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.
I recently saw a GoFundMe set up by an average guy who was looking to have everyone else pay off his student loans. His thought, based on the summary, was: hey, if I can get X number of people to put in just $10 I can pay these off. It actually made me a little sick to my stomach and was glad that no one had contributed to it. People need to take responsibilities for their finances and actions. But I do believe there is a lack of education when it comes to personal finance. There really should be a mandatory lesson/class on basic finance that is taught in every high school.
Speaking of entitlement, I cannot believe what some college students expect to get paid at their first job.
A few months ago a group of my friends and I were hanging out when the topic of financial goals came up. The discussion covered prospective job opportunities, life goals for our 20’s, living expenses, college loans, things like that. When it came my turn to share, I was immediately told “good luck, you’ll never achieve that with your degree”. To be honest, I just sat there speechless. For those of you wondering, my degree is in a physical science.
Apparently, because I wasn’t going for one of the “BIG” degree’s, I was never meant to make any money. While, albeit, my proposed financial goals were ambitious, they were in my opinion very achievable. What nagged me the most though about the conversation was the simple fact that I already had a higher income than they did. I have the highest GPA. I have taken out the most student loans because I’m practically paying for all of college.
For the last few years, I have sometimes gotten annoyed at how it always feels like I put in the most effort in school while everyone else skates by. Working double time to get the highest GPA possible. Working a job for extra money. Or, how I’ll be paying off way more student loans than most people.
Yet, as I have gotten older, while the feelings of annoyance have not diminished, new feelings have started to appear. I have begun to feel pride in my independence. I now realize that life is give and take; and my success comes not from how much I take, but in how much I give to reach my goals.
Reaching the financial goals I proposed a few months ago won’t be easy. I know it will entail countless hours of hard work and then some. It will require many more gives than takes, but at the end of the day, no matter how rough it gets, it sure feels good to be independent.
Looking back, I do hope that everyone else reaches their proposed goals as well. But, as I have learned over the last few years of college, success is not how much you are entitled to, but how much you are willing to give up to reach your goals.
As Jon Krakauer said “It is easy, when you are young, to believe that what you desire is no less than what you deserve, to assume that if you want something badly enough, it is your God-given right to have it.”
“I now realize that life is give and take; and my success comes not from how much I take, but in how much I give to reach my goals.”
I enjoyed this point. I can’t tell if you are in college now, or have graduated. Either way, do know that you will gain no greater satisfaction than being independent to pay your own bills, make your own decisions, and strive to live the life you want. Having the ability to choose is priceless.
This is something I need to remind myself more —
Things do not happen on their own. I need to MAKE things happen in my life.
I need to earn my own success.
I feel like this is also a great lesson on trade offs.
We can have anything, but we cannot have everything. Something has to give, right?
Speaking of entitlement, did you see the recent story of the woman suing her law school, because she couldn’t get a job when she graduated?
She is blaming the school for over inflating its employment figures.
And while I certainly agree that a school, or any business, should be held accountable for accurate performance reporting (obviously a big deal in the investment world), holding the school responsible for her getting a job seems far-fetched.
A lot of comments seem to student loan focused, with several people bringing up a perceived injustice that student loans can not be vanquished through bankruptcy, when other types of loans can.
Perhaps we should keep in mind that student Loans are not secured by anything. If you welch on your mortgage the lender can seize an asset (your house) same with a car loan etc, but a lender can’t seize your education. So in order for a lender to take on this additional risk, there needs to be SOME form of an incentive. One option could be that student loans could be treated like any other unsecured personal loan, which would result in much much higher rates. Another option is the current treatment, that they can’t b vanquished through bankruptcy. A borrower can’t just demand that they be able to get student loans at artificially low rates, while still having all the protections of other loans… There is no free lunch… just b/c you want it doesn’t mean you are entitled to it.
From my perspective the problem with student loans is that unlike just about any other kind of loan, there is no evaluation of the borrower’s ability to pay back the loan. When you apply for a mortgage a lender analyzes your credit score, income, existing debt, etc. for the purpose of establishing your ability to service the loan. Any weakness will drive higher rates as the borrower represents higher risk. Additionally the lender goes through the appraisal process to reach a conclusion as to whether the asset (the house) is of sufficient value the justify the loan in question (the mortgage). Why don’t we do this for student loans?
As an example, someone seeking a $20k loan for the purpose of getting an engineering degree from MIT should have a high likelihood of approval, and at a favorable rate. This would be driven by the low risk profile associated with servicing the debt as only a moderate amount of debt is being taken out, and the degree will likely yield a high starting salary, as well as a high value of the asset (the engineering degree from MIT).
Conversely, someone seeking a $100k loan for the purpose of getting an art history degree from the University of Phoenix should have a high likelihood of being denied, or only approved at exceptionally high rates. This would be driven by the high risk profile associated with servicing the debt as only a high level of debt is being taken out, and the degree will likely yield a low salary, as well as a low value of the asset (the art history degree from the University of Phoenix).
Of course people would throw a fit about any such analysis due to the “entitlement crisis” that makes everyone think they are entitled to be able to “follow their dreams” and get whatever education they want, regardless of how irresponsible it might be.
Thats a real issue, and its why private institutions should mostly stay out of the primary student loan market. It was also a big issue before the ability to refinance was there just a year or two ago. You now had professionals with loans that were double the going rate with good incomes and credit that couldnt change the situation.
While the subject/school part is intuitive, it would likely cause massive distortions in the market and just be too difficult to implement properly. The government should have been much stricter and not allowed these for profit, obviously inferior diploma mills to pop up and just fund them indiscriminately, that was a failure.
These reasons, and the ultimate over arching societal benefit are why government should be the one on the hook for the primary student loan market. There should definitely be some form of real financial education about value, etc…before taking them out, and something done on their side about not promoting rapidly inflating tuition, though that seems to have come to a head already.
Im not for the blanket bankruptcy allowance, it would be abused like mad, but I am for 100% tax deduction on all payments.
I really don’t think there’s an issue until serious talk of “write off the debt” happens. THAT is a crisis.
The moral hazard on that is pukeasaurus rex (Shakespeare created 1000’s of words…that’s one of mine haha).
