26 ms·

Young People Are Screwed: Here's How To Survive

220 points by dkasper 14y ago

jkat 14y ago
There's plenty of money to be made, it's a question of hard work. Luck? You were already lucky to be born in the western world. I think education is the answer, but not the type people seem focused on. I'm talking about life skills children can learn from good teachers and, much more importantly, good parents. Work hard, it's important. Learn life lessons, like cooking...all the basics that are more basic than the 3 Rs.
- Kerrick 14y ago
  It's not just a question of hard work, it's a question of hard work in the right field, and at the right place.
  - jkat 14y ago
    True, but fields around math, science and engineering have (as far as I'm aware) been rather reliable.
ChuckMcM 14y ago
While it is true that a four year college degree at Yale, or Stanford or USC can easily set you back $200K, the only reasonable thing about 'point 2' is that we don't need Spanish Majors, but we do need scientists, mathematicians, and engineeers. And a California State education is about $5k a year [1] or $20K for four years. Same cost as a car these days. You can pay off a car with a 60month loan, why not your college education. [1] http://www.calstate.edu/budget/fybudget/2011-2012/documentation/14-mandatory-fees-table.shtml http://www.calstate.edu/budget/fybudget/2011-2012/documentat... [2] http://www.commerce.gov/news/press-releases/2011/07/14/new-commerce-department-report-shows-fast-growing-stem-jobs-offer-hig http://www.commerce.gov/news/press-releases/2011/07/14/new-c...
- sswezey 14y ago
  College costs a lot more than just tuition. You have room and board, fees and 'service charges' galore, textbooks, living expenses, etc.
  - ChuckMcM 14y ago
    I am aware. I've got one in college, one recently graduated, and one entering next year. And many of my kid's peers are currently in college. All of the room and board costs in every college we've looked at, or sent someone too, could be paid with a part time job taken at the same time as attending classes. The idea that getting a STEM degree is outside the reach of kids today without going into lifelong debt is a myth.
    - jere 14y ago
      Agreed. I went to a dirt cheap state university and worked part time throughout college. With help from my not very well off parents, I came out without any debt at all. One of my gigs was Resident Assistant. While it may not have been the most lucrative job, it did cover room and board and included a stipend which easily covered textbooks and fees.
    - bane 14y ago
      One of the things I remember distinctly in High School oh so many years ago was the overwhelming impression handed down by the administration that if you couldn't make it into a top tier college you may as well just go vocational and rebuild transmissions for the rest of your life. It was such a pervasive piece of propaganda nonsense that entire groups of my peers, with their wallet terrified parent's blessing, made long reaching life long decisions not to pursue an upper education but try and land in the best possible vocational job. I personally was so terrorized by it that I flaked out and never even took the SATs, convinced that my mediocre high school GPA had damned me to a life of cleaning drainage gutters, resurfacing outdoor wooden structures or at best tech support in a call center that, defeated, I didn't even try. It wasn't until several years after graduating High School, fed up with dead-end bullshit jobs that I signed up to the local community college almost on a dare. I met with a very old, nearing retirement, placement councilor who completely turned my world upside down. He carefully and patiently explained to me that the myth the education system propagated, the one that I, my classmates and our parents had been fed, was a complete a total line of nonsense. I sat there, in raw disbelief as I found out that I could finish my first two years of my undergrad there, then transfer every single one of my credits and start as a junior at the local state university. And I could do it at some ridiculous price that I, even making next to nothing, could easily afford. I thought he was a liar, a schemer who was trying to put me onto something. Everything he said sounded like such a polar opposite of the system described to me during my teenage years that I went to another campus for the school and spoke to a completely different councilor who only confirmed everything, and also told me that the degree program I was interested in was so close to another program that if I took 2 more courses I could get both degrees almost for the price of one. It's like spending a fortune on off-sale, high fashion brand shirts only to find out that if you wait a season you can pick up most of the same stuff at discount clothiers like Ross for $10 a shirt. It took me a long time, as I was working and had significant living expenses to handle, but I finished my B.S. in 5 and a half years and my M.S. in 3 and a half -- debt free, paid for either on my own or by spending 20 minutes filling out grant applications at the student aid office. It was madness. And it was the truth. edit a previous set of back of the envelope numbers http://news.ycombinator.com/item?id=3753975 http://news.ycombinator.com/item?id=3753975
andrewljohnson 14y ago
Exactly right, glory to the makers I say. I graduated college in 2003 with a business degree from CMU and 10K in debt. I played poker professionally for about a year, then went to work for an ad agency for 18 months, then worked for a start-up doing marketing for 18 months. At the start-up, I learned that you can work really hard at marketing, spin your wheels with all sorts brochures and websites and conference speaking and presos, and not do a bit of good. That's a scary thought - that you might just be useless, or at least that your job is only a multiplier to the people actually building the thing. The start-up marketing experience (and living with two software developers) made me start to worry and yearn for change. As the start-up I worked for began crumbling in 2007, and I began to get whiffs of pending financial meltdown in early 2008, I made the switch to making software, instead of making brochures. And that was either a very smart or very lucky choice, because if I had tried to find a new marketing job, I'm not sure where I'd be today. But making software sure does pay OK, and having people use your software sure feels a lot better than having people NOT read your brochures.
icegreentea 14y ago
While its certainly fun to toss marketing under the bus, that's not really fair or reflective of reality. An engineers work only has value as long as it has customers. Marketing definitely has a real and important role to play, and really is worthy of the attention of smart, hard working young people. I think the problem is that marketing was overdone. Too much of a good thing so to say.
johnfuller 14y ago
Networking is seriously important. It will be valuable now and for the far off future. It's the worst thing holding back my buddies at our small town back home. They don't know anyone who is successful and wouldn't have anything to offer a successful person anyways. So, they are stuck in their small ecosystem of the local pub and trading tips on low paying low skilled jobs. Combine skills, networking and the leverage of reach (through the internet) and you might find yourself in a position where you are wondering what all the fuss is about. There is a ton of work which needs to be done out there, but too few people who have figured out how to change with the times. Edit: In other words, things may change so much to be unrecognizable in ten years. So, networking is the only thing that you can really count on to always be important.
- Kluny 14y ago
  I'm still trying to figure out the networking thing. I think this article kind of got it though - worry about friends, not your network. Today I had a really great chat with the director of the co-op program at my college. She's a pretty good professional contact, and has experience running her own business, as well. But I think she'll remember me as a friend after today. Same with a specialist doctor I see. When I met him, I was 17 and he was a fresh grad on his first week on the job. Now we have a 6 year relationship and we're kind of on equal terms. I'm trying to think of more people in my life this way - people I previously thought of as unapproachable elders are becoming friends. Hope I'm on the right track.
- PaperclipTaken 14y ago
  The article is very hyperbolic, and I don't think that the author meant to say that networking is unimportant. I think he was trying to say that your friends are more important for determining your success than your network. And I agree with that. Your friends, much more than your network, define your outlook on life, your general attitude towards various successes and failures, the things you place the most importance in. If all of your friends are get-out-there-and-do-something people, it will rub off on you, even if not to the same extreme. Furthermore, it's much easier to do something extreme or different if you have a friend group that wants to do it with you. Starting a business on your own is nearly impossible. Starting a business with a close friend is no cake walk, but now there is motivation. And regardless of what sort of way you try to be successful, friends can pool their networking resources.
spydum 14y ago
There is a lot of focus on programmers , which is absolutely fine: they are usually the "makers". However I wonder why admins get overlooked. Just like the plumber or the electrician, sys/net admins are the handyman/tradesmen of the computing world, and as software deployments grow, so will their demand.
- recuter 14y ago
  I'm sure a great admin is worth their weight in gold for an org with a headcount of 10,000. I'm not so sure for an org of 10. I think, and I could well be wrong, that the trend for successful companies is towards the latter. None of this is to say the field is bad or will go away any time soon, just food for thought.
  - sjg007 14y ago
    One admin for 10 programmers is a huge multiplier. That admin can take care of the non programming needs so that the devs have more time to focus on code than context switching to handle the crap.
- munin 14y ago
  admins are going to be replaced by programs that software engineers write (consider devops, heroku, aws, etc).
  - spydum 14y ago
