If you’re looking to start a business, the first thing you need to consider is your education level. Just like any other business venture, it’s important to choose the right education level so that you can get the most out of your investment. One way to determine if an education level is worth pursuing is by calculating its Return On Investment (ROI).
ROI on education level is a way to determine the worth of an investment on one’s education. It is calculated by dividing the return (the increase in income) by the cost (the total amount of money spent).
Some people are skeptical about this method because it doesn’t take into account other factors such as happiness, fulfillment, or job satisfaction.
What Is ROI?
When thinking about your education, you may have heard the term “return on investment.” ROI is a way to compare the profitability of different investments by comparing the return (profit) with the cost of an investment.
Essentially, it’s a way to determine how much money you’ve made or lost as a result of an action or decision; in this case, your choice to pursue higher education.
To calculate ROI for education level, subtract your total cost of each degree from its estimated lifetime income and then divide that number by its total cost to get an idea of how many years it will take for you to break even on that degree.
For example: If I want a bachelor’s degree in business administration but I’m unsure whether or not having one would earn me more than getting only my high school diploma did during my working years—and therefore whether or not investing in that degree would be worthwhile—then all I need do is calculate how much money I’ll make over my lifetime compared with what I’d otherwise earn without one.
A little time spent researching which classes might lead toward some sort of career path (or even just looking at job listings) can help narrow down where exactly those paths lie before starting college so you can jump right into them instead of spending precious time floundering around looking for an area where your skillset fits into what needs doing best at any given moment.
Education and the Job Market
The job market is an extremely good indicator of the ROI on your education level. It’s possible to get a high-paying job with a low-cost education, especially if you’re willing to work hard and hustle.
Of course, not everybody wants a corporate job or even considers themselves suited for such employment; some people prefer the freedom of freelance work or entrepreneurship. In any case, it’s important that students consider whether their career goals match up with their school choices before selecting which path will be best for them in the long run.
How Do You Calculate ROI on Education Level?
ROI is a simple equation:
$$\text{ROI} = \frac{\text{Cost of Education}}{\text{Income after Graduation}}$$
If your education costs $40,000 and gives you an income boost of $50,000 per year, your ROI is:
$$\text{ROI} = \frac{\$40,000}{\$50,000} = 0.8 \mathrm{or 80%}$$ However, if you don’t go to college at all and start working instead with no degree? You’ll earn just $25K annually instead of the $50K that we assumed above. In this case:$$\text{ROI} = \frac{\$-25}{\$-0}=1.5 \mathrm{or 150%}$$ So even though the cost of going to school was higher than not going at all ($40k vs $-25k), getting that college degree made sense because it allowed you to make 50% more money than not having one in the first place!
The ROI on education level varies by school and degree, but it is usually possible to make back the money you invest in your education.
There is no one-size-fits-all answer to the question of how much money you can make with a college degree. Your ROI will depend on your field of study, location, and other factors. However, there are some general guidelines we can use to determine whether or not investing in education is worth it.
The first thing you should consider is how much it costs to go to school and what kind of income you can expect after graduation. This will vary widely depending on the type of school (public vs private) and degree program that interests you most.
The U.S Department of Labor has an online tool where students can search for careers based on their interests; this tool also shows average salary ranges based on location and job title so that they know if they want to pursue certain careers before committing themselves financially
Conclusion
It’s important to remember that the ROI on education level is different for every person and school. It’s also important to consider how much debt you can afford in addition to the cost of your degree.