Big issue is…as a country we are projecting each interest group’s values on other people. For example, while I agree with you and share your views here on FS in almost 100% entirety…one thing I notice or feel (and again it’s just the way it lands on me) is that sometimes it’s easy to look at “data” and automatically assume we know the answer or that it applies to everyone.
I think the bigger issue is not how much a person makes or saves…but rather if they’re rational and say “I make $4k a month and I should spend less than that or else I’ll be broke/in debt” then that’s ok. I think you probably feel the same since you’re super rational and logical.
But sometimes I think it’s easy to assume (and I see this a lot in blog comments here) that people all share the same values. I see readers assume your premises are faulty (especially when I read the “don’t spend more than X% of your net worth on your car” article that was full of haters) or assume it’s not possible.
I laugh at all the dumb spending I did in my 20’s. Granted it’s not drinking or drugs or whatever…but just depreciation/interest on cars alone is disgusting. I had to “unlearn” my belief that used cars were junk and it took me buying 4 new cars in 11 years to do it. Oh well live and learn.
But now…I find that it’s easy to live comfortably on 3500-4k net (after taxes and debt paydown) and honestly probably couldn’t figure out what to do with money beyond that. We eat at Chipotle whenever, have fun, watch/go to movies, and can easily pay for our kiddo on that. Life is good.
So, I’ll say this…it’s always a slippery slope projecting values on other people. Media does it a ton with how they portray millenials. Same with the boomers. America is a great place to live and has probably more immigration than the next 10 countries put together. They wouldn’t be coming if there was a crisis or negative situation.
We have a crisis of perception/marketing not in the data in my opinion.
Entitlement certainly has something to do with it. I’ve had an entry level employee complain about his $31/hr wage when the guys next to him were making $45 and $108(both different departments on the same project). He thought he should be getting at least as much as them because he does so much work and they sit around. When actually he’s got one year experience and the $45/hr employee has 4 and is a supervisor while the $108 is a contract worker that’s providing his own equipment(which is factored into the rate) and is also a supervisor. The worse part is he’s not the only one that doesn’t realize their place as an entry level employee.
Nothing pisses someone off more than someone who isn’t willing to pay their dues when others have!
Because it’s Friday, I’m just gonna say ya don’t gotta give up sex to get ahead. :-) In fact, going hard to get what you want is sexy as hell! Hats off to Sean Cooper for his monkish devotion to the cause, but…damn, don’t make it harder than it needs to be.
Wow – lots of comments to this post. Cool. It’s encouraging to see people refusing to step into the long, slow line of chained suckers shuffling their way to normal.
Are kids entitled? Of course they are. They’re entitled from the first time they grope for mama’s milk. We all were. But then we started grow up and someone taught us we actually had to DO shit to GET shit and if we didn’t, well, sit down and shut up already! “Oh, but that hurts my self esteem!” Huh? Your self-what? Sounds like you need something to DO. Go make yourself a trophy.
From 1st grade, financial management and basic economics should be woven into math and social studies. I was hanging out with my college daughter and her friends a while back and mentioned my daughter – who is pretty good with money and contracts – had asked me to give her a crash course on managing money and investing. I was surprised when all of them kinda looked at each other and said, “Uh, hey, any chance we could get in on that?” No one ever taught them. Looks like I’ve got me some students!
Oh, and if I were allowed to wave the change wand some more, I’d also require kids to study abroad with exposure to a developing nation. India, much of central & south America, lots of options in Asia etc. That college daughter still talks about our no-plans trip in northern Mexico when we walked across the border and took public transportation to get around. She was 7. The lasting image of a girl her age in rags begging her for money helped burn the edges off her sense of entitlement.
Keep going hard for what you want! Get laid a lot! And thanks for helping others step out of the long sad line to normal. Happy Friday.
Quite frankly, I appreciate that the Government was willing to extend me the money (as loans) so I could attend SUNY to get my undergraduate degree. Later, when i was working, i again used these programs so I could get 2 masters degrees (MBA and MQF). I grew up disadvantaged and my parents had NO financial resources to support any of this. Without these programs (and my savings from HS jobs) I would not been able to afford STATE school. I was accepted to Cornell and others – however it just was not in the cards. Now? I have paid back my loans – I honored my contracts – and I fully recognize without these programs I would not have been able to be as successful as I am know. I was always going to pay it back no matter what (and I have always paid all my debt). Sacrifice – even know when I am making a significant amount of money – is something that I live with daily so I can have the resources that are really important to me. I live in a home that is smaller than I should, drive cards that are have less “prestige”, go on lower-scale vacations, and save for the future. Some people say maybe I am missing out on life – well I value my time and children and financial security more than consumerism. Sometimes I look back and thank my lucky stars I grew up poor and without any means, I truly feel it makes me appreciate everything more and makes me always prepare for the worst.
Regarding entitlement specifically – it blows my mind how some people think they deserve certain luxuries when they can’t afford them. I know someone who is drowning in debt because she treated her HELOC almost like play money for decades and wonders why she has no money left. Nobody “needs” an $80 gym membership, cable TV, newspaper subscriptions and salon appointments but she thinks she does. At least now she is starting to make changes and be better about what she spends her money on.
Had a situation just like this recently when talking with a family member who was lamenting to me about not being able to find a full time job in her field and not having enough money to pay her credit card MINIMUMS. It went something like this:
“You already have one part time job. Why not get another one while looking for a full time job?”
“I don’t have the time for that.”
“Why not consider selling your car? It’s worth around $15,000”
“I’m not gonna sell my (insert luxury car model) and drive around in a piece of junk”
“Why don’t you consider cutting down your TV package? You hardly even watch TV.”
“I have a lot of shows on my DVR I need to catch up on I can’t get rid of those.”
Needless to say this was an enlightening look into the mind of an excuse maker but also a mind numbing exercise at the same time. Most people love making excuses about not being able to get ahead.
As my high school math teacher said to students who had crazy excuses about why they didn’t do their homework, “If you put as much effort in doing your work as you do in your excuses, you would be a lot better off.”
I have to say I agree with Willow above. While I applaud the hustle of the poster you quoted who worked multiple jobs to pay down the $88k in student loans, I was also wondering why so many other jobs were necessary while making 100k per year. I realize that certain places (like the San Francisco area) are terribly expensive, but so many side-hustles still seemed overkill. As a college professor (in the humanities, not in a STEM field), I never expect to make 100k. But I was able to pay off my student loans and live a comfortable life driving around my little not-luxurious hatchback, packing my leftover lunches to bring to campus, cooking elaborate meals in for dinner parties, etc.
