00:00is a phd worth it that's what we're
00:02going to be talking about today but
00:04before we get into that let's gently tap
00:05the like button in order to defeat the
00:07evil youtube algorithm
00:08on this channel we talk about personal
00:10finance college degrees careers and
00:11opportunities that are going to lead you
00:13to success and we also go over some of
00:15common mistakes that you see so many
00:18now if you're new here and that sounds
00:19like something that interests you and
00:20you haven't done it already go ahead and
00:22hit that subscribe button ring the
00:23notification bell so that you never miss
00:25so with that out of the way let's jump
00:27right into it so i've decided to save
00:29you all the suspense in this video and
00:32right off the bat what the answer is to
00:34the question is a phd
00:36worth it that's right the answer is
00:40it depends okay okay you want a more
00:44fine fine i'll give it to you
00:48this is a personal finance channel so
00:50you have to keep that in mind so from a
00:52personal finance perspective
00:54a phd will usually not be worth it and
00:57by that i mean getting a phd versus
01:00getting a masters or a bachelor's you're
01:02probably not going to make
01:03that much more money but there are a few
01:05exceptions and i'm going to talk about
01:08and i'm also going to go over reasons
01:10other than the financial aspect
01:12of why a phd might be worth it but first
01:14let's go ahead and talk about the fact
01:16that student debt is
01:17absolutely out of control according to
01:20the national center of educational
01:21statistics the average debt for a phd
01:24graduate is around 108
01:26000 now part of that debt is going to be
01:28from their undergraduate degree usually
01:30that's going to be a bachelor's and then
01:32part of it might be from them getting a
01:34master's and then going on to get a phd
01:36there are many instances where phd
01:38programs are fully funded so you
01:39actually don't have to gather any
01:41student loan debt while you're in the
01:42program itself but many of them
01:45aren't now i couldn't find any exact
01:47figures but the ones that tend to be
01:49are usually in degrees that are already
01:52good in the first place majors like
01:55math technology etc those do tend to be
01:58fully funded whereas ironically a lot of
02:00the time the degree tracks where you
02:02might have to actually get a phd in
02:04order to work in that subject or that
02:06are the ones that unfortunately aren't
02:08fully funded so if you do decide to go
02:10make sure to get into a fully funded
02:12program because a hundred and eight
02:14thousand dollars of student loan debt is
02:16the total federal student loan debt
02:18right now in the united states is about
02:21trillion dollars now we're not going to
02:23get into how this ridiculous catastrophe
02:26happened i've made other videos where i
02:28but basically most people know it's bad
02:30but it's actually even worse than it
02:32the total credit card debt in the united
02:34states of america is over one trillion
02:36dollars which is a lot
02:37the total amount of auto debt aka car or
02:41is about 1.2 trillion still not as much
02:44as the total amount of student loan debt
02:46over half of the 1.7 trillion dollars of
02:48student loan debt is from
02:50graduate school alone in fact graduate
02:52school might be the biggest offender in
02:54the student loan debt crisis
02:56the reason for this is there's a lot of
02:58arguments that the way the college
02:59system is set up is that it incentivizes
03:02people to go into particular degree
03:04that won't end up getting them a job
03:05with just a bachelor's level degree
03:07then a lot of them end up going to
03:09graduate school because they pretty much
03:11don't have any other choice
03:12and of course the school benefits from
03:14that by making a lot more money
03:15and this leads to my second point which
03:17is if you do end up having to pay for
03:20graduate school using loans
03:22the type of loans you take out are
03:25worse now typically undergraduate loans
03:27are going to have an interest rate of
03:28somewhere around 3.5 to 5 percent
03:31on top of that when you take out these
03:32undergrad loans in order to get a
03:35they usually don't start accruing
03:36interest until after you've graduated
03:39now three point five to five percent
03:40really isn't all that bad especially
03:41when you consider the fact that if you
03:43were to just put money into the stock
03:44market like an index fund
03:46for instance you'd get about seven
03:47percent return on average
03:49however when it comes to graduate
03:50schools you take out what are known as
03:52grad plus loans and the interest rates
03:54for these loans are over
03:56seven percent per year for instance last
03:59year the interest rate on these loans
