Yes, using the 529 for non-educational purposes would mean I would be taxed/penalized on a small portion of it. So I would lose some money, but not as much as going to college.
Should I go to college or try FI/RE?
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HawkeyeNFO
Thinks s/he gets paid by the post
Better yet, find a NROTC unit, get Uncle Sam to pay for college, then go to Navy flight school, fly airplanes for a living (instead of having to sit in a boring cubicle at a real job), have the Navy send you to PG school for a Master's degree, all before you're even 30 years old.
Then you still have the GI Bill left to pay for a PhD or for your unborn kid's college.
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If you're good looking as well as smart, you could be a Navy submariner, but Navy pilot would be a good second choice.
ERD50
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It's kind of a long shot, but I wonder if you could find an established business where the owner is looking to retire, and has no family or other person to take over? They might be interested in hiring you and mentoring you to take over in a few years. I think most small business owners have an emotional attachment to the business they built, and would hate to see it just fade away.
Maybe your local SBA would have some leads?
-ERD50
ivinsfan
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Things can happen that way but you know what? Very often these small business can't do a successful transition to a new ownership. The owners either can't let go or need so much of their capital back to retire on that the new guys can't make the numbers work. The OP could end spending years in a situation like this waiting and waiting.
It is definitely something to look into! Thanks!
My two cents - I went to school for a very long time, with a couple of gap years along the way.
If you want to run a business - go to school.
If you want to start a business, start something that you are passionate about - if you don't have that figured out already, then I would suggest not starting a business. 50% of all small businesses fail within five years, something worth considering.
As far as the school route - community college would be a way to reduce your costs. Not the same experience, but would meet your goals of low cost.
With your clear goal setting mentality, it should be possible for you to chart out a path for college.
Keep in mind to that it is about the journey, not the end goal. Having a baby at 30 might be a goal, but first you have to have a woman (most common) and then you also want to choose one that has your mind set for FI/RE as well, if not it could completely jeopardize your plan.
If you want to run a business - go to school.
If you want to start a business, start something that you are passionate about - if you don't have that figured out already, then I would suggest not starting a business. 50% of all small businesses fail within five years, something worth considering.
As far as the school route - community college would be a way to reduce your costs. Not the same experience, but would meet your goals of low cost.
With your clear goal setting mentality, it should be possible for you to chart out a path for college.
Keep in mind to that it is about the journey, not the end goal. Having a baby at 30 might be a goal, but first you have to have a woman (most common) and then you also want to choose one that has your mind set for FI/RE as well, if not it could completely jeopardize your plan.
ExFlyBoy5
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I think this is an outdated theory. Today, degrees are a dime a dozen and unless ACTUALLY useful (STEM or nursing as an example) I don't think most employers give a rat's arse about them.
I am of the mindset to giving consideration to trade schools or similar. If I hadn't gone the Air Force route, I would have gone into the family business of commercial HVAC repair and I would have made a killing $$$ wise.
I am not saying that a traditional degree is worthless, but I certainly think the value has been watered down because of the proliferation in recent years.
They may hire someone without a degree because they have qualifications that don't require a degree. That's the issue...there are LOTS of folks out there with degrees...you need to stand out and that's not the way to do that today.
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There are many aspects to college/university that have little to do with book learning. Independence, social interaction, organizational skills, figuring out how you learn and retain information, learning how to deal with authority. Sadly, we are in strange times and you may not get all the benefits of a true college education. Unless you are laser focused on a path (finance/business) I don't think it's worth it to go to college/university at this time.
Take a year or two, hopefully this virus will be gone by then or we'll know how to treat it. Explore ways of making money, you're young, you can take a few risks. Read, research on your own. The internet offers endless paths for educating yourself. I do believe you gain so much from a college/university experience but there's no hurry. Let your imagination run for awhile.
Take a year or two, hopefully this virus will be gone by then or we'll know how to treat it. Explore ways of making money, you're young, you can take a few risks. Read, research on your own. The internet offers endless paths for educating yourself. I do believe you gain so much from a college/university experience but there's no hurry. Let your imagination run for awhile.
