Buying a house in one city is basically the equivalent of buying one stock. You may hit it, you may not. You can't sell it quickly. Then there are the transaction costs. There is no Scottrade where you can sell your house for $9.99 in an instant. The only financial benefit fromis you avoid paying rent.
You say people should think of their kids as investments. I've got two kids in college and I feel that they're depleting my money. Or am I just not waiting long enough for the payoff?
I have four lovely daughters and I don't view them as assets or liabilities. But if you want to think about kids from a financial point of view, early on in life, they're a liability and later they become an asset.
In your later years, you will need lessand less pension income because in most cases, the kids will help out. The larger the number of children, the greater the probability that that's going to be the case. Your kids may be your pension.
What do you mean when you talk about the opportunity cost of being an English major?
If you're an English major, theis going to be much, much smaller than someone studying engineering or computer science or accounting. For a mechanical engineer who's going to be earning $60,000 or $70,000 after graduation, a $30,000 student loan shouldn't be that bad. But if you're a Shakespeare major, maybe you shouldn't be taking on any debt because I'm not sure how you're going to pay it off.
But maybe that English major will start the next Google? Who knows?
Absolutely. But all else being equal, if you have two students in the same dorm room, one majoring in electrical engineering and the other studying dance, who's going to be making more money 10 years from now? On average, it's a no-brainer.
Don't they know that intuitively?
You'd think so. But why does my local Starbucks barista complain about her master's degree in Milton? She's stunned that her thesis isn't helping her get a job.
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