Business school as a leveraged buy out
I’m thinking of going to the US to pursue an MBA but haven’t saved up much for it at the moment. If I apply next year max I will have saved is £30-40 with maybe another £20k from family.
Most people would say it’s stupid to take on $100k debt for an MBA, but considering the ROI is it reasonable to compare the personal borrowing to debt used for an LBO.. like instead of Debt/EBITDA forecasting debt to income afterwards? Like if I went straight to NY with some prior corp banking experience, could be safe to assume $150k after b school. Minus 110k for rent, living expenses etc. and Debt/EBITDA would be around 2.5x with Interest coverage around 5x. Those are still very safe levels for an LBO imo
the difference is that the performance of an LBO doesn't impact your base salary, but here it does, and it can get pretty ugly if you end up in a bad job market, similar to now. Even ending in in NY, a HCOL, which would be the ideal case (harder to get = less chances you'll get) would pull you down to a pretty narrow budget for at least 1 year.
Isn't a better comparison analyzing the same scenario in UK vs. US and seeing which one brings higher % ROI or lower Debt/EBITDA? This comparison will show you that you don't really want to take decision based on % when cash amount is maybe more important in such scenarios...
I even find it a bit stupid to analyze such decision like an LBO lol like you have 40 other sources of revenue that can bring you out from chapter 7 in case this "LBO" ends up nasty
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