As you both say, it is indeed about “choices and trade offs,” and, I would venture to add, our definitions of what constitutes a good life.
Hi Sam. I’m not sure I agree with the premise of the question. I think you can be financially independent without working 60 hours weekly. It’s about choices and trade offs. For example, if you want to move to San Francisco and pay $3500 for a one bedroom apartment, eat out two to three times a week at the latest hipster restaurant and drive a BMW then you probably do need to work those longer hours. However it may be possible instead to live in Oakland/Berkeley for $2600, eat out less, or at more affordable places, and drive an Acura and save yourself 20 hours to connect with friends and family.
I have luckily not worked 60 hours over a sustained period. I’ve done it for short periods and have been miserable. Obviously the more you work, the more you potentially have for later in life. However, I’d rather take that time now.
BINGO! “It’s about choices and trade offs.”
We must take OWNERSHIP of the choices and trade offs we make. If we decide to take on massive debt, not finish school, or whatever, we must own up to resolving our decisions and not rely on others to resolve them for us.
I think it’s overly convenient to think of people being entitled. I graduated undergrad with no debt, went to a top 20 law school and had to fund it entirely with student loans. Although the cost was ludicrous ($56,000 a year) I justified it based on supposedly vetted measures like US News & World Report claiming 99% of the graduating class was employed with a median salary of $135,000. Not only did that situation change, it later came out those numbers were a complete fabrication (the real numbers closer to 55% at a median of $70k). Meanwhile, the legal market tanked, most of my class who even found jobs were forced to take unpaid internships during law school so we couldn’t work side jobs or we would never get law jobs. I don’t know about others but between journals, moot court, classes and internships I would say 80 hour weeks were the norm for me.
I have little patience for people upset they can’t find jobs after a few applications (Oh my god 50 didn’t do it?!) I tracked my Applications though and without exaggeration applied to over 1750 jobs. I finally got one working in house at a fortune 100 company, but guess what? My loan payments if I wasn’t on some income based repayment plan would cover 93% of my take home pay. My loans are at a truly idiotic rate of 7.25%( they are all federal loans, that was the federally mandated rate when I went to school) and have ballooned to over $300k. Meanwhile, at my job WR are expressly prohibited from moonlighting because I’m expected to always be available. That means no adjunct teaching and no side law practice, and even no uber because my employer is one of the largest in the area and it would be impossible to do so discretely.
This is all a long way of saying it’s unfair to classify younger people as lazy and wanting their loans forgiven. Free University is a total joke, of course, but the prices have gotten out of control. In state tuition at my local state school will still leave you $50k in debt even if you’re able to work and cover living expenses. All this for a job that won’t pay the bills.
I think the student loan market should be shut down. It would force these schools to stop charging insane rates that lead to a future of indebted servitude. But I’m a little tired of the “lazy” label when the truth is its just depressing to have been scammed so hard. There is no universe where I will ever make enough to pay off these loans. In the past schools were less costly, loan rates less onerous. I think anyone over 40 should try and hold their tongue until they look into it further, because the truth is the situation is vastly different than it used to be
A 7.25% interest rate for a student loan IS A JOKE when the 10-year bond yield is at 2% or less. This is why there is an entire industry of financial tech companies like SoFi who are trying to lower the cost of debt for consumers. I hope you check them or another fintech lending company out b/c you should be paying under 4%.
Trying to get consumers, borrowers, and financial freedom fighters to SEE all this disconnect, and SHOW them how to improve their situation is one of the things I try to do on FS.
This is not a Millennial Focused post. This is a post focused on finding alternative ways out. You are not lazy if you are busting your ass and not welching on your debt while having a job.
There are definitely systemic issues. In med school/residency any questions about the feasibility of loan repayment was immediately quelled with, it wont matter its no big deal. While it will eventually be paid off, it is a big deal.
The way the loans incentivized exaggerated costs is terrible but there are simple ways to make it better now. It would be beneficial to make 100% of student loan payments tax deductible, making paying incentivized, freeing up capital for household formation and consumption, etc…Lots of ways to intelligently make headway to the wrongs that have occurred, and approaching keeping it from occurring again, of course, none of that will happen.
Jd- im sorry that happened to you. That could have happened to anyone. There is a large componant of luck involved. The people who graduated right into the great recession really got a bad break on account of nothing they had control over. Hang in there, bro. You will make it.
Living within you’re means is really important but I think working 60 hours a week is really a bad idea for most people. It’s not good for your health and overall well being, and ultimately you’re going to be stressed and unhappy.
How does one rectify wanting to get ahead with not wanting to work longer than 40 hours a week? Do you speak from experience working 60 hours a week and suffering some health issues in the past?
I did 60-70 hours a week for 13 years, but am still standing thank goodness to write new articles and respond to all y’all. The beginning was kinda rough as I wasn’t used to it, but i adapted and things turned out Ok. Looking back, I was absolutely thankful for putting in the time while younger to enjoy more time while older.
Well, its super complicated. There is of course some entitlement and then some feeling of defeat and a mountain that cannot be climbed that is a self fulfilling prophecy. Everyone is different, some people just need to be shown to see things differently in order to allow themselves to overcome. No simple answers unfortunately.
Sometimes bad, crappy things do happen to people that are totally unfair and shouldnt. However, as I have tried to explain to people at times, including my kids, even if that is the case there is no reward for it outside of experience. No one is going to pay your bill out of pity, give you that promotion you deserve, etc….The only thing you can do is take a moment to acknowledge you were screwed and figure out a path around that obstacle. That is just real life and it is never fair. The sooner you come to grips with that the less time you will waste feeling sorry for yourself and being placated by these excuses that only serve to keep you from getting ahead. We’ve all been screwed at one time or another, but ruminating on that instead of the reaction hasnt helped anyone.
That student loans available were so high and tuition increased like crazy isnt anyones fault but the systems. Everyone is right, but it didnt make the bill go away (tell me about it mine was 496k). Make a plan, learn from your experiences and keep on moving forward.
