But spending on factories dwarfs spending on data centers.
By Wolf Richter for WOLF STREET.
Of the hundreds of billions of dollars spent on AI infrastructure over the past few years amid a massive AI spending mania, only a small portion went to the actual construction costs of data centers. The vast majority of the costs of a data center is in AI servers and the equipment to supply the servers with prodigious amounts of power. Construction spending on data centers does not include the costs of the servers and racks.
Data centers take years to plan and build, and the spending we see today has been planned some time ago. Nevertheless, construction costs of data centers show the trend of the AI spending mania.
Construction spending on data centers soared by 25% year-over-year, from the already red-hot pace a year ago, to $3.7 billion in August, up by nearly 400% since the beginning of 2021, according to the Census Bureau today. Over the past 12 months, $38 billion were spent on building data centers.
Construction cost inflation for nonresidential buildings rose only by 1.0% over the nearly three years since the beginning of 2023, after having flattened out from the 37% spike in 2021 and 2022, according to the Producer Price Index for Construction of Nonresidential Buildings through August.
With the PPI for construction costs up by only 1% since the beginning of 2023, and with spending on data center construction up by 219% over the same period, the red-hot construction spending boom on data centers over that period is not a result of construction cost inflation – but of the AI mania.
Construction spending on manufacturing plants has run over the six months through August at a pace of nearly $19 billion per month, up by 219% from the beginning of 2021, and up by 41% since the beginning of 2023, according to data from the Census Bureau today.
Over the past 12 months, construction spending on factories totaled $228 billion.
Construction of factories, though still at a red-hot pace, has slowed from the spike in 2024, possibly as construction resources have been pulled away by the mindboggling boom in data center construction, and amid reports of bottlenecks, shortages of skilled labor, and ICE hauling off workers from construction sites, such as from the Hyundai factory.
After decades of globalization, there is now a widespread rethink underway about production in the US. These facilities will all be highly automated plants that produce complex high-value products.
Within this total factory construction, spending on factories for computers, electronic, and electrical equipment has exploded by over 1,400% (by over 15 times!) since 2021, from $570 million to $8.86 billion, and now accounts for over half of total factory construction.
Other big factory construction categories include factories for motor vehicles and components, batteries, semiconductors, and for the chemical industry.
Factory construction spending ($18.8 billion in August) is 5 times the size of data-center construction spending ($3.7 billion in August).
Powerplant construction is a notoriously long, costly, and highly regulated process. Data centers require lots of power, and utilities or the data center providers, have to invest to build new capacity to generate this power, and they have to invest in the transmission infrastructure to get the power to the data centers. But this is a complex process and takes years.
Utilities and power generators are leery of spending billions of dollars on power plants for data centers that might never work out after the AI investment mania implodes, which would turn these investments into stranded assets.
Monthly construction spending on electric power installations, including power plants and transmission infrastructure, has run at a pace of nearly $10 billion a month this year ($9.8 billion in August), after two big waves of acceleration, starting in 2019.
Between August 2021 and August 2025, the monthly construction pace has risen by 29%. With the two waves of accelerations combined, so between August 2018 and August 2025, the pace of monthly construction spending has increased by 69%.
Powerplant projects that are being planned won’t show up in construction spending until on-site construction actually starts.
But spending on office building construction has plunged by 35% from the peak in August 2021 through August 2025. This does not include data centers. Some of this spending on office buildings is for buildings that were planned years ago, before the office segment of commercial real estate began to collapse, and that are being completed now.
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Markets Brace for a Make-or-Break Week. Nvidia, the Fed and Holiday Spending Take Center Stage.
Nvidia’s earnings may decide the fate of the entire AI rally, while key retail and consumer-spending data will signal how resilient the economy really is. With multiple Fed speakers on deck, this is one of the most important market weeks of the quarter.
Now if we could only get AI to build hyperscaler data centers in the Metaverse, pumping out Bored Ape NFTs, America would truly return to #1 in the global economy.
Wolf. Curious how this stacks up with data around wage increases in the labor needed to build out these factories.
I’m building a new facility outside of Chicago, and rate sheets for non-union electricians are $110-$130/hr now. Getting a simple 480V drop feels 2.5x more expensive versus the last time I built out a new facility in 2015, but memories are faulty. Curious what the data shows.
I just read a report on the shortage of electricians for data centers, and the hourly pay rate that experienced electricians can command were right in your ballpark. This was for installing the electrical lines and equipment in data centers and hooking it all up to the power source.
