I occasionally mock graduate school in a good-natured way, so it might come as a surprise to you that I do actually think it can be a worthwhile investment for the right person. At this point, I’m feeling pretty happy with my BSc., though I’m not sure if it’s all I’ll ever need to get me to the career (and salary) I want. At this point, I’m not in the mood to pursue any more formal education, but that’s a decision that my mind can be changed on.
While a few of my friends are doing PhDs and medical school and law school, the greatest number are enrolled in MBA programs. There seems to be a pretty broad spectrum of MBA programs you can take, from finance to environmental consulting, and the compensation doesn’t seem to be a bad deal either. I didn’t know what an MBA grad made but I got curious once I met a dozen people pursuing the degree.
According to Forbes, the starting salary for an MBA graduate is $101,778 + a signing bonus of $18,139 for an average total compensation of $119,917
Good thing, because the cost of an MBA is in the neighborhood of $100,000 even though it’s usually only a 1-2 year program. Not to mention that’s also 1-2 years out of the workforce (unless you study part-time, which extends your degree) which translates directly into $50,000 to $100,000+ in lost income, depending on your current job.
While I think completing an MBA part-time is an attractive option, I’d much rather just go into it full-time, finish as quickly as possible, and enter the workforce as soon as I could at that $120,000 starting salary. Then I think about living as a student and going back into debt again and I start to feel a little sick. There are, of course, ways to keep your costs down such as getting your employer to pay for some or all of the costs (particularly if you’re studying part-time) and saving by print your MBA thesis at doxdirect.com, but chances are, unless you’ve saved up six-figures of cash, you’re going to graduate in the hole. Nevertheless, an immediate six-figure paycheque does make that easier to swallow.
Like all things, it probably depends what school you attend. While I’m confident an MBA from Harvard Business School will secure you a >$100,000 in compensation, I’d encourage you to avoid online degrees from questionable, never-before-heard-from “universities”.
While I am very debt-averse, I do believe in borrowing (responsibly, of course) for your education since it means investing in an income-generating asset. Student loans aren’t that much fun, but earning more money over your entire working lifetime is, so I think if it’s your only option to pay for school, it’s a worthwhile investment to make.
I have my MBA and I definitely think it’s worth it. I went full-time, and still kept my full-time job (which I still have today). Worked well!
I think you’re absolutely right that it depends a lot on where you go for school and what your concentration is. Same with law school.
I looked into an MBA and it’s something that I might pursue in the future, but the idea of going back to school full time and incurring that much debt is not something I want to deal with any time soon. I might eventually, but not right now.
The other thing to remember is that some MBA programs offer paid job placements.One of my best friends is currently finishing his MBA F/T and while in the program he worked and made back over 40k to help offset the tuition cost.
Where you go to school is definitely important but I don’t think that quitting your job/studying full-time is the best option… If you can do your MBA in 2y part-time, you would be much happier overall I think (money-wise, at least)
I have my MBA and it was kind of worth it. I wanted to switch out of Engineering and go more towards Finance and my MBA has allowed that, but I also had wonderful timing and graduated in 2008. That being said I am starting to get some headhunters calling and emailing me, apparently an Engineering degree with a finance MBA is a pretty good combo!
I’m almost finished with my MBA. I have one class left! Was it worth it….yup, I don’t regret it. I had a scholarship that paid for most of it, and then my company covered the other 6k left in my program.
I got my MBA and I loved the experience and found something I really enjoy. However, I do think there’s a bit of hype surrounding getting an MBA. I was told basically that recruiters would be there ready to give you insane job offers and that really is not true. On the other hand, I learned a lot which has helped my wife and I in running our own business. That said, it was worth it for me.
Holy cow, no one offered me that much money when I got my MBA! It must be slanted for larger cities. I think my MBA altogether cost around $35K, but I was lucky that my work paid for it all. I did it all at night and on the weekends while I was working full time, so that was fun! My son was born right on one of my exams too!! But now its over and I’m glad to have done it.
It totally depends which industry you work in, whether or not it will be worth it. My spouse had always planned to do one, but with the lost revenue to go full time, combined with the average “after” salaries, it probably isn’t worth it. Rough guesses indicate it would only increase earnings by about $10K/year, so at a 0% IRR, that’s still like 10 years to pay back a year’s lost revenue, let alone the cost. The only way it truly makes sense would be if a company was footing the bill.
Although I may not be in an elite MBA program, I am working at a University and getting my MBA for free. I hope it pays off, and I end up with a job making $100K +++. :)
As long as you want the MBA job. These jobs often come with long hours, lots of responsibility, and good dose of stress. I don’t think it’s for me :)
I do sometimes think of going back to school, but I really like making money now instead of getting back into debt or paying thousands of dollars every four months for school. I think I’m still tired from doing my degree though so if I go back it won’t be until I’m at least 30.
I have to agree with MoneyMasterMomMandy. I have always thought I wanted to get my MBA. But when I look at what kind of work I would really like to do in the future(maybe my own business, less/flexible hours job/ lots of passive income so I don’t have to work) I don’t know if I can justify the debt and lack of income. I don’t want to slave away working long hours for years and years. My version of success is to escape that life. And although I would love to say I have my MBA and am sure I could be focused and determined to finish I don’t know if I could justify it.
Even though I never pursued a higher degree, everyone I know who got an MBA is doing well, so it seems worth it!
I think it boils down to personal choice and whether it’s something you really want. It potentially will be lots of hours,stress and responsibility but for some MBA stars they thrive in this type of environment. Others not so much so it’s really choice. Money can be made with a degree, without a degree nothing in life is guaranteed even if they say so. Sounds like a great starting salary though enticing to most anyone that wants to make the big $$$. Mr.CBB
I think the major indicator here is whether or not you’d enjoy the work. If you can and think you can stomach the two more years of school time, go for it
The debt made me balk at going back to school, but also because I wasn’t really interested in any field of study to qualify the amount of money I’d be spending. Thankfully, I don’t have to!
Ditto on working at a university and getting my MBA for free… tuition remission = best staff benefit ever! :)
Depends on the industry.
Mine, couldn’t care less if you had a PhD or 8 Masters. Either you know what you’re doing or you don’t.
I couldn’t make more money with an MBA, which is the reason why I haven’t gone back for one.
My brother who is in an entirely different industry, saw the same reason for not going back for his.
MBAs are great for changing careers. I would also like to point out it is a great ROI if you can pay back the loan in 3 years as well. If you racked up $100K in debt, you have to pay back $30K net a year.
The debt amount really depends on the school and the amount of scholarships you qualify for. I attended a top tier school for my full time MBA specifically because they were known to give the largest amount of scholarships for those with the GMAT scores of 700+. you can graduate with minimal debt but you may have to compromise in other areas (location, etc). I do hope that the possible student loans won’t be the only factor stopping someone from pursuing their MBA.