Does an MBA cost less than you think it does?

When I announced that I was going back to school for my MBA, once of my friends balked that it seemed to be contrary to my values of saving money and building wealth — they left this comment on my Facebook post announcing my acceptance to the program. Yikes! Were they right?

When people hear the letters “MBA” they see about $100,000 in tuition right next to it. For Canadians, a lot of this perception is inflated by the cost of prestigious MBA programs in the USA. Down south, you do have to shell out six-figures to attend a good school. For this reason, many opt to complete their degrees at lower tier schools or online.

In Canada, the most expensive school is nearly six-figures a year, but most are much, much cheaper. The University of Alberta (where I completed my undergraduate degree) and The University of Calgary (where I’m currently finishing up my MBA) cost less than $30,000 per year. You can get even cheaper in Quebec if you’re a resident of that province.

After spending two years getting rid of my student loan debt from undergrad, I wasn’t interested in repeating the process for an MBA, so cost was a huge factor in determining where I wanted to go to school. When I had narrowed down my choices of possible schools to attend, I had narrowed it down to Sauder, Rotman, Queens, and Haskayne. My GPA and GMAT score meant I had my pick.

From my list I chose the least prestigious, which is not typically the route aspiring MBA’s go, but Haskayne had a lot to offer even if the program wasn’t as well recognized. Some of the perks were school specific, others were just geography, but all of them made my graduate degree more affordable than it looked when I got my tuition statement.

The Government of Alberta Completion Grant

I’ll get $2,000 next term just for graduating, courtesy of the Government of Alberta. Because of my income history and personal savings, I didn’t expect the government to be super eager to dole out any student loan money for school, but I applied anyway just to be eligible for the completion bonus (and promptly stored the student loan money they gave me in a savings account until graduation). If you’re an Alberta post-secondary student, you can get information on applying for the grant here. I’m not sure what other provinces or states offer, but it’s possible there’s similar programs where you live.

High proportion of tuition covered by scholarships 

By the time I graduate from Haskayne, 1/4 of my degree will have been funded by scholarship money. I was nominated directly by the school for awards, and the money showed up in my bank account without any action on my part. These were the biggest sources of funding, but you can find small amounts ($250 to $1,000) on The majority of scholarships are based on academic achievement, so high grades are very important, but chances are if you’re in an MBA program you have a GPA >3.5 so you already clear most hurdles. Lots of people are trying to give money away. Take it.

Income Tax Tuition Credits

One of the major perks of paying your own way through school is you get to reap the tax benefits. Because I paid so much in tuition & fees, I’ll pay less in income tax. This makes my MBA more affordable, even if this perk of going back to school isn’t realized until after I file my income tax returns. The school will issue a T2202A indicating your eligible tuition & fees, but you can claim additional credits for textbooks. A detailed explanation of eligible expenses and how your credits are calculated is available here. But suffice it to say I don’t think I’ll be paying income tax until 2016. Bonus perk: Alberta has a flat provincial income tax rate of 10%, which means even though my income has increased, I’m not paying a premium on it.

A strong career network

Calgary is one of the most robust job markets in North America, and the business schools are along for the ride. Don’t get me wrong, I learned a lot in my MBA program, but even I know the school’s most powerful asset is the job market of the city it’s located in. Many of Calgary’s most successful are closely tied to Haskayne, and you can leverage that network through the school’s career centre and special events (speaker series, job fairs) they host on campus. Queens and Sauder have a lot to offer in connections as well, but everywhere is hiring in Calgary, which makes a big difference. What good are connections if there are no opportunities? Here there are opportunities AND connections. Your degree is worthless if it doesn’t get you a higher-paying job. Consequently , one of the best insurance you can take out against a worthless degree is looking for work in a city that’s hiring.

My MBA will cost about $50,000 in tuition, fees, and textbooks when it’s all said and done. More than $30,000 of that’s already come back to me in scholarships, tax credits, and a 4-month paid internship, making the degree way more affordable than it looks on paper. The biggest blow to my bank account is still leaving my job to go back to school and going 9 months without a full-time income (a loss of nearly $50,000) and moving to a city with a higher cost of living.

The cost of an MBA is still high, it’s just not as high as you might think — and the payoff is worth it. I had previously calculated my MBA would take ~3 years to start paying off, but since I’ve managed to start my new career while finishing up the program, that number is lower.

Graduate school isn’t for everyone, but if you’re interested it might be more affordable than you think!

This Is What It Looks Like When You Put Everything Into One Stock… And Lose

Special thanks to Kapitalust for sharing the link that brought me to one of the craziest stock mess stories I’ve read in awhile. Maybe you heard about this incident in the news, but I promise, it looks different up close.

