Skip The Debt Trap | Robert Farrington | Growing Money with Sean Trace

I sat down with Robert Farrington, founder of The College Investor, and we went deep on something no one is being truly honest about: the real cost of a college degree. 

Robert has spent nearly 20 years breaking down the intersection of education and money, and the clarity he brings to this conversation is something every student, parent, and young professional needs to hear. 

We talked about why federal student loans are actually some of the most flexible debt available, yet most borrowers don't even know what options they have. 

We broke down why master's degrees are the most financially dangerous education decision people are making right now, why the average borrower doesn't finish their degree, and why that's the most expensive outcome of all. 

Are you still carrying student loan debt — and do you actually know all the repayment options available to you?

Transcript

SPEAKER_00 0:00

If you don't spend over 40 to 80,000 bucks, it generally will work out financially for you. But I think it's not for everybody. The biggest risk of ROI is actually not finishing college. And here's a crazy stat is uh, you know, only about two and three finish college in six years. That means one third of students don't finish in six years. One and three. So you stand in a line, look to your left, took to your right. One of you is not finishing that college degree. And that's the worst place to be financially, right? You spent the student loans and you didn't get any of the value for it because you didn't get that degree. So it is worth it. If you can finish, yeah, but if you can finish and you don't overpay, it can still work out financially. Now, there's a spectrum of what financial working out is. And then there's been some new studies done of how do you judge the timeline. And so here's the crazy one is that you don't actually kind of break even if you go to college, and even if it works out financially for you, if you're comparing yourself to the high schooler that never went to college, you're not breaking even against them until about 12 to 15 years down the road.

SPEAKER_02 1:14

Well, welcome everybody back to the Growing Money with Sean Trace podcast. I'm your host, Sean Trace, and I've got an awesome guest with me today. Would you like to tell people who you are and a little bit about what you do?

SPEAKER_00 1:24

Yeah, so my name is Robert Farrington, and I'm the founder of The College Investor. And I basically talk about everything related to education and money. And I know that sounds kind of vague, but when you think about it, education and money intersects across everyone's lives from saving for college, paying for college, student loan debt, even estate planning, grandparents, and all types of things. Plus, let's just be honest, it's probably one of the most confusing aspects of personal finance. The paying for college side is a black box. Student loans is like a spaghetti of options that no one understands. And so that's what we talk about at the college investor. And I have been doing this for almost 20 years now.

SPEAKER_02 2:04

It's interesting too because we're all expected to go to school. Like there's this underlying thing that everyone's expected to go to school, and you're expected to go as far as you can, and you're expected to figure out how to pay for it, but no one's really there. And in like for a long time, the universities were trying to, you know, like be the ones educating people. But the problem is that they weren't truthfully educating people because their goal was to get people through the front door, you know, and they're like, just use this, do this. And I think that a lot of young people, especially, have felt confused about how to do this whole system, you know?

SPEAKER_00 2:42

Yeah. No, I mean, you nailed it. I think there's two things that you got to separate out is education, I think is phenomenally important. Um, we need to learn how to read, to write, to do math, to learn skills. Like, heck, we're on a podcast. They're not teaching you this stuff in school. Like, but you can go and educate yourself, right? Like there are ways to get educated. But then there's also the paper certificate of a bachelor's degree or farther along, if you want a master's degree or more. And, you know, those do serve some purpose still. And uh I think they still add value. The question is, is like any other investment, it's not risk-free. So there is potential downside risk and it's not a guarantee. And part two is uh it's only worth it if you don't overpay for it. And so I think a big part of the student loan crisis that we're seeing today is a lot more to do with people overpaying for degrees that really don't add any financial value to their lives. Not to say that the education wasn't fun and exciting and they had a great time, but it doesn't necessarily boost their long-term financial returns, right?

SPEAKER_02 3:50

I have something that I studied that was super interesting and it was fun. But then it got me student loan debt, and I actually dropped out of school because I saw all of my friends that were finishing school were broke and not able to get clients and were struggling beyond measure. And I was like, that doesn't seem smart to me. And when I sat down with the financial advisor, he's like, You're you're on your track, but you just need to borrow this much more to finish. And I was like, but why would I do that when I see all my friends that are just like not able to get jobs right now? And I think that that was one of the things because when I spoke to their marketing department, marketing department sure made me feel like that degree could open every single last door on the planet. Like everyone's gonna need this, you know. This is something that's really, really important. And it was it. And I mean, was it fun? Yes. If I had millions and millions of dollars, would I just stay in school forever? 100%. I'd love learning. But there's a reality out there that you have to get a return on your investment, you know, and that's that's something that I think we got to start teaching people ROI on everything, but especially education.

