According to a recent student loan debt report, the average student debt for graduates has increased to $28,564, and the national outstanding student loan debt figure was up to $1.52 trillion in 2018. What we also know is that for most recent graduates, the debt load is even worse than that, given the additional debt they accumulate during these years on credit cards to pay for daily living costs.
I truly believe that the smartest approach a student today can take is to not only have a plan for their major early on, but also to have a plan to monetize that degree upon graduation. But how can a student in their late teens have a monetization plan with little to no experience?
Most likely they cannot, and they will not. Many students and new grads will start their employment life in debt and continue to build that debt into their thirties to a significant and almost unpayable amount. The New York Fed recently released a report that showed out of all derogatory or defaulted loans, a stunning 35% were student loans. Student loans also showed to be the fastest and most alarming trend of loan debt growth in the country.
So, what's the solution to what could be a debilitating trend to our country's economy as well as a damning debt sentence to our youth? I believe an early understanding of real estate investing and real estate-based careers could be a salve for a debt disease that is growing out of control.
According to the Bureau of Labor Statistics, employment of real estate agents is projected to increase at a rate of 7% through 2028; it's one of the fastest-growing professions. By 2028, there are estimated to be about an additional 32,400 agent jobs alone. It's also a profession that can be started at the age of 18 even on a part-time basis. A real estate agent needs to be licensed; nationwide, the average cost to become licensed is typically below $1,000.
This does not tell the whole story, but an inexpensive entry to a growing industry that does not require any prior experience is a good start. Real estate is also a business that has largely embraced technology and has gone more and more virtual, utilizing skills that young people today have well before college, giving young agents a leg up on the competition, with or without a college diploma.
The latest generation of entrepreneurs also craves human interaction in their work, according to a recent survey, which makes real estate perfect for Generation Z. Real estate has functioned for years with a heavy focus on mentorship, the key for most successful entrepreneurs. Real estate agents are, in most senses, self-employed, 1099 workers with limited budgets. This means, in a lot of cases, they are looking to train free or inexpensive help - an opportune scenario for a young, obligation-free, inexperienced person to enter an industry and learn on the job.
Many members (download required) of Generation Z want to pursue entrepreneurship and make a social difference with their work. I contend that real estate can fulfill these wants.
But what about earning potential, the most important factor when challenging debt?
Real estate has also been an industry in which I've seen many part-timers filling up the ranks but not doing enough business. Even with that being the case, the average income for a real estate agent with a high school degree or equivalent experience in 2018 was $50,300. The average salary for bachelor's degree-holder with less than five years' experience is $48,400. So even with the part-time figures attached to real estate earning potential, there is still potential in the business to earn a higher average income than college graduates in today's market.
Debt is scary, and it is even scarier to start life as a working adult with a disadvantage of financial strain from student loans. I have always believed your best career decisions would be made from a position of financial stability, not out of need. I have also witnessed young real estate agents grow careers in other professions after they were able to succeed early in their real estate careers. For this reason, I strongly believe it's a great starting point, whether as a working student or a young entrepreneur, to begin a mostly debt-free journey with growth potential at a young age.
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