Why College Could Be a Bad Investment

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In this environment,
opportunity cost trumps tradition. For many undergraduates and parents,
the cost of going to college is now far greater than the supposed
benefits.

“College
costs – along with living and medical costs – are rising,
and salaries are going down right now,” Managing Director of
Formula Capital and Wall Street Journal columnist James Altucher
said. “College graduates don’t have the same benefits
as they did 30 years ago.”

Parents should
beware of their child’s intentions. Many students want to spend
their parents’ money – it’s their last chance to
go all out.

Now is the
time to reflect on prospects.

When potential
students think about college, they should ask themselves what they’re
hoping to get out of it. Analyze their life. Assess their majors.
This is a major investment decision. Discuss possible returns, separating
anticipation from reality.

“If a
student wants to go back to school in their 20s, when they’ve
made some money, traveled, and matured a bit, then go ahead,”
Altucher said. “But a parent shouldn’t have to spend $50,000
a year for their kid to go to frat parties all day long.”

An alternative
to college is becoming an expert at one area and offering your services.
The best university in the world is called Google (GOOG). You can
learn anything you want on the Internet, free of charge.

Why don’t
parents give a quarter of the amount they would have spent on an
education to their kid to invest? The cost of starting a business
is next to zero. Not everyone is an entrepreneur, but there’s
no harm in trying to be one.

“Critical
thinking shouldn’t cost $200,000,” Altucher said. “There
are other ways to learn that while kids can make money and get experience.
Lay your own track. Become an artist, entrepreneur, investor.”

One of the
real benefits of a college education is developing a good network.

Read
the rest of the article

November
25, 2009

Naresh Vissa
[send him mail] is a junior
accounting, broadcast journalism and finance major.

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