Techniques to be financially well

[Junket]

"Go to college."

That has got to be some of the worst financial advice to give someone.

Going to college=debt.

And the majority of undergraduates have little nothing to show for it. I few score good careers, but the rest start paying off their loans for the next 10-20 years.

EDIT: Credit cards do not mean debt.

Idiots with credit cards mean lots of debt.

[clearskies]

Oh dear, that is really bad if it costs that much. It there is no tuition fees or it is not that much, a small job on weekends will relieve the debts. A well off family will also save the day.

[Lipp]

Full international fees are quite a hassle, but as far as I know student loans (which is maxed out and funds half of my tuition fee, getting a part-time job for the other half and through my own savings) are a lot more benign than other types of loans, and I'd much rather get a lot of debts and pursue a professional career than end up like most who didn't go to uni back in Sweden - Either in the army or working a dead-end job in a shop.

[GrkScorp]

"Go to college."

That has got to be some of the worst financial advice to give someone.

Going to college=debt.

And the majority of undergraduates have little nothing to show for it. I few score good careers, but the rest start paying off their loans for the next 10-20 years.

True.., but college is an investment in your human capital.., and if you're going to college.., and paying money.., accumulating interest bearing debt.., and forgoing income for 4 years.., the expected future benefits better outweigh the costs..

In financial terms.., the type of investment college is.., is an annuity

You invest now.., and choose to forgo a stream of payments for X number of years.., and in return.., you expect to collect a large amount of payments in the future..

You can then compare the present value (PV) of both options you have

- Avoid college.., work instead
- Go to college.., focus on future

When you discount the number of future cash flows by some rate.., let's say 5% (for as long as you're using the same rate in both examples.., the numbers are comparable and meaningful).., then you can see which choice you're better off making..

If you plan on being a Doctor.., Lawyer.., Investment Banker.., etc.. you'll find that the present value of all future cash flows is more than 20 times higher than without college..

If you plan on majoring in Media Studies.., Film.., Sociology.., Psychology.., Women's Studies.., etc.. nobody cares.., and you'll probably not end up doing anything that significant with that anyway.., so you will see that it's actually the better choice to avoid going to college and start working..

Kobe Bryant had to make this calculation.., to go to college.., or to be drafted and play professional basketball? If you ask him if he's glad he didn't finish college.., I don't think he'll have any serious regrets..

The kids in the park.., will be idiots if they make the same choice Kobe made.., because they can't do what Kobe does.., so they better be useful in some other way to society..

Generally.., going to college is usually a good choice.., because you are investing in your ability to offer to society.., namely.., "services"

- Medical services
- Legal services
- Consulting services
- Financial services
- Technical services
- Educational services

It's allowing you to be more valuable.., and offer more value to others.., and as compensation for the greater value you can offer to others.., you can expect greater compensation..

Even electricians will require some formal education.., I believe the only "semi-skilled" occupation that breaks $150,000 a year are plumbers..

Furthermore.., skilled & professional occupations allow you to tap into the secret of wealth

[GrkScorp]

Furthermore.., skilled & professional occupations allow you to tap into the secret of wealth

This is something you learn in Real Estate.., especially if you have a close relationship with your broker..

"The secret to being rich.., is hard work.., the secret to being wealthy.., is no work"

"I make over $2 million a year.., and the only work I do.., is check the balance on my accounts through my computer.., and go to the bank to deposit checks.."

What my broker wanted to say was.., that there's only so much you can do through hard work.., and it's a dream and fantasy to believe that you can be wealthy if you work hard..

Limitations:

- Time (7 days in a week.., you need to sleep & have fun to stay productive.., so even if you can put in 100 hours of your own labor.., that's your limit!)

Wealth Model:

The one thing all wealthy people have in common.. (besides not working)

- They all make their money.., using other people's labor.. (think about that)

Be it a medical office.., law office.., consulting firm.., accounting firm.., real estate office.., etc.., There are a few people that are reaping the rewards of everyone else's labor.., all they offer these other people is "rent" for their labor & time.., and the rent they offer is less than 100% of the income these people generate.., so that it's profitable to have them working..

Example:

Real Estate office.., let's say 10 agents to make the math simple..

They each sell one home every week.., $10,000 commission.., they keep 50%.., individually.., they make $5,000 each week.., the broker however.., makes $50,000 each week.., and he didn't do sh*t..

Law firm.., let's take just one attorney as an example.., a tax attorney who has to put in 100 hours a week.., billing $300 an hour.., at the end of the week.., that's $30,000.., at the end of the year (50 weeks.., 2 weeks vacation).., that's $1,500,000 he generated in income.., his salary is only $150,000.. that means he's only being compensated 10% of what he produces.., where is the rest of this sum going? To the partners..

The professions allow you to do that.., to take fresh blood.., workhorse it.., or take perhaps some accounting majors who didn't pass their CPA exam.., or finance majors who didn't become CFAs.., Real Estate agents who didn't become brokers.., law students.., new attorneys.., or paralegals who never made it to law school.., and let them do the work.., train them.., supervise them.., but have them ultimately do the work.., and simply rent their labor.., and realize any difference between the income they generate for the services they provide and the rent you pay for their labor.., as your compensation..

