Saturday, May 7, 2011

Investing for Grads and Young Adults

My first lesson in finances after I finished came the day after high school was over.  I received a call from the principal of the high school asking me to come 'to the office' at school - can you believe that!?!  I had been the treasurer of the Grad Class that year.  As it turned out, I had not left the books 'balanced' as it were.   So I spent a good part of that day - the day after school was out for the summer - tearing through a file cabinet looking for documentation and receipts in an attempt to balance the Grad's account that year.  Not an auspicious way to end high school or start my life after high school.

Finances are not something that should be ignored or put off after you graduate or during college.  Whether your parents are helping you with your post secondary education or not, it will do you well to carefully consider how you spend your time and money after you finish high school.

Consider this: many people enter into post-secondary education in an attempt to start a career that they hope will take them to retirement.  At the very least, a young adult stands to make over 2.2 million dollars during the course of their career (conservatively, 50k/year x 45 years).   This makes your post-secondary education an investment decision.  If you are looking at those kinds of 'returns', doesn't it make sense to treat your post-secondary education as an investment?  You need to ask yourself where you will get the best returns for you money, your time, and your effort during this time of you life.

I need to clarify something here - when I use the phrase 'post-secondary education', I don't necessarily mean college or university.  Some people aren't ready to go back to school full time right after high school.  I certainly wasn't.  Sometimes the best post-secondary education one can get after high school is getting some working experience.  Or going on a trip.  There is a world full of other things you can learn outside of a formal education while you wait for your 'education motivation' to return.

If you do have an idea of what you like to study and you have the motivation to study it, do some research first.  Ask lots of questions.  You motivation for asking?  2.2 million dollars of your (future earnings) money - is on the line.  Its amazing how changing your perspective like that can help you find good questions to ask. Find people who have made careers of what you are interested in and ask them for their perspective and advice.  Research what courses you should take and then find the best schools and teachers to learn from.

Check out PayScale's College ROI (Return On Investment) report.  It essentially highlights which universities and colleges give the best (future) return on each dollar you spend.

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