SPEAKER_00 4:57

I mean, you nailed it. I I talk ROI all the time when it comes to college. And I think that's key because look, education is huge. And I don't want to dismiss anyone from going into any major and studying or anything. But the financial reality is when you're 24 years old and you're done with college, you need to pay for your housing and transportation and live and eat. And you don't want to be stuck in a bunch of student loan debt for something that maybe isn't helping you pay those bills. And so while it might sound fun to go into certain career fields, you got to look at what your future holds from 22 to 45. And what do you want that life to look like? I know it's really hard to tell a 17-year-old that, like, hey, I need you to kind of look past these next four years and think of what the next 20 years look like. But it's so important that you do that because, like, honestly, like you don't want to peek at 20 years old here. Like, you have a better life beyond that, right?

SPEAKER_02 5:56

100%, man. And I think that it's like, you know, I wanted to ask you this question because it's got me thinking, and this is something I haven't been able to answer, but like, why do you think that so many young people feel like they're doing everything right financially and still can't get ahead, whether they're in school, about ready to go to school, or done with school, you know?

SPEAKER_00 6:16

Yeah. So I mean, the hard part is there's no simple answer. I like to kind of view it as a kind of compounding leaks that people have in their financial life. And the leaks can be from everything. It is death by a thousand paper cuts. And I also hate to be the guy that says, like, cut out your latte, because I don't want to necessarily stop that for you, but it's the latte compounded with the subscription service, compounded with the vacations, compounded with eating out and going out to drinks with your friends, compounded with the fact that you're probably single through your 20s and you're not coupling up early, which two incomes in one house is a lot better than one income in one house, allows you to save some money. So it's a combination of factors that is really preventing young people from getting ahead. And everyone's gonna have a different lever and a different factor that's impacting them. But I mean, I I wanna like, like, I don't know how you grew up, but like I never left this country until I was 40 years old. I never took an international vacation. I only went local. Like my family vacations growing up was going camping, you know, an hour and a half from our house. We'd drive, you'd sit at a $20 campsite, and you'd have a fire, and your vacation would be a week of that, and you're all into it for the cost of food and maybe like a hundred bucks in campsite reservation fees. Like the idea that we're spending so much money on so much things, and it does, it just all adds up. And I don't want to stop someone from this, but like you see the social media posts and you see the trends, and it's like that that is kind of what's holding you back. But if that's what you want, cool, but you can't have everything. One of my really good friends, uh Paula Pant, she runs the Afford Anything podcast. She says, you can afford anything, but you can't afford everything. And I think that is huge because I think people do have this mindset of, I'm gonna buy all these things, and then you realize that like, you know, none of it really moved the dial for you.

SPEAKER_02 8:17

And none of it makes you happy, you know. Maybe you maybe it does for a while, but at the end of the day, the things are just they're they're flashy stuff. But like the stuff that really matters, it doesn't have to be big, you know? And I think that was one of the things that for me is like, you know, I think we're we're dancing around this topic, but like, what is your money values? Like, what's actually important for you? And I think that, you know, today I was talking to one of my employees, and she's got another semester left in school, and she's studying business with an emphasis in, I forget what her what her focus was, doing business degree, right? And I said, Well, what do you want to do with that? What do you want to be doing in business? And she's like, I don't know. And I said, Well, why did you choose business? And she's like, I, I, my, my family said it was a good degree. And I'm like, have you thought about like what you would like to do? You have Aladdin's lamp, you're rubbing it right now, pops out, and you're you're doing a job for the next 30 years. Like, what would you like to do? And she's again like, I'm figuring that out. And I said, Well, that that's an okay place to be. But, you know, I what I started talking to her later is like, what types of things would you like to be doing? You know, would you like to spend time with family? Would you like to be doing this and that? And she had clear answers to that. So the the ideas were there, but she was still finalizing that. And I think one of the things too that for me, when I talk to my own daughter, is trying to like, my wife and I tell her she can study whatever she wants. She can choose whatever career she wants. But we're gonna try to teach her how to make money doing that. You want to be an artist? Okay. Well, there's a way to make money at art, and there's a way to not make money at art. You know, there's a would you like to be a doctor? You know, and it's like, and I don't want to throw certain careers under the bus because, you know, a couple of years ago, computer sciences was the most high-paid, you know, but right now there is a bloodbath in that field, and it's still, you know, high paid. But like, I was it, they there was one of the degrees that was hardest to get a job out of college right now, you know, because there is a bloodbath in that industry with AI. And I mean, and that just leads people to feel really confused about what does have a good ROI. And so I want to ask you another question, too. Like, student loans confuse the hell out of people. What's the biggest thing borrowers misunderstand and kind of leave them feeling confused?

