The Best Investment Return You’ll Ever Earn

tt153-feb-22-2017.jpgOne of the greatest and most significant investments that we as a society can make toward the future success of our nation is in early childhood education. Research shows that the best time to shape future productivity is from birth to age five (5). This is because the brain is most apt for development. Stimulating educational influences during this time period lays the foundation for the cognitive and character skills necessary to achieve success in school, personal health, professional development for the rest of one’s overall life. 

This is especially true for children from disadvantaged backgrounds. These children often come from families who lack the education, social and economic resources to provide the early developmental spark that is so helpful for success in school, college, career and life. Poor health, dropout rates, poverty and crime are all issues we must address. There is a degree of self-interest here because by helping children who face these roadblocks early in life, we will significantly reduce future costs to taxpayers. These investments in developmental opportunities for these at-risk children are essential to a better overall society in the long run. 

As more research continues, the results are becoming more definitive: Investments in education provide significant benefits to children, families and society as a whole, accelerating economic growth and promoting opportunity over time. The December 2015 Washington Center for Equitable Growth study analyzed the benefits and costs associated with this investment. The study showed that over time, an investment in early childhood education would offer a 9:1 return. I wish my investment portfolio enjoyed that type of success.

According to the study, by 2050, a universal pre-K program would yield $8.90 in benefits for every dollar invested and $304.7 billion in total benefits. If we want to pay more than lip service to the concept of promoting the well-being of children, families, and our nation as a whole, then the evidence shows that investing in early education is a proven means to that end.

If there is anyone who bats a baleful eye at investing more money in our educational system, allow me to become personal 

When you were a child, didn’t someone give you a boost, a kind word, sage advice or even some type of tangible help that moved you forward? Or is your experience different, and you didn’t quite reach the heights that you might have at climbing the next rung because you didn’t have the direction or help when you were young? You just didn’t get the direction you needed. 

But here is what we do know. If there is anyone who is innocent in this world, it’s our children. They enter the world with that well-known axiom of tabula rasa or a clean slate. Lets fill that slate with knowledge, understanding, ideas and citizenship. And let’s do it now.

As I wrote this blog, I wondered how anyone could be indifferent to the need to rally around our children, especially those who need that little extra boost. The math is unassailable on this point. Investing in early childhood education is a win for the individual child and for our society over time. Period. Full stop. 

Still not convinced. Ok, if we put aside our hearts for a minute (and I don’t suggest that you do) and only use our heads, then investing in preschool programs makes all the sense in the world from a rational, economic standpoint. No less an authority than James Heckman, Nobel laureate, and a professor of economics at the University of Chicago and also the director of the Center for the Economics of Human Development, offers illuminating thoughts on this subject.

Referring to the economic payback of caring now and doing it early, he said, “if you count all of the benefits that accrue from this program in terms of reduced health care costs, reduced crime, greater earning, more education, higher IQ — the list is quite long. Those all are monetized. We can compute a rate of return, the dividend would be from the investment. You get about 13 percent per annum. Much higher than the annual return on equities in the U.S. stock market post-Second World War through the 2008 meltdown.

Now you have the reasons for your heart and your head to support this worthy cause. Your future, your children’s future and their children’s future depend on it. That’s my take, what’s yours?


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