By this time most people have ran through their New Year’s resolutions and basically forgot all about them. Humans seem to be hardwired to forget resolutions within about two weeks. I think it could be some kind of survival mechanism.
That’s okay for the typical lose weight, exercise more, drink less, and read more resolutions because in the grand scheme of things if you weigh a few more pounds, can’t run a four-minute mile, have a few beers on the weekend, and haven’t read Moby Dick it’s not really going to have a huge impact on your life.
Maybe that’s why these kind of resolutions usually evaporate in a week or so… No real urgency.
So now that you have these basically unkeepable resolutions out of the way how about a few real resolutions that could profoundly change your life for the good or for the bad if you don’t do them?
And of course, these better resolutions all have something to do with income inequality.
No matter where you are on the income ladder climbing a few more rungs up or keeping yourself from falling a few rungs down will make you feel less unequal. And that’s a good thing.
It should be no surprise that all three of these better resolutions have to do with education… That may seem odd but education is the only sure fire proven way to add value to yourself so you can move up the income ladder. It’s definitely an antidote for income inequality.
Unfortunately waiting for someone else to boost you up the income ladder is probably not going to get you where you want to be any time soon. Especially if you are waiting for some government agency to come to your rescue… Not gonna happen. You need to do it yourself.
Do something in 2018 to learn as much as you can in an area that will get you to a higher paying job or a higher paying position in your current company.
This may sound like a tall order but with free options like Coursera ( https://www.coursera.org/ ) where there are classes in a range of subjects from things like better math skills to improved selling and people skills. Other places to hunt for education opportunities could be a community college or even the Human Relations department at your company. When you get on HR’s radar as someone with a desire to move up the ladder you will be surprised what can happen.
This “get more education” resolution has a potential pitfall. And it’s a big one.
That leads us to the second resolution…
Don’t overspend on education.
This may seem like a no brainer but when you look at the huge amount of student debt outstanding your nose will start to bleed. How much? Does $1.5 Trillion (that’s with a “T”) make you feel a little queasy? That comes out to an average close to $30,000 per graduate. And if that number doesn’t worry you then consider it is just an average. Estimates show that almost 2.5 million people owe over $100,000 in college debt. Make no mistake, with that much debt the rungs on your ladder to a better life will be firmly blocked.
This college debt or any money you spend or borrow for education should be thought of as an investment in your future. And like any investment you need to be reasonably sure that you will see a solid return on your investment. And this particular education investment can cost you a lot of money and time.
Sure… People might be telling you to follow your dream in college. But the way I think about it is that college is career training. Getting a job. If you want to pursue poetry, creative writing, psychology, history, or a foreign language don’t mortgage your future for something that at best will get you a job frothing cappuccinos. You can always pursue these dreams for free at your local library where stacks of books await you at no charge. Probably the same books used in a college course that could cost you up to $10,000.
So… Do the math and make sure a job awaits you and the end of your education adventure that can actually provide enough money pay back all of your education loans in not more than ten years.
And of course, this leads to resolution number three…
Don’t get suckered into paying for someone else’s education.
This may seem harsh but some parents (and even grandparents) have an attitude that it is required for them to pay for their children’s college education. Sort of like how Disney has everyone convinced that every parent has an obligation to bring their kids to Disney World.
Here’s the dilemma… When a parent diverts money to paying for college for a kid it comes from somewhere. Usually indirectly from retirement savings. The parent is basically trading off future security so some kid can go off to a four-year party. And the bill for that education adventure can be as high as $250,000 when you include everything.
Now here’s some interesting math to show what this $250,000 really costs the parent… Assume the Parent is forty-five years old. That means that the $250,000 would have twenty years to grow in a retirement account if it was not spent on a kid’s college. At a conservative 7% interest per year that means the college adventure actually cost the Parent $967,421 of retirement savings. And that is just for one kid.
That’s another income inequality aspect of this… Will an extra million dollars have any impact on your retirement? I bet it will…
Bottom line is that a kid can take a loan out for college. The government and banks are standing in line ready to loan kids money for college. But when you get to the ripe old age of sixty-five no government agency or bank will be ready to loan you a million dollars so you can pay for food, housing, medical, and other expenses in your retirement.
So… If your kid is putting the pressure on you to pay for college simply ask them this question… “Since we will be taking this money out of our retirement savings we may be at risk of not having enough money for food, housing, and medical when we retire… Can we count on you to financially help us when we are retired?” If they ask how much… Figure the million dollars over 25 years or around $3,500 a month.
If they say sure they will send you the monthly checks… Then you have a great kid. Get your attorney to draw up the papers. But I will bet that most kids will laugh when you suggest they help you out in retirement. Mine did…
I hope these New Year’s resolutions will be easier for you to keep than the ones you already forgot about. Good luck…