How Investing in Education Impacts Earning Potential

Instructor: Kat Kadian-Baumeyer

Kat has a Master of Science in Organizational Leadership and Management and teaches Business courses.

It is no surprise that those with a bachelor's degree can earn significantly more than their counterparts with only a high school diploma. In this lesson, we will explore the degree types associated with potentially higher earnings.

The Financial Benefit of Higher Education

Pete and his buddy Jimbo graduated from high school. In the days after graduation, each of them thought about what to do with the rest of their lives. Pete always said he wanted to make a million dollars. Jimbo wasn't sure. He didn't have any clear goals.

Both boys stumbled across a flyer for a college fair. In bold type, it read, ''Did you know that those with a bachelor's degree potentially would earn a whopping $2.2 million in their lifetime while those with only a high school diploma will cap at around $1.3 million?''

Suffice it to say, Pete was more convinced than ever to invest in his education because he knew it would have an impact on his potential lifelong earnings. He could potentially earn millions of dollars!

Pete read more about college degrees, and in his research, he learned that there are certain degrees that beget higher paying jobs than others. According to U.S. News and World Report, degrees in STEM disciplines, science, technology, engineering and mathematics, lead to higher-paying jobs.


Forbes, Inc. reports that a petroleum engineer with a bachelor's degree and less than three years experience can expect an annual salary of $88,700. Marine engineers with the same credentials and experience can expect a lower wage but are still compensated quite impressively at $62,200. Don't think that an engineering degree is the only cash cow. Computer analysis and software developers range from $79,690 and $93,350.

Since science was not Pete's strong suit, he investigated other degrees. He found that The Occupational Outlook Handbook ranks market research analysts at a not too shabby $60,300 a year. For a job like this, employers are looking for a degree in business administration, marketing, or even psychology. Ideal candidates require strong math and analytical skills.

There Is A Downside

Pete completed his first year in college and returned home to see his friend Jimbo. Jim was still working at the car dealership making some money. Pete was jealous in a way because he knew that although he was living his college dream, he was going to be one of many graduates pounding the pavement for a job.

It was clear to Pete that a higher education is the key to financial independence. However, it is important to note that not all college grads land a high-paying dream job. The rate of unemployment is higher for recent grads than that of college graduates already in the business world. A young graduate should understand that it might take time to land the right job.

But all is not lost. In comparison, a person with some high school or even a high school degree will have a much harder time making ends meet. This person will experience a much higher rate of unemployment and for a longer period of time. His lifetime earnings will be 53% lower than those with a higher education.

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