Air national guard basic training then military finance school. Credits are transferable if you want to continue collage with gi bill or start your business while one weekend a month for the rest of the four year commitment. You’ll get paid for going, get free college, and serve your country.
College would have been a waste of time for me but if I would have had to work a normal job my income would have limited me to around $60,000 yr. With an MBA $300,000 - $500,000 yr is doable.
Retire completely as early as possible. I can’t think of anything that’s more fun when your less physically able.
College would have been a waste of time for me but if I would have had to work a normal job my income would have limited me to around $60,000 yr. With an MBA $300,000 - $500,000 yr is doable.
Retire completely as early as possible. I can’t think of anything that’s more fun when your less physically able.
ExFlyBoy5
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
While I think this is an awesome idea, be wary of the "be a pilot" mantra. I say this because flying is a very small part of the job. Yes, for the first few years you will spend a lot of time around airplanes and it will be fun. However, soon you will be stuck doing other duties (we called it queep in the AF) and flying will become secondary. When you join the military, you are military member FIRST...pilot is second. Plus, there are a host of other crappy things that go with being in the military.
Don't get me wrong, the military treated me very, VERY well and I wouldn't have done it any other way. The military paid for 3 AA degrees, a BS degree, a MA degree and the GI Bill paid for law school when I retired. And the job was pretty awesome...most of the time. Actually, it wasn't a job...it was MY LIFE as *any* military job will be.
Rustic23
Thinks s/he gets paid by the post
I would go Air Force all the way. I once heard Adm. Zumwalt say as Chief of Staff of the Navy, 'My goal is to get Navy housing/services up to Air Force Standard"!
So, not to high jack your thread, I would look at the military academies. If not an option I would pick a school with an ROTC unit. They pay for you last two years and pay you too. You will find lots of retired military on this site.
So, not to high jack your thread, I would look at the military academies. If not an option I would pick a school with an ROTC unit. They pay for you last two years and pay you too. You will find lots of retired military on this site.
ExFlyBoy5
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I would +1 the ROTC route if you consider military. You get the REAL college experience (not the harassment that is a service academy) and Uncle Sugar pays...best deal going. And of course Air Force...geez, are there even other branches?!
ERD50
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
It would certainly take some very serious due diligence, and like just about everything, no guarantees.
I'm not even sure how you'd go about getting a solid contract written, you would need something to protect your investment of time (real assets like a % of the business, that grows to 100% as you put in time). Not trivial.
-ERD50
After hearing what people have to say on this forum and a few others, I did some research on a few things:
1. Several people recommended and asked about a community college option. There's one near me that would cost me $2,000-$3,000 and allow me to get an associates in 1 year with the credits I already have. My problem with this though is that I feel like you're missing out on the college experience.
2. After doing some math, it would take about 10 years for my college degree to be 'worth it' if I decided to go. At that point I would have made enough additional money with the college degree to pay for the degree and the opportunity cost of working throughout the college years instead.
3. Some people commented on the penalty for using the 529 money for non-educational purposes. The penalty is only 10%, which means that I would lose $2-3k.
4. Several people have mentioned the military, which is not something that I'm really interested in or that I feel aligns with my life timeline.
5. Finally, several people have mentioned looking for merit scholarships which is something that I have done and will continue to do. I just have yet to find any opportunity that is amazing.
1. Several people recommended and asked about a community college option. There's one near me that would cost me $2,000-$3,000 and allow me to get an associates in 1 year with the credits I already have. My problem with this though is that I feel like you're missing out on the college experience.
2. After doing some math, it would take about 10 years for my college degree to be 'worth it' if I decided to go. At that point I would have made enough additional money with the college degree to pay for the degree and the opportunity cost of working throughout the college years instead.
3. Some people commented on the penalty for using the 529 money for non-educational purposes. The penalty is only 10%, which means that I would lose $2-3k.
4. Several people have mentioned the military, which is not something that I'm really interested in or that I feel aligns with my life timeline.
5. Finally, several people have mentioned looking for merit scholarships which is something that I have done and will continue to do. I just have yet to find any opportunity that is amazing.
