Q&A: Should My Teen Go to College?

What It Covers

Paula Pant and Joe Saul-Sehy address three listener questions: evaluating college ROI for a 14-year-old, choosing between assets under management versus flat fee financial advisors, and whether to take dividends as cash when drawing down from a taxable brokerage account during Coast FI retirement.

Key Questions Answered

• •College Timing Strategy: Wait until age 24 to attend college when FAFSA considers students independent, eliminating parental income from financial aid calculations. This six-year window between 18-24 determines aid eligibility. Use this time to gain work experience, develop skills through certifications like phlebotomy (4-12 weeks training, $20-26/hour), real estate licensing (100 hours), or two-year vet tech programs while clarifying career direction and avoiding expensive degree changes.
• •Career ROI Research Method: Use Bureau of Labor Statistics to compare median incomes and required education across career paths before committing to degrees. Interview professionals currently working in target fields to understand daily realities and income variance. Fat tail distribution careers like journalism concentrate rewards in top 2% of earners while 98% earn modest incomes, contrasting with predictable income bands in fields like neurosurgery or dermatology where median starting salaries reach $280,000.
• •Graduate School Funding Advantage: Top tier graduate programs with large endowments provide full tuition coverage plus living stipends for candidates with substantial work experience. One example included full tuition, fees, and $6,000 monthly stipend for a Columbia master's program. Work experience becomes the qualification criterion for these funded positions, making delayed education financially advantageous compared to immediate undergraduate enrollment with debt.
• •Fiduciary Verification Process: Ask financial advisors three specific questions: Do you accept commissions on products you recommend? Do you have fiduciary duty to me at all times? Are you dually registered? Request the ADV document which legally discloses compensation structure regardless of verbal claims. Many advisors falsely claim fiduciary status without enforcement consequences, making commission structure the most reliable indicator of true fiduciary standing and potential conflicts of interest.
• •Assets Under Management Justification: The 1% AUM fee becomes worthwhile when clients consistently fail to implement financial plans independently. Multiple cases showed clients leaving money in wrong accounts for 3-5 years despite knowing better, missing market gains while avoiding the fee. The accountability and systematic implementation provided by AUM advisors produces better outcomes for people who lack follow-through, similar to paying gym trainers who ensure consistent attendance versus attempting solo workouts.
• •Dividend Harvesting During Drawdown: Take dividends as cash rather than reinvesting when drawing down taxable brokerage accounts because dividends create taxable events regardless of reinvestment. Harvesting dividends avoids selling appreciated holdings and triggering additional capital gains taxes while maintaining desired asset allocation. Use dividend cash for living expenses or to rebalance by purchasing underperforming asset classes, preserving the core portfolio structure without unnecessary tax consequences from selling winners.