The Motley Fool Discussion Boards
Financial Planning / Paying For College
|Subject: Fund your retirement by avoiding college||Date: 11/8/2001 4:28 PM|
|Author: boatgod2001||Number: 4502 of 8398|
Forbes is great at telling the truth about the
costs of college, The Tyranny of the Diploma was
an excellent article.
It is so damn frustrating that Libertarians and
Republicans alike haven't figured out the
strategy which best attacks the progressive
income tax. Both Democrats and Republicans spew the
propoganda that secondary education is the
panacea which makes all things "fair". But it's
the policy of the "progressive income tax" that
the DEMOCRATS promote, which takes away much of
the financial benefit of secondary education. It
in essence punishes those who are rewarded with
extra compensation for their education efforts.
When will the Libertarians and Republicans inform
the public that the "progressive income tax" is
really a huge "tax on education?" It is an
argument that would probably actually bring about
a flat tax.
Forbes failed to calculate their assessment correctly,
had they, the evidence against going to college would be more
compelling. That's because Forbes failed to
1. The effects of the progressive income tax.
This tax penalizes the benefit of education
(supposedly higher income) to redistribute money
to those who don't seek education (call it the
Democratic "ignorance is bliss benefit program").
None of your articles have ever taken this
calculation into consideration. If you invest
money into tax deferred instruments that you
would have spent on college, you get compounding
of the investment until you sell at retirement.
Whereas, if you achieve a higher salary there is
no compounding of the investment tax deferred
because you are taxed every payday for the
investment (the tyranny of the progressive income tax).
Avoiding college then, is a sound way to provide for
retirement through tax deferment.
2. Calculate the lost wage that those who are
smart enough to go to college, can earn in the
workforce. An hour in class or spent studying
is an hour not spent in the workforce. Your
article titled The Tyranny of the Diploma did not
calculate this effect, but your article
concerning the MBA does. For argument sake,
we'll consider 4 years in college spent studying
and in class, to have a 1 to 1 ratio for time
lost that one could have worked (when in reality
that is a favorable ratio tilted in favor of
college. The time spent in class and studying
for four years may be equivalent to the time
spent working full time 5.5 years).
I'd estimate going to college four years
sacrifices about $80,000 lost income (what a
high school grad with skills enough to get into
college, can earn immediately from graduation
from high school. Let's presume at
18 a kid leaves high school to make $20,000 a
year. His parents invest the $120,000 (the cost
for room and bo