Should I Invest in More Education?


In a time of economic uncertainty, you might consider investing more in your own formal education. This might be a master’s degree or continuing education courses. You might be wondering if this is a good financial investment, as well as an investment in yourself. Here are some things you should think about before going back to school.

Why You Should Invest in More Education

If only one of these reasons appeals to you, then it may be worth your time to look at investing in more education.

The World Bank 1 has proven that investing in education has a greater rate of return on investment than stocks and bonds. This study was done across the globe and shows that you get a 9% return on average for every year of school. That is a much higher return than the average of 2.5% on stocks and bonds. Every year more and more people get higher education degrees, and every advantage you can get helps.

Another reason you might consider investing in education is that you might be able to get a pay raise or a promotion. When compared with the immediate costs of any education, a pay raise may not seem like much of a financial gain in the short-term. However, you have to consider the long-term effects of this pay raise. Even the smallest increase in earnings would continue to accumulate with time, which can help offset the cost of your education. Also, as your salary amount increases, so does your social security payment.

One more financial reason to invest in more education is that no one can take your education from you. Once you have learned it, you always know it, well, in theory. No one can intellectually repossess your knowledge.

What About the Costs of More Education

Of course, you still need to consider the immediate costs and how you will cover those.
One option might be asking your employer to pay a portion of your education. Many businesses give a yearly tuition reimbursement allotment or money for professional development. If not, you might be able to petition your supervisor for tuition reimbursement. Even if they can cover some of the costs, it might be worth it based on what you know from above. You will have to balance your work while in school, though.

There is always the possibility of taking out a student loan. While not everyone wants to take out a loan, a student loan is considered ‘good debt.’ The interest rates are usually fairly low as well, when compared with other types of loans.

Pursuing your education part-time is another option. While it will not reduce the overall cost, it might allow you to spread the cost out over a larger period of time. This would also allow you to continue to work, without having to keep up with a full student schedule at the same time.

Sometimes, online school is less expensive than in-person classes. Tuition can be lower, but you will also likely not have the costs of commuting back and forth to school. If the classes are asynchronous, then you can take the classes when it is most convenient for you as well. Just remember this type of learning requires self-discipline since there is generally a lack of personal interaction and collaboration.

If you need help with this crucial investment decision, contact us and we will be glad to help you navigate the financial strategies that are available for your specific circumstances.

 

1 “For Better Returns than the U.S. Stock Market, Invest in Education” Harry A. Patrinos & George Psacharopoulos, worldbank.org, Apr. 24, 2018.

 

This information is being provided for general educational purposes.

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