The College Investor with Robert Farrington

Today we have so much data, and I love the data because I can tell you right now that if you spend on average over $80,000 in total to go to college, you will likely have a negative ROI on your college costs.

Welcome to the Next Level Income show, where it's our goal to take your income, your investments, and your life to the next level. I'm your host, Chris Larsen. If you haven't yet, get a copy of our book for free at our website, nextlevelincome.com. that's www.nextlevelincome.com. just click on the book link and I'll even send you a copy if you put your address in. On today's show, we have Robert Farrington. Robert is the founder of the College Investor that you can find atthecollege investor.com and he is a millennial money expert. He's passionate about helping people get out of student loan debt so they can start investing and building wealth for the future instead of cutting expenses and living a frugal life. He advocates side hustling and entrepreneurship to earn extra money to achieve your financial goals. And, and in today's episode, he's going to share how he did exactly that to achieve financial independence in his early 30s. Robert, welcome to the show from sunny California.

Hey, thanks so much for having me. I'm excited to be here.

Oh, man. Yeah. This is great. So, you know, as I was mentioning in the intro here, you know, you are a millennial money expert and it's been fun. You know, we used to have millennials on the show and we're like, oh, these are, you know, millennials are pretty young now. We got Gen Z. So, like, you're, yeah, you kind of, you're getting beat. You're getting beat to the punch by like 23 year olds. Hey.

I mean, honestly, it's the most exciting time for millennials, though, because now, you know, they're in their early 40s to, like, late 20s. They probably have a little bit of money and, you know, they're looking to build wealth. So it's a lot better than kind of when you started, right?

Oh, man, it's. No, it's like the, you know, it's, it's interesting. You look at the thing that pops into my head is I think the guy's name is Anchor. His last name is Anchor. He talks about the happiness curve. He was in Harvard. And if you haven't and you're listening today, you got to look this up. So happiness peaks twice during your life. The first one is basically during college. Right. You have all this freedom and you're out there and you're an adult, and then it gradually decreases till you're about our age. Robert. We're married, we got kids, we got responsibilities, and we get all this stuff and we think it's supposed to make us happy. And then it peaks, it starts to ramp back up when you're in your lower 50s, and then it just keeps going up basically until you get older. So let's talk about some ways how if you're middle aged, like us, you know, millennial Gen Xers, you can really kind of bend that happiness curve upwards by reaching towards financial independence like you achieved.

Yeah, I mean, that's kind of my story. Right. So I've always been that perpetual like entrepreneur or I was the kid, like selling stuff out of my backpack in high school. I had an ebay account when I was in high school and I was selling like video games and stuff. And I love to take that extra money and I would invest it and I was in high school. In high school, yeah.

Awesome.

And it wasn't a ton. Right. But you stacking, you know, a couple hundred bucks here and a couple hundred bucks there. And granted, back then too, I remember it used to cost like 9.99 to like buy a stock or anything, right? Commissions. Yeah, exactly. I think I use share builder and other myself.

Oh yeah, yeah, I remember that. Yeah. You could buy fractional shares. Yeah, yeah.

It doesn't even exist anymore. Right. But I used to take that money and I'd invest it and I'd always been very passionate about that. So even through college, I was consistently side hustling. I got a point where I couldn't sell my own stuff anymore and I couldn't sell my parents stuff anymore. So I started going to garage sales and estate sales and I'd buy stuff to resell it. And this is, this is like what, 15 years before the Gary Vee phenomenon that is today where he goes to garage sales and estate sales. I was doing this way back when and through college, I was making about 2,000 bucks a month, flipping stuff on ebay and then rolling that money into investments. And it was really fun and exciting. And then of course, you know, you had some investment wins, some investment losses, kind of learned a lot about myself at that point in time, but I just continued doing it. So I graduated college, I had student loan debt like most millennials do, and you know, I started working full time, but I continued to side hustle, earn money, and then honestly partnered with my spouse and we kind of did that same kind of thing together. And, you know, by just compounding and all these small events, got out of debt, continued to invest, bought a house, bought some real estate, you know, just continue to grow. And, you know, by the time we're in our early 30s, you know, effectively financially dependent, not retired early, because I enjoy what I do and like the work, but, you know, it's nice to have it be optional, right?

