Invest in Yourself: How to Generate Insane Returns

by Don Smith

All products and services featured on this site are independently selected by our authors and editors. If you buy something through links on our site, we may earn an affiliate commission.

Warren Buffett, one of the richest men in the world and considered by many to be the greatest investor who ever lived, said, “Ultimately, there's one investment that supersedes all others: Invest in yourself.”

You can listen to one of his many speeches on this subject below.

Is that really true, though? Is it wise to invest in education especially when the cost of a 4-year college degree in the USA can run up to $334,000 over 4 years according to Forbes? That's a major investment; you'd better be sure you're getting a return on it!

To answer the question, I dug through several salary surveys. Then I looked at the costs of education and ran the numbers through the online education investment return calculator at the end of this article to see if this is really worth investing in.

What I found is insane, especially with investments in yourself after college…

What Does Traditional Education Cost?

Let's start with college. According to Forbes, the average cost for a four-year degree from a public college is $28,000 per year. $28,000/yr X 4 years is $112,000 total.

How Much More Will You Make With a College Degree?

For this article, we'll be focusing only on averages. According to CNN Money, the average college grad makes $1,227 per week. That's in contrast to the average high school grad who makes $678 per week. Punching those numbers into my calculator, I come up with a difference of $28,548 per year (($1,227-$678) * 52 weeks/yr).

Calculating Your College ROI

Take the difference in salary of $28,548 per year divided by the average total cost of a college education at $112,000, and you'll get more than a 25% return! Compare that to stocks that have an average rate of 7% return on investment!

Invest in yourself through college - ROI calculator showing more than a 25 percent return on college
Return on investment for college

The bottom line is that a $112,000 investment in your college education should be a no-brainer! On average, you'll recoup those costs in 3.9 years. After that, you'll be making $28k more each year on average than you would have if you had not attended college!

Calculating ROI on Certifications

I added more than $20,000 every year to my paycheck early on in my career by taking some IT certifications. As you'll see in a moment, continuing your education after college can provide enormous returns on your investment. I believe in this enough that I've lost count of the number of certifications I now hold, but I can put a ton of initials behind my name if I so choose.

Our training partners offer many certification programs. Let's take a look at what adding a PMP® Project Management Professional Certification to your resume might do as an example.

According to a PMI Global Study, you can expect to increase your base salary by $20,000 EVERY YEAR for a few thousand invested in certification. Let's take a look at what that investment looks like on our education investment calculator below.

Invest in yourself with certifications: calculator showing a return of 1000 percent on an investment in certifications

Note that these are averages. Obviously, if houses in your area start at $50,000, you will probably not be making as much as a major metro area on the coast where the houses start at $1,000,000. It is all about supply and demand.

Regardless of where you live, the percentage difference in salary with and without certification appears to be pretty universal. I looked at the PMP certification in this example, but most industries place a premium on certifications, meaning you can expect to earn more after completing training because you have specialized skills. They are almost always worth getting unless you are already overqualified for what you want to do.

1000% Return When You Invest in Yourself?

Stop and think about what we just discussed for a moment. You could invest a few thousand dollars and potentially make $20,000 or more in extra income every year. That's a 1,000% return on your investment!!! If the numbers are off even by a factor of 100, you are still outpacing the average stock return by a wide margin.

That's one hell of a safety net. In investing terms, we call that a significant margin of safety or margin of error.

You'll find similar returns on many certifications, which is why I've lost count of the number of certifications I now hold. Investing in myself has allowed me to rise to the top of my company and even get hired as a Director on several other companies' boards. There are diminishing returns on certifications, but it would be hard for me to calculate how big that return on investment has been. I believe in it so strongly that I created this site, which is all about investing in yourself.

Other Ways to Invest In Yourself

  • Hire a Private Coach: Many business owners massively improve their bottom line by hiring a private coach or consultant.
  • Networking: Networking with the right people can give you ideas and opportunities to grow your income.
  • Add Streams of Revenue: Most millionaires do not have just one income stream; many of them have up to 50 different income sources. If becoming wealthy is one of your goals, you'll want to branch out a little beyond your job and retirement savings. Just be careful about going into high-risk investments.
  • Join Toastmasters: Consider investing in yourself through Toastmasters, an organization that allows you to practice your communication and leadership skills plus build relationships with other like-minded individuals. CNBC found that oral and written communications are the #1 soft skill that employers look for, so improving those skills should be at the top of your list.

Want to play with the numbers yourself to see what investing in yourself could do for you? Here is the simple online education investment calculator that I used for this article. Input how much you will invest in your education, your current salary, and what you expect your new salary will be, and it'll spit out your return.

Calculate Your Return When You Invest in Yourself

It appears Warren Buffett was right when he said: “Investing in yourself is the best thing you can do.” By my calculations, you are NOT going to find a better investment than investing in yourself!

By the way, investing in yourself is what our community is all about! If you are interested in investing in yourself, be sure to join us!

Invest in Yourself: How to Generate Insane Returns

About the Author 

Don Smith

Happily married with five kids, Smith owns a technology company, is the founder of this site, has served on the board of directors for multiple companies, and loves playing soccer, hiking, and mentoring.

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

Use the links below to navigate our picks for the best personal development books for each of the following topics. FinancesBusiness Relationships

Read More
Best Personal Development Books: 20 Books to Skyrocket Your Success

Me and my wife enjoy seeing live stand up comedians perform in the NYC/NJ area. One of my thrills was seeing iconic

Read More
How Does the Wealthiest Comedian on Earth Teach You to Be Creative?

“They say such nice things about people at funerals that it makes me sad I am going to miss mine by just

Read More
What is the Tombstone Test?

What makes you think you are right? Have you ever gotten into an argument with a person who believes they are always

Read More
Are You Sure About That?

What do you consider to be a failure? And do you know how to deal with failures? For me, failure is directly

Read More
How to Deal with Failures in Your life?

I am guessing that most people reading this have a good supply of books. And that every new personal development book that

Read More
Looking to Buy More Books?

A little while into the first meeting between Warren Buffett and Bill Gates, Warren pulled out his little black datebook and started

Read More
Coffee with God

We recently did a major overhaul to our main site here at The Personal Growth Channel. For years, we've been using the

Read More
Website Update: Guest Authors, Comments On. From Blogger to Thrive Themes, Siteground, and WordPress

No long article today. Just a question to make you think. How will you make today a great day? Here are a

Read More
How Will You Make Today a Great Day?

You've probably heard the advice go after your passion in life, do what you enjoy doing, and the money will follow. That

Read More
Why Following Your Passion May Be the Worst Advice You Ever Received

Have you ever felt isolated as a small business owner, CEO, or leader? If so, you're not alone. Half of the CEO's

Read More
It’s Lonely at the Top: Dealing with Isolation as a Leader

This morning I found out that I weigh the same as my personal trainer. We're roughly the same height as well, and

Read More
Numbers Don’t Lie but They Rarely Tell the Full Story