The Economics of Studying in Ireland

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For all the different methods of investment appraisal such as Net Present Value, Internal Rate of Return, Adjusted Present Value, one of the most popular is also one of the most simple, Pay Back Period. This method asks the question, how long will it take me to recover my investment? In this article I want to apply this investment appraisal approach to studying in Ireland and in the future develop a course score purely from a finance perspective so courses can be compared across countries.

Assumptions

  1. You will study a 1 year masters course in an area where there are job opportunities in Ireland and you qualify for a two year visa.
  2. You are an outgoing person and want to keep your costs low so you don’t mind sharing a room.
  3. You will live and work in Dublin.
  4. You like to cycle.
  5. The course you want to pursue is at the higher end of spectrum costing €15,000.
  6. You will not get more than a minimum wage job during your studies.
  7. After your studies you will find a job inline with the industry average.
  8. You have at least one year working experience from your home country.
  9. You are able to work voluntarily 2/3 hours per week in a startup in Dublin.

During your study

During your course in Ireland you can work 20 hours per week during the academic year and 40 hours during the holidays. With a minimum wage of €9.25 per hour you will earn roughly €15,000 per year. After tax this will be €14,880. (Tax Calculator). Which equates to €1,240 per month on average for the year.

During your study it will be tight, every cent counts. There is a housing shortage currently in Dublin. So you have to share a room, cost €350 per month. Shopping in Aldi & Lidl keeps you food bill down to €200. Dublin being small you use your own bike bought from adverts.ie for €100. Utility bills are €100 per month.

After your study

After you complete university you find a job working as a Java Developer. The combination of your previous experience back home, your university in Ireland and the reference you got from the Irish startup helped you land the job, €35,000 per year. Year 2, your salary increases to €40,000.

Your year in university was tough so with your new job you rent a room for yourself €800 per month. You start eating our more with less homemade lunches, food per month €350. Entertainment and other increase to €400 & €200 per month.

Summary

It is possible to pay back your investment within 3 years which is very good. The first year will be very difficult as you can only work 20 hours per week. Cash flow management is essential. However, it is possible to find work well above the minimum wage.

The most important thing is to only come to Ireland if you have a skill which is in short supply and you have prior experience. Also, you need to do whatever it takes to get experience working in Ireland on your CV. If you need to work for free for a startup do it, it’s not fair but in the long run it will work out for you.

Please don’t forget those three things, have skill in short supply, prior experience and experience working in Ireland.

Payback is 2.92 years

Year 1Year 2Year 3
Salary14,88035,00040,000
After Tax14,88028,86031,423
Expenses
Rent4,2009,6009,600
Food2,4004,2004,200
Utility Bills1,2001,2001,200
Entertainment2,4004,8004,800
Other1,2002,4002,400
Total Expenses11,40022,20022,200
Net Savings3,480*6,6609,223

*Assume nothing is saved end of Year 1