Is it worth doing a double degree (5 years) vs. a single degree (3 years) at university
Alright..just realised that a 5 year double degree course means that you have 16 extra exams which already seems like a downside…but what about cost wise?
Assumptions
Just like my finance textbooks, i’m going to make some assumptions
- There is no tax to be paid
- There is no discounting of any cash flows
Subject cost
Okay so i’m going to assume the average subject costs $1000 each so that’s $16,000
Opportunity cost
For the years that you study extra (2 years), you forego the money you would get. i’m going to be fairly conservative and say this is $45,000 before tax. so that’s $90,000 for 2 years.
Total cost
So that’s $106,000 that you lose out already.
What do you have to earn extra to make this worthwile?
So let’s say if you were to graduate after 3 years, you’d start work at the age of 22. let’s say you continuously earn $45,000 (just to make things easier for me) every year and you retire at 60? (is this the normal retirement age?)
So you’d get 38 years of earning $45,000 = $1,710,000
If you do 5 years, for it to be even, you would have 36 years of $x – $106,000 (cost of extra subjects and opportunity cost) = $1,710,000
36(x) – 106,000 = 1,710,000
x = $50444
So basically you’d need to be paid ~$5000 every year for the rest of your life for this to be worth it….
But then i guess you have to take into account if a double degree and spring you into better jobs to begin with, and maybe it allows you to earn at a greater increasing rate compared with having a single degree…..
DUNNY
nanciepants
I wouldn’t want to do a single degree because you would have to concentrate on studies the whole duration and stress about job applications earlier. Think about applying for internships in second year and graduate jobs during third year. You wouldn’t have had ample time to choose your future career path properly, especially when you haven’t yet taken third year, major specific subjects.
P.S Stop being so nerdy with your discounting cash flows
big 4 firms already give u a “double degree” bonus… but apparently its only like $2000 once off… and then ur subsequent pay rises are only calculated based on ur salary without the bonus?? so like not even that good!!