SPEAKER_00 10:45

Yeah, so I mean, it's a fewfold. So, first off, student loans operate unlike any other type of debt. And what do I mean by that is federal student loans have a ton of options that actually make them pretty good, but they're confusing. And what I mean by that is you have income-driven repayment plans. So if you don't make a lot of money, you could have a very low or $0 student loan payment. They have loan forgiveness programs, which without any crazy changes to the laws, 50% of all federal student loan borrowers qualify for partial or total types of loan forgiveness. Um, and then they offer a ton of hardship options. We're recording this in 2026. There are some people that have not legally been required to pay their student loans since 2020 because of these federal hardship options. And that's wild, right? Imagine any other type of debt where you could not pay for six years and you're totally fine. There's not hurting you at all. That's wild. But there's a downside to this that people don't realize. Number one is the limit on this good debt is 5,500 as a freshman, 6,500 as a sophomore, 7,500 as a junior, senior, and beyond. Okay. Well, there's no colleges that are costing 5,500 bucks. Right. So where people are getting themselves into trouble is they are looking at this stop sign and they are going around the stop sign and they're going into private student loans, which do not have any of these flexible options. Or the parents themselves are borrowing federal parent plus loans, which also do not have any of these options. And so they're adding in all this other debt when the government's saying, hey, you shouldn't do that, which is crazy to say the government's trying to save you from yourself in a way. And we as Americans are saying, no, thank you. I'm gonna borrow more because I want to do this thing. And that is what you have to realize when it comes to student loan debt. And, you know, the average balance of a graduate in 2025 last year was about $39,000 in student loan debt. Which honestly, if you were average or below average, it's a lot, but it is manageable. I'm not gonna say that it's easy, but that's a manageable amount. But you have to realize that since that's the average number, 50% of people are way above that. And that's where it starts to get unmanageable. And there's a lot of math today on the value of college, right? We were talking about ROI just a second ago. When I went to college, there was it was a black box. We didn't have all this data, the internet was like barely a thing. Like you couldn't just Google salaries and figure things out. Today, we know what degrees are worth it and what people make at every single program at every single college. And so, if you want to do a net present value of the value of a bachelor's degree in America, it's $40,000 to $80,000, depending on your degree and your gender. And so once you pass $80,000 and spend on a bachelor's degree, uh, it's highly likely that you're not gonna see a positive financial return on that investment. Now, if you're super wealthy and you're paying cash and you want to buy whatever you want to buy, buy it, whatever you want to buy, right? No one's stopping. You can go buy the G-Wagon, you can go buy the BMW, and you can go buy the expensive college. But if you're taking out debt, it's probably not a good idea to go past these amounts. It should be a better thing to go buy the old used car that still gets you to where you want to go and gets you on a career trajectory, but it doesn't cost you as much.

SPEAKER_02 14:13

I love that. And I love the the talking to people about doing. I have one of my workers that is wanting to do her master's in is a very interesting master's. I won't get into whether I think she can get a job from that. Uh, but it's a university in London. Uh, can I stop you too?

SPEAKER_00 14:35

So where I was to say, where people get into the most trouble, because this is just a big red flag for me. So the most financially troublesome degree in the entire country is master's degrees. This is why the new rules are coming into play with 20,500 limits and 100,000 totals. Everyone that you see on any type of call-in show, anyone that has over $50,000 in student loan debt, it's always a master's degree. Every single time, and those are the ones that do not pay off financially. Some crazy ones, even like an MBA, right? 50% of MBAs deliver a negative financial return. 40% of them break even. And I call breakeven zero to 250,000 in return because come on, you just spent a bunch of money and over 40 years, you're only making an extra 200,000 bucks. Like that's kind of breakeven. And only 10% have a ROI of a million dollars or more. But 50% are negative. I mean, that's lottery odds at that point in time. Right. And you talk about this and you see it. The hard part is, is, you know, like people just think that more education somehow will unlock more value. But when you talk to employers, and and you know this, and I can just see it right now, it's education and experience combined. And what can you do for my company? Has nothing to do with anything. And I'm gonna pay you more if you can make me more money as an employer. Like 100% answer.

