Opportunity cost of doing a 5-yr combined degree (1 Viewer)

[klaw]

Hello, I am a recent HSC graduate interested in pursuing an accounting/finance type job in the future but have a personal interest in psychology (yes.. the same one asking about comm/psych a few threads down, but since then I've thought about the opportunity cost of combined degrees and changed my stance). I have considered doing a comm/sci course, but thought that I would probably be less employable in an accounting/finance field if I did B Commerce (Accounting)/B Sci (Psych) than if I did B Commerce (Accounting+Finance) due to the extra qualifications related to finance. Now since my UAI probably won't get me into liberal studies, the only option that leaves is a 5 yr combined degree with arts or social sci. I've sat down and thought about the opportunity cost for doing a 5 yr combined degree and it's just way too high.

By doing a 5 yr combined degree, you're studying for an extra 2 yrs when you could be working. Thus, you're losing 2 yrs work experience in addition to 2 yrs income (let's say $40k/yr so $80k total). Another factor to consider is that you have less time till you move out. For example, let's say you plan on moving out when you're 25 yrs old, so after you turn 25, you have to add rent + living costs to your expenses (let's say $25k/yr) so while you're working between 21-25 yrs old, you're saving $25k/yr of expenses. Therefore, by doing a straight comm degree, you're saving around 2 yrs worth of rent + living costs more than if you were doing a combined degree (because you're not earning any income to save).

So by doing a combined degree, you're losing 2 yrs work exp + $80k (2 yrs income) + $50k (money saved from not having to pay rent+living costs) + $10k (uni fees) which add up to around 2 yrs work exp + $140k.

What's worse is that you're probably LESS employable if you have a combined degree than if you have a straight degree and 2 yrs work exp. And in the long term, work exp is a lot more important than your uni degrees so combined degrees don't benefit you in the long-term either.

Whilst I understand that uni lifestyle may be a lot more enjoyable than working and you may have a genuine interest in the field, is doing a combined degree worth the huge financial and career costs?

 

[ditto.]

I bet you thought you were really clever using the term 'opportunity cost' in this situation.


You're really thinking about this thing, far too much.


All that stuff you rambled on about, is really irrelevant.

You seem like a smart kid, deep down you know what you want to do...so do it.

Two things to consider:
1) If you do a combined degree, you can drop one of the other degrees at any point, without having to go through the transfer process.
2) If you do a single degree, and later wish to transfer into the combined degree, you have to apply externally to UAC and go through the transfer process.

 

[klaw]

Actually opportunity cost is like a prelim economics term, there really isn't anything impressive about using the term, it was just the best way to describe this cost so I didn't really think I was clever in using it . But I admit that I was proud of myself for thinking of all the costs associated with a combined degree .

I don't really understand why you're saying that the financial and career costs are irrelevant. I'm just comparing the 23 yr old comm/law graduate with no work exp with the 23 yr old comm graduate with 2 yrs work exp, which I believe is a far more accurate comparison than a 23 yr old comm/law graduate with no exp with a 21 yr old comm graduate with no exp, which is the way most people compare combined degrees to single degrees. It is the person you become five years after you enter uni, rather than comparing two people who just recently graduated.

 

[seremify007]

I think he meant the irrelevance was the fact that you know down the road, you're going to end up with the Accoutning/Finance job rather than ever making use of psych. Sorry for the very short post but I'll post a more detailed post later- just something for you to think about though, how about doing psych for your gen ed? It's not much, and won't really amount for anything, but it might help make your time at uni feel more interesting?

 

[tallkid34]

You sound as if you can predict the future and know exactly what will happen after you finish university. However, you make some good points.

I'm in a similar situation. I got a UAI of 88 and Im thinking of doing a combined commerce or economics/social science degree at UNSW (d-fee). As I'm young (turned 17 in september), the fact that I'll be spending longer at university than other people doesn't necessarily bother me too much. My dad (who is a commerce graduate in accounting, finance and systems from UNSW) has told me numerous times that by entering the workforce at a young age, employers are unlikely to hire you depending obviously on your experience/skills/personality.

As for the other costs you've mentioned, I'm in an entirely different boat since I've applied (and hoping to get in) for a residential college on campus and if that doesn't work out, it looks like I'll be at my parent's apartment.

As other people in this thread have mentioned, you definitely seem to be a pretty smart guy so you shouldn't look into these things too deeply for now. I'm pretty sure you'll figure something out next year. Otherwise, good luck and let's hope we'll just get into UNSW in 2007 without any major problems!

 

[ditto.]

