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Personal Investment

Bachelor’s Degree vs. Master’s Degree. Team 4 Aaron Komagome-Towne: Researcher Jannet Loera-Gutierrez: Data organizer Kaylen Malley : Leader EGR 403H –Asset Allocation in Technical Decision Making. Personal Investment. Scenarios.

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Personal Investment

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  1. Bachelor’s Degree vs. Master’s Degree Team 4 Aaron Komagome-Towne: Researcher Jannet Loera-Gutierrez: Data organizer Kaylen Malley : Leader EGR 403H –Asset Allocation in Technical Decision Making Personal Investment

  2. Scenarios A 23-year old civil engineering student is about to graduate. He is debating to specialize in the transportation engineering field. In addition, to working full time, he has three options to choose from: • Obtain only a Bachelor’s degree from Cal Poly Pomona, or • Continue for a Master’s degree in transportation also from Cal Poly Pomona, or • Continue for a Master’s degree in transportation from USC

  3. Considerations • Cost of education expenses • Loans • Salary • Raises • Inflation • ROR

  4. Assumptions • Bachelor’s degree was paid off (financial aid and parents) • One loan is needed for USC and none for Cal Poly since education expenses will be paid with the working salary • Unsubsidized Federal Stafford Loan • 6.8% interest rate • Time to pay the loan will be 10 years • Living costs are consistent between scenarios • Only adjusted for inflation (3%)

  5. Comparison: Education costs

  6. Comparison: Salary

  7. Basic Plan Bachelor’s 3% raise, Master’s raise 4% Bachelor’s vs. Public Master’s: 12 years Bachelor’s vs. Private master’s: 32 years Public vs. Private: never

  8. Sensitivity Analysis: Salary Private Master’s: $10,000 more than Public Master’s BS vs. Public MS: 12 years BS vs. Private MS: 11 years Public MS vs. Private MS: 11 years

  9. Sensitivity Analysis: Salary Private Master’s: $5,000 more than Public Master’s BS vs. Public MS: 12 years BS vs. Private MS: 17 years Public MS vs. Private MS: 21 years

  10. Sensitivity Analysis: Percent Raise Bachelor's = 3.5% Raise, Public Master's = 4%, Private Master's = 4.5% BS vs. Public MS: 12 years BS vs. Private MS: 19 years Public MS vs. Private MS: 22 years

  11. Results • Based on the Future Value, it is more logical to obtain a Master’s Degree in Transportation Engineering from a public school like Cal Poly Pomona.

  12. Resources • Bureau of Labor Statistics (http://www.bls.gov) • Civil Engineer Salary Info (http://www.payscale.com/research/US/Job=Civil_Engineer/Salary/by_Degree) • Cal Poly Pomona Tuition Costs (http://dsa.csupomona.edu/financial_aid/costs_even.asp) • USC Tuition Costs (http://www.usc.edu/admission/fa/applying_receiving/graduates/costs.html) • MSCE Program -Transportation Engineering Emphasis (http://www.csupomona.edu/~ce/MSCE/transportation.html) • Cost of Living Information (http://www.leavingthefolks.com/cost.php)

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