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How Does Our Future Earnings Estimate Tool Works?
GyanDhan's 'Estimate Your Future Earnings' tool is an advanced data-backed tool. This tool, one of its kind, considers opportunity cost along with the actual cost to help students understand the real return on investment. Here is how the tool calculates the results:
Students can use this tool to compare the countries based on the return on investment. Here is a step-by-step guide on how to use this tool:
1. The tool considers that -
You will not have any income during your course.
You will have to let go of your current salary.
You will be paying a part of your study abroad expenses (mentioned by you). This part gets zeroed if you are funding your entire expenses through an education loan.
2. The tool assumes that -
You will be placed within 6 months after graduation.
You will pay your loan within 5 years after graduation.
Based on the information provided and an assorted list of data points, the tool tells you the additional savings i.e. how much extra you would be able to save compared to if you would have not opted for abroad education. For Example, in 10 Years, a student would have saved INR 30 Lakhs here in India and now by going abroad is able to save INR 1 Cr, then the additional saving is INR 70 Lakhs.
It gives you a country-wise graph of the estimated additional savings (based on the target countries you choose). It also provides a country-wise salary vs investment chart. For an in-depth understanding of the mechanism that we use to compute the figures, read the ‘Methodology’ section below.
The following is the in-depth methodology behind the calculations presented:
We compute post-graduation average salary for different universities in each rank bucket for each of the four countries in our scope. We've considered a rise of 2.5% in salary every year and 10% in every alternative year for the USA, Canada, Germany, and Australia. The assumption is that you get an increment every year and a promotion every alternate year. The same numbers for India are 7% and 20%. (Indian salary is taken as an input)
The expenses are averaged for a country (rent, basic utilities, car EMI, fuel, health insurance, etc are considered here). To account for inflation, we have considered a 2% increase per year for the USA, Canada, Germany, and Australia and a 5% increase for India.
Average investment is the total of the average tuition fee of the universities related to a selected rank range; living expenses are calculated from the above step.
For every year, for a given country and college group, we calculate:
(a) net savings in both India and the target country by subtracting the expenses (including loans) from income
(b) the difference between the two net saving amounts. This gives us incremental savings, which we show in the graph.