It really is. No, I love that you said that, because I really believe that people think. I think a lot of people think, oh, once I'm financially independent, I won't work anymore. And what I found is you get to do what you really want to do. And when you're doing what you want to do and you spend time with people that you enjoy being around, people like yourself, you're like, this is fun. I want to do more of this.

How does that. I mean, it becomes that you can be a lot more choosy in what you do. You don't have to be constrained. And I think there's that point, too. You probably heard the phrase, like, go to hell money, right? Enough money first that you could tell.

I heard it called something different, but. Yeah, yeah, yeah, you know, you can.

Tell your boss off. That's great. And then, like, the next stepping stone is like, you can really just do whatever you want to do.

Yeah, that's great. I had a professor in college, and he called it your nuts to you fund. So. And I was. Everybody's like, what? Nuts to you? He's like, this. This is. I know you got an MBA as well. We were, you know, sitting there in class one day, and he's like, you know, he. He would get on these tangents. So he'd have his lesson, and then he'd say, all right. You know, he's like, you know, he'd start talking about, like, a life lesson that he learned, you know, in business. And he's like, you really need to build up a nuts to you fund. And everybody's like, what are we talking about today? And he's talking about how you go through life and you get frustrated. And, you know, he weaves it into this story. He goes, and then you have this, you know, this. This pot of money sitting there. He goes, and then if your boss walks in one day and says, you know, I need you to do this, Robert, and you don't want to do it, you can just say, well, nuts to you and walk out. And I was like, oh, that's your fu. Fund. I was Like, I like that. Yeah, so that's so good, man. So, I mean, I thought I was young because I started. I started trading when I was in college and you started in high school. Who were your mentors? What was your inspiration? To get you inspired to create capital to be entrepreneurial and ultimately invest.

You know, I didn't really have a ton of mentors, but I definitely had the motivations from my family and my parents. Right. So I guess you can call it mentorship. But really it was like, my mom and dad are like, if you want something, you gotta go in. There was no. No money, no. No nothing. You know, it was very much like, you want to go hang out with your friends, you want to go to the movies? Well, where are you up with that 10 bucks? Or, you know, things like that. And so it really drove me from an earlier age to, like, figure out how I'm going to put money together and whatnot. And then I do remember that, like, you know, watching my dad, he was, you know, an average investor, but he'd save a lot, and he was very good with his personal finance. So some of my earliest memories were him with balancing his checkbook on Quicken. But this was like back in the 90s when you manually entered anything, and he would go through, and I'd just be asking him questions, and I'd be like, hey, what's this? What's that? What's that? And really started understanding. He's like, you know, here's like, I've invested in, and this is what that means. And I really just thought that was cool. And then so it was kind of like, hey, you know, I could take this money that would just sit there where I'd spend it, and I could, like, put it into something. And I always thought dividends were so cool back then, right? And I was like. And it would pay you a dividend. And so, like, I mean, I put in, like, money and, like, they just pay me for putting in money. And, you know, I didn't totally understand all the concepts of it yet, but I found that to be so awesome. And that's really kind of what drove me to start. Because you could start investing in these companies, they'd pay you for investing these companies. You could see growth from investing in these companies, and then, you know, really kind of just grew from there.

