Getting Your Money's Worth: 6 Degrees with High ROIs
Education is often referred to as an investment, but as with stocks and bonds, some investments pay off better than others. So, as you contemplate investing in the next stage of your education, how can you be confident of getting your money's worth? To put it differently, what is the best degree to make money with over the course of your career?
One way to look at this question is to borrow a concept from the finanical world known as Return on Investment (ROI). In basic terms, ROI is the proceeds of a given investment measured as a percentage of the cost of that investment. So, if you invested $100 and earned a $150 profit as a result, you'd have a 150 percent return on investment.
So how do you measure the ROI of higher education? One way is to look at the typical wage levels for a profession, project those out over a 40-year career to come up with an estimate of lifetime earnings, and then divide that by an estimate of the cost of the education necessary to qualify for that profession.
As you might expect, this analysis shows that some educational programs pay off much better than others do. Listed below are some examples of vocational certificates, associates degrees, and bachelor degrees with especially high ROIs.
ROI of higher education: Vocational certificates
Vocational certificates can typically be completed in a year or less, at an estimated cost of $5,200. In return, they can really boost your earning power in some cases. The following are two examples:
- Electrical and electronics repair. This is generally a high-paying occupation, and at the top of the profession are electrical repair specialists who work in power-generating and other electrical utility plants. According to the Bureau of Labor Statistics (BLS) data from May, 2009, electrical and electronics installers and repairers who work at powerstation, substation, and relay facilities earn an average of $61,700 per year. Multiply that by a 40-year career, and it would yield a return on your educational investment of an incredible 47,461 percent.
- Court reporting. Court reporting is a specialized skill, and the pay scale typically reflects that fact. According to the BLS, court reporters in the United States earn an average of $52,460 per year. Projected over a 40-year career, that rate of income yields an education return on investment of 40,353 percent.
ROI of higher education: Associate's degrees
Associate's degrees are typically two-year programs with an estimated total cost of $10,400. They can be used as a stepping stone to a bachelor's degree, or to qualify for some highly worthwhile professions on their own. Here are two examples:
- Radiation therapy. Radiation therapists administer treatments to cancer patients. As the Baby Boom Generation ages, this is expected to be a fast-growing profession, and it is also one that pays well. According to the BLS, radiation therapists earn an average of $77,340 per year, which would yield a 29,745 percent education return on investment over the course of a 40-year career.
- Fashion design. Fashion design can be a very competitive field, but for those who succeed, it can be highly lucrative. According to the BLS, fashion designers earn an average of $74,410 per year. Over a 40-year career, this would result in a 28,618 percent education return on investment.
ROI of higher education: Bachelor's degrees
Bachelor's degrees are typically four-year programs with an estimated total cost of $37,672. They can lead to a variety of high-paying occupations, including the following:
- Software engineers. Computer-related professions generally pay well, and according to the BLS, the job market for software engineers is expected to see extraordinary growth in the years ahead. The average salary for this position is $96,620, which would give you an education return on investment of 10,258 percent over the course of a 40-year career.
- Electronics engineers. There are several branches of engineering, all of which tend to pay well. According to the BLS, electronics engineers earn an average of $91,540 per year. Over the course of a forty-year career, that would yield an education return on investment of 9,719 percent.
The above analysis used a fairly simple measure of ROI, sufficient for comparison among different degrees and professions. The actual ROI you get depends on the school you choose, how much financial aid you get, how many years it takes you to get through school, and how successful you are upon graduation. As a rule though, if you choose a career like the ones highlighted above, you are increasing your chances of getting a favorable ROI.