Financial Investment For Students
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I began my English 102 class at Arizona State University wanting to
solve a problem, right a wrong, invent ideas no one has ever thought of - and comb the world for injustice. But sadly, I ended up
spending all of my time on the computer. There were no expeditions heading to Africa to define English
philosophy in a research paper and there are no black and white right and wrongs, even the library waits
around in the same place every day for research students. My discoveries: one, research does not tell you
what topic to write on, and two, I was on my own. I searched the net, discovering (what you probably
already know) that it is only an asset if you know exactly what server to go to and the key words to plug in,
and finally that you must have the patience of an elephant ( I am certain that is what they are known for) to
find something useful. My point is that through my research at the library, e-mail, and influenced by
otherworldly circumstances (aliens visiting), I finally decided on a topic. And without further adieu, I will
present it to you, drum roll............, my topic is financial investment. I know! You are disappointed, I can
tell by your expression (I am now trapped in the computer, hear all, and see all). Why is this important?
How in the world could I, searching Africa and combing the deserts for divine knowledge end up with
finance? Well, my fine net friends, FINANCE, and what you do with finance, is what society is about.
Humans live it, breath it, and stuff it into every crack that surfaces in this “material world”, as Madonna
said. And more important than finance, is what facilitates human beings to increase, insure, secure, invest
and SPEND finances. I am certain there are some people in my audience today that are familiar with the
spending notion. The key is education. We are here today to solve a problem in which everyone is
involved. The U.S. secretary of education, Richard W. Riley claims that, “a good education is essential for
each citizen to fully participate in the changing economy and to our democratic way of life.(Riley 1)”
However, we do not live in a perfect world and education is not always in the reach of all people. There
are still problems that inhibit educational growth in this nation like the threat of violence, drugs and alcohol
in schools, limited access to new technologies, and restricted financial aid for college. Proposing a solution
is easy, but the real task is doing something. Financial matters concerning education are pressing issues
that are, and should be, addressed by all Americans with bipartisan political support. The financial
economy and education play a stupendous role in the present as well as in the future.
The topic of financial investments is of interest to millions of consumers internationally. Every
ritual that defines a lifestyle adds to the power of money. Let’s suppose you’re not interested. Let’s
suppose that you don’t believe in this financial razzle dazzle. Let me change your mind. I will attempt to
identify advantages, disclaim opposition and propose solutions for the concerns surrounding financial
investment and educational endeavors. Take for example the materialism of the your average American
ritual; wake up in the morning from your sheets, blankets, and pillows (all from Mervyns), change from the
J.C. Penny’s flannel nightgown into Dillard’s clothing, and tie on those expensive tennis shoes (Nike or
Reebok). Your toothbrush is from Target, shampoo and conditioner- Safeway, the hairbrush from K-mart,
english muffin and milk- CityMarket. Then it is off to school or work in the practical, affordable (still has
not been paid off) station wagon Civic, or maybe its just a bike. You have made special trips to
accumulate all of the material objects listed above, each and every one bought with money that has been
earned or acquired. This is finance and you willing participate in it every morning in your own American
rituals. Our daily existence is defined by the materialistic nature of our society, which is attained through
monetary means.
Education is probably the most important financial concern that young individuals confront. For
students attending a university or college tuition is by far the largest investment they make. Out-of-state
students going to Arizona State University full time are estimated to be paying $30.00 a class. Receiving
and paying for a college education is also the limiting factor for students hoping to attend school, often
putting students far into debt. According to David W. Breneman, an economist and dean of the Curry
School of Education at the University of Virginia, “The economics certainly suggest tuition increases”
(New York Times A12). An article addressing rising tuition concerns also validates the tuition trend, “the
cost of attending college has spiraled upward faster than inflation for years, stretching the resources of
many families and putting college beyond the reach of some” (New York Times A12). A.S.U. itself plans
to have a 5% rise in tuition for the upcoming years (A.S.U. Financial Aid Office).
Why do people choose to go to school? What are the benefits? The 45,000 students attending
Arizona State University belong to an elite group of individuals who, like others attending college, made
the choice to invest in education. Some of the causes that have contributed to this increase in higher
education as an investment include: rational self-interest, companies placing a premium on a college
education, and increased job skills (human capital) (Boyes 9). The greatest motivating factor is what is
called rational self-interest, which is the economic definition describing the “tendencies for human beings
to do what will give them the most satisfaction” (88). Rational self-interest explains why people choose to
invest in education, while the work force, incorporating higher education as a requisite for jobs, explains
the force behind the higher education trend.