Actually opportunity cost is like a prelim economics term, there really isn't anything impressive about using the term, it was just the best way to describe this cost so I didn't really think I was clever in using it .

Um yeah I know, i did High School Economics and University Economics, I'm quite familiar with the term.

I don't really understand why you're saying that the financial and career costs are irrelevant. I'm just comparing the 23 yr old comm/law graduate with no work exp with the 23 yr old comm graduate with 2 yrs work exp, which I believe is a far more accurate comparison than a 23 yr old comm/law graduate with no exp with a 21 yr old comm graduate with no exp, which is the way most people compare combined degrees to single degrees. It is the person you become five years after you enter uni, rather than comparing two people who just recently graduated.

Yeah but...what's two years in the grand scheme of things?

Two years, out of your whole 80 year life...you should spend it on what you think is most enjoyable.

You seem to be talking yourself out of doing the combined degree, so I don't think your hearts really in it.

And we all have to start out with no experience anyway...if you were concerned with moving ahead with yr life as quickly as possible, you'd have skipped grades in High School...or at uni you'd overload every semester, or accelerate during summer school.

I just think the whole analysis you did is irrelevant and unneccessary.

 

[Affinity]

First to correct a mistake you have with your estimation -> you have living expenses whether you are at university or not, so it's really 90K instead of 140K. remembering that parent's money comes out of your inheritance.

secondly, things aren't as clear cut as you set it out to be. For example, who knows one will get employed after 3 years? And work experience isn't more the better, it's about what you do and your "success rate".

Thirdly, you seem to see education as a mere selection process to rank graduates. Don't you think a person actually learns something useful?

Forthly, The aussie first degrees are really short compared to other places. US -> 4 years, china -> 4 years, Europe -> usually 5/6 depends on country, UK->3 but they have 7 years in Highschool. perhaps there's a reason for that.

Lastly, you can consider a double degree as some sort of hedge, maybe when you graduate, they would be hiring less accountants.


Although, you might find psych boring...

 

[klaw]

I think he meant the irrelevance was the fact that you know down the road, you're going to end up with the Accoutning/Finance job rather than ever making use of psych. Sorry for the very short post but I'll post a more detailed post later- just something for you to think about though, how about doing psych for your gen ed? It's not much, and won't really amount for anything, but it might help make your time at uni feel more interesting?

Ahhh I agree that it's an irrelevant degree, but it's more for personal interest than boosting my career . I was seriously considering it at one stage, but that was when I thought I'd only be losing time. I have thought about studying it through general ed, but there's 21 units I'm interested in and I can only do 12 .

You sound as if you can predict the future and know exactly what will happen after you finish university. However, you make some good points.

I'm in a similar situation. I got a UAI of 88 and Im thinking of doing a combined commerce or economics/social science degree at UNSW (d-fee). As I'm young (turned 17 in september), the fact that I'll be spending longer at university than other people doesn't necessarily bother me too much. My dad (who is a commerce graduate in accounting, finance and systems from UNSW) has told me numerous times that by entering the workforce at a young age, employers are unlikely to hire you depending obviously on your experience/skills/personality.

As for the other costs you've mentioned, I'm in an entirely different boat since I've applied (and hoping to get in) for a residential college on campus and if that doesn't work out, it looks like I'll be at my parent's apartment.

As other people in this thread have mentioned, you definitely seem to be a pretty smart guy so you shouldn't look into these things too deeply for now. I'm pretty sure you'll figure something out next year. Otherwise, good luck and let's hope we'll just get into UNSW in 2007 without any major problems!

Hmm... I understand that being younger, you might be perceived to be less mature by some people but I think it's something that you can prove to be wrong in the interview!

Ahh... I wanted to live on campus too but I figured out that it'll cost me around $300/week and I just can't earn that independently . I didn't want to depend on YA either in case my parents' circumstances changed.

Yeah gl on getting into the degree you want and hopefully we'll both get in!

Um yeah I know, i did High School Economics and University Economics, I'm quite familiar with the term.

I wasn't doubting your knowledge of the term . Your post just seemed to me as if you were suggesting that I posted this thread in order to impress rather than actually discuss the costs of doing a combined degree. I'm sorry that my wording made it seem as though I was attacking you .

Yeah but...what's two years in the grand scheme of things?

Two years, out of your whole 80 year life...you should spend it on what you think is most enjoyable.

You seem to be talking yourself out of doing the combined degree, so I don't think your hearts really in it.

