Should you invest in college, crypto, or the stock market? [Video]

So – should you invest in college, crypto, or the stock market - that's quite a question, huh?

And in this video, we are going to try and answer by giving you the pros and cons and some background thoughts on each of these options.

Firstly, the big difference between crypto and the stock market, when comparing with college is that college – and the results you get – depend entirely on you. If you work hard and study, you'll get the results - hang around in the frat house or sorority and go clubbing every night, you'll flounder, and you'll fail miserably.

You're investing in yourself when you go to college.

By contrast, when you invest in the stock market or crypto you are investing in strangers. You are relying on a market that you cannot control but can only react to. You cannot influence what happens to your investment beyond timing your entries and exits and the amount of money you put into the markets.

These are the basics:

College has always been seen as a means to get on. It is well-known that a degree will increase your lifetime earnings.

The Association of Public and Land-Grant Universities published a fact sheet, which is downloadable from its website aplu.org.

The key facts were that the average earnings for workers aged 22 to 27 were $30,000 a year for high school degree holders but $44,000 a year for bachelor's degree holders.

There was a 3 ½ times lower poverty rate for bachelor's degree holders vs those with only a high school degree.

47% of bachelor’s degree holders were more likely to have health insurance through their jobs than those holding high school degrees – and those employers contributed 74% more to their health coverage.

In economic downturns, 15.7% of young workers with high school degrees found themselves jobless as opposed to just 6.8% of young people with bachelor’s degrees.

Finally, as a return on investment, the lifetime earnings of someone with a high school diploma averaged $1,304,000 – a worker with a bachelor's degree earned an average of $2,268,000.

Those with an advanced degree did even better, with lifetime earnings of an average of $2,671,000.

According to US News.com, in an infographic, average college tuition dropped in the 2022 2021 academic year.

It remains an expensive prospect which many families struggle with. With the US median household income remaining almost static for 20 years finding the money for food and books, housing and other expenses, as well as the tuition.

US News found that the average tuition and fees ranked colleges are currently running at $35,087 for private colleges – $21,184 for public, out-of-state colleges – $9,687 for public, in-state colleges.

US News publishes a list of the 180 best value schools against price and academic quality and the net cost of attendance after receiving the average level of need-based financial aid.

Of course, it’s never that simple. Taking a degree in art is a completely different ballgame compared to taking a degree in medicine or law. For example, it can cost hundreds of thousands of dollars to obtain a degree, at a top college, to do such a degree.

Student loans are a perennial source of grief to millions of Americans – so going to college is something you have to crunch the numbers of to make sure it’s worthwhile.

Investing in the stock market is a little different. Here instead of choosing colleges, you choose companies.

The methods of selecting your investment choice vary.

Firstly, it can be through technical analysis, which relies on charts and “indicators” to find recurring patterns and signs of “pullbacks” or “peaks” in a stock’s performance.

The second main way of analyzing the stock is through value investing – or “fundamentals” – where the investor studies annual reports, profit and loss statements, supply and demand statistics, and myriad other facts and figures to determine whether there is an “arbitrage” or advantage which will see the stock prices rise (calls) or fall (puts).

Investopedia is the Wikipedia of investing. If you are new to stocks you will find all the information you need to become familiar with the terms used when buying and selling stocks.

It was once necessary to have a broker to deal with your investments but it is possible to set up accounts online and trade from your home computer or even your phone.

According to ETX Capital, a provider of online brokering services, 74% of private investors lose money on the stock market.

In other words, only 26% make money. Even more surprising – in 2017 a survey by PocketSense found that only 20% of investment professionals produce returns as good or higher than the average profits earned from the stock market.

The majority of successful investors in the stock market make their money over a long period and hold onto their stocks for decades. On the other hand, getting out of a position when it is not working is also a key skill in retaining your capital.

This combination of “art and science” is a tricky one to master with certainty – so investing in the stock market is always a risk.

You should never risk more than you can afford to lose - and you should be able to keep calm, emotionally, to enable you to make informed decisions by sticking to a preplanned investment strategy and holding, selling, or buying based on this plan.

Investing in cryptocurrencies is a very recent phenomenon - with the first – Bitcoin – created in 2009.

Cryptocurrencies had a difficult birth. They were, initially, mired in controversy because of their use in the Dark Web in payment for drugs, arms, and other illegal goods and services. These activities put many off of being involved in the early days. Although this activity still goes on, to a degree, Bitcoin, especially, has become far more trusted as more and more institutional users trade with it.

It is well-known that Bitcoin climbed from almost nothing to a giddy $20,000 in late 2017, only to fall back to around $4,000 during the following year. Since then, it has climbed to $14,000, and again fallen back – but recently has started another bull run taking it to over $18,000.

This history shows the basic problem with all cryptocurrencies – the volatility of these instruments is legendary.

It takes nerves of steel to actively trade the thousands of cryptocurrencies out there - and this points to another problem – the dispute about the exact number of "coins" out there.

According to CoinMarketCap, the total number of cryptocurrencies is 6,955 with a total market cap of $324.716 billion (as of September 9, 2020).

Coinlore offers a different count, listing a total of 4,621 cryptocurrencies. It seems like there are more than 4,928 cryptos in the market. But that does not reveal the exact number of virtual currencies in existence today.

With the last five years seeing massive growth in crypto startups, it was inevitable that some would fall by the wayside.

One of the biggest problems in assessing cryptos is finding out whether they are current. A look at CoinGecko would show 7916 cryptocurrencies. This is a huge difference between the previous two assessments above, so it would seem that at least a thousand of these cryptos are “dead,” and, like stocks, choosing which crypto to run with is crucial.

In terms of fundamentals, the crypto’s basic structure - its blockchain and hash rates, its intended use, and its limitations are all considerations - making sense of forks, tokens, scams, coins, ICO's, STO's, and IEOs, amongst other terms, is also a challenge to anyone not versed in digital currencies.

For good and ill, in the foreseeable future, Bitcoin will be the standard bearer for cryptos and the marker by which all the others are valued.

In conclusion, rather than worry about whether you should invest in college, crypto or the stock market – why not do all three?