016: How to Measure the Value of a College Education – A Do Over! [PODCAST]

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A Do Over! In PODCAST 008 I promised to discuss Five Steps to Make Sure Your College Education Pays. Unfortunately the audio cut off right before we it got to the 5 steps. Several people have brought this to my attention and have asked me for the file. In trying to fix it, we realized the best bet would be to just release this as another podcast. So … here it is.
What is the value of a college education? Can you put a number on it? 
College education is the second largest “investment” most people ever make, and yet many make very poor choices resulting in a poor return on investment.
Courtesy investitwisely.com

Courtesy investitwisely.com

While education is very important, most of us have a limited view of how to get an education and how to make it pay. In this podcast I cover 5 steps to help you guarantee your investment returns with true monetary value.

Five Steps to Guarantee Your College Investment Pays (as covered in this podcast)

  1. Define your education goal.
  2. Research your increase in value.
  3. Do some reverse interviews to learn the right path to take for education.
  4. Find alternative ways to get the needed education.
  5. Calculate your Return on Investment (ROI) 

ROI = (increase in salary over period  – cost of degree) / cost of degree

Example 1: Working with $25k / year income

Engineering degree pays $60k – increase of $35k / year Cost of degree $30k

2 year ROI = ($35k*2 – $30k) / $30k = 40k/30k = 133%

Example 2:

Working with $25k / yr income

Liberal Arts Degree pays $35k Cost of degree $40K

2 year ROI = ($20k – 40k) / $40k = NEGATIVE

LAST POINT – do not borrow money for education!

 

Education Money and Debt – Key Links

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