The Pros And Cons Of Higher Education
I. School versus Work
When deciding how to finance the school I would like to attend, the first thing I would do is check the current price of Apple’s stock using Yahoo! Finance, and figure out how much I would have if I were to sell all 1,000 shares that I own. As of 6/3/2016 at 10:15am, Apple’s stock is valued at $97.63 (Yahoo! Finance, 2009). Therefore, if I were to sell my 1,000 shares …show more content…
Obviously, if I were to sell all of my bonds, I will have raised more than enough funds to finance my education, which is an obvious advantage, while I would not have enough if I were to sell all of my stocks (an obvious disadvantage). In addition, if I were to sell all of my bonds and was left with my stocks there are other disadvantages. In the face of a recession, I would have the potential to lose significant amounts of money from having only stocks left in my portfolio, whereas my savings bonds are backed by the US government, making them a reliable and “low-risk savings product” (Treasury Direct, 2016, para. 1). This makes selling a combination of both stocks and bonds appear to be the best option, not only because of the risks involved, but also for the purposes of maintaining diversity within my …show more content…
Using this equation, if I were to take $30,000 of that salary this year and invest it with an interest rate of 5% for ten years, I will have about $48,867 at the end of ten years, whereas, if I wait four years, and then invest $30,000, I will only have $40,203. That is a difference of $8,664, just in four years. Of course, this is just random numbers I am using for examples, and I have simplified for demonstration purposes, but my point remains the same: the sooner I start earning (and saving), the more money I will have for the future, to invest or do with as I choose.
II. Bonus versus Stock
Similarly, if the firm were to offer me either a $5,000 bonus today, or 100 shares of the company’s stock, which is valued currently at $50 per share, I would say that mathematically the best offer would be the $5,000 bonus. Not only will I have the money today (considering again the time value principal I discussed above), but again, what would happen if I were to take the shares and have the stocks