Invest In Yourself With A College Education

By Lisa Smith AAA

How would you like to invest $21,964 and have it turn into $2 million? Thousands of people do it. Their investment strategy involves a four-year commitment to education. The payoff begins with the receipt of a college degree, which opens the door to a lifetime of earnings that otherwise might not have been possible to obtain. In this article, we'll show you the million-dollar benefits of choosing to pursue an education.

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The Math Is Simple
According to information released by the U.S. Census Bureau in February 2012, workers with a college degree earn nearly twice as much as those without one in 2009. Census data indicates that the earnings of the average worker between the ages of 25 and 34 with a high school diploma was $27,511. The average earnings of a similar worker armed with a bachelor's degree was $45,692. Taking these earnings into account, spread over the course of a 40-year career and not accounting for inflation and salary increases, results in roughly $1.1 million for the high school graduate and $1.8 million for the college graduate.

Watch Wages Increase by Degrees
While just about any degree will help your earnings prospects, more education generally equates to more money. Over the course of a working career across all persons, an associate's degree is worth about $1.6 million, a bachelor's degree is worth $2.3 million, a master's degree is worth $2.9 million, a doctorate is worth $4.1 million, and a professional degree is worth $5.1 million.

Of course, like any investment, some are better than others. A degree in basket weaving, Renaissance art or golf is likely to result in significantly lower earnings than a degree in information technology, business or the health sciences. Choosing your major wisely is a lot like selecting an appropriate investment for your long-term portfolio. In other words, you need to choose something that dovetails with your goals and has a realistic opportunity to provide the return on investment that you are anticipating.

See the True Cost of College
Of course, getting a degree is easier said than done. The cost of a college education is high, and it's only getting higher. In fact, the cost of education has risen faster than inflation over the past decade, and tuition at a four-year public university is estimated at $8,240 dollars per year for the 2011 - 2012 school year, according to the College Board, a non-profit higher education association. Tuition at a private school will cost even more - about $28,500 per year.

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Costs are also higher for students who live on campus. Because learning financial responsibility is just one of the many lessons that we all must face, choosing to commute rather than live on campus is a financially prudent decision that can save tens of thousands of dollars.

For four years on campus, the final bill at 2011 rates was $21,447 at a public school for in-state students, $33,973 for on-campus, and $42,224 at a private institution. To put that into perspective, a public school education for an in-state student costs about as much as a 2011 MINI Cooper, while the cost at a private schools costs about as much as a 2012 BMW 3 Series Sedan 335i, according to Yahoo! Autos. Considering that the average American buys two cars over the course of four years, a college education looks very cheap indeed. It also provides a far better return on investment.

Focus on the Future
The focus on the cost of college is misplaced. While the cost of a single year, particularly at a private school, can be significant, most college graduates will earn back the amount spent in a single year of working. In some cases, such as graduates from public education institutions, their first year's salary will cover the cost of all four years in college.

Learn to Look Beyond the Money
The significant earnings that a college graduate can expect provide the opportunity to enjoy material comforts. A nice car, a nice home and some spending money in your pocket are the traditional rewards for financial success. Likewise, increased earnings provide an opportunity to save and invest. College graduates have the opportunity to not to only enjoy a comfortable lifestyle during their working years, but their increased earnings provide an opportunity to save and invest to ensure a financially secure retirement.

While there's no doubt the paychecks are nice, attending college has additional financial and intangible benefits too. A number of studies suggest that higher education leads to better health consciousness, which translates into time spent at the gym or engaging in other forms of exercise. Healthier eating habits often go hand-in-hand with a good exercise regimen, and exercise and healthy eating habits lead to healthier lifestyles, overall.

A college education also provides greater opportunities for promotion and upward social mobility, not only for the recipient of the degree but for non-working spouses and children, as well. An increase in job security and a decrease in unemployment are also associated with a college education, as college graduates tend to have transferable skills. Therefore, if the widget factory closes down, a college-educated accountant or human resources professional can often transfer their skills to another employer with relative ease.

Make an Investment in You
The Census Bureau reports that, as of 2006, about 27% of the U.S. population had least a bachelor's degree. Although income for this demographic fell for the first time in 30 years for the period between 2001 and 2004, a college degree is still likely to be one of the best investments you will ever make.

SEE: Investing In Your Child's Education

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