Can I Afford a Master’s Degree?

Good morning and how are you doing?

Friday letters are usually dedicated to taking questions from our community. Do you have a question for us? Please feel free to?

• send an e-mail to [email protected]; or
• send a DM to any of our social media channels, or
• simply fill out this form. Don’t worry, your responses are kept anonymous.

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Question

I am a worker and at the same time schooling. I have children who are also schooling and I’m facing financial problems about paying their fees. But I still want to pursue my Master’s programme.

What should I do?

Answer

Education and acquiring skills are a form of investment. In fact, it is commonly said, that the greatest investment you can make is in yourself. However, this should not come at the cost of your financial health.

Here are some things to consider to ensure that your quest to acquire further education, does not stress your finances:

• Consider more affordable alternatives. The cost of education in general is expensive. However, some are relatively cheaper than others. You can do some research to weigh your options and pick what best suits your pocket.
• Seek funding/scholarships. Your dreams are valid. You might want to go to a well-recognised school, which is usually more expensive. This may not necessarily match your pocket, but seeking funding and scholarships will help make it easier.
• Draft out a plan for this. If you assess your pockets and it is evident that you are unable to afford a Master’s degree without financial stress, you might need to work towards pursuing this degree at a much later date. This is so that you can plan and save towards it well enough.
• In the case that all the above options are not suited for you, you can consider using free resources as well. There are many free resources and courses available on the internet that can help improve your knowledge base. Agreed, this is not the same as a Master’s degree certificate, but to an extent, it serves the purpose of improving your knowledge base.?

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Question

I am a student and I am in 400 level. I have saved ?50,000 from the money my parents send me, and I don't know what to invest it in. How can I go about this, please?

Answer

Well done to you, for taking charge of your finances!

Beyond being a tool to acquire wealth, investing should also be cultivated as a habit. We often say that it is not about how much you earn, but by what how much you are able to do with what you earn. Investing is what helps you make the most of your money.

While building an investment portfolio, it is important to diversify. An investment portfolio is a combination of assets owned by an individual. To diversify your investment portfolio means that you invest across asset classes. Generally, investment assets are classified as:

• Low risk assets: These are assets that are subject to minimal fluctuations. They also have the potential for low returns. Examples of low-risk assets are government bonds, high-yield savings accounts, etc.
• Medium risk assets: These assets fluctuate in price, but on a more minimal level than high-risk assets. An example of medium-risk assets is corporate bonds (i.e. bonds issued by companies).
• High risk assets: These are very volatile. Their prices fluctuate frequently, and sometimes drastically. As a result, they are regarded as high-risk. In the same vein, they have the potential to generate high returns. Examples are stocks, cryptocurrencies, etc.?

While building your investment portfolio, it is therefore important that you include a bit of each category. Different investors would usually have different investment portfolios based on their unique profiles. While some investors are risk-tolerant, some other investors are risk-averse. A risk-averse investor may have an investment portfolio that looks like this, for example:

• 50% - Low-risk assets
• 30% - Medium-risk assets
• 20% - High-risk assets

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