Is university still a good investment?

Is university still a good investment?

by Goh Eng Yeow
PUBLISHED 23 April 2017

A top-notch education is frequently viewed as the passport to a well-paid job. Yet putting your child through college these days is no walk in the park.

Former US Federal Reserve chairman Ben Bernanke once said an ex-colleague had likened the experience of putting his three children through Princeton University to buying a new Cadillac car every year and then driving it over a cliff. Still, painful though it may be financially, his ex-colleague said he would have no hesitation in doing it all over again if he had to, Mr Bernanke added.

I had similar feelings when my nephew asked me for a $60,000 loan to do his MBA at Singapore Management University. He had graduated with a social science degree and felt he needed some financial grounding to get ahead in life.

Since he was already working, his first option should have been to apply to a bank for a loan. But the catch is that even if the loan application had been successful, he would have been saddled with a big debt to repay.

He also hasn't fully paid off the loan he had taken out to fund his undergraduate studies.

More details in http://www.straitstimes.com/business/is-...investment

EY is rich.
He don't mind giving the money to his nephew.


For me, I'll ask my nephew to pay off his university loan first.
After that, then, I will give him the S$60k.

loan or not loan is not important.

important is his ability to pay off debt, which is a important lesson to learn.

MBA should be self funded after working experience and personal saving. I will not lend unless I have his parent blessings and no impact to my financial well being if is not returned.

Will see what is their motivation for taking MBA.

Mostly will not sponsor or lend. Easy come easy go.
Ask them to go work first to self fund. spending OPM is different from spending own money.

Thats why they are taking an MBA to learn "spending OPM is different (much easier) from spending own money."

After graduation, he will join either as a fund manager that will deliver sub-market returns for policyholders or as a reit manager.

Honestly speaking, a university degree is too generic a category to determine if it is worth getting as an investment. There are so many sub-factors to consider.

1) What type of University degree?
2) What type of job you interests you or you intend to get?
3) What is the exact cost of that degree?
4) Is this a MBA/Undergrad/PHD? (Depending on the type of job, the degree is worth a different amount. PhD may be worth a lot to a professor but is almost worthless in other areas.)
5) Do you have a previous degree in the same field? (duplicates are worth lesser)
6) Do you have another MBA/Bac Degree? (duplicates are worth lesser)

Before his nephew or anyone decides to take an MBA they should do a cost benefit analysis to work through the factors that push you to getting the degree. In my opinion, you should practice the same investment mindset from value investing to getting a degree.

You can often "calculate" the future cashflows (salary increase, job retention, job availability - probability of getting a job) from getting a degree. Of course you may attach any premium you may desire on having the degree (i.e. emotional satisfaction of having the degree, better prospect of finding a partner, bragging rights...etc). Hence, whether or not it is still a good investment is way too highly subjective and it is up to each individual to decide.

Haha, his nephew is no different from the earlier days of Ezra and Swiber. Taking on debts to add-on new capabilities.
Whether the market will value the capabilities is really unknown.

In these days, I find that many courses of the Universities are lagging behind the real world. I suppose the unleashing of the unlimited knowledge via internet have somehow increase the speed of knowledge acquisition by those who can harness it and it is tough for universities to update its course content yearly.

It used to be that the research papers have to be obtained via academic institutions. But now, a few clicks will do the job.

(23-04-2017, 04:40 PM)chialc88 Wrote: EY is rich.
He don't mind giving the money to his nephew.


For me, I'll ask my nephew to pay off his university loan first.
After that, then, I will give him the S$60k.

loan or not loan is not important.

important is his ability to pay off debt, which is a important lesson to learn.

When one is young, money is important. When one is older, it (money) gets less important and will soon pale in comparison with things that end with "-ship". Imagine the non-ideal scenario where one has the capability (to give) but yet did not, and then cause the receiver to miss the opportunity to "seize the moment" (after course all these is hindsight but we can only connect the dots backwards).

I am sure most of us knows that a degree do not guarantee success. And we have many successful people that do not have a degree.

Whether a good investment depends on the person taking the course. If he is comfortable running a rat race and climbing the corporate ladder, then I think paper qualifications are very important.

relating back to my undergraduate days and now in the working world, I think for the next generation's benefit universities curriculum should definitely be further improved, at least to be more skill oriented

The government wants to make engineering here cool again and wants more engineers, but i'm seeing more "talkers" now rather than "doers", and ironically "talkers" are occupying most of the managing positions. I think we need more skilled ppl now, and education plays a big part in it