Dear Dave: I’m 19, and I’m about to finish up my first year of community college. I have enough money through scholarships and help from my family to get a bachelor’s degree. After that, I plan on going to law school and cash flowing that part of my education. I’ve already started a Roth IRA with money I’ve made working, but I’m wondering if I should continue contributing to retirement when I will have to pay for law school out-of-pocket. — Jonathan
Dear Jonathan: No, I wouldn’t recommend that. You should stop saving for retirement for now and put all that money aside to pay for your education.
An education that’s usable in the marketplace to increase your income is more valuable to you right now than a mutual fund. A degree in left-handed puppetry or underwater bubble blowing definitely is not. Believe it or not, people spend years, and tens of thousands of dollars—sometimes hundreds of thousands of dollars — getting degrees in silly things that have no real value whatsoever. But, if you’re going to get a law degree, and use that degree to create value to society and an incredible income for yourself, that is going to give you a better mathematical return on your investment at this point in your life.
You have plenty of time ahead to invest for retirement. I don’t want you to put it off forever, but a debt-free education is the right investment for you right now. Just keep piling up cash, and let’s pay for this law degree out of pocket. And hey, if you end up with a bunch of money left over when you’ve graduated and are ready to become a lawyer, that’s not the worst thing in the world, is it?
Good luck, Jonathan. Keep up the hard work. — Dave
Dave Ramsey is a seven-time #1 national best-selling author, personal finance expert, and host of The Ramsey Show, heard by more than 18 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.