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Economic Value of a College Degree vs. Working in a Trade

5,830 Views | 67 Replies | Last: 12 days ago by ABATTBQ11
I bleed maroon
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AG
First of all, this is not intended to be political, but we will accept some current trends as a baseline, at least for a few years. This all depends on assumptions, so feel free to state your own, and apologies in advance for my simplistic unresearched "fact"-set.

Given fewer illegals (undocumented, migrants, etc.) filling lower-end jobs, it becomes clear wages will have to increase to (in GW Bush's terms) do the work that Americans just won't do. While this will certainly lead to sustained increases in inflation, it also may provide more of a "living wage" to those left behind in our AI Age who don't have a decently funded investment portfolio. My framework:

If you can earn a minimum of $50-60k+ for being a truck driver, $75k+ being an electrician or plumber, or $100k+ being a nurse, does it really make economic sense for someone of average (or below) intellect (or drive to study/learn as college demands) to spend 4-6 years earning a college degree? I suggest in most cases is doesn't, due to forgoing college debt, getting a head start on saving for a house, and developing expertise much more rapidly (potentially a quicker path to starting your own business, if you're driven that way).

I could see a journeyman electrician saving 20-30% of their income, and being so far ahead financially that it might take 15-20 years for a degreed entry-level accountant to catch up (paying off college debt, working 60+ hour weeks, and other sacrifices in building their career beginning 4-6 years later, even if they do earn $80-100k annually to start).

By that time, the electrician could have started their own business, bought a nice house, taken a lot of vacations with family, and might have no non-mortgage debt. They might be working 8-4 M-F, and just may have a better quality of life.

No real point to this, other than to pose some food for thought. I think the new situation could erase some of the stigma of not having a college degree, and I think that's healthy for our society.

THOUGHTS?
AgPT06
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AG
I agree. From a strictly economic sense it is often difficult to justify college. If you have a drive to hone a skill and some level of business sense, a trade, leading to a private company can definitely lead to financial success. Plenty of success stories out there.

But is college more than a degree leading to a "job"? To me, it's a transition time for young people to grow up, learn life skills, make connections, and hopefully gain an education at the same time.

EFR
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I am curious why being a nurse was included when it requires a college degree. It requires a minimum of an associates and some places require a BSN.
I think there is good money in the trades, with three caveats. First is that to make good money it is literally back breaking long hours hard work. Second is that many people vastly overestimate what those guys are making. And third is that people always say "you pull wire for a few years then start your own business and ten years later you are on easy street". The reality is that most tradesmen never own their own business, many that do own are not getting rich, and many that try fail.
I bleed maroon
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EFR said:

I am curious why being a nurse was included when it requires a college degree. It requires a minimum of an associates and some places require a BSN.
I think there is good money in the trades, with three caveats. First is that to make good money it is literally back breaking long hours hard work. Second is that many people vastly overestimate what those guys are making. And third is that people always say "you pull wire for a few years then start your own business and ten years later you are on easy street". The reality is that most tradesmen never own their own business, many that do own are not getting rich, and many that try fail.

Excellent point. I was kind of assuming any of them took some trade school (1-2 years?), nurses just more than most. In reality, to have a great nursing career, you might have to invest just as much as any other college degree.
one safe place
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I bleed maroon said:

First of all, this is not intended to be political, but we will accept some current trends as a baseline, at least for a few years. This all depends on assumptions, so feel free to state your own, and apologies in advance for my simplistic unresearched "fact"-set.

Given fewer illegals (undocumented, migrants, etc.) filling lower-end jobs, it becomes clear wages will have to increase to (in GW Bush's terms) do the work that Americans just won't do. While this will certainly lead to sustained increases in inflation, it also may provide more of a "living wage" to those left behind in our AI Age who don't have a decently funded investment portfolio. My framework:

If you can earn a minimum of $50-60k+ for being a truck driver, $75k+ being an electrician or plumber, or $100k+ being a nurse, does it really make economic sense for someone of average (or below) intellect (or drive to study/learn as college demands) to spend 4-6 years earning a college degree? I suggest in most cases is doesn't, due to forgoing college debt, getting a head start on saving for a house, and developing expertise much more rapidly (potentially a quicker path to starting your own business, if you're driven that way).

