College and Student Loans - are they worth it?

[Buzz]

Anyway, I'm halfway through my junior year and I have been taking out very conservative student loans (govt, minimum to pay tuition) and working pretty much full-time to pay for living expenses (32 hrs/wk). I know I could be doing better in school if I had more time, and I could also get more involved in student organizations if I had more time.

The question is, it it worth taking out extra student loans to get done with school:
#1 Faster (I can take more classes)
#2 Better (I can do better in school in terms of GPA)
#3 More Prestigous (I can hold office and stuff)

However, when I graduate I won't have as much 'work experience' (although my current job isn't in my major, its just a retail store to pay the bills).

I already have ~$13,000 in loans. If I take out extra loans to pay rent, food, etc. then we are looking at ending balance of around ~$30,000 instead of $20,000.

P.S. After this and I graduate with my BA I am planning on getting my MBA after this as well, which I am planning on taking off work and do the 1yr full-time MBA program

P.S.S. My major is business finance

 

[Bible_Belt]

At least you are getting a real degree, one that should get you a job. You have to keep your gpa high so that you can get into a decent mba program. You might try looking for some sort of internship to make business contacts. Do you plan on working in your geographic area when you graduate? If so, it's time to start networking. Even if you have to sacrifice now in pay, it could be worth it. Look for a way to get a small job now at a place where you would like to have a better job later.

 

[I'm Joe Dirt]

Finance is a good major to have. I myself have similar plans to yours, that is business major (Management in my case though) and want to do my MBA.

You should try to get some work experience in your field, like even work for some small time accounting or bookkeeping company as a helper. Its not DIRECTLY financing but its close.

Or you could work for one of those mortgage/lender places that facilitates loans for people to buy houses and what not. Even as a junior assistant to people like that. That way you get a feel of the practical side of your field. Another option is to do something technical like computer repair or desktop publishing (you can start this as a home business even, look into it). That way you have technical experience as well as a business education, which is a good combination.

As an MBA you should expect to make $40,000 or so after you have completed your education to start, which is pretty decent.

As far as loans go, I don't have much experience there. I pay my school tuition by myself using money I make working at Geek Squad (not exactly my field either, but sometimes its good to mix technical experience with business knowledge, every office appreciates having a computer guy), but I do live with my parents for now so I don't have to pay any other bills besides school, books, and whatever I spend for myself on going out, buying new crap, etc.

Now regarding which route to take, the "prestige" part is pretty useless. Its the same as with clubs and stuff in High School. People joined up to do crap "so it looks good on their college applications" and guess what, I, who never participated in anything like that, sit with these people in class, so its not like they went on to do much greater things or much greater schools because they participated in some useless student council or activity.

Its the same way in college. Employers don't really care about that kind of stuff unless its in your field. My school has a Management Club, Marketing Club, etc. so things like that are potentially useful since they are extracurricular activities and they are useful to the students area of study. Other than that, I wouldn't think that it matters much.

I don't think an employer is going to say "what, this guy was on student government? give that man $100,000!?" or conversley an employer will also not say "what? this person wasnt in any extracurriculuar activities? no, we can't hire him! we need the guys who were on student council!"

If you wanna do activities cause its your thing, go for it, but to do it purely because as the myth goes "it looks good on your resume" is useless. Waste of time.

If you can get your degree FASTER and still have a decent enough GPA to get into a business program to get your MBA, that's the route I would take. That's pretty much the route I am now. Granted, my GPA is 3.68 on a 4 point scale as it is, so despite trying to get it faster my grades aren't suffering as much as I thought they would.

I would say go faster, so long as you have a decent enough GPA to get into an MBA program. If you don't think you can pull that off then go with the Better option to keep a high GPA.

If you have to work full time, you should consider a company like Best Buy or Target which offer tuition reimbursement for full time employees. Best Buy reimburses up to $3,500 a year for a full time employee who is also attending college. Perhaps your current work place also has this for full timers, so make sure you ask around and make sure they classify you as a full timer if you're doing the hours rather than staying part time on paper which disqualifies you from these benefits.

Having a full time job (32 hours a week is minimum for full time at Best Buy) that pays your tuition at least in part also could be the key to keeping your loans down as much as possible while you finish your degrees.

 

[Buzz]

Right now I have a 3.0 on a 4.0 scale. I am getting the feeling like it needs to be much higher. What would you say it 'needs to be' minimum to get into a decent MBA program? Most people tell me that GPA, at least in the workplace, only is important if you have LESS than a 3.0 and then it will disqualify you from things. What is the minimum I need to be safe?

