For ages now school leavers have been told their path to wealth and fame was through a university. Now some new research says maybe that’s not the case after all.
In fact, apprentices have a head start which results in them being ahead of their university counterparts throughout most of their working lives.
That’s the finding from new research for the Industry Training Federation that showed that apprentices are financially better off than university graduates throughout most of their careers.
Apprentices get off the mark earlier
“Apprentices contribute to the economy earlier, earn earlier, buy a house earlier and contribute to KiwiSaver earlier, and pay off their mortgage earlier,” says Industry Training Federation Chief Executive Josh Williams who commissioned the research.
In the middle of their careers, those on the trade pathway have often paid off most of their mortgage and have no other debts. At the end of their working lives there is little to no difference between a university graduate and an apprentice.
“Better than first year free, is first year paid,” Williams says. “Workplaces make the best classrooms because you get paid, get qualified, and can launch a highly skilled, in demand career without racking up a student loan.”
“Apprenticeships are for smart people too and many go on to own and run their own businesses. Meanwhile, some graduates never use the degrees they studied for,” Mr Williams says.
The universities strike back
Naturally enough the university sector has had a lash at the new research, their spokesman accusing the ITF of misleading students and parents.
The universities have their own research outlining that a person with a Bachelors degree will out-earn those without one. That does depend to some extent on what you study though. However by looking at the whole picture - no debt, earning earlier, chance to start your own business and all the other factors that count for lifetime earnings – the result is that both pathways end up in a very similar place.
When they reach their 40s (mid-career) an apprentice can expect to have net assets of $489,827, somebody with a bachelor degree or higher can expect to have $229,806 and a person who gets a job straight out of school can expect to have assets worth $399,501.
At the end of their career their financial positions are almost equal. Somebody with a bachelor degree or above can expect to have net assets of $1,854,126 while the net assets of somebody who trained as an apprentice will be $1,849,169.