I don’t think we have a student debt crisis so much as an entitlement crisis. There used to be a time when paying back your debt with interest was done with honor. There would be no complaints, but simple gratitude for someone or some organization willing to take a risk on you. I think people don’t want it bad enough.
Nowadays, it seems like there is a growing movement of folks who believe there should be debt forgiveness just because. Just because what? Seriously, please tell me or write a guest post explaining why you are entitled to free money.
Being a debt welcher demonstrates bad character. If you’re not willing to scrub toilets, drive a car, get up at 5am to work extra hours, or flip burgers to pay your debts or get out of a bad financial situation, then you are going blame the world for your problems until you die.
Financial Freedom: Do You Want It Bad Enough?
Here’s a comment from the Average Student Debt At Record High post I’d like you to read.
I went to a private college and got a BS and MS in engineering. School left me in $88K of student loan debt upon graduating. This would have been more, but I was working multiple jobs throughout college to afford the $40K/yr price tag. Like some others have said, the FASFA really screwed over my family. It valued their house at an insane amount even though they had a substantial mortgage. I’m pretty sure it also looked at my parent’s retirement accounts as assets that could be liquidated, but that was not an option.
Anyway, after graduating with $88K in debt, I continued to work 2, 3, 4, and even 5 jobs at a time to make as much money as possible. My first real job started at 50K but has risen to just over 100K in six years. Even though I am making this money now, I am still working side hustles to make extra money, and can easily make an extra $2-300 a week with minimal work from home, mostly through websites like fiverr, crowdsource, and other freelancing platforms. Sometimes I still help out at a friend’s restaurant waiting tables and can make $2-300 in a night!
On top of this, I also went back to school while doing all this work and got a professional degree in an unrelated field that is going to allow me to open up my own business on the side. I’m hoping that this will net me around $10,000 extra each year.
The thing that really resonates with me, though, is how few people are willing to put in the time, and to make smart life choices so that they can reach financial independence. With all this work, I was able to pay off my $88k in loans and finance a professional degree without taking out any new ones.
I also bought a house and have a very reasonable / manageable mortgage payment. I save roughly 20% of my income for retirement when you count the employer match. And, I still can go out for nice dinners, go to sporting events, go on a week or two of vacation each year, go to shows, have nice clothes for work and casual events, drive a decent car, and afford home improvement projects on my house.
Every time I hear some sob story about people who are stuck in debt from student loans, I also hear stories about how they waste money on useless wants, go on extravagant vacations they cannot afford, eat out at fancy restaurants for every meal, and sleep-in every chance they get. They never tell us they are working a second job, or how they are trying to save up for something. Instead, they are racking up credit card debt on top of student loan debt, complaining about it, and not thinking about the future at all.
We really need people in college and recent graduates to be more responsible for their own decisions. I think that is where the solution begins.
When You Want It Bad Enough You Make Sacrifices To Get Ahead
By working multiple jobs through college, multiple jobs after college, waiting tables while making $100K at his day job six years later, and diligently saving 20% of his income, it’s clear this commenter WANTS to get ahead. He’s not somebody who complains why he can’t get ahead while working less than 40 hours a week.
I’ve highlighted Sean Cooper’s story about how he put his life on hold for three years so he could pay off his mortgage early. No sex. No fine dining. Definitely no fancy car. No travel since travel is banned anyway. Forget about main house living. Lots of extra freelance work. And now, no mortgage debt. Sean wanted to get ahead, so he did it. Are you willing to make the same sacrifices to pay off your debt?
The benefits of financial freedom sooner more than outweigh loose spending today. I could show you pictures of how awesome life is once you have absolute freedom, but that would just annoy you or make you feel bad. Hence, all I can do is just continue to write and share some examples of doing what it takes.
One More Example Of Hustle
In the post, Larks vs. Night Owls, another reason I decided to drive for Uber between 5am-7am was to get its year-end $750 bonus after 20 rides. You see, Uber ran a special last December where referrers would get a $750 bonus if they signed up a new driver (from $300 usually), and the new driver would also get a $200 bonus for a combined bonus total of $950.