Boose
Recycles dryer sheets
I can only say, at age 49, that what you think you're going to do at 18 can be vastly different from what you actually do. But as others have mentioned, coronavirus represents an opportunity to defer college and try working in something related to your chosen field - you will definitely see the ups & downs of a turbulent economy as you do so. Perhaps a relative, teacher or other adult in your life knows a business where you could work closely with the owner and find out what it's like to be in charge. Are your parents amenable to your deferring college?
After changing my major 3 times, I graduated from a "Little Ivy" college in New England in 1993 with $10,000 debt, by virtue of my parents making very little money. It turned out that the work experience I gained in high school and college work-study was most valuable for pointing me toward a profession, although I needed the B.A. and eventually an M.A. (obtained while working, partially paid by employer) to reach the highest earning level. And I still would never have achieved FIRE at this age without marrying a high-earning spouse (the high-earning part was an unknown when I met him).
After changing my major 3 times, I graduated from a "Little Ivy" college in New England in 1993 with $10,000 debt, by virtue of my parents making very little money. It turned out that the work experience I gained in high school and college work-study was most valuable for pointing me toward a profession, although I needed the B.A. and eventually an M.A. (obtained while working, partially paid by employer) to reach the highest earning level. And I still would never have achieved FIRE at this age without marrying a high-earning spouse (the high-earning part was an unknown when I met him).
ivinsfan
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What does your family think about all this. They know you better then we do.
youbet
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Don't shy away from tossing a few applications into quality private schools where you think you might enjoy spending 4 years. With your test scores and GPA, you might get an offer competitive with the cost of public schools. And if not, you're only out a few application fees.
Also, peek into a major in Economics or Accounting as opposed to general business.
Amethyst
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I'm curious...what "college experience" do you feel you'd be missing out on? Living in a dorm, maybe? That's kind of a mess right now anyway, due to COVID. The other things you will miss out on are meeting a rich person to marry, and making fraternity ties to help you in later life.
What is the "math" what are your assumptions? Best case and worst case?
What income are you assuming for with college degree vs. owning your business?
This was from a different forum:
Simple calculation to see if it's worth it.
Given your grades, I'll assume you're part of the crowd that would graduate in 4 years (over half don't). So, take your opportunity cost for those 4 years plus the debt for those 4 years.
Total cost. Assuming you make $15 an hour, and work 40 hours a week, this translates to $31200 a year (not including taxes), or $124800 over 4 years. Add in your debt of $15000, and you get $139800.
Excess earnings per year. Now, you take your projected salary with a degree, minus your salary without a degree. Here I'll assume you make the average of a college graduate (you can look up data for the specific degree you want to be more accurate), so that's $45000 - $31200 (or however much you'd make at this point), or $13800.
Now it's just your (total cost) / (excess earnings per year), or 139800/13800. This leaves you with 10.13, which is the number of years it would take you to out earn yourself.
This is the super simple version of the calculation. There's plenty of other things to factor in like taxes, job security, job benefits, job location, salary increases, upward mobility, compound interest for your opportunity cost and loans, and so on.
End notes:
I think depending on the degree you get, college can be very clearly worth it or very clearly not worth it. The under employment rate (have jobs that don't require their degree) for college graduates is just under 50%. Even if you aren't under employed, some fields don't pay well. These degrees are clearly not worth it financially.
I'm just over a year out of college and am earning just over $90k with a comp sci degree. Compared to what I'd be doing without a degree, using the calculation above, I'd out earn myself in less than 3 years.
I wouldn't take your 529 money out for investing unless there's absolutely no one else's education it can help pay for. It's taxed a butt load if you use it for anything but education.
TL
R It depends on how much you'd make with and without a degree, which depends on your degree. You can use a simple calculation, with a little research, to figure out whether it'd be worth it, and how quickly it'd be worth it. Don't take your 529 money out if you can use it for someone else's education instead.Well, they have advocated for college my whole life. However, they'll support me in whatever I decide.
Yeah I like this idea. Thanks!