SPEAKER_02 15:58

And that's what I was telling her. She was like, I want to move to London and I want to get this degree. And I said, They have the same degree online. So let's say that you're gonna do it. London, you're gonna pay tuition plus living in London, plus all the other things. And I said, if you chose to stay here, I'll pay, you know, because she works so well. I said, I'll give you a scholarship, like I'll pay for some of your learning. I'll give you a stipend, but you can stay working at my company for three years. And she's like, it's really tempting. And I know financially the better option is to stay here, do the same degree. And if she still wants to go do her doctorate, then she's done the cheaper option and she's gotten a partial scholarship, you know, from a work study with me. She still like wants to go do that, the experience. And I'm less like, you know, it's the danger because um it seems fun, and you're in these days where you just don't understand the repercussions. And I was there, I took out those loans, thinking, you know what, that that time will never come. And it does, it really does when you have to pay it back.

SPEAKER_00 17:12

And it's like you can go to London and you can see these things anytime. And I think it's a lot more fulfilling to do it when you're a little older and you have a lot more money and you can kind of do the trip that you want to do. Um, that's a lot of fun. You know, you don't need to again peek, peek in your early 20s and see like all this stuff. Like you got a whole lifetime, right?

SPEAKER_02 17:33

Yeah. Well, it uh let me ask you this. Because if you were 22 and you're or you're talking to a 22-year-old, just graduating college today, what's the very first financial habit you'd want them to build?

SPEAKER_00 17:45

Number one is get organized. Um, literally, and I some people call it budgeting. I just want to start with even before budgeting and get organized. What do you own? What do you owe? What do you make? What are you spending? Like, where are your documents? Are your things updated? I can't even have the conversation with you of what you should do next if you don't know. And I say this from personal experience that it's about 50% of people that just don't know the basics of their money. I'll say, like, they're like, I can't afford my student loan payment. I'm like, okay, well, what is your student loan payment? I don't know. And you're just like, well, let's go find that out. And then it's like, have you run the calculator to see what the lower other options are? No, I haven't. And I think it's really important to realize that no one cares more about your money than you, not a financial advisor, not the government. It's wild to me that people like want someone else to like take ownership of their own finances. It's like, no, you need to get organized, know what you have, know what you owe, know the options for yourself. And then you can have a real conversation about what levers do we want to pull. I'm not telling you that you need to cut expenses. I'm not telling you you need to go side hustle, but like, what are we trying to do? What's your goal? And then we can have a real conversation. But it all starts with organization.

SPEAKER_02 19:06

I was trying to find an analogy for this. Um, you go up to the kitchen and you're hungry, you know, and you're like, I want to make something to eat. Well, what do you have in the fridge? I don't know. I don't know what's in the fridge. Well, right there you've got a fundamental problem because you need to know what you have to work with, you know? And maybe the milk's gone bad. Well, that's something that you should know. Maybe you're out of eggs. That's also something that you should know. And once you can figure out what you've got going on, it makes it much easier to prepare a plan. You know, maybe you do need to run to the store. Okay. Well, that's something that you got to figure out. But you can only figure that out if you have a good awareness of where you're starting from. And, you know, and I think that's one of the things that I think that people sit there and go, I want to do this or that. And yet there's not this clarity. And like you said, you might not even have the it's not might not be the budgeting space yet. You might just need to be at the sitting down going, what room am I in? Okay, that's a good place to start, you know, figuring out where we're at today, you know.

SPEAKER_00 20:12

But absolutely. I mean, your analogies too. It's like if you go to the, let's just say you go to the grocery store on your way home and you don't know what you have, that's when you end up buying two sets of eggs and then half go bad, too. You waste money and you make bad choices because you're not organized and you don't have even the the outline of a plan. And I, like I said, I'm not trying to be this hardcore budgeter that you gotta do it, but you gotta have some basic organization here.