I could see a journeyman electrician saving 20-30% of their income, and being so far ahead financially that it might take 15-20 years for a degreed entry-level accountant to catch up (paying off college debt, working 60+ hour weeks, and other sacrifices in building their career beginning 4-6 years later, even if they do earn $80-100k annually to start).

By that time, the electrician could have started their own business, bought a nice house, taken a lot of vacations with family, and might have no non-mortgage debt. They might be working 8-4 M-F, and just may have a better quality of life.

No real point to this, other than to pose some food for thought. I think the new situation could erase some of the stigma of not having a college degree, and I think that's healthy for our society.

THOUGHTS?

I did tax returns for over 30 years and saw a lot of the ranges of income that folks made and I had knowledge of the lifestyles of hundreds and hundreds of people. My practice was in my hometown of around 8,000 people.

If I had it to do all over again, I likely would not have gone to college but saying that is with the benefit of hindsight, seeing the fruits of labor of those who did not go, but got into a trade or had their own business. Would I have done what they did as far as running the business? Having multiple locations? Branching out into businesses that tied into their core business? Likely, no. I had no experience in those trades or running business, and neither did my parents, thus no advice. Some of those folks made an awful lot of money, multiples of what I made as a CPA. But many that had their own business were second or third generation owners of the business, it was running wide open when they took over.

When this subject would come up over the years, my comments were generally along the line that out of my top 20 clients who worked for a living (i.e., excluding those who had substantial royalty or working interest income), those in my peer group, only one had a college degree. These were people with $500,000 to $1,000,000 in annual income. Few had ever been on a college campus, at least not until their children went to college. The others had their own business or businesses.

Though you said you could see a journeyman electrician saving 20% to 30% of their income, I can't. And I never saw that. Not once in over 30 years. Folks in trades (whether it be a welder, electrician, plumber, HVAC, etc.) are typically consumers. They spend almost everything they make. They work hard, they play hard. They had all the toys (boats, ATV, high end deer leases, tractor, skid steer, etc.), very nice homes generally (not always though). I hunted and fished with a lot of these kind of people. And they seem to have plenty of debt.

As to working 8-4 M-F after starting their own business, never saw that either. Most worked 60 to 70 hours a week (more on occasion) for 3 to 5 years getting it off the ground. In time, the hours went down, but never did it become 8-4 M-F. Yeah, having your own business means you can take off when you want, but you also have to be there far too often when others are in bed asleep. And worry about things when you are not there.

One other factor about the trades is the issue of aging. When a 20 to 40 something, crawling under a house for plumbing, or in an attic in summer for HVAC, or in a trench welding pipe, is work but not something you can't handle. I worked as a derrickman until my mid-20s. Sort of a "ain't nothing I can't take" mindset. But those same tasks would be pretty awful once you get some years on you. They have to be smart enough to hire that stuff to be done once they get older, while they are out drumming up business and such. Not sure where they would learn that, perhaps from a mentor. We have a small RV park and everyone works in some sort of trade. A few have attained a supervisory role, don't get dirty, but still work 50 to 60 hours a week. Many of them are past 40, and in the summer months, they come in and look like they are beat. They shower, cook, and go to bed. Up at 5 to go to work. Again 50 to 60 hour weeks.

It's a big old goofy world. I had one dentist client, and one family doctor, who for the last 10 to 15 years of their work life, worked just enough to make $90,000 to $105,000 a year. Each had one employee. Could have made three or four times that. It gave them something to do, and some income. Evidently it was enough. Neither were wealthy, but neither were they poor. I had two others who worked all the time, made a lot of money, had a lot of stuff, and both wound up shooting themselves.
Gaeilge
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I think the issue we have with CDLs is that we currently have a massive shortage and we're trying to get a bunch of new CDLs on the road all while telling them their jobs will be replaced by autonomous trucks in the next 10-15 years. I don't think we see CDL shortage resolving ever. I think it gets tighter to the point that the autonomous vans are sooner rather than later on a mass scale.
ATM9000
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AG
There's good money in the trades… but I think you vastly overrate how much folks in the trades make early on when they are apprentices and journeyman and are significantly underbaking how much they work and how much time it takes to get a master license.