I so love these stories and your continued commitment to encourage others to do the same.. My husband and I (married 30 yrs) are nearing retirement. Lost everything ( yes homes, and retirement) during this last downturn, we are “older parents” of a wonderful daughter, she’s 25 and 12 credits shy of her undergrad. She had to come home and begin working instead of finishing school during the downturn, we could not afford to pay her living expenses and college.
We had both been laid off 2008-2010, last lay off was 3 mos before closing on our new home, my husband started his own private practice (he’s a therapist) and worked in a wine bar part time helping to keep us solvent, his income is modest, but we survived, I was able to get a job that pays a 6 figure salary, and we began our climb out of debt. I took on additional contract work, any time I could find it, from Consulting to handing out coupons at Pet Smart. Throughout all our financial struggles, we were able to short sell our homes, pay all associated fees, taxes,(no bankruptcy!) and continue to pay down our debt. We moved into our new home, and had the additional burden of taking full time care of an elderly parent, and a 23/yo nephew, and helping to support other family members that were seeing hard times.
I’m so very grateful for being raised by a family that when times got hard, they always worked harder and loved each other more. I came from a family of six kids, four of my sibs have always been self employed, our dad and mom always had their “Job” + a family business on the side. Dad was a fireman, mom a nurse, but together they owned 6 apt homes, and dad even worked evenings weekends as a realtor, and cleaning homes in new subdivisions, our mom was always by his side working in every capacity possible.
Fast forward, the past 5yrs have been a struggle, rebuilding our retirement, and stretching ourselves even more to continue to support those we love. We opened our home as Airbnb & VRBO hosts, we’ve gotten our debt down and getting our “house” in order. We’ve been able to maintain very good health, have work we continue to enjoy, and now since losing mom in Nov. have decided to make 2016 the year that will close out all debt. with the exception of our mtg.
We are moving this week into a 900s/f apt. and have rented our home as an executive lease for the next year and will have the last 29k paid down by May 2016. So. yes, hard work,determination, and keeping your eyes, mind, body and soul on the goal of being FREE.. makes it all worth the struggle… and the struggle is Real!
Thanks for continuing to be an inspiration to all of us!
Such a wonderful attitude! I love it. I’m glad you have your family there to support you to get through tough times. May the financial trauma of 2008-2010 never return! I think a lot of us have learned from our mistakes, and therefore, I don’t think things will be as bad again.
We’ve talked about a proper bond and stock allocation for people of various ages. We’ve talked about a proper net worth compositions based on our experience. And we’ve got net worth goals to shoot for by age.
I’m confident that everybody who implements a plan will be much better off when the next downturn comes.
Fight on!
I personally disagree with your article. Do we really want a society where a person has to work 3 jobs to afford to get an education? Do we really want a society where a person has to forgo sex in some of his/her most fertile years in order to afford a roof over his/her head?
Do we really think that overworking ourselves to death is praise worthy? Why?
The inventions of the ages were not created by the serfs working 12-16 hours a day. The great masterpieces are not created in the 30 minutes is takes you to drive between 2 jobs.
A society where everyone husless is a stupid society in my opinion. It’s a society where everyone has his nose to the grindstone and nobody dreams.
In order to have trully insightfull thoughs you need to have headspace. And in order to have headspace, you need to have free time.
There’s a saying that inventions are made by lazy people, because those are the ones that look for shortcuts. Being conscientious is good, but it is not the end all / be all.
This comes from a person who graduated from university with a degree in engineering in the first 30% in her class while working full time and also slowly destroying my health.
If I could go back and not have to do that, I would go back and not do it.
A society where people are forced to choose between school and money, where there is no time for the finer things in life is a broken society.
I see nothing to glorify in this article, I see poor sods like myself who are working themselves to death. It might not matter in your 20s, but you will feel it in your 30s and 40s with interest.
I would love to have more of a society like Europe, where there’s a broader safety net, a lot less anxiety, and a lot more happiness. I’ve been doing research about why Europeans are consistently so happy, and it’s fascinating! Have you seen The Wintergatan Marble Machine that was just created by a brilliant young Swede? AMAZING!
The health benefits of early retirement are priceless. Please read the post. I decided to get out of the rat race to work less and live more free 4 years ago and I do not regret it, even though I made way less money the first two years out.
May I ask you why not also take things down a notch if you want to protect your health? I can guarantee you that stopping to smell the pink jasmin flowers is totally worth it! What keeps you from not living a more leisurely life if you’ve already put in your hard work?
Check out: Wealth Is An Illusion Of Happiness
You misunderstood me Sam. I have taken it down a notch. I actually taken it way down and planting my own jasmin to smell. It’s just when I was in my 20 I did not have the luxury to take it down, that money was a need not a want. I am now left in my 30s to deal with the fallout of having neglected my health for almost 7 years and while having worked my but off during that time has given me a lot of money, it has also robbed me of big opportunties.
As somebody said above, in my corner of Europe, only poor people work like crazy, because they don’t have another choice. We, as a society are definitely not perfect, let’s not kid ourselves. We have plenty of problems and our economy is not going to get better any time soon. But we have got one thing right: almost free education for smart students. Because those smart students will then produce more for the society than if they would have had to worry about how to pay the money back. And those students who don’t have the ability or grits to go into university? Well, they are better served by not going to a consolation university and being left with a worthless degree and a huge loan. They will not get a good life, but they still get an ok life, with healthcare and opportunities for them and their children. Just not as many.
I don’t think the future should look like Europe, but I dread a future where everything looks like the States. It just feels weird to me that we would want to go back to a place where a chosen few (either by ability, but increasingly by family name) would reap the most rewards, while the rest of us would be left to fight for the scraps. That’s not a fair society. That’s been done. It’s called the Victorian era. Just like then, we have huge technology advances, but the very rich managed to capture the majority of the ensuing benefits for themselves. I would not want to go back there.
I want FIREFUM so badly it hurts! But here’s my list of excuses.
I belong to another category, the scaredy cat category which comes from having little to no financial education. It’s a family thing. I come from a family that knows nothing beyond running a household and being super savers and budgeters. We do know to sacrifice than to get credit cards.
The few forays we’ve made into investments (mostly ETFs), were unsuccessful and we’ve lost whatever little hard earned money we’ve managed to scrape together. So we are absolutely risk averse because it takes so long to save and then just like that, it’s gone.