I work at Wal-Mart, no tuition reimburstment, but I applied for the $1,000/yr scholarship they offer. I would get another job but I have been there 4 years and have moved up from $8/hr to $11.50 and for the region/experience level/flexibility of hours/demandingness of work I am doing very well for myself.

In terms of career goals, basically I want to work in the stock market... start out as a broker and maybe move my way into something higher up like investment banking, fund management, etc.

 

[Bible_Belt]

I've been a broker, and you probably don't want to be one. It's glorified telemarketing. Watch Boiler Room.

I love the stock market, too, but good employment is difficult to find. Brokers can work anywhere with a phone, but most jobs are still in NYC. Investment bankers are still quietly making small fortunes, but since it pays so well it is very difficult to get into. They like to hire Ivy-league grads. Fund managing is trading. It is an awesome job, but very difficult to get into. They want either an Ivy League grad who has been with the company a long time, or a pro trader with an amazing record of profitability, preferably with several million of his own money in the fund.

 

[Buzz]

Bible Belt,

What do you recommend I look into then to earn 60-100k or more a year in finance? I can always trade for myself in my spare time, my current passion, if necessary.

 

[Buzz]

btw I own Boiler Room and Wall Street, I really like them - the latter the best.

 

[Bible_Belt]

I don't know much about the MBA route. (I'm in law school now.) Nor do I know much about the distinction between accounting and finance. Most of the people I know with MBAs are big into networking with people and making contacts. The other business types at law school are going the CPA route.

Where do you want to live and work? $60k is barely enough to survive in New York, but in rural mid-America you would be one of the rich people.

 

[I'm Joe Dirt]

In Chicago and most of the midwest, $25,000 a year is the minimum to pay bills and have a car and stuff (for a single person). At $35,000-$45,000 a year which is entry level management (MBA degree or even a Bachelors in Management), its pretty decent living.

Of course once you make contacts and get experience you can move up quickly and make more money.

You do damn well for working in retail. I make $11.07 an hour at geek squad as a tech.

 

[cinephile]

What is the repayment schedule on your loans? Most, I remember give the borrower 6 month before they start repayment. An easy way to cheat is right after you get your degree is to immediately register back for school. Your loan will go back into deferment. It can help buy some time. Also consider refinancing them as soon as possible. Rates are great right now. Mine are 1.87% for 20 years. I pay $60 a month for my loan.

As for degrees, Finance is good, Accounting is better. A friend of mine hires Accounting grads at $38K a year starting. That is considered to be under the national average. If you have a reasonable amount intelligence and get your MBA ( not that hard), you cn expect to make near 6 figures within 10 years.

 

[Colossus]

I think MBA's are quite common these days, especially in urban areas of the country. I know a lot of Marketing/Business majors at my school--and like cinephile noted, it doesnt take an unusual amount of intelligence. Not to knock you or any other business majors--some can be quite successful. But it is one of the more common majors, so of course there is more competition.

Im a Science major, so I dont know too much about the business world. But from the people Ive talked to who do, it all seems to be about contacts and networking. There are some very successful business people who arent very intelligent per se...as far as absolute knowledge goes...but have a natural ability to make friends and contacts wherever they go.

I personally think grades arent terribly important unless you are looking to be a professional--- like a physician, lawyer, vet, chemist, ect.
I also think that science majors are hands down the most difficult, just because of the sheer volume of factual data and calculations you must memorize, and there is very little room for error in most science diciplines. But that is neither here nor there.

Talk to your Financial aid dept at your school and ask them to help you get every possible scholarship you can. Tell them your whole situation and you career goals for the next 5-10 years.

When I finish with all my schooling I will be looking at $100k or more in debt. Outlandish? You bet your a$$! But I consider it a wise investment if I follow through.

College really is what you make of it. Rarely does just a degree guarantee a job.

 

[Buzz]

So if investment banking is pretty much ivy-league only, does anyone have suggestions for other careers that are 1. open to me and 2. the best paying?


I don't really want to switch my major to accounting if I can help it - I think it is kindof B-O-R-I-N-G, and finance is just much more interesting to me/my personality.=D

 

[A-Unit]

Re:

Let's start @ the beginning, Buzz, because you're singing my song.

Financial Services and Investment Advice.

