in College Tuition [pdf]
by dinkumthinkum on Tuesday December 22, 2015 @08:49PM
(#10781555)
Before we go too far off the plumber deep end, consider there are more lawyers in the U.S. than plumbers:
http://m.wolframalpha.com/input/?i=plumbers+lawyers (note difference in salary as well)
Anyway, these numbers work best when you compare "all college graduates" to the "holy grail of all trades," the oft-referenced plumber. Most non-college graduates are not swimming in thr rich plumber mondy. Once you take out the bottom earners out of the college graduate pool, the difference in numbers becomes much more drastic, I think.
Median income is 52k. Split the difference and assume it's 52 - (13.6k /2) = 45K * 47 = 2.115 million.
So, now 680k is an extra 32% which sounds great! Except that's pretax, and takes ~100+k of capital to get and your get 4 years less for interest to compound.
If you actually work out the numbers, paying for collage adds less money than buying that much stock and giving your kids the interest from that stock while they work. So, on it's on a BS is a poor investment, the only advantage is it's a highly leveraged investment.
PS: For comparison the median plumber makes ~49k/year in the US. Median electrician also makes ~50k/year.