My family defined financial freedom as being credit free and a permanent job. But the way the economy’s been for the last 10 years that is clearly no longer a definition that works.
My terror of the tax man and his astronomical rates dissuaded me for a long time from investing as I didn’t understand how tax was calculated. But now I do and I’ve started investing (and paying the tax man :’( ) and I research financial products online (which was unheard off a few years back, you just had the word of the person selling it to you).
We have no clue on how to run a business or any idea that you could do a side hustle. We just know how to work hard and save. I think I’m the first in my family to even think of getting a side hustle on/getting a second job. It’s been ingrained in my family that you work one job and be loyal to the company (probably because we’re Indian). But having knives in your back will wear that sentiment off. I just wish I hadn’t been so blind and had started earlier but part of that is that I really wanted to believe in my employer; needed to pay back my parents, innocence of youth and all that.
Also, for many years my health problems (can you believe blocked sinuses almost killed me?) drained me physically and mentally and the thought of overtime let alone a second job was unachievable. But now that that’s not the case and I’m ready to work like I did in college, the overtime has dried up (typical Murphy’s Law).
It was only really after reading your blog that I was inspired to now try another avenue for revenue (one that I would’ve to pursued later in life) in a different way. So thanks Sam. It’s true; everyone needs a Sam in their life. :D
One more thing I would like to add to my defence is that from the time I started working permanently up until last year, I was taking care of at least two households at any one time (my own as well as some struggling family members).
Thanks for sharing your thoughts! One thing I learned from leaving the work force early is that the fear inside our heads is often much, much worse than the reality.
The main purpose of using charts in this post and in the income profiles of financially free people post is to do exactly that, SHOW people the way. I can only share and write so much.
It was people online 7+ years ago who spent time to show me that making money online was possible that gave me a chance to try full-time and risk leaving a well paying job for no money.
I would MUCH rather have tough love and SOLUTIONS to problems, rather than be coddled and told everything will be OK, and to not worry b/c someone else is at fault and somebody else will save me. Solutions are sometimes hard to swallow, but they are often the only way to improve.
Let me know if I can help further!
It’s unfair to complain about student loan debt if you know what you are doing going into it. Unfortunately at 17 most aren’t equipped to make that decision. Maybe that’s their fault, or maybe someone else let them down (parents, school system, colleges).
I’m lucky. I came out of college with no debt and my fiance’s is manageable enough. So I don’t feel I’m in a position to judge those people complaining with 100k in debt and no job. Tough spot to be.
Why on earth are student loans the only kind of loans subsidized by laws that make them impossible to default on? Why aren’t the banks required to face the consequences of their stupid decisions to loan money to students who aren’t good candidates for loans? Why are they allowed to reap all the reward without having to face any of the risk? It’s absolute madness.
The idiocy is in the society that sells the dream of a college education to kids who can’t afford it, and the price we pay is a whole generation of graduates who are left digging themselves out of a hole instead of building wealth in the first decade or two of their work life and a slumping economy as all of our extra dollars are poured down the mouths of the banks who gave out stupid loans.
You prattle about hustle and side gigs as though everyone in America should be willing to work eighty hours a week to get out of a negative net worth, as though it’s normal and not at all a system problem of inequity that’s been getting worse and worse as time goes on. You’re wrong.
I’m a high earner, self-employed, frugal, as bootstrappy as you can get, and still it makes me sick to read stuff like this that puts the blame everywhere but on the people in power that let things get this bad.
It’s not the seventeen year old kid to blame who doesn’t know any better about going to college.
It’s not the kids’ parents to blame for wanting their kids to go to the best and priciest schools.
It’s not the twenty-two year old graduate who sees the reality of crushing debt and is grasping at straws to get out from under.
It’s not the millennial who wants an iPhone (because forgoing an iPhone will solve the 50k loan debt, right?).
It’s not the person’s fault to blame for buying a nice car and getting tricked into taking out a loan. We all deserve a safe vehicle.
And it’s certainly not a young couple’s fault for buying a house with the little they have down and then seeing the economy turn south.
Push frugality and hustle all you want, but don’t make the mistake of blaming people for problems that are so overwhelming and systemic that they have erased the wealth building capabilities of a generation. They are not to blame.
Banks and cutthroat corporations who constantly cut benefits are to blame.
And it’s people like you who publish this yay-boostraps propaganda that ignores the real problem in favor of placing blame squarely on the people who have been hurt the most by the systemic issues in banking and education. Because if we can blame the students, we don’t have to face the real issues that are staring us right in the face, and we sure as hell don’t have to stand up to anyone in power and tell them that they’re doing things wrong.
I hope you find compassion within your lifetime, but you’ve lost a reader today.
Thanks for your thoughts! Any suggestions on solutions to the problem? What are some of the things you are doing to help those who are in debt or who are striving for financial independence?
You won’t get an answer because people like Mrs. Whipple only COMPLAIN and blame other people, instead of ever doing something to help other people by taking action.
This is called virtual signaling. Sad.
Student loans capable of being defaulted would be such high risk loans that no bank would make them at a non-usurous rates. So your proposal simply does away with student loans. Which may be a good thing, really.
I say that because you do almost touch on the actual problem created by the current student loan system. And that is that the money is so widely available it has (1) encouraged people to go to college who aren’t really college material and (2) created incentives for schools to increase tuition and other expense far faster than inflation would suggest was normal and reasonable.
When I went to high school in the 80s, there were kids like me in AP English, and other kids who spent half the school day in the school mechanical, electrical engineering, woodworking and automobile shops. That is all but gone now, for no good reason I can think of.
Great comment Mrs. Whipple. There’s blame to go around everywhere. I do tend to hate it when those who are educated and privelaged pick on those beneath them instead of identifying and vilifying the true culprits – often white collar elites.
Think about the universities who expand expand expand and pay their presidents ridiculous sums and focus on their football teams above the care of students.
I think the point about having to work meaningless jobs 80 hours (hustle) a week just to get back to even is absurd. That’s not life. Anyone striving for financial independence knows that’s not what life’s about. We need to fight the institutional problems, the greed and rapaciousness of those in power and not shame the poor folks who are victimized by it.
Sam offers many great insights so I will continue to read him – and challenge him at times – but I believe most of us can gain through his posts.