The industry is changing and transitioning. Those who can't afford investment advice will be do-it-yourselfers until they're assets are high enough to be worthy and cost effective for top notch guys to get involved. Payouts on mutual funds are coming down, or becoming nil, so they won't be pushed as much. You'll see wholesalers (the outside sales guys making 150k + right now), go away.

The switch in the industry is FEE for SERVICE. Why?

Because, the time related to income ratio is VERY lopsided. The industry stands on commission-based business, mostly.

Read: The Millionaire Mind.

See where the wealthy get their investment-related advice. Mostly from CPA's and Lawyers.

A broker, nowadays would be focused on positions like TOTAL merrill, where they integrate a team environment to provide full service investment advice to the high networth.

The low-end segment of the investment population does not generate a sufficient profit for financial advisors to target them. You could work for Fidelity or ScotTrade, but you won't find an investment adviser working with people under 100k in assets making any money to keep the lights on.

If you go that route, go hard. Focus. Be knowledgable, but work with the wealthy.

-------------------------

As far as being a Fund Manager, it's very possible, if you push hard. I've walked through the Trading Floors of Boston, and some guys epitomize what you see on Wall St. But normally it's very low key. And guys are promoted within, and have very esteemed degrees.

There's already MORE funds than stocks, so we will likely see a crunch there, even though people will have to UP their investments for the future retirement. The big push is toward FEE for SERVICE, of which mutual funds are NOT good at. Separate accounts, large portfolios of stocks, even Hedge Funds are growing in popularity. One of the best ways to operate within this market is a prestigious degree, hard work, good networking contacts, and an existing portfolio of clients. Or gather your family and some assets and manage their's. That's how Buffett started with relatively small peanuts. He had about 5-50k per friend/client invest with him. When he grew, he required more assets.

------------------------

You can be an investment adviser, but you'll gain the MOST credibility by backing up your licenses and designations and degree by sitting for the Bar or CPA, or networking with them. Investment counseling can be time and work intensive, so your per client revenue should be high enough to be worth your while. Commissions on mutual funds and life insurance are gone. And people are tired of hearing about Annuity concepts even if they don't own one. The industry has to be customer-centric, and focused on the advice. Products are incidental to the solution and sale.

The finance industry is wide open, as money will always be required. But ask yourself if you want to be self-employed, how you want to use your degree and how you want to stick out. There's the corporate world of M&A, corporate finance, corporate accounting, trading, or working independently counseling clients. The latter is VERY people oriented.

----------------------

The middle market is being crushed, by commission low-balling, regulations, and the internet. The internet doesn't effect PLANNING, so much, because advice specific to the individual is valuable, and that's where the most costly mistakes are. BUT...

***Most people pre-retirement lock their dollars into 401(k's), and so they have little need for services outside of Life Insurance or Disability.
***The largest source of revenue for the planner is RollOvers. This is the under 55 crowd who's doing planning, but the revenue is sporadic.
***The crowd who can use investment counsel doesn't use 401k's or has more need to save and invest BEYOND the 401k, so we're talking about the millionaire crowd, which largely consults with CPA's and Lawyers. Do it through networking, or again, back up your fin. degree with a CPA or Legal background.
***Being a fund manager is good, but you'll see MASSIVE changes in mutual funds roll out now. Funds will start to be absorbed, totally go out of business, or change their method of working due to expense pressure and the inability to gather assets.

---------------------------

READ A TON in finance. Learn to acquire everybook you can. Then you'll find what you like. In the end, most finance majors should be like PROFESSIONAL investors, in that they have a widespread working knowledge of financial concepts, investing, markets, and psychology, and will be able to subsist on their investments. THATS' why most FIN. majors go into it-- because they like the markets.

There's no particular niche for which you can define right now, because the industry is changing rapidly. And personally not knowing you, all I can say is, there's lots of job between 60k and 100k, more of them found in the Northeast and in large cities around the country. The top finance people learn to understand ALL topics and have a good grasp of all areas, not just finance. They grasp legal, accounting, tax, and economics.

Just find an experiment. Most finance majors end up in support positions first, such as paraplanners, or internal wholesalers, or accountants in corporations, or payroll. Investment banking normally EXPECTS a high, lofty degree, but you can do anything you set your mind to.

Also consider if you want to go self-employed. Money is always in demand, but lots of places lay off support finance positions BEFORE they get to sales or business driver positions. If you become a business revenue driver or sales person, you're always protected. The ones who aren't are cogs in the wheel of finance, just processing and supporting others. The real money is in deal making. And being on the front lines.

