Is it a good idea to dropout of school to retire much faster ?

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George the original one
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Re: Is it a good idea to dropout of school to retire much faster ?

Post by George the original one » Fri Jul 27, 2018 9:50 am

dropoutretire wrote:
Thu Jul 26, 2018 11:50 pm
But thanks to that decision I ended up beating inflation, buying 6 houses because houses were very cheap back then and retiring by the ripe young age of 39 !!!!!
Really, you didn't beat the system. You merely found an investment vehicle that worked for you. It's no different than someone, like the Clintons, who followed advice to plunk down money on cattle futures and struck gold.

Also, have you ever thought that there's a limit to how many people can follow your advice? No more than 16.6% of the population, because then all the homes are bought and no one is selling. 65% of the USA population own their home, so that cuts the people who can own 6 homes down to only 5.8% of the population. And that doesn't count the corporations dealing on a scale larger than 6 homes.

Thus it takes different strokes for different folks.

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Re: Is it a good idea to dropout of school to retire much faster ?

Post by rube » Fri Jul 27, 2018 10:14 am

Farm_or wrote:
Fri Jul 27, 2018 6:54 am
You'll never really know what you didn't learn. Your lack of education will be readily apparent to anyone else with an education, particularly when you are trying to communicate.
THIS!!!!!! ;-)

"Retire early" in the sense of doing nothing, just chilling, is mostly not what happens with people who 'retire' extremely early. Instead they start doing things they like, and are often more in line with their personal values.
Alone for that part and your personal development an education is generally good. Perhaps if one education system does not work for a person, the person needs to switch to an alternative method. But "dropping" out completely from education seems not a wise move to me. An education helps with the journey (i.e. life) and to work on a web of goals etc.

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Re: Is it a good idea to dropout of school to retire much faster ?

Post by prognastat » Fri Jul 27, 2018 10:38 am

@dropoutretire

First off I would say calm down. You are at this point practically ranting and all the caps, exclamation marks and lack of paragraphs make your responses a pain in the ass to read.


As for my opinion on the topic in general I don't think telling people not to go to school is the correct answer, but I do think there is a problem with the current climate of telling everyone to go to college without asking some serious questions that require introspection first.

If you are average-below average in IQ, but high in conscientiousness you would probably be better going to a trade school, apprenticeship or dropping out and getting a head starts.

If you are a average to a little above average in IQ, but not exceptionally so college could be for you, but make sure you choose a major that isn't a massive waste of time and money.

If you are well above average and you want a job in a field where a degree is necessary(law, healthcare etc) then go to university.

If you are well above average and you want a job in a field where a degree isn't necessary focus on teaching yourself the skills you need and if you manage to teach yourself the skills you don't need a degree and could potentially drop out.

Unfortunately, few people want to tell a kid they aren't smart enough for college and the go get a degree at any cost mantra has most parents and teachers convinced.

Also if you are below average IQ and low in conscientiousness you are probably screwed regardless of what you do.

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Re: Is it a good idea to dropout of school to retire much faster ?

Post by suomalainen » Fri Jul 27, 2018 11:13 am

@dropout If you want to be taken seriously, you

You know what, never mind.

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Re: Is it a good idea to dropout of school to retire much faster ?

Post by SavingWithBabies » Fri Jul 27, 2018 1:40 pm

After some reflection, I would agree with @C40. I should have persisted and graduated the first time around. I basically delayed about a decade. Which we all know means roughly a doubling of savings if I had been gainfully employed (I was mostly employed but not very gainfully).

That said, when I later graduated at age 30, I felt a huge bonfire under my butt to catch up with where I could have been. I still do to some extent and I do have some regrets. I can take stock of my life right now and I am very happy with how it is but that doesn't change that it would have been financially a smarter move to have graduated at a younger age.

I enjoyed studying Computer Sciences at university. Some of it I'd figured out on my own but many topics were new to me and expanded my horizons. And I was pushed to accomplish things that felt like pure busy work but also expanded my comfort level and my ability to get things done (even if it seemed stupid in the big picture). Those kinds of things are important in employment so I think having those skills, even if you still question the bigger picture, can be useful.

