But here is the real kick in the ass
After kids get their degrees, the prospects of making that hard-earned money and study pay off aren’t great. Youth unemployment in December 2014 was 13.5%. A recent report from the Canadian Labour Congress says the underemployment rate – those working in jobs unrelated to their field after graduating – is about twice the unemployment rate. This means that less than three-quarters of Canadian graduates are able to land an entry-level job in their area of study.
Here’s a different scenario: What if kids took the $68,933 for their degree and invested it, instead of spending four years at school? Assuming a 5% return annually over 45 years, it would be worth about $619,364. Plus they’d be able to get started early and spend four extra years working as baristas, dog-walkers or rock stars.
In the extreme scenario that they lived at home with Mom and Dad, and could bank 100% of their after-tax earnings from the $30,817 average high school grad employment income for four years, and invest it at 5% through retirement, they’d have about another $800,000. So call it $1.4 million extra going into retirement from bringing in money during the first four years after high school instead of shelling out. Not bad. Not that $1.4 million would buy them nearly as much in 45 years’ time, but still, it’s not chump change.