Skilled labor in general is in short supply (we just talked about the shortage of high-level auto technicians the other day). Lots of people wasted their time in college when they should have gone to trade school and learned a trade.
” Lots of people wasted their time in college when they should have gone to trade school and learned a trade.”
Yeah, that’s an interesting point. I wonder how many new trade schools we will see popping up. Some junior colleges used to have really good vocational programs. I don’t know about now.
My home state of Connecticut has had technical high schools for over 50 years turning out trades people. I went to one between 1957 – 1961 and graduated as a mechanical draftsman. I immediately went to work on the board for a machinery manufacturer (Waterbury Farrell Foundry and Machine Company, now Textron).
The technical high school system is still active throughout the state and both my nephews graduated from the one I went to, one as a machinist, and the other as a tool and die maker. Both are fully employed in their trades.
The trade schools have upgraded their curriculum’s over the years to include computer related courses of study and training,
@Anthony A.
That’s good to hear!
(FYI – I also worked for Textron for a few years after they purchased the small company I was working at)
Anthony: that’s really cool that Connecticut has an abundance of trade schools. I’m sure once the word gets out that there’s money in the trades, as well as pathways to leadership and project management positions, tuition will go parabolic like it did at universities.
Wolf: Do you think skilled labor is in short supply because boomer parents steered their children away from the trades and into universities?
“…parents steered their children away from the trades and into universities”
My parents certainly did.
Meanwhile I made $200 in 2 hours swapping out a guy’s ABS pump yesterday.
We have a real world example that genius learned his craft in a trade
China’s bet that all that’s needed is a little training seems to have paid off in the sense that every person has a job, a source of income and a platform of the American project.
Ignoring the obvious transfer of American manufacturing to the third world at the behest of the depression era retailer, Walmart,
With an obvious ethos that slaves are better than employees, they sent the manufacturing sector, over seas.
Time was when I took Woodshop and Drafting in Junior High. The guys going to trade school also took Metal Shop.
@Mitry, yes, that’s exactly what happened. Starting in the late 1950s as the space race heated up, the focus from the White House on down was on creating more brain power to fuel the perceived demand for STEM and the “future of America” was about technology. We still had shop class when I was in high school (late 70s) but everyone was all about kids going to college, not becoming plumbers.
Fast forward to today, the trades are being taken over by technology (as Wolf noted with auto mechanics). HVAC is quickly becoming a technology driven trade, as is electrical. Parents grasping the impact of AI are rethinking their aversion to the trades.
What you don’t really want is a bunch of new trade schools popping up. The is already a shortage of qualified instructors right now, a big increase of demand would mean a lot of unqualified instructors — unless you were willing to pay experienced tradespeople what the could make in the field. Even then, not everyone has the gift of being a good educator (and it is gift, make no mistake).
The whole education industry needs to be torn apart and rebuilt to account for technology and AI. Much like every other industry, the established players will fight like crazed weasels to stop any progress that threatens their revenue models, so it’s an uphill slog all the way.
Carpenter here for almost 50 years. And, I taught construction for 15 years at a local BC high school, as well as CAD, electronics, machining, and math etc etc. A very good job if you like kids. Retired at 57 and never looked back. And yes, earned a masters deg along the way.
Now 70, I run into ex students all the time, all working in trades and making a good living. Last week I picked up some lumber at my fav yard and an ex student helped me load some 2X12s. He now runs a crane truck, owns a house, and still talks about his tech training in high school.
Retired, I now just build for myself, and for neighbours…..no charge. In turn, one day I will need some help and they will be there for me. Priceless exchange, and off the books of course. Just replaced a dryer plug in my rental about 1/2 hour ago. Without a trades background I would have had to call an electrician at $100/hr. Plus travel.
The reason why I could retire so young wasn’t because of salary, but due to trades skills saving me hundreds of thousands of dollars over my working life….renovating my homes. Now, I write this looking over a river. The house was built by me at contractor rate for materials. It is still paying off.
regards
How is going to college and learning critical thinking a waste of time? I have always found it astounding comment from people who use analytical skills to show data. Nothing stopping people from learning a trade after they went to college.
