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Don't send your kids to college!

KnowitsomeKnowitsome Registered User Posts: 280 Junior Member
edited February 2011 in Parents Forum
Here's an article and accompanying video interview on Yahoo finance with hedge-fund manager and author James Altucher, who argues, "Don't send your kids to college!"

Don't send your kids to college: James Altucher

While there's some sloppy analysis (this is what I want from my hedge-fund manager?), I'm interested in your opinions on the merits of his argument. Are we just being lazy and sending our kids off to school because that's what's expected? Should we use more critical thinking before blindly taking that route? What are the points he's missing, and what assumptions does he get right/wrong? When does it make sense to send your kid to college, and why would you choose NOT to do so?
Post edited by Knowitsome on
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Replies to: Don't send your kids to college!

  • fogcityfogcity Registered User Posts: 3,228 Senior Member
    The article for 99% of students with college potential is nonsense.
  • proud_momproud_mom Registered User Posts: 771 Member
    I think he is on target for many high school seniors, but instead of giving my son money to start a business I wish I had sent him to another country for missionary work for a year. I think that would have better enabled him to figure out what he wants to do.
  • starbrightstarbright Registered User Posts: 4,660 Senior Member
    Just another bozo looking for attention with a provocative argument.

    I want my kids to get an EDUCATION and to have a wide swath of career options to find that which most fulfills them (most of which will likely truly require formal educational training credentials, not merely selling, networking and personality). Some people actually want to be physicians, lawyers, engineers, or therapists, and so on.

    In our family, we have the luxury perhaps of not viewing college as job training (nor do we narrowly calculate ROI using only future earnings). We see many things as much more valuable than 'how much you make'. Of course I would not expect a hedge fund manager to necessarily share our values on that.

    I love this quote, "so teach your kids how to be motivated!" I'd love to see his expertise on how one teaches motivation.
  • SmithieandProudSmithieandProud Registered User Posts: 3,038 Senior Member
    Every so often these articles come out, and they are completely useless. Of course, the son of a hedge fund manager probably could skip college and run his own business. He's been steeped in the world of finance from birth, given access to the best of educations, and unless his parents keep him away from all normal society, he's got a wide network of contacts to draw on, all of whom know and trust him, and most of whom are extremely wealthy.

    Most kids aren't like that. They don't have the maturity to manage and grow a large investment, they don't have the contacts to help them invest it in a business start up, and what happens if the market crashes or their business fails and they lose it all? They have no college degree to start over on, and no money to earn any kind of higher education certificate. They would just get taken for a ride.

    If college education is a "scam" this just seems like another scam to replace the tyranny of degrees with the tryanny of hedge fund and other financial managers, who would undoubtedly see their businesses grow if every college student in America was told to invest their educational savings or better yet, have someone invest it for you.
  • MarianMarian Registered User Posts: 12,525 Senior Member
    This is the part of the article that bugs me the most:
    He notes for some people, it might be more enriching and productive to go to college later in life.

    It might indeed be better educationally, but later in life, people tend to have more conflicting responsibilities -- jobs, businesses, children, elderly parents, etc. Going to college is therefore much more of a challenge at that time.
  • nightchefnightchef Registered User Posts: 1,450 Senior Member
    If college education is a "scam" this just seems like another scam to replace the tyranny of degrees with the tryanny of hedge fund and other financial managers, who would undoubtedly see their businesses grow if every college student in America was told to invest their educational savings or better yet, have someone invest it for you.
    I agree. This advice would seem a lot more credible coming from someone who doesn't stand to benefit from people following it.

    Also, leaving aside the whole issue of the intrinsic value of education, I see a Ponzi-scheme problem in Altucher's argument: where did the parents get the money that he wants them to invest in his hedge fund rather than in a college education? From another hedge fund investment? And so on ad infinitum? At some point our economy has to be based on people who make their living actually producing and exchanging goods and services, rather than just playing games with money. And those kinds of jobs will often (though not always) require an advanced education. Maybe the parents who send their kids to college are suckers, but without those suckers, there would soon be nothing for the wise guys to invest. Or so it seems to me.
  • RSBuletzRSBuletz Registered User Posts: 403 Member
    Let's see what he has to say when his children reach college age. Likely a different tune then seeing as how his plan is to take the commisions he's reaped off of his "educated" guidance and pay full-boat for his spawn.
  • GossamerWingsGossamerWings Registered User Posts: 1,559 Senior Member
    I love it when he talks about how if you invest your $200,000 college fund now, you will have $2.8MM in 50 years. And what are you going to live on while your $200,000 is growing? (And BTW, if you want to compare an end result of $2.8MM to what you would earn over 50 years (if you didn't need to live on anything)...$2.8MM divided by 50 years is $56,000, not a very high salary if you ask me, especially in future dollars....)
  • QwertyKeyQwertyKey Registered User Posts: 4,590 Senior Member
    I like how the only data he used was the fact that college costs 104K over 4 years (which honestly sound like a number they just made up...) and the empirical evidence that Bill Gates and Steve Jobs are drop-outs. And then he didn't even connect the cost of college to anything other than to say college is expensive. Any investment yielding 5% annual interest is going to carry risk, and 5% over 50 years is starting with 104K is just under 1.2M, not the 2.8M they said.