    All of those services are run by sysadmins using software, not by software themselves. They just moved up a level of abstraction (take a look at the SRE listings, places are crowded with trying to hire proper devops/SRE). They have become the utility, which is where my plumbing/eletrician analogy comes in. You might argue this is just suggesting there is a greater demand for software engineers, and that may be true, but I would be very skeptical of someone saying sysadmins would be replaced. Why haven't we replaced plumbers/electricians? Clearly we have utilities/plumbing/wiring that has been deployed for decades with little to no maintenance? Yet the profession still exists. The reality is, it still takes these tradesmen to build new environments, and support the frequent changes that technology throws us.
sjg007 14y ago
You can get loan forgiveness in public sector jobs: teachers, peace corp, and government service. You can become a nurse after college, you don't have to write code, but it is not for everyone. The boomers will be retiring so there will be a huge need for medical and care givers. Also when they go, the jobs they left will open up (minus some losses for productivity). You can go the trade route as well, or accountancy etc...
- mjmahone17 14y ago
  Capitalism has an unnerving tendency to force people to work in the jobs that "no one wants to do" or that everyone needs, and aren't viewed as jobs that deserve high incomes. For instance, the US went to war partially because its citizens were being impressed into a foreign navy for essentially no pay. Young people were forced to become soldiers via the draft. Entire racial groups were forced to do manual labor that was "beneath" freemen. My guess is that, unless healthcare workers are able to demand higher wages in some way, that we'll "find" a cheap labor supply, be they foreign workers or "recruited" young workers. Or, for much the same reasons that teachers are underpaid compared to their skills and education level, society as a whole will refuse to raise healthcare wages once those jobs become a cornerstone of our society.
BobWarfield 14y ago
The scariest thing in the article is the unemployment graph from Calculated Risk. Isn't it interested at how Wall Street has gotten better and better at inflating bubbles that take longer and longer to recover from. I just wish the gov't was more focused on creating jobs instead of all the other BS they're fighting with each other over.
- muzz 14y ago
  Huh? You do realize that we are in month 60-something, ie the upswing, of that graph that began in 2007. Private sector has been creating jobs for over 3 years now, etc. What that graph really shows is how deep the Great Recession was-- it should be compared to the Great Depression rather than the garden-variety recessions we've had since then.
  - rrmm 14y ago
    Indeed. Today's kids may or may not be screwed, but I don't think CR's chart implies what the article's author infers from it. Starting the article off with post-apocalyptic imagery seems to be the wrong tone to make any constructive statement.
bbthorson 14y ago
I may not be applying to the easiest jobs to get but I'm finding it incredibly difficult to even get an interview. After graduating from a top 25 undergraduate business program in 2 years and then going on to earn my MA in econ in another 2 all the while playing Division 1 football I thought it might be easier than normal to get a job. Ideally I'd like to be at an audacious startup and even rode my bike 215 miles to a midwest tech event (http://goo.gl/JX1ud http://goo.gl/JX1ud). No such luck, unemployed as ever. On a positive note, it's my opinion that energy prices are a better indicator of economic growth than interest rates and energy prices should continue to fall for the foreseeable future. The only problem is how quickly the economy will artificially inflate after years of QE.
- jacalata 14y ago
  I might have misunderstood either you or the article, but the main point of the article seemed to be that people don't really have much use for business/econ grads - they need people who will write the software. So you're clearly pretty smart, but are you hoping to be a programmer/teaching yourself to program, or what? How is your story a response to this article?
  - bbthorson 14y ago
    I think point 1 is largely that business/econ isn't needed, however a large part of econ is dealing with data sets. Regardless, college isn't a tremendous metric of ability; how many times has the fallacy been sold that it doesn't matter what you graduated in, just that you graduate? Programming and comp sci are largely about logic, and teaching oneself how to program is certainly a fine suggestion but it's not a very efficient solution for somebody who has previously demonstrated aptitude and is still going to face a learning curve once employed. Stepping away from the startup scene and simply looking at businesses in general, it's ridiculous to think that an employer would hire you and put you to work with no training. Also a hire should be a long term strategy, turnover is very expensive and destructive to company culture. "Building something" is a relative idea. Aptitude is not. My story isn't specifically important, just that hiring is maybe overly focused on buzzwords and the short term. But I don't know.
moocow01 14y ago
A lot of this article has points I agree with but feels swarmy and misdirected. The take-away seems to be "forget about getting educated, pick up a few O'reilly books, make a website, make sure your friends are doing the same". Yeah a lot of stuff is tough for young folks. Yeah we probably have got some tough things coming. We've got a lot of collective debt, healthcare problems, student debt, global warming, etc etc etc. I agree with avoiding debt - it should be every young persons first priority. Go to college, work on the side, take a year off, work full time, go back etc IF you want an education. Yeah it sucks but its better than coming out and realizing you essentially are enslaved for the next X years of life. I also feel like these articles always skirt the issue that education has a very strong correlation to earnings - even still today. If you take on huge debt your actual earnings may be different but the macro-trend is that education increasingly correlates with high pay and high employment. At the same time, everyone needs to be realistic - look at the prospects for what you are getting educated in (ex. wanna-be social science majors and prospective law students should look before they leap). Lastly I feel like everyone needs to get better at doing things themselves and being sustainable. Cant afford a ton of food - start learning to grow a small vegetable garden and cook for yourself - its cheaper and way better than the shit you are going to eat at Chiles. Cant afford a big screen TV - well congrats you dont need one, marketers are just going to tunnel shit to you through it. In other words, a lot of the things and systems that have been setup in US and integrated into normal living are really not needed and sometimes surprisingly undesirable - Im not suggesting we all live in huts but it wouldnt kill us to all be forced to learn skills that fall outside of going to work and swiping our credit cards for everything else.
- SatvikBeri 14y ago
  I agree with avoiding debt - it should be every young persons first priority. Go to college, work on the side, take a year off, work full time, go back etc IF you want an education. Yeah it sucks but its better than coming out and realizing you essentially are enslaved for the next X years of life. I'm not sure how this makes sense, financially. You'll generally earn much more with a degree, so 4 years of college followed by 4 years of work will leave you with much more money than alternating years of college & work. It's much more important to focus on increasing your income than decreasing your debt. Negotiating a salary increase once pretty much means an extra $X,000/year for the rest of your life, whereas growing your own food will save you $X00 and you have to do the work again each year. Do it if it satisfies you, but recognize you'll have a much higher (financial) RoI by focusing on earning more.
klibertp 14y ago
"Your parents and grandparents want what is best for you. But they do not understand your world in the slightest. You should probably ignore them." This is great advice. It was true when I started my career, some ten years ago - I think it's even more true now. The path I chose in life was, and probably still is, incomprehensible to my parents. They have the best intentions, I'm sure, but for the very long time they couldn't understand that my computer is for work, for example. And later they just didn't want to believe me that I am actually working (I was telecommuting) and kept repeating things like "get out of the room and go find some job". Most parents wish all the best for their children, but they are frequently completely incapable of understanding the differences between their and our situations. And the worst thing is you cannot tell them this, because you'll be rude, and on the other hand they are not going to understand on their own, because they are "older and they know already". So ignoring bad advice from parents while pretending to do what they wish is the only sensible choice, but a hard one. I have many friends who followed their parents dreams - mainly journalists, but also many others - who are really screwed now. It's a real problem and someone should write a guide how to respectfully disagree with one's parents and how to convince them to at least stop complaining.
- unimpressive 14y ago
  The ideal solution I think, is simple: "Followers of the Way [of Chán], if you want to get the kind of understanding that accords with the Dharma, never be misled by others. Whether you're facing inward or facing outward, whatever you meet up with, just kill it! If you meet a buddha, kill the buddha. If you meet a patriarch, kill the patriarch. If you meet an arhat, kill the arhat. If you meet your parents, kill your parents. If you meet your kinfolk, kill your kinfolk. Then for the first time you will gain emancipation, will not be entangled with things, will pass freely anywhere you wish to go." - Linji Yixuan [0][1] Before you object with something to the tune of "But I'm living with them!", I said it was simple, not easy. [0]: https://en.wikipedia.org/wiki/Linji_Yixuan https://en.wikipedia.org/wiki/Linji_Yixuan [1]: I'm fairly sure he doesn't mean it literally, but then I've never read the quote in context.
  - prewett 14y ago
BenoitEssiambre 14y ago
