Policy Perspectives on Medicare
Students will define opportunity cost, and with this in mind students will list various career choices and salaries and calculate future value of money
Should you learn to fly? Haven’t you ever dreamed of soaring like a bird, leaving the ground behind, and looking down on the earth from above? What about those pilots you see in the airport? White shirts, gold braids, little suitcases on wheels, don’t they look like they’re having fun? How much do they get paid for that? Is learning to fly expensive? What else could you do with that much money? Which would be the smarter thing to do? Which would be more fun? Let’s find out!
If this sounds like fun, or like something that would be rewarding, go to the How to Become a Pilot page to learn more.
Go to the Who Can Fly? page to learn about who can fly and how much it costs.
But suppose you did have $4500: is learning to fly the best thing that you could do with the money? $4500 would buy a lot of things right now. It might be worth a lot more than that in the future if you invest it. Write down three things that you could do right now with $4500.
The problem is always that if you have $4500 and there are several things you could buy with that money, you can only buy one of them. If you choose one, you can't have the others. Your opportunity cost is your second choice. If you learn to fly, you won't have the money to invest. If you invest the money, you won't have enough to learn to fly. Choosing one option means that you won't have the opportunity to do the second thing. The next-best thing you give up is your opportunity cost.
Let's try to estimate how much that money would be worth later if you invested it for your retirement. Use this calculator to find the future value of the $4500 that you have today. Use this site Bankrate. com, which is an Online Bank, to find out the current interest rates at banks or on money market accounts.
How does it look? If you had $4500 would you choose spend it on flying lessons? Put it in the bank? Invest it in the stock market? Or buy something really cool right now?
Before you run out to the mall, consider this. If you spend the money on flying lessons, you are investing in yourself. You will have a skill that provides enjoyment and also one that may provide you with additional income.
If you went to work as a professional pilot, how much money could you earn every year? Go to the Airline Pilot Salary page and check to see how much money some pilots working for the airlines make after 10 to 15 years on the job. Is that for you?
How much money do people in other professions make after the same amount of time? Ask your teacher what he or she is making. How much could you make as a software engineer? A fry cook? A firefighter?
Go to the Career Guide to Industries page for information on how much money people working in various professions make.
Remember that most airline pilots have four-year degrees and more than just a private pilot's license. But this is cool: There are many colleges that will train you for various aviation careers at the same time that you are obtaining your private, instrument, commercial, and Airline Transport Pilot (ATP) licenses. Go to the Aviation Colleges page for a discussion of the reasons to attend a college with an aviation program.
What do you think? Should you earn the $4500? If you do, will you spend it? Invest it in some stocks? Or invest it in yourself? What would provide the greatest benefit over your lifetime?
If you have decided to look into flying, here is some advice on finding a flight school. Remember that you can start your training at any age. It will be an investment in your future!
Here is an evaluation activity for this lesson.
Let's see what we learned:
1) Why should you learn to fly?
b) Interesting profession
c) Financial rewards
[No bad answer here.]
2) If you invest money today will it be worth more or less in the future?
a) More, because of interest paid by the bank or growth in the value of stocks. [true, but inflation decreases the value of your $]
b) Less, because of inflation. [It depends. If the interest rate is more than inflation, you will have more than you do today. But not as much as it seems.]
3) Is an investment in your own skills better than an investment in the stock market? [It depends. Usually yes, for other than strictly financial reasons.]
4) How does inflation make your money worth less? [The same number of dollars buys fewer actual goods in the future.]
5) Is the amount of money you can make the only reason to consider a profession? [No. Ask any teacher.]