They don’t teach “critical thinking” in college. That’s just BS. I went to college (major in English, minor in Philosophy, summa cum laude), and grad school (MA in Modern Letters), and more grad school (MBA in finance). You can learn a lot of professionally useful stuff – that is useful at the beginning of your career. My MBA was finally helpful in launching my career in the mid-1980s after the worst recession since the Great Depression. After about 5 years of work experience, the value of my MBA was down by half, and after 10 years, it was zero.
For many professions, you must have the right degrees, and you cannot enter those professions without them. So if you want to enter one of those professions, you need to start out with college. But “learning critical thinking” isn’t part of it.
Learning critical thinking is a byproduct of any learning process that people who want to learn critical thinking benefit from. You learn critical thinking in your daily life, on the shop floor, in trade school, when you’re out on a date, in college, in the military, anywhere if you’re open to learning it.
“Nothing stopping people from learning a trade after they went to college.”
Correct, except by then they spent 4 years and tons of money on stuff they might not use, and might have $50,000 in student loan debt to deal with.
But there are some real and important reasons for going to college for some people:
#1: get a degree to launch a career or get into grad school to then launch a career.
#2: There are other benefits of college, such as lots of fun with people your own age all around you, and it’s easy to find dates since they’re always right in front of you; learn social behavior, etc. (you can do all this anywhere, it’s just easier in college).
#3: Some people also manage to create lifelong connections in college that may turn out to be professionally important later in life, which is helpful, especially in Ivy League schools, but I didn’t go to those and didn’t make those connections.
Every person needs to decide what kind of career they want to have. It’s just hard for a 17-year-old to do that. College gives them a structured environment where they have four years to think about it and finetune it.
I believe college to be very valuable in the right circumstances…but….
Critical thinking and problem solving skills are not necessarily taught in college, and I have observed that there seems to be a deficit of both in college and non-college graduates these days
By far…. Some of the most important lessons I have learned in life have been from observation, paying attention, and situational awareness….
And I did not learn either from my college education or the trade school I attended.
I also think there’s value in the exercise of pursuing a goal and teaching your brain to use executive function. My friend sent me the name of an HVAC tech they’d been considering hiring. After I read through his rap sheet, it occurred to me that his education had left him ill-equipped to run a business or manage his own career, as he seemed to lack impulse control. College isn’t the only pathway to that, but it does force you to pursue a multiyear goal; the more it challenges you academically, the better.
College as it currently exists is being used to a) gate-keep those who cannot stomach indoctrination of a liberal agenda for four years from having jobs and b) funnel tax dollars into administrative salaries. Though it may fail to some extent in it’s first goal it’s obviously achieving it’s second goal.
Electrical installation IS the cost of data center construction. On a typical ground-up data center, the workforce is 60-70% electricians. The expensive materials are electrical. The rest of the building is relatively cheap.
Today most companies will give you free “on the job” training to work as an electrician, plumber or HVAC guy. As a young guy without a family you can really save up a lot of cash working overtime durrign the week and working weekends.
ApartmentInvestor: a lot of those places with free training are bottom of the barrel outfits. If a young man is wise enough to work around and build up his skills at a variety of companies, free training might be an okay career move. Especially if he wants to become an independent contractor. If there’s no desire to start a contracting business, working for a union will give you better pay and job security. Better equipment and working conditions, too.
It is called an apprenticeship in Canada. When you finish and write final exams as per your trade you earn what we call a red seal. It does not matter if you are union or non union. I have often worked at both in the same year. A first year makes first year rate, second etc etc. I have been paid higher rates on both union and non union sites, but never lower. 50% of journeyman rate for 1st, 60% 2nd, up to 80% for 4th. The top tier is called journeyman with different certifications depending on your field. There is no law against being paid more if your company decides to reward you….or bonuses. Companies will often buy you tools etc, or at perks negotiated in the collective agreements.
Paul: That’s really cool, sounds like Canada treats their tradesmen pretty well. The work arrangement sounds like how a union run things, at least by US standards. So over here, it depends on the trade. To become a licensed building contractor (sometimes called a general contractor) you just need to pass a state exam and get a completion bond. If you want to work for wages, most companies will provide tools to use, but the company owns them. Stipends to purchase tools are called tool allowances, but are less common. Union shops have a % of journeyman pay scale, and also foreman and project manager positions. Working for an independent shop pays the least on average, unions pay the most on average, and if you’re an independent contractor you’re pretty much guaranteed to make $150k in your first year but you’ll have expenses like truck, trailer, and equipment. After a few years, it really pays off.