Since the beginning of the financial crisis the media has constantly been repeating that the housing market was key to recovery and that the government had to do things to help prop up house prices. As someone who would like to own a house in the future, I find it quite unfair that the government is helping to maintain bubble prices. It is yet another way for current homeowners to to extract as much money as possible from the next generation. However, that is even not the main concern for my generation. Here is an interesting fact: My house whenever I can afford it, will _not_ be the most expensive thing I will have to buy in my life. My retirement savings are. With lower expected long term investment returns and interest rates, the expected cost of securing a retirement annuity goes up steeply and there is much less money left for everything else. All the news article I read on the subject of house prices assume that low interest rates prop up prices since they allow for cheaper financing and lower mortgage payments. However, as a 30yo who would like to one day be a homeowner AND also one day retire, this is not the effect low interest rates have on my budget. The low interest rates are currently more than offset by low expected returns on investments which make it much more difficult to secure retirement. I decided to try to quantify the effects of low returns on my budget: I calculated that if I managed to get 4% _real_ returns on my savings, which is what most online savings calculators assume by default and about what the previous generation got, I would need to save 23% of my income to maintain standards of living after retirement (This includes home equity and what the government saves on my behalf, those "entitlements"). If real returns were 3%, I would need to save 27% of my income, if they were 2%, I would need to save 35% and 1% would require saving 42%. This assumes a saving period from the age of 30 to 60 and retirement from 60 to 90. This is a somewhat optimistic scenario but with two equal periods of 30 years, it makes one data-point easy to calculate: With 0% real returns, to maintain standards of living. we would spend half the money before retirement and half after so we'd have to save 50% of our income. Long term real returns going down from 4% to 2%, increases the amount we need to save by 12% of our income. This means we have this much less money to put on housing and other things. For example, if our after tax household income was $50 000. We would need to save an additional $500 a month ($6000 a year) for retirement. Is it even possible nowadays to get a safe 2% real (~4% nominal) return? The investment opportunities I see are closer to 0.5% or 1%. Meanwhile the cost of financing a $200 000 mortgage go down by about $4000 a year or $333 per month when mortgage rates go down by 2%. If I bought the same house when returns and mortgage rates both went lower by 2%, I would need to find an additional $166 per month ($2000/year) to keep my retirement savings on track. If I decided to recoup this $166 per month by buying a less expensive house, at 4% interest, it would have to be $50 000 cheaper. I realize that expected returns and mortgage rates don’t necessarily move in sync and it may be that mortgage rates have bigger downward moves than expected returns but this still all makes me uncertain about my ability to spend while saving for retirement. Here is the graph I made showing how much we have to save relative to long term real returns on investments to maintain standards of living at retirement( https://picasaweb.google.com/lh/photo/d4vj9i43MIPd8H7MqUq_BtMTjNZETYmyPJy0liipFm0?feat=directlink https://picasaweb.google.com/lh/photo/d4vj9i43MIPd8H7MqUq_Bt... ). Here is the math I did for reference (let me know if I made any mistakes): I : Annual Income S: savings ratio The amount saved each year of my working life is I x S The amount spent each year of my working life is I x (1-S) For example, if our household after tax income I=50k and we save 10k for retirement, S=0.20, we get to spend 40k that year. We would like to maintain our standards of living after retirement which means we would like the amount we spend I x (1-S) to be equal the amount of our retirement pension payments. That is, if we save 20%, (spend 40k, save 10k) we would like to get a 40k pension at retirement. The value of our savings at retirement should be enough to give us this annuity. To calculate S, the proportion of our income we should save to achieve this goal, I take: Future Value of my savings FV(I x S) = Present Value (at retirement) of the pension annuity PV(I x (1-S)) Taking the formulas from here: http://en.wikipedia.org/wiki/Time_value_of_money http://en.wikipedia.org/wiki/Time_value_of_money I arrive at S = 1/( x + 1 ) where x=1/((1-1/(1+i)^m)/((1+i)^n - 1)) (See https://picasaweb.google.com/lh/photo/rdEbvkw5wx78_dnqZuL4QtMTjNZETYmyPJy0liipFm0?feat=directlink https://picasaweb.google.com/lh/photo/rdEbvkw5wx78_dnqZuL4Qt... ) i is the real (above inflation) returns on my investments which, assuming I don’t take too much risk, should follow the trend of long term real interest rates. n is number of years we are savings m is number of years we plan to be retired. Lets say, that I start saving for retirement at 30, retire at 60 and live to 90. That’s 30 years of savings and 30 years of being retired, a somewhat optimistic scenario (n = m = 30). Here is the graph showing how much we should save relative to long term real returns on investments ( https://picasaweb.google.com/lh/photo/d4vj9i43MIPd8H7MqUq_BtMTjNZETYmyPJy0liipFm0?feat=directlink https://picasaweb.google.com/lh/photo/d4vj9i43MIPd8H7MqUq_Bt... ).
jakeonthemove 14y ago
Another piece of advice: take your diplomas and expertise in Law, Journalism, Medicine and others to developing countries. They may not pay as much, but the jobs are there...
- deleted 14y ago
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ruswick 14y ago
Other than the overt sexism, ("They are no smarter than you, and they are definitely way less organized and far less attentive to detail. So go show them what you are made of.") this article makes some fair points. That said, the author seems to be on a vendetta against post-secondary education. H asserts that an education "probably won't" pay for itself. This is a total falsehood. The nontrivial positive returns of collegiate degrees have been documented by numerous studies. (http://www.nytimes.com/2010/09/21/education/21college.html?_r=0 http://www.nytimes.com/2010/09/21/education/21college.html?_...) Moreover, this is not, as he asserts, only true of top 25 schools. (http://www.businessweek.com/interactive_reports/bs_collegeROI_0621.html http://www.businessweek.com/interactive_reports/bs_collegeRO...) On this front, he appears to be talking out of his ass. I do agree that the world has changed drastically over the past 3 decades, and that the precedents for education and occupations have irrevocably changed for the worst. I thinks some qualification is necessary for his contention about "making things." This is not necessarily a recipe for success, especially if what you make is superfluous. If the economy tanks, you'll still be the first to go. To ensure career resiliency, one needs to pick a field that 1) won't be obviated by technology in the near future, and 2) is fundamental to society and thus will never go away. If anything, I think that this skews towards more abstract fields that are removed from physical labor. All physical labor can or will be able to be performed by technology at far greater efficiency and far lower cost. Machines won't be able to think anytime soon, which is why coding is such an attractive profession. Computers aren't going out of fashion, and will, for the foreseeable future, require people to write software for them.
brianchu 14y ago
Firstly, it's misleading to say that the cost of a UC Berkeley education is $210,000. That's the price is you're an out-of-state resident and you receive no financial aid. In-state residents without financial aid end up paying roughly $120,000 (and the cost is even less since most students live off-campus after their first year, but I digress). Going to the flagship state college in the state you live in is generally a highly affordable choice for anyone. Secondly, a private school education typically runs around $200-240k, a number that is calculated to include room, board, books, and living expenses. Third, you need to realize that most people get financial aid at private colleges (and state colleges). The irony is that top private colleges (i.e. Ivy Leagues) are actually more affordable options than state colleges for low-income students because of financial aid policies for which households earning even low six-figures can qualify. The only people who actually pay full price are people whose families have gross incomes of ~200k+. If they have a sibling in college at the same time, even then they might get financial aid! Fourth, for middle-class families that straddle the line between "too rich for significant financial aid" and "too poor for parents/myself to easily pay," students should be aware of merit scholarships. Many liberal-arts colleges offer them. USC, despite its reputation as a wealthy private college, is well-known for "buying" good students by offering them generous scholarships (full-ride, half-ride) dependent on your performance on the PSAT.
- nicholas73 14y ago
  Interesting. So the impending diarrhea I had during the last section of my PSAT cost me a potential free ride at USC (I scored a notch below what it took to be a top merit scholar). Oh well ended up at a state school anyway.
- bane 14y ago
  >Secondly, a private school education typically runs around $200-240k, a number that is calculated to include room, board, books, and living expenses. That's not entirely correct. The tuitions at many private schools these days lists at ~$200k for a 4-year undergrad and does not include expenses. For example https://undergraduate.admissions.gwu.edu/costs-attendance https://undergraduate.admissions.gwu.edu/costs-attendance Lists just tution at $45,735 while R&B is $10,530. So, assuming the rates don't change, tuition for an undergrad is $182,940 and other expenses run another $58,600 for a grand total of $241,540. So yeah, it's at around your upper bound, but just the difference between your lower and upper boundary was literally the entirety of my undergrad + grad degrees.
rfurlong 14y ago
This article, like many articles on Hacker News equates the value of education into dollars. Education, intrinsically, cannot be solely measured in dollars. The problem isn't people getting useless degrees, its degrees that don't correspond to high paying jobs in the current economy costing too much. THERE IS NO SHAME IN GETTING A DEGREE IN LITERATURE. Education should be free. I just get a knee jerk reaction to any article like this because it wholly overlooks how education is supposed to make you a better human being, not a money making machine. Articles like this take the easy way and basically say ASSIMILATE or die. Yea, thats going to solve the problem...
