How do you define investment?
The dictionary defines the verb to invest as “to put (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value.”
What about investing in people?
A woman we’ll call Amy works in a grocery store for little more than minimum wage. She owns no car and has no savings, since her pay, after the usual deductions plus union dues and a medical plan, barely covers rent in an old building, a few clothes, food, and public transportation to work. Thankfully, Amy’s employer offers a benefit package to help with her chronic medical condition, but Amy still has to come up with 20% of the expense from her meagre paycheque. With costs constantly rising as her pay stays the same, she is unable to save for a post-secondary education, a family, or a couple of months’ cash reserve in case she loses her job.
Amy once had a dream. It was a lot like Monica’s.
Monica bends over the sick child in the emergency trauma unit, holding her hand and offering words of comfort. Even her supervisor notices Monica’s special way with people, and nominates her for the Employee of the Month Award, which Monica easily wins.
After work, Monica, now in her late twenties, hops into her car and drives to her new condo. She bought it a short time after she paid out her student loans. Initially, Monica had saved up over $4,500 over a two-and-a-half-year period to take a four-month introductory course that would get her into a two-year diploma program. She had a year to come up with tuition to cover the rest of her schooling. In addition, during her two years of study, she was not allowed to hold a job because the program was intense and extra workshops sprung up in the evenings or on weekends, as opportunities in the hospital arose.
As a young woman in her early twenties, Monica had worked for years at low wage jobs just to come up with the money to pay for the initial four-month introductory course. It was not possible to earn the tuition needed for the two-year diploma program that followed, which Monica was required to attend within one year. If she did not continue within one year, the introductory course, her acceptance to the diploma program and, of course, the money she worked so hard to save were all forfeit.
Luckily, Monica’s education was financed, and her parents offered free rent for the duration of her schooling. By finishing the diploma program, Monica’s pay tripled and she paid out her loan in less than two years, in spite of paying rent again and dealing with other expenses.
She is now in a field she enjoys, her thirst for knowledge is satisfied, and she makes a difference in many people’s lives. Every year, she pays her healthy dose of taxes to the government. She has started investments and looks forward to a future with her fiance. She supports the economy and society by making purchases with her disposable income and giving money to charity. Most importantly though, Monica’s income and job allow her to have a full life rather than dealing with constant scarcity. If Monica has children, their needs, including adequate housing and education, will be met.
Amy’s future could look like Monica’s, except that Amy can’t come up with the money to get her through school. It’s not that Amy isn’t working hard enough. Without additional skills, her wages are too low for the number of hours she can work in any month or year. Her pay barely covers essentials, which makes saving for school, especially within the time constraints of educational programs, a physical impossibility.
The decision of whether to help a person like Amy so she can help herself, or not, often lies in the hands of someone other than that person.
Once Monica’s pay increased after she completed her post-secondary education, her whole life changed. She lives a comfortable life and is in a position to look after all her needs, with additional resources to help others.
Conversely, with each year that Amy is trapped at her current income level, the shorter a time horizon she has to benefit herself and society. She risks never being able to save for any education. She is condemned to a life of poverty that she did not choose.
Are human beings worth it?
What if the only difference is that Monica managed to get a loan from a financial institution, through her school, from the government, or from someone who believed in her?
The reality is that sometimes the resources for a young person, or an older person going back for more education, are there and sometimes they are not. Sometimes the ratio of pay to expenses is enough, and other times it is subsistence level. Sometimes bank loans and student loans are readily given, and sometimes hardly at all. These differences are marked by economic conditions and demographics. The one thing a person has no control over is the year in which he or she was born.
Not everyone wants to attend a post-secondary institution, but for those whose dream it is, helping them get there is an investment that promises returns.
So if there is return on the investment, and the risk is low, why is offering it so difficult?
Amy knows that her chosen field is currently in high demand and jobs are plentiful, and that this trend will continue for years to come because of the makeup of the population. With the promise of a job immediately upon graduation and even opportunities for overtime, Amy’s program is nearly a zero risk venture. In her first year following the program, if her income is double to triple what she is used to earning, she can pay out her tuition within a year or two, one of the shortest known times in recent education history. (A larger loan to cover living expenses would take a bit longer to pay out, but in the present economy, still well worth it.) This is an important point because not all programs of study carry this kind of success rate immediately upon completion. It should be entered into the formula when determining whether to approve the financing but, sadly, often it is not.
Giving Amy a loan for her education is a small—and temporary—price to pay. It is an investment that offers “potential profitable returns” and “appreciation in value.”
Amy’s life could be Monica’s. There is no excuse for it not to be.