No, I love that. That's. I mean, that's so great. I mean, just that that passive experience of seeing your father do that. And I had a similar experience with my parents where they really weren't they wouldn't push me, but they would by default by not pushing me, by saying, hey, you can go do that if you want. I race bicycles. And they were totally unfamiliar with this, right? Cycling is not an American sport. It's huge internationally. And they're like, you want to race bicycles? They're like, okay. I would fly to the national championships halfway across the country and hitchhike rides and sleep on, on friends floors. But it taught me a lot, right? It taught me how to find things, do things myself, create that money. I was fortunate in a sense. My father passed away when I was young and my mom set aside a little bit of money for college. So through some scholarships, through working through college, through getting in state tuition, I was able to come out of college debt free. So that was nice. You mentioned you had some student loans. And I would even argue that, you know, if you look at cost of capital and you know where to put your money, borrowing money at a low interest rate may actually be a favorable endeavor, you know, for some people. But we, at the time of this recording, you know, we just went through this period, Biden administration started giving away or relieving 10,000, $20,000 of student debt. I would love to hear a little bit more about your experience and talk about, you know, how we can help some people with that aspect.

Yeah, so, right. Student loan debt isn't end all, be all. It's not a bad thing. It's like any other form of debt, right. And so if you borrow appropriate amount and you see a positive ROI because you leverage it to boost your future, you boost your future earnings. I'll tell you, my framework for college is 100% ROI based. Yes, you get the touchy feely stuff of networking and life and experiences and yada yada, Right. But at the end of the day, it costs money. And so it's an investment. And the reason you're buying this investment is because you're trying to boost your future earning, which hopefully pays off. Right. But like any other type of debt, if you overextend yourself, you borrow too much, well, it could be a really bad investment too. It's like over leveraging a house or whatever. The same rules apply. And the interesting thing that I think is that a. So rewind to my story. I just took out my student loans because it's what you did. We didn't really have a ton of information. Everyone needed to go to college. Got an email from the financial aid office, said, this is how you pay for college. I hit accept and I Moved on with my life. There really wasn't a ton more to think about at that point in time. That left me with almost $43,000 in student loan debt. When I was done, which honestly, it wasn't terrible, I got a job out of college. I was making 40 my first year. But then I got a raise right away to like 50 and like I was side hustling and you just paid it off. Paid it off in three and a.

Half years with my wife. Yeah, yeah.

But today we have so much data, and I love the data because I can tell you right now that if you spend on average over $80,000 in total to go to college, you will likely have a negative ROI on your college costs.

I want you to say that one more time. If you spend more than $80,000 or $20,000 a year on for your education.

You will likely have a negative ROI on your college cost. And this is on average, right? Oh, yes, there's people above average, people below average. Like sometimes life doesn't work out for people. But how did I get to that number? Right. Well, we have a lot more data today to figure out what the ROI on college is. And so the numbers say that you were going to earn on average 300,000 to a million dollars more over lifetime. So like you know, 22 to 65 than if you didn't go to college. Right. That's a long time. But we could do things like present value and what is the value of that today? And so if you aggregate it out, you make some assumptions, yada, yada, yada, $80,000 is about that inflation point for average. Now granted it's in medicine you go into different things. Some majors have like no ROI under like any circumstances.

Yeah.

And does vary by school. But there's amazing, you could literally Google like ROI by my college major. And like there are like research reports on this that are done by like index foundations and you can see the data for yourself. Now I also don't want to dismiss anyone from going to any college or any degree, but I also think of college like a car. Most of us can get by just fine buying the used 2000 Civic and get us to work so we can earn money. But hey, if you have a bunch of cash or your parents saved for college, buy the G wagon. Like I'm not going to here to stop you go to the expensive private school, but I would really caution you on spending the debt for that, things like that. Because at the end of the day, it's just a car to get you to your career. It's just a piece of paper that signals to future employers that, hey, I should pay this guy a little more. So you really got to think of it that way.

I love it. And you really. Again, I said, you said the magic word. You said roi. And we have a chapter in a children's book called no Problem Parenting. And I condense this into tips for being for teaching your kids how to be money pros. Five tips. You could check that out if you're listening. You haven't yet. At nextlevelincome.com forward/kids. And the fifth step is teach your children the true cost and value of college or true value and the true cost. And what I explain in there is you need to teach your children how to calculate the ROI on a college education. Which I think like you pointed it out in the article that I referenced in there says, yeah, you may earn an extra million dollars over the course of your career, but if you just took that money you spent on college and put it in the stock market, you'd make $1.6 million over that. So you have to balance out what that cost of that capital is. Now, Robert, you mentioned there's some good places to find that data. Do you have stuff like your website or is there another spot that we.