- Domenic_S 14y ago
  > THERE IS NO SHAME IN GETTING A DEGREE IN LITERATURE. I agree with you, but the supply side of the education system agrees with you all the way to the bank. The real point is: the traditional education model is usually a bad financial deal. If you want to learn, do so -- but don't be swindled into taking out loans for it.
  - rfurlong 14y ago
    I agree with your real point, however, I would not say the current model is the traditional or even universal model. Countries other than the US have much better models. I just get tired of the discussion not focusing on the problem and instead accepting it. Universities are often the best place to get an awesome education in the humanities. Withholding that opportunity because education has been transformed into some financial investment, instead of a holistic investments that not everyone can take is just plain sad. I think its also important to point out that the skills and concepts you learn in areas such as the social sciences and humanities are still financially lucrative. As long as our economy is dominated by big corporations there will be managers and CEOs whos only job is to delegate tasks to and organize the humans beneath them. Understanding human power structures and having the ability to persuade and communicate effectively with people will always be the real big money ticket.
    - ucee054 14y ago
Suncho 14y ago
While I think he's made some important observations and I agree with some of his advice, I don't agree with his conclusion that young people are screwed. Here's an important insight that I definitely agree with: "But won’t a college degree pay for itself? It probably won’t." It won't. You probably shouldn't get one if your goal is to make money. Here's some advice I disagree with: "My advice to young people is to figure out how to make something. That means either working with your hands, or learning how to type code with them." The job market is a game of musical chairs. You can give a person a strategy for winning at musical chairs, but it doesn't change the fact that there are fewer and fewer chairs each round. It's not reasonable to tell young people (or any people) that their goal should be to find a job so they can be self-sufficient and they can support themselves financially.
- angersock 14y ago
  It's not reasonable to tell young people (or any people) that their goal should be to find a job so they can be self-sufficient and they can support themselves financially. Are you kidding? How am I supposed to parse this properly? It reads like you are suggesting that it is not reasonable to suggest that you should get a job to keep yourself secure.
  - Suncho 14y ago
    Yes. That is what I'm suggesting. And I am not kidding. Do you disagree?
    - angersock 14y ago
      I'm concerned that I'm maybe putting the wrong emphasis on some bit of what you said, because if I'm not then yes, I disagree with you. There is no reason historically that people have not had to work to support themselves, and so to suggest that they not do this suggests either that you desire them all to become layabouts dependent on welfare or that you want them to stop working and die off. Please explain an alternate interpretation of this.
nazgulnarsil 14y ago
Idiots who don't plan their future are screwed, everyone else is perfectly fine. This isn't a change from the past, it's just that today's idiots are visible due to the internet.
jpdoctor 14y ago
Note that the article draws on a graph from the blog Calculated Risk. I have followed CR for years, and after reading the pando article, I'm am convinced the pando author is completely out to lunch. Just as one example: The author is cherry-picking CR's data. Here is the graph of unemployment vs education level: http://cr4re.com/charts/chart-images/EducationUnemploymentSept2011.jpg http://cr4re.com/charts/chart-images/EducationUnemploymentSe... And still the author recommends avoiding higher education? Anybody who follows such clownish advice despite the data deserves what they have coming. BTW: CR is an excellent source of economic information, but it will take you a year or so to truly digest some of what is being put in front of you. (The comment board is of mixed value. It used to be the best on the web.)
cmbaus 14y ago
I've always considered Prop 13 as a way for the babyboomers to screw over their own kids.
chuckreynolds 14y ago
This post is so dead on... love it.
usaar333 14y ago
I'm finding it hard to reconcile Lesson 2 which implies a school even of the caliber of UC Berkeley isn't worth it with Lesson 4 to get successful friends. A selective college is probably the best place to develop close friendships with people destined to be successful.
- leoedin 14y ago
  I completely agree. Meeting smart and driven young people without the luxury of college is hard. Convincing those people to be your friends when you don't have a shared background is even harder.
xiaoma 14y ago
I really don't get generation-based hatred from the author. My grandfather (who raised me) worked long and hard for decades, first as a marine, later a railroad worker and then finally a manager at AT&T/Bell. He paid far, far more into the social system than he was ever able to take out. I've felt the pain of our increasingly stratified society first hand, but I have little respect for the practice of blaming a generation who have given so much and taken so little in return. Yes medical expenses are spiraling out of control, but that's a structural problem, not a sign of a generation as a whole "screwing young people".
agorabinary 14y ago
I feel like this article would have a greater thrust if it focused more on the perils of college and the job market nowadays and less on software programming as the overarching solution for young people. It really hits a more accessible tone that way, because frankly, only a small fraction of young people are interested in a coding lifestyle. A young person with little or no debt and a good head on their shoulders is in pretty good shape, regardless of the waters they dip their toes into.
jjsz 14y ago
This may be OT but it relates to survivalism for our generation (I'm 20). As I get older, like the OP, I'm seeing Entrepreneurialism and, personally, Agorism as two of the many strategies that should be focused on to influence people, mostly non statist capilists who don't innovate as much as they should, to change their philosophies so that disruptions, subsidies, and investments can occur in various other markets here in Puerto Rico besides the pharmaceutical. I don't classify myself as libertarian, I'm all about direct democracy and believe highly in sovereignty, however the ongoing regulations and the centralization and manipulation of the housing sector, the energy sector, and the food and liquor sector here in PR have gone overboard just like in the states and it has lead me to believe that all of this is caused by us submitting into conformity after we have generate a bit of passive income without focusing on taking down some barriers and instead we're maneuvering around them. Why the hell does someone that has a self sufficient house, windmills, solar panels and all, takes water from a deep well STILL have to pay a minimum electricity bill or the government would regulate his energy and tax him like if he were to be selling it. To us country folk that do not like to be taxed on our own property, this sort of regulation is going to be taken down- it'll only get worse when more ways to decentralize markets happen and we get our hands in them like 3d printing. I'm naive and you can justify calling me a fool but this is modern day slavery, and that's what the article is generally touching upon. Not sure if the above was the best example, but to me it's the most relational. We're obligated, enslaved, to fix many problems that we haven't caused on top of worrying about the elderly before we retire, as shown by some of the comments here- no problem, people had it harder back in the days..Especially here in PR. Have you seen Clint Eastwood's Super Bowl Half time commercial? That's what came to my mind after finishing reading this.. Besides showing an interest in a certain market by crowdfunding capital and displaying market interest how can one influence non statist capitalists to invest lets say in informing the majority of the Puerto Rican population to take the current issues we should really be focusing on seriously? I know my kind and they're not generally inclined to think on these things day by day but please be kind enough to criticize my philosophy. Focusing on mostly the pharmaceutical market, the general PR'an population won't stand a chance to adapt to this change of thought on survivalism.. Again excuse this if it's OT, this is my first post.
deleted 14y ago
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elisehein 14y ago
I am loving these illustrations
cfn 14y ago
Although the article has some good advice I have to cringe at the us versus them mentality set at the start. Blaming the fate of the young on the healthcare bill of the old is a false dichotomy. Our parents reached a fairly good finantial state that we may not be able to attain but I have to ask if blaming them for the current state of affairs is the easy way out. Is it not like blaming immigrants for lack of employment?
crazysaem 14y ago
I'm wondering how this article compares to other countries. In Germany you don’t necessarily need to pay expensive medical bills, and Universities have either no fee at all, or a very small one (500 € per Semester usually). So after getting a Bachelor’s degree, you can be pretty much debt free. Is this then only a problem for the USA?
- secure 14y ago
  Consider that many German students (I don’t have numbers, just a subjective impression) get Bafög, a government-issued loan to pay for fees/rent/living.
vy8vWJlco 14y ago
> "My advice to young people is to figure out how to make something." Problem: patents. Good luck making things as a "little guy" with patents (software or otherwise) in the way. Patents and similar government-granted monopolies are all, by definition, obstacles to economic activity through an accessible and competitive market. They are also the most difficult to overcome for those starting at the bottom. Want economic recovery? Break monopolies.
AYBABTME 14y ago
So the obvious solution seems to fix this world while we can, so we can retire and leave something better for our heirs. I find this distress motivational.

