This is logical raw again with lesson number 13 case studies. We will now apply our modeling techniques to evaluate college for two different careers. First, a veterinarian and then a nuclear engineer. Suppose you love pets and like biology in high school, should you plan on a career as a veterinarian? Well, to find out more about this occupation, we would go to the ownit website and search for veterinarians in the search box. This site lists 18 occupations.

And notice that the occupation code for veterinarian is listed as a number 29.11 v 1.00. This is a unique code that is assigned to each occupation, and it is standard across all US government websites. In fact, it's also used heavily by the private economy as well. If you click further down this page, you can look at the wages and employment trends and you will see that the average compensation off of originating is pretty decent. Let us try to do our ROI analysis from this information. The owner database gives us the median wages for this profession.

This is not particularly helpful to us to model our ROI for college. Remember median wages are the wages earned at the 50th percentile of the population. So people with a median wage of 88,000, it means that half the number of people earn less than 88,000. And the other half will earn about 88,000. That is not particularly helpful to us. What we need is entry level compensation.

And this is a hard number to obtain, we can go to private websites like PayScale which will give us some information. But even here, the range is why because graduates from different colleges are different starting salaries, with graduates from prestigious schools making a lot more than schools with open admissions policies. So what we will do in this case is to narrow this range down we have always used Texas a&m in our examples. And so according to PayScale, the average starting salary for a freshman Texas a&m grant is $55,200 and we will assume that our vet will get this starting salary. This is not an unreasonable thing to do, because Texas a&m College of Veterinary Medicine is ranked number three in the US, and so is considered a highly prestigious school. So we will now compare this grads ROI against a high school grad who starts his career off acquittee $6,000.

What do we see? We see something remarkable the ROI is 89% six times the Federal Reserve Bank of New York's expected rate of return. This is an amazing number. Let us look at other factors here. Go back to the wages and Employment trends and you will see that the projected growth over 10 years is in the nine to 13% range. This is very good.

The US population is growing only at about 0.7% a year so veterinarian jobs are growing at more than 10 times the population growth. Let's also look at the demand. The projected number of job openings over a 10 year period is 19,000. About 1900 new vets are needed every year. This is after you take into account retirement of existing vets and vet to actually die. Next, let's look at the supply.

The Association of American Veterinary Medical Colleges reports that there are 30 schools or colleges in the US graduating about 3000 students every year. So if every one of the new graduates passes the licensing exam, the 3000 new graduates each year will be vying for the 1900 new jobs. That is pretty good, a 63% fulfill. This means that students in the top 60% of the graduating class will easily get jobs the unlucky few, we'll have to look at other related professions such as rent assistance or agriculture technicians. Still, this is not a bad situation at all. Don't forget that this is a regulated profession because it requires licensing by passing the North American Veterinary licensing examination.

Regulated professions are those that protect public health and safety. It takes time, money and effort to get into regulated professions. The benefit is that these act as entry barriers to the profession, others will be turned off pursuing this profession. And if you're already in it, it gives you a sense of protection. Also, regulated professions are generally exempt from outsourcing it's hard to export jobs. In the healthcare or animal care industry, because the work needs to be done here attending to the human or animal patient.

Finally, the US government throws in $25,000 each year. If you agreed to serve for three years in areas where there is a designated shortage of veterinarians, this is free money. Using our ROI analysis, we can conclude that if you're interested in this field, going to college to become a veterinarian is a fabulously good idea has exceedingly high ROI nearly six times the Federal Reserve threshold, very high job growth projections supply and demand equations look very favorable. It's a regulated profession. So there are higher entry barriers and there is also free government money to pay off college loans under certain conditions. Now, let us look at the case study of a nuclear engineer.

Suppose you like physics and math should you plan on a career as a nuclear engineer? To do this, we need an estimate of your likely starting salary when you graduate. The owner database gives us the median wages for this profession information that is not particularly helpful to us to model our ROI for college. What we need is entry level compensation. Luckily, PayScale gives us some information here. It says the average salary for an entry level nuclear engineer is 70,008 68 per year.

Running our ROI model again, with all other assumptions being the same shows an outstanding result. The ROI is 147% nearly 10 times the Federal Reserve Bank expected rate of return of 15%. The difference in earnings with a high school grad is so stark that it appears to make sense to pursue this career. But should we look at the wages and employment trends section of this video you will see that jobs are in decline and there are very few jobs During the next 10 years, in fact, the projected growth is negative. Clearly if you look at it overall, although the ROI is very high because jobs are in decline, and the supply and demand equation looks extremely unfavorable, this is not a career to pursue. So what have we learned from this lesson?

ROI modeling is a powerful tool to employ when planning for college. Modeling shows us that we should not only aim to lower costs, but also strive to make good choices which earns a decent return. For example, delaying graduation or pursuing fields of study, which do not help us get well paying jobs can lower our ROI and put us into a debt trap from which it's hard to escape. If you have any questions, please let us know. Thank you