Get my Masters or Invest the money?

[tyler1215]

I started my Master's Degree in Electrical Engineer online through Purdue University at the beginning of the year.  My tuition is $3,333 (nice round number), or $860 per month.  I did ok in my first class, and am starting back up in the fall.  I took the summer so I could use the tuition money to pay off my last credit and become debt free. 

I work full-time as an Electrical Engineer, but go to school online.  I have my badassity down to less than 50% of my take home pay.  When I read the MMM blog late at night, I lay there wondering if I'm doing the right thing by going to back to school or if I should take the 50% of my pay that's left over each month (~$2500) and aim for FIRE.  I would like to retire from the rat race in my forties, after I have made it to that executive level at work.  Pursuing my Master's is not purely driven by career opportunities, but more by my desire to keep learning.

Should I keep with school, keep my badassity low, and play catch-up when I finish School? Or should I quit school and work toward retiring earlier? 

[Left]

I'm in the boat that going to school is more about personal interest and not work requirement after you've already started your career. Unless you are working for a promotion that requires the degree, it doesn't benefit you much in terms of return since the time it takes to recoop costs is same as getting to FI

I've been thinking about getting a DCLS degree but I'd need 5 years experience first so I got a few years to go anyways, but add in that time and the time to study/earn more would be about 10 years and I'd be FI in 13 or 18 (5 years to build a buffer). So after the 10 years to pay it off my investments would be returning more than what I'd make with the degree. If I was aiming for FI then I wouldn't want the higher responsibility of a higher position since it'd be harder to walk away from it without guilt since I wouldn't have "put in the time" yet to make it worthwhile. In the end I may just FI first then go back to school for the personal enjoyment and may study something completely different.

but how much extra would you earn if you got it, vs the amount of money you'd get investing it? I don't know what masters of  Electrical Engineer get paid :S

[tyler1215]

My manager and I have had candid talks about my future.  He strongly believes that within a couple of years (the time I finish my degree) I am due a huge pay raise.  He is concerned that I would leave if my current company didn't take care of me in time. 

I have also had some pretty candid conversations with other managers and employees, and they all view me as the successor to the CEO. A little back story: the company hired a new CEO last year and then he brought me in after 3 months (we use to work together at our old company).  If everyone's speculation came true and the CEO retired at 65, then I could become the CEO in my mid-thirties.  Being a young CEO is not unheard of in my industry.  One reason I have been pursuing my Masters is to put me in that position to take over at a young age.

I have been doing my research and building my case to ask for a pretty significant raise in the fall.  The idea being that I want fair-market value for what I do (I'm not that greedy) and I want enough of a raise to cover my tuition expenses before any potential reimbursement.  When it's all said and done, I would be asking for a $10k raise (~15% increase), that IS unheard of, but I feel like I have a strong enough case to ask for it.  Worst they can say is "no", once they get done laughing.

[Lance Burkhart]

Invest the money.  No one cares about master's degrees in electrical engineering unless you're on your way to a pile it higher and deeper and academia. 

None of our technical experts have master's degrees.  They built expertise on the job.

[ltt]

Have you had the conversations with your employer about them paying for your Master's Degree??  I would think that if they value you highly and want you to continue with their company, this may be something they are willing to entertain.

[BFGirl]

What do you want to do?

[tyler1215]

What do you want to do?

I want to be the next CEO.
I'm the only engineer at the company that does not have a master's degree in engineering, that includes the CEO. I would like to emulate the success of those before me.

 

Have you had the conversations with your employer about them paying for your Master's Degree??  I would think that if they value you highly and want you to continue with their company, this may be something they are willing to entertain.

Currently, the company's tuition reimbursement policy is being rewritten because of me. I have to wait until next year for board of directors to vote on the revised policy and then I can take advantage of it. I am really hoping it is approved, then that would make this a non-issue. But the engineer in me wants to be prepared for the worst-case scenario. Always planning ahead.

[Goldielocks]

I made the decision - get my MBA or buy a nice car...  This was pre mmm...

I am glad to choose the education, even if it hadn't unexpectedly paid off in spades like it did.    Sometimes the mind can stagnate at work.   It was like a mental fitness investment in myself. And I will have better quality of life.

So don't think FIRE or education... think about the frivolous stuff you are not buying and feel happy in the choice.

Now if it is merely a chore... I would quit and invest, of course!

[BlueMR2]

Personally, I would invest the money.  However, that's just me.  It sounds like you may need a Masters to reach your goal.  However, I'm not sure that your goal will stay the same.  Many that embrace the way of the mustache trim down their goals and become happier for it.  In that case the Masters would not just be a waste of money, but of time and effort as well.

[tyler1215]

So don't think FIRE or education... think about the frivolous stuff you are not buying and feel happy in the choice.

As far as frivolous stuff I'm not buying, I had to put the cost in perspective and found out I could get a new BMW 4.35 for less than I'm paying for school.  But the BMW wont be there when I'm 60, my mind well hopefully still be there.

My brother and I joke that you can never be too educated, and a master's is an investment in yourself.  But he is a non-mustachian.  I'm starting to come to the conclusion that both choices are an investment, and both have no guaranteed ROI.   