Every trade is different. Electrical contractors, for example, need to apprentice for a certain number of hours in various disciplines before they can take the contractor license exam. I think it’s 8000 hours total. No apprenticeship necessary for building contractors. That’s all I got. Thanks for listening to me ramble.
Same Situation here in Germany. The few really good and qualified craftsmen can work around the clock, because they are really getting so rare.
A lot of sloppy and un-motivated bums around, but they do not have the work ethics and quality standards as in the past.
The void is often filled by workers from Eastern European countries and although those guys are really working hard their work result cannot be compared to that of a qualified German craftsman, be it plumbing or woodwork or what have you.
Most of the Gen-Z Kid are rather going to Uni to get a useless degree in underwater basket-weaving (thanks Dave Ramsay for that word) or Genderallala science!
How can you maintain your infrastructure and industry under such circumstances? Even housing demand cannot be taken care of!
The situation is completly different as there is no “free” on the job training. You get payed quite well doing an appreticeship. (around 40% )
Though the training goes 3.5 years. You can start with 15 or 16. I myself did mechatronics. Though later I went to university.
If you want to make money in the trades you’re going to have to open your own business at some point or do quite a bit without paying tax… If that isn’t for you, then there is just not much upwards mobility without a university or comparable degree.
The only degree one has to pay is someting like photography or other arts as there isn’t a supporting industry behind it.
I wonder how you want to maintain our infrastructure with an enconomy that tries to compete with china without people who study.
My rant was against useless degrees, not against a university degree in general.
I am all in for an engineering degree, medical, science or even economic degree, but no one needs so many bullshit degrees that teach nothing tangible or usefull.
Earn an engineering degree, it will pay you back,
From personal experience as a truck driver’s son.
Agreed. The pendulum has swung to “all college is a waste”. Engineering is still a great career path, and you need the degree. Anyone going into the trades should set out a long term goal of running their own company (after they get experience). That’s where the real money is.
Good post because you referenced the hidden cause of American angst.
Survival is no longer an acceptable life style.
Yes, but you are also learning the bad habits of whomever is working with you. You learn the mechanics, but you don’t understand things like the refrigeration cycle, which underlies the mechanics.
The best people in any trade learned on the job – and then went on and learned how to do it right.
The worst people in any trade learned on the job and never even realized there was a right way to do stuff.
The skilled Americans were laid off and their jobs were transferred to China. Hardly the fault of the victim being blamed here.
So the Trump economy, despite having supposedly been “about jobs”, is all-in on AI, down a bit from Biden on factories, and down on renewables in favor of burning more fossil fuels to power said AI. So, actually taking the path of accelerating the destruction of jobs right when that’s the opposite of what we need and what was promised. Interesting!
You’re over-interpreting this to fit your narrative. Like I said, planning, buying the property, and permitting for a factory takes a long time. Construction spending begins to happen after everything else has been done, and construction actually starts. The Trump effect, if any, isn’t even visible in this data yet. People today have zero patience. Everything has to be instant. They have no idea how many years it takes to pull off a multibillion-dollar project, from when the idea is first hatched.
The Biden-era Infrastructure Investment and Jobs Act (IIJA) became law in November 2021. The result can be seen in the graphs that all start to take off in 2021. Thank you, President Biden.
🤣 I’ll just repeat here what I said a couple of hours ago in reply to Murrca’s different narrative:
You’re over-interpreting this to fit your narrative. Like I said, planning, buying the property, and permitting for a factory takes a long time. Construction spending begins to happen after everything else has been done, and construction actually starts. The Trump effect, if any, isn’t even visible in this data yet. People today have zero patience. Everything has to be instant. They have no idea how many years it takes to pull off a multibillion-dollar project, from when the idea is first hatched.
In other words, the 2021 start of the boom had other causes than Biden’s policies. The CHIPS Act payments started in Dec 2024, just days before Biden left office! That’s how slow all this is.
<– Real Estate Guy
[I]You’re over-interpreting this to fit your narrative. Like I said, planning, buying the property, and permitting for a factory takes a long time. Construction spending begins to happen after everything else has been done, and construction actually starts.[/I]
Maybe, maybe not.
"Construction spend" doesn't start until construction starts….sure, and what is spent before that we'll call Development Soft Costs – it is semantics. Cash flow out in support of the intended project.
Bafflingly, there are several dark data centers that are dark b/c of lack of power generation – in CA (permitting nightmare for something like a new power plant). The new concern related to sites in NV / TX (other areas that lack water) is that they are long term short on water.
