Is a trade school a better investment than a four year degree?

Question

Rich Dad · Accepted Answer

“College isn’t expensive — bad ROI is.”
Let’s strip the emotion out and talk numbers. The average four-year degree in the U.S. costs anywhere from $80,000 to $200,000 total when you factor tuition, housing, and lost income. Meanwhile, many trade schools cost $5,000 to $30,000 and take 6–24 months. That’s a massive capital difference. If you become a licensed electrician making $65,000–$90,000 within two years, while your friend is still sitting in lecture halls racking up debt, who’s actually ahead? The one earning cash flow sooner. In investing, time in the market matters. Same with income.
Now here’s the twist: the real question isn’t trade school vs. college. It’s employee income vs. asset ownership. A plumber making $80,000 working for someone else is solid. A plumber who starts a plumbing company, hires five crews, and clears $400,000? That’s wealth. Skilled trades are a phenomenal foundation for entrepreneurship because demand is constant. Pipes burst in recessions. Air conditioners break in downturns. In many cities, tradespeople are booked out 4–6 weeks in advance. That’s pricing power.
Look at the demographic trend: the average skilled trades worker in the U.S. is over 40, and many are retiring. Fewer young people are entering the trades because society pushed the “everyone must get a degree” narrative. That supply-demand imbalance means rising wages. Electricians in some states charge $120–$150 per hour. That’s lawyer-level billing without law school debt.
Now, I’m not anti-college. If you’re becoming a doctor, engineer, or investment banker with a realistic $150,000+ starting trajectory, the math works. A computer science degree from a strong program can produce a $120,000 starting salary. But getting a $120,000 degree to earn $45,000 in general studies? That’s a financial mismatch.
Here’s what nobody tells you: a trade gives you cash flow early, and you can later invest that money into assets — real estate, stocks, businesses. Imagine earning $70,000 at 22, living on $40,000, and investing $30,000 annually at 8%. By 35, you could have over $700,000 invested. Your college-educated friend might just be finishing student loan payments.
The counterpoint? Physical wear and tear. Trades can be demanding. But smart operators transition from technician to owner within 5–10 years. Work on the business, not just in it.
If you want prestige, go to college. If you want leverage, cash flow, and a fast ROI — trade school can be a weapon. The real power move? Learn a trade, build a business, and let college grads apply to work for you.
Degrees buy knowledge. Skills build cash flow. Ownership builds wealth.

Poor Dad · Answer

“Security isn’t sexy — but it pays the bills for 40 years.”
Before you jump into a trade because it sounds faster or cheaper, be careful. A four-year degree still statistically leads to higher lifetime earnings. According to the U.S. Bureau of Labor Statistics, bachelor’s degree holders earn about 65–70% more per week on average than high school graduates over their careers. Over 40 years, that difference can amount to over $1 million. That’s not trivial.
Trade jobs can pay well early — yes. An electrician earning $70,000 at 22 sounds impressive. But what about at 50? Some trades are physically demanding. Knees, backs, and shoulders wear down. If you’re unable to work, your income may stop unless you’ve moved into management. A corporate career, especially in fields like accounting, engineering, healthcare administration, or IT, can offer stable salaries, benefits, and retirement plans well into your 60s.
Also consider benefits. Many white-collar jobs provide 401(k) matches, healthcare, paid time off, disability insurance, and career mobility. That 5% 401(k) match on a $100,000 salary is $5,000 per year of free money. Over 30 years at 7% growth, that alone compounds to over $470,000. Trade workers who are self-employed must fund these benefits themselves, which requires discipline.
There’s also flexibility. A college degree often opens doors internationally and across industries. If you earn a degree in finance or computer science, you can pivot roles — analyst, manager, consultant, executive. A plumbing license is more specialized. Specialization can be powerful, but it can also limit mobility if the market changes.
However, not all degrees are equal. I would strongly caution against borrowing $100,000 for a low-demand major with unclear job prospects. If you pursue a degree, choose one with clear employability — nursing, engineering, accounting, teaching, information systems. And keep debt reasonable. Ideally, student loans should not exceed your expected first-year salary.
Trade school can be an excellent option if you are practical, hands-on, and entrepreneurial. But if you value long-term stability, structured career progression, and lower physical risk, a four-year degree in a strong field is often the safer path.
Quick money feels good. Long-term stability feels better when you’re 60.

Is a trade school a better investment than a four year degree?

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