Programs and books:
-Anything by Buffett, Lynch, Graham, Dodd, Oneil, Soros.
-The Richest Man in Babylon.
-The Wealthy barber.
-Trade magazines
-How to Trade Commodities.
-The Millionaire Mind
-From Debt to Wealth - John Commuta
-Credit Broke to Credit Millionaire.
-Begin trading stocks.
-Check out books on Economics.
-The Coming Generational Storm.
-Philosophy.

I could go on, but you'll find it in time. it's not definitive.



A-Unit

 

[Bible_Belt]

nice post, a-unit

This paragraph summarizes a few years of my life:
The low-end segment of the investment population does not generate a sufficient profit for financial advisors to target them. You could work for Fidelity or ScotTrade, but you won't find an investment adviser working with people under 100k in assets making any money to keep the lights on.

The only way to make money off poor people is to sell them poor products with high commission under the rationale that they would not have invested at all without hearing the sales pitch. Young people were the only ones who would trust me, and I was faced with the option of putting them in growth mutual funds where they should be and not making enough to pay for the gas to drive to their house, versus selling them a ~5% annuity with a 15-year surrender charge and making almost a grand for the 2-3 hour visit. It's good to have a finance degree so that you don't ever have to work lowly sales jobs.

 

[A-Unit]

Re:

I'd add that in finance you're best INTRO is to intern or get your foot in the DOOR now. Don't begin learning finance stuff hands on @ the age of 21 or 22 when you're done.

Get into bookkeeping, payroll, accounting, working for a broker, those sorts of things. Bring real world experience the table and you're in. It's very hard to find people like that; I can barely find them. I was one of them though. I'd interned with Salomon Smith barney for a semester for a broker. And then went on with many accounting positions, through temping, through my uncle, and through various jobs. I followed it up with a Northwestern Mutual Internship, which at least was enlightening, too. When I finished school, i hadn't a clue what I wanted to do, so I did security part-time while I felt out Boston.

The biggest advantage I had in finance was having done multiple things, understanding the flow of it all, and just being open-minded, because finance is very open.

That's just my path, but working on the inside, most people FORESAKE the little steps and want to leap ahead. You can't get the big jobs until you know the basics. Even if you offer a few free hours a week to a financial planner, you get in the door. Learn from him. Look on line.

Avoid the internships @ Amex and Northwestern, TO AN EXTENT, because they normally require some cash investment and expect you to sell right away to friends and family, or strangers, or straight commission, no base, at 20 years old. It's liable to help, but there's a large gap between this problem.

People, even without assets, FEEL the right to demand high class professionals, though they can't pay for them or compensate them, or even provide assets to be managed. Normally, they see their accountant, because they pay him/her for taxes, so the advice is incidental.

--------------------------

Alot of guys who get into Fund Management start inside a company, have lofty degrees, and years of analytical experience. I met a few of them who work over at Putnam after the whole company melted down. They wanted to tell us what they were doing to "right the ship", but it was all alot of mumbo jumbo and nonsense.

If you get your own personal reading down, you can talk more intelligently with the guys already in the know and bring tons of value to the table.



A-Unit

 

[A-Unit]

Re:

That's only part of the problem, Bible.

Life Insurance and Disability, which pays SOME good comm. takes AWHILE to land payment on. Plus, it's undergoing comm. pressures. MOST of the public demands low cost term, and can only afford that since their retirement planning is so off base.

My buddy who Is succeeding in Comm. driven insurance sales has OTHER pursuits to fulfill him, such as coaching tennis, selling aflac, and working in the tech industry. Plus, he's 40. He's only been in insurance for 2 years, but he has amassed a client list, and being able to cross sell his AFLAC clients and ride out low comm. periods he can make it. But he doesn't sell enough HIGH paying products to ONLY do life business and insurance work.

The top-paying insurance work in terms of comm. is for business, corporate, or wealthy clientele. They buy the $10,000 to $1,000,000 premium policies that pay $100,000 commissions. I know guys like that, but they've been around awhile, work in teams, and worked up to that point, BEFORE the industry underwent HUGE changes.

Besides, when you get COMMISSION, you want it on...

-Low Service products.
-Products with repeat sales.
-Or to have a service department behind you.