220 points by dkasper 14y ago

jkat 14y ago

There's plenty of money to be made, it's a question of hard work. Luck? You were already lucky to be born in the western world. I think education is the answer, but not the type people seem focused on. I'm talking about life skills children can learn from good teachers and, much more importantly, good parents. Work hard, it's important. Learn life lessons, like cooking...all the basics that are more basic than the 3 Rs.

Kerrick 14y ago
It's not just a question of hard work, it's a question of hard work in the right field, and at the right place.
- jkat 14y ago
  True, but fields around math, science and engineering have (as far as I'm aware) been rather reliable.

ChuckMcM 14y ago

While it is true that a four year college degree at Yale, or Stanford or USC can easily set you back $200K, the only reasonable thing about 'point 2' is that we don't need Spanish Majors, but we do need scientists, mathematicians, and engineeers. And a California State education is about $5k a year [1] or $20K for four years. Same cost as a car these days. You can pay off a car with a 60month loan, why not your college education. [1] http://www.calstate.edu/budget/fybudget/2011-2012/documentation/14-mandatory-fees-table.shtml http://www.calstate.edu/budget/fybudget/2011-2012/documentat... [2] http://www.commerce.gov/news/press-releases/2011/07/14/new-commerce-department-report-shows-fast-growing-stem-jobs-offer-hig http://www.commerce.gov/news/press-releases/2011/07/14/new-c...

sswezey 14y ago
College costs a lot more than just tuition. You have room and board, fees and 'service charges' galore, textbooks, living expenses, etc.
- ChuckMcM 14y ago
  I am aware. I've got one in college, one recently graduated, and one entering next year. And many of my kid's peers are currently in college. All of the room and board costs in every college we've looked at, or sent someone too, could be paid with a part time job taken at the same time as attending classes. The idea that getting a STEM degree is outside the reach of kids today without going into lifelong debt is a myth.
  - jere 14y ago
    Agreed. I went to a dirt cheap state university and worked part time throughout college. With help from my not very well off parents, I came out without any debt at all. One of my gigs was Resident Assistant. While it may not have been the most lucrative job, it did cover room and board and included a stipend which easily covered textbooks and fees.
  - bane 14y ago
    One of the things I remember distinctly in High School oh so many years ago was the overwhelming impression handed down by the administration that if you couldn't make it into a top tier college you may as well just go vocational and rebuild transmissions for the rest of your life. It was such a pervasive piece of propaganda nonsense that entire groups of my peers, with their wallet terrified parent's blessing, made long reaching life long decisions not to pursue an upper education but try and land in the best possible vocational job. I personally was so terrorized by it that I flaked out and never even took the SATs, convinced that my mediocre high school GPA had damned me to a life of cleaning drainage gutters, resurfacing outdoor wooden structures or at best tech support in a call center that, defeated, I didn't even try. It wasn't until several years after graduating High School, fed up with dead-end bullshit jobs that I signed up to the local community college almost on a dare. I met with a very old, nearing retirement, placement councilor who completely turned my world upside down. He carefully and patiently explained to me that the myth the education system propagated, the one that I, my classmates and our parents had been fed, was a complete a total line of nonsense. I sat there, in raw disbelief as I found out that I could finish my first two years of my undergrad there, then transfer every single one of my credits and start as a junior at the local state university. And I could do it at some ridiculous price that I, even making next to nothing, could easily afford. I thought he was a liar, a schemer who was trying to put me onto something. Everything he said sounded like such a polar opposite of the system described to me during my teenage years that I went to another campus for the school and spoke to a completely different councilor who only confirmed everything, and also told me that the degree program I was interested in was so close to another program that if I took 2 more courses I could get both degrees almost for the price of one. It's like spending a fortune on off-sale, high fashion brand shirts only to find out that if you wait a season you can pick up most of the same stuff at discount clothiers like Ross for $10 a shirt. It took me a long time, as I was working and had significant living expenses to handle, but I finished my B.S. in 5 and a half years and my M.S. in 3 and a half -- debt free, paid for either on my own or by spending 20 minutes filling out grant applications at the student aid office. It was madness. And it was the truth. edit a previous set of back of the envelope numbers http://news.ycombinator.com/item?id=3753975 http://news.ycombinator.com/item?id=3753975

andrewljohnson 14y ago

Exactly right, glory to the makers I say. I graduated college in 2003 with a business degree from CMU and 10K in debt. I played poker professionally for about a year, then went to work for an ad agency for 18 months, then worked for a start-up doing marketing for 18 months. At the start-up, I learned that you can work really hard at marketing, spin your wheels with all sorts brochures and websites and conference speaking and presos, and not do a bit of good. That's a scary thought - that you might just be useless, or at least that your job is only a multiplier to the people actually building the thing. The start-up marketing experience (and living with two software developers) made me start to worry and yearn for change. As the start-up I worked for began crumbling in 2007, and I began to get whiffs of pending financial meltdown in early 2008, I made the switch to making software, instead of making brochures. And that was either a very smart or very lucky choice, because if I had tried to find a new marketing job, I'm not sure where I'd be today. But making software sure does pay OK, and having people use your software sure feels a lot better than having people NOT read your brochures.

icegreentea 14y ago

While its certainly fun to toss marketing under the bus, that's not really fair or reflective of reality. An engineers work only has value as long as it has customers. Marketing definitely has a real and important role to play, and really is worthy of the attention of smart, hard working young people. I think the problem is that marketing was overdone. Too much of a good thing so to say.

johnfuller 14y ago

Networking is seriously important. It will be valuable now and for the far off future. It's the worst thing holding back my buddies at our small town back home. They don't know anyone who is successful and wouldn't have anything to offer a successful person anyways. So, they are stuck in their small ecosystem of the local pub and trading tips on low paying low skilled jobs. Combine skills, networking and the leverage of reach (through the internet) and you might find yourself in a position where you are wondering what all the fuss is about. There is a ton of work which needs to be done out there, but too few people who have figured out how to change with the times. Edit: In other words, things may change so much to be unrecognizable in ten years. So, networking is the only thing that you can really count on to always be important.

Kluny 14y ago
I'm still trying to figure out the networking thing. I think this article kind of got it though - worry about friends, not your network. Today I had a really great chat with the director of the co-op program at my college. She's a pretty good professional contact, and has experience running her own business, as well. But I think she'll remember me as a friend after today. Same with a specialist doctor I see. When I met him, I was 17 and he was a fresh grad on his first week on the job. Now we have a 6 year relationship and we're kind of on equal terms. I'm trying to think of more people in my life this way - people I previously thought of as unapproachable elders are becoming friends. Hope I'm on the right track.
PaperclipTaken 14y ago
The article is very hyperbolic, and I don't think that the author meant to say that networking is unimportant. I think he was trying to say that your friends are more important for determining your success than your network. And I agree with that. Your friends, much more than your network, define your outlook on life, your general attitude towards various successes and failures, the things you place the most importance in. If all of your friends are get-out-there-and-do-something people, it will rub off on you, even if not to the same extreme. Furthermore, it's much easier to do something extreme or different if you have a friend group that wants to do it with you. Starting a business on your own is nearly impossible. Starting a business with a close friend is no cake walk, but now there is motivation. And regardless of what sort of way you try to be successful, friends can pool their networking resources.

spydum 14y ago

There is a lot of focus on programmers , which is absolutely fine: they are usually the "makers". However I wonder why admins get overlooked. Just like the plumber or the electrician, sys/net admins are the handyman/tradesmen of the computing world, and as software deployments grow, so will their demand.

recuter 14y ago
I'm sure a great admin is worth their weight in gold for an org with a headcount of 10,000. I'm not so sure for an org of 10. I think, and I could well be wrong, that the trend for successful companies is towards the latter. None of this is to say the field is bad or will go away any time soon, just food for thought.
- sjg007 14y ago
  One admin for 10 programmers is a huge multiplier. That admin can take care of the non programming needs so that the devs have more time to focus on code than context switching to handle the crap.
munin 14y ago
admins are going to be replaced by programs that software engineers write (consider devops, heroku, aws, etc).
- spydum 14y ago
  All of those services are run by sysadmins using software, not by software themselves. They just moved up a level of abstraction (take a look at the SRE listings, places are crowded with trying to hire proper devops/SRE). They have become the utility, which is where my plumbing/eletrician analogy comes in. You might argue this is just suggesting there is a greater demand for software engineers, and that may be true, but I would be very skeptical of someone saying sysadmins would be replaced. Why haven't we replaced plumbers/electricians? Clearly we have utilities/plumbing/wiring that has been deployed for decades with little to no maintenance? Yet the profession still exists. The reality is, it still takes these tradesmen to build new environments, and support the frequent changes that technology throws us.