Based on my 400+ ride experience, I knew I could do 3-4 rides an hour. In other words, after 6 hours of work, I could capture a $950 bonus + ~$200 in fares for a total of $1,150. That’s an hourly rate of $192, while also being able to do research on early birds for my post.
A $192 hourly rate equals $33,280 a month, and $400,000 a year if maintained for 40 hours a week. Not bad, if you take advantage of the various opportunities. So many people are making way more money than anybody knows through side hustles.
What’s interesting is that I gave my referral code to three friends, and none of them bothered to sign up to earn extra money, even if I told them I’d split the proceeds. All have nice cars (VW GTI, BMW 535i, and Porsche Cayenne), but none of them can afford a median priced single family home in San Francisco. Their house-to-car ratio for measuring fiscal responsibility is out of whack!
They bitch and moan about the cost of housing. One of them would rather let three of his doubles players wait for 45 minutes because he didn’t want to pay $3.25/hour for parking! The person who did accept my referral code was my business partner. And she was smart to make me drive for her while she collected her $200 bonus for just being.
I’ve come to the conclusion that too many people are either too proud to make extra money or too lazy. They don’t want it bad enough. Unless you have some physical or mental malady or come from a broken family, it’s hard to except so many excuses when there’s so much opportunity now.
Remember this: It takes effort to see the sunrise.
For Financial Freedom, Don’t Do Nothing
Please don’t complain when others buy nice things, retire early, travel abroad, and live in fabulous places. They stayed on top of their net worth and work towards a financial plan.
Get your finances in order the easy way:
Want to be financially free and have a great retirement? You’ve got to want it bad enough.
Every single goal achiever put in plenty of sacrifice. If you want to be free, put in the extra work today. If not, I guess you can blame me or the President. But blaming won’t get you anywhere.
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If You Want Financial Freedom Bad Enough, Put Your Money To Work
As 2022 has taught us, inflation can creep up quickly and put a lot of strain on your budget. In times of high inflation, it’s important to put your money to work so it doesn’t lose value as prices rise. How you choose to invest will be based on things like your own risk tolerance, existing assets, and financial goals.
Here are some helpful posts to help you get started with managing your money. If you want financial freedom and greater wealth bad enough, you have to be willing to put in the time and effort.
How To Have A Risk-Appropriate Asset Allocation When Investing
Buy This, Not That: How To Spend Your Way To Wealth And Freedom
Top Financial Products Recommendations
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Updated for 2022 and beyond.
Children learn their spending habits and lifestyle based on what their parents can afford, and their parents, and their friends’ parents, can afford a lot because this is an awesome country. But they aren’t taught the skills to do this for themselves. So it’s a combination of all of the above: entitlement, lack of teaching, and cultural blindness. We are victims of our success, but we are to blame as well. But children grow up into adults. A child will understandably do bad things if taught to do so by their parents, but there comes a point when the child becomes an adult and the lessons don’t really matter. They are responsible for themselves.
But parents could make it easier simply having the conversation with their kids “You have a good life based on MY salary which is based on MY skills and credentials. When you turn 18 [or 22 with a shiny new degree] you are unskilled and your credentials non-existent so expect to eat a lot of ramen.”
I really wanted to go to a top school for my BS, but I’m so glad I went for the state school and scholarship. I found out later that jobs either don’t really care, or they want an MS. And if they want an MS they care about where you went for that, not your BS. And if the MS program is a right fit you should be sponsored anyway. I took out one small loan, deferred, at 2% because I could and that went into my down payment after I graduated.