What about working 60 hours a week instead of 80 hours a week? Anybody want to join me in driving for Uber again? Or maybe we can try doing TaskRabbit gigs to help pay for things we want or the debt we owe?
My point is: blaming is useless. It doesn’t get us anywhere. We need to find solutions and take action.
You guys will enjoy my follow up post!
Mrs Whipple,
You are the worst type of person in society. Not only do you blame others for your problems, you lash out at people while saying you are doing great, yet don’t do anything to contribute to society. Give me a break.
You’re probably some lonely, out of shape woman who nobody wants to be with because you have no heart, kindness, or self-respect. As soon as you can love yourself you can start loving other people. It’s clear you have some deep personal issues that need to be resolved.
Go see what suffering and poverty is like outside of America.
Seems harsh. She didn’t seem to blame others for her problems, but rightly pointed out that student loans are treated differently from other types of loans as they are not dischargable in bankruptcy. I see no reason why they shouldn’t be?
My guess is Mrs. Whipple is an Surgical Oncologist (and spent years working over a 100h/wk) and while she does well, is not so blind as to see issues in the system that perpetuate the problem. Sam is correct that blame doesnt necessarily make it better, voting and working for change certainly does, making everyone a little task rabbit isnt necessarily the best use of bright minds either. Acting as if laziness is the only problem isnt any better though.
Its far more worth it for a highly productive individual to hone their craft then to annualize a one time bonus to a fictional $/h figure that is not able to be reproduced long term in that area. Please so me a sharing economy or gig work that pays greater than the 1400/h I can get by focusing on my primary endeavor.
In real life problems and solutions are nuanced and have many levels of problems and unintended consequences.
She’s not, but I’ll leave it up to her to explain if she wants to.
You’ll enjoy this new post on her comment: How To Get Everyone But Yourself To Pay For Your Financial Mistakes. I’ve provided eight solutions on how to do so.
I really appreciate all the perspectives, so please keep them coming!
Do you really want banks deciding who should be loaned money for college? What happens when redlining type activity starts occurring, and the most underprivileged members of society can’t get financing for college?
I agree with the comment above, the issue is that loans are so freely available that those who are not college material, get loans, go to school, may even graduate from some of the worst colleges, and then are more unemployable than they would have been without college (and a trade).
In other countries with affordable higher education, they are VERY discriminatory on who can go to university/college. For example when looking at 25-34 year olds;
in Germany 26% have a free/very affordable degree.
In the US 42% have a very expensive degree.
If you want cheaper education like Germany, you need to fail out students like Germany so it is affordable to the country. In America, that is 16% of the population getting expensive degrees, and likely having very little use for them.
I don’t see the lenders being the correct group to decide who can go to college. It should be based on academic ability.
Mrs. Whipple, can I point out a tiny flaw in your argument? At 18, these “children” are allowed to vote, join the military, and if they perform criminal acts, be sentenced as adults. If we push responsibility for these adult activities, why not finance management (debt)? Why are parents failing to recognise their children’s capabilities and encouraging them down a more suitable career path? (My parents acknowledged that my brother should not attend a tertiary institution). Why are we encouraging this victim attitude?
While I agree that some of these creditors must be reined in (based on reading opinion pieces on the internet) but demanding free anything, including education, is a slippery slope from which there’s no return. I live in a country where the government promised free housing, electricity, water and education and barely fulfilled anything. Currently universities are burning because students are demanding free tertiary education. It will never end just like how the electricity theft will never end because it was promised free.
Unfortunately we followed the American education system, by closing trade schools and lowering the quality of education as well as implementing a ridiculous 30% pass mark, so most of these students have no business being there anyway.
What Sam speaks of, is the desperation to be out of debt taken to the limit. My parents had a 20 year mortgage back in the day when interest was around and above a crippling 20% to build our house. My dad worked a low paying job, making extra with overtime. He knew nothing of finances. My mum supplemented income by doing cooking and sewing, and ran the house, accounting for every cent. But by the time I was in university, they had paid it off in full approximately +5 years later by chopping corners and still making ends meets. This blog piece reminded me of those times and how normal it was to us. And how I feel now.
I have to tell you that yes, forgoing an iPhone will solve the 50k loan debt. It’s a luxury, not a necessity. I’m not sure how you guys run a household over there. When I see the cash price (in my currency of course, please pity me) of a new iPhone, I see six month’s water, electricity, household rates and phone bill (with slow adsl) paid in full with money left over. And mind you the phone bill with its unlimited calls and adsl is my little luxury.
I’m 32 but I’m only on my 2nd phone having received my first as a gift at 17 (I was responsible for the bill). Why should I buy another when this one is still in working condition with bluetooth, camera and email? I’ll only buy another when the phone packs up and you can be sure the replacement will be on sale. Same with my car and clothes.
Do you feel overwhelmed when you have a debt? Of course you do. Just ask my mother who spent sleepless nights for years planning her way out of it. It’s part of growing up. Life’s tough and unfair. But that doesn’t mean you roll over and say poor me, I’m such a victim of circumstance. You take the hand you were dealt, plan ahead and fight your way back and out of it.
Very cool post, really gets you thinking! I really resonate with the engineer in this post.
My two cents: a lot of people get caught up with life, sold on marketing and consumerism, and buy what other people buy because it portrays success. And having a nice car, a nice expensive purse and fancy clothes is a status thing.
I’m guilty of that too…at least more so in the past.
What has helped overcome this: Once you take a bit of time to reflect what you really want out of life, then it all makes sense and you will do what it takes,
Those are the the action takers
As for others, they gravitate to immediate gratification and working extra isn’t worth it.
I still hustle despite having a family, a full time consulting gig, and my blog….the extra money helps me build more projects, help others and buy more time in the future.
Sam, c’mon – there are lots of lazy people out there but I think there’s clearly a predatory lending problem in this country that’s created a student loan problem. Lenders are very protected legally while consumers are quite exposed.
There are plenty of people who are taking out huge loans for for-profit degrees that have no idea what they’re getting into. I firmly believe no one wants to ruin their life by taking out $200k for an art degree, but that happens. Even if it’s because they’re stupid don’t they deserve a little protection – how can they even be approved for that sort of thing?
Lots of people who are single parents desperate to make a better life but with real responsibilities, people who have to take care of sick parents, people who have medical emergencies and can’t bankrupt their loans. You were a never a dumb kid who made a mistake?