The following is not for the faint of heart.

I actually felt legitimately sick reading these posts and watching the story unfold. To summarize, a whole bunch of eager-investors dumped a ridiculous amount of money in a tech stock that went bad. Really, really bad.

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$GTAT hitting near zero October 6, 2014

In the beginning, this group was practically high-fiving each other through their screens thinking they’d all become instant millionaires. They spoke confidently about catching one of those rare opportunities that changes your whole life. It’s really easy to get carried away trying to decide what kind of yacht you’re going to buy.

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If you read the forum, some investors exited early and the ones staying in smugly waved them goodbye, chastising them for missing out on the money train that was headed their way.

I don’t really fault them for being overly optimistic, but it cost them dearly.

Many had dumped their entire life savings, and that of their family into the shares. Some even went above and beyond gambling their own money and purchased options in the stock. I’m going to let them tell you how that unfolded when GT Advanced Technologies unexpectedly filed for Chapter 11 bankruptcy. The posts below are merely excerpts from the thread as the group realizes their losses.

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A forum poster & GTAT investor laments going from expected millionaire to over six-figures in debt in a single morning

They are heart-wrenching.

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I hesitated a bit sharing this story because I’m generally a really big advocate of millennials investing in the stock market, and sharing such a terrifying story of loss isn’t going to inspire confidence in young investors who came of age during the crash of 2008.

But I’m hoping this grisly tale serves as a tale of what NOT to do.

For those of you that want to invest and want to make sure you do so wisely, heed the following:

  • Never invest more than 3% of your portfolio in a single stock.

  • Stick to index funds to diversify your portfolio and reduce your risk.

  • Always, always, always keep a percentage of your net worth in cash.

  • Never risk an asset you can’t afford to lose, like your retirement accounts or your house.

  • Make sure you understand the risks of options completely before you invest on a margin.

  • Do true due diligence in researching an investment before your buy.

  • If something seems too good to be true, it probably is.

One of the most cringeworthy moments of the the $GTAT debacle is when one poster asks if things would be different if they hadn’t been encouraging each other in the forum:

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It’s a poignant self-reflection, and one readers of personal finance blogs should take to heart. The personal finance community is a receptive one — so receptive you’re bound to find a blog that will support you in making really dumb financial decisions. Only yesterday I was linked to a blog written by a woman that cashed out retirement savings at a huge penalty to buy a car. Her 401K was irrevocably damaged, but her comment section was filled with words of encouragement and congratulations for following the Dave Ramsey way. I’ve expressed some criticism for the personal finance blogger community before, but I feel the need to reiterate that we also need to be careful not to continuously heap praise on each other for bad decisions just because we like each other.

That said, the $GTAT forum is not the time to be honest about someones financial idiocy. A lot of those people lost everything, so I’m going to second Joshua Kennon and urge you not to kick them while they’re down by commenting in the forum. Let it serve instead as an up close look at what it really feels like to make a huge money mistake — may you never know it first-hand.

Get Rich Young: Sean Cooper

Hi guys, I’ve got something special for you this morning — an interview with Sean Cooper. You’ve probably run across him in the PF community already because he is already a financial whiz and he’s not even 30. I met Sean earlier this year on a trip to Toronto with Lesley-Anne Scorgie. In a world everyone doled out a ridiculous amount of praise for mild accomplishments like saving $32,000 by age 26, I wanted to share a story of someone who actually made serious progress with their money. Sean is rich. And I feel like he can teach us how to follow suit.

Sean Cooper is a Personal Finance Expert and Financial Journalist. He is a first-time homebuyer and landlord who aspires to be mortgage-free by age 31. Follow him on Twitter @SeanCooperWrite and read his blogs and request his Writing and Web Design services on his website:


What is your current net worth?

At age 29, as of November 2014 I have a net worth of $548,281. You can view my latest net worth statement on Million Dollar Journey. When FrugalTrader reached his goal of a net worth of a $1 million, I was fortune to be chosen to be part of Team MDJ. It’s a great honour – it’s a lot like being asked to be the next dragon on Dragon’s Den. My long-term goals are to be mortgage-free by age 31, and reach a million dollar net worth by my mid-thirties.

When I look back at where I was a decade ago, it amazes me how far I’ve come. At 18 years old, I hit rock bottom – I was unemployed and living in my parents’ basement with a net worth of only $5K. I attribute my financial success to when I got my first job at age 19 at a supermarket. It helped teach me to work hard and the value of a dollar.

After three years of college and two years of university, I graduated debt-free with a net worth of $70K in 2009. Landing my first full-time job after graduation really helped grow my net worth exponentially.


