Amplify Your Success: Why Investing in Your Career Skyrockets Growth in Management Accounting

Investing in Your Career Pays off in Management Accounting

You’ve probably heard the old saying, “You have to spend money to make money.” While there’s some truth, it’s important to remember that not all career-related expenses are created equal. Some investments can help you earn a higher salary and advance your career, while others may not be worth the cost.

So, what are some of the best career investments you can make? Here are a few to consider:

1. Education and Training- Management Accounting

Investing in your education and professional development is one of the smartest things you can do for your career. Whether taking courses to earn a credential or taking advantage of training opportunities at work, continued learning can make you more marketable and help you earn a higher salary.

2. Networking- Management Accounting

Building a robust professional network can pay off in many ways. It can help you find a job, get a promotion, or even start a business. While networking is not costly, building relationships takes time and effort. Attending industry events, joining professional organizations, and contacting your contacts can help you expand your network.

3. A Professional Wardrobe- Management Accounting

Having a few key pieces of professional clothing can make a big difference in how you’re perceived at work. If you don’t have the budget to buy a whole new wardrobe, start with a few essential items that you can mix and match. A well-fitting suit, for example, can be worn for job interviews, client meetings, and other important occasions.

4. A Good Resume- Management Accounting

Your resume is often the first impression you make on potential employers, so it’s essential to ensure it’s updated and error-free. If you’re unsure how to write a resume or don’t have the time to do it yourself, plenty of professional resume-writing services can help.

5. A Professional Website- Management Accounting

In today’s digital world, having a professional website is essential. Whether you’re looking for a job, trying to attract clients, or simply want to share your work with the world, a website can help you achieve your goals. Plenty of easy-to-use tools and templates are available if you’re unsure how to create a website.

Making intelligent career investments can pay off in the long run. Investing in your education, networking, and professional development can lead you to success.

Calculating the ROI on my extra-curricular education

Investment in your career is essential, and one way to think about it is in terms of return on investment (ROI).

How much will you earn throughout your career, and how does that compare to the cost of earning credentials and advanced degrees? How do you calculate your career’s return on investment by earning credentials and advanced degrees?

However, your return on your career investment is a bit tricky because there are factors that can’t be quantified. While the cost of a credential or degree program is easy to ascertain, there is no novel way to encapsulate the countless hours studying, preparing, and reading to achieve each milestone, nor is there a way to quantify the cost of what was sacrificed.

You can calculate your career’s return on investment (ROI) by earning credentials and advanced degrees. Only you can gauge some of the factors, but by going through each step, you will tell if the investment has improved your life.

Different ways to calculate ROI- Management Accounting

Median Salary vs. Your Salary

One way to calculate the ROI is to consider the average salaries for different educational levels.

For example, according to the US Bureau of Labor Statistics, the median annual wage for workers with a high school diploma was $28,000 in May 2015, while the median annual wage for workers with a bachelor’s degree was $50,556.

This means that workers with a bachelor’s degree earned an average of $22,556 more per year than workers with only a high school diploma.

As a management accounting professional, the IMA’s Annual Salary Survey is the first place I go to assess the return on my career investments. The IMA produces several different versions. The 2021 Global survey link is below:

https://www.imanet.org/-/media/9a1dcbd05d484c938193749d29a6f6bc.ashx?la=en

And the US 2021 Survey is below here:

https://www.imanet.org/-/media/b60f79f4b1a04f8b8b88ae1760e24231.ashx?la=en#:~:text=More%20specifically%2C%20the%20overall%20median,the%20extraordinary%20events%20of%202020.

You can view the median salaries by region,

 By Gender and age,

By Gender and management level

And by Age and Certification

As well as by Education Level

Or Industry

For qualitative factors, you can find tables for job satisfaction

And Mean Hours Worked

Finally, there is a comprehensive table.

Alternatively, Robert Half provides an excellent tool to assess your salary based on job title and location.

 Earnings – Cost -Management Accounting

One is to compare your earnings to the cost of your education simply. If you earn more than you spend, you have a positive ROI. Another way to consider it is how much additional income you can earn with a credential or degree. For example, if you have a bachelor’s degree and earn $50,000 per year, but you could earn $60,000 per year with a master’s degree, your ROI is 20%.

Payback Period-Management Accounting

You can also think about ROI when earning back your investment. For example, if it takes you two years to earn your degree and earn $50,000 per year, your ROI is 25%.

The payback period method is a simple way to calculate the return on investment (ROI) for a particular career choice. It answers the question: “How long will it take me to earn back the money I spend on my education and training?”

To calculate the payback period, you simply divide the total cost of your education and training by your expected annual salary.

For example, if you expect to earn $50,000 per year after completing your education and training, and the total cost of your education and training is $10,000, your payback period would be 10 years – that is, it would take you 10 years to “payback” the cost of your education and training.

