This article, by Justin Baiocchi, was originally published in The Northern Daily Leader on 27 February 2016.
Another important life milestone was reached recently when our eldest son, Jack, started school this year. Just Kindergarten of course, but still a big step up from lolling around on the lounge floor playing with his wooden train set all day. Uniforms, bells, lessons and set meal-times; the poor kid probably can’t decide whether he’s in the army or in prison. But thinking of the rites of initiation, bullying in the yard, and intimidation by long-term muscle-bound inmates sporting beards and tattoos, prison is probably the best analogy. Those Year 5 kids are much more mature these days than when I was at school. Still, Jack seems to be coping well with the change and it only requires a moderate level of force to drag him out of the car at school drop-off.
The purpose of being at school is to gain an education of course, not to meet girls (or boys) and have a good time, which is what most kids tend to think of school. They’re too young to understand it, but time spent learning is the best indication of how wealthy you’ll be in later life. There is an extensive body of research which clearly links the level of household wealth with the level of education of the primary wage earner. In the United States for example, the average weekly wage of someone who finishes high school but goes no further in their education is $668. If you went to university and completed a university degree your average weekly wage rises to $1,101, and if you decided to do some post-graduate study (a Master’s for example), your average weekly wage rises to $1,326. So if you go no further than high school, your annual salary is probably going to be around $34,000 – push on to complete a Master’s degree and you can expect to earn around $69,000 (on average of course and all in US dollars, although the same relationships would also apply in Australia).
While the accumulation of wealth and money should not be your overriding goal in life, it’s clear that the longer (and harder) you are willing to study, the better off you will be from a financial perspective. Naturally, studying extensively beyond high school comes at a cost, both of your time and your wallet. A Master’s degree could set you back $15,000 or $20,000, or even more. But think of it this way – if you pay for both undergraduate and post-graduate degrees, costing $50,000 in total, your expected increase in annual earnings of around $35,000 (in US dollars), means your studies pay for themselves in less than two years. From then on the extra income is all for you. No wonder it’s said that education is the best investment – even Commonwealth Bank shares can’t match that return.