What does "out" refer to in here?
Answer from a Native speaker
In this context, we can think of "out" as meaning "outside," which refers to a location or place removed from oneself. "Out" is used here to create a feeling of distance or separation. "Out in the real world" is a commonly used expression used to mean the current reality or situation of life, and not someone's ideal world, dreams, or imagination. It is often used as an admonishment to be more realistic. Ex: Life is not easy. You have to work and pay rent out in the real world. Ex: Spoiled children suffer out in the real world, because they are often experiencing hardships for the first time.