The financial services industry in the traditional method is set up for the average producer who enters to make you fail and frustrated. The selling of a PRODUCT almost entitles the client to advice, but they EXPECT, in going to an advisor to get ADVICE. Yet most can't afford the ADVICE, so sales people work on payment for commission, which nets little to no profit, in most cases. There will be lots of appointments that are left unfulfilled, and you'll chase lots of leads trying to get the big sales that changes things, but in the end, only a battle hard plan works, that makes sense, to a market that can use it.

Mom & Pops might not accept it, but the industry is FORCING fidelity right into a position to handle MOST of their investing advice. The age upon which MOST people should seek an advisor or tax person is around 22-25. This way they ensure their own financial future. If you go to 1 at 40 or 50, it's too late. They can plan assets, but you don't get the benefit of year's of experience and assistance ACCUMULATING money that you need.



A-Unit

 

[Buzz]

So if you suggest I also get my CPA, then I am going to have to have two degrees, one in finance and one in accounting as well as my cpa - correct? or is it possible to get a cpa w/o an accounting degree?

Am I wasting my time here with Finance? I am really into it but if I am wasting my time and need to switch to accounting then I need to know.

Also, does anyone know of a website with listings of the top business schools around as well as the GPA/GMAT requirements all compiled onto one site? I'm just now starting to think about what I need to do to run the MBA route and all that, soo....

 

[cinephile]

Finance is a good degree. It is just that right now there is a huge demand for accountants, so that is why the pay is so good. In a couple of years when the supply level out, the pay rates will start to go down.


As far as getting your CPA, it is a great idea. The requirements vary from state to state. Basically, they require a set amount of hours in Accounting classes with a certain amount of real world experience.

The top Business schools vary a bit every year In general, they are:

Harvard, Yale, MIT, Wharton, Stanford, and Tuck

The basic requirements for entry are usually minimum 3.5 GPA at a good college with a GMAT of at least 670. More important are having quality letters of recomendation and a great essay.

Personally, you do not have to go to one of these top schools to get a quality education or a great job. A MBA from a quality State School may do more for you. UT, UCLA, Notre Dame, etc all offer good MBA programs with a very strong Alumini network that will help you move forward in your career.

The big advantage of going to a top school is that it is name that everybody will recognize and associate with you. It is like placing a stamp of quality. The degree alone will ensure job interviews and job offers. Also, if you are looking to enter upper management of a large corporation, it is a prerequisite these days.

Good luck on school and your career. You will need it.

 

[MarkHenry]

Accounting and Finance are totally different. While there more of a demand for accountants right now, its not like there are a lack of jobs in Finance. If you like Finance, go into Finance. Dont go into Accounting because it pays a little more to start out with, or you will find a job faster. Go into the field you enjoy. You will have to work in that field the rest of your life.

Heres a decent website with finance jobs, what they pay, what skills to have, etc. It will give you a good overview at least.

http://www.careers-in-business.com/

 

[A-Unit]

Re:

Finance is a fantastic field, but I am reminded by 1 of my Econ/Fin professors that "finance is a major all to itself in Grad school." What he meant is...it's very HIGH level. The REAL finance money is made in...

[]Financial Planning
[]Investing
[]Fund Companies
[]M&A
[]CFO

High level finance REQUIRES advanced degrees. What you learn in college, while valuable, isn't what gets you to 100k, even with a Bentley or Bryant degree. It's basic, most stuff you can learn in a text book. And besides, EVEN if your classes are SLIGHTLY harder @ 1 college vs. another, it's the NAME of the college that gets 10k more, not your collegiate roster of classes.

I'm not downgrading the Finance, but it's the reality that it's the bland side of business, yet has LOTS of jobs for those willing to pursue ADVANCED degrees and positions.

Accounting, for a CPA, even requires 2 years of work POST college in accounting, OR an MBA (that's in the US). It's getting harder, too. In light of competition and regulations, that MORE education is testing 1's dedication to a particular field.

Any CFO requires an accounting AND finance background. But finance and accounting are diff. Accounting Looks BACK. Finance LOOKS FORWARD.

Search your heart and DO what you like. Fvck money. You'll make MORE and BETTER money doing what you love.

I'm just pointing out my EXPERIENCE with Finance, as my degree is Acc/Fin/Eco. I went in as an ACCOUNTING/FINANCE major, and took all Econ classes I could. I did this because I loved it, without any direct plan in finance for the future. Thing is, the academic world is NOWHERE near close on to the reality, which is why INTERNSHIPS are mandatory for quicker ascension.




A-unit