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Can Money Really Reflect The Value Of College Majors?

Can Money Really Reflect The Value Of College Majors?

Starting a college education is an exciting decision that can enrich your life for decades into the future. There are many ways to look at the value of a college education, including money and personal growth. If you are concerned about the years of effort and expenses required to obtain a post-secondary education, give yourself the benefit of reviewing the value of advanced study.

1. Engineering Majors Earn The Highest Incomes

For students who are interested in maximizing their income, engineering is an excellent choice. Engineering majors tend to earn more than many other graduates. In fact, some specialized engineers (e.g. petroleum) have earned +$90,000 salaries upon graduation according to a Wall Street Journal report. For those who enjoy the precision of science, math and engineering, there are many wonderful ways to make an excellent income and make the world a better place.

According to The Hamilton Project, engineering majors tend to earn over $2 million over the course of their careers. In contrast, English Language and Literature majors tend to earn $1 million over the course of their working career.

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Lifetime Earnings By College Major (The Hamilton Project)

    2. Reduced Likelihood of Unemployment

    Unemployment is an unpleasant experience by any measure. Not only do you have the prospect of lost income, but you also have to contend with the unpredictable job search process. The unemployment rate for college graduates in the US peaked at about 4% in 2010 according to a Business Insider report.

    Avoiding the anxiety and discomfort of unemployment is a significant benefit! According to Robert L. Leahy, director of the American Institute for Cognitive Therapy, “Research suggests that being unemployed doubles a person’s chance of a major depressive episode and that unemployment is also highly associated with domestic violence and alcohol abuse.” (source: Unemployment takes tough mental toll, CNN).

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    3. Increased Access To Six Figure Jobs

    Earning a six figure income is one of the rewards available to college graduates. For example, most project managers with six figure salaries have a four year degree. Other highly paid careers such as medicine, law and engineering also require a college education. While there are significant numbers of people earning high incomes without a college degree, it is a much more difficult to earn a high income.

    4. Understanding The World

    For many fields of study- including the liberal arts and social sciences – you gain a much deeper understanding of the world. My university studies focused on history and it enhances every aspect of my life. Whether I’m seeking to understand the latest revolution, the economic forces that influence our choices or the impact that leaders have, history has enriched my life deeply. My knowledge of history also enhances my enjoyment of travel and ability to understand different countries.

    If you are studying the social sciences, humanities or another field that prompts your friends and family to ask “what are you going to do with that?”, don’t worry. Smart motivated people who understand the world usually find good opportunities.

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    5. Improved Critical Thinking Skills

    Improving the quality of your thinking and reasoning skills is one of the greatest benefits you receive in college. In writing an essay, you acquire the habit of evaluating evidence and contributing your perspective. In a science class, you learn how to collect and organize data and other tools of the scientific method. These skills protect you from being taken in by people who play fast and loose with the facts. Developing effective critical thinking skills is a life long activity, get started now with 9 Ways to Train Your Mind to Think Critically.

    6. Prepare For Life As An Active Citizen

    The freedom to vote and participate in politics is a great responsibility. The broad perspective you earn from college studies – especially those in the liberal arts and social sciences – make you into a better citizen. Richard Sigurdson, former Acting Dean of Arts at The University College of the Cariboo, emphasizes the broad social and personal benefits of studying the liberal arts in his essay Why Study Liberal Arts?

    A liberal arts education will enhance your knowledge and improve your understanding of the world and its people. Many say that knowledge leads to wise action, perhaps even to goodness. Thus, an Arts education may help you to perceive and to understand your shortcomings, allowing you to become a better citizen, friend, spouse, parent, human being. Arts courses often enable students to reach beyond their own experiences and imagine worlds far distant in time and space. By opening your eyes, ears and mind, a good Arts education can strengthen in you the virtues of tolerance, sympathy, and respect for others.

    7. College Graduates, Regardless of Major, Earn More Than High School Graduates

    On average, earning a four year college degree significantly increases your income over the course of your life. This finding has been proven again and again by numerous researchers. Additional higher education tends to result in higher incomes. The chart below comes from the U.S. Bureau of Labor Statistics:

    Earnings and unemployment rates by educational attainment, U.S. Bureau of Labor Statistics

      Featured photo credit: Trinity College Dublin/Gigglekid via pixabay.com

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      Bruce Harpham

      Bruce Harpham is a Project Management Professional and Founder and CEO of Project Management Hacks.

