CFO of Life #111: Intellectual Property - Why it pays off to invest in yourself!

“No other investment yields as great a return as the investment in education. An educated workforce is the foundation of every community and the future of every economy.” - Brad Henry

?This is the exact quote that sparked my interest in writing this article! It reminded me how much more I can afford now that I am a few years past my education. How much more I can get from it and how I keep on going back to my education to draw more and more parallels with the real world.

?Still, education in the form of a university degree is expensive. If I estimate, it probably cost me around ￡65,000 for the three years of study. This would include my tuition fees, cost of living, food, travel (back and forth to home as I got homesick a few times) and all other costs associated with going to university.

?And to make a point, this is around 11 yearly wages in Bulgaria, or I would need to save for 20ish years living on the minimum amounts just so I can pay for it. Luckily, I managed to get a student loan for the biggest part of it. A part-time job to pay for the day-to-day costs and a few small scholarships to cover some others. But it was all worth it. And I can hear you say “Simeon, but why should I care?” You should care as education is one of the tried, tested and proven methods to improve your earnings. It is the one thing that will give you the greatest return on investments throughout your life.?

?For example, if we compare my current salary and my salary before I went to university, I earn 12 times more. What investment can predictably provide you with this type of return?

That is why in this week's newsletter, I will break down the topic of education and how it is the best investment anyone can make:

1. Financial Benefits

2. Personal Development

3. Social Benefits

4. Choosing the right education

?If this is your first time reading this blog, my name is Simeon Ivanov (Si-Me-On). I write this weekly blog about personal finance called CFO of Life to bring you on the journey towards becoming the CFO of your Life! I hope you like it and stick around for the long term!

Now, let’s get into the thick of it!

?We have to start with the obvious reason why most people study anything, it is to improve their earning potential. And education is one of the best vehicles to do so! It does that by helping you get your first graduate job which usually pays a lot more than a regular job, it helps with long-term job security as it allows you to always have that “stable starting point” and it is like a gift that keeps on giving.

Higher Earning Potential:

?One useful way to look at this is the long-term statistics for people between 16 and 64 and how the salaries of those with and without higher education stack up.

According to Statista:

?People with a graduate degree continuously outearn people with no education. With just about ￡10,000 a year. Which is a staggering amount that can’t be ignored. And to put this into perspective, that ￡10,000 over your 45-year career is ￡450,000 or just about the cost of a studio apartment in London. All this, without factoring in promotions and any other career advancements that you can secure thanks to your degree.

?Now, getting a Postgraduate degree would definitely help you a lot more, but that jump is not that high and usually costs a lot more. But nowadays, with the invention of online courses, it becomes more and more normal to supplement your learning with shorter and pinpointed courses that teach you just about what you need.

Job Security:

?Another benefit of education is the increased job security it provides. It makes you a lot more antifragile and extremely adaptable to the changing job markets. It allows you to specialise and obtain skills that can flex into plenty of fields, increasing your market value and the number of jobs you can do.

?Another reason to vouch for investing in your intellectual property is that it will help your personal development. As, while you study you don’t only increase your knowledge you improve your personality and curiosity.

Critical thinking:

?Most education would require you to develop your critical thinking, as it would push you to use what you learned and deploy it in different situations. You need to learn how to use it in any situation, with any person or adapt it to different places.

For example, I learned how microeconomics works, how people make choices and how they supposedly think from an economic point of view. While that is not what I do at work, that analogy and framework of thinking helped me when creating numerous customer-centric solutions. It allowed me to critically analyse the way any other person would approach the problem and put myself in their shoes.?

Improved Communication Skills:

?Another key element of developing yourself and investing in your education is improved communication skills. Communication skills are paramount for any job you do, regardless of the level, the country or the setting. Efficient communication is the key to solving a problem, passing an interview, making friends and scoring a promotion!

?But it is also something that will help you in your personal life. From being able to articulate to your partner why you want a specific thing, to win the argument with the tax employee who wants to charge you extra tax, to charming the restaurant hoast into giving you a table without a reservation.

Increased Self-Confidence:

?Going to university and studying for 3 years abroad made me a better man. When I started, I was a boy on a journey to conquer a huge challenge in a foreign land with people whom I didn’t know. In the end, I became a man who was able to solve his problems and find his way around many many tricky situations. Now, that is not something you can expect from all types of education, but formal university education does help develop you quickly into a responsible adult as either you sink or you swim out of it!

Investing in your education unexpectedly has some additional social benefits!

?One of the biggest social benefits that you can get from education (regardless of the type of it) is to become a Global Citizen. By being exposed to different cultures, to different traditions and a myriad of different ways of thinking, you will broaden your perspective, you will find new ways of thinking and make a few new friends along the way.

?Now, this is not only true for traditional education it happens with online courses! I have made friends with people from around the world who were taking the same courses and we helped each other with tricky problems. We checked each other's work and we learned a lot, all this without even talking to each other in person, ever!

?On the back of that, I have managed to learn a lot about different cultures, and types of people and this has been pivotal in my work life. It has helped me understand a lot of different cultures and how to connect with my coworkers from different countries. And that will help you too, you just need to give it some time to blossom and enjoy the learning.

?Education can be expensive and lengthy, which is why choosing the right education for what you want to achieve is super important, it is like choosing the right tool when doing a task. You can use a chainsaw to cut logs for your fireplace, but you can always use an axe and do it the old way. Or if you don’t know better, you might choose a hammer and a screwdriver, it will be silly and efficient but it will do the job.

It is the same with education, going to university you will acquire a lot of skills, but most of them will be to a basic level with some being a bit more specialised. At the same time, choosing an online course would help you improve those skills and the tools you use, and it would give you plenty of alternative ideas on when and why you can use them.

?Education is like a tool you need to pick the right tool for the right purpose. And it is paramount to find the best teachers with the most suitable experience for the problems you are trying to resolve as they can give you the exact knowledge you need! Otherwise, you risk studying for the sake of it, which might feel right but would not bring any benefits.

?Don’t forget to invest in yourself, as no one else will! Education was the right choice for me and even close to 6 years after graduation, I can see the benefits of this education. But don’t forget, it will take time and patience to start seeing the results!

Learning is something that you will do all your life, so do your best and enjoy it.

Post #111 in the series CFO of Life #si #personalfinance #CFOofLife