Can find that we definitely have stuff like that on our website. You can see calculate the ROI. Go to the collegeinvestor.com I also like college scorecard.gov I believe it's.gov.gov cool. Yeah. And it does is you can type in any college there and you can see like how much do loan debt borrowers have, like what their people are in default on. And you can basically get a snapshot of like, what's my outcome going to be after I graduate from said college. Right. And so if you're looking, you're a high school senior and or junior and you're making the decision and be like, okay, the state school, the private school, like, I'm looking at my choices. You can dive into these resources and see like, where am I going to be better off when I make that decision? I will say too, a lot of these young adults are actually savvier than we give them credit for. I talk to a lot of them. They know the math. They can understand this. But where I think fail as community members and family members is putting that negative psychology on them of like, you have to go here or you're a failure or you know, your dad went to this college, so don't go to this college, like, I'm going to be disappointed in you. And that really weighs heavily on young teens when they're like, trying to make these decisions.

That's a really good point. Yeah, it's, it's challenging, right, because there's a lot of prestige associated with some schools out there. I went to a state school. It was, you know, it was a very good school. It, you know, it was great, but it wasn't, wasn't prestigious and that sort of thing. And I think it is like you mentioned, I think it is worth pointing out there are certain careers where it does make a big difference. If you go to like an Ivy League school, you want to work on Wall street, there's big advantages to going to certain schools. If you want to, you know, if you want to, you know, go into academics and medicine, there's advantages to doing stuff like that. So there are, there are some very specific instances, I would say.

Absolutely. Because even, you know, we like to blanket colleges as like a whole. But even within, like, really prestigious schools, they can have really crappy programs and majors. So like, you gotta really kind of assess different things, like, what do you want to do? Right.

Yeah, no, that's a great point. Today's show is sponsored by Money Insights and their investment optimizer strategy. In my book, I share how I use the same strategy starting over a decade ago to invest my money in two places at one time. This strategy has been used by the wealthiest for generations for estate planning, minimizing taxes, preserving wealth, and increasing stability for their investments. Now you can do the same thing. In addition, you can build a plan to build an emergency fund, pay for college, fund a business plan for retirement, and ultimately optimize your total financial picture. To find out more information, check us out at the banking link at NextLevel Income. So kind of, kind of backing up. So let's say you, you're, you're out of school. You know, you've, you've got some student debt. You know, you mentioned side hustles. I love one of, one of the things that you have on your website. It talks about 10 crazy ways to make $10,000 you've never heard of. Maybe you can share, you know, some ideas and some tips for those listeners that are thinking like, okay, I got some debt. Maybe it's credit card debt, maybe it is student loan debt. I'm working. What are some of your favorite side hustles out there that you can be creative, Robert, and make some extra cash?

I mean, today we live in this day and age where you can literally make money anytime, anywhere from your mobile phone. I think what I like to challenge people on is like, what are you doing with your time? And then like, what do you value, right? So you know, you get off work, you go home, like, what are you doing from like 6 to 10pm, especially when you're like younger and don't have kids yet, things like that. Like, you can do simple things like go out and drive for, deliver food, things like that. And people are like, whoa, you don't earn any money. I see all these headlines, whatnot. I mean, you still walk away with some cash. I don't, you know, like, you're not earning zero. Maybe this doesn't turn it. You're not earning zero and like you were probably going to earn zero or cost yourself sitting on couch watching Netflix, paying that subscription subscription and ordering the doordash instead of getting the, you know, delivering it, right? So it's like, what are you doing with your time? And it might not be crazy, sexy amounts of money, but if you can start stacking an extra 20, $40 a day, and you do that five days a week. So give yourself the weekends off. Shoot, right? But now you're making a hundred bucks a week times four. You're at $400, you know, and then like, it just starts adding up. And then when you start seeing all these crazy statistics, oh, it can't afford a $500 emergency or, you know, whatnot, it's like, why not? Like you, you could literally pull out your phone today and download one of 40 different apps and start earning some money. And don't tell me there's not a job shortage. So maybe you don't want apps. Go to your nearest Target, Walmart, Chick Fil, A whatnot. They will hire you probably on the spot. Right? Because we have a job shortage.