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      Published on May 7, 2019

      How to Invest for Retirement (The Smart and Stress-Free Way)

      How to Invest for Retirement (The Smart and Stress-Free Way)

      When it comes to stocks, I bet you feel like you have no idea what you’re doing.

      Everyone who’s not a financial expert has been there. I’ve been there. But, time is passing and you need to be crystal clear with how you’re investing for your retirement.

      Otherwise, it’s back to work until you can afford not to. So, how can you invest for retirement when you’re not a financial expert?

      You take the time to learn the fundamentals well. If you do, you can grow your wealth and retire happy. The best part is that you don’t need to be a financial expert to make smart investment decisions.

      Here’s how to invest for retirement the smart and stress-free way:

      1. Know Clearly Why You Invest

      Odds are you already know why should invest for retirement.

      But, maybe you know the wrong reasons. It’s time you get clear on why you’d like to retire. Here are some questions to help you get started:

      • Will you spend more time with your family?
      • What does retirement mean to you?
      • Are you looking to launch that business you’ve been holding off for years?

      Everyone wants to retire but not for the same reasons. Once you’re clear for why retirement is important for you, you’ll focus on making it happen.

      Investing in the stock market allows you to take advantage of compound interest.[1] All this means is that your money earns money on top of its interest. A reason why investment in the stock market is one of the best ways to plan for retirement.

      2. Figure out When to Invest

      “The best time to plant a tree was 20 years ago. The second best time is now.”– Chinese Proverb

      It’s true if you’d had started investing when you were 10 years old, you’d have a lot more money than you do today.

      The reality is that most people don’t start investing until it’s too late. So, if you’re currently waiting for the perfect time to start an investment, it would be today. Open your calendar and block out 2 to 3 hours to choose how you’ll invest for retirement.

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      A quick way to get a snapshot of where you stand is to use Personal Capital. Input all your personal information and spend some time setting your retirement goals. Once completed, you’ll know where you stand with your retirement.

      Having a savings account for retirement isn’t planning for retirement. Why? Your money loses value when you factor in US inflation.[2]

      3. Evaluate Your Risk Tolerance to Create the Perfect Portfolio

      Investing your money well depends on your emotions.

      Why?

      Because when the market drops most people panic and withdraw their money. On average, the US stock market yields an annual 6% to 7% ROI (return on your investment.) But, this won’t happen if you’re worried about short-term loses.

      Before you invest your next dollar, know your risk tolerance.[3] Your risk tolerance determines the number of risky and safe investments you’d have.

      Regardless of your investing style, you need to view investing for retirement as a long term game. Know that some years you’ll lose money but recoup this in the long-term.

      Avoid watching market-related new. Also, create a double authentication to log in your investment account. This way you’re less likely to withdraw your money.

      4. Open a Reliable Retirement Account

      Depending on your circumstance, you may need to open a new brokerage account. This is the account is where you’ll invest your money.

      If you’re currently working for a company, odds are that they offer a 410K investing account. If so, here’s where you’ll invest most of your money. The only problem with this is that you’re limited to the stock options that are available.

      You do have the option to open a separate IRA (individual retirement account.) Here are some of the best brokers:

      1. Vanguard
      2. TD Ameritrade
      3. Charles Schwab

      5. Challenge Yourself to Invest Consistently

      Committing to invest for retirement is hard, but continuing to do so is harder.

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      Once you’ve started investment for your retirement, you run at risk from stopping. Often you’ll want to contribute less, so you’d have more money in your pocket.

      That’s why it’s important that you create a budget that allows you to invest each month. If you’re working for a company, you can set a percentage for the amount you’d like to contribute each month. Most people by default contribute 1% but aim to contribute 10% to 15%.

      Be the judge for how much you can afford to contribute after covering important expenses. To stay motivated, use Personal Capital to view your net worth.

      A benefit to contributing money to your retirement account is not taxed. For example, if you earn $100 and invest 10%, you’d contribute $10, then get taxed on the remaining $90. As of 2019, the most you’re able to contribute towards your 401K is 19K but this can change.

