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Boost Your Human Capital: Increase Your Education

Last year, I offered ten ways to boost your human capital. I’ve spent the past few years concerned mostly with the net worth, income, and expense measurements of personal finance, but human capital is just as important as monetary capital. By increasing human capital, you increase your value to society as well as potential future income. In this series, I’m taking a deeper look at how you can increase your human capital.

If you read a fair amount of financial writing, whether in mainstream media or on personal finance blogs, you may have come to question the value of higher education. It’s a reasonable question. After all, student loan debt has surpassed credit card debt as the Untied States’ heaviest pull on net worth. An increasing number of students leave college with student loans that will take an increasing amount of time to pay off, and in an economy where graduates are lucky to have jobs that pay well, or even lucky to have jobs, the increasing cost of college is raising questions as to whether the financial sacrifice is worth the education.

Numerous surveys should that in general, income levels increase significantly with each degree, with the most significant increase being from a high school degree to a bachelor’s degree. Despite this, the increases don’t always continue into advanced graduate degrees or professional degrees if you look at each industry separately. As a result, financial writers look at the return on investment (ROI) of any particular education and often determine that for many people it makes more sense to join the workforce right out of high school.

The numbers don’t tell the full story, however. Someone whose job is a mortgage broker might not see an income gain from finishing a bachelor’s degree. In fact, he could earn more by starting right out of high school with a head start of up to four of five years. This can be a lucrative position for someone particularly skilled at sales. However, as many mortgage brokers have seen since 2008, the income potential can be limited by the economy. Most brokers are primarily paid in commission, and if banks aren’t lending, brokers make very little money. Most quit.

University of Delaware Memorial HallWith a boarder education, such as a degree in a different field or certification in something related, like financial planning, they would have flexibility. Their income would not be subject to market forces as much if they had education that might take them elsewhere.

Again, looking at averages, it’s not always the subject of a degree that’s important. Most jobs require a college degree, but the degree doesn’t always need to be in the same field as the job. One type of degree could increase your suitability for a number of jobs. At one time, I was considering going back to school to earn a law degree. I wasn’t interested in being a courtroom lawyer, but the degree could have opened doors for me in the future in any number of fields.

It can be difficult to earn degrees later in life when there are more responsibilities to be concerned about, but it can be done.

  • If you don’t have a bachelor’s degree, earn one now. If you’re interested in boosting your human capital and allowing yourself greater flexibility, don’t be concerned about which school. Find a convenient program, perhaps at a local community college, and take classes at night until you can walk away with a bachelor’s degree.
  • Take classes online. Regardless of whether you’re aiming for a degree, consider enrolling in online courses. While the difficulty of the courses can be higher than classroom-based courses, you may have freedom to learn the material on your own schedule. In my experience, online courses required more teamwork than traditional courses, so you’ll need to reserve time to work together with your classmates.
  • Have a goal of certification rather than a degree. Friends of mine who enjoy technology found more opportunities for greater income when they became certified with certain hardware and software.
  • Enroll in classes unrelated to your field. If you’re not passionate about your work, you may benefit from changing course. You don’t necessarily need to leave your current job behind, but taking classes that allow you to learn more about a topic you’re passionate about can increase your versatility as well as invigorate your desire to succeed in any field. Over the last few years, I’ve been taking photography classes, and it’s helped me view the world more artistically, and that may pay off some day if I focus on taking photography to the next level, or it may only pay off in the way I look at the world around me.

Most importantly, and particularly for younger people, higher education and the habits that come with succeeding at higher education help develop advanced cognitive skills that allow people to have a better understanding of the world around them. That’s a concept to which it’s difficult to assign a finite value, but it is important in the development of someone seeking to reach the top of Maslow’s Hierarchy of Needs pyramid.

Education is an important component of human capital. Do you consider it worthwhile to increase your education?

Photo: mathplourde

Updated February 6, 2012 and originally published October 10, 2011.

About the author

Luke Landes is the founder of shizennougyou. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 16 comments… read them below or add one }

avatar 1 Anonymous

Another option is to find a mentor…. I did this after college and learned more from him in 2 years than I learned during 4 years of college… really great option if you can find someone in your field who is willing and able to teach you.

