I lost three quarters of a million dollars.
By 2008 the United States hosing bubble had burst and bled around $750,000 in equity from my investment and personal home equity. I watched as the dollars flowed directly out of my pockets and into the coffers of the United States Treasury and eventually to the banks that had contributed to the mess via subprime mortgages as well as Fannie Mae and Freddie Mac by way of an illegal “bailout”. The bubble had burst. The hopes and dreams of millions of Americans…crushed. Entire life savings wiped out. I was depressed. I’d lie in bed every night worrying. No more robbing Peter to pay Paul. It took a toll on my health…mentally and physically.
Markets can’t increase forever. I had hoped that it would reach a plateau and not a bubble. I was wrong. And I am still suffering the consequences. We all are.
The next impending bubble is the education bubble and your children are at risk.
Bubbles can be defined in hindsight after a market correction. But, I’m going to give you a glimpse inside my magic crystal ball for a moment.
College loan debt has eclipsed credit card debt in the United States. 1 in 10 students is graduating with around $40,000 in college loan debt. The college diploma is the new mortgage note but students have no houses to show for it. And guess who backs the $1.2 trillion dollars in student loans? That’s right…our government.
Have you taken a look at the temp staff market lately? While full time employment has declined…temp staffing has increased. The U.S. Bureau of Labor Statistics reports that temporary and contract workers make up one of the fastest-growing segments of the work force. Furthermore, the American Staffing Association estimates that 11.5 million temporary and contract employees were hired by U.S. staffing firms during 2012.
The job market is dead. Full time employment has died right along with it. Obamacare will be the final nail in it’s coffin. Our kids are going to be either entrepreneurs or temp staffers with multiple part time jobs to pull in a full time salary.
We’re sending our kids off to colleges so that they can get degrees for full time careers. Wake up! Full time jobs are becoming obsolete. If your kids are going off to college to try and gain an edge in the dwindling job market they are playing a fools game.
Costs of college tuition have risen faster than inflation. Just as housing prices rose. Kids are snatching up college degrees like investors snatched up houses hanging on to the false hope that that investment will one day pay off. It won’t.
Better to take that $40,000 in potential student loan debt and use it to pay for an internship with someone really smart who is already making a living in this new digital economy. They can supplement with Khan Academy for free. Or better yet, let your kid use the cash to start their own business. Let them get some real world education and experience. This will give them an edge over the college-educated competition. While those other kids sit in a classroom for four years learning theoretics, your kid can be learning real world on-the-job skills that will propell them further in life.
Who do you think is more likely to get the contract? The edupunk who cleverly hacked his education and has four years of real world experience or the kid who played it safe and hid inside a classroom with their nose in a textbook?