Eddy asks:
I am 21 years old living in Los Angeles CA. I dropped out of [college] after 2 years of studying because of lack of stimulation. I’ve had a job since I was 15 and have been in sales since I was 18. I currently work as an account manager at an IT outsourcing company. Oh, and I forgot to mention one small detail, I am also $40,000 in college debt.My only plan right now is to gain enough experience and a set of skills in sales to make six-figures. After that I will begin investing. I know its to early to doubt myself, but I am constantly reminding myself where I am and where I am going to make sure I am on the right path.My question is this, am I on the right path? A lot of my colleagues do a great job reminding me about the glass ceiling above me because I don’t have a college degree. Also, once I start making six-figures, how do I learn how to invest?
I told Eddy that I don’t/can’t give personal financial advice (laws aside, I simply don’t know enough about him … or any other reader).
BUT, I can make some general observations about the e-mailed question:
To succeed in life requires tenacity … and, to make any sort of large Number (e.g. $7 million) in any sort of soon Date (e.g. 7 years) requires super tenacity; if it didn’t, everybody would be rich!
More on this a little later …
Eddy’s second problem seems to be his unwillingness to even begin investing until his income reaches the “6 figures”.
But, it’s important that Eddy begins investing NOW.
[AJC: if you haven’t already done so, Eddy, please read this post: http://7million7years.com/2011/05/26/the-pay-yourself-twice-wealth-strategy/]
If Eddy does, one day, it may not even matter that he didn’t complete college 😉
Back to Eddy’s first problem …
The first thing that I look for in anybody who tells me that they wish to succeed financially is “show me evidence of your ability to follow through”.
With this e-mail, I see a couple of red warning flags:
The first one is, what sort of return on investment is there in a $40k college loan for a college degree not completed?
I’m guessing none … after all, you don’t need two years of college to work from age 15, nor to get most typical 18 y.o.-level “sales” jobs. So, by not completing college, Eddy seems to be $40k worse off than anybody else entering the same sales job at the same age!
I don’t know about that, I’m a roofer and I make a good living. My dad always said that if you took a kid out of high school, and had him work in the industry of his choosing, then in four years, when the college kid showed up for work, he’s be working for the guy who started working after high school. While that doesn’t work in all industries, it does in everything from computer graphics and web design, to construction and manufacturing.
@ Kent – Can’t argue with that 😉
But, what do you think of the ROI on pulling out after 2 years of college and $40k in fees?
@Kent: Thanks for the comment. That was one reason that influenced my decision, I had an inner circle of friends that were doing really well in business and companies they chose to affiliate with. I am not afraid of hard work so I thought “why not me?”
@adrian: if we’re going examine the ROI of dropping out after 2 years and 40k in fees. we should also examine the ROI of a college degree in 4 years and 80k in fees, no?
@ Eddy – Yes
http://7million7years.com/2009/10/12/is-a-college-degree-worth-it/
And of course the ROI of $0 in college fees and not doing the 2 years at all.
But I actually want to comment on Adrian’s point about beginning to save now.
I discovered this way too late in life:
The moment you start investing, your appreciation of the value of money changes, and your view of the purpose of the money you receive, changes.
This might seem esoteric but it has a massive impact on your approach to life.
How difficult was it to get the $40k? Now go and try to save up $40k.
You will notice that the latter is going to be much more difficult, especially while you are earning little – and it’s that difficulty that builds the persistence and the determination needed to cut unnecessary expenses.
My wife and I used to travel internationally at least once a year. Since starting to invest, I’m much more reluctant to spend that money, because every holiday is delaying my retirement.
You might not be spending money on such big ticket items, but you’ll find that the moment you start investing and watching that investment grow, financial discipline comes quickly.
Secondly I discovered that I make decisions differently. Every decision I now make (e.g. make a career move with a physical move) includes calculating the overall impact that move is going to have on my retirement plan.
If there is one thing AJC has taught me, it is that you are not retired as long as you still have to work. And through some recent experiences I’ve discovered that you are seldom free to do what you love, until you are retired.
Every young person’s first life goal should be to retire as soon as possible. Most of us can only start doing our real life work after we’ve retired.
I’ll repeat this bit from the bottom of your comment, Ashton, because it is gold, and not all readers may have seen it:
“… you are not retired as long as you still have to work. And through some recent experiences I’ve discovered that you are seldom free to do what you love, until you are retired.
Every young person’s first life goal should be to retire as soon as possible. Most of us can only start doing our real life work after we’ve retired.”