This might sound cliche but it takes a village in some ways to raise a child. So many people influence a young adult’s views on money and debt. Universities have become expensive cocoons that extract a heavy price for a 4-year stay of a young adult walking in their hallowed halls. In the 90s Bill Gates famously said, Banking is necessary, Banks are not. Similarly, knowledge is necessary, expensive universities are not. As a senior executive who has interviewed hundreds of applicants for various jobs in my company, I found find the hungry, hard-working tier 2 or 3 university graduates who worked their way through college to be far better hires than those from top tier names who come saddled with $100k debt asking for similar salary!
Everyone “wants” financial freedom… but very few want it bad enough to actually take action and take specific steps that are needed to get there.
If you are currently saving less than 10% of your income, you clearly don’t want it bad enough. Otherwise, you would find a way to MAKE it happen.
Well my friend there are definite generation changes.
The feelings of entitlements didn’t exist in our parents generation, but do now.
Tuition has increased by how many 100%s from our parents generation. My parents worked one year during school and ended up affording a car and paying for FOUR years of tuition. Today that is impossible because the the rate of tuition increase is exorbitant while rate of wages is turtle pace.
Some things are better with time, other things have changed for the worse over time.
I think much of the “crisis” you are addressing comes back to the pervasive culture of excess. It’s nothing new, humans have sought to one-up each other for centuries. Our competitive nature has caused mass droves of people to buy into consumerism in a pursuit of winning out over their neighbors. This has only gotten worse as we have added in the element of “self reward,” buying things as a way to reward ourselves for our hard work (at a job we likely hate) because we “deserve it.” I know because I was one of those people just a few months ago.
Discovering “the truth,” that buying things won’t make you happy and that you don’t have to slave away at a job you don’t like until you’re 65, is not an easy message to get across. This is especially true for the majority of people who, I think, are most comfortable when someone else will tell them how to live their life. Most people are more than happy to take their guidance from friends, family and mass media who perpetuate these myths. It takes a certain amount of intelligence and independent thought to break free, to swallow the red pill. I consider myself lucky to have met very little resistance from friends and family (although I sense most of them think this is a “phase”) and also lucky to have married someone who was just as easily convinced to see the big picture once I revealed it. Now we look at each other every day and ask “Why did we ever think that was the right way to live?” and then “How do we bring others on board?”
The answer, in our short experience, is that you can’t force these concepts on other people. They have to discover it for themselves or see it in action. Just in the past 2 months we’ve traded down to an electric vehicle, stopped mid-build on a massive custom home and are now looking to sell our current home and downsize to half of what we live in now. We’ve cut expenses in almost every area we can and are looking at our budget each month to find where we can cut back further. The more we cut expenses, the faster we can save and the earlier we can retire because we’ve learned to live with less. This is the example we set for those around us – I tell everyone I know that I’m going to retire in 10 years (or less) as a way to make myself accountable to my goals.
Well said, and I agree. I hope you meet your retirement goal in 10 years or less!
Here’s a follow up post: Why Tough Love Is So Important In Personal Finance
I’m a little embarrassed to admit that I may not be doing everything I can to reach financial independence as soon as possible – from reading this post. I definitely have used excuses (too tired from shift work, not having as many opportunities for side hustle in Canada, not wanting to leave my comfort zone…etc) and I feel like I’ve given these excuses too much power to stop me.
I’ve gained more insight of myself after reading this. Truth hurts!
I’d love to side hustle and get ahead, but the problem is that I’m a foreign worker from China, and my visa is tied to my employer. If I earn any active income outside of that, I would be in violation of immigration law. That includes working for another company, this is the obvious one, but also driving Uber, hosting on Airbnb, consulting, and freelancing. Even if the work is location independent, like blogging or YouTube.
My stepbrothers and I are worlds apart, and some of it does come down to entitlement. The eldest was too lazy to apply for guaranteed scholarships from an in-state school since his dad can afford to cover in-state out of pocket. But it’s also about not understanding money and how hard you do need to work to pay it off. My student loans shocked me, and they are fairly minimal, and my degree is in science, but didn’t come with a lot of marketable skills. I built those on my own (coding, leadership, analytics), on accident. Universities don’t always do a great job preparing students with real skills.