There are a few things to keep in mind when using the payback period method to calculate ROI:

1. The payback period only considers the direct costs of your education and training. It does not consider the opportunity cost of not working during that time.

2. The payback period assumes that you will earn the same salary every year. In reality, your salary is likely to increase over time as you gain experience and move up in your career.

3. The payback period does not consider the earnings potential of alternative career choices. For example, if you could earn $60,000 per year in a different career, the payback period for that career would be shorter than the payback period for the career you are considering.

4. The payback period assumes that you will continue working until you have “paid back” the cost of your education and training. In reality, you may retire or change careers before that time.

Despite these limitations, a payback period is still helpful for comparing the ROI of different career choices. When deciding on your career, it is essential to consider all of the factors involved – not just the financial ones. But if you are considering multiple career choices and all other things are equal, the payback period can be a helpful way to narrow down your options.

Unemployment rates vs. your employment status- Management Accounting

Another way to calculate the ROI is to consider the unemployment rate for different educational levels.

For example, according to the US Bureau of Labor Statistics, the unemployment rate for workers with a high school diploma was 5.0% in May 2015, while the unemployment rate for workers with a bachelor’s degree was 2.7%. This means workers with bachelor’s degrees were less likely to be unemployed than workers with only a high school diploma.

Job satisfaction-Management Accounting

In addition to calculating the ROI regarding salaries and unemployment rates, you can also calculate the ROI regarding job satisfaction. For example, according to a survey by the Pew Research Center, workers with a college degree were more likely to say they were “very satisfied” with their jobs than workers without a college degree

You must first determine your job satisfaction to calculate your Return on Investment (ROI) in your career. Here’s a quick and easy method to do just that.

1. Make a list of important things for you in a job. Examples might include salary, benefits, location, hours, company culture, etc.

2. Rate each item on a scale of 1 to 10, with 10 being the most important

3. Add up your total score.

4. Compare your total score to your field’s average job satisfaction score. If your score is higher, you’re more likely to be satisfied in your current role. If your score is lower, you may want to consider changing.

Remember, job satisfaction is relative. What matters most is how satisfied YOU are in YOUR current role. Use this method to calculate your own ROI in your career and make the best decision for yourself.

My Take on Understanding the Return on Career Investment-Management Accounting

 And one of my favorite tools is the Average US Salary Calculator

Using this table, my average total salary is estimated at $132,053.

 However, as you can see, no one tool covers every variable- my PMP & CSCA were not considered in this calculation.

• Bachelor’s degree. 156 credit hours- Rutgers Camden 2 yrs + 2 yrs community college

• 2 years community college = Free tuition + $4,800 for books/materials

• 2 years Rutgers Camden @ scholarship rate = $14,877 + $4,800 for books=

• CMA

  • Exam Fees= $350*2 + $700 for exam prep materials= $1,400

• MBA

  • 10 courses @ $2,109 per 3 credit course = $21,090. Add in textbook and other fees and that would be 10*$150=1,050 for a total MBA cost of $22,140.

• CPA (Pennsylvania)

  • Registration and exam fees= $838.2 + $700 for prep materials= $1,538

• CSCA

  • Registration and exam fees + Learning Series= $800

• PMP

  • $405 registration and exam fees + $700 study materials= $1,105

My subtotal is $51,460

• I’m also a prolific reader, and I’d estimate my library has 300 books at $15/piece= $4,500

• I subscribe to HBR, Business Insider, and a few others, so let’s estimate $300/yr for 10 years= $3,000

• New total Education Investment= $58,960

• Median hours worked= 40

• Current job satisfaction = 50% satisfied

• Career future prospects= 100% satisfied

• Times unemployed= 0

• Total earnings in 10 years= Approx $997k

Total Earnings less cost= $938,040

My current salary is higher than the estimate and median figures, which means the additional factors I’ve invested in have paid off substantially.

Would I invest in mostly the same path? Absolutely.

Conclusion- ROI on Career Investment

The bottom line is that there are many ways to calculate the ROI in your career by earning credentials and advanced degrees.

In the end, there is no right or wrong answer regarding calculating ROI. It is essential to consider all of the factors involved and decide what is right for you.

The best way to calculate your ROI will depend on your specific goals and circumstances. However, no matter how you calculate the ROI, it is clear that earning credentials and advanced degrees can lead to a higher salary, lower unemployment rates, and greater job satisfaction.

Recommended Reading- Investing in Your Career Pays off in Management Accounting

1. Modern Management Accounting- Developing Industry Awareness

2. FAQ- Questions on a Career in Management Accounting

3. Why Management Accounting is a Great Profession

4. Managerial Accounting: Selecting an Accounting Credential

5. Controller vs. Chief Accounting Officer: Which Management Position Suits You Best?

Updated: 5/11/2023