What has been your best investment so far?

My best investment has definitely been my house. My journey to homeownership hasn’t always been easy. As a single first-time homebuyer in Toronto, I found it difficult to find a home I could afford. One evening while watching HGTV’s Income Property with my mother, I got the brilliant idea to purchase a house and live in the basement and rent out the upstairs just like Scott McGillivray.

It took me almost three years of house hunting and two failed bids to finally find a home. I purchased my dream home in August 2012, a beautifully renovated three-bedroom bungalow, in east Toronto for $425K. Even with a sizable down payment of $170K, I was left with massive mortgage of $255K.

This is when I made the decision to pay down my mortgage as soon as possible. Living with my mother, a single mother, I saw the financial struggles she went through when she lost her job and struggled to pay the mortgage. In today’s economy where you can wake up tomorrow and be downsized at work, I just wasn’t comfortable with 6-figures of debt hanging over my head for the next 20 years.

I made the ambitious goal of paying off my mortgage in 5 years. While a lot of people argue paying off my mortgage that quickly doesn’t make sense, especially when I could be making a higher return by investing, my argument to that is that paying down my mortgage sooner is all about risk management. If I lose my job I can always stop contributing to my RRSP, but if I stop paying my mortgage I’ll lose my house. It’s as simple as that.


What has been your worst investment or financial mistake?

My worst financial mistake was not working until I was 19 years old. I strongly believe that getting a part-time job in high school is beneficial. Not only does it teach you about transferable skills like communication and time management, it teaches us budgeting. For the first-time you’ll be earning a pay cheque. You’re never too young to start saving – this is a great opportunity to start a good lifelong habit by paying yourself first.


With more than half of Canadians living paycheque to paycheque, I really believe financial literacy needs to be taken more seriously. We learn about history and science, but when it comes to personal finance we’re on our own for the most part. I’m a strong advocate for financial literacy. Basic financial skills like budgeting and managing debt should be taught in high school. With November being Financial Literacy Month, it’s the perfect time the shine the light on the lack of financial literacy. My mission for financial literacy won’t be complete until personal finance courses are mandatory in high school.


What is the key to getting a good return on your money?

My best advice for getting a good return would be to automate your savings. This is best achieved by setting up pre-authorized contributions (PAC) and investing consistently. When your savings are automatic, it removes the temptation to overspend, since your money will be invested before it can reach your bank account.


You should take advantage of “free money.” If your employer offers a pension plan, run to join it! Many employers offer matching contributions. By not joining, you’re leaving free money on the table.


Understand your risk tolerance and choose your asset allocation accordingly. Some Millennials consider themselves risk adverse and invest 100% of their money in equities. However, if they weren’t in the markets during the 2008 financial crisis, chances don’t have a firm grasps of their risk tolerance. Even if your investment time horizon is 25 years or longer, it can be unnerving to see half of your portfolio go up in smoke. Your asset allocation (the percentage of bonds and equities) will have the biggest impact on how your portfolio does over the long-term, so make sure you get it right!


A book that really resonated with me that I think everyone should read is Stop Over-Thinking Your Money!: The Five Simple Rules of Financial Success by Preet Banerjee. The basic message is you shouldn’t worry about stock picking until you have the basics down like paying yourself first. That’s like running a marathon when you haven’t gone jogging in a decade – chances are you’ll be out of breath in the first two minutes of the race.


What advice do you have for millennials when it comes to building wealth?

My best advice would be to continue to live like a student even after graduation. While it can be tempting to go out and buy a fancy new car and rent a trendy downtown condo right away, by continuing to live frugally you’ll be able to afford your dream home a lot sooner.


Living like a student doesn’t mean necessarily mean eating Kraft Dinner (unless you enjoy it like me), but it does mean watching the expenses that can really add up. Beside mortgage and rent, transportation and groceries are the two most costly expenses for most families. Instead of driving to work and shopping at premium supermarkets, consider biking or taking public transit and shopping at discount supermarkets. I only spend $100 a month on groceries, which is helping me reach mortgage freedom a lot sooner.


If you want to get ahead financially, you have to be willing to make financial sacrifices. A lot of millennials want the good life right away and aren’t willing to scrimp and save to get there. The art of savings seems to be lost. My parents were married at 19 years old and bought their first house age 21. Their house was far from their dream home – it was rundown, had rats and the basement flooded, but they were willing make those sacrifices to eventually move to an upscale neighbourhood to raise their children. Most millennials would never fathom living like this. I’m not saying you should live like this, but what I am saying is that small finances sacrifices can pay big dividends down the road. If you’re willing to make sacrifices in your 20’s, you’ll be able to live in your dream home and enjoy the good life a lot sooner.