These are all matters that prudent developers understand and solve for in advance. If it isn't solved – it isn't built.
This is malinvestment.
Way back when, I remember doing a national teleco deal. They bought the site because of the location in relation the main fiber trunk (overpaid). Encountered and mitigated haz mat underground. Scraped the site and rebuilt. Installed all the racking (unbelievable amount of copper bus bars that would be worth a few bucks today). NEVER flipped the switch. Where did the ca$h come from? Enron.
My point being – if these are being built without sensitivity to requirements (like power and water) – these are being done on a model that is way, way outside of the norm, and somewhere in here the phrase [I]moral hazard[/I] is probably warranted.
I figured the CHIPS Act was responsible for the factory construction boom, but it sounds like you are saying that is not the case. What then were the contributing factors? Why has it leveled off now when CHIPS money should be kicking in?
There has been a total rethink in Corporate America and government on essential supply chains going through China. The rethink started years ago, under Trump 1: fears that China can essentially shut down US production and part of the economy, when key products, produced in China, suddenly become unavailable, such as semiconductors and all kinds of other stuff. 2020/2021 proved it, leading to massive shortages of components in the US, plant-shutdowns, etc. There is a big national security angle to it as well.
And plans that were made before the pandemic got stalled by the pandemic during the lockdowns and uncertainties, in terms of finalizing plans and starting construction. But with the reopening, those plans and projects were accelerated and added to, and new plans were made. Funding from the Biden administration started to flow in 2024 and continued in 2025 under Trump, but obviously, companies anticipated these Acts because they took a long time to work out.
The important thing here is the rethink in Corporate America and government about China, which started under Trump 1, was reinforced under Biden, and is further reinforced under Trump 2. This is a massive change, and both Trump and Biden understood it, and pulled in the same direction. Trump was the first President to break the decades of globalization dogma.
to that observation… i see most of this investment cycle in Biden era, not Trump.
Making Wolf’s point more succinctly: any meaningful construction project during Biden’s term had to have been planned and started during trump’s first term.
Similarly for events in 2025 (good or bad) that were set in motion while Biden was the guy.
There are people who like to draw a partisan paintbrush across the calendar and claim that anything good must have happened instantly just because their guy was now in office… yet simultaneously the exact same people will claim that everything bad is after-effects of the other guy’s prior term. That’s a logically inconsistent pattern reflecting the speaker’s confirmation bias, equally disconnected from reality on both ends.
That’s a straw man argument, a logical fallacy. The boom built up slowly. Would there have been a boom without legislation? The legislation played its part.
Bitcoin just wiped out all of its 2025 gains. What a crypto winter could look like.
Bitcoin is still at an inexplicably high $91,000. Not much of a “crypto winter.”
OK but what is it worth. My guess that it is closer to 10 K than 100 K.
10k 100k bitcoin value. Why any value? How many new coins have appeared ? I thought there were never going to be any more digital coins? Is there a limit on the number of crypto currencies and exchanges? I personally don’t like crypto at all because the process circumvents traditional money regulations and is used for many criminal activities. Why would society want to support criminal activity store of profit? I don’t . If people decided that crypto was not a store of value and started to sell all holdings I suspect the value goes to a really low number before someone scoops up all the digits for recycling value.
“Price is what you pay. Value is what you get.” -Buffett
What is a fair price is subjective here. What is the fair price for a Rembrandt painting?
Bitcoin, specifically, is limited at 21M coins of which about 95% have already been mined, the current rate down to about 450 per day.
Anybody can create new tokens, just like anybody can create a new painting, but that doesn’t (a) make it valuable or (b) affect the value of others.
While it’s true that cryptos have been used for criminal activity and can be difficult to trace, it’s really not that easy. The public leger means that once a person is identified, every transaction they ever made is visible. Converting the crypto to fiat is (a) fairly heavily monitored these days and (b) identifies the crypto holder.
The major crypto tokens, by which I mean BTC, ETH, and (maybe) XRP do have some intrinsic value (the first and biggest, decentralized apps, currency exchange, respectively) but I won’t for a minute speculate as to what a “fair price” would be for any of them.
I have an unvalidated conspiracy theory that the US is going to move to crypto so that we can walk away from the dollar and all its debt.
