Yesterday, we took a look at the worst paying college degrees. Today, I want to look at a list of the best paying college degrees. It is clear that, like all things in a free society, supply and demand determine payoff. Engineers rule the day when it comes to making a wise investment in education, boasting low unemployment and starting and mid-career pay that is far above the median household income in the United States. It’s no wonder that engineers are disproportionately represented relative to the population in the ranks of the top 1% of wealth.
All College Degrees Are Not Created Equal
There is no question that the single best indicator of whether or not a person does well in life is whether they have a college degree. In the United States, for every 100 millionaires, roughly 90 are self-made. Of those, 81 have college degrees. The other 9 don’t have a college degree. That’s a high correlation when you consider that in the United States, for every 100 citizens, approximately 30 have a bachelor’s degree or higher and 70 do not.
The thing few people are admitting, though, is that just like investing in stocks, the price you pay for your degree relative to the earnings power determines the return you earn on your money. In other words, if you overpay for a degree program that doesn’t substantially boost your household’s income, you could end up with a slightly larger paycheck but much higher student loan debt payments; a disastrous situation that created a perverse reality where you were worse off for having gone to college.
The Difference Between the Best Paying College Degrees and Worst Paying College Degrees Is Huge
When comparing the list of the best paying college degrees to the worst paying college degrees, think of this: A high paying college degree can generate as much as 200% to 300% more annual income in the very first year after graduation, while enjoying much lower unemployment rates than a low paying college degree, and yet both degrees cost the same amount of money. Over the course of a career, the difference between a high paying college degree and a low paying college degree can be magnitudes; in the millions of dollars. To be specific, according to a recent USA Today article examining the income generated from the best paying college degrees compared to the worst paying college degrees:
An analysis of the projected lifetime earnings of 171 college majors provides a clearer picture of what one bachelor’s degree means compared to another in the labor market. And the answer can be as much as $3.64 million.
That’s the difference between what petroleum engineering majors can expect to earn over a 40-year career ($4.8 million) and what counseling psychology majors could earn ($1.16 million). Even the lowest-paying major beats the $770,000 average earnings of a person who holds only a high school diploma.
All things equal, a counseling psychology major costs the same as a petroleum engineering major. The payoff is an extra $3.64 million over a career, or 414% more money for the same amount of work and the same financial investment.
Sometimes, It Makes Sense to Go With the Best Paying Degree and Use It As a Platform for Your Passion
Imagine your passion is providing food for poor children who go hungry. You have a choice between a chemistry degree and a degree in social work. Both require the same cost and total student loan debt. The difference in pay and employment prospects is monumental.
[mainbodyad]If it were me, I’d become a chemist, earn a good living, and then use my savings to start a company and a non-profit foundation. Through the company, I’d develop some sort of product that the market wanted – cosmetics, sunscreen, bath products, body butters, something – and then have the corporate charter or limited liability operating agreement written so that a percentage of profits were automatically donated to the related non-profit foundation, providing not only a tax-write-off but a source of funds that I could then use to run a food bank. But, again, that’s just me. That’s how I’m wired. Before long, I’d set it up so the non-profit were collecting money from outside sources and put myself on the board of trustees, collecting a salary and fee for the time it took to build the organization so that I could make my passion my full-time job.
Within a 10 year time span, I’d accomplish more, and help more children, than I would in three lifetimes of being a social worker. And, I would have done it driving a Lexus and wearing cashmere sweaters. To some people, that doesn’t matter – they just want a decent house and financial security. There is no right or wrong answer, it is about what you and your own family want based on your personality, desires, and values.
The lesson: There are multiple routes to your wished-for port in life. Your ship doesn’t have to take the hardest, most difficult journey in the saddest, moth pathetic boat. I prefer the fastest, most direct, most enjoyable vessel. That seems to be the only rational way to behave. If you are considering a major, you might want to look at the best paying college degrees as a starting point.
