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I was with you up until the very end. Pay N times more for tuition, expect to earn N times more _on_your_degree_investment_ in the long run. That doesn't mean
by dsjoerg 10y ago
I was with you up until the very end. Pay N times more for tuition, expect to earn N times more _on_your_degree_investment_ in the long run.
That doesn't mean your entire income will be N times higher.
For example if you spent $100k on your tuition in year 0, and the rate of return from that degree is 10% per year, and assuming you spend the returns rather than reinvest them, then your degree is adding $10k/year to your income.
But you're not living on $10k/year, you're earning $80k/year, $10k of which is attributable to your degree.
So to complete the exericse, if you had spent 2x on your education, you would be making $90k/year. Not $160k.
- lisper 10y agoI think we're both wrong, but I think you're wronger than I am. Yes, it's true that N times spent on tuition does not equal N times more money in an absolute sense because the baseline income for spending zero on tuition is not zero. However, the article said that the ROI on tuition was 12% annualized, which means that you're not reinvesting the proceeds. If you reinvest the proceeds, then that is additional return on top of the 12%. But the details are not really relevant. What matters is that the headline is wrong. Where you do to school does matter.