SPEAKER_02 20:38

You're right. It there's gotta be a starting point. And that starting point is gonna be the thing that gets you on the map. You're you're at least headed in the right direction. But you know, I I have my opinion on this, but I was a university professor and for a while before I stopped because there were fundamental problems in what the school was doing. And I just couldn't do it. I had kids that were coming to my class. I was teaching uh podcasting classes, teaching a content creation class in the comms department. And here I am. I produce eight podcasts a week. I record about 20 a week. You know, I've got my clients, I do, I'm my stuff I do, I do all of my clients. I've been in this industry for a long time. I've got a lot of knowledge that I can pass down. So I, when I signed up for this class, I was like, I am excited to be here and I am excited to share. Then my students didn't show up. They were phoning in. I had one, I had a bunch of guys that were on the basketball team at the school that were just like, hey, Professor Trace, uh, yeah, I'm gonna have my camera off. And I was like, Okay, but where are you right now? It sounds kind of funny. And I was like, Are you at the gym? No, Professor Trace. And they turned the camera on for a second. He didn't really, and he's dribbling the ball up and down the court. And I talked to like the department head and I said, you know, I need to talk to you about these kids on the basketball team. They're communicom majors, right? And she's like, Yeah. And I said, I need to have them not playing basketball, you know, when they're in my class, because they're not retaining anything. And she was like, Oh, well, sadly, the uh the practice is scheduled at the same time as our as your class. And I was like, So tell them not to practice that day because this class is really expensive. You know, it's a three-credit class. This was from a private school. It was like $3,000 for this class plus, man. And I was just like, Don't, don't do that. And then I had other kids that were like, one kid was a nursing major and he took the same class like six times. And I was like, you just gotta show up. And I was like so accommodating. I said, I do not want to fail you. If you call me and we walk through these these homework assignments together, you just tell me the answers verbally. I will give you credit for this. He didn't show up. And I was just like, it's wild that we have that going on. And I was like, I I failed one class in a program, and it was painful for me because I was just like, that was a massive loss of money for me. And then I had to retake it. And I I I think that college can totally be worth it, but there are ways to do it cheaper, faster, and better. You know, whether that be going to community college and getting all those pre-rex knocks out. Because I don't think kids understand the whole concept of pre-rex. Like you want to be a business major. Okay, that's great, but you do understand that the first two years, you're not doing much business stuff. The first two years, you're taking general English and general math and all of these other classes, like world history, US history, that I don't, it doesn't matter if you're taking it at Harvard or, you know, Rhode Island junior college.

SPEAKER_00 24:09

It's the same type of stuff, you know? Well, and the irony is like I would say half those junior college professors teach at the state school or the regular college in the same town. It's the same professor.

SPEAKER_02 24:22

100%. This is 100% true. They're sharing the same teachers, you know? And they are one of the things that uh, yeah, man. I I had a friend who got kicked out of my school. But when he got kicked out, he went and was like, Well, I'm gonna go to junior college. And he finished up a bunch of his stuff at junior college before coming back. And one of the things that he realized afterwards was getting kicked out was one of the best things that could have happened to him. Because when he got kicked out, it saved him so much money. And he went the junior college route for a while. And then when he came back, he just had a few classes to finish, and he got the degree from the same college that all of our other friends went to for four years, and they were hurting, and he wasn't.

SPEAKER_00 25:05

And so he was like sitting and looking back, you know, a lucky cat. Well, I was gonna say, that's the cool thing, is that we also live in this day and age where there's so many ways to get that college degree for a much less expensive amount. Junior college is fantastic, but now we have dual enrollment in high school, which is basically if you're gonna take AP calculus, why don't I take just the junior college calculus and then I get my credit and I'm already doing it, you know? And so you get that. You have you do have the AP route still, because my favorite way to reduce college costs is instead of going for four years, what if you only went for three? You just took off 25% of the sticker price. So maybe you could go to a little bit more expensive school or not and save that money. Either way, you're done in three years because of everything you achieved in high school. You got community college. You also have working. Uh, so many of the Fortune 500 companies are now paying up to 5,000 bucks a year or more to go to college. Some of them are offering free online degrees at places like ASU and uh WGU. And no one actually cares what the actual end degree is. If you got the degree, cool. And if it was free, even better, right? You don't get a, I always say too, you don't get a gold star for spending a fortune on college. Like you show into your first job and it's like, because you spent $100,000, we're gonna give you a raise. No, it doesn't work like that, right?

SPEAKER_02 26:28

I I try to tell my students that before when I would teach, I would say, when you pay in for those big fancy name colleges, you're not paying for the college, you're paying for the network. Like that's it. You're paying to have that fancy name and to connect to all those other people that have that. And if that's something you're not it's important, you know, it's important to you? Whatever, man. But I don't think you need it anymore, is what I'm saying.

