Is higher education really worthwhile? I have been in school for most of my life, and as I look back at it all, I wonder if it was worth it?
What are the pros and cons of higher education?
Pros:
Better paying job
Better working conditions
Greater social acceptance
Greater flexibility with private life
Cons:
Immense student debt
It is a know fact that salaries increase proportionately with education achievements. According to PBS, the numbers are dramatic.
Highschool dropout: ~$20,000 per year
Highschool graduate: ~$30,000 per year
College graduate: ~$56,000 per year
These numbers seem impressive and can make a good argument for finishing school. The larger jump is when you get into professional schools.
Average Dentist Salary: ~$124,000 per year Source
That may seem like a significant jump in salary, but so is the amount of student debt. I completed my freshman and sophomore years of college in Puerto Rico at UPRM, costing $76 per semester (if you had a very high GPA, they would only charge laboratory fees). I moved to Maryland for my junior and senior years, and that totaled to $8000. My college education cost roughly $8,304 and I would be set into the average salary bracket of $56,000.
I then went to dental school where I tried to spend as little as possible. The average graduating student debt from dental school is $250,000. I managed to get out with only $160,000 of student debt.
This debt costs will cost me $2,000 a month for the next 10 years, costing $240,000 to repay it (making minimum payments). Imagine what the monthly payments must be on the $250,000 student debts!
Making more money is great, but then you end up in a higher tax bracket. You have to pay taxes on the money you made to pay the student loan, and in the 28% tax bracket, the $2,000 monthly student loan payment will cost you $560 in taxes.
This means that the first $24,000 you make per year is already spent on student loans and will have an additional $6,720 in taxes to go along with it. $30,720 of your yearly income is already spent on student debt and taxes. This leaves $93,280 for you at the end of the year! Not really, the $93,280 will carry along another $26,118 in taxes.
At the beginning of the year, you need to earn at least $30,720 to pay your student debt, that's more then a high school graduate makes in a year! After taxes and passing your student debt payments, your $124,000 has now been reduced to $67,162.
If you have a job, you need somewhere to live and you need to get to work. Due to social pressures, you might feel inclined to buy a fancy house and car to impress people you don't know. The house and car payment will have to come out of the remaining $67,162. Don't forget that you also need to pay property tax, as well as insurances. Soon enough, you will have less money leftover than what the college graduate is earning! Luckily, you live close to work and can work everyday until you die to pay off these debts and try to save for retirement.
Once you're old and stop working, you can try to sell everything and buy the boat you have been dreaming of to sail over the horizon to new lands! Hopefully your health is still good enough to enjoy cruising for a few years before your body can't take it anymore!
The other option is to not follow the system! I have friends that cruise on sailboats in the tropics, everyday is warm weather and beautiful beaches. They don't have much money, but they do have their happiness. When they need some cash, they work as a bartender; otherwise, they just enjoy life for barely no cost!
There is no doubt that cruising has significant startup costs. First, you need to buy a boat! That can be a pricey ordeal. Next, you need to outfit the boat and stock up with provisions, also costly. Lastly, you need to cast off and sail away; not costly!
Having completed my higher educational studies, I have the disposable income to do the first two steps. The problem lies in the last step! It is not costly to cast off, but I have these massive anchors called student debt that are keeping me here! I work to pay them off, but I also need to save up money to cover my student loan payments for a time while I am cruising around.
As it stands right now, paying the minimum, I will finish paying them off in 2022; that is a serious anchor! It is a project to not form any other anchors to shore during those years that will prolong our departure. Maddie grew up with the land based mentality of "Buy a house, buy a car, buy buy buy" and it is a struggle to not buy anything we don't need or want.
When we first met, her sole goal for the future revolved around having a house on land, where my sole goal was to get away from land as quickly as possible. After many discussions, we have come to agree on not buying anything with a loan. If there is no debt, there is no anchor; once again, the third step becomes "not costly" and you can cast off to explore anytime you want!