    The arithmetic errors and logical fallacies give me a warm fuzzy feeling inside. I like it!
  • TortfeasorTortfeasor Registered User Posts: 570 Member
    [Just another bozo looking for attention with a provocative argument.

    I want my kids to get an EDUCATION and to have a wide swath of career options to find that which most fulfills them (most of which will likely truly require formal educational training credentials, not merely selling, networking and personality). Some people actually want to be physicians, lawyers, engineers, or therapists, and so on.

    In our family, we have the luxury perhaps of not viewing college as job training (nor do we narrowly calculate ROI using only future earnings). We see many things as much more valuable than 'how much you make'. Of course I would not expect a hedge fund manager to necessarily share our values on that.

    I love this quote, "so teach your kids how to be motivated!" I'd love to see his expertise on how one teaches motivation.

    Many feel as you do. Many who feel this way are middle class and blue collar. There's more to college than just job training and future income potential. There's power in information and knowledge.
  • TortfeasorTortfeasor Registered User Posts: 570 Member
    If hedge fund managers paid more attention in college we would have such a large procession of them going to prison after the Galleon Group insider trading scandal.

    They have everyone thinking they are the kings of the universe when they cheat in order to get the returns they claim. The have no more talent in analysis than a high school algebra student.
  • RSBuletzRSBuletz Registered User Posts: 403 Member
    "There's power in information and knowledge."

    Agreed. That information and knowledge is not locked up in the ivory towers of academia anymore. Its out in the ether, accessible to anyone. I think this will have to act to repress tuition increases in the near future when folks finally say "the hell with it, I'm not paying that anymore". As more and more people self-educate, or by a package of classes at a reduced cost on-line, this tuition inflation madness will mitigate.
  • thisgirlisaGthisgirlisaG - Posts: 1,338 Senior Member
    "I love it when he talks about how if you invest your $200,000 college fund now, you will have $2.8MM in 50 years. And what are you going to live on while your $200,000 is growing? (And BTW, if you want to compare an end result of $2.8MM to what you would earn over 50 years (if you didn't need to live on anything)...$2.8MM divided by 50 years is $56,000, not a very high salary if you ask me, especially in future dollars....)"

    while watching the clip, i was thinking of all of this, too : P

    by the way..."dad, can i have $10,000 to start a business instead of going to college next year?!" ****.
  • proud_momproud_mom Registered User Posts: 771 Member
    Personally, what I am taking from his message is that
    1. there are other ways to gain knowledge and
    2. spending a lot of money to educate an 18 year old may not be the best financial choice.

    I don't know how anyone can argue that we should send all 18 year old kids off to college right after high school. It really depends on the kid. I know plenty of kids who were very smart and did extremely well in high school but floundered in college. These examples are endless and there are plenty of cases where kids were so-so in high school and then flourished in college. I really think parents should look at their children in terms of 'are they really ready right now' instead of 'they have to go to college right after high school'. Too many parents have thrown a lot of money away by sending a child who was too immature to go off to college because they felt it was the right thing to do.

    Education is very valuable and knowledge is power, but not all knowledge is gained inside college walls and not every child is ready to absorb and make the most of "college" knowledge at 18.

    I don't agree that college is a scam, but I do think it is a waste of money for some kids until they mature a little bit.
  • compmomcompmom Registered User Posts: 8,206 Senior Member
    I agree that the financial burden of sending kids to college is ridiculous, and deserves a second look.

    The idea that giving an 18 year-old money to start a business, when he also said 18 year-olds are often not mature enough yet for college, seems contradictory. It takes more maturity to start a business, I would think, than go to college.

    Attending later in life can make sense for many, despite the responsibilities we all have then, and new options like online courses and low residency programs help with that, and will be even more available.

    While one of our kids has graduated, and another is a sophomore, our youngest has no plans to go. She is involved in performing arts and we are going to try to contribute to her training in the same way we would have for college, modest as that is. She hates academics. I worry about her financial future, but it wouldn't surprise me if she ends doing fine.
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