04:02and the year before they were about
04:03seven on top of that there's about a 4.2
04:06servicing fee that they take out right
04:08at the beginning when you first get your
04:10and if all of that wasn't enough the
04:12money that you take out starts gaining
04:14right away this is why if you're
04:16becoming a doctor for instance that
04:17might take seven to ten years of
04:20all of that interest is going to be
04:21accruing and compounding the entire time
04:24while you're still in school and you're
04:25not able to make any payments
04:27so by the time you start paying your
04:28loans the total amount might have almost
04:30doubled and you end up as a click bait
04:32thumbnail on a dave ramsey video now the
04:34average student loan amount that you
04:35take out for a bachelor degree is around
04:37000 a year for a master's degree it's
04:39going to be around 66
04:41000 and for a phd it's around a hundred
04:43and eight thousand and a lot of that
04:45hundred and eight thousand dollars on
04:46average again if you get it fully funded
04:48you don't have to worry about this
04:49but on average a lot of that hundred and
04:51eight thousand is gonna have seven
04:52percent plus compounding
04:54interest so i guess the big point here
04:56is make sure that if you do go for a phd
04:58that it's fully funded
05:00because the next point is that it's
05:01going to take a really
05:03really long time now most people think
05:05that a bachelor's degree takes around
05:07four years then you can tack on another
05:09two years for a master's degree so that
05:11would be six years total for a master's
05:13so a lot of people also think that
05:14getting a doctor would be another two
05:16years on top of getting a masters and
05:18that would be about eight years total
05:21nope that is completely false the
05:23average phd completion time is about 8.2
05:27years on its own so if you get a
05:29master's before getting your phd
05:31it's going to be the time it takes for
05:32you to get your masters plus another 8.2
05:35years if you get a bachelor's then you
05:36go directly into a phd program
05:39it's going to be four plus 8.2 which is
05:43this is why the average phd graduate
05:45when they finally get that piece of
05:46paper that says that they're a doctor
05:48is going to be around 33 years old and
05:51all that time while you're getting your
05:53they are gonna be working you hard
05:55you're probably gonna be working like 12
05:58six to seven days a week now for me
06:00personally and i think a lot of people
06:01who watch this channel are the same way
06:03is yes i do like to work i want to have
06:05a good income and make a good living and
06:07all that sort of thing and i want to
06:09but i also want to have a good work life
06:12i want to have a good work life balance
06:14i think a lot of people are like this as
06:15well and working 12 hours a day
06:17seven days a week throughout all of your
06:1920s and then into your 30s is probably
06:21not a great way to have a good work-life
06:24it's nice to have the freedom and
06:25flexibility to start a business travel
06:27enjoy time with your family and your
06:29friends i know i'm like this and i think
06:31a lot of other people out there
06:32like this as well and then even when you
06:34graduate you're like 33 years old you're
06:37still gonna have to pay back all those
06:39if you do it aggressively is still gonna
06:41take you probably around three to five
06:44and here's the thing this is all
06:45assuming that you actually
06:47finish your phd and that brings me to my
06:50next point which is many people end up
06:52not finishing their phd in fact only
06:54about 57 percent of phd students will
06:59years now that's on average but it gets
07:01even worse when you dig
07:03deeper into it and you look at the field
07:04of study when you look at it closely
07:06you'll find out that the types of phds
07:08that weren't able to get a job with just
07:10undergraduate degree are also the ones
07:12that have the lowest graduation rates
07:15for instance the 10-year completion rate
07:18in humanities so the students that need
07:21to have a graduate degree the most in
07:22order to be able to get a job in that
07:24field are the ones that are least likely
07:26graduate and i guess if you look at it
07:28from a supply and demand perspective
07:30that kind of makes sense if you have a
07:32graduating with this degree because of
07:34the fact that they couldn't get a job
07:35with a lower level degree
07:37that means there's going to be a lot
07:38more competition to put this in another
07:40way the students that are most likely to
07:42go to graduate school out of necessity
07:44not because they chose to but because
07:46they basically had to
07:47are the ones that are least likely to
07:49graduate they're the least likely to get
07:51through graduate school and finish their
