I’m “hot for teacher”, but in a strictly financial sense.

If I could give people a one-word recommendation for their own financial success and that of their children it would be “education”.

Education is a great thing on a variety of levels, of course.  Education correlates to better health and longer life.  There’s also that very true thing about the way knowledge enriches your life.  Even if a good education didn’t put a dime in your pocket it would have tangible and intangible advantages that made it worthwhile.

But it’s also a massive winner in personal finance terms.

I just took a look at BizJournal’s list of the 20 highest-paying occupations.  All of the usual suspects are there–CEOs, lawyers, doctors, engineers, dentists, etc.–and almost all of the jobs have one thing in common.  They come with significant educational requirements.

The power of education isn’t just in its ability to land you a gig as a commercial pilot or an optometrist, though.  There’s more to it than that.  It’s not just a matter of hooking up with one of those top-20 jobs.  The correlation between education and earnings remains strong across the board.

According to a Census Bureau study, education really matters.  According to an article addressing the Bureau’s work, “In 1999, average annual earnings ranged from $18,900 for high school dropouts to $25,900 for high school graduates, $45,400 for college graduates and $99,300 for the holders of professional degrees (medical doctors, dentists, veterinarians and lawyers).”

If you do the math, a person with a Master’s degree is going to make a whopping $1.3 million dollars more than a high school graduate, on average, over the course of a lifetime.  Not interested in a grad school stint?  You still shouldn’t skip the undergrad experience.  State Farm insurance states, “According to The College Board, college graduates earn 80% more on average than high school graduates.”

Obviously, even an education obtained at the most expensive schools would still offer an amazing return in financial terms.

That’s why anyone who’d like to see their earnings increase should consider advancing their education.  If you dropped out once upon a time, find a way to get back into class.  The stigma of the “non-traditional student” is all but gone and most schools offer flexible programs designed to assist those who have adult responsibilities to manage while trying to complete their educations.

If you finished your education and have a degree, consider going back for more.  Gabby Hyman, in an article sponsored by the Keller School of Management offers:

The facts are clear: to make the most money, no matter your chosen field, hitting the books helps. Once upon a time, holding a bachelor’s degree and landing a job with a solid employer meant life-long career stability. In today’s world, ongoing job training, the pursuit of advanced degrees and leapfrogging from company to company–or starting your own business–are hedges against an uncertain professional existence. When it comes to earnings and education, more is better.

There are a couple of lessons to glean from all of this.  First, if you have a chance to go to school, do it.  Second, if you have children one of the best things you can do is to encourage them to get a solid education–and prepare to help them, if necessary, to pay the bills associated with it.

Let’s play with that $1.3 million dollar figure for a moment to underline what a great deal education really is.  This is what that really means to an eighteen year-old potential college frosh:

Let’s say that a four-year undergraduate degree and two years of grad school will cost a whopping $120,000.  That accounts for $20K per year in tuition.  Let’s also make the very generous assumption that our hypothetical student will need another $120,000 in loans or other spending to make ends meet while studying.  We’re going to tack another $150,000 onto that total by making the probably-unrealistic assumption that he or she could be making $25K per year somewhere out in the workforce if he or she wasn’t going to school.

Total “cost”:  $390,000

Compare that to $1,300,000.

The educated hypothetical student is still going to be about $1 million dollars ahead when the dust settles–even when using inflated cost projections.  And he or she is also going to live a longer and fuller life.

Education is an amazing investment.