College

Going to college has become an almost universal requirement on everyone's list of "things required to succeed". Let's talk about that. Does that make sense?

I'm sure you have heard or read it multiple times that people who have a college degree make a lot more money over their career than people with just a high school diploma. And those statistics become even broader as you add advanced degrees. So that seems like an open and shut case. Get a degree or suffer from lower wages and overall employability the rest of your life.

There is a bit of a wrench I want to throw in that general assumption. Not all degrees are created equal. Someone graduating with a bachelors in philosophy can expect to start making somewhere around $40,000 a year. Compare that to a chemical engineering degree starting at over $65,000 and you start to see the value differences, especially over time.

The thing to understand though, is why there is such a range of incomes despite them both being 4 year degrees. The critical variable is how much the degree prepares you to be skilled labor. This allows for an apples to apples comparison between college and non-college career paths. For example, welders on average make about $16/hour which isn't a ton, but is certainly a lot more than minimum wage.

$16 an hour equates to a bit more than $30,000 a year, which is less than even the philosophy major. So on the surface it seems that the degree is a sure win. However, a philosophy major (arts degree) has a pretty high unemployment rate at about 7.1% and on top of that there are probably associated student loans that drop that effective salary by a bit for quite a while. All that combined with the four or five years it takes to get the degree where the student's salary is very low. Welding on the other hand is in very high demand and it doesn't require four years or loans to get trained. So you start earlier and without the debt.

All that to say, it is more about whether or not you are able to develop a skill set that puts you into the "skilled labor" category or not. A college degree doesn't guarantee that, and there are lots of paths that don't include college that can prove to be quite lucrative.

So don't just blindly march yourself or kids off to college because it is the "smart" thing to do. Know your options and know where you are going before you make the investment of time and money that college requires.