07:53now there's a number of different
07:54factors that go into this but just to
07:56mention a few you have to write a
07:58dissertation that is basically original
08:01at the end of this dissertation you're
08:02going to get grilled by an entire room
08:05full of people who also have phds and
08:07they're experts in that subject
08:08and one of the people grilling you is
08:10going to be your advisor and this is
08:12kind of a make or break situation if you
08:14have a really good advisor it's probably
08:15going to be a lot easier for you
08:17and if your advisor isn't so good it's
08:19going to be much more difficult
08:20oh and by the way if you end up not
08:22getting your phd you still have to pay
08:24all of that student loan debt back the
08:26school has no skin in the game
08:27whatsoever there's no accountability
08:30all of the risk yourself so if you end
08:32up dropping out a day before you're
08:33supposed to graduate
08:35then you have nothing to show for it now
08:37the next thing i want to mention is
08:38going to be a little bit controversial
08:39but just hear me out
08:40graduate school in many ways especially
08:43phd programs are a little bit like
08:45a pyramid scheme now i'd like to point
08:47out that this does not apply to all
08:48types of phds out there
08:50there are some that are pretty good and
08:52you can actually get jobs that you
08:53wouldn't have been able to get otherwise
08:56for instance there are a lot of
08:57opportunities out there for people who
08:59get phds in engineering and mathematics
09:01that you wouldn't be able to get into
09:03otherwise and these opportunities will
09:05likely not become saturated in the
09:07future just because of the fact that you
09:08can easily get a job with just a
09:10bachelor level degree and so there's not
09:12that many people that end up going for a
09:15however for a lot of other types of
09:17degrees my research was a little bit
09:19shocking one thing i found out when
09:21researching graduate level degrees
09:24is that they were very similar to a
09:26pyramid scheme now a pyramid scheme if
09:28you're not aware is an unsustainable
09:30business model where only the few people
09:33end up profiting and pretty much
09:34everybody else ends up either losing
09:36money or not making any so basically how
09:38this works is the people at the bottom
09:41end up going into a particular field and
09:44they get a bachelor level degree because
09:46they think that they'll be able to get a
09:48job a lot of the time they'll find out
09:49three or four years in that they
09:51probably are not going to be able to get
09:52a job in that field so many of them will
09:54end up going for a master's or even a
09:56doctorate level degree
09:58now even at the doctoral level with a
09:59lot of degrees there's still not a lot
10:01of opportunities out there and so a lot
10:03of them will end up trying to become
10:05professors now don't get me wrong if you
10:08especially if you're a tenured professor
10:09that is a really sweet gig
10:11and many people work their way up the
10:13hierarchy in the university system and
10:14they could even end up becoming
10:16presidents that can make millions of
10:18but very very few people in some of
10:20these degrees end up making it to that
10:22top level becoming professors or
10:25first of all a lot of them end up
10:27dropping out and not getting their phd
10:29and the few really stubborn ones that
10:32very few of them will end up becoming a
10:34professor very few of them will even end
10:36up working in the field that they got
10:38their phd in a lot of the time
10:40now if you think i'm some kind of crazy
10:41conspiracy theorist go ahead and check
10:45grad school where they talk about this
10:46stuff all the time so a couple comments
10:49is you know one of the funniest most
10:51depressing parts of this sub is how many
10:52of us have independently come to the
10:55that academia is a pyramid scheme
10:58the phd postdoc professor system is most
11:01definitely a pyramid scheme
11:02there is even a comic on the website
11:06phdcomics.com it's literally called phd
11:09that kind of makes fun of this whole
11:11system so i'm definitely not the only
11:12person talking about this and warning
11:15it's a really big problem now the next
11:17thing that i want to talk about here
11:19is the fact that you don't make all that
11:21much more money than if you got a
11:24i know what you're going to say master's
11:25degree phd holders they make way more
11:28money than their bachelor degree holder
11:31nope actually in general master's degree
11:33holders only make around 23
11:35more than their bachelor's counterparts
11:37even though they take out a lot more in
11:40and with a phd it's even worse you only
11:4326 more so three percent more than a
11:47even though they take out way more in