SPEAKER_00 26:53

Well, well, I was gonna say twofold. Number one is that the network at the bachelor's degree level is very different than a graduate school network, right? Yeah, you're not getting the same thing when you go to an MBA or a law school. The networks are totally different. Part two is you just said it. The kids don't even show up to network. So what are you even talking about? And this has been a trend for the last five, seven years. But it's like if you're not showing up to class, to me, the best networking of a college is to get with the professors, right? The the knucklehead next to you in your freshman 101 class has no value to your network, but your college professor and the TA might. But if you're not showing up to the class and interacting and building that reputation, you know, getting that rapport going, you're not building a network. So, like to me, the idea of a bachelor's degree network is is so minimal today because of all these different factors. And you don't need it. I mean, LinkedIn is great. Your professional network, too. I also don't think we talk to kids that like your network is actually who you meet professionally. And then honestly, reach out, go to events, go talk to people. You reached out to me, I reach out to other people. Like that's how you build connections, and then you meet face to face or virtually and start doing some things together. And then in a couple of years, you circle back and new things are happening. Like, that's how a network is built. It's not by just going and living in a dorm, right? Maybe you meet a friend, but even then, your friends, it's very rare that someone in their 30s or 40s still is hanging with their college friends. If they are, it's also maybe an indicator of something else that's not working out for them, that they still have it, right?

SPEAKER_02 28:37

A couple thoughts there. First of all, um, I I went to a college that didn't have a great network. I met people, but whenever I tried to reach out to those people to help me with my career, none of them ever did anything.

SPEAKER_03 28:52

Yeah.

SPEAKER_02 28:52

And one of the things that I found is that I started a bunch of podcasts, and podcasting has become one of my superpowers to network. Like there are so many ways to do stuff, you know? And I think that that's where when I ask this next question, my thought is that the answer is not as clear as it used to be. But do you think that college is still worth it financially for the average person?

SPEAKER_00 29:20

If you don't spend over 40 to 80,000 bucks, it generally will work out financially for you. But I think it's not for everybody. The biggest risk of ROI is actually not finishing college. And here's a crazy stat is uh, you know, only about two and three finish college in six years. That means one third of students don't finish in six years. One and three. So you stand in a line, look to your left, took to your right. One of you is not finishing that college degree. And that's the worst place to be financially, right? You spent the student loans and you didn't get any of the value for it because you didn't get that degree. So it is worth it. If you can finish, yeah, but if you can finish and you don't overpay, it can still work out financially. Now, there's a spectrum of what financial working out is. And then there's been some new studies done of how do you judge the timeline. And so here's a crazy one is that you don't actually kind of break even if you go to college, and even if it works out financially for you, if you're comparing yourself to the high schooler that never went to college, you're not breaking even against them until about 12 to 15 years down the road. But I think it's also important to realize that the people that don't go to college typically burn out in their careers in their 50s. They stop earning, they don't get as much. Going into the trades, everyone's like trades, trades, trades. But you don't see a lot of 50 and 60 year olds climbing through attics or in basements and doing trade work. There is an also a risk on the trade side that, yeah, you start earning 18. So you can make good money right away, but you don't get to earn good money potentially in your 50s, 60s, or beyond. Whereas if you're a white-collar college graduate, 50s typically is your top earning years and it kind of perpetuates you into retirement. Um, because one is a risk of bodily injury and like just wearing yourself out. The college risk is that you have a slower start and then you kind of hopefully perpetuate your earnings later on. Again, there's trade-offs to both of those, and you have to just be mindful of it because it's really hard to say. It's kind of when they said like millennials will never get ahead of their parents because you were judging millennials when they were 25. And it's like, yeah, like half of them just graduated college, and like half of them are still 15. And it's like, yeah, they're the poorest generation. Now, when they're in their 40s, everyone's like, oh my God, millennials are passing the boomers in terms of wealth. It's like, yeah, because they've gotten to their mid-careers and they're able to earn money again, like or earn more money than they did when you're judging them. And so it's it's just really important to think of those milestones. But it's also important to realize those milestones in terms of your life, because when do you want to start the family? So this whole idea of starting a family, it's happening later. Well, it's like, yeah, because people aren't starting to earn and get stability until their 30s, whereas other fields not going to college, you can maybe get more financial stability in your 20s, right? And so it's these are all these kind of factors coming together. And so the question is, is college worth it? Yeah, if you don't overpay, but you have to realize how that's gonna magnify out over the next 15 years, 20 years of your life, what that earnings is, and then how are you comparing yourself, right? Because yeah, the guy, your buddy that you went to high school with became an electrician is making 120K at 23 and has a boat. That's cool. But like, you know, how long is that gonna last? And what does that look like, you know, for you by the time you're 40? You know, is he still crawling through attics and being an electrician, or did he do anything else? And then how is your earnings now that you got your college degree and now you're in mid-career and so on?

