My posts generally focus on how to pursue a happy life while increasing your wealth and sparing the environment. To date, I have mostly focused on reducing costs as a byproduct of other activities that make a person happy. In this post I am going to turn things upside down and focus on how you can make more money as a byproduct of getting an education.
As odd as it may seem, there are plenty of people who doubt the value of an education. Before we get into the financial realities of pursuing an education, let’s take a look at how an education may improve your ability to pursue happiness.
In a very good report from 2012, Dr. Philip Trostel describes a host of benefits one would expect to realize as a byproduct of attaining a bachelors degree compared to just graduating high school. Among my favorite points are the following:
- Health – likelihood of reporting health to be very good or excellent is 44% higher
- Disability – 3.6 times lower likelihood that one cannot care for oneself as a result of disability
- Life Expectancy – 7 years longer at the age of 25 and that is with only having attended some college
- Jail – 4.9 times less likely to end up in jail
- Marriage/Divorce – 21% more likely to be married and 61% less likely to get divorced or separated
- Happiness – likelihood of being happy is higher, 89% for high school graduates vs. 94% for college graduates
That’s right, those who attain college education can expect to be happier, healthier, live longer lives, and avoid jail, failed marriages, and the nursing home. To me that sounds like a pretty amazing deal and we haven’t even gotten to the money part yet.
When it comes to the difference in earnings power the numbers are striking. The following chart from Dr. Trostel’s report shows the difference in earnings in any given year.
It is immediately evident that every level of educational attainment leads to a higher expected income. However, the difference between a high school diploma and bachelor’s degree is remarkable in that one would expect to more than double their earnings potential.
My favorite chart follows because it discounts the future earnings into today’s dollars thus giving a difference in total value for different levels of academic attainment. It’s a very finance way to look at things.
Above you can see that the value of increased earnings between graduating high school and earning a bachelor’s degree is in excess of $600,000. Again, this difference means that the college graduate can expect to recognize more than twice the value from their career in the form of revenue alone.
Dr. Trostel’s report goes on to describe and quantify many of the benefits that going to college represents for the individual, but he also wades into the topic of what extra value a college graduate brings to the larger society. He touches on topics such as civic engagement, criminal activity (or lack there of), philanthropy, and productivity.
From my personal experience, I can say that I made some life long friends while in college. It was truly a pleasure to meet people from all over the country who were bright and engaged in trying to improve themselves and society. The fact that I was having a great time and significantly increasing my odds of a better life were not lost on me. To be sure, I can imagine a scenario in which I never did attend college because of the up-front costs or fear of debt payments being too high.
Of course, a traditional four-year education is not for everyone. For a variety of reasons a person might want to pursue a trade, go to a community college, or join the military. All of these options are good ways to get a leg up on your financial situation while improving your general well-being at the same time. In-fact, I personally joined the military out of high school. It was a great experience for me. I met many life long friends in the military just as I did in college, learned a trade, developed a sound understanding of what it means to be a leader, and earned the GI Bill which later paid the tuition and much of my living expenses while I was earning my bachelor’s degree.
The fact is that there is no one right answer for everyone or even one right answer for any individual. But what I can say, is that pursuing an education, regardless of how it is packaged, will most likely improve your lot in life. As the old slogan goes, knowledge is power. With that said, why don’t you go get some?