And yeah… truckers can make a good living but mate… that job and lifestyle is pretty brutal for so many reasons.

College degree isn't just about the economics… it's about giving you a means to income that's not brutal.
Captain Winky
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Another post overblowing the trades. There was a post on f16 about this and one very upvoted comment was about being a diesel mechanic and how much they make. Only problem being that it is incredibly hard on your body and most are practically handicapped by the time you turn 50. Sounds like a great trade to get into except for having a non-functioning body for the last part of your life.

Edit to add that the part of your body breaking down was part of that upvoted post.
Mas89
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Trades may be great but that's tough conditions in Texas. I've known and hired welders, hvacs, mechanics, etc over the years and it's a brutal, hot, often dirty work environment. I've always wanted a small air conditioned and heated shop for my ranch/ construction equipment repairs. Our local tractor tire/ big truck tire repair/ installation guy told me he often has $1,000 income days when his schedule is full.

Of my local friends who did not go to college, the ones who worked as chemical plant/ refinery operators for Exxon, Chevron, Oxy, Enterprise, etc seem to have had great careers and many retired before age 60.
I realize this is local to certain areas, but a good career if that's what someone wants. A long time friend recently said he makes over 200k per year currently at $68 dollars per hour but wishes he was not required to work so much overtime. Plans to retire soon.
These plants have lesser paid maintenance contractors who do most of the repairs, maintenance, welding, and other dirty jobs. Most of the operators I know work in a control room, including an old Aggie roommate with a management degree from Tx A&M. And another Aggie friend with a wildlife/ fisheries degree.
one safe place
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Mas89 said:

Trades may be great but that's tough conditions in Texas. I've known and hired welders, hvacs, mechanics, etc over the years and it's a brutal, hot, often dirty work environment. I've always wanted a small air conditioned and heated shop for my ranch/ construction equipment repairs. Our local tractor tire/ big truck tire repair/ installation guy told me he often has $1,000 income days when his schedule is full.

Of my local friends who did not go to college, the ones who worked as chemical plant/ refinery operators for Exxon, Chevron, Oxy, Enterprise, etc seem to have had great careers and many retired before age 60.
I realize this is local to certain areas, but a good career if that's what someone wants. A long time friend recently said he makes over 200k per year currently at $68 dollars per hour but wishes he was not required to work so much overtime. Plans to retire soon.
These plants have lesser paid maintenance contractors who do most of the repairs, maintenance, welding, and other dirty jobs. Most of the operators I know work in a control room, including an old Aggie roommate with a management degree from Tx A&M. And another Aggie friend with a wildlife/ fisheries degree.

My son works at an air separation company and makes in the $160k to $180k range depending on how much overtime. Very good benefits and they get the 7 day long change every 4 weeks. If he does coverage for someone and it is overtime, he makes just over $1,000 for that one shift. Most of my peer group wound up in chemical plants or refineries or similar work. Many of them were financial knotheads but retired with $1.4 to $2.0 million or so in retirement.
jh0400
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AG
My dad, grandfather, and uncle were all in the HVAC business. They did okay, but not great. The work was extremely seasonal, and the busiest times were during the hottest parts of summer.

I feel like there are a lot of college graduates on here who like to talk about the trades but have never actually done the work. The jobs that pay the most typically have the worst working conditions.

I remember working in the family business during high school and college, and it's difficult to explain just how miserable it is to kneel or lie on your side for hours in an attic during a Texas summer, cursing at a blower fan assembly that doesn't want to come out or go back in.

It's not the clean and glamorous six-figure lifestyle that some people on here seem to think it is.
sts7049
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graduating college with tens if not hundreds of thousands of dollars of debt is pretty miserable too. and really sets people up poorly for the rest of their lives.

jh0400
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sts7049 said:

graduating college with tens if not hundreds of thousands of dollars of debt is pretty miserable too. and really sets people up poorly for the rest of their lives.




