Sunday, August 04, 2019

Harsh truths about local degree programmes

One of the really powerful ideas in Quit Like a Millionaire by Kristy Shen is the idea that your first degree will be a major driver that determines whether you can become financially independent, so you need to choose your first degree carefully.

In her book, Kristy's thesis is the idea that you should never choose a degree based on passion - you should choose a qualification based on your grades, and what she terms the Pay over Tuition Score or POTS score.

So I decided to take her framework and shoehorn it to NUS degrees.

In my rethink of Kristy's POTS framework, the earning potential of a degree is equal to your first year's annual salary minus what salary you can credibly earn as an A level student. I don't have data on how much an A level student can earn, so I pegged it at $2,000 a month, about 20% below a diploma graduate. So in my formulation, POTS is the ratio of this earning potential of a degree over the school fees charged by the program. If you are a Polytechnic graduate, you may need to adjust the calculation based on a diploma holder's salary which is around $2,400.

To do this, I took whatever data I could from Seedly and did my best to construct a POTS spreadsheet for NUS degrees. My methodology is probably quite shoddy so you should do your own research and calculate the POTS of the course you want to take.

( I think POTS > 0.5 is a fairly good screen because you break-even after 2 years of work. )

If you review the data, you can see that actually most of the NUS degrees lead to decent outcomes. 

The most prestigious program that is Medicine obviously has a low POTS score because of the cost of all the cadavers and labs doctors need to get themselves trained. Nevertheless, the salary recorded was based on a first year registrar salaries and doctor salaries do improve very quickly throughout their careers.

The high POTS score for Law students can be deceptive. It's like the Hokkien saying goes "Ho Kuah Bo Ho Jiak". Good to see, but not good to eat. To rub salt into the wound, Law can't even match the POTS of a Computing degree where all the whiz kids and the action is these days. 

I'm also glad to declare that Singapore is not the place where we make fun of Humanities graduates.  NUS Philosophy graduates do not end up becoming Starbucks baristas. The POTS of an Arts degree is relatively high compared to Business and Science degrees. 

The real whipping boy of NUS is in fact the Science faculty. Perhaps a Science degree needs to be cheaper if we want more folks taking STEM degrees - their starting salaries really suck. 

I think the degree to really avoid is the Bachelor of Music that actually has a score that actively destroys the value of an A-level student. You can go for this degree if you can get a full scholarship or come from the High SES families of District 10. 

Also, I simply cannot imagine why anyone would pay the full fee for NUS-Yale Liberal Arts program. Starting salaries are a joke, fees are ridiculously expensive, and don't get me started on the 'woke' brainwashing that comes with it. Yes, maybe some of these guys will end up in management consulting or investment banking, but shouldn't that be reflected in the average salaries?  

At this stage, I have refrained from calculating the POTS of private degree for polytechnic graduates, this is something I leave someone else to do. I would be surprised if any private degree program will pass my screen of POTS > 0.5. 

Feel free to try and report your results.


  1. Hi Chris.

    I like to hear your opinion whether is it still wise to study medicine in SG? The person in question has already received a full scholarship to read a double degree (non-medicine course) locally.
    My points of consideration are below versus the full scholarship already awarded to him.
    1. The cost is very high, all in around $300K (I took the number from NTU LKC instead of NUS YLL to play safe), saddled with a large study loan upon graduation at 26 YO.
    2. Bonded until age 31. No guarantee of continued employment after that.
    3. I also read articles that doctors are at risk of oversupply recently.
    Hope to hear your thoughts Chris. Thank you.

  2. Absent any other evidence, take medicine, if possible.

  3. Well since you brought up music degree specific to NUS, a full scholarship is offered when you are accepted so that might skewer your data