Investing in university graduation

Now the Wall Street Journal is reporting that university graduates do not earn that much more than non-graduates over their lifetimes. This is an American publication, and I actually thought American graduates had an easier time than British graduates, and were more highly compensated because they pay far more for their education than in England. Clearly this is not the case. A source from the report estimated that the actual lifetime-earnings advantage for college graduates is a mere $279,893!!

There is a big debate about the worth of a university degree at the forum on MoneySavingExpert.

Being a graduate now, is much different from being a graduate in the past, as this Guardian article shows. Wes Streeting, president of the National Union of Students, said: "People are feeling incredibly angry. They have debts in excess of £20,000 after being told they would get a job at the end of their degree and earn more money. Instead they're just heavily indebted."

Heres a selection of news articles about what graduates are going through:

• 90% of small and medium businesses not planning to hire graduates - The Guardian
• Many graduates not getting jobs through recruiting "milk rounds" - The Guardian
• Graduates in 2009 are having a hard time getting a job - MSNBC
• Is this the worst time to graduate, ever? - The Daily Beast
• McDonalds is planning to offer it's own PhD - The Financial Times
• Graduate nurses can't find jobs - Allnurses.com
• Graduate sues her university, because she can't find a job - CNN.com
• UK universities say their budgets should not be cut by the government - BBC
• University applications are surging - BBC
• UK graduates will only earn £100k more, in their lifetime - BBC

I have realised for quite a while that a degree is not a good investment for most people. Even though I am a graduate myself, I have long suspected that  nowadays, graduates ultimately end up with less money overall, due to:

• The lost opportunity to earn money for years, while they study.
• Prices for all investments going up over the years, whilst they are studying.
• High government student loan debts.
• High commercial student loan debts.
• Having to compete with all the other graduates when they graduate.
• Having to compete with all the experienced non-graduates, when they graduate.
• Gaps in employment, i.e redundancies.
• No guarantee of getting any job.
• Lack of financial knowledge.
• Statistically, only a few graduates make "the big money" after leaving university.
• Businesses make more profit by employing, or outsourcing, graduates from poorer countries like India, who will work harder for much less compensation. This results in less opportunities for graduates.
• Higher tax rates for graduates if they do earn a "high" salary.

Books like The Millionaire Next Door and The Millionaire Mind show that having a degree is not a guarantee that you will be successful in the real world. If there are a lot of graduates, they will all have to fight for the same job opportunities, so their chances of success reduce. Amazingly, right now in England, more people are applying to university than ever before, so the problem will only get worse.

The studies that were done in the past, showing that graduates earn significantly more, were done a long time ago.They were flawed by not accounting for other common factors such as student debt, redundancies,  taxes, and much other stuff that happens all the time in the real world.

I'm not jealous of people who have a degree, because I have one myself (I'd probably be richer by now if I didn't, lol), and it's not sour grapes because I didn't attend an "Oxbridge" university. I'm just telling it like it is. I am not saying that people should not go to university, I'm just saying don't expect it to make you super-rich (or even rich), because that's what I hoped would happen to me when I did my university degree. I thought that with my mathematical degree and high grades, it wouldn't be long before I was earning 100k. I deserved it right, because I really did work for it. It never happened. As I long suspected, I was not the only one to be duped by such a ridiculous fantasy. In the real world, you have to drag yourself up by your own efforts and in the majority of cases, a degree does not provide the extra push that it should.