Business School Investment Analysis
Your decision to pursue an MBA should be considered largely as an
investment opportunity with a clearly calculated return on
investment, or ROI. Most people do not look at the MBA
as the further pursuit of a hobby and the 2 years of
business school boot camp that you will experience should be
undertaken with an end goal in mind. We are not trying to
say that you will not have any fun in business school, but
it is a lot of hard work and you will experience the
pressures of juggling recruiting, class and case
assignments, and networking. Even if you do land your dream
job during your second year, you are still likely to
experience at least a little burnout before the whole
experience is over.
To make this investment decision, you should quantify the following variables:
Financial
- Current salary
- Expected salary after graduation
- Summer internship salary
- Tuition, fees, and books
- Room and board
- Discount rate
You will be losing roughly two years of salary during your business school
tenure and you will want to be able to recoup this after graduating with your
MBA. You should also ideally use a discount rate to account for the time value
of the salary lost and the additional discounting of your post MBA salary. The
discount rate chosen will vary from applicant to applicant.
Personal
- Desire for career change
- Willingness to relocate
- New friendships and networking opportunities
- Prestige
- Test yourself against top-notch future MBA leaders
It is very possible that you are making a large amount of money working on a
trading desk for instance. You may want to make a career change so badly,
however, to a field such as strategic consulting for instance, that you are more
than willing to take a substantial pay cut to find more fulfilling work.
Your willingness to relocate can become a very significant factor if you have
a spouse with a say in your decision to return to school for an MBA.
Click here to see our MBA salaries table which
details what the average student earns before attending business school as
compared to after graduation.
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