Chapter 5: What are the Outside Benefits of a Finance Degree?
No matter how well you plan and prepare for the future, you just never know for sure where that future will take you. You may discover that you graduate with a finance degree, work in the field for a few years and realize that your job, career, or family goals lead you down a completely unrelated and unexpected new road. You may not ever even get a standard finance job upon graduation, falling into a role that has you performing duties that really don’t relate to finance at all. However, this doesn’t mean that having the foundation upon which a finance career is built won’t prove valuable over the course of your lifetime. In fact, you could find that the education that comes from your finance degree work could add hundreds of thousands of dollars in value or more to your financial situation over the course of a lifetime even if you end up working as a sanitation worker or being a stay-at-home parent.
Sound crazy? It’s not. Don’t believe it? Here are a few examples of how a finance education could still have huge payoffs even if you never work within the industry.
The Home Buying Scenario and More
Let’s say you’re buying a home. Well, there are a variety of financial factors that can come into play during this process and that could significantly affect the price you pay for that home over time. However, depending upon the level of your financial knowledge, you could cut the amount you pay for that home by more than half. By understanding things like interest rates, loan terms and loan timeframes, amortization rates, and how payment amounts and extra payments can affect the amount of interest owed over time, you could effectively cut hundreds of thousands of dollars off the amount a mortgage costs you over its payoff period.
But some people never own a home and would therefore have little use for such information…or would they? Many of the principals involved in paying off a mortgage could be used for future planning and other debt payoff strategies. Understanding interest rates and how they affect the building of debt upon itself can help you payoff credit card debt more quickly, or better yet, avoid credit card debt altogether. And on the flip side, understanding how interest rates work can help you select the best investments to help you grow your money over time.
This and similar knowledge that can come along with a degree in finance can have other far-reaching effects over the course of a lifetime. From understanding future values and helping you with retirement planning to knowing how to properly diversify your portfolio allocation and doing stock and fund analysis or just having confidence in handling money and understanding financial terminology when talking with other financial professionals, a finance degree can have all kinds of wide-reaching and long-lasting benefits for the remainder of your life.
And over the years, this education can add substantially more in value than the amount you paid for your tuition and education-related costs. Just think, according to CreditLoan.com, the average American’s interest payments on debt can be $600,000 over the course of a lifetime. Now consider if you could use your financial education not only to stay out of debt — and possibly save yourself over half a million dollars in the process — but then put that excess cash to work earning you even more money. Over the course of a lifetime, we could be talking millions of extra dollars or more in assets added to your wealth. Not only could this improve your quality of life, but it could lead you on amazing travels, new career or entrepreneurial endeavors, allow you to take an earlier retirement, and do many of the things that most people only dream of. However, it’s important to bear in mind that the education that comes along with a degree in finance is only a tool, and it’s up to you to wield it wisely, making it a more effective instrument.