What does investing in your skills mean?
Investing in your skills means spending money and time on learning something new, such as a course, a degree, a language or a trade. You do not buy a thing; what you gain stays in your own knowledge and abilities, and it goes wherever you go.
The payoff comes later: a better job, higher pay or the chance to charge more for your work. But no institution promises that payoff; it depends on how well you put the learning to use and how much the market wants it.
Say Tania finishes college and pays Tk 15,000 for a graphic design course, spending three months of evenings in class and practice. Afterwards she starts earning by making logos and posters for small shops and online pages. If the work comes regularly, she may recover the cost within a few months; if it does not, the money and time are spent, though the skill stays with her. The numbers are only an example.
How it works
With other investments you put in money and get interest, profit or price gains. When you invest in skills you put in money and time, and get a better-paid job, promotion, higher-value work or the ability to run your own business.
The cost has two parts. One is visible: course fees, books, travel, equipment. The other is not: the income you could have earned during the time you spend studying. For full-time study, that second cost is often the bigger one.
The return arrives over many years, a little at a time, and is not guaranteed. Two people with the same degree or course can see very different results. What you learn, where you learn it and how much the job market wants it make most of the difference.
Say a six-month evening course costs Tk 30,000 in fees and other expenses, and you keep your job. If you then earn Tk 3,000 more a month, you recover the cost in 10 months and everything after that is extra. If your income does not rise, the Tk 30,000 and the time are simply spent. The numbers are only an example.
Common forms of skills investment
- Formal education
- A bachelor’s, master’s or diploma. Costly in both money and time; results depend heavily on the subject and the institution.
- Technical and vocational training
- Hands-on trades such as electrical work, welding, vehicle repair, nursing or cooking. In demand both at home and abroad.
- Professional qualifications
- Recognised certificates in fields such as accounting, finance, IT or project management. Often possible while working.
- Short and online courses
- Languages, programming, design, digital marketing and so on. Cheap, but quality varies widely; what you can actually do matters more than the certificate.
What the research says
Drawing together studies from many countries, World Bank economists Psacharopoulos and Patrinos found in 2018 that, on average, each extra year of schooling raises a person’s earnings by roughly 9%. That is an average; it varies a lot by country, level, gender and subject.
In Bangladesh, the Bangladesh Bureau of Statistics (BBS) Labour Force Survey 2022 put unemployment among the tertiary-educated at about 12%, against about 3.5% overall. A degree on its own does not guarantee good earnings; which skills the market actually wants matters.
Choosing a course
Ask people already doing the work you want: which skills are really needed, which certificates employers take seriously. Job adverts are another good guide to what is being asked for.
Check the institution’s recognition. For universities, see the University Grants Commission (UGC); for technical education, the Bangladesh Technical Education Board (BTEB); for skills training, the National Skills Development Authority (NSDA). Be wary of promises like “guaranteed job after the course” or “earn a lakh a month”.
What return to expect
The 9% is not an interest rate. It means that, other things being equal, people with one more year of schooling earn about 9% more on average. In your own case it could be much more, much less or even nothing.
Studies on Bangladesh also find that the earnings effect of education differs a good deal between urban and rural areas, women and men, and levels of study. And in 2022 about 12% of the tertiary-educated were unemployed, a reminder that the subject and the demand for the skill are what count.
To work it out for yourself, ask three questions: what is the total cost (including income given up), how much might your income rise afterwards, and how many years will it take to earn the cost back.
Why people choose it
- A skill, once learned, lasts a lifetime and cannot be taken from you.
- You can start with small amounts; many courses fit around a job.
- Higher income can then be invested elsewhere.
- Not directly tied to market or bank ups and downs.
Points to weigh
- Results are not guaranteed; the wrong subject or a poor course can waste both money and time.
- Full-time study means giving up income, which is a large cost.
- The return can take years to arrive.
- Demand changes; a skill in demand today may be wanted less in a few years.
Tax
There is no tax on spending on skills, and no separate tax on the “return”. But the extra income it brings, whether as salary, business profit or freelance earnings, is part of your total income and may be taxable under the Income Tax Act 2023.
Some income received from abroad through formal channels, such as certain IT and freelance earnings, has had tax concessions in recent years. The conditions and time limits change with the Finance Act, so check the current rules.
Tax rules can change with each year’s Finance Act. Before a big decision, check the latest rules or speak to a tax adviser.
How to get started
- Decide which work or career you are aiming for, then find out which skills it needs.
- Talk to a few people in that field and read job adverts.
- Where possible, test your interest and aptitude with a free or cheap course first.
- Check the institution’s recognition, its teachers and where former students now work.
- Write a simple sum of total cost (including income given up) against the likely rise in income.
Check before you start
- Is there real demand for this skill, or have I only seen it in adverts?
- Is the institution recognised, and do employers value the certificate?
- Have I counted the total cost, including income given up?
- How much would I get back if I could not finish the course?
- Is any promise of a “guaranteed job” or “guaranteed income” in writing, and realistic?
- If I borrow to study, could I keep up repayments if my income rises later than hoped?