🤣 opposite, we have been walking away from crypto and moving to the dollar. For example, Ethereum has crashed 36% since August against the USD and all its Treasury debt…
I recently read the average American retail $BTC buy in price is 88k, ironically that’s where chart range support is. MSTR has an average buy in price of 74k. MSTR chief Michael Saylor this week stated that it took 14 months for Bitcoin to climb from approximately $55,000 to $94,000. How long will it take to BTC to fall from this weeks 94K to 55k? No circuit breakers in crypto. The mid cap 400 will turn negative for the year today, it’s the first of more sectors to come before year end!
So this country is going to pivot from a service based economy to manufacturing based economy? I think that’s a great start. Get back to basics building things again. It appears this transition will take time however. How much time is the trillion dollar mystery, but this means perhaps a decade or two before the machines do get built and eventually take over and only then can the framers of all this dance in the streets boasting ‘mission accomplished’! ‘We built it, and they came’!
Look what we’ve built! I will say it’s good we’re a Keynesian based system on steroids because we are going to borrow and print up a big pile of money to complete this task.
🤔
Thanks for the reminder Wolf
This curve in a few years I hope continues on a steady flat line or even increased activity. Go power and NG , nuclear, and coal. Renewables are welcomed as well . Lowest cost power is all I desire which changes over time. Given the lead time for nuclear I am hoping some mega projects are announced near the areas with the biggest demand. Texas and CA I assume
All the Made In America may pay off, but few alive today will still be around to reap the rewards!
The real questions, do Americans get good jobs, do they want them, and how many will there be.
If tech goes bust, where will the money come from to built all those factories and afford all those fine homes.
Crypto is crashing and heading for zero or BELOW ZERO. Investors in this scam may not only lose their entire investment but may have to pay up to liquidate their positions.
Meh, so much for the “green agenda.”
I wonder what AI says about the environment?
The data centers remain cool inside, so: all is well.
Good comment Struggler, my similar one was rejected…..to obscure?
The WSJ says 50% of spam is from AI data centers.
Squeezing what they can out of old folks and ignorant folks under tremendous lack of money stress.
Going after value in “distressed human assets”?
Not much is being done to slow it’s growth, either, IMHO.
NBaY,
Remember the other day when I told you about spam in the comments on this site, from what I can see in my firewall and commenting software. I said, a lot of the spam came from data centers in Ashburn, VA. And I said that AI created spam comments that sounded reasonable (like summarizing the article) and were harder to distinguish from regular comments. But then spam comes with links, and they give it away. I told you that “AI was used for all sort of things.”
Yep. And I checked it out. Still seems to be mostly personal email “spoofing” attempts…and only 14% businesses per link you deleted
…but phone AI spam could be even spookier…..But how much programming will it take to duplicate friends/relatives voices and mannerisms?
Data collection and storage DOES continue full steam.
A controlled cultural “nervous system”? All arrogant and phony evolution to me. Self appointed grey matter. (see cerebral cortex layers)
Like I always say, culture made some BAD wrong turns over the centuries. And I fail to see why people choose to ignore climate change, I sure don’t…..but then I control nothing but me…..sorta.
Sorry, I meant Forbes…..those wealthy folks mags are all the same to me.
In Texas and Georgia youngsters desiring to attend tech schools for such jobs as car maintenance, air conditioning install and repair etc, spend the first two years on Core Curricula- same as 4 year colleges and this creates a large drop out rate as these students either can not pass or lose interest. Trade Schools and Tech Schools should offer trade classes. Period.
One of my sons attended two. A 4 week school to get a CDL. Best money I ever spent. Then he drove ~3 years for Oregon Growers and CRST in the PNW.
He paid for the second class out of pocket. 10 weeks at the Volta Lineman school in Astoria Oregon. Joined the IBEW and has been working construction jobs ever since.
5 1/2 years after graduation from high school he has 150k in savings. 5k in his checking account. With 6 months of payments left on his used GMC 2500 HD work truck and 11 months of payments left on his 26′ Lance 4 season toy hauler. (Which he lives in while working construction.)
Meanwhile his cousin did 4 years in a second tier ivy league school for $320k. He is a smart kid with a piece of paper and no debt. Currently living at home deciding on the next step.
Which one is the better investment?
That is a ~$500k difference. ($150 save -vs- $320k spend.) Following the rule of 72 with a 7% return… That $150k should grow to $1,200k in 4 decades…
Wolf,
Have you ever posted a chart with multifamily construction spending over time? How about SFH?
Yes, many times, both.