11:49student loans and it takes a ton of time
11:51now for the purposes of this video just
11:54i set up a very simple spreadsheet where
11:56i talk about how much you earn with a
11:58bachelor's degree a master's degree and
12:01and how long it would take you to catch
12:03up with a bachelor's degree
12:05if you decide to go back to school and
12:06get your phd now again this is not
12:08perfect but let's say you start
12:10off at about 22 years old with a
12:11bachelor's degree you're earning 50 000
12:13a year and you have 35 000 in student
12:16loan debt with a master's degree you'd
12:18be starting at 24 years old you're going
12:20to be making around 61
12:21500 which is 23 more and you're going to
12:26000 in debt with a phd you're going to
12:29start off at 30 years old yes i'm being
12:31nice here because the average phd
12:33graduate is 33 but i'm going to go ahead
12:36you have around hundred and eight
12:37thousand dollars in debt and you're
12:38going to be making around 63 000 a year
12:42more than a bachelor's degree holder
12:44would be making now i kept this
12:45extremely simple for the purposes of
12:47this video but when you run the numbers
12:50very obvious which ones are the best so
12:53a bachelor degree holder will have the
12:55highest net worth here out of all of
12:56them until about 32 years old at this
12:59point the master's degree holder will
13:01have a higher net worth
13:02the doctorate degree holder is way
13:04behind both of them though and they will
13:06not catch up to the bachelor's degree
13:0960 years old and they don't catch up to
13:11the master's degree holder until they're
13:15but wait there's more we never added in
13:17student debt when you add that in it's
13:19going to skew it even a little bit more
13:21the bachelor's degree holder will have
13:22the highest net worth until they're
13:26at that point the master's degree holder
13:29and the phd will not catch up with the
13:31bachelor degree holder until they're
13:32about 68. now it gets even worse when
13:35you factor in the interest rates on the
13:37grad plus loans in that case it's hard
13:40to calculate because some of it's going
13:42to be undergraduate loans and some of
13:43it's going to be grad
13:44plus loans but you could probably tack
13:46on a couple more years at least
13:48so the bachelor degree holder is going
13:49to have the highest net worth until
13:5238 to 40 years old somewhere around
13:54there and the phd holder would not pass
13:56up the bachelor degree holder until
13:58they're both in their 70s and probably
14:00retired so this shows that getting a phd
14:02from a personal finance perspective
14:05is not that great and honestly i was
14:07being really nice to the phd and the
14:09master's degree in this situation
14:11there's probably a bunch of other things
14:12that we could add in there like
14:14opportunity costs and all kinds of
14:16that make it even worse and it's just
14:18crazy to me that a lot of people aren't
14:20warned about this before going to
14:21college a lot of the time college
14:23counselors won't even warn you about
14:24this stuff because it makes the college
14:26more money if you end up going back to
14:29university unfortunately just like
14:31everything else at the end of the day
14:32is a business but let's say that you
14:34have your heart set on going to graduate
14:36school and getting a phd
14:38it doesn't matter what i tell you you're
14:41fair enough i respect your decision but
14:43there's a few things that you want to
14:44think about before going there's really
14:46only two reasons that you should be
14:50one is you're going for a position where
14:52there's no other way that you could
14:53possibly get that position than getting
14:56something like becoming a rocket
14:57scientist for nasa or a professor
15:00at a big university that has to have a
15:02phd there's just no other way for you to
15:04get there you absolutely have to have
15:06that piece of paper that phd in order to
15:08get hired and then the second reason is
15:10that you want to understand
15:11a subject on the highest possible level
15:14you understand it so well that you're
15:15actually going to be contributing to the
15:18and you'll likely sacrifice a ton of
15:20time and money in order to do this
15:22but if it's something that you're
15:23extremely passionate about then it can
15:25be worth it if you haven't done it
15:26already go ahead and gently tap the like
15:28button hit the subscribe button ring the
15:30notification bell and comment down below
15:31any thoughts comments criticisms etc
15:33that you have on the video
15:34and before you leave don't forget to
15:36check out my other videos
15:38right here i made them just for you
![Welp, Here's what the Fed *Just* Said [Fed FOMC Minutes]](/_next/image?url=https%3A%2F%2Fi.ytimg.com%2Fvi%2Fl8u23oq1E9E%2Fhqdefault.jpg&w=3840&q=75)
