Cost of T10 MBA?
What is the average cost in total of a top 10 MBA program? Also, what would be a resonable estimate for living expenses each year during MBA if you are married? single?
I am just trying to get a feel for all-in cost of MBA. Thanks.
100K + foregone income anywhere from 0 - 800K (pre-MBA PE associates)
All-in (including room and board), total expenses for two years at bschool are closer to $150K.
opportunity cost is not fair to factor in because going to b-school is assuming you dont have a better option like that to go to. if you had some associate offer at carlyle i doubt youd be going to bschool. i use you in the proverbial sense.
Do the opp cost calculation but factor in the dramatic rise in income post-mba (assuming good creds before)...
hopefully, you're income gets a jolt post mba
If your goal is to build net worth as fast as possible/retire somewhat early, you MIGHT be better off not going, even if your income gets a jolt post-MBA.
People often underestimate the importance of learning for one's own edification and personal growth...It's one intangible factor that people rarely consider when calculating opportunity cost and the "value" of an MBA.
I would also argue against Mark Klein's assertion regarding early retirement. Unless you found some entrepreneurial venture it is very unlikely that you will earn more without an MBA in the long-run (and thus be able to retire early). Generally speaking, those individuals who are successful (most of the people on this board) have an intrinsic motivation to do well and would get bored in early retirement anyway.
Sorry for rambling; to the original poster: Average cost of b-school at top 10 ranges in the 42-46 range (assumes no financial aid/scholarship) and the cost of living in places like Boston, NY, Chi generally runs around 40K per year (apt, food, entertainment, etc) so you are looking at 150-180K over two years and I wouldn't calculate the opportunity cost unless you are gonna run a full blown ROI (projected 10 years post graduation).
Calculating the cost of an MBA as foregone income versus a post-MBA income "jolt" misses a key risk associated with not having an MBA.
You can progress within an organization and have all the credibility / internal brand equity in the world, however, this brand equity is specific to a single company and won't translate particularly well to others. Conversely, an MBA carries credibility that is very transferable among various companies and across various industries. Given this dynamic, I'd much rather be a VP with an MBA than a directly-promoted VP during a company-specific or broader economic downturn.
$100K + your expenses for 2 years (mine were abt $53K) + lost income
Tuition: $8ok Real Killer: Cost of Living Can be as low as $800/month. Average $2000/month easily. Remember the whole point of MBA is having fun, networking, meeting, exploring avenues etc. That 1200 you save on cost of living will destroy that experience and you will get nothing out of the MBA. An MBA is not about getting the books and reading them in your room, you can get the learning at a much cheaper cost. MBA is about access and network. You have to do well yourself but to reach the pinnacle you need to have a lot more going for you. What those things are; You will understand outside the classroom. So if you can't afford that much, stay away.
Opportunity Costs: I was on $200k/year (almost as much as i will make first year post MBA), decent enough and yet chose not to look at the same. An MBA provides you with choices, measuring the benefit of which is pretty hard to do. Cuz at the end of it all, you may never exercise the option. 95% of the MBA's would not use the latent value and yet this is what makes an MBA priceless. Do not factor in the opportunity cost. The more accomplished you are, the more you will get out of it. Infact the statement about "you do an mba when u don't have a better option" is absurd. $400k/year is nothing phenomenal. But if you are young and smart enough to earn that much you will amplify your future potential. Only qualifier is that the value diminishes if you are older than 27, and pretty rapidly so.
Can you expand on the last sentence? Are you saying that it's not worth getting your MBA if it's after you're 27?
So could you please expand on this statement? --> "Only qualifer is that the value diminishes if you are older than 27, and pretty rapidly so."
Thanks.
It has been awhile since I looked, but I believe businessweek has in their rankings an "estimated tuition cost" reported direct from the university. I only checked HBS, but their all-in (books, apartment, tuition, etc.) was $150k or so. I bet the numbers are still available (and pretty reliable), so I suggest ya'll go check.
I'm 27 and am an associate at a pe firm. well capitalised and pretty much immune from this downturn (can't give more detais i'm afraid). yet, i'm looking to apply to b-school next year, which will mean that I will be 30 when i graduate! I'm seriously considering doing an executive mba (e.g. columbia) rather than going full time due to the age factor, but not the pay factor. I don't want to be a 30 year old associate. I should make about USD 250 - 300k+ after taxes next year. i believe that the opp costs are off-set by not being held back from higher levels (MD, etc...)because of not having an MBA or being able to transition more easily between firms and industries (buy side/sell side, industry/product groups).
i wonder if i would be able to return to pe or ib post mba directly as a vp/principal. that could change the full time vs executive mba balance, but not whether or not to do an mba.
i hope this helps.
Living expenses are not a cost of getting an MBA. These costs will be incurred whether you go to school or not. Treat them like a sunk cost in a project DCF.
Cost is:
Tuition: around $90K without scholarship + 21 months of foregone expected income +/- Change in living expenses (moving to / from NYC is a big change) - 2 months of internship pay ($15K-20K pretax)
Too much money and not worth it. My two cents now.
aadpepsi, do you mind elaborating a little bit ? I'm two years out and considering an MBA, but could go for an accelerated MBA since I went to undergrad b-school.
I was under the impression that most accelerated MBA programs have the criteria of candidates being out of Undergrad at least 5 years? I might be wrong.
Anyways, if you could do an accelerated program. Do it. Mind you, I don't think it will give you any more leverage in this job market than if you were to do a traditional 2 year MBA.
That said, I think MBA programs are simply overrated. Ofcourse, my perspective is very cynical. I started an MBA program in 2003 at a time when many MBAs were poorly placed. When I finished in 2005, the economy was not much better. Fast forward to 2007 and companies aggressively hired, but actually, they over-hired. 2008 and 2009 have been no picnic. Suffice it to say the Class of 2009 and 2010 face the same, actually correction, they face far worse placement prospects than the class of 2003 did. So what? Let's see in the course of the past 7 years only 2 graduating classes did extremely well? That's not good enough incentive to toss out $150,000, is it?!?
Think of it this way... if you are valuing a company and looking at its financial history and you see that in a historical 7 year period, only two years were actually profitable, would you invest in that company?!?
Pretty much, the folks that truly benefit from an MBA the most are those folks that are on a hard core career transition, e.g. engineers who want to do banking, creative arts people that want to go into financial services etc. An MBA is almost an absolute necessity from a credibility and positioning standpoint in those instances.
Another example, I have a good friend who is frustrated with supply chain consulting, feels like he's reached a plateau in his career, not likely going to move up any higher, so he's now at Northwestern doing a part-time MBA. Truthfully, he's not having much luck at all moving out of supply chain consulting into let's say investment banking, or sales + trading etc. He's been paying for his MBA out of his own savings too. Ouch.
I simply have few friends that are genuinely significantly better off with an MBA vs. if they would have just had continuity in their careers etc. The time spent, the opportunity cost, the debt burden... simply not worth it in retrospect.
If you land a job after your undergraduate do companies tend to pay for your MBA ?
aadpepsi,
Your analysis isn't really fair. You're assuming that the only value of an MBA is in