I've been on both sides of the fence on this issue. I think those who dropout and are successful have a very big chip on their shoulder. But there are some, like me, who dropped out and didn't do as well. Sounds like survivorship bias to me.

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Re: Is it a good idea to dropout of school to retire much faster ?

Post by Lucky C » Sat Jul 28, 2018 7:30 pm

OK here's my attempt... I wanted to compare my chosen path of finishing high school, 4 years of college (with student loans), and then a high paying engineering career, vs. a high school dropout scenario.

In Excel, I punched in my rough numbers per year: -$20k college "investment" per year followed by my approximate yearly salaries. Then for my What If dropout scenario, I punched in a $30k starting income that would start during my junior year of of high school, and increase by 5% each year. $30k starting income as a high school dropout the first year may sound unrealistic, but I'm trying to compare to OP's scenario where it sounds like he was off to a strong start.

Despite the extra 6 years (2 years of high school and 4 years of college) of $30k income at a 5% growth rate, the dropout path still falls short of the college + engineering path, but not to an extreme degree: $844k (dropout pre-tax income) vs. $1,153k (engineer pre-tax income - college debt). A difference of $309k. For me, the college route has gotten me an IRR of 8% when subtracting the dropout path "opportunity cost".

Now if the drop out path had started at $40k with 5% income growth, or $30k with 8% income growth, the two scenarios would have ended up tied. So it's not that crazy to think that a dropout could beat even an engineer's income, if the starting point and growth is strong enough. However in my case, I have no idea what I could have done to make much more than minimum wage if I had dropped out of high school. I really needed the skills college provided to succeed.

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Re: Is it a good idea to dropout of school to retire much faster ?

Post by Lemur » Sat Jul 28, 2018 11:35 pm

dropoutretire wrote:
Thu Jul 26, 2018 10:04 am
I am curious if people on here think that dropping out of school is a faster way to retire earlier in life ? Whats your thoughts on this ?
Always do a Cost + Benefit Analysis.

I'll give you two examples. Both individuals will have a 50% savings rate and achieve 5% return in the stock market over 20 years. Person A's savings will be allocated towards paying down the student loan debt before dropped into investing (for simplicity sake).

Person A - Gets $200,000 in student debt, earns a salary of $125,000 a year.
Person B - Has no student debt, earns a salary of $50,000 a year. Has 4 more working years.

I played around with a few scenarios on Excel and found that Person A will eventually eclipse the net-worth of Person B but only after 20-25 or so working years. In any case, Person B would be able to retire sooner. Additionally, this doesn't factor in a few more risks that Person A has. One, his/her degree may not guarantee that high salary. Two, they may not be able to be consistent as the person making the smaller wage due to burnout, etc. Certainly, there is some type of risk premium.

Jean
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Re: Is it a good idea to dropout of school to retire much faster ?

Post by Jean » Sun Jul 29, 2018 9:41 am

!!!LOL!!! You worked 20 years to retirement. That's so long. I hope you enjoyed working. It only took me 2.5 yearz to retire at 28 ROFL. Hope you enjoy your aching knees and back. !!!LOL!!!

This new balise is funny, I promise to never use it outside this thread.

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Re: Is it a good idea to dropout of school to retire much faster ?

Post by C40 » Sun Jul 29, 2018 6:44 pm

(in good natured sarcasm, meaning no offense.. there's a real point in here)

!!! LOL !!! - because I went to college, I only had to work 11 years full time. And it could've been only 7 or so.

At work, since I was one of the people who went to college, I mostly got to sit around, use a computer, walk around, and tell other people what to do. The people who didn't go to college had to do all the actual physical work. And I got paid twice as much as them. LOL !!!!

3 or 4 days each week I had meetings before or after lunch, for which a fancy lunch would be delivered (which was paid for by our size-able catering budget), so I'd be sitting in the air-conditioned conference room eating delicious food and shooting the breeze while all those other poor saps were out in the hot factory doing endless repetitive quality checks. LOL !!!!

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Re: Is it a good idea to dropout of school to retire much faster ?

