I was always told I needed a good education in order to get a good job and make decent money. The following chart supports that notion (CESDP.nmhu.edu 2016):
I’ve always enjoyed math an am good with numbers. I’ve also had an interest in business, reading about the stock market and guys like Warren Buffett. Finance is a large market. Every industry and company needs finance people, whether they specialize in finance like investment analysis and advising, or a corporation that needs capital budgeting to finance projects. Finance is much narrower in focus than business in general and involves more personality than an area like accounting. The following chart shows average salaries for people specializing in finance (Online Finance Degree 2016):
Of course, earning an advanced degree is not cheap. The following is the cost based on an instate four year degree with a 10 year loan at an interest rate of 4.29% (All Business Schools 2016):
Looking at the chart, the total investment in my finance degree is $102,120. According to Forbes, the average starting salary for a finance degree is $57,000. I’ll assume a 2% raise each year for the comparison. The following chart shows the ROI compared to a high school only degree, an associate’s degree, and a bachelor’s degree.
First, I’ll compare to a person with a high school degree. As we can see, the ROI ranges from 23% to a little over 29%. Once I am finished paying of the loan, the ROI is over 40%.
As I would expect, the ROI is lower compared to a two-year degree, but is still impressive. It ranges from just under 15% to just under 20%. When the loan is paid off, the ROI is close to 30%.
Finally, compared to a college degree in general, we see an ROI between 1% - 3%. When the loan is paid off, we still have an impressive 13%.
Even though the money is good and the opportunities ample, I chose finance mostly because I like it. I like the combination of numbers with intangibles like decision-making and making presentations. I figure I am going to be doing it for 40 years, so I better like what I am doing. There is nothing worse than dreading getting out of bed each morning and going to a job you hate.
References
All Business Schools. “Finance Degrees and Programs” Retrieved June 8, 2016, from
http://www.allbusinessschools.com/business-careers/finance/degrees/
CESDP.nmhu.edu. “How Do Salaries Compare for College vs. Non-College-Educated People?”
Retrieved June 8, 2016, from
http://www.cesdp.nmhu.edu/youth-programs/docs/earnings.pdf
Online Finance Degree. “5 Reasons Why Finance is a Good Major” Retrieved June 8, 2016,
http://www.onlinefinancedegree.org/5-reasons-why-finance-is-a-good-major/
