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Which education level has the highest return on investment? We ran the numbers – Business Insider

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  • People often argue about the value of a college degree, but the numbers prove that someone with a higher level of education will typically earn more than someone with less education.
  • An associate’s degree has the highest ROI overall, though other degrees will earn you much more over time.
  • Remember that each degree major or concentration leads to different job opportunities with different income prospects.
  • Read more personal finance coverage.

There’s a big debate over the value of a college degree. Some education advocates urge every young person to earn at least a bachelor’s degree. Detractors call college a waste of money.

Rather than listen to opinion, here’s an objective look at the cost of college and the most likely return on your investment.

Average income by education level

The Bureau of Labor Statistics tracks income by education level, which makes it easy to figure out how much you’ll make with a good degree.

As the education level goes up, the unemployment rate goes down until you reach the professional degree and doctorate level.

Here’s how much the average worker earned per week based on education level in 2018 according to data from the Bureau of Labor Statistics.

Foto: sourceBureau of Labor Statistics

The correlation here is very clear: More education means you make more money. The only exception is among people with a doctoral degree. Going to the top of the education ranks likely means you will become a teacher or professor. They tend to earn a bit less than someone with a professional degree, but not much.

Medical school, dental school, pharmacy school, and law school have different time and cost commitments. We are going to skip the ROI for these programs because they all look so different. The same is true of PhD programs. And, in those cases, the student also works as a student-teacher at the same time, further blurring the true cost of attendance.

Also, keep in mind that these are averages. Your own personal abilities and skills, the college you attend, your chosen major or concentration, where you live, your industry, and other factors will all play a role in your income.

The average cost of a college degree

The cost of college, like the cost of housing, always seems to be rising. The National Center for Education Statistics tracks the cost of college, including tuition, fees, room, and board.

The „degree cost“ noted in the chart below is a total cost, assuming the same annual cost and the typical number of years to complete. „Total cost“ includes the cost of a required prerequisite degree. You can’t get a master’s degree without an undergraduate degree first.

The cost per year at a two-year public institution was $10,598 per year for 2017-2018. At a public four-year institution, you would pay an average of $26,593 per year. A four-year private college charges an average of $41,468 per year.

For graduate school, you would pay an average of $11,617 per year at a public institution or $26,551 at a private institution.

Foto: sourceNational Center for Education Statistics

Here we assume that graduate students went to a four-year public institution first for a bachelor’s degree. Estimating the cost of professional and doctoral degrees is a bit trickier, as the types of degrees and how they work vary widely.

Which education level has the highest return on investment?

So, which degree offers the best return on investment? Here are the numbers:

Foto: sourceNational Center for Education Statistics, Bureau of Labor Statistics

Given there are many variables and we used a lot of assumptions, I was surprised to see that the education level with the highest ROI is an associate’s degree. The very low cost, despite a much lower lifetime income, gives you a higher ROI.

A bachelor’s or master’s degree from a public college or university are the next best in terms of ROI, but both give you a much higher lifetime income, too.

In absolute terms where you look at the difference in cost versus what you’ll make, a higher education level is better no matter how you look at it.

Results can vary widely

For this analysis, we treated the incomes of public and private school graduates as the same. Results may vary based on the reputation of the school, career office quality, engagement of alumni networks, and other factors.

At the end of the day, your college experience is only as good as what you make of it. You also have to look at the specific degree, as a fine arts major isn’t going to start a career with the same job and income prospects as an accounting major.

But when it comes to the cost of education, on average, it will pay off very well.

Related coverage from How to Do Everything: Money

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Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX up more than 200 points, U.S. markets also higher

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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