Financial Benefits of a University Degree

Student debt levels are projected to rise to £25,000 for those starting university this year, research suggests.
So is going to University a ‘good’ investment in pure financial terms?

Official figures from the Office of National Statistics Labour Force Survey reveal that over the last decade university graduates have earned on average £12,000 a year more than those without a degree.

Average salaries for graduates aged 22-64 stood at £30,000, compared with £18,000 for non-graduates.

Interestingly the gap between graduate and non-graduate salaries takes time to show itself – earnings for 22-year-olds were around £15,000 regardless of whether they had a degree or not.

Non-graduate earnings increased every year until the age of 30 before leveling off and peaking at £19,400 at age 34.
Graduates saw their salaries increase faster and over a longer period – leveling off at age 35 and peaking at £34,500 age 51.

ONS statistician Jamie Jenkins explained: ‘We see a big difference based on age, with graduates’ earnings not peaking until they are in their early 50s. After this age, average wages decreased, as the higher earners leave the labour market earlier.
‘The statistics also reveal that gender differences are present in both graduate and non-graduate salaries. While male graduates could expect to earn 20 per cent more than their female peers, men without a degree made 23 per cent more than their female counterparts.

Let’s simplify things by taking a look at 2 career paths.

Graduate
Enters the workforce at 22 and retires at 64
Earns an average of £30,000 over those 42 years for a total of £1.26m. Take off the £25,000 student debt to finish with £1,235,000

Non Graduate
Enters the workforce at 18 retires at 64
Earn an average of £18,000 over 46 years for a total of £828,000

Which shows on average a graduate will earn on average an additional £407,000 over their working lives.

Of course there are a number of other factors, such as vocation, academic ability and the availability of funds up front for study. These figures are also averages, there are some very notable exceptions who dropped out of university and did very well financially, for instance, Bill Gates and Sir Richard Branson.

How to be a more effective parent

By Brian Tracy

If you have children, one of the most important questions you will ever ask is this: What is the real role of parenting? Parents are required to do a thousand different things in the process of bringing up their children, but what is the fundamental, central role of parenting? I have four children of my own, and I have studied this question for more than twenty years.

The role of parenting is to raise your children with high levels of self-confidence and self-esteem so that they leave you feeling completely capable of making their own way and succeeding in the world. This definition is sufficient to govern your behavior from the time your child is born to the time he or she leaves home, and for years afterward.

The biggest single mistake that parents make with regard to their children is that they conclude, usually unconsciously, that their children exist to fulfill the parents’ expectations, to be what the parents want them to be.

What I learned very early, an awareness that has helped me to be a better parent, is that children belong to themselves. They are not personal possessions. Parents do not own children. The job of parents entails raising their children to feel terrific about themselves, to feel capable of dealing with the inevitable ups and downs of life.

Whether a child comes from a good home with every material blessing or a poor home with limited resources doesn’t really matter in the long run. What does matter is how confident the child feels when it comes to setting goals, making decisions, overcoming obstacles and succeeding in his or her chosen areas of endeavor. If you raise your children to feel that they can accomplish any goal or task they decide upon, you will have succeeded as a parent and you will have given your children the greatest of all blessings.

So how can you plant the necessary seeds in your child’s mind and heart to assure that he or she grows up straight and strong and capable? First, understand that parents have a tremendous ability to influence the growth and development of their child. The little things that you do or say over the months and years can have a powerful impact on how your child thinks and feels about himself or herself and how he or she turns out. It is therefore extremely important that you be very aware of what you are doing and saying, and why, and the likely consequences of you words and actions. Abraham Maslow identified two sets of needs experienced by every person: deficiency needs and growth needs.

The major deficiency needs are for survival, security, and belongingness, or acceptance. If a child, or an adult for that matter, is preoccupied with physical survival and physical needs, or emotional security, or whether or not he or she is accepted by others, he or she will continually think about satisfying these deficiencies. The child will become tense, anxious, uncertain, and insecure. And the child will develop fears of failure and rejection, and will be constantly looking over his or her shoulder.