sjg007 14y ago

You can get loan forgiveness in public sector jobs: teachers, peace corp, and government service. You can become a nurse after college, you don't have to write code, but it is not for everyone. The boomers will be retiring so there will be a huge need for medical and care givers. Also when they go, the jobs they left will open up (minus some losses for productivity). You can go the trade route as well, or accountancy etc...

mjmahone17 14y ago
Capitalism has an unnerving tendency to force people to work in the jobs that "no one wants to do" or that everyone needs, and aren't viewed as jobs that deserve high incomes. For instance, the US went to war partially because its citizens were being impressed into a foreign navy for essentially no pay. Young people were forced to become soldiers via the draft. Entire racial groups were forced to do manual labor that was "beneath" freemen. My guess is that, unless healthcare workers are able to demand higher wages in some way, that we'll "find" a cheap labor supply, be they foreign workers or "recruited" young workers. Or, for much the same reasons that teachers are underpaid compared to their skills and education level, society as a whole will refuse to raise healthcare wages once those jobs become a cornerstone of our society.

BobWarfield 14y ago

The scariest thing in the article is the unemployment graph from Calculated Risk. Isn't it interested at how Wall Street has gotten better and better at inflating bubbles that take longer and longer to recover from. I just wish the gov't was more focused on creating jobs instead of all the other BS they're fighting with each other over.

muzz 14y ago
Huh? You do realize that we are in month 60-something, ie the upswing, of that graph that began in 2007. Private sector has been creating jobs for over 3 years now, etc. What that graph really shows is how deep the Great Recession was-- it should be compared to the Great Depression rather than the garden-variety recessions we've had since then.
- rrmm 14y ago
  Indeed. Today's kids may or may not be screwed, but I don't think CR's chart implies what the article's author infers from it. Starting the article off with post-apocalyptic imagery seems to be the wrong tone to make any constructive statement.

bbthorson 14y ago

I may not be applying to the easiest jobs to get but I'm finding it incredibly difficult to even get an interview. After graduating from a top 25 undergraduate business program in 2 years and then going on to earn my MA in econ in another 2 all the while playing Division 1 football I thought it might be easier than normal to get a job. Ideally I'd like to be at an audacious startup and even rode my bike 215 miles to a midwest tech event (http://goo.gl/JX1ud http://goo.gl/JX1ud). No such luck, unemployed as ever. On a positive note, it's my opinion that energy prices are a better indicator of economic growth than interest rates and energy prices should continue to fall for the foreseeable future. The only problem is how quickly the economy will artificially inflate after years of QE.

jacalata 14y ago
I might have misunderstood either you or the article, but the main point of the article seemed to be that people don't really have much use for business/econ grads - they need people who will write the software. So you're clearly pretty smart, but are you hoping to be a programmer/teaching yourself to program, or what? How is your story a response to this article?
- bbthorson 14y ago
  I think point 1 is largely that business/econ isn't needed, however a large part of econ is dealing with data sets. Regardless, college isn't a tremendous metric of ability; how many times has the fallacy been sold that it doesn't matter what you graduated in, just that you graduate? Programming and comp sci are largely about logic, and teaching oneself how to program is certainly a fine suggestion but it's not a very efficient solution for somebody who has previously demonstrated aptitude and is still going to face a learning curve once employed. Stepping away from the startup scene and simply looking at businesses in general, it's ridiculous to think that an employer would hire you and put you to work with no training. Also a hire should be a long term strategy, turnover is very expensive and destructive to company culture. "Building something" is a relative idea. Aptitude is not. My story isn't specifically important, just that hiring is maybe overly focused on buzzwords and the short term. But I don't know.

moocow01 14y ago

A lot of this article has points I agree with but feels swarmy and misdirected. The take-away seems to be "forget about getting educated, pick up a few O'reilly books, make a website, make sure your friends are doing the same". Yeah a lot of stuff is tough for young folks. Yeah we probably have got some tough things coming. We've got a lot of collective debt, healthcare problems, student debt, global warming, etc etc etc. I agree with avoiding debt - it should be every young persons first priority. Go to college, work on the side, take a year off, work full time, go back etc IF you want an education. Yeah it sucks but its better than coming out and realizing you essentially are enslaved for the next X years of life. I also feel like these articles always skirt the issue that education has a very strong correlation to earnings - even still today. If you take on huge debt your actual earnings may be different but the macro-trend is that education increasingly correlates with high pay and high employment. At the same time, everyone needs to be realistic - look at the prospects for what you are getting educated in (ex. wanna-be social science majors and prospective law students should look before they leap). Lastly I feel like everyone needs to get better at doing things themselves and being sustainable. Cant afford a ton of food - start learning to grow a small vegetable garden and cook for yourself - its cheaper and way better than the shit you are going to eat at Chiles. Cant afford a big screen TV - well congrats you dont need one, marketers are just going to tunnel shit to you through it. In other words, a lot of the things and systems that have been setup in US and integrated into normal living are really not needed and sometimes surprisingly undesirable - Im not suggesting we all live in huts but it wouldnt kill us to all be forced to learn skills that fall outside of going to work and swiping our credit cards for everything else.

SatvikBeri 14y ago
I agree with avoiding debt - it should be every young persons first priority. Go to college, work on the side, take a year off, work full time, go back etc IF you want an education. Yeah it sucks but its better than coming out and realizing you essentially are enslaved for the next X years of life. I'm not sure how this makes sense, financially. You'll generally earn much more with a degree, so 4 years of college followed by 4 years of work will leave you with much more money than alternating years of college & work. It's much more important to focus on increasing your income than decreasing your debt. Negotiating a salary increase once pretty much means an extra $X,000/year for the rest of your life, whereas growing your own food will save you $X00 and you have to do the work again each year. Do it if it satisfies you, but recognize you'll have a much higher (financial) RoI by focusing on earning more.

klibertp 14y ago

"Your parents and grandparents want what is best for you. But they do not understand your world in the slightest. You should probably ignore them." This is great advice. It was true when I started my career, some ten years ago - I think it's even more true now. The path I chose in life was, and probably still is, incomprehensible to my parents. They have the best intentions, I'm sure, but for the very long time they couldn't understand that my computer is for work, for example. And later they just didn't want to believe me that I am actually working (I was telecommuting) and kept repeating things like "get out of the room and go find some job". Most parents wish all the best for their children, but they are frequently completely incapable of understanding the differences between their and our situations. And the worst thing is you cannot tell them this, because you'll be rude, and on the other hand they are not going to understand on their own, because they are "older and they know already". So ignoring bad advice from parents while pretending to do what they wish is the only sensible choice, but a hard one. I have many friends who followed their parents dreams - mainly journalists, but also many others - who are really screwed now. It's a real problem and someone should write a guide how to respectfully disagree with one's parents and how to convince them to at least stop complaining.

unimpressive 14y ago
The ideal solution I think, is simple: "Followers of the Way [of Chán], if you want to get the kind of understanding that accords with the Dharma, never be misled by others. Whether you're facing inward or facing outward, whatever you meet up with, just kill it! If you meet a buddha, kill the buddha. If you meet a patriarch, kill the patriarch. If you meet an arhat, kill the arhat. If you meet your parents, kill your parents. If you meet your kinfolk, kill your kinfolk. Then for the first time you will gain emancipation, will not be entangled with things, will pass freely anywhere you wish to go." - Linji Yixuan [0][1] Before you object with something to the tune of "But I'm living with them!", I said it was simple, not easy. [0]: https://en.wikipedia.org/wiki/Linji_Yixuan https://en.wikipedia.org/wiki/Linji_Yixuan [1]: I'm fairly sure he doesn't mean it literally, but then I've never read the quote in context.
- prewett 14y ago

