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> 80k invested at 18 and getting 10% returns like in the stock market is $1 million at age 45. At 65 it’s $7 million dollars. The math on college doesn’t even b

> 80k invested at 18 and getting 10% returns like in the stock market is $1 million at age 45. At 65 it’s $7 million dollars. The math on college doesn’t even beat the stock market. This isn't the alternative for most people. There isn't an option to get a mix of 80k in federal and non-federal students loans to throw into the stock market. The real question is, for most people, does it make sense to take on ~80k in student loans and go to school for 4-5 years, or should you try to immediately enter the job market. Plus, expecting 10% real returns, year after year, in some chosen passive fund is unrealistic modeling.

Mistletoe 3y ago
No one said 10% real returns. It’s 10% counting inflation, which is the number I provided. > The average stock market return is about 10% per year for nearly the last century, as measured by the S&P 500 index. I don’t know why people are getting hung up on this 10%, it’s just the historic returns everyone in Boglehead and FI/RE communities uses. If you wanted to use the 6-7% real returns after inflation that is fine too. The numbers still are the same, you’ll just get an inflation adjusted number. You’ll need inflation adjusted numbers on your college earnings too though, I don’t think the “extra 1 million earned by a college grad” is inflation adjusted.
- HDThoreaun 3y ago
  I get hung up because the last century was by far the best economic century for humans ever, and it seems reasonably likely that the next will not be as good growth wise.
  - readthenotes1 3y ago
    That affects the value of a college degree as well, of course. I believe there have been studies that show that graduates who are unlucky enough to be job searching during a one or two-year recession have a lifelong income deficit compared to those who don't
    - HDThoreaun 3y ago
      Do high school grads not face the same issue?
      - readthenotes1 3y ago
        Not sure, but they won't have traded 4 years and $200k for a high salary future

Mistletoe 3y ago

No one said 10% real returns. It’s 10% counting inflation, which is the number I provided. > The average stock market return is about 10% per year for nearly the last century, as measured by the S&P 500 index. I don’t know why people are getting hung up on this 10%, it’s just the historic returns everyone in Boglehead and FI/RE communities uses. If you wanted to use the 6-7% real returns after inflation that is fine too. The numbers still are the same, you’ll just get an inflation adjusted number. You’ll need inflation adjusted numbers on your college earnings too though, I don’t think the “extra 1 million earned by a college grad” is inflation adjusted.

HDThoreaun 3y ago
I get hung up because the last century was by far the best economic century for humans ever, and it seems reasonably likely that the next will not be as good growth wise.
- readthenotes1 3y ago
  That affects the value of a college degree as well, of course. I believe there have been studies that show that graduates who are unlucky enough to be job searching during a one or two-year recession have a lifelong income deficit compared to those who don't
  - HDThoreaun 3y ago
    Do high school grads not face the same issue?
    - readthenotes1 3y ago
      Not sure, but they won't have traded 4 years and $200k for a high salary future