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avatar 2 Luke Landes

A mentoring relationship can be invaluable. It brings up the interesting questions pertaining to what someone should look for when seeking a mentor, and whether being a mentor to someone at the same time you’re a “mentee” in a relationship is worthwhile. It’s definitely a worthy topic for a future post.

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avatar 3 Anonymous

I’ve found that most knowledgable people are more than happy to share their expertise. You just have to ask… if you’re willing to learn and really take it seriously, most people will respond to that positively. You don’t have to be like “Hey, will you be my mentor?”. In my experience (for what it’s worth), a mentoring relationship just grows as you ask more and more :)

Yeah, would be a great topic to explore further.

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avatar 4 Anonymous

I see it as making an investment in yourself. Not everything has a direct influence on your income, however education or training makes you better. You are more prepared for change and perhaps a better problem solver.

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avatar 5 qixx

Certifications and additional training can also make a difference in your confidence and intangible hirerability. This aspect i think is often overlooked and it might not be the certification that got you the job. I find interview swagger goes up with the diplomas and certifications.

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avatar 6 Anonymous

Clearly applicable to those who are employed by others, but to us self employed, I am not sure it is so black and white.

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avatar 7 Luke Landes

I disagree. Education increases your human capital regardless of whether your boss is yourself or someone else. Everyone has something to gain from education, and you never know where it can be an advantage in your future.

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avatar 8 Anonymous

Jared, I would have to side with Flexo on this one. I am in academia, and although the links here are not allowed, I wish you could see the certifications that are available to enable and assist you as an entrepreneur. We alone offer one in negotiations that has helped small business owners to establish more advantageous and stronger vendor relationships. There are other schools who offer six sigma training that increase the efficiency of your business, and internet marketing courses that help find new markets for your business and compete for market share that some of the larger businesses are too rigid to address. This is one subject where an open mind can truly be a benefit when learning to benefit yourself.

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avatar 9 Anonymous

Thanks for the article, Flexo! I’ve been thinking a lot about the value of higher education lately. I’m 42 and have a bachelors in Computer Science, and my college education and degree have been a tremendous asset to me in my career.

I now have a child who is a senior in high school, and we’re thinking through options for college and career for him, as well as for our other three children. With the costs of college where they are now, with the economy in its present state, with the value of a college degree being greatly diluted from what it was in decades past, and with the explosion of options available today, I’m much more inclined these days to consider alternatives to the standard four-year-college route. I appreciate how you’ve included some good alternatives in your list of options.

I wish so incredibly much that I had learned as a younger person the fundamentals of business and personal branding. I’m only now, after many years of post-college self-education, beginning to grasp how to “do” business and create my own income streams that are not simply trading my time for money. I hope that, in the few years remaining that I and my wife have our children under our care, that we can start them on a solid path of building their own businesses and brands so they’re not as vulnerable to the ups and downs of the job market, and so they can become wise consumers of education rather than followers of the masses who are seeking security in a debt-laden degree that may or may not serve them well in their lives and careers.

Appreciate your thought-provoking article, Flexo!

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avatar 10 Anonymous

Getting a mentor is a definite help. It’s ok after working with someone for a little while to ask them to be your mentor. Someone who has worked many years for the company or in the field or who is now employed on a contract basis after many years working in the field can be a good person to ask.

You can also get free organizational experience and leadership training via volunteer work or joining a civic-minded club, charity, or religious group. Joining a Toastmasters Club can help greatly with public speaking to increase your confidence in communication.

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avatar 11 Luke Landes

Hi Maggie,

I believe that volunteer work and public speaking are two important facets of building human capital, so much that each will have its own post coming soon.

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avatar 12 Anonymous

Hi, Flexo!
I agree. Looking forward to it!

Those kinds of opportunities are especially helpful to unemployed people for developing confidence and contacts.

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avatar 13 shellye

Can’t wait to read!

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avatar 14 wylerassociate

I agree with this post. Education is always a good thing and increasing knowledge in fields outside your specialty is not a negative thing.

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avatar 15 Anonymous

Definitely. I’m looking forward to going back to grad school soon.

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avatar 16 Cejay

Education is very important. I have noticed that people with a high school education are treated differently than someone with a college degree at my employers. Funny thing is that the young lady with the high school education can do the job better than the one with the college degree but they chose Ms. College. I want to go back for my accounting degree but do not have the money and time right now. Maybe, next year.

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