And we all have to start out with no experience anyway...if you were concerned with moving ahead with yr life as quickly as possible, you'd have skipped grades in High School...or at uni you'd overload every semester, or accelerate during summer school.

I just think the whole analysis you did is irrelevant and unneccessary.

Hmm... I understand that two years isn't much if you compare it to your whole lifetime, but two years worth of income/work experience and savings from not having to pay rent helps considerably when you move out (which, in my opinion, is a big turning point in life).

To be honest, I'm not really 100% sure now if I'd do the combined degree even if there was no financial or career cost associated with it. I have heard that uni psych isn't what I'm expecting and that it's got a lot to do with stats and neuroscience, and I'm not sure if that's something I'd be interested in, although I am interested in human behaviour. So I guess you're correct in saying that this might just be an excuse to talk myself out of it .

I don't agree with the point that we all start with no experience so it doesn't matter when we start working though. Whilst 2 yrs work experience mightn't be much in the grand scheme of things, it helps considerably when you move out, because at that point of your life, the experience makes considerably more employable and thus easier to find work as well as having a higher salary . I understand your point about how I could just skip high school or overload myself in uni if I was that concerned about moving ahead in life but I'm not. Rather than wanting to move ahead, I don't want to be left behind. I also don't want to overwork myself, which is necessary if I want to skip or overload.

First to correct a mistake you have with your estimation -> you have living expenses whether you are at university or not, so it's really 90K instead of 140K. remembering that parent's money comes out of your inheritance.

secondly, things aren't as clear cut as you set it out to be. For example, who knows one will get employed after 3 years? And work experience isn't more the better, it's about what you do and your "success rate".

Thirdly, you seem to see education as a mere selection process to rank graduates. Don't you think a person actually learns something useful?

Forthly, The aussie first degrees are really short compared to other places. US -> 4 years, china -> 4 years, Europe -> usually 5/6 depends on country, UK->3 but they have 7 years in Highschool. perhaps there's a reason for that.

Lastly, you can consider a double degree as some sort of hedge, maybe when you graduate, they would be hiring less accountants.


Although, you might find psych boring...

Hmm.. I understand that living expenses such as food have to be paid whether or not I'm at uni, but additional rent, which makes up the majority of that $50k does not have to be paid if I'm living with my parents (renting 1 household instead of 2). Thus you still have more disposable income through saving money that would otherwise be spent on rent . I also believe that your point that parents' money comes out of my inheritence is irrelevant, because if I plan on moving out when I'm say, 25, my parents would still have to feed me for 25 yrs. Doing a combined degree or a straight degree has no influence on this. My point was that disposable income would be higher due to having less necessary living expenses while working and staying at home than working and living on your own. These expenses can't be saved if you have no disposable income (because you're at uni rather than working), so studying a single degree and working for 2 yrs will allow you to save more than if you were to do a 5 yr combined degree.

I understand that I'm making assumptions as employment is not guaranteed. But compared to other degrees, commerce graduates seem to have more success in finding employment . I don't understand what you mean by success rate, can you please elaborate? .

Yes, I agree that people actually learn something useful at uni, but is learning about psych worth the huge costs?

Comparing Australian unis to overseas unis seem irrelevant to me. I am comparing the two me's five years from now, one who's done straight comm and has worked for 2 yrs and one who's just graduated from Comm/Arts. Whilst overseas unis might cover their courses in more depth and graduates might have more understanding, doing a combined degree does not change this as you are studying two separate degrees rather than covering one in more depth. If overseas graduates are at a better age to start employment, it shouldn't be much of an issue if you plan on working in Australia, as most of the people you're competing against to get those graduate entry jobs would have gone to uni in Aus.

I agree that studying a combined degree acts as insurance as you have more options to choose from if you end up not liking your type of job but from what I've gathered, commerce is already a really broad degree and there are many occupations suitable for commerce graduates.

Yeah.. I'm unsure of whether I'd actually find uni psych interesting. While I'm interested in human behaviour, I've heard that uni psych isn't what I expect, and a lot of it has to do with stats and neuroscience so I'm not sure .

 

[ditto.]

You won't be left behind, dude. You'd be better equipped, once you finish university, with skills and knowledge to aid you, not just in your career, but in general life.


You're just taking a very mercenary attitude towards your education. But I understand your dilemma, since you're moving out.


How's this, for a compromise, do a straight commerce degree, and just do some electives in Psych.

In my Commerce degree@USYD, I've done two Arts electives and had the space for at least two more.

Out of interest, what degree/uni are you looking at?

 

[treelovinhippie]

Remember any uni degree is just a piece of over-priced paper.