Otherwise, as an immigrant, I think some comes down to the fact that it’s common to be told that you weren’t brought to this country to continue doing menial tasks. My first job was undergraduate research and tutoring, since I didn’t have work authorization before that (to be fair, I volunteered at a pizza place many weekends to raise money for a school activity before, but it wasn’t a ‘real job’). I definitely think if I had been a server or worked more jobs like this when I was younger, I would have had the drive for financial independence earlier.
I’m just very happy I did not apply for any out of state universities and got free tuition through scholarships. Even now, my student loans have an impact on my financial freedom, which is what ‘awoke’ me financially and got me hustling to pay those off ASAP. But it makes me appreciate my education more. I just wish I had been doing it all along.
I think there’s societal pressure to go to the best school you can get into, regardless of the cost. It’s the same type of message as needing to get the best marks possible. It’s as though that’s a necessary ingredient to success. I had the same pressure put on me for my MBA, given I was usually at the top of my class, and I just refused to spend $100K for my masters. I stayed at home, did it for $30K (less $10K in grants and scholarships I hustled for) and worked part-time during part of my studies, despite my mother offering to foot the bill. I also used money I saved up so that I could afford transportation and parking on my own dime. That meant that I could finish school without breaking the bank. Sometimes, just because society pressures us to go for broke doesn’t mean we have to make that choice. After all, we’re the ones who need to live with the decision.
Most all 20-something folks I have met in recent years are in that entitled crowd and are complete clueless about life and responsibilities… I don’t know.. did their lack of having good parents fail them?? did their formal education steer them wrong?? are they just lazy??? I think it is the first and the latter… Create good goals and achieve them.. life can be simple… and awesome at the same time… with lots of challenges in the mix when you are killing it…
I think there’s definitely some validity to the entitlement issue. But like some commenters, I do think you kind of overlook the costs of education and give a pass to those who are profiting off the backs of students. I took out student loans for undergrad but it was a state school so it wasn’t too bad. I took out the max Stafford loans for law school but I worked full time while attending in the evenings part-time so that my loan burden wasn’t as bad. I could pat myself on the back and say that others should work harder rather than complaining. But I think there is a genuine issue when law schools charge $50,000 and tout their great employment record for grads and $150,000 start salaries at firms when in actuality, many grads with huge amounts of student loan debt will make $40,000 to $60,000 as an entry level attorney. Some may not even be able to get those jobs and have to do temporary document review. Maybe they can work hard and move up…Nope…that type of job will not help you move up or out. There’s also an issue with the interest rates on student loans….federal loans at 6.8% and private loans in double digits, when mortgage rates are under 4%?! Collateral? Well student loans are not dischargeable in bankruptcy so there’s a good chance that if a person can pay, they will.
As a lawyer, what are some solutions you can think of to help other lawyers? I’ve read that lawyers are one of the most unhappy group of people due to the cost of education, time it takes to be a lawyer, work hours, and job overall. I’ve heard this since 1995 when I graduated high school. It deterred me from going the law route.
Also, I’ve always thought lawyers were some of the smartest people because they had to get the best grades to get into the law schools. Can we make a conclusion that good grades and smarts is only loosely correlated with good financial habits? It’s not like law students are those who went to go fight a war and are being convinced by private online for private colleges to pay big tuition so they can have a chance at a future propaganda.
Good question, I don’t know the answer as I’ve been “fortunate” to not have the soul sucking job that many attorneys have. I have a government job which okay pay and best of all…decent hours and no need to find clients. As for being the smartest people, I don’t know about that. You may have to have the best grades to get into law school, but there are many lower tier schools (that charge the same as the top ones) where it is much easier to get in. I think it’s a common misconception for many people going the law route that they all make tons of money. There are the top grads from top schools who make the big money: https://www.nalp.org/class_of_2013_bimodal_salary_curve
But many start off much lower and there is very little in between.