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Personal Investment Options

Personal Investment Options. Higher Education: Bachelor’s vs. Master’s. Team 8 Jade Thiemsuwan – Organizer Nicholas Sakamoto – Techie Andy Yau – Summarizer Markel Vessup - Summarizer. EGR403: Asset Allocation and Technical Decision Making. Scenario 1.

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Personal Investment Options

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  1. Personal Investment Options Higher Education: Bachelor’s vs. Master’s Team 8 Jade Thiemsuwan – Organizer Nicholas Sakamoto – Techie Andy Yau – Summarizer Markel Vessup - Summarizer EGR403: Asset Allocation and Technical Decision Making

  2. Scenario 1 Tom, a 22-year old graduating Chemical Engineer at Cal Poly Pomona chooses to go straight to work after his Bachelor’s Degree. He graduates with good standing and has a great attitude and work ethic.

  3. Scenario 2 Jerry, a 22-year old graduating Chemical Engineer at Cal Poly Pomona chooses to pursue a Master’s Degree immediately after his Bachelor’s Degree. He graduates with good standing and has a great attitude and work ethic.

  4. The Bachelor’s Degree • Cost of tuition • Time • Job advancement • Jobs after retirement • Salary

  5. The Master’s Degree • Cost of tuition • Time • Job advancement • Jobs after retirement • Salary

  6. Bachelor’s $19200 – 4 years Master’s $19200 – 4 Years AND $73400 – 2 Years Total: $92600 6 Years Comparison: Education Cost and Time

  7. Bachelor’s Entry-Level Associate Engineer $57361 Comparison: Entry-Level Jobs Master’s • Entry-Level Associate Engineer • $68561 Difference of: $68561 – $57361 = $11200

  8. Bachelor’s Associate to Principle Comparison: Job Opportunity Master’s • Up to Manager/Director • Post-retirement careers

  9. Spreadsheet parameters Major spreadsheet base-case parameters include:

  10. Analysis Assumptions • Based on testimonies from industry, the promotion schedule for a chemical engineer with a bachelor or master’s degree does not differ. e.g. 2 yr, 5yr, 10yr, etc. • The engineer with the Master’s degree does not surpass management level. e.g. not CEO or President, etc. • No initial sign-on bonuses have been accounted for • Savings plan assumes only a 401k. e.g. No IRA, etc.

  11. Analysis Results • The Master’s Degree does (and should) make more in total savings by age 62 • However, the Bachelor behind by $604,000 (about 16%) • Our sensitivity shows that little needs to be done for the Bachelor to save the equivalent amount by retirement

  12. Sensitivity Analysis

  13. Sensitivity Analysis

  14. Resources United States Bureau of Labor and Statistics 2007 $59,361 Bachelor’s $68,561 Master’s Testimonies 1. ~$57000 Bachelor’s ~$65000 Master’s 2. ~$60000 Bachelor’s ~$65000 Master’s Chemical Engineering & News' 2006 $67,200 Bachelor’s $79000 Master’s Engineer Salary.com 2008 $67,504 Bachelor’s $71,028 Master’s

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