SPEAKER_02 33:02

I think that's a good point because I've heard that argument a lot and I didn't think about that at all, man. And it's like it's interesting because you do think like, oh, the trades, this and that. I've been hearing that so much, but yeah, it is physically demanding, you know, there's a lot to that. It is tiring work. But, you know, I think one of the things that is what we're trying to do, though, is to get people to think about this stuff, you know, and just start asking these questions. But that leads to another question I want to ask you like, what's a money mistake people make in their 20s that quietly hurts them for the next 20 years?

SPEAKER_00 33:37

I mean, we already talked about the organization piece, but the next part is simply just not saving and investing. So the value of a dollar at 22 is actually about $20. Every single dollar you spend is $20. And that because of the power of compounding, right? So if you were to put that dollar in an investment account and let it grow for 20 or 30 years, it'd be worth $20 down the road. So when you're paying for this coffee, that's $10 these days at Starbucks, which is ridiculous, you're really, you know, almost paying $200 for a coffee every single time. Times that by 20, right? And now is that coffee worth it? Right. And then if you want to go on this Disney vacation at $25, that's $10,000 for the week. That could be $200,000 when you're in your 60s. Like that's wild. When you start thinking of that, and you're just like, I can skip Disney, I can do it, because I'd rather have $200,000 down the road instead of wasting $10,000 in my 20s, right? It's not that valuable to me. And I have to remind people that every dollar you spend is making somebody else wealthy. So is that worth it to you? You know, maybe there is just something that you're like, yes, like I want to have sushi once a week on Friday. That is the most important thing to my life. Okay. But like, then do you need to do these other seven things that are making other people wealthy and not you wealthy? Because every dollar you're giving away is literally making someone else's wealth. And I don't I don't know how you feel about that, right? Like, I don't like it. My money, like mine. Like, I'm not trying to be selfish, but you gotta take care of yourself first, right?

SPEAKER_02 35:21

When I um started my business, I thought about it that way. Like every hour that I was spending working in another job was building someone else. I I actually I've got a bunch of hats for my company. And one of the things that was the reason I did that is because I was running around wearing sports hats, like different teams that I liked from places that I lived. And I love my team, but what I realized was when I wore my own company hat, it was something that was mine. It was something that I was building. And so when you talk about that, when you invest in yourself, you're investing in yourself. And it's gonna be something that you get back out of it, versus if you're spending stuff constantly, you know, and I I want to talk to people too about like the ROI for young people. I wish someone had taught me when I was younger what ROI was all about and why it's important. Because it's like if you buy a new computer, that could be not a dumb spend. That could be a phenomenal spend that you're gonna go out and make money with that. Maybe that computer is gonna make you edit videos, maybe it's gonna help you comp program something. But whatever it is that you're gonna use it for could be great. But if you're using it just to play video games, you know, unless that's your thing that make money, but like, you know, and I think that's one of the things. I had a friend that we were talking about buying a car. Okay. Now I live part of the year in Southeast Asia, and he wanted, and there's a huge import tax on cars. So, you know, what you would pay in the US, they would pay double in Southeast Asia in Vietnam. It's wild, right? And yet the resale value is way lower because you only have to pay that the first time when you buy the car new. When you sell the car, it's like the regular price, which is also wild, right? So he was comparing three different cars, and he was talking about the Honda, the Toyota, and the Mercedes. And it was like, I was like, Well, that Mercedes is worth about 40k. And I was like, How much is it here? And he's like, about 100K. And I was like, dude, are you serious right now? I said, What's that gonna bring back to you? What do you need it for? Well, we're gonna go here, we're gonna do this. I said, Are you driving anyone in it? Is it for the company? No, it's just to drive my family around. I said, Okay, can you do that in a cheaper car? Well, yes, I can. I said, Don't tell me the butts right there, because I'm gonna tell you that any of those butts are gonna be stupid as hell. And he went, but I like the nicer, more fancy car. And I was like, that's not gonna help you get ahead. And, you know, he went ahead and bought the most expensive one. And it was a fashion, it was a flex thing for him. And the problem was is that he lost a bunch of money on it. And then a couple years later, when he could have used that money, it wasn't there. And you know, I I see people that working on your priorities, your financial priorities, and that return on investment are so, so huge. Because certainly we all need to buy stuff, you know. And in a modern day and age, a car is pretty important. But do you need the most expensive one or should you go out and buy that secondhand one that's really cheap and you can use until it dies, you know? Probably the better option, you know?