When Women Earn More Than Men

I’ve been trying to write this post for awhile, and only recently managed to get it done after Cait blogged about the book “When She Makes More” by Farnoosh Torabi. I haven’t read, and I’m not sure if I will. But maybe I should because:

I out-earn my fiancé.

Salary-wise we’re nearly evenly matched. There’s less than a $10,000 difference in compensation between us from our primary jobs, but my income through Money After Graduation throws me quite a bit higher. For now, anyway. The next 5-10 years will be marked by definitive promotions and raises, that will either keep us neck-in-neck or further emphasize a divide. I’m not alone though: single women between the ages of 22 and 30 earn more than single men of the same age group.

Thankfully, my fiancé’s reaction is what every person’s should be when their partner is killing it financially: “woohoo!”

Why? Because one person earning more is better for both people in a relationship, assuming they’re a real partnership in which each person shares the fruits of their labor with the other. My fiancé knows my higher income means direct perks for him because it adds to his purchasing power. Whatever he could afford without me, he can now afford even more with me — and the same is true for me.

It doesn’t matter who earns more, because a win for one partner is a win for both.

Our buying — and saving — power is multiplied by sharing our wealth with each other. Earning more isn’t a blow to his bank account. Quite the opposite, actually. Because I earn more, he directly profits. My big income means a nicer house, a nicer car, more luxurious vacations more often, more dinners out, etc. for him as well as me. I’m a generous spirit and I love sharing what I have with the people I love.

But it’s more than just nice-to-haves, a high-earning partner means more financial security for the household.

One of the best things about our careers, is my fiancé and I work in different industries. This means if one industry dips and one of us experiences a lay-off or any reduction in income, the other has the resources to support the household. Both my fiancé earn enough to pay all our bills, which means we don’t need two salaries to support ourselves. There’s a lot of power in that — and there’s even a lot of personal power in knowing I could support myself and my spouse. I understand the pride in being a “provider”, because that’s how I feel about knowing that’s in my arsenal of abilities. We may or may not be tested to live on one income in our working lifetime, but if we ever are, it’s nice knowing neither partner’s income is essential.

If we’re going to be painfully honest and have a really raw sharing moment here, let me confess this: I always intend to be the higher earner.

I only know what it’s like to be me, not what it’s like to be in a relationship with me, so I can’t imagine how much of a pain in the ass I actually am to share a life with, but I do know my hyper-competitive personality isn’t for everyone. An ex-boyfriend once complained that I’m emasculating — unfortunately for him, this still ranks as one of the best compliments I’ve ever received.

I believe that women should pursue any career they want and earn however much they want to, and thankfully I have a partner that agrees. But this is more than merely a feminist issue: being married to an ambitious workaholic has its own challenges. Higher incomes typically come with higher costs — that’s longer work hours and higher stress. My fiancé has already had to suffer as a tag-along through most of my MBA with me, and it meant a lot of sacrifices for him as well as me, not the least of which was time. I can’t count the number of family dinners or other events I missed out on because I had school. It was only last month that my fiancé celebrated his 28th birthday with his family… while I was on campus completing an in-class assignment on strategic legal planning for new ventures. My partner knows me well enough to know the workaholicism won’t stop with my MBA graduation. I will work late, I will miss things, and I will be worn out in the wide-eyed over-caffeinated exhausted-with-excitement way at all times. These are the difficult parts, not my paycheque.

I don’t think women should “act more feminine” to soothe a male ego bruised by high-earning wife. I don’t think the answer is in how you split chores or raise your children. I do think Jordann of My Alternate Life offers a good suggestion:

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Readers, do you out-earn your partner? Does it affect your relationship?

Cashflow is King

I may be overdosing on episodes of Shark Tank, but I can’t help but love Kevin O’Leary’s perspective that, at the end of the day, the only thing matters in a business (and in your bank account) is how much cash is coming in.


Kevin O’Leary, the cash-flow king of Dragon’s Den and Shark Tank

I noticed that O’Leary is even dabbling in personal finance advice, though I have yet to read his book myself. However, that doesn’t mean I can already guess what the premise of all his personal finance advice is:

All that matters is cashflow.

And for the most part, I agree with him. I like money that makes money. The more money I have, the more I want to use it to make more money. In a world where wealth is generally equated with how many and what kind of physical assets you can accumulate, holding money as an end in itself requires a different way of thinking.

Putting “amassing wads of cash” as your number one personal finance goal is different than wanting the things cash can buy.

