Even if you’re not currently living the high life, it’s hard to deny the appeal of being rich. While we don’t all dream of buying bottles of Cristal or diamond-encrusted laptop sleeves, being wealthy does have its perks. Sending your future offspring to college, saving for retirement, or taking a vacation to Thailand among them.
Graduation - The path to enrichment
But how to grow rich? If you don’t have the thighs of Beyonce or the dramatic chops of Meryl Streep, it’s probably best to stick to building a more traditional career. Research has shown that your degree level and the type of education you have correlates strongly with your lifetime earnings and how rich you can expect to become.
How College Makes You Rich
- Increased Lifetime Earnings – While a particular education level won’t guarantee you tremendous wealth, on average you can expect to earn more as your degree level increases. Over a lifetime, this extra income can really add up. For example, according to the U.S. Bureau of Labor Statistics (BLS), in 2011 those with a bachelor’s degree earned $1,053 a week, on average, while those with only a high school diploma earned $638. The college graduate earned an extra $21,580 a year. If you assume a 40-year period of working full time (from the ages of 25 to 65), this adds up to an extra $863,200 over the worker’s lifetime. Therefore, bachelor degree holders earn more than three-quarters of a million dollars more than the high school graduate.
The increase in earnings is pretty consistent as you increase educational level. Those with master’s degrees earned $1,263 a week, those with professional degrees earned $1,665, and those with doctoral degrees earned $1,551. A graduate with a professional degree will earn more than $2 million more than the high school graduate, assuming a 40-year work life. Not too shabby – and that’s not even counting interest.
- Lower Unemployment Rates – Besides earning more, you’re less likely to be employed if you have a higher degree. Those with higher degrees have greater knowledge and more specialized skills, and they’re less dispensable when recessions hit the economy. In 2011, the BLS reported that those with only a high school diploma experienced a 9.4 percent unemployment rate. Those with an associate degree had 6.8 percent unemployment, while those with bachelor’s degrees had only 4.9 percent. Those with professional degrees had the lowest unemployment, at 2.4 percent. No matter which way you spin it, the more education you have, the better equipped you are to deal with a bad job market.
- Specialized Skills – Lately, there has been much talk about the dollar value of a liberal arts education. While two sides can debate all day on the monetary worth of being well-rounded and a great communicator, there are some skills you just have to learn in college, which are vital for society. These specialized skills are more apt to make you rich.
For example, the physical therapist. This profession requires knowledge of anatomy and physiology, medical science, and diagnosis procedures. For architects, not only do they need to understand computer-aided design, material science, and geology, they also have to have a state license. The only way to get these sought-after skills and the respectable paycheck they come with is to earn a higher degree.
Heading Back to College to Increase Wealth
- Choosing a Career – Perhaps you’re convinced that more education is the right track for you, in order to secure your financial future. While on average a higher degree will increase your earnings, choosing a well-paid career area with good job opportunities is also important. Consider your own skills and interests, then do some research on the career pages at the BLS. Investigate the employment projections for the future, and take note of fast growing career areas, such as healthcare and personal care and assistance. The BLS also notes that jobs requiring master’s degrees will be experiencing the greatest job growth during the 2010-2020 period.
- Investigating Return on Investment – Some higher degrees have a much better track record, when it comes to providing a “return on investment” (ROI) for the tuition money and time you put into your degree. Engineering graduate degrees and Master of Business Administration (MBA) degrees are two types of degrees that have been shown to have solid returns on investment, as graduates experience a significant increase in earnings. Other careers, such as social work, require a graduate degree to advance, and thus a higher degree can be a good investment in the future.
- Minimizing School Costs – Even though a higher degree will likely net you higher earnings, that doesn’t mean you should go totally broke in order to attend school. Make sure you investigate all federal financial aid and state financial aid options open to you and get your applications done on time. Compare college costs and the sticker price of different programs. Find online degree programs if you wish to continue working while you attend school. This approach can provide more financial security and flexibility.