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Course: Financial Literacy > Unit 9
Lesson 1: Education and earningsWhat is educational investment?
Investing isn't just about putting money into things like stocks or bonds. You can also invest in yourself by learning new skills and getting a better education, which can help you succeed in many ways.
Educational investment
Educational investment is all about how much time, money, and effort you and your family put into getting a higher education. People choose to invest in education for different reasons, like personal growth, getting a better job, moving up in the world, or helping their community. Everyone has different goals, so what's important to one person might not be the same for someone else.
The good and the not-so-good
Investing in education can be a great thing because it can lead to more money, better skills, and more opportunities. But, it can also come with some downsides, like expensive tuition, student loans, and missing out on doing other things. You have to weigh the good and the bad to figure out if investing in education is the right choice for you.
Human capital
Human capital is all about your skills, knowledge, and how productive you can be. Education and training can help you build up your human capital, so you're more valuable in the job market. The more education you have, the more skills you can offer to employers, which can lead to better job opportunities and higher pay.
Earnings and education
In general, people in the U.S. earn more money if they have higher levels of education, as shown by the table below:
Higher education and training usually help people gain more knowledge, skills, and abilities, making them better prepared for good-paying jobs. When people have more education, they often become more competitive when looking for work. However, having more education doesn't always guarantee a person will make more money. Other factors, like where you live, the type of job you have, your experience, and even discrimination, can also affect how much money you make.
The changing world of work
The economy and job market have changed a lot in recent years because of things like globalization (how countries trade with each other), automation (machines doing work), and innovation (coming up with new ideas). These changes have led to a greater need for workers with higher skills and less demand for those with lower skills. This is called a skill-biased technological change or a skill premium.
Different education levels
These changes can have different effects on workers, depending on their education and training. For some, it might mean a higher risk of unemployment (not having a job), underemployment (working less than you'd like or in a job that doesn't use your skills), wage stagnation (not making more money over time), or wage inequality (some people making way more than others).
Jobs that need higher education and training
There are some jobs that are growing fast and need people with higher education and training, like health care, information technology, engineering, and more. There is also a high need for jobs that require skills, and not necessarily a degree. Examples of these jobs are mechanics, carpenters, electricians, wind turbine technicians, welders, and more. These jobs often involve hands-on training, where people learn the necessary skills by doing the work instead of sitting in a classroom.
If you're interested in these areas, investing in education or learning these skills could be a smart move.
Tips for getting ready for a changing economy
To prepare for a changing job market, try things like lifelong learning (always learning new things), exploring different careers, and networking (meeting people who can help you find a job). By being proactive and adaptable, you'll be better prepared for whatever the future has in store.
Want to join the conversation?
Is it better to work a job you love that pays poorly or to work a job you hate that pays well? The age-old question.(8 votes)
This is, indeed, an age old question. It is based on your needs and values. If you need to pay for a child's medical or educational expenses, you might have to take the better paying job that you hate. If, however, nothing except for status demands that you earn a lot of money then do what you like and live within your means.(18 votes)
- Can you do more than 1 career at the same time or one at a time?(3 votes)
- You could do more than one at the same time.(1 vote)
- How long do you need to be in school for a bachelors degree ?(1 vote)
- You'll need to give it 3 to 4 years of your life.(2 votes)
If your in America and an American job says they can't hire you due to race or gender that goes against the law.(1 vote)- It sure does! Isn't America wonderful?(2 votes)
- get ready for money buy house(1 vote)
- get ready for money buy a house(1 vote)
- Is it better to work a job you love that pays poorly or to work a job you hate that pays well? The age-old question.(1 vote)
- I'm curious. Why did you post this question in this lesson? You'll probably get a better answer in a lesson about jobs and work, than in one on educational investment. People doing a lesson on jobs will be "primed" to help you.(1 vote)
- Is it worth it to do more than one career or only one?(1 vote)
- "Worth it" is a moving target. What are your measures of "worth"? If they are only money, then you are shorting yourself of things like love, safety, contentment and faith.(1 vote)