I’ve been in Paris for more than a week, and I’m reminded of how little money you need to have an amazing experience.
This morning I ate a fresh baguette (88 cents) with cheese and olives, and sipped a homemade cappuccino in my living room. This afternoon I’m taking a long walk to a local park, where lilies are in full bloom.
Today’s spending: Almost zero. Enjoyment: Complete.
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Welcome to the latest edition of Reader’s Ask. Today I’m featuring two questions: one from a reader who is debating whether or not to attend grad school, and the other from someone who has a logistical question about travel and money.
Reader Question #1:
I’m 24 years old. I have a marketing job making about $40k per year (before taxes), half of which I live on, the other half goes into a savings account, which I use for my student loan payment and my Roth IRA contribution. I have about $18k in student loan debt. I have about $15k saved in a Roth IRA, and a few thousand in a 401k plan. I’m happy with what I’ve been able to accomplish so far, but I want to do more.
I’ve been accepted into the MBA program. Total tuition and fees will run me about $15,000. The motivating factor for me wanting to get my MBA is to be able to teach business and marketing classes at a University. In my area, these positions are typically paid around $50,000 per year. Not a bad rate of return, invest $15k and earn $10k more in just one year….. BUT is it worth taking out the extra student loan debt? (This would take my total debt up to around $35k — yuck!)
Afford Anything’s Answer:
You’ve stated that your motivation is to teach business/marketing classes at the college/university level. That’s key information, and its good to hear. Getting a masters degree is a mandatory prerequisite to getting that job.
If you had written to me and said, “I want a marketing position at a company,” I’d be a bit more hesitant about recommending that you go to grad school. After all, you can get a marketing job with your bachelor’s degree, and then climb your way up by being an awesome performer. Once you’re on-board with the company, most people won’t know what your highest level of education is. And your rockstar performance at the company will matter more than your education.
But teaching at the college level is different — the degree is literally a requirement; it’s an unavoidable price of entry. So if that’s what you really want to do, then I think that you should go for it.
BUT — and here’s the but —
First I want you to ask yourself one question: Is this your dream?
Don’t take that question lightly. Are you going to want this same dream (teaching at the college level) within two years, when you graduate? Do you want it badly enough that you’re willing to sacrifice traveling, delay investing, delay buying a home and throwing a wedding and having kids, for the sake of pursing this dream?
If your answer is yes, then absolutely go for it. I have no objection to people consciously making sacrifices in other areas of their life for the sake of pursuing a dream. In fact, I think that’s admirable. Everyone who has done anything noteworthy has made plenty of sacrifices along the way.
My only “beef” is with people who assume they should go to grad school because they’re “expected” to, or because they’re dissatisfied with their current job, or because their friends did it. That’s not sacrifice on behalf of a dream … that’s sacrifice for no real good reason, other than succumbing to social pressure.
Reader Question #2:
How do you pay for things when you’re traveling? Is it safe to carry that much cash around?
The more you’re off-the-beaten-path, the more likely cash is your only choice.
If you’re in Burma, buying a cup of tea from a market stall, you’ll need cash. But in more developed countries, you’ll be able to swipe plastic.
Don’t assume that “developed countries” is synonymous with the Western world. There are plenty of highly developed countries across the Middle East and Asia. The United Arab Emirates, Egypt, Malaysia – these nations, especially their major cities, are far more advanced than you might imagine. (The flashy wealth in Kuala Lumpur is unbelievable. It’s what I imagine Beverly Hills to look like.)
So, onto the second part of your question – how do you keep your money safe? Credit cards give you the highest levels of fraud protection, so use it when you can. When you use cash, withdraw money from an ATM rather than going to a moneychanger. You’ll get the best exchange rate.
Withdraw ONLY as much cash as you need for about a week. Put the majority of that into a “money belt” that you wear under your pants. Stash only one day’s worth of cash into your wallet. That way, if you get pick-pocketed, you’ll only lose a day’s bills.
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To Reader Question #1:
Don’t forget to investigate if your current employer will fund your MBA. Many do, at least in part, as they’ll be benefitting from the skills you learn while in school. Even if they require you to stay on board an extra year after completion, a fully funded degree would be more than worth the opportunity cost of waiting a year to switch. ($40+$15) > $50
The employer would not be willing to fund the MBA. They are aware that the motivation behind furthering my education is to also make a career move as well, which would leave them short their marketing manager.
I would continue to work for them for at least the first year of my grad program. The second year I think it would be beneficial to apply for a teaching assistantship at the school to gain experience as well as to help keep my costs down. The assistantship would allow me a tuition waiver, and a stipend to live off of in return for my part time work at the University.
I would add to the grad school question that it is hard to find positions at universities. My neighbor was a statistics professor at California State University. He had a PhD. from UCLA. He had to work part time (adjunct) for years before he was hired on tenure track. I have a friend who teaches at community college has been working part time (adjunct) for several years and unsure when she can go on tenure track. She teaches just 2 classes and needs several other jobs to support herself.
@Krantcents — Excellent point. It’s tough to find a job, but if that’s her dream, I wouldn’t dissuade her from shooting for it. After all, anything that’s worth doing will be tough. Starting your own business is tough. Becoming a doctor is tough. Long-term traveling is tough. It’s all tough.
The question is, does she want it enough that she’s willing to endure?
Adding on to this… is the questioner sure that he or she can get one of those 50K jobs in hir area with just an MBA?
Business schools do hire masters degrees instead of PhDs but generally only as adjuncts (which usually pays per course, no benefits). Full lecturer positions are more likely in accounting than in marketing, and I believe they often hire adjuncts with extensive marketing experience.
And, generally being an academic means you don’t get to choose where you live.
If you’re doing this for the money… it’s probably not a good investment. There are better ways to get up to 50K/year.
