This Degree Is A Good Return On Investment
Kelsey is a nurse with a bachelor's degree, and he's looking to go back to graduate school for $70,000. Dave does a quick calculation to help Kelsey determine if this is a good return on investment.
QUESTION: Kelsey in Illinois is 29 and completely debt-free. He’s renting a house and has $80,000 in assets. He’s a nurse with a bachelor’s degree, and he’s looking to go back to graduate school for $70,000. Dave does a quick calculation to help Kelsey determine if this is a good return on investment.
ANSWER: If you went from $65,000 to $85,000, that’d be $20,000 a year. As a return on investment of $70,000 invested, if I could make $20,000 a year on it, I’d be dancing a jig. That’s like a 25% or 30% rate of return. Usually, the money invested in you—if invested thoughtfully—gives you the best return on investment, meaning education (education done thoughtfully that has an application in the marketplace). Typically, the finances on that work very well to your benefit. In this case, yeah.
You don’t burn a lot of cash as a single guy, so it doesn’t take a lot. I’m just making sure because if you have $80,000 and you’re going to spend $70,000 on the education only and then you don’t have the money to eat, then we haven’t thought it through. You’re the kind of guy who does think it through, so you’re going to be fine. I think that is a good investment, assuming that’s the career choice you’re going to use. If you’re going to go that way with your life, then the return on it is there.