Life long learning

Although I've already got a successful career in a multinational corporation I've long been looking at strengthening my CV with a degree in business. It's impossible to say with certainty if this will be a good investment in terms of life-long earnings but I am confident it will help me continue developing my skills and it may open up new career options if I find myself looking for employment for any reason. The networking potential is also attractive, not least as I am living in a foreign country and therefore cut off to some extent from the 'normal' network of people I grew up with and went to school or uni with in my home country.

Looking purely at the financial aspect I expect it will cost me around 4000 pounds over a period of four years to obtain the degree. I will be around 40 years of age when I complete it, with an expectation of working between 10 and 30 years after that point. Assuming I retire at 50, I'd need to earn an additional 400 pounds per year after taxes to break even whereas if I work until I'm 70 (not impossible given the way the government keeps raising retirement age!) I'll need to earn just 134 pounds extra per year to break even.

A recent issue of the Economist indicates a degree in economics boosts lifetime earnings by more than 25% based on data from the Labour Force Survey as analysed by I. Walker and Y. Zhu. Whether or not this can be effectively translated into similar benefits for an adult student who's already been in the workforce for 15 years by the time the degree is obtained is difficult to say, but assuming it boosted my earnings by just 10% it would still be an excellent rate of return.

In numbers, assuming I never got another payrise except to keep up with inflation I'd earn some
280.000 pounds after tax from the time I'm forty until I turn fifty. Double or triple this for longer career spans. If the degree boosts my earnings by 10% then I'd have an income of 310.000 pounds every 10 years, an increase of 28.000 to 84.000 pounds which far outstrips the 4000 pound cost of the degree.

Looking at the opportunity cost of those 4000 pounds, if I invested them today in an account with 7% interest then discounting taxation and using the Rule of 72 it would be double in value after 10 years, double again after 20 years and double a final time after 30 years so that by the time I was retiring it would be worth 32000 pounds. This comes in comfortably below the 84.000 pounds value of the degree from the 10% lifetime earning with a 30 year career.