Post by C40 » Sun Jul 29, 2018 6:51 pm

related to the numbers I was looking at before, I would be curious what effect it would have if it were possible to filter out the - not sure how to say it without seeming un-PC - to filter out the total losers. (The meth-heads, deadbeats, low skill criminals, very low IQ or EQ, and people with super low motivation). That high school dropout group is going to have a higher percentage of total losers than the other two. If we had data of people of comparable IQ, EQ, and motivation, the numbers might look much different.

One possibility I hadn't mentioned before, relating to the ceiling of promotion (HR guidelines that strictly limit promotion of people without degrees), in many companies, one could go to school and have it all paid for by that company. This is kind of like what MikeBOS did - he worked as a lineman I believe, and got a law degree for free at some satelite campus of Harvard or MIT (?).

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Re: Is it a good idea to dropout of school to retire much faster ?

Post by Kriegsspiel » Sun Jul 29, 2018 8:20 pm

C40 wrote:
Sun Jul 29, 2018 6:51 pm
MikeBOS worked as a lineman I believe, and got a law degree for free at some satelite campus of Harvard or MIT (?).
FWIW I think he went to main campus Harvard, but a different program (than the direct pathway from HS) that Harvard put in to give back to the local community.He mentioned taking the same classes as kids who were going there full time, from the same professors on the Mad Fientist's podcast.

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Re: Is it a good idea to dropout of school to retire much faster ?

Post by Lucky C » Mon Jul 30, 2018 4:39 am

In the experience in engineering a popular benefit is to start with only a bachelor's degree and then get a master's degree part time with all tuition paid for by the employer. Seems like a great deal until you realize that at part time a master's could take 4 years and to keep the reimbursement you have to stay with the company at least 3 years after the reimbursements, so they're getting you locked in for a solid 7 years. In hindsight the potential pay bump from having a graduate degree, when you really only need a bachelor's to do the engineering work well, is not worth that long of a commitment. The employer benefits greatly by reducing turnover. I'd rather just stick to the 401k and stock vestment retention incentives which are typically only about 3 years total to vest.

Also when comparing my career path to the "what if I were a dropout" scenario, I didn't include the benefits of 401k, stock, course reimbursement, and health insurance which add a significant % to the total compared to starting out on your own / not part of a corporation. I think you'd have to be at the extremely high end of the curve in terms of skills/talent/fortune (have a lot of startup money available) to outpace an engineer career as a dropout, even with a 6 year head start.

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Re: Is it a good idea to dropout of school to retire much faster ?

Post by steelerfan » Mon Jul 30, 2018 8:25 am

This topic interests me. I have two sons. Son number one is currently starting year 4 at a pretty good university - BA Computer Science - Minor or perhaps double major in Math. Son number two will attend attend a local community college and train for a career in TV/video production. Both kids attended and thrived at a trade school in their chosen occupations as HS seniors. Both received ~50K from me. Son number one is in year two of obtaining student loans since he wanted to live on campus. Son two will live at home and work part time and likely be working in his industry. He will likely not have to tap the 50K and will instead start investing it - his idea not mine. Who will be more successful?

On paper it would appear son number one. He will likely get a pretty good first job. Maybe be making more than me in a year or two. But I can remember BRUTE saying that programmers peak intellectually at 24 years old and by 35 they want to take you behind the woodshed at 35. I am trying to talk him into taking a few actuarial exams in college just as a hedge even if he has no desire right now to be an actuary. I have seen programmers/software engineers go through their career progression and most of them are not having fun at 38 - and worried in their 40s while the actuaries are dicking around for more money at that career point once the exams are in the rear view mirror (some have their exams done by graduation so all gravy starting at 22). As an accountant my experience is more variable shall we say.

Son number two never liked school. He struggles with dyslexia but in many ways is better for it. He sees things in a different way. People love him. He works hard and has won praise and even got an award for a film he edited in HS. He is more extraverted than any of the rest of us. He will only need a two year degree but the skillset is more specialized. He has a critical eye for how movies are made and makes observations I would never notice. He will likely be interning in the industry while he is still in his teens. Starting salary will be lower. His long term goal is to be in the movie industry but will start out in TV.

