Friday, June 10, 2011

"How Can I Stay Safe From the Higher Education Bubble Collapse?"

Each Friday, The Echo Boom Bomb will feature a common question among Echo Boomers and/or their parents concerning economics or finance concerning the Millennial generation. These questions are often asked by Echo Boomers and/or their parents that I survey or can be directed to my email at echoboombomb [at] gmail [dot] com. If you email a question, please be sure to keep it concise and direct.

Question: You recently wrote about the higher education bubble popping, but I wondered what to avoid when this bubble bursts as far as investing and career advice?

This post is intended solely to inform people of industries that may experience trouble in the future if the education bubble pops.

You can avoid losing money when the education collapse occurs by not investing in companies involved in education, and I'm not just referring to online colleges. Textbook companies, educational supply companies, et cetera all will suffer when the education bubble collapses. Think about who these companies do business with as well, and you can see how widespread this bubble may end up becoming.

As far as career advice, I would avoid the education profession for a long term prospect, IF it is your sole source of income and your field isn't "required." For instance, I doubt society will ever need less engineers, physicists, or doctors, but as far as humanities are concerned, they tend to produce little wealth outside general knowledge.

Becoming a professor at a small university is a good idea, but a massive university with large costs may place hiring freezes or eliminate staff in they find themselves in a terrible financial position. If you decide to become a professor at an expensive university, use your position to perform side-work so that you still have another income outside of your job.

You will hear "education" is safe, but frankly, if I were working in the education industry, I would be saving at least half my income. The uncertainty rises everyday as student loans balances continue to climb and many young people contemplate whether college is worth the financial risk. It may take a generation or two, but the negative educational stories we hear now will have affects for future generations in the same way the positive educational stories motivated Echo Boomers to always look to school for solutions.

Trade schools, however, may end up becoming the winners. By saving student's time and money, they can get student in and out with a specified skill that can help out. If you plan to work as a trade school professor, you may find that your salary increases (but, as always, be prepared for anything).

None of this is meant to bash education (to an extent, some degrees are quite useful), but to warn some people considering an education profession of some of the potential difficulties that may arise. All professions come with some risk, and timing tends to play the largest factor in all things. Hey, good luck with your career and investment choices.