Rational self-interest is the greatest reason why people do the things they do. Quite simply,
people are selfish. This phenomenon is often used to explain trends in human behavior. Human beings do
the things that will gain for themselves, and their families, the most satisfaction. People attend college
because they believe it will give them the greatest amount of satisfaction. Their decision is considered an
investment towards a better lifestyle and a more secure or more prestigious job. Evidence to support the
benefits of education are found in studies showing that unemployment strikes those with less education
first. The Economic Report of the President in 1992, indicated that the incidence of unemployment is
18.1% in men and 17.9% in women who only graduated from high school or had dropped out, compared
with the 2.3% of men and 2.5% of women who attended 4 or more years of college (Boyes 21). Also, the
median incomes of college compared to high school educated workers is steadily increasing. In today’s
dollars, college graduates earn $650,000 dollars more over their lifetimes than non-graduates (Crowley
141). Improved unemployment rates and the additional income earned with a college degree serves the
purpose of rational self-interest, and is cause for investment in education.
The demand for a college diploma in the work place is another reason for educational investment.
A prime example illustrating the success of graduates is exemplified in an article titled, “In Terms of
Managing Mutual Funds, Must Youth Be Served?” This piece from the New York Times describes a
study done to monitor the success rates of different mutual fund managers. The study found that the most
successful managers were coming right out of college. Norris from the New York Times states, “as the
stock market has soared during the last several years, it has often seemed as if the manager of the latest hot
mutual fund is barely out of college (Norris C10).” Not only did the study find that the younger managers
were the most successful, but also the quality of education the student received seemed to effect his or her
performance. The higher quality of education seemed to render greater rewards for the young mutual fund
managers. The higher tuition at Princeton was a large investment that made larger returns in mutual funds
possible. This is success. The value of education is constantly elevating and will continue to elevate in the
future.
Some people argue that the value of going to college is not worth the large financial burden and
time commitment. They choose instead to go straight from high school into a full-time job. They earn
income while college students spend money due to the direct costs of higher education. These people
clearly enjoy a higher monetary lifestyle right out of high school while college students are receiving their
education. However, according the text of Microeconomics, that trend continues only into their late
twenties. At that time, students who have increased their human capitol, begin to see the benefits exceed
the costs. The higher wages in the future far outweigh the increased income a non-college-worker enjoys
in their twenties. Over a lifetime, the worker with a college degree will earn more than the worker without
a college degree (Boyes 409). People go to college to increase their worth as a worker and in turn, increase
their future income.
Human capital is defined as, “skills acquired through education and job experience”(408). The
increase in human capital makes a person more valuable in the work force. This is caused by the work
force determining that skilled workers have higher marginal productivity than unskilled workers. This
trend follows the theories of economic supply and demand, where scarcity is demanded. The supply of
skilled workers is more scarce than the
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***ion. Wage disparity and the demand for a college diploma also explain why students will invest in an
institution that provides a means toward a better lifestyle. In choosing to increase their human capital,
students increase their wage potential by twice as much (Crowley 141).
The lawyers and bachelors of science earn the best returns on their educational investments with
winnings of almost $290,000 per person, per year, in 1992 dollars (Crowley 110). The benefits far
outweigh the burden of time and money spent. Higher wage expectancy, greater opportunity to choose a
satisfying career, and increased leisure and quality of life are all advantages of higher education. Although
people choosing not to continue their education may present arguments refuting the existence of such
rewards, their claims continue to be disproved by overwhelming support and evidence for higher
education.
Among the advantages of investing in higher education is an increased income (Crowley 141).
Although increased income may seem a very materialistic aspect proving the advantages of education, the
real importance is that money affords people a better quality of life. According to Leisure and the Quality
of Life , “Money was one of ten factors identified in at least three research projects in 1988 as being a
participation constraint,” meaning that people were not active because they could not afford to participate
in sports, music, etc...(Allison 360). The book stresses the importance of active participation, benefiting
the mind, body, and spirit. Doing so facilitates less stress (which has been accounted for the origins of
between 50% and 80% of all diseases (304)) and increases satisfaction and happiness (360). Therefore, an
increased income can increase participation, reduce stress, and facilitate a happier lifestyle.
Another advantage, often overlooked by people who do not go to college, is the resources and
time that a university or college allows a student to expand their horizons and eventually focus on a career.