In any case, talk to some of the professors there about the feasibility of your idea.
I’m currently asking the same as question 1. It’s almost as if I wrote the question myself! Except it will only be about $8k-$10k to get my MBA. The only thing I’ve figured out in terms of why I want it is because it will open up a broader job market for me. I’m in IT now, and I’ve been thinking about going into a different area. I work in banking so having an MBA would be super beneficial. Meh, decisions… Would you remain at your current position while you went to school? I would and having done it as an undergrad I know it’s difficult but doable.
Hey Paula,
I am following my dreams of living abroad and moving to Madrid to teach English in a couple of months. I plan on traveling throughout Europe while I’m there-where have you been staying during your stay in Paris? I typically go through airbnb.com but was wondering what you do? Thanks!
@Isabel — AirBnb and Coucusurfing.org are my two favorite websites for getting started in a new place. If I were you, I’d arrange for temporary accommodation (maybe a couple weeks) through one of those websites, while you’re still in your home country. Then — after you arrive and you’ve had time to explore the area — sign a traditional lease (6 – 12 months). You’ll have a better idea of where you want to live, and you’ll be able to read local apartment/house rental guides.
Great answer on the grad question, Paula. On the “dream” part, I heard something recently about “chasing your passion” that struck me as sage advice: don’t follow your dream, follow the thing that you would love to work hard at for 10 years. The first 10 years in most careers aren’t fun. The fun parts of the job are often reserved for people at the top. If you wouldn’t mind being at the grindstone for 10 years chasing it, then I say go for it, too.
@Average Joe — That is great advice. I remember once contemplating whether I’d be willing to suffer through 10 years of the “grindstone” work in the field of journalism, doing mundane tasks like fact-checking, before I made it to the top. My answer was no, which is why I left that field. And I feel fortunate that I didn’t opt for a graduate degree in journalism!
I attended (and completed) graduate school twice – in two foreign countries (Ireland and England).
I think it is absolutely worth it if it is something that a person truly dreams of. If you are blessed enough to be in a good program, in a dynamic environment, it is worth it.
However, there are also reasons NOT to go, such as:
1) You will end up in massive debt that could be problematic.
2) You are doing it just to earn more money in the future but do not really have a passion for the topic you will study.
3) It is not something you have always dreamed of.
Although I have to add a disclaimer for number one – massive debt is ok, if you know you can handle it. But if you have a family to raise, other debts to pay, and it will hurt you or others, then it is a problem.
Also, keep in mind that your education may not open doors into your field – it may just end up being something that you did in your life and then moved on.
That is ok too, but it is another good reason to think seriously.
If you cannot work in this field, will you still feel enriched that you learned about it?
Overall, I am glad I went to graduate school because it was a rewarding experience. I do not work in my field or make a fortune, but I was able to pay off the debt, am debt free, and had a very rewarding experience living in other countries.
@Reclaiming the Sacred — I think those are fantastic points. If graduate school isn’t really your dream, OR if you bury yourself with crushing debt, then you’re facing a huge problem.
But if you absolutely dream of it … well, we ALL make sacrifices for our dreams, whether that dream is traveling or becoming a rockstar or attending graduate school. Sacrificing on behalf of a dream is fantastic. But sacrificing it because you’re “not sure what you should be doing next” is not.
I actually just started my Master’s degree to be able to teach at a college or university which is my dream. I HIGHLY, HIGHLY suggest that you see what your options are for an assistantship right away. I start mine my first semester of classes and I will already be teaching my own classes. They are covering my entire tuition and I will also receive a living stipend. I will not become rich by teaching though my Degree but I will already be able to add to my resume that I have already taught three classes a semester for two years by the end of my degree and I won’t have to pay for classes out of pocket. I don’t know that I could have started this program at all if I waited until my 2nd year. I’m excited that simply going back to school for my Master’s degree will allow me to start the job I really want. I wish you luck with school!
@Ney — Congratulations on starting your master’s … and thanks for the tip about the assistanceship! I wrote this post assuming that the person has to pay out-of-pocket, but assistanceships and other grad-student jobs provide great opportunities for graduating debt-free.
MASTERS DEGREES ARE FOR ACADEMICS/ INTELLECTUALS AND MAKE ABSOLUTELY NO BUSINESS SENSE !
A masters is about mastery– a specialized knowledge in an area. Ultimately a waste of time and money if you want to build wealth. You will be 35K in debt!
My favorite teachers had financial business sense (like the owners of AffordAnything) and were far more engaging than the typical profs because they knew how to build wealth. While they lacked a ridiculous piece of paper that said they were “masters” they had business building expierence and didnt teach for money. They didnt have to teach for a salary.
I had profs that had masters degrees and made PowerPoint presentations based off the book we were reading. I skipped their classes and focused all my attention on my courses that were taught by businessmen.
I remember a marketing prof (noticing me blatenly skip her class till test day) tell me how she wished I liked her class as much as I liked my entreprenurship ones– taught by actual business people not proffesors.
Still want to be a proffessor or do you want to pursue a financial education? Still on the fence?
– Read ‘Why “A” Students Work for “C” Students and Why “B” Students Work for the Government’ by Robert T. Kiyosaki
– Watch (although cheezy) ‘Larry Crowne’ with Julia Roberts and decide if being a professor is really the lifestyle you are passionate about.
** P.S: I’m no expert, just starving for financial wisdom which is why Afford Anything is one of my favorite sites to follow.
@Drew — Aww, thank you for the compliment! I’m also a huge fan of Robert Kiyosaki, though I haven’t read Why ‘A’ Students Work for ‘C’ Students. I absolutely loved his book Cashflow Quadrant, which was one of the books that made me realize that being self-employed is VERY different than being a business owner.