I think both will be successful - maybe in ten years neither will be where they started out. Who knows?

Sometimes school doesn't matter. I went to school on a track scholarship and ran in college. I came home one summer and ran into an old friend/rival from another school and we went out drinking. At some point we went back to his house which had a pool that went under the house. His dad was a custom home builder and he worked for him from his early teens. Obviously he didn't need no stinking college. It was a funny contrast - I crushed him in HS and got the scholarship only to find out he already buried my pitiful efforts - LOL. Still makes me laugh.

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Re: Is it a good idea to dropout of school to retire much faster ?

Post by steelerfan » Mon Jul 30, 2018 9:43 am

In 2018, everybody needs at least a GED just to be able to manage your affairs. Basic math and reading comprehension skills. General ability to use technology. Personal finance skills. I am assuming the OP was not talking dropping out of HS. Doing so puts you at risk of not even making the cut for a skilled labor apprenticeship. A good tradesman can out-earn a mediocre programmer or accountant particularly if they work for themselves. Just keep in mind that some trades inflict a great deal of wear and tear. Tradesmen often retire early because they need to. C40 mentioned underwater workers. I work with a lady whose dad was an underwater welder. Very dangerous but very lucrative. He had to quit due to damage to his body from the pressure (lungs). Working construction can take its toll as well. Sitting in front of a monitor can take its toll as well though. My wife told me sitting was the new smoking. Time to go to work at my standing desk...But we are talking early retirement - so maybe consider a trade.

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Re: Is it a good idea to dropout of school to retire much faster ?

Post by Riggerjack » Mon Jul 30, 2018 10:50 am

This thread suffers the same myopia the 9.9% thread did. It strange watching how the college educated think about opportunity for the rest of us.

If one is smart, and driven, and poor, lacking in other obstructions, then the college plan can, and generally will work out. If one is poor, and this track is open, take it.

But there is a significant fraction of the poor that very much does not fit this profile. Trying to follow that path can lead to the double whammy of no degree and loan debt.

So let's talk about other options.

No hs diploma closes the door on military, most of the time. Closes the door on skilled trades with apprenticeship programs, and unions. But there are still ways forward.

Many very hard labor jobs pay well and don't require a diploma. Oil rig work, commercial fisherman, under water construction, etc. These are all high pay, high risk options that will not work out as a career, usually, but boost early options.

I knew a complete moron. He worked for me a while. Not good for much of anything, and he had messed himself up as a commercial fisherman. Nearing his mid 30's, he just retired. It turns out that while he was on the boat, he sent his checks to his grandfather, who bought RE investments with it. Then, during the off-season, while his crewmates we're partying in Cabo, he was working with his grandfather on RE. By the time he hired on with the company I work for, he had his costs covered by his rental income, and he was saving 100% of his paychecks. A few years later, as he was getting in deeper and deeper trouble for the generally poor work he did, he just asked his boss if it would be better if he found somewhere else to be. And then he retired. In his mid 30's. When I had been plugging away at my 401k and pension, he was retired.

But if you can stick it out to HS graduation, more doors open. Get into an apprenticeship. Go to work, go to class, move close to class, as work is everywhere. Then start finding side jobs for yourself. Then find side jobs for your buddies, then go full time at finding jobs. Very high success rate, for a person who can set this up properly, but setting this up requires more than it takes to run it, so having someone show you how to do it makes it much easier.

The thing people don't like to think about, is if one is poor, every path is high risk.

So, if one is poor, choosing a path with the greatest return, early, and changing that path, is the right way to go. Unless the education route is a good fit. Then do that.

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Re: Is it a good idea to dropout of school to retire much faster ?