[Left]

If you become the CEO, you wouldn't really need the masters since you'd just hire someone with it to do the job, masters degree in electrical engineering has nothing to do with learning to be a CEO... you 'd probably do better with a mba or something in that field.

I'm not sure but I've never met a CEO that was "hands on" doing the bench work instead of whatever CEO's do (I don't know what they do :D). Best thing I'd think a CEO would do is refer technical questions to his managers/experienced employees so they can add their input and be part of company. I don't mean that the CEO passes all duties to someone else but bench work isn't related to running a company. Sorry, not sure if I wrote this well, I work in a lab field and don't know equivalent engineering terms.

[DJP1]

When I think of CEO I think of someone with lots of experience, good business savvy and one who can manage others well. Personally, I don't see a MSEE as a requirement.

So I can only see two reasons to get the MS:
1. You enjoy school and desire to earn the degree
2. It is essentially required to advance in your line of work or company

In most cases, I don't think a MS is that essential. The majority of the senior engineers I work with don't have their Master's, instead they have their P.E. - but that is specific to our line of work.

If it will hold you back and you really desire to move up in the company, go for it. Otherwise I would save/invest the money.

[tyler1215]

dJP1 and Eyem, you both valid points of not requiring an MSEE to be CEO. I'm pursuing for me but I also noticed the CEO possesses MSEE and MBA.  The program I'm in is a dual degree program that offers an MSEE and MBA in half the time. I have also seen the trend that more companies are hiring engineers to be their CEOs, about half of the Fortune 500 companies have an engineer as their CEO. Even the great CEOs like Jack Welch and Alan Mulally were CEOs without an MBA.

[avongil]

I spent around 25K to get my masters in mechanical engineering. Is it worth it. Maybe.  In  your case probably.  If you get a government job one day you will be required to have one most likely. I think higher education is money well spent.

[DJP1]

The dual degree aspect is a plus in addition to the shortened schedule.

It sounds like you want to earn the degrees. In that case, I say go for it. Work hard, save as much as you're able and knock the degree out ASAP.

I'm willing to bet the benefit of a promotion/pay raise/personal enjoyment will pay you back in the end.

[ltt]

Masters Degrees (and I have an MBA) are highly overrated and oftentimes unnecessary in the grand scheme of things.  They're also a dime a dozen.  Of course, I left the workforce many years ago to be a stay-at-home mom, so that's easy for me to say.

It's a fine line, but I would much prefer someone to have business experience over book knowledge; and I think this is definitely the case as you get older.  Since you want to ask for a raise in the fall, do not ask for enough to cover the tuition, also.  Ask for the raise you want independent of the tuition.  And then also ask for them to pay for your education, if that is the course you and your company want you to take.  If you are being groomed as the next CEO, someone at that company will see to it that you are taken care of.   

[OOBER]

I made the decision - get my MBA or buy a nice car...  This was pre mmm...

I am glad to choose the education, even if it hadn't unexpectedly paid off in spades like it did.    Sometimes the mind can stagnate at work.   It was like a mental fitness investment in myself. And I will have better quality of life.

So don't think FIRE or education... think about the frivolous stuff you are not buying and feel happy in the choice.

Now if it is merely a chore... I would quit and invest, of course!

I agree with this. I graduated with my MBA ~2 years ago. There wasn't any direct advancement opportunity at the time as a result of my new degree. I didn't really have any plans other than I like school and work was paying for ~1/2 of it. The weird thing is that it made me more ballsy. Shortly after graduation, I went out and got a new job at a different company and was recently approved for a very significant raise this week with no title change or additional responsibility. They find so much value in me that they don't want to risk me leaving.

Not only in advancement opportunities, but I have noticed that life in general is easier. The further I went in school, the more I realized that the teachers don't have all the answers, nor are they supposed to. If I want something I have to go out and get it, not just hope that it comes to me. I regularly get pulled into meetings well above my pay grade because my education provides me with the skills to help analyze the #'s with people much more "experienced" than me. So in my opinion, if I can sit in a meeting with people 20-30 years my senior and have an educated discussion on the same level as them at ~28 years old then I would say my education was well worth it.

As Goldielocks said: If you like school and learning, do it. If you think school is a pain, drop out and invest instead.

Masters Degrees (and I have an MBA) are highly overrated and oftentimes unnecessary in the grand scheme of things.  They're also a dime a dozen.  Of course, I left the workforce many years ago to be a stay-at-home mom, so that's easy for me to say.

It's a fine line, but I would much prefer someone to have business experience over book knowledge; and I think this is definitely the case as you get older.  Since you want to ask for a raise in the fall, do not ask for enough to cover the tuition, also.  Ask for the raise you want independent of the tuition.  And then also ask for them to pay for your education, if that is the course you and your company want you to take.  If you are being groomed as the next CEO, someone at that company will see to it that you are taken care of.   

I agree to a point. I would rather be over-prepared though. If as a Mustachian we are planning on leaving the workforce early, then we must play our cards smarter. The extra education could lead a person to get advanced to higher pay grades faster so they can save/invest more and retire faster. The raise I am getting this year is enough to cover my entire MBA program....Also, it will set the precedent for all my future pay.

Everybody's journey is different. Looking back today, I am very glad that I followed through with my Masters.