Oh, I saw Taco Bell was paying $5,000 signing bonus and it was, I think $18 an hour, something like that this summer. It was crazy.

And again, it's like, I'm not telling you to do this full time. I'm not telling you about your dreams. But I'm saying, like, if, if money is something that you want to change in your life, whether that's getting out of debt or starting to build wealth or achieving other financial goals, there's typically a way to do it. But it does require your time to go out and do something. Maybe you're entrepreneurial too. I'm an entrepreneurial guy. We talked about that. Like, you know, you could start selling stuff. You could, you Know, create. One of the things that one of my friends is doing right now is creating Etsy printables and she is crushing it. She's basically making like flyers and sometimes she'll even do like invitations for birthday parties and she just sells this stuff on Etsy. But she also does it from home. So she watches her shows like Real Housewives of Wherever and is like folding paper on the couch and making money at the same time. So it's like you don't have to preclude yourself too if that's what you value. Like just, there's a lot of ways to do it. The list goes on.

No, it's fantastic. My mother in law who works for me, she still likes to be active. She's in her early 70s, she goes to CrossFit still. She's amazing. She works for me, but she also enjoys sewing. So she just got a word of contract with Calico Corners and she makes pillows. She makes different things and she makes good money doing that. So she does it a lot because she enjoys it. I think that's a great point. I also, you know, if you're listening, there's a great blog post on the website, talks about how to create another 20 to 40 hours a week. Like you were alluding to Robert. And it's like, listen, if you say you don't have time, you're, you know, you need more money. If you are, if you're surfing social media, if you're watching the news, it's, it's football season. You know, if you're watching football, you know, three, four nights a week, you know, there are so many ways to create that extra 10, 20, even 40 hours a week where you can create money on a side hustle.

I mean, you nailed it. One of my favorite challenges, one of my favorite challenges is that whenever someone comes complaining about their life, show me your time and your money. I can't help you with just your budget. I need to see your calendar. I want to know what you're doing with these times because we could talk about the math all day, but you know, what you value and where you're spending your time to start pulling different levers about how you're going to change that.

Yeah, that's a great point. And sometimes you have to make tough choices or you have to remove yourself from certain situations. Like you said, you know, if you're blowing, blowing 100 bucks at the bar, you know, hanging out with friends, well, maybe you, you go to a meetup group where, you know, you're not, you're not blowing 100 bucks and you're learning, you know, a skill or a way that you can make some extra cash or learn about investing or those sorts of things. So today, Robert, you're financially independent. You now love what you do. Like you were saying, tell us a little bit more about your company, and I'd love to talk a little bit about kind of some of your favorite areas to invest here today and in the future.

Yeah. So, you know, over the years, so investor started as a side hustle. So continuing our side hustle conversation, I was working full time as a store manager at Target. I was assistant store manager. I kept working up the ranks, full store manager whatnot. And the college investor was something that I was always just passionate about. I started it when I was finishing college to talk about these money topics. And so I was doing it at night.

It's an amazing site now, by the way, so thank you for what you built. It's awesome.

Definitely, I appreciate that. And then, so, yeah, I mean, honestly, about five years, six years ago at this point in time, I was like, first off, I started making more from the college investor than I did at my day job. But I continued at my day job for another two years and stacked that cash, parked it away, invested it. And then we got to this point where it was like my kids were getting older, started to have conflicts of scheduling. It wasn't even about the job. I actually really enjoyed working at Target. Great company to work for, but scheduling conflicts. Right. Like, I was really doing a lot of things and it was kind of like, why going back to that value conversation is, I say I value spending time with my family, but I can't go to the soccer game on Saturday because I'm working. Like, it doesn't make sense. So finally decided, call it quits. And doing the college investor full time.