SPEAKER_00 38:47

Totally. And I think that's the a big trend we're seeing just nationwide is like the death by car loans. Like so many people are just getting up to it in car debt, which just adds to it. And so when you're also saying in your 20s, you made me really think of the 20s before you have a kid and a family is when you can make the unconventional life choices that can save you money. Go live with three or four roommates, go drive the really crappy car, like live cheaply. Because I I one of the things I think about a lot is that people are always judging you when you said your friend did it because he wanted to show the flex, right? Well, people are gonna judge you when you're living unconventionally and saving money and buying the cheap car, but people are also gonna judge you five years down the line when they're like, How'd you buy a house at 28? I don't understand. And they're not gonna connect the two dots. They're not gonna realize, well, yeah, I worked and I side hustled and I had four roommates, and I literally rode the bus every day, but I saved, and now I'm able to buy this house. They don't connect, but they are always judging. And I think once you get out of your own head about everyone judging you about everything, it becomes a lot easier to make some of those unconventional life choices.

SPEAKER_02 39:57

I love that, man. And I think that, you know, and it's like one of the things too, is like I think that if you get context, you know, it's like if you're feeling embarrassed about driving that cheap beat up car, you have a car. There are people that walk everywhere. You know, there are countries where you're lucky to have a, you know, like have shoes on your feet, you know, and it's like, and I think there are, and then like there are other people that you have that Mercedes, you know, you think you're gonna flex with that, or you have the Lamborghini and you think you're gonna flex with that. There are people that have things way bigger than you. I was like looking at all of the uh the billionaires like super yachts, and I was just like, and seeing the game those guys are playing to kind of out flex each other. And it's like at some point in time, it just gets stupid, like stupid, ridiculous. That you there's always gonna be a bigger fish, you know? But one of the things too is I think that you just gotta find you and find that you know, and I'm not hating on buying something, but if you can find that thing that truly brings you joy, you know, so you buy a nicer guitar, but you play it all the time. We we we bought my daughter a nicer piano. You gotta understand though that for the last five years, she's been playing on her mother's 25-year-old electric piano. Which it's like playing on a 25, it's like learning to do computer skills on a 25-year-old computer. It was challenging anyways, but she did it and she's been playing Bach. So her mother and I crunched some numbers and we realized a new digital computer is the same, or a piano is the same price as an a refurbished upright piano. So for us, we paid 700 bucks and we bought the piano that was nicer because I mean she's playing Bach on her piano. That's like she's gotten some practice under her. But the wild part is, is like it was something nicer that brings her joy, and she'll be able to have this. This piano is gonna be good for another 50 years, you know? And so her kids can play the damn piano. And I think that one of the things is it's like if you can find something that brings you joy, that's it. And if it's your coffee, then have your coffee, but understand that if you're paying more for that coffee, there's gonna be another area where you have to cut back or learn to make more.

SPEAKER_00 42:17

You know, it could be a combination of those things, you know? Totally. I think grow in the pot of money is also just also the biggest hack. When you're in your 20s, it's the best time to go work. Uh, it's go side hustle, go work a day job and go work an evening job, go side hustle, earn that extra money. Because once you start having a significant other and a child, it becomes incredibly more challenging to do that. And your value set also might not align with that. But uh earning more is honestly the best financial hack, but it does require that trade-off of time, especially when you're 22.

SPEAKER_02 42:53

If someone feels overwhelmed with money and bills, loans, investing, retirement, where do they even start without panicking?

SPEAKER_00 43:00

That's it. You really have to get organized. Like you have to write it down. And this is where now we maybe move into the budgeting side, but it's figuring out a way for you to get organized that aligns with your personality. And so where I think a lot of people fail on this front is they hear their friends say, Well, I use this app or that app, or you know, I have a notebook. And this is where it's like, think back to when you were in college or in high school. Like, what was your style? Did you like to take notes on the computer or your phone? Are you a pen and paper kind of person? Are you like a spreadsheet guru? I don't know. But you need to get organized in the manner that aligns with your personality type so that you will actually do it, do the work that you need to do to figure it out. Because if you're trying to force yourself to use a system that's not natural to you, well, it's never gonna happen. You're just not gonna do it.

SPEAKER_02 43:52

I want to ask you a question too. Like, where can people go to find out more about you and what you do?

SPEAKER_00 44:00

Yeah, so we are at thecollegeinvestor.com. Uh, that is our home base. You can read all you want there. We have our podcast, The College Investor Audio Show. We have our video channels, all on social media, the College Investor. And if you are interested in this intersection of education and personal finance, we also have a strong dose of financial literacy content as we work through these basics for young adults. Um, that's what you're gonna find when you check out our channels.