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Personal Finances / Credit Cards and Consumer Debt
|Subject: Re: Musings about grad school tuition and loans||Date: 6/16/2008 9:39 AM|
|Author: ziggy29||Number: 274166 of 309112|
>> To the extent that education is not building your human capital, you can a) get it a HECK OF A LOT CHEAPER if you don't need the magic piece of paper at the end of the tunnel and b) you should consider it like you would an entertainment or other optional expense. <<
Agreed. Depending on whether or not you intend to use it and it increases earning power, it can be an investment. If done simply for "personal enrichment" it's an expense. There's nothing wrong with such an expense IF you can afford it, but it can't really be seen as an "investment" if it doesn't improve job prospects and earning power.
And if you do use it as an "investment," you still have to consider ROI. If you can go to school for two years at a low-cost JC and improve earning potential by $20,000 a year, it probably has a high enough ROI to be a good investment in your financial future. If it costs you $150,000 over four years (including lost income) for something that might increase it $5,000 per year, probably not so much.
Personally I don't like the idea that college is ALL about getting the "right" degree to make more money, because there is a value to personal enrichment and "learning for learning's sake." But one should not go into debt to finance "personal enrichment," nor should one drain the emergency fund for it. If it's something that can be securely afforded and paid for with cash without weakening your long-term financial plan, if you really want it -- go for it.
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