Education is always a good investment.
1 min read


The fallacy “Education is always a good investment” operates on the assumption that any type of education, in any field, at any cost, will inevitably yield a positive return on investment. Although it’s undeniable that education can generally increase earning potential and opportunities, it is not always financially beneficial in every scenario. Several factors can influence the value of an educational investment including your chosen field of study, the cost of education, the prestige of the educational institution, and the time it takes to complete the degree.

In calculating the return on investment (ROI) for education, both direct costs (tuition, books, fees) and indirect costs (opportunity costs such as potential income foregone by attending school instead of working) need to be considered. Depending on these factors, the debt acquired from education may outweigh the financial benefits gained, rendering it a poor investment.

As to why we may fall for this fallacy, it’s understandable. It stems from an ingrained belief that education offers social mobility and success. It’s a testament to the way society values education. In decades past, a solid education was indeed a reliable path to a stable, lucrative career. However, with evolving job markets and rapidly changing industry needs, this is not always the case.

An effective financial strategy in relation to education would be conducting a full cost-benefit analysis before investing in it. This includes researching potential earning prospects in your chosen field, calculating total education cost, considering the time to graduation, and exploring options for scholarships or financial aid. It’s also important to consider non-financial benefits or costs such as interest in the field or job satisfaction.

Further Readings:

  1. “Will College Pay Off?: A Guide to the Most Important Financial Decision You’ll Ever Make” - Peter Cappelli. Book Link

  2. “The Case against Education: Why the Education System Is a Waste of Time and Money” – Bryan Caplan. Book Link

  3. “The Return on Investing in a College Education” – Federal Reserve Bank of St. Louis. Report Link

  4. “Paying the Price: College Costs, Financial Aid, and the Betrayal of the American Dream” - Sara Goldrick-Rab. Book Link

  5. “Return on Investment”. Wiki Link.