Which is a better return on your college tuition dollars: the stock market or yourself?
The average cost—room, board and tuition—for a four-year degree is approximately $80,000. And based on the state of the economy, your eventual returns on that investment might not be so great. Instead of sinking all that cash into an education you might not end up using, look for some other ways to invest.
Play the stock market
You’ve got a few options here, from reckless to relatively safe. Day trading, with its relentless and random ups and downs, is probably the most risky form of stock market participation—and the most demanding. There’s also the micro-trading arena, where you can pit your algorithms against the financial system and watch your math fight for you (for MIT types only). Or there’s good old conservative investing: putting your $80,000 into a variety of “promised return” portfolios that will probably net you a 6 percent to an 8 percent return, or $4,800 to $6,400 per year—not exactly the lap of luxury and definitely not a safe haven from financial disasters. If you’re a real gambler, throw your entire bankroll behind Facebook and see what happens. [This could actually be a great bet, considering the following prediction, made in January by an industry insider: “When online gambling is legalized, Facebook will be a $100 billion company.”]
In most real estate markets, you should be able to purchase a house with an $80,000 down payment. If you can get it for $50,000, even better: you’ll have a bit of a cushion when you start making those monthly mortgage payments. Take on some renters to help you carry the load. It’s not guaranteed you’ll be able to sell your house for more than what you paid, but at least you’ll always have a place to crash.
Start a business
Entrepreneurship is a great way to become successful without an education—though a well-run company does require business savvy. Start small so you can learn the ropes, then focus on expanding your empire. If you don’t turn a profit within the first ten years, it might be time to head back to school. D’oh!
Develop a website
Ten years ago, web development was for ultra geeks only. Now anybody with a laptop and some shareware can make a pretty badass moneymaking website. The one hurdle to jump here is content: with so much competition for ad revenue on the Internet, your site will have to standout. Make sure you can provide regular original content or a niche product and soon enough the ad dollars will start rolling in. Can you hear Google knocking?
Drill an oil well
The value of oil is only going to increase as world supplies dwindle. Use your wildcatting instincts (and an investment in heavy machinery) to discover your own stream of semi-sweet crude—then let the petro dollars gush. Caution: unless you’re a geological engineer wildcatting is a total crapshoot—you might strike black gold or you might go broke.
Provide venture capital
If you dole out some seed money to the next new idea, you could be set for life. Just make sure you’ve arranged—in contractual writing—for a worthy return on your investment. If the company you believed in begins turning a $5 billion profit, you’re going to want more than your $80,000 back. Also, do your research. Someone probably sunk a lot of money into pagers at one point and we all know how that worked out.