The Motley Fool Discussion Boards
Personal Finances / Living Below Your Means
|Subject: Re: Don't do this....||Date: 2/25/2014 1:53 PM|
|Author: woodymw||Number: 880433 of 894031|
That's about as dumb a statement as any I've ever seen.
Holy crap, yes.
Background: I’m the first one from my family to go to college. I did my undergraduate degree at a public institution and on scholarship – no student loans. I did my business degree at a public institution, as well – that was also on some scholarship, but I borrowed to pay for my living expenses so I could focus on my studies. I wound up, grand total, with nearly $60k in student loans.
And doing that was the best choice I ever made in my life. Except, just in case she reads this, choosing to marry my wife. There are many reasons why:
1. Straight up ROI. I used low-interest leverage to invest in human capital, and after two years of graduate school tripled my annual income. Tripled. And that was 7 years ago – I’m at much more than that now. My loans paid for themselves in the first year. Now I know I made some financially sound choices in terms of my course of education, but there are plenty (many many) courses of study that would provide at least positive, if not spectacular, returns. Some degrees may never pay off, but the idea that you should never take student loans just doesn’t hang from a straight up financial investment perspective – never mind anything else that comes after this in this post.
2. Class movement (alternately, livin’ the American Dream). Look – when you grow up poor in areas that have low rates of higher education, income, and job opportunities, it can be very difficult to improve on your parent’s standard of living. This goes beyond financial support, but the financial support certainly isn’t there. In my senior year of high school, my parents were raising four kids on a combined salary that is going to be roughly a third of what I’m making right now. There was no money. And though they valued the education, they didn’t (still don’t) understand some of the non-financial rewards that have value. So there wasn’t that emotional or otherwise non-financial support. Hell, I couldn’t even get administrative support – my high school counselor’s office had no ability to support me because I was the first student they’d ever had looking at schools outside of our immediate area and scholarships from multiple sources. They just couldn’t help. And I would have wound up doing none of it – and making the doughnuts in