Consider for a moment your high powered education, upbringing in a nuclear family and investment banking experience that puts you at the upper echelon of society. I don’t want people to get a free pass but I reject the notion that lenders are blameless and everyone in trouble is lazy and could pay their loans if they’d just get off the couch.
I am a blogger who was unemployed for a couple years and drove for Uber for 7 months most recently. My profile is definitely NOT “upper echelon of society” material. Maybe while I was working in finance, but not now and not for the rest of my life probably.
I made plenty of dumb mistakes and I paid for them dearly. And now I’m doing everything possible not to make the same mistakes. Medical expenses are outrageous here in the US, and I’m very pro universal healthcare b/c nobody should not be able to afford medical insurance. I don’t care that I’m paying $1,500/month for two people if it can help someone else get care.
Tough love is tough, but it will do more to help someone than to just tell them everything will be OK. If anybody wants to get motivated, let’s ping ourselves at 6am every weekday and get started on something that can help achieve financial independence!
I have written about this in the past, and this article is right along those same lines of the point that I always try to make. Our choices in life have a very, very profound effect on how successful we ultimately become and whether or not we achieve our goals. While there are circumstances that we truly cannot control, our choices and how we react to those circumstances we very much CAN control. Some complain. Others do.
Sam,
Couple of things here:
1) Is it okay that companies and high profile individuals can declare bankruptcy (a la Trump) but not the run-of-the-mill fool down the street who’s been exploited and duped? I believe in debt forgiveness big time. For student loans in particular (as those never leave) that really pisses me off. This is taking advantage of young people without experience who’ve been lied to that a college diploma is integral to success. I have sympathy for those folks. Not to mention those private for-profit colleges which disseminated BS fliers promising hi-paying jobs, etc. upon graduation. It’s BS these people were preyed upon.
2) My wife incurred over 480k of debt. She is a lawyer, a public defender. Her base salary out of law school was 50k. Now granted she didn’t have to attend a prestigious law school and she could have delayed matriculating until she had the money to defray some of the costs. But she didn’t. She was 21. Fresh out of undergraduate, and wanted to start helping people immediately.
She is on the 10-year public service loan forgiveness plan. This will have enormous repercussions for taxpayers I believe. An uncountable number of individuals are taking this route and there is no method to adequately trace just how many participants are out there. I believe the first bill comes due in 2018. As you can imagine this program has come under attack and is not likely to be extended long-term. However…it has been open for 8 years already. She is also paying an ‘income-based’ rate so that it’s affordable…meaning she’s not even near touching the principal.
Perhaps this encourages public service. Perhaps it encourages citizens to continue their education. I think it’s a little of both and I’m sure a slew of other issues.
I’d be happy to pen a guest post on why I think loan forgiveness is important. Can potentially provide examples of nations whose loans were forgiven which saved their citizens from devastating consequences.
Are you able to provide a breakdown as to how your wife graduated with $480k of debt? What proportion was tuition / living expenses / ungrad vs grad school / interest?
I was mistaken in terms of the initial amount. She took out $180k solely in law school loans, tuition being about $40k, living expenses, rent etc making up the other $20k.
Because she’s on income based repayment and required to be locked into the federal government loan rate of 8%, she doesn’t even touch the principal each month. By 10 years she estimates it will have ballooned to $480k as I mentioned before, based on the interest being capitalized and added onto the principal.
Yes! I would love a guest post from you about why debt should be foregiven, or why I should pay for your wife’s student’s debt and not you if she should default.
This will be great! I love reading perspectives and learn how folks justify their decisions.
Sam here is an article that give a brief synopsis of country debt forgiveness I alluded to:
https://www.huffingtonpost.com/marcelo-giugale/does-debt-forgiveness-wor_b_5318764.html
It’s just one article but in my Master’s program I remember doing some case studies on nation’s that benefited from sweetheart deals with creditors that had a positive impact. Wonder what will come of Puerto Rico today?
Shoot me an email if you want a post and I will try to work on something and email it to you. I think you’d want it confined to personal debt forgiveness in which case what you’re likely to receive is a list of compassionate anecdotes that places blame not on the unwitting consumer but on the unscrupulous lender(s).
I actually believe I have an objective stance on the issue, really. Many people make dumbass decisions knowingly (take out obscene amounts of debt to finance nice toys) and I don’t have much sympathy for those folks. But that doesn’t capture the entirety of the picture as you know.
Okay, Financial Fool asking a question here. What is the big deal with filing for bankruptcy? Yeah your finances are disclosed to all and sundry but at the end of the day, the debts are cancelled and you start fresh right?
Are there employment issues like Sam’s previous post about the bad debtor not getting the job because of a bad debt?
After reading this site for several years, this is the first time I’ve felt compelled to comment. I’m a 32 year-old doctoral student with extremely high student loan debt ($200k +). While a small portion of my student loan debt is from my undergraduate degree at an Ivy League institution that refused to apply my outside scholarship money correctly (long story for another time), most of it is the result of my doctoral studies being extended due to unexpected health challenges and a field change (another long story). At this point, within the next year with career options (academia, government, or traditional corporate) and side hustles (writing, tutoring, music, ministry-related endeavors, consulting, etc.) that make my student loan debt feel manageable. Plus, I’m single and I have few responsibilities outside of myself and my elderly mother. Nonetheless, as a largely quantitative public policy researcher, I am aware that the United States’ student loan system has many issues that need to be addressed–especially with regard to private loan servicers like Navient (formerly known as Sallie Mae) that tend to target students from low-income families who in many cases are among the first in their immediate social circles to go to college. The same could be said about for-profit educational institutions like the University of Phoenix and Corinthian Colleges (which ran Everest College / Everest University / Everest Institute before being shut down by the federal government for its unscrupulous dealings) that have been known to target low-income individuals with little knowledge of the education system and below-average financial literacy. In the end, entitlement is a part of the problem, but so is the system of predatory lenders and educational institutions profiting while selling false hope to vulnerable people.
Glad you are commenting for the first time after several years!
I think you’ll feel much better about your student debt once you graduate and start working. There’s always anxiety during school on whether you will get a job or made the right choice. The good thing is you recognize you’ve decided to take on the $200,000 in debt. So my question is: do you expect to pay it back? Or do you expect someone else to pay it back for you?