Now, that is amazing. And no, it's. I mean, it's right in line with, you know, what we, what we try to do at next level Income, which is help educate people to ultimately move towards financial independence. And a big part of that, you know, we like to say that you can't have true financial independence without passive income. Robert, what are some of your favorite areas to invest today and really create some of this passive income, aside from your website, which I know is kind of semi passive, right?

Yeah, it's not incredibly passive. But, you know, I'm a, I'm on one hand, I'm a keep it simple kind of guy, but I do, I have this bucket mentality of how I like to look at my money. So number one is myself, my. You, maybe your spouse, like your earnings. That's a bucket of money. Right. And then you have your business, and that's a bucket of money. So, you know, when I was being. I was taking money out of me, I was putting into my business. But then you also have equities and stocks. Right. So keep it simple. I started with a 401k in my little trading account and then continued to add to all that, did a Roth ira. You know, just started stacking money away, keeping it simple. With index funds. Yes. I traded a little bit, but like 5% or less of my investments and had some amazing wins and then had some equally terrible losses, which is like, hey, let's 95% index this thing.

I've been there.

Yeah, right. And then, you know, I like to do a little real estate as well. I've done both syndications, actually. All my syndications have recently did. And so I've redeployed that a little bit. But those are the fun.

That's the fun point. Right?

The fun point. Right. Yeah. But I do like that because I do like the idea of having a hard, real asset. But you can go both ways on that. Right. Like I've done owning a property, managing a property. It's kind of a job a little bit. Right. Like you gotta deal with stuff, gotta have a handyman out there. You gotta do it yourself. Right. It's worse.

Actively. Actively passive, active.

It's like a. I guess. Right. But you know, the nice thing, you could also do real estate, like you said, through syndications, through, you know, REITs, other ways that you get that exposure. But I think having that class is. Is very useful from both. It's real and it has that cash flow perspective. Right. So I like to take it into. Do all of that. It's kind of how I view my investments over time. Right. And then just continuing to do that. And I'm still, you know, in a growth mode. Like, it's fun. I've been actually watching my parents transition from, you know, we go our whole life stashing it and then at some point in time you have to switch to like, I'm using live and draw down on it. So it's just been interesting walking through those strategies too. But right now it's just full growth. Let's go.

Yeah. No, I love it. And man, you have. You are a shining example of what's possible if you implement all the strategies that you talk about here. And, you know, if you look at the ultra wealthy that are out there. They do exactly what you did, right, Robert. They built businesses to create wealth. They invested real estate to create wealth. They also invested in other things like equities, startups, those sorts of things. But I would love for you to share kind of exactly where listeners can go to find out more about the college investor, what else you have going on if people want to work with you or get in touch with you.

Absolutely. So you can find us@thecollegeinvestor.com we have a ton of resources there from getting out of debt to building wealth, passive income. You can find us on audio, the College Investor audio show on your favorite podcast platform. And then if you're a video person too, you know we're on YouTube TikTok, you can find us there. Feel free to hit the contact form, leave a comment DM us, whatever. Like, you know, to me it's all channel. You'll get to us on the back end. It's I want to meet you where you're at.

Awesome. Well, you are leading the world's biggest demographic that we've ever seen with the millennials. I don't know if everybody knows that, but the millennials are actually bigger than the baby boomers. They're a little spread out, a little more spread out. They're not quite like the belly of the python after it ate its meal, but it's a huge demographic that's out there. Robert, we love what you're doing. Thank you so much for being on the show today and sharing it with our audience.

Thank you for having me. This has been fun.

Indeed. Hey Chris, here again. I hope you found this episode valuable. Now I have one more thing to get gift you. We have a page for my coaching clients where you can get a free copy of my book as well as much more from previous guests on the show. Just check out nextlevelincome.com coaching to get a free copy of my book, audiobook and much more. I'll send you a copy of my book and cover all the shipping costs as a thank you for listening to the podcast. Also, please like share and take just 90 seconds to give us a rating on Apple podcasts.