I've done both. It was much easier to sleep at night knowing I'd go to work the next day in an air conditioned office and would eventually pay off my student loan than it was knowing I had to get up the next day and work in a 120 degree attic.
YouBet
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When this topic comes up, we tend to pigeon hole "the trades" as plumbing, HVAC, electrical which I guess is mostly correct. However, there are so many random ass jobs out there that people fall into or discover and then make a ton of money doing it and those get overlooked....that do not require a college degree.

I'm not going to share what this business is because I'm going to protect the innocent but I know a guy with no college degree that really wasn't doing much in life even into his 30s and then started low bidding some government contract work and winning it. About 10 years later he sells that business for $30-40M. Has started a similar business after selling the first one and is now going to sell the second one for >$10M.

Now owns a **** load of land and has so much money he can't even spend it all. It's just such a wild story and it's simply because he realized he could low bid some contracts. lol.

My last boss never finished college. Dropped out because he made enough money making websites for people that he no longer felt he needed to go. He's now worth north of $100M.
sts7049
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jh0400 said:

sts7049 said:

graduating college with tens if not hundreds of thousands of dollars of debt is pretty miserable too. and really sets people up poorly for the rest of their lives.




I've done both. It was much easier to sleep at night knowing I'd go to work the next day in an air conditioned office and would eventually pay off my student loan was easier than it was knowing I had to get up the next day and work in a 120 degree attic.


well, good that it worked out for you specifically. but the cost of college is not always worth it. and not every trade works in an attic.
double aught
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AG
Interesting thread.
leighann
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This is an interesting thread. We've talked about this with our kids, and are concerned about AI making some white collar jobs less common/needed.
We'll encourage our kids to acquire skills that they can be paid for.
Our local Lions Club used to help pay for tools for tradespeople just getting started as barbers, mechanics, etc., and I thought that this was a great alternative to college scholarships.
Ducks4brkfast
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I have welders that make more than $100,000 a year. In a shop/ clean and controlled environment. It's not air conditioned, but it's not laying on your back in the mud welding a 36" diameter pipeline. And many men well into their 60s and 70s. We have very, very low turnover too. Learn to weld in high school and I'll hire you.
TTUArmy
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I've got two daughters and a son. The daughters went to college; teacher and accountant. They pretty much hated their professions after a few years and decided to return to school for a second degree: nursing and IT...respectively.

My son did 4 years in the Marine Corps and is currently at TSTC-Waco getting a 2 year degree learning to be a CNC machinists. My son will have no debt and a skill once he graduates. I have no idea how much AI could/will impact his future career. He's pretty flexible and technology savvy so, I'm not terribly worried about his ability to adapt. He's also got an entrepreneurial spirit. Hopefully, he considers starting his own business after a few years of paying his dues in the trade.
permabull
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I made a similar analysis when I left grad school after 1 semester to take a job. I mostly only started grad school bc I didn't have a good job lined up out of college. If I had for my grad degree I likely would have started with a 20% higher salary than just my undergrad but once I factored in 2 years less compounding growth in my 401k, the more student loan debt, and two years of missed raises, grad school no longer made sense once I had the job offer.
94chem
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I have 6 kids, and I can just tell as a dad which ones won't be happy without a higher education. I have one welder, and he made an art project for his mom. One in a Ph.D. chemistry program. Another who speaks 4+ languages. Another who solves differential equations in the middle of the night for fun. One who plays D1 sports, one who is disabled and will never do blue collar work...so much of the FIRE/trade/career stuff only focuses on income, but the human spirit was made to CREATE something. That's what our kids need to find.
94chem,
That, sir, was the greatest post in the history of TexAgs. I salute you. -- Dough
Buck Turgidson
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Ducks4brkfast said:

I have welders that make more than $100,000 a year. In a shop/ clean and controlled environment. It's not air conditioned, but it's not laying on your back in the mud welding a 36" diameter pipeline. And many men well into their 60s and 70s. We have very, very low turnover too. Learn to weld in high school and I'll hire you.