I don’t know these for-profit education institutions charge so much. It would be one thing if they were free, or charged a level that was commensurate with their placement levels.
I do not expect anyone to pay my student loan debt for me. While I wish my educational journey had been more straightforward and less expensive, I still feel the opportunities I have ahead of me are worth the cost. I’m creative so I am confident that I will find a way to thrive in spite of the high loan payments that are waiting for me once I graduate. For now, I am weighing my career options and trying to ensure that I am not swayed by salary alone. Thankfully, I have friends with high-paying corporate jobs who have been open enough with me to share the pitfalls of having a high salary and no personal fulfillment. Ideally, I’ll end up being a scholar / entrepreneur hybrid.
As for the for-profit institutions, I have a friend who earned an associate’s degree in criminal justice from the now defunct Everest College. He chose Everest because its online offerings fit in well with his work schedule. At the time, he was working several hours per week as a security guard for a few retail stores and nightclubs. After graduation, he decided to go back for his bachelor’s degree at a traditional 4-year college. He pretty much had to start over because less than a semester of his credits transferred in. Then, with a year left of his studies, he found out that his time at Everest led to him prematurely maxing out his undergraduate federal loan eligibility. Since his credit wasn’t strong enough to get a private loan, he ended up dropping out. He’s currently working the same kind of minimum wage job that he could have obtained without attempting to go back to school except that he now has student loan payments. I feel that government repayment (which unfortunately falls on taxpayers) would be acceptable in cases like his since the government really did close Everest for its predatory practices.
I don’t know if its so much about getting ahead as it is about not falling behind. Europeans are happy because they have safety nets in place. They will never worry about going bankrupt due to medical costs, or spending $100k+ on a degree, or having to eat dog food in their old age. Younger Americans will not receive pensions and do not expect much from Social Security. So “getting ahead” may mean affording medical insurance, paying off student loans and adding some financial security in their old age. This would make “getting ahead” on par with what Europeans get for free.
Obviously your level of success, retiring before 40, takes much hard work, study, patience, and some luck as well as personal sacrifices. Retiring before 40 is not an entitlement, but is a carefully planned choice. But for a country as wealthy and productive as the US, people should be able to afford homes, pay medical bills, and have some future security on 40 hours per week. In times past, families were provided for on single person incomes. Why can’t we do it now with our current levels of GDP?
Good perspective. Coming from a middle class family, I had tremendous fear of falling behind b/c so many people were smarter, went to better schools, and came from wealthier families. The only way I could catch up was to work longer and figure out side hustles.
The good thing I’m coming away with is that those who don’t work longer or do any side hustles must not feel the same amount of fear or stress that I felt. In other words, they were more relaxed and happier.
Times change. Society changes. We must adapt or get left behind. I’m for universal health insurance b/c disease doesn’t discriminate. Why should the rich live and the poor die b/c they can’t afford the same treatment.
I also think a factor is the culture of spending in the U.S. Many people seem fine with being in debt (loans, credit cards, etc.) and continuing to spend without saving for their future.
For example, I just graduated college last summer and started working full time. Out of my three college roommates all three bought new cars after graduating and starting work, mind you 2 have student loans to repay. And let me add that all three were no where near your 1/10th rule for car buying, but all seem perfectly ok with shelling out what I see as an absurd amount of money for a brand new car. It just doesn’t make sense to me.
It’ll be interesting to see how things turn out in 10 years. Compound interest/returns is a very powerful wealth builder.
I’m glad you’ve got your head on straight EARLY on!
I think your travel experiences to Asia and the third world give you a unique perspective, but one that is not shared by others. America is still a relatively good place to find opportunities but we are a shadow of what we used to be. Just decades ago, high school grads were able to find a job that allowed them to buy a house, a car, and get married and raise kids with their wives staying at home. Going to college was the way the smart and ambitious could get ahead.
There was an implicit promise in society that good grades and education provides a good job. So I can feel for today’s generation that get $120k in debt and spend 6 years getting a Masters degree only to be unemployed. Working “only” 40 hours per week with two weeks vacation is still more hours of work than most first world countries. Only comparing America with the third world makes us feel lucky.
Compounding the frustration and anger is the fact that jobs are still being outsourced at an alarming rate and company executives make 300 times what their workers make. GDP has tripled over the past few decades, but the average wage has stayed stagnant even though the average citizen is more educated.
This idea that only the hyper-energetic and super-ambitious will succeed and the rest will perish is what is tearing society apart. If your goal is to live a balanced life, raise a family, volunteer and be active in your community, then you are out of luck. Only those that chase money can seem to catch up let alone get ahead.
Finger pointing and calling those that choose not to work 60 hour weeks is pointless. If these trends continue, the masses will elect whoever promises to solve it. Right now it looks like it might be Trump. Next election it may be a real fascist. Having a highly educated, under-employed, unhappy citizenry is an easy recipe for chaos.
I don’t remember ever being given an implicit promise that getting a college education and good grades would promise me a good job in the 90s. All I remember was thinking “FOOK! The world is so damn competitive. I better get good grades to give myself more options.” I remember someone scolding me during freshmen chemistry saying, “How do you ever expect to become a doctor if you can’t even get an A in HS chemistry?” I didn’t have the natural gift of getting good grades, and my SAT scores were very mediocre so I just had to spend more time studying.
I knew some very wealthy people growing up, which caused me more anxiety to try and work more b/c I didn’t have the crutch to fall back on. If there is no safety net, the only way is forward.
There are definitely bad breaks all the time. Lucky for us, there’s the gig economy that helps keep people surviving if they have the hustle to work jobs beneath their $120K Master’s degrees. Luckily for us, there’s the internet which we can build our brand ourselves online to potentially find better opportunities.
Working 40 hours a week or less is absolutely fine. Europeans are consistently rated the happiest people on Earth, despite high unemployment and taxes. But working 40 hours a week or less and complaining why you can’t get ahead makes no sense. Does it to you?
Ha, the comment featured in this article is mine from one a few months ago. Nice to see that it helped inspire more discussion on this topic! Unfortunately I think the people who could most benefit from reading these articles and comments simply don’t get it and will never see discussions such as these. Keep up the good work!
Thanks for commenting! Too bad Mrs. Whipple below believes you or I have no compassion for trying to do more to improve our financial situations.