College education is a need, which defines it as a significant investment in any society. Every student must make a decision about the career path to go in life. When making this critical decision, the student must consider all conceivable characteristics, including the cost of each specific vocation, as well as career ranking in the general occupations scale, availability of career possibilities, work opportunities, income scale, and taste and preference. A career in finance ranks very high on the list of the most prominent job prospects in all of these categories. Financial analyst position ranks among the top twenty prestigious jobs in the country according to the US News and world report as noted by (Messick, 2013).
In business terms, education is viewed as an investment and therefore the degree certificate acquired at the end the course is an asset. Consequently, it is of essence to know how to calculate college degree return on investment abbreviated as ROI. However, experts also advise that students should keep their debts in check especially in areas where the college education payments are from loans. The cost of the college education should therefore not exceed the projected return in the long run on that particular investment otherwise it will not be profitable. The total cost of education mainly constitutes tuition fees, books, accommodation or room and boarding minus grants and scholarships awarded to the students as demonstrated by (Mckeown-Moak & Mullin, 2014)
Scholarships vary from the first year of freshman to the subsequent years of study hence they do not always remain constant through the course of the study. The net cost of the college education varies from one college to another, public or private as well as from one graduate course to another. Therefore making an informed decision on career choice is a vital business investment strategy like any other investment in life. The salary scale in business and finance career path is very lucrative as evidenced by some of the professionals working as financial managers or advisors, financial analysts with an estimated average salary of $58,343 annually as reported by (Messick, 2013)
Table 1(a) Indicating specific estimates of annual cost of college education
ITEMS Annual budget in US $
Tuition fees 28,930
Room & Board 17,440
Books & Study supplies 4,040
Loan & interest 6,800
Other expenses 4,450
Estimated total Cost 61,660
Return on investment (ROI) is a ratio expressed as a percentage of profit or loss made in a financial year as quoted by Man (2015). The initial investment for a college education is the money for tuition estimated to be $28,930, cost of books $4,040, Room $17,440, Loan $6,800 payable at an interest of 4.66% per annum and personal or associated expenses at $4450. According to a recent study conducted to analyze whether a college education is still a viable investment, it indicated that overall ROI has not fallen below 15% in the past one decade despite the cost being an all-time high. Bachelors' degree graduate earns 66% more than their counterparts with high school education according to the Bureau Labor Statistics.
The demand for professionals in the field of finance is expected to rise by 26% by the year 2020 in the U.S. Bureau of Labor Statistics (2013) as observed by (Mckeown-Moak & Mullin 2014). Therefore the future is full of opportunities for all the financial subsector jobs. Financial related services are required in all others areas of our economy to review, categorize, record and analyze financial information on any given business. The college education provides students with a chance to learn and gain experience in understanding the world economy in varied business sectors across the globe. College education, as well as work experience, varies from one industry to another, while different businesses require a mixed set of skills and expertise to become a successful financial analyst. College education on finance is beneficial to the students because they can also become successful entrepreneurs.
Part 2: Research findings on financial analyst's cost of education and projected compensation (return on investment).
Pursuing college education is a tempting opportunity especially when one considers the ROI and other factors such as improving job marketability, starting off with a better salary and professional network growth that brings better job opportunities within reach. In undertaking any education program, the profit and expense path must be defined. Research on college education in job evaluation prospects are significant and therefore return on investment top the list of critical factors to consider on college education as noted by (Messick, 2013).
Table 1(b) Indicates annual cost of education versus ROI
ITEMS Annual budget in US $ Compensation (ROI) in the 1st year of employment
Tuition fees 28,930
Room & Board 17,440
Books 4,040
Loan 6,800
Other expenses 4,450
Salary on employment 58,343
Subtotals 61,660 58,343
Estimated Net Compensation 61,660 -3,317
All these finance subfields provide a broad range of potential jobs in the market with a positive projection of return on investment in the long run. The average salary for a financial analyst is 58,343 per year according to (Messick, 2013) in major corporations in the country. He is in charge of preparing annual and monthly financial budgets and financial forecasts as well. The analyst is mandated to provide detailed economic analysis of the company at any given date besides preparing weekly, monthly and quarterly financial reports and schedules versus budget allocations and variances thereof with appropriate recommendations. A bachelors' degree in finance prepares one to work in career tracks such as commercial banking, business consultant, tax consultant, business analysts, finance managers, financial planning, accounting, investment banking among others. Therefore keeping all parameters constant with the same pay cheque, the cost of investment can is realizable in exactly four years and one month of employment and afterward enjoys lifelong benefits of college education. Consequently, College education is a viable investment whose interests are far higher than the cost of investment in the long run.
References
McKeown-Moak, M. P., & Mullin, C. M. (2014). Higher education finance research: Policy, politics, and practice (3rd ed.). Charlotte, North Carolina: Information Age Publishing, inc.
Messick, S. J. (2013). Assessment in Higher Education: Issues of Access, Quality, Student Development and Public Policy (2nd ed.). Hoboken: Taylor and Francis.