Here's a hypothetical:

Student A:

Studies for 5 years (double degree) and comes out the end with a nice, shiny piece of paper and then looks for a job. Probably gets one with all the "credentials", congrats.

Student B:

Studies for 3 years, gets the shiny piece of paper at the end. But somewhere during those 3 years, managed to meet a tonne of people in the accounting industry (networking) and landed a part-time job at a big firm while in their 2nd or 3rd year. They graduate, go full-time in their job and by the time Student A arrives, they're already earning 20k+ more, plus have an added 2 years of experience.


That's my 2c.

I think the problem these days is society sees a uni degree as something special, while employers would prefer people with experience over fresh graduates.

 

[klaw]

You won't be left behind, dude. You'd be better equipped, once you finish university, with skills and knowledge to aid you, not just in your career, but in general life.


You're just taking a very mercenary attitude towards your education. But I understand your dilemma, since you're moving out.


How's this, for a compromise, do a straight commerce degree, and just do some electives in Psych.

In my Commerce degree@USYD, I've done two Arts electives and had the space for at least two more.

Out of interest, what degree/uni are you looking at?

Yeah I'm leaning towards straight comm with electives in psych atm . I'm looking at comm at UNSW/USyd atm, but probably narrowly missed it with a UAI of 92.9 . It shouldn't be hard to do eco and transfer though

 

[klaw]

Remember any uni degree is just a piece of over-priced paper.

Here's a hypothetical:

Student A:

Studies for 5 years (double degree) and comes out the end with a nice, shiny piece of paper and then looks for a job. Probably gets one with all the "credentials", congrats.

Student B:

Studies for 3 years, gets the shiny piece of paper at the end. But somewhere during those 3 years, managed to meet a tonne of people in the accounting industry (networking) and landed a part-time job at a big firm while in their 2nd or 3rd year. They graduate, go full-time in their job and by the time Student A arrives, they're already earning 20k+ more, plus have an added 2 years of experience.


That's my 2c.

I think the problem these days is society sees a uni degree as something special, while employers would prefer people with experience over fresh graduates.

Yeah you've just summarised everything I've said in this thread so far (around 2000 words omg!!! I never had any intention of writing so much!) into a short post! Pretty efficient .

 

[seremify007]

I'm in a similar situation. I got a UAI of 88 and Im thinking of doing a combined commerce or economics/social science degree at UNSW (d-fee). As I'm young (turned 17 in september), the fact that I'll be spending longer at university than other people doesn't necessarily bother me too much. My dad (who is a commerce graduate in accounting, finance and systems from UNSW) has told me numerous times that by entering the workforce at a young age, employers are unlikely to hire you depending obviously on your experience/skills/personality.

I think in modern times, this has changed a lot as the turnover rate increases substantially- there are now lots more opportunities for younger people to enter jobs previously reserved for graduates and higher.

Anyway, back to this thread and I'm too lazy to read all the lengthy posts! I'd say unless you're really passionate about the other degree, don't waste your time doing it if you're not going to use it for a career. Chances are you'll end up getting a job based on your Commerce degree and start off on a similar salary to someone who just did straight Commerce and is years younger. Just my 2c.

 

[turtleface]

Obviously since people still do both single and double degrees, it means that there are obvious benefits and cons of both, otherwise arbitrage will settle the differences.

My personal opinion is if you are going to do Com/Law for investment banking, insolvency accounting, corporate law etc. or a Com/Sci/Eng for actuary or quantitative field then do the relevant double degree. Otherwise do a single degree because the others are a waste of time.

The only complicating factor is whether you enjoy uni so much as to want to spend more time in it.

The benefits of an irrelevant degree combination like Com/Arts or Com/Eng if you don't want to pursue specific fields where the actual degree (not the skills (or lack of) you learn in it) is close to zero.

For accounting specifically, unless you want to get into a highly regulatory/insolvency orientated specialisation (in which case Com/Law), your best bet is a single business degree. By the time a 5 year grad graduates, you will have finished the academic components of your CA and be at Senior Accountant level on 55-65K+.

The additional benefit to accounting career opportunities is next to zero for a non Com/Law double degree grad compared to a single commerce, but Com/Law does become useful if you ever want to transfer into a banking or general management role.

 

[treelovinhippie]

Yeah you've just summarised everything I've said in this thread so far (around 2000 words omg!!! I never had any intention of writing so much!) into a short post! Pretty efficient .

hehe, no probs

 

[Affinity]

Make sure you account for hidden costs and benefits.