My father's attorney for example.., James.. he works for 2 weeks every month.., and then for the other 2 weeks.., he's on vacation.., he makes $250,000 annually.., and he doesn't even work! He's very lax about it.., he even tells my father.., that if he were to work more seriously.., he could easily retire much sooner.., but he doesn't plan to.., he wants to enjoy himself while he's young..

Personally.., he's an idiot.. financially of course.. Because he could easily solicit some new hires.., have them do the dirty work so to speak.., and still enjoy the lifestyle he wants to enjoy for himself.., he doesn't have to be the one necessarily doing the work! But that's a concept he's not mentally comfortable with..

In Summary:

- Use other people's labor to generate income for yourself
- Never pay interest on depreciating assets
- Learn to negotiate instead of simply accepting the terms of a transaction
- It's not a bad idea to invest.., in yourself

Best,

GrkScorp

[Gribble]

Uhm... Fras? You're way the **** off. Sorry.

There are exceptions to every rule, but for the most part college grads make lots more money. Those loans are nothing next to a grad's overall earning potential.

[Junket]

College would have done me no good in my field of work, except for give me debt to pay off.

Only when I've reached my fullest potential without a degree, will I consider college.

[someonelse]

Not to mention when you have a BS or BA lets say art but end up working in accounting you'll get paid better then someone who has no degree. It's a fact.

[Junket]

Not to mention when you have a BS or BA lets say art but end up working in accounting you'll get paid better then someone who has no degree. It's a fact.

Good thing I'm not paper pushing.

[Illusional]

Silly illusional... you are supposed to SAVE money so the women in your life can spend it.

is she is doing this, then he pussy better be DAMN good.

Don't go drinking every night.

now you look even sadder in my mind.

raverboy

[GrkScorp]

College would have done me no good in my field of work, except for give me debt to pay off.

Only when I've reached my fullest potential without a degree, will I consider college.

Hey.., that's a smart choice then

But not just limited to your line of work.., but also your job sector..

I look at my classmates who choose to specialize in Criminal law.., Family law.., Constitutional law.., Litigation.., General Contracts & Business law.., etc.. all brilliant.., hardworking people.., but the sectors are saturated.., so much so.., that the ones who do end up finding work not only have to settle for a lower starting salary.., but there are many students who won't find work at all.., can you imagine finishing with $150,000 in debt from law school alone.., on top of whatever other debt you have.., and having to start finding some way of paying it back?

Many of the lawyers you see.., helping you with contracts.., being your Real Estate lawyer.., the guy you call when you want to sue someone.., those are the people who wanted to practice what a million other people also wanted to practice..

Which again falls back into the annuity model..

Take a small educated look into your future.., if it makes financial sense to invest in yourself.., if that's something you want to do.., and you can't do it without education or some kind of degree for licensing requirements.., then college or professional schooling makes sense.., otherwise.., don't bother..

My brother asks me about accounting all the time.., no.., you don't need to be a CPA to prepare taxes.., you don't even need to be an accountant! (hello! it's called H & R block.., the only company who prepares taxes.., who also made a mistake on their own corporate tax return.., ouch.., that's gotta hurt.., that's what you get when your minimum cut-off is high school kids)

Even without college Fras.., you're still investing in yourself!

Time is the only valuable commodity.., there is no money.., there is only time (that's some pretty deep economic theory right there).., if you want.., you can even break it down into.., "How much for that coffee? 5min of my time?"

It all depends on what you do.., when you make more.., it costs you less of your time to purchase things.., and that's because your time is valuable.., and check this out!

You can invest time.., your own time.., to make your time more valuable!

When you take the time to learn things.., even if you didn't do so through formal classes.., you took the time to learn those things.., so you did invest in improving yourself and the value of your time.., the value you have to offer others.., and henceforth the compensation you will receive for your added value to society..

When athletes train.., musicians practice.., students educate themselves.., or people learn & acquire new skills & knowledge.., they are all improving themselves.. College is such a limited mode of thinking about the overall concept of improving yourself..

How you choose to invest your time.., could be a much more valuable tool in achieving the wealth you want

[GrkScorp]

Not to mention when you have a BS or BA lets say art but end up working in accounting you'll get paid better then someone who has no degree. It's a fact.

You're going to end up working in a dead-end job in accounting with nothing but a degree in art..

It will be so dead-end.. that from a HR perspective.., you're more likely to get fired after a couple of years.. because even if you enjoy your job and have no better options.., they can only assume that you are dissatisfied and likely to steal or suffer from lower productivity than a younger (and perhaps cheaper) hire..

[someonelse]

I have 35 different people in the company I'm at now that would tell you differently and they've been here 5 years or more. I myself have my degree in Animation and multimedia and work in production. A degree shows nothing but you motivation and determination to finish something you started. This is a fact everyone should learn. This is why people will get a degree in communications and move on to just about any job they'd like. 90% of the account managers/media reps/etc I've worked with have a communications degree. Also you learn more on the job then you would ever learn in a classroom.