You’ve got your undergraduate degree and now you’re debating if you should go to graduate school. I’ve been in your shoes. I too wondered should I go to grad school? It’s a big commitment. Tuition can get quite expensive, especially if you quit working full-time to go to graduate school. However, earning a graduate degree can boost your career and really increase your earnings potential.
I’ve decided to dedicate time this month on graduate schools, specifically the much loved and vilified graduate degree, the MBA. Let’s start off with a layup as to why getting your graduate degree is a good idea, if you want to make more money.
Many personal finance publishers use Net Worth IQ as a way to track their financial progress. NW IQ gathered some interesting data on education level and compensation, which I highlight below.
A lot of it is just common sense. For example, the older you are, the greater your net worth tends to be.
This is the chart that stood out most
|Education||Profile Count||% of Pop.||Median Net Worth|
|Less than high school graduate||21||0.67 %||$26,440|
|High school graduate||79||2.53 %||$40,570|
|High school graduate with some college||322||10.32 %||$25,189|
|Associate degree||117||3.75 %||$46,464|
|Bachelors degree||1460||46.78 %||$73,461|
|Masters, professional, doctoral degree||901||28.87 %||$193,761|
|Total Reporting Users: 2900|
Someone with a graduate degree averages a net worth 160% more than someone with a bachelors degree.
In addition, those who go to graduate school earn 700% more than someone with only a high school diploma. The data is based on info provided by 2,900 users which is a big enough sample set.
1) People are older when they enter or re-enter the work force
2) Graduate degrees command higher salaries
3) People tend to work longer because they invested a greater amount of time and money in their education. Doctors, for example, study until they are 28-30, and can work well into their 70’s.
4) People may have more money already, since graduate school is expensive.
5) People are motivated to succeed because they are sacrificing more, and need to prove to themselves they made the right decision.
There’s been a lot of debate over whether a graduate degree is worth it, and this data tilts the data towards yes. You guys know we don’t like to rely on net worth, as it gives a false sense of security.
But, since net worth by definition is net of all liabilities, we can presume the cost of higher education, and student debt specifically, is included.
The Older You Are, The Wealthier You Tend To Be (Except If You’re Between 60-64!)
|Age||Profile Count||% of Pop.||Median Net Worth|
|Under 25||499||15.99 %||$9,660|
|75 and over||2||0.06 %||$2,734,001|
|Total Reporting Users: 2981|
The Higher Your Income, The Higher Your Net Worth
|Income||Profile Count||% of Pop.||Median Net Worth|
|0 – 9,999||92||2.95 %||$1,830|
|10,000 – 19,999||65||2.08 %||$839|
|20,000 – 29,999||131||4.20 %||$1,808|
|30,000 – 39,999||186||5.96 %||$3,582|
|40,000 – 49,999||268||8.59 %||$22,211|
|50,000 – 59,999||283||9.07 %||$32,461|
|60,000 – 69,999||282||9.04 %||$50,177|
|70,000 – 79,999||260||8.33 %||$96,520|
|80,000 – 89,999||180||5.77 %||$113,100|
|90,000 – 99,999||202||6.47 %||$176,548|
|100,000 – 149,999||542||17.37 %||$267,042|
|150,000 – 199,999||190||6.09 %||$513,000|
|200,000 – 249,999||99||3.17 %||$549,446|
|250,000 +||129||4.13 %||$1,035,000|
|Total Reporting Users: 2909|
The last two charts aren’t a surprise at all. The net worth differential among various levels of education is. Now obviously there are plenty of wealthy people who don’t have graduate or even bachelor degrees (Bill Gates).
However, if you’re debating if you should go to graduate school or not, this data may help you decide.
I’ll be the first to tell you that getting a graduate degree was a royal pain in my a$$, especially going part-time. Can you imagine working 60-70 hours a week, and then going to class from 9am-6pm every Saturday for 3 years?!
What’s worse was the last minute studying on Friday night. The only thing I wanted to do was pass out on the couch watching my favorite movies. But, the good thing about a difficult experience is that it’s over.
And what’s left of you is a stronger individual who can better endure future hardship. Every weekend now feels like a vacation for me. And I’m really glad I got my graduate degree.
To quantify the MBA is somewhat difficult, but I’d like to think it’s helped me avoid the chopping block during the past two downturns. It also enabled me to get promoted once during school, and once right after I graduated.
In addition, the degree gave me the credibility to manage a business and I’d happily do it all over again.
Is An MBA Worth It?
Should I Get A PhD?
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