The primary growth needs that Maslow identified are for self-esteem and self-actualization. The self-esteem need is satisfied when the child learns to love himself or herself. And children love and respect themselves to the exact degree to which they feel that their parents love and respect them. Whatever genuine emotions you express toward your children repeatedly will eventually be impressed deep into their minds and will have a tremendous impact on forming their characters and personalities.

The self-actualization need is satisfied when your relationship with your child is so secure that his or her energies can be dedicated to being the very best person he or she can be.

There are two qualities that Dr. David McClellen of Harvard University has identified as the fundamentals for raising a happy, healthy child. The first of these is the establishment of a democratic environment at home. This means that the child’s opinion and views are solicited and considered from an early age. The child is asked what he or she thinks about personal and family issues.

My wife and I involve our children in all decisions affecting them, such as selecting the clothes they wear, the activities they engage in, the schools they go to and how they will spend their leisure time. The important thing to remember about creating a democratic environment at home is that you do not have to agree with everything you children want to do. You can argue and disagree when you feel that their decisions would not be in their best interests over time. As long as you solicit their opinions and carefully consider their viewpoints, they will feel that what they have to contribute is valuable and important to the family. They then grow up feeling that their ideas can be valuable and important to any group.

The second ingredient in raising happy, healthy children is positive expectations. We know that expectations tend to be fulfilled, one way or another. If you have positive expectations for your children, they will do everything possible not to disappoint you.

In planting the seeds of success, it’s important to remember that expectations are not the same as demands. Many parents think that putting intense pressure on their children to perform to some particular standard is the same as expressing positive expectations. But children can be destroyed psychologically if they believe that their parents will no longer love them if they do not excel at a particular subject or sport. Positive expectations that graduate into ceaseless demands can cause lasting harm to a child.

One of the most important things you can do in planting the seed for your children is to continually refer to the future. Use words like next time. In regard to a poor grade in school, for example, you can say something like, Next time, if you really apply yourself you can bring that up a full grade, can’t you?

Or you can use the words, in the future, or from now on. Instead of becoming upset or critical about a particular mistake that your child has made, you can say something like, In the future, you could do it in this way. Or, From now on, why don’t you try this approach?

There are three steps to high achievement for your child, and these steps will remain the same throughout his or her lifetime. They are:

1. The acceptance of complete responsibility. 2. The setting of clear goals and plans for their accomplishment. 3. The development of persistence in overcoming obstacles and achieving goals.

Starting when they were very young, I have continually reminded my children that they are responsible to themselves. They are responsible to their decisions. They are responsible for getting good grades and for cleaning their bedrooms. They are responsible for contributing to the family. Like a mantra, I have repeated the word responsibility over and over again. And it really works. It is absolutely amazing how intelligent your children’s decisions will be when you make them fully responsible for them. Of course, responsibility must be age appropriate. A young child cannot be responsible for major financial decisions. But encouraging the level of responsibility that is appropriate at each age is fundamental to planting the seeds of success later in life.

Out of the soil of responsibility grow the flowers of goals and plans. Young people feel like winners to the degree to which they set goals for themselves and then attain those goals. Children who learn to set small goals and then accomplish those goals soon become excited about setting even larger goals and accomplishing those goals as well.

When a child has achieved a goal, large or small, you should make a big deal about it. The more you celebrate the successes of your children, the more they will look forward to celebrating future successes. Soon they will develop an unconscious, instinctive drive toward the attainment of worthwhile objectives. You will have set them up psychologically for life.

The final step toward high achievement is cultivating persistence. Children, especially young children, easily become tired and discouraged in pursuing a goal of any kind. Your job is not to force them to keep at it; rather, you need to continually encourage them and guide them when their interest or attention begins to weaken. Sometimes you need to get right in there with them and do part of the task yourself. The most important thing is that they develop the habit of staying the course until the task is accomplished. Soon, they will find their own motivation for overcoming obstacles and adversity as they move toward task completion and goal accomplishment.

The very best way for children to grow is in the direction of his or her own natural talents and abilities. Each child is unique. Each child has his or her own particular agenda. Your job is to listen to your children, to ask them questions, to probe and to find out what it is they really want to do. Then, give them every opportunity possible to do it. If they decide later that they don’t want to do that particular task or engage in that particular activity, you should let them off the hook gently and guide them toward something that will be of greater interest.