Post by SavingWithBabies » Mon Jul 30, 2018 11:40 am

@steelerfan I think the software developer/programmer and agism thing is more complicated. I do think there are some companies that act as @BRUTE suggests however they are few and far between. I think there are other problems with being a software developer that tend to push older people out. These reasons would be:

* lack of awareness of office politics (until too late)
* assuming other non-developer employees in a company also default to logical thinking/choices
* assuming their seniority means they don't have to put as much effort into keeping up to date
* focusing 100% on one technology choice (often at one employer for whole career) -- this is like investing in only one stock
* not knowing when they are not a good fit for the employer (so not leaving before things go south)
* wanting meaning in their work
* being insensitive to the changing landscape of young people
* not understanding where their value is in the business
* walking the line between being a senior contributor but not a manager
* ?

I'm about 12 years into my (software development/programmer) career at 40 years old and I love what I do. I only got into this because I loved it before and was excited to get paid to do it. My income is far higher than I ever expected (and plenty of developers are making more than me). But I hate how organizations make software. I want to be in control. So that is why I'm here on this forum -- I want the Financial Independence in FIRE so I can spend my time working on my own companies with minimal risk (to my family's quality of life). So in a way, I'm trying to push myself out of regular employment (as almost all of us are here).

I don't know a single developer who quit the career due to agism. I'm going to start asking my older developer friends. But I do think there are huge risks/potholes in this career that can take you out if one gets too hung up on why? or lack awareness of the "big picture".

Unrelated, I did two years of community college and two years of university. I worked during the summers in a cushy tech-related job and came out about $30k in debt. I paid that off quickly (partly thanks to my grandpa giving me a chunk of money). So for me, college wasn't a huge cost. I get one could argue about opportunity cost however I was failing to land on good opportunities before so...

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Re: Is it a good idea to dropout of school to retire much faster ?

Post by Augustus » Tue Jul 31, 2018 11:46 pm

Too much generalization. It depends entirely on context, including person, economy, etc. I did well in software with no degree. Lots of trades can do the same, handymen can make a killing if they're good at business, or they can be hand to mouth. Alternatively, my wife does accounting, good luck getting anywhere as a Dr, lawyer, nurse, or accountant without a degree.

Timing is very important for real estate, there was a prime opportunity with high interest rates in the 70s-00s, prices were very low. Now it's totally insane, if interest rates went to 10% the housing market would probably go back to early 90s prices. You can still do well, buts it's not the 70s anymore where practically anyone who bought and held made a killing.

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Re: Is it a good idea to dropout of school to retire much faster ?

Post by Nomad » Wed Aug 01, 2018 7:32 am

I think it would depend a lot on the cost of the education that wasn't purchased.
The other key thing is that some degrees give an excellent return on investment ( on average ) but others are essentially worthless.
So it depends.
If someone had the means to get the investment ball rolling they could attend university and rent out properties. Time wise neither is
particularly demanding.

George the original one
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Re: Is it a good idea to dropout of school to retire much faster ?

Post by George the original one » Wed Aug 01, 2018 9:21 am

Nomad wrote:
Wed Aug 01, 2018 7:32 am
The other key thing is that some degrees give an excellent return on investment ( on average ) but others are essentially worthless.
Degrees do not define career path.

Of 5 friends & myself from high school diploma:
1) degree in Political Science --> dock worker, OSHA inspector
2) degree in History --> telco system programmer, retired
3) no degree --> marine reserve, community college, IT manager
4) degree in Electrical Engineering --> electrical engineer, retired
5) no degree --> navy, community college, IT analyst, degree in Psychology, retired
6) degree in General Studies --> technical writer, IT analyst, retired

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Re: Is it a good idea to dropout of school to retire much faster ?

Post by SustainableHappiness » Wed Aug 01, 2018 9:41 am

@George

In the short to mid-term some degrees definitely have a strong, strong influence on career paths. Since ERE's are hoping to only be in the whole career thing for the short to mid-term, I'd say education choice is extremely important.

All of these end with, "until you decide to do something different".
If you get a nursing degree -> Nurse of some sort
If you get an engineering degree -> Engineer of some sort
If you get a law degree -> Law of some sort
If you graduate from medical school -> Doctor of some sort
If you go to tradeschool for trade X -> Trade X

In your examples, I agree if you get generalized degree, or arts degrees X, Y, or Z or no degree -> ????? Whatever job you land at?

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