Even though my son is going to college, he wants to learn to weld. He is a HS senior now and his HS has no shop classes. Where could he learn to weld, and how long does it typically take? This coming summer is wide open.

[edit]He wants to major in Construction Science at A&M and work for a general contractor upon graduation. His interest in welding is more to have a skill that might come in handy on the jobsite once in a while, rather than being a full time welder.[/edit]
94chem
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Buck Turgidson said:

Ducks4brkfast said:

I have welders that make more than $100,000 a year. In a shop/ clean and controlled environment. It's not air conditioned, but it's not laying on your back in the mud welding a 36" diameter pipeline. And many men well into their 60s and 70s. We have very, very low turnover too. Learn to weld in high school and I'll hire you.

Even though my son is going to college, he wants to learn to weld. He is a HS senior now and his HS has no shop classes. Where could he learn to weld, and how long does it typically take? This coming summer is wide open.


We have a place in Humble, Texas Arc Welding Academy, that could do it. Probably $5K or less.
94chem,
That, sir, was the greatest post in the history of TexAgs. I salute you. -- Dough
Ducks4brkfast
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AG
Buck Turgidson said:

Ducks4brkfast said:

I have welders that make more than $100,000 a year. In a shop/ clean and controlled environment. It's not air conditioned, but it's not laying on your back in the mud welding a 36" diameter pipeline. And many men well into their 60s and 70s. We have very, very low turnover too. Learn to weld in high school and I'll hire you.

Even though my son is going to college, he wants to learn to weld. He is a HS senior now and his HS has no shop classes. Where could he learn to weld, and how long does it typically take? This coming summer is wide open.


Public school.

Or a harbor freight stick welder and you tube.
ABATTBQ11
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I have done a lot of DIY work, from plumbing to electrical to HVAC. I would not want it as my day job. It often sucks even under the best conditions, but it's especially bad when you're outside in the heat, in an attic in the summer, or freezing your ass off. It's usually a pain in the ass project that I'd love to pay someone else to do, but I'd rather save the money more.
JobSecurity
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I think it's more important to have a plan or a path than anything. A degree from a private university in elementary education is probably not going to be worth it financially. My parents never talked with me about a career field or what I could do with my degree and whether those fields would have decent wages, I just stumbled into something that has been great.
bagger05
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94chem said:

I have 6 kids, and I can just tell as a dad which ones won't be happy without a higher education. I have one welder, and he made an art project for his mom. One in a Ph.D. chemistry program. Another who speaks 4+ languages. Another who solves differential equations in the middle of the night for fun. One who plays D1 sports, one who is disabled and will never do blue collar work...so much of the FIRE/trade/career stuff only focuses on income, but the human spirit was made to CREATE something. That's what our kids need to find.

Excellent post. Focus on being happy first and you can reverse engineer an education and career path from there. Don't feel like our society does a good job of teaching this.
Hoyt Ag
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I manage people in a few different trades and come from a family of tradesmen/women. Our electricians, instrument techs, welders and mechanics are all over $100K a year. My girlfriends son just got his journeyman card and is now rated at $55/hr with his employer, plus 5% from every ticket. I have a cousin that runs a hot shot OTR business and I know his guys are well into $80K a year. Some of the trades guys have short career lifespans due to the work but there are so many options now that are not backbreaking work in ****ty conditions. The guys that work for me have it pretty easy on the body and make great money. Just depends on the path you take.

I wish I had gone into the trades after seeing where it took my siblings and friends. Corporate America SUCKS.
South Platte
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For a rather bland topic this thread is pretty wild.
62strat
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I bleed m said:


If you can earn a minimum of $50-60k+ for being a truck driver, $75k+ being an electrician or plumber, or $100k+ being a nurse, does it really make economic sense for someone of average (or below) intellect (or drive to study/learn as college demands) to spend 4-6 years earning a college degree?

No one actually believes this to be true, and you aren't the first person to pose this question. Many people have made the dumb decision to go to college when it didn't make (financial) sense, and that will likely continue to happen. But many kids now are going for the trades, and no one is looking down on them for doing so at this point.

I'm in CO and my SD and the others around all have CTE campuses for high schoolers, and I'd guess it's similar all over. The pendulum has absolutely swung back to not pushing ALL kids to college.