Most people are focused on earning money so that they can do something else with it: save up for a down-payment on a home or for a car or for a vacation. My perspective in my early 20’s was that the purpose of money is to buy things, but once I learned you could use money to make more money, I was interested. That isn’t to say I gave up spending money on stuff, but it does mean that I’ve spent more money buying stocks over the past 4 years than I’ve spent on clothes, restaurants, and leisure combined. Just when I think I truly am the YOLO blogger, the math says otherwise.

I already know the tricks to putting more cash in your bank account:

Maximize your income.

In my opinion, the more money you bring in, the better. I don’t believe money is the most important thing in the world, but I do believe that you don’t have the luxury of pondering the real reason we’re here if you can’t put food on the table. The more cash you bring in, the more easily you’ll meet your needs, and the easier it will be to focus on the other things that are important to life. I get the people that want to follow their passion or don’t want to spend 8 years in school or 80 hours at the office or whatever, but they’ll max out at a comfortable life, and I’m aiming for luxurious. This means chasing a high-paying career, but it also means maximizing my salary in my career, which is why I’m continuously encouraging young people to negotiate their salary.

Diversify and multiply your income sources.

Believe it or not, Money After Graduation and the side freelance career it spawned accounts for as much as 20% of my gross income — and for September 2013 through May 2014 it was my ONLY income. Despite operating on two primary income sources right now, previously I had a myriad in simultaneous operation. While working full-time for a university, I used my lunch break to tutor undergraduate students in chemistry. On weekend evenings I took babysitting gigs. I snapped up ridiculous odd jobs like being a hair model or scanning store inventory whenever the opportunity arrived. Nothing else has provided me with resources and security the way diversified income sources have. I will never rely on a single source for living wage, it’s too risky… and it’s too little money. Why settle for less than you can earn in a month?

Focus on purchasing income-generating assets.

I can only work about 10-12  hours per day before my brain & body refuse to churn out anything more worthy of cash. On a typical weekday, I’ll devote 8-9 hours to my full-time job, and another 2-3 hours writing and answering emails for Money After Graduation. After this, I’m tapped. Even though I would like to earn more money, I’m totally out of resources to do so. I’ve experienced this in every job and side hustle I’ve ever had: I can only babysit so many kids at one time, book so many tutoring sessions in one week, serve so many tables as a waitress. There are limits to my energy and time. Which is why I love passive income where these limits no longer exist. My passive income right now is purely investment income — dividends and interest on the money I have in the stock market and savings accounts. This money appears in my account whether I bust my butt for a 12hr workday, or lay around binge watching Netflix. It’s my favorite income stream.

Don’t buy a house in your 20’s (in Canada)

Oh yeah, I really typed that. Every personal finance book and many blogs will tell you to get your butt into home ownership as fast as you possibly can, but forcing twenty-somethings into such a major purchase too early can cause damage to their finances that will take decades to recover from. House prices vary by region, but if you live in a city where prices are really really high (like I do) taking on that type of debt can crush your networth, not boost it. Many people are pro- home ownership because “houses always go up in value”, but those gains are unrealized unless you sell your house. This isn’t a post about unrealized gains, this is a post about cash-flow. Houses mean illiquid assets, massive debt, increased expenses in insurance, maintenance, and taxes/fees. Unless you can put 20% down, plan to stay in the same place for 5+ years, buy as little house as you need, have a killer income, and can get a tenant, chances are home ownership in Canada will hurt you more than it gets you ahead. For the average Canadian 20-something, having $20,000 in cash is far, far more valuable and useful than putting $20,000 down on a home.

Don’t buy expensive depreciating assets

With the exception of investments, everything you buy is a depreciating asset. But there’s a difference between buying a $60 sweater that’s going to wear out in 2 years and buying a $60,000 car you need to make make payments on for the next decade. Anything that requires a loan to finance and is only going to go down in value from the day you purchase it is something you should run far, far away from. You don’t need a big home theatre system or a boat, I promise.

Don’t buy items that require future purchases

Records are really cool. I love that old school style record players are making a come back, and modern day artists are releasing their albums in record format for their fans to enjoy. I was admiring the record players at Urban Outfitters myself thinking how cool and retro it’d be to play my favorite tunes on this affordable (I think it was $100) machine… and then I realized I’d have to buy records for it. With iTunes letting me buy a single song for $1 and take it with me anywhere, it’s hard to swallow shelling out $30 for a record I can only listen to in the comfort of my own home. A record player is not expensive, but keeping a massive music collection is. Don’t buy things that require future purchases. This rule goes for anything from paying a membership to shop at certain businesses to buying an app that will require further in-app purchases.

Following the above will maximize the amount of free cash in your bank accounts. What are your thoughts on cash flow as an investment goal?