High school provides a narrow curriculum that does not include an outlet for specialized interests.
Universities allow students a chance to focus on intense programs strictly in their special discipline. As
well as offering special interest programs, a university has a very broad variety of studies which allows
people who are uncertain of their unique interests, a chance to try out many options. Individuals who
choose not to go to college may find a job, but they have not had the time to analyze their interests with the
resources a university offers. They may be unhappy with their employment, but have no other options
except to continue with their low income job by necessity. This is characterized as pure job, “which has no
connection to feelings of intrinsic reward. Intrinsic reward is the benefit of doing something because of the
satisfaction gained from doing it” (Allison 48). On the other hand, people who have a career that matches
their talents and interests, have reported to be the most satisfied with their lives(39). The difference is that
a higher education can allow individuals a greater opportunity to choose their career (offering more
advantages, benefits, flexibility, etc that be chosen for a job
(resulting in more limitations and boundaries).
Along with the advantages of choosing a career, comes the respect a diploma demands. Tannis
Mittlebach, sales representative for Safeway and Kingsoopers stores throughout Colorado, states that,
“Most people can’t even get a resume read by a hiring company unless they have a degree from an
accredited institution.” She goes on to explain that “corporations are looking for individuals who can stick
it out. They want to hire people who can set goals and achieve them”( Mittlebach). By attending a
university and completing the program, companies know that the individual is a hard worker and dedicated
to excellence because of the time and effort they spent to attain a degree. Other alternatives just don’t
measure up.
Ms. Mittlebach also added that a college diploma is necessary to drive the Oscar Mayer
Wienermobile. “The hot dogger school is the toughest school in America to get accepted to. Over two
thousand people apply every year and only 50 are granted a position to drive America’s funnest
automobile. (Mittlebach)” This information in itself should be reason enough to invest in higher education.
People who choose not to go to college face the reality of life in an adult world. But going to
college can ease that transition. Take for example Beth Lakin, who is a sophomore attending the
University of Colorado. When asked why she spends the time and money to better herself, she justifies her
decision with her brothers situation.
“This was a delinquent of nature . . . he dropped out of high school middle of his junior year.
Spent many a night in jail, and many hours getting drunk and having a good ol’ time. However,
now at the age of 25, he is married with a wonderful son. They just bought a very nice, new
house, he has a new truck and his wife has a brand new car also. He has a job at a factory where
he is the production manager and gets paid sixteen bucks an hour, and is sent to Germany to
oversee the setup of a new company”(Lakin).
But the story does not dramatically finish happily ever after. As Ms. Lakin states, “while he may have the
money and the car, etc… he does not have the knowledge. College is an experience all it’s own, and my
brother missed out on it. He tells me that he regrets not finishing high school, and that he felt he had to
grow up very fast. I don’t want to have that feeling when I am 25.”
Keeping the mind, body and soul healthy is what precipitates a satisfying lifestyle, and higher
education is the first step. The benefits prove to far outweigh the burden of time and money spent. On the
grounds of higher wage expectancy, greater opportunity to choose a satisfying career, and increased leisure
and quality of life, individuals should consider higher education the most advantageous choice. The
alternatives just don’t compare. Even the Weinermobile drivers know that!
How does America ensure that a secure future is a reality for everyone? By solving problems at
the educational level. I propose that more money be invested in education, not only on an individual level,
but also state and federal. The government must have priorities to make schools safer and raise educational
standards, research better teaching methods, and provide assistance for low-income students. Already,
President Clinton has instigated The Goals 2000: Educate America Act, providing extra resources to
schools. Also, helpful efforts to increase the availability of loans have been effective for students through
direct lending. This allows students quicker and easier access to financial aid.
But despite the small efforts on the part of the government (which accounts for only six of seven
percent of the total spending on education (Riley 1)) there still exists inadequate support for education.
The simple fact is that education should be a top priority. While grown ups are whirling around, too busy
with present affairs of the world, students are getting lost in the riga marole. Devoting enormous amounts
of time and energy into the present, leaves the future unprepared. Parents need to be involved in their
children's education, teachers should be well trained, and high standards of learning should be achieved.
Students: primary, intermediate, and higher level should be continuously encouraged toward greatness;
forged into individuals of great potential and confidence. People should have the choice and the will to
better themselves and recognize the dream of education. This is the greatest financial investment a
country can provide for it's children.
Bibliography
About the Author
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mellers@imap1.asu.edu