Remember, motivation requires motive, and motive is invariably personal. It is your children’s job to try a lot of different things as they grow up until they find the best fit. And it is your job to offer encouragement and love to sustain them during their search. As a parent, the most important and longest-lasting thing you can ever do is to raise happy, healthy, self-confident children. You do this by planting the seeds of success early in life. You help them accept responsibility, set goals and persist in the face of adversity until it becomes a habit for them. You invite their opinions and tell them continually how much you believe in them. You never use destructive criticism; instead, you keep them focused on doing better in the future. And you enhance all aspects of your relationship with your child with the magic of unconditional love.

When you plant the seeds of future happiness and achievement in the fertile soil of love and caring, you can be assured that your children will grow up straight and strong, good and true. And for the rest of your life, you will enjoy the bountiful harvest.

About Brian Tracy

Brian Tracy is a leading authority on personal and business success. As Chairman and CEO of Brian Tracy International, he is the best-selling author of 17 books and over 300 audio and video learning programs. Copyright 2001 Brian Tracy International. All Rights Reserved. http://www.briantracy.com/

Using the Almighty Dollar

Do you know how many countries around the world use the term dollar as their currency?

The Financial Fairy Tales Activity Book is a resource for parents and teachers helping to teach kids about money. It contains puzzles, games and exercises which develop an understanding of money values and principles as well as the mechanics of money.

The Financial Fairy Tales are helping children learn about money in over 12 countries and the list is growing almost every day. We wanted to ensure that the Activity Book is as usable as possible. Therefore we created an international version which has been ‘translated’ into American English and makes reference to the dollar instead of pounds.

I’m delighted to announce that the international edition is now available via Amazon for distribution around the world – visit The Financial Fairy Tales Book Store for details.

Oh and according to my research their are 29 countries using the dollar 🙂

How Saving Young Can Add Up Over A Lifetime

In times like these financial conversations are more common than ever. They are particularly important for those just starting out in their careers. The young generation of today has entered a battered workforce and economic turmoil. This article will discuss the importance of saving in your youth.

Compound Interest

Einstein is known for making the statement, “There is no greater force in the universe than compound interest.” This is certainly pertinent to this subject matter. Saving doesn’t have to be a matter of high salaries or inheritance, it is more important to have a disciplined steady approach. Someone who saves $100 monthly from age 25 to age 65 will have saved a total $48000.00  in 40 years time. These figures assume no interest gained in those 40 years.

Now here is where compound interest takes over. Now lets take that same scenario; $100 a month for 40 years assumed a 6% interest rate annually. Over that period of time your total would now be $200,144.82. Quite a stark difference you might say. Now let’s try to do this scenario with a 10% return; that would give us a total of $637,678.02! Your starting to get the picture now.

But why is it important to start early? Well simply put, your money will grow the most when it has the most time to compound. The example above is certainly impressive, but what if that same person started saving when they were 45 rather than 25? With the 10% annualized return they would have $76,569.69. A nice figure but nowhere near the $637,678.02 over 40 years. This should illustrate both the power of compounding and the importance of starting early. To compute your own scenario visit this compound interest calculator.

How do we find the interest?

So after exploring the scenario above you may be wondering how you achieve these rates of return. There is no simple answer to this. Currently interest rates on certificates of deposit and money markets are near 0%. These are the safest types of investments, but they do not provide much of return these days. The other options are stocks and bonds. These securities can be complicated to make money on even for an experienced investor. The best bet for a new investor would be a mutual fund.

A mutual fund is a collection of stocks and bonds that provide an investor with more exposure to the market. Instead of just buying one stock the investor holds shares of a fund, this fund can hold hundreds of stocks or bonds. This provides more diversification for the investor and more safety overall. Historically growth stock mutual funds have returned an average of between 8%-12% annually. For more information on investing options, check out Morningstar.com.

David Spader is a freelance writer and blogger who usually looks at savings account deals over at SavingsAccount.Org. His most recent review looked at the best saving account rates.