My wife works at the CTE campus in our district. There are roughly 16k high school kids in the district, so assume half for 11/12 grade (the requirement to enroll at the CTE campus), so that's 8k kids.

My wife said enrollment this year was nearly 1200. That's 15% of kids pursuing a trade/skilled job. And this campus is only 3 years old.. they were behind on getting one, so are slowly growing (last year was like 850). Our neighboring district opened theirs in 2018.


YouBet said:

When this topic comes up, we tend to pigeon hole "the trades" as plumbing, HVAC, electrical which I guess is mostly correct. However, there are so many random ass jobs out there that people fall into or discover and then make a ton of money doing it and those get overlooked....that do not require a college degree.


I was going to say this.. 'trades' is overused. The campus my wife works at is called CTE, career and tech-ed.. notice how it's not called 'trade' school anymore.

The options for kids in this district;
Advanced manufacturing/aerospace
advanced robotics
architecture
automotive tech - ev/hybrid
aviation
building controls tech
construction trades (there's the term everyone is using)
culinary/hospitality
electrical technology
emt/ems
future educator
nursing (cna)
secure network tech


So much more than just plumbing/electrical/carpenter.
I bleed maroon
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Quote:

No one actually believes this to be true, and you aren't the first person to pose this question.



I have no real idea what you're trying to say here?


The rest of your post makes sense, along with all the other responses - thanks to everyone for engaging in an interesting topic.
62strat
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I bleed maroon said:


Quote:

No one actually believes this to be true, and you aren't the first person to pose this question.



I have no real idea what you're trying to say here?


The rest of your post makes sense, along with all the other responses - thanks to everyone for engaging in an interesting topic.

I'm just trying to say, the question you posed has been around for a while, and people are no longer pushing college like in the past. It was college all the way when I was at aTm in late 90s/2000s, and continued to be for a while, but the idea of 'college is the only answer' has been waning for a decade or so imo.

Your post just made it sound like you came upon a new concept, that trades can make as much money as degrees.

I bleed maroon
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Quote:

Your post just made it sound like you came upon a new concept, that trades can make as much money as degrees.



I think you were seeing something that wasn't there. Sorry to offend your sensibilities.
jenn96
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This has been a fascinating thread to read. I'm approaching it from the other direction, with a daughter who doesn't want to go to college. My 13 year old daughter is very smart and clever but has always struggled academically. She hates school and for now, has no interest in college. She wants to get her cosmetology degree in high school, graduate with her license, and start working right away. A lot can change, especially once she gets older and all her friends are talking about where they are going to college and applying, but as of now she has zero interest at all. Financially, I'd much rather see her start working and saving money than blow $20K+ on a Tier 2 or 3 school before dropping out because she hates the school part of college.

A lot will change between 13 and 18 and she very well may go to a university, and we are saving as if she will. But it's been really interesting to read the responses, here and just in general around the topic. The discourse around the trades, not going to college, and the math of education debt vs working immediately are almost all based on young men. And while I hear a lot of white-collar, educated professionals extoll the virtues of the trades I don't see many of their kids skipping college to follow that path, and I do worry about all the intangibles she'll miss out on. Not to mention that working as a cosmetologist, even a very good one, doesn't pay like a high-demand trade does unless you own your own business with all the attendant headaches. On the other side, it's completely AI-proof and extremely portable, and can be done part-time and flexibly.
bagger05
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I know this isn't you doing this... but the idea that anyone needs to have some idea of what they want to be when they grow up when they're 13 is heartbreaking to me.

But honestly if she was more of an academic type and wanted to compete for going to an Ivy League school or something... starting to build your case at 13 is maybe even a little late.

I would make sure your daughter understands that you don't have to decide to go to college when you're 18. You can always do it later. Some of the people I know who had the best college experiences (academically and otherwise) started college a little later after working for a few years.

College was pretty hard for me in a lot of ways. Not because I wasn't smart enough, but because I was too immature. A little life experience would've done me a TON of good.

Like I said this is a comment on society, not you or your daughter.
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