      6. Consider Where to Invest Your Money

      The most common way to invest your money is in stocks, but it’s not the only way. Here are other ways to invest:

      Robo Advisors

      Robo-advisors[4] are fancy algorithms that’ll choose the best investments for you. Sites like Wealthfront make it easy for first-time investors to invest their money. You’d input information about yourself and set your risk tolerance.

      Then, set your monthly contribution amount and your robo-advisor would do the rest. Robo-advisors charge a fee to manage your money, but less than regular advisors.

      Bonds

      Think of bonds as “IOUs” to whomever you buy them from.

      Essentially, you’re lending money and charging interest. Like stocks, not all bonds are equal. Some will be riskier than others depending on their rating.

      Here are the different types of bond categories:[5]

      1. Treasury bonds
      2. Government bonds
      3. Corporate bonds
      4. Foreign bonds
      5. Mortgage-backed bonds
      6. Municipal bonds

      Mutual Funds

      Picture a group of people dumping all their money in a jar that’s managed by a professional. This is how mutual funds work. The fund manager manages the money looking to earn capital gains (interest.)

      One of the best types of mutual funds is index funds. Since these funds don’t try to beat the market and instead follow it, they need less research. Because of this they often charge the lowest fees and yield the best long-term results.

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      Real Estate

      Yes, buying a home is an investment when done correctly.

      Imagine buying a home and using it as a rental property. After repairing it, you receive a monthly surplus check of $100 to $200.

      This may not sound like a lot, but repeat this process enough times and you’d earn a large amount of passive income. That’s why real estate is one of the best investments to not only retire but become wealthy.

      But, it requires a lot of money to start and you should expect losing money along the way as you learn the process.

      Savings Accounts

      Your money can still grow in a savings account. Nowadays most online banks offer a 2% annual return. Although the average inflation is higher your money will be available when you need it.

      7. Master Disincline to Dodge Short Success

      Investing for retirement is a long-term strategy. That’s why you need to master delayed gratification. All this means is delaying short-term pleasure for something bigger in the future. Research shows that those who have delayed gratification are more successful.[6]

      So how can you master delayed gratification?

      By building your discipline.

      Think back to what retirement means to you. A clear purpose will help you avoid withdrawing your money during a market downturn. It’ll help you contribute more towards retirement when you’d want to waste it instead.

      Your journey towards retirement will be long, so reward yourself along the way. Choose a reward that’s relevant and meaningful, so that you reinforce positive behavior. For example, after contributing more towards retirement, treat yourself to dinner.

      8. Aggressively Invest on This One Investment

      I’ve mentioned several types of investments but haven’t covered the most important one.

      It sounds cliche but here’s why you’re your best investment towards retirement. The more you know, the more money you’ll be able to make. The more good habits you adopt, the more secure your retirement will be.

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      More importantly, investing in yourself is an investment that no one can take away. There’s no market downturn nor tragic circumstance that’ll wipe your knowledge and experience.

      But, how can you invest yourself?

      Reading books, blogs, and anything that’ll help you learn new topics daily. Listen to podcasts and audiobooks on your commute to/from work.

      Save money to buy courses and hire coaches. I used to believe hiring coaches was a waste of money when I could learn the subject alone.

      But, coaches see your blind spots and hold you accountable. Hiring the right coach will help you achieve your goals faster than you would’ve alone.

      Retire Happy with Excess Money

      The key to a secure financial future doesn’t only belong to financial experts.

      It’s possible for you and I. What if you were able to retire earlier than most people and weren’t a financial planner? What if you were able to focus on what you enjoy doing the most while your money was working hard for you?

      I know this sounds impossible now, but the truth is you’re capable of taking charge of your retirement. I’m not a financial expert but I’ve learned how to invest my money by reading books and learning from others.

      Investing your money is scary. So start small and invest a small amount of your money with a robo-advisor. Feel your money drop and rise for a month or two. Then, invest more and keep this up until you’re aggressively saving for retirement.

      One day, you’ll wake up with a net worth you’re proud of – confident about your retirement. You now know a few strategies you can use to invest in your retirement. Will you take action to retire happy?

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      Featured photo credit: Matthew Bennett via unsplash.com

      Reference

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