BenoitEssiambre 14y ago

Since the beginning of the financial crisis the media has constantly been repeating that the housing market was key to recovery and that the government had to do things to help prop up house prices. As someone who would like to own a house in the future, I find it quite unfair that the government is helping to maintain bubble prices. It is yet another way for current homeowners to to extract as much money as possible from the next generation. However, that is even not the main concern for my generation. Here is an interesting fact: My house whenever I can afford it, will _not_ be the most expensive thing I will have to buy in my life. My retirement savings are. With lower expected long term investment returns and interest rates, the expected cost of securing a retirement annuity goes up steeply and there is much less money left for everything else. All the news article I read on the subject of house prices assume that low interest rates prop up prices since they allow for cheaper financing and lower mortgage payments. However, as a 30yo who would like to one day be a homeowner AND also one day retire, this is not the effect low interest rates have on my budget. The low interest rates are currently more than offset by low expected returns on investments which make it much more difficult to secure retirement. I decided to try to quantify the effects of low returns on my budget: I calculated that if I managed to get 4% _real_ returns on my savings, which is what most online savings calculators assume by default and about what the previous generation got, I would need to save 23% of my income to maintain standards of living after retirement (This includes home equity and what the government saves on my behalf, those "entitlements"). If real returns were 3%, I would need to save 27% of my income, if they were 2%, I would need to save 35% and 1% would require saving 42%. This assumes a saving period from the age of 30 to 60 and retirement from 60 to 90. This is a somewhat optimistic scenario but with two equal periods of 30 years, it makes one data-point easy to calculate: With 0% real returns, to maintain standards of living. we would spend half the money before retirement and half after so we'd have to save 50% of our income. Long term real returns going down from 4% to 2%, increases the amount we need to save by 12% of our income. This means we have this much less money to put on housing and other things. For example, if our after tax household income was $50 000. We would need to save an additional $500 a month ($6000 a year) for retirement. Is it even possible nowadays to get a safe 2% real (~4% nominal) return? The investment opportunities I see are closer to 0.5% or 1%. Meanwhile the cost of financing a $200 000 mortgage go down by about $4000 a year or $333 per month when mortgage rates go down by 2%. If I bought the same house when returns and mortgage rates both went lower by 2%, I would need to find an additional $166 per month ($2000/year) to keep my retirement savings on track. If I decided to recoup this $166 per month by buying a less expensive house, at 4% interest, it would have to be $50 000 cheaper. I realize that expected returns and mortgage rates don’t necessarily move in sync and it may be that mortgage rates have bigger downward moves than expected returns but this still all makes me uncertain about my ability to spend while saving for retirement. Here is the graph I made showing how much we have to save relative to long term real returns on investments to maintain standards of living at retirement( https://picasaweb.google.com/lh/photo/d4vj9i43MIPd8H7MqUq_BtMTjNZETYmyPJy0liipFm0?feat=directlink https://picasaweb.google.com/lh/photo/d4vj9i43MIPd8H7MqUq_Bt... ). Here is the math I did for reference (let me know if I made any mistakes): I : Annual Income S: savings ratio The amount saved each year of my working life is I x S The amount spent each year of my working life is I x (1-S) For example, if our household after tax income I=50k and we save 10k for retirement, S=0.20, we get to spend 40k that year. We would like to maintain our standards of living after retirement which means we would like the amount we spend I x (1-S) to be equal the amount of our retirement pension payments. That is, if we save 20%, (spend 40k, save 10k) we would like to get a 40k pension at retirement. The value of our savings at retirement should be enough to give us this annuity. To calculate S, the proportion of our income we should save to achieve this goal, I take: Future Value of my savings FV(I x S) = Present Value (at retirement) of the pension annuity PV(I x (1-S)) Taking the formulas from here: http://en.wikipedia.org/wiki/Time_value_of_money http://en.wikipedia.org/wiki/Time_value_of_money I arrive at S = 1/( x + 1 ) where x=1/((1-1/(1+i)^m)/((1+i)^n - 1)) (See https://picasaweb.google.com/lh/photo/rdEbvkw5wx78_dnqZuL4QtMTjNZETYmyPJy0liipFm0?feat=directlink https://picasaweb.google.com/lh/photo/rdEbvkw5wx78_dnqZuL4Qt... ) i is the real (above inflation) returns on my investments which, assuming I don’t take too much risk, should follow the trend of long term real interest rates. n is number of years we are savings m is number of years we plan to be retired. Lets say, that I start saving for retirement at 30, retire at 60 and live to 90. That’s 30 years of savings and 30 years of being retired, a somewhat optimistic scenario (n = m = 30). Here is the graph showing how much we should save relative to long term real returns on investments ( https://picasaweb.google.com/lh/photo/d4vj9i43MIPd8H7MqUq_BtMTjNZETYmyPJy0liipFm0?feat=directlink https://picasaweb.google.com/lh/photo/d4vj9i43MIPd8H7MqUq_Bt... ).

jakeonthemove 14y ago

Another piece of advice: take your diplomas and expertise in Law, Journalism, Medicine and others to developing countries. They may not pay as much, but the jobs are there...

deleted 14y ago
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ruswick 14y ago

Other than the overt sexism, ("They are no smarter than you, and they are definitely way less organized and far less attentive to detail. So go show them what you are made of.") this article makes some fair points. That said, the author seems to be on a vendetta against post-secondary education. H asserts that an education "probably won't" pay for itself. This is a total falsehood. The nontrivial positive returns of collegiate degrees have been documented by numerous studies. (http://www.nytimes.com/2010/09/21/education/21college.html?_r=0 http://www.nytimes.com/2010/09/21/education/21college.html?_...) Moreover, this is not, as he asserts, only true of top 25 schools. (http://www.businessweek.com/interactive_reports/bs_collegeROI_0621.html http://www.businessweek.com/interactive_reports/bs_collegeRO...) On this front, he appears to be talking out of his ass. I do agree that the world has changed drastically over the past 3 decades, and that the precedents for education and occupations have irrevocably changed for the worst. I thinks some qualification is necessary for his contention about "making things." This is not necessarily a recipe for success, especially if what you make is superfluous. If the economy tanks, you'll still be the first to go. To ensure career resiliency, one needs to pick a field that 1) won't be obviated by technology in the near future, and 2) is fundamental to society and thus will never go away. If anything, I think that this skews towards more abstract fields that are removed from physical labor. All physical labor can or will be able to be performed by technology at far greater efficiency and far lower cost. Machines won't be able to think anytime soon, which is why coding is such an attractive profession. Computers aren't going out of fashion, and will, for the foreseeable future, require people to write software for them.

brianchu 14y ago

Firstly, it's misleading to say that the cost of a UC Berkeley education is $210,000. That's the price is you're an out-of-state resident and you receive no financial aid. In-state residents without financial aid end up paying roughly $120,000 (and the cost is even less since most students live off-campus after their first year, but I digress). Going to the flagship state college in the state you live in is generally a highly affordable choice for anyone. Secondly, a private school education typically runs around $200-240k, a number that is calculated to include room, board, books, and living expenses. Third, you need to realize that most people get financial aid at private colleges (and state colleges). The irony is that top private colleges (i.e. Ivy Leagues) are actually more affordable options than state colleges for low-income students because of financial aid policies for which households earning even low six-figures can qualify. The only people who actually pay full price are people whose families have gross incomes of ~200k+. If they have a sibling in college at the same time, even then they might get financial aid! Fourth, for middle-class families that straddle the line between "too rich for significant financial aid" and "too poor for parents/myself to easily pay," students should be aware of merit scholarships. Many liberal-arts colleges offer them. USC, despite its reputation as a wealthy private college, is well-known for "buying" good students by offering them generous scholarships (full-ride, half-ride) dependent on your performance on the PSAT.

nicholas73 14y ago
Interesting. So the impending diarrhea I had during the last section of my PSAT cost me a potential free ride at USC (I scored a notch below what it took to be a top merit scholar). Oh well ended up at a state school anyway.
bane 14y ago
>Secondly, a private school education typically runs around $200-240k, a number that is calculated to include room, board, books, and living expenses. That's not entirely correct. The tuitions at many private schools these days lists at ~$200k for a 4-year undergrad and does not include expenses. For example https://undergraduate.admissions.gwu.edu/costs-attendance https://undergraduate.admissions.gwu.edu/costs-attendance Lists just tution at $45,735 while R&B is $10,530. So, assuming the rates don't change, tuition for an undergrad is $182,940 and other expenses run another $58,600 for a grand total of $241,540. So yeah, it's at around your upper bound, but just the difference between your lower and upper boundary was literally the entirety of my undergrad + grad degrees.

rfurlong 14y ago

This article, like many articles on Hacker News equates the value of education into dollars. Education, intrinsically, cannot be solely measured in dollars. The problem isn't people getting useless degrees, its degrees that don't correspond to high paying jobs in the current economy costing too much. THERE IS NO SHAME IN GETTING A DEGREE IN LITERATURE. Education should be free. I just get a knee jerk reaction to any article like this because it wholly overlooks how education is supposed to make you a better human being, not a money making machine. Articles like this take the easy way and basically say ASSIMILATE or die. Yea, thats going to solve the problem...

Domenic_S 14y ago
> THERE IS NO SHAME IN GETTING A DEGREE IN LITERATURE. I agree with you, but the supply side of the education system agrees with you all the way to the bank. The real point is: the traditional education model is usually a bad financial deal. If you want to learn, do so -- but don't be swindled into taking out loans for it.
- rfurlong 14y ago
  I agree with your real point, however, I would not say the current model is the traditional or even universal model. Countries other than the US have much better models. I just get tired of the discussion not focusing on the problem and instead accepting it. Universities are often the best place to get an awesome education in the humanities. Withholding that opportunity because education has been transformed into some financial investment, instead of a holistic investments that not everyone can take is just plain sad. I think its also important to point out that the skills and concepts you learn in areas such as the social sciences and humanities are still financially lucrative. As long as our economy is dominated by big corporations there will be managers and CEOs whos only job is to delegate tasks to and organize the humans beneath them. Understanding human power structures and having the ability to persuade and communicate effectively with people will always be the real big money ticket.
  - ucee054 14y ago

Suncho 14y ago

While I think he's made some important observations and I agree with some of his advice, I don't agree with his conclusion that young people are screwed. Here's an important insight that I definitely agree with: "But won’t a college degree pay for itself? It probably won’t." It won't. You probably shouldn't get one if your goal is to make money. Here's some advice I disagree with: "My advice to young people is to figure out how to make something. That means either working with your hands, or learning how to type code with them." The job market is a game of musical chairs. You can give a person a strategy for winning at musical chairs, but it doesn't change the fact that there are fewer and fewer chairs each round. It's not reasonable to tell young people (or any people) that their goal should be to find a job so they can be self-sufficient and they can support themselves financially.

angersock 14y ago
It's not reasonable to tell young people (or any people) that their goal should be to find a job so they can be self-sufficient and they can support themselves financially. Are you kidding? How am I supposed to parse this properly? It reads like you are suggesting that it is not reasonable to suggest that you should get a job to keep yourself secure.
- Suncho 14y ago
  Yes. That is what I'm suggesting. And I am not kidding. Do you disagree?
  - angersock 14y ago
    I'm concerned that I'm maybe putting the wrong emphasis on some bit of what you said, because if I'm not then yes, I disagree with you. There is no reason historically that people have not had to work to support themselves, and so to suggest that they not do this suggests either that you desire them all to become layabouts dependent on welfare or that you want them to stop working and die off. Please explain an alternate interpretation of this.

nazgulnarsil 14y ago

Idiots who don't plan their future are screwed, everyone else is perfectly fine. This isn't a change from the past, it's just that today's idiots are visible due to the internet.

jpdoctor 14y ago

Note that the article draws on a graph from the blog Calculated Risk. I have followed CR for years, and after reading the pando article, I'm am convinced the pando author is completely out to lunch. Just as one example: The author is cherry-picking CR's data. Here is the graph of unemployment vs education level: http://cr4re.com/charts/chart-images/EducationUnemploymentSept2011.jpg http://cr4re.com/charts/chart-images/EducationUnemploymentSe... And still the author recommends avoiding higher education? Anybody who follows such clownish advice despite the data deserves what they have coming. BTW: CR is an excellent source of economic information, but it will take you a year or so to truly digest some of what is being put in front of you. (The comment board is of mixed value. It used to be the best on the web.)

cmbaus 14y ago

I've always considered Prop 13 as a way for the babyboomers to screw over their own kids.

chuckreynolds 14y ago

This post is so dead on... love it.

usaar333 14y ago

I'm finding it hard to reconcile Lesson 2 which implies a school even of the caliber of UC Berkeley isn't worth it with Lesson 4 to get successful friends. A selective college is probably the best place to develop close friendships with people destined to be successful.

leoedin 14y ago
I completely agree. Meeting smart and driven young people without the luxury of college is hard. Convincing those people to be your friends when you don't have a shared background is even harder.

xiaoma 14y ago

I really don't get generation-based hatred from the author. My grandfather (who raised me) worked long and hard for decades, first as a marine, later a railroad worker and then finally a manager at AT&T/Bell. He paid far, far more into the social system than he was ever able to take out. I've felt the pain of our increasingly stratified society first hand, but I have little respect for the practice of blaming a generation who have given so much and taken so little in return. Yes medical expenses are spiraling out of control, but that's a structural problem, not a sign of a generation as a whole "screwing young people".

agorabinary 14y ago

I feel like this article would have a greater thrust if it focused more on the perils of college and the job market nowadays and less on software programming as the overarching solution for young people. It really hits a more accessible tone that way, because frankly, only a small fraction of young people are interested in a coding lifestyle. A young person with little or no debt and a good head on their shoulders is in pretty good shape, regardless of the waters they dip their toes into.

jjsz 14y ago

This may be OT but it relates to survivalism for our generation (I'm 20). As I get older, like the OP, I'm seeing Entrepreneurialism and, personally, Agorism as two of the many strategies that should be focused on to influence people, mostly non statist capilists who don't innovate as much as they should, to change their philosophies so that disruptions, subsidies, and investments can occur in various other markets here in Puerto Rico besides the pharmaceutical. I don't classify myself as libertarian, I'm all about direct democracy and believe highly in sovereignty, however the ongoing regulations and the centralization and manipulation of the housing sector, the energy sector, and the food and liquor sector here in PR have gone overboard just like in the states and it has lead me to believe that all of this is caused by us submitting into conformity after we have generate a bit of passive income without focusing on taking down some barriers and instead we're maneuvering around them. Why the hell does someone that has a self sufficient house, windmills, solar panels and all, takes water from a deep well STILL have to pay a minimum electricity bill or the government would regulate his energy and tax him like if he were to be selling it. To us country folk that do not like to be taxed on our own property, this sort of regulation is going to be taken down- it'll only get worse when more ways to decentralize markets happen and we get our hands in them like 3d printing. I'm naive and you can justify calling me a fool but this is modern day slavery, and that's what the article is generally touching upon. Not sure if the above was the best example, but to me it's the most relational. We're obligated, enslaved, to fix many problems that we haven't caused on top of worrying about the elderly before we retire, as shown by some of the comments here- no problem, people had it harder back in the days..Especially here in PR. Have you seen Clint Eastwood's Super Bowl Half time commercial? That's what came to my mind after finishing reading this.. Besides showing an interest in a certain market by crowdfunding capital and displaying market interest how can one influence non statist capitalists to invest lets say in informing the majority of the Puerto Rican population to take the current issues we should really be focusing on seriously? I know my kind and they're not generally inclined to think on these things day by day but please be kind enough to criticize my philosophy. Focusing on mostly the pharmaceutical market, the general PR'an population won't stand a chance to adapt to this change of thought on survivalism.. Again excuse this if it's OT, this is my first post.

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elisehein 14y ago

I am loving these illustrations

cfn 14y ago

Although the article has some good advice I have to cringe at the us versus them mentality set at the start. Blaming the fate of the young on the healthcare bill of the old is a false dichotomy. Our parents reached a fairly good finantial state that we may not be able to attain but I have to ask if blaming them for the current state of affairs is the easy way out. Is it not like blaming immigrants for lack of employment?

crazysaem 14y ago

I'm wondering how this article compares to other countries. In Germany you don’t necessarily need to pay expensive medical bills, and Universities have either no fee at all, or a very small one (500 € per Semester usually). So after getting a Bachelor’s degree, you can be pretty much debt free. Is this then only a problem for the USA?

secure 14y ago
Consider that many German students (I don’t have numbers, just a subjective impression) get Bafög, a government-issued loan to pay for fees/rent/living.

vy8vWJlco 14y ago

> "My advice to young people is to figure out how to make something." Problem: patents. Good luck making things as a "little guy" with patents (software or otherwise) in the way. Patents and similar government-granted monopolies are all, by definition, obstacles to economic activity through an accessible and competitive market. They are also the most difficult to overcome for those starting at the bottom. Want economic recovery? Break monopolies.

AYBABTME 14y ago

So the obvious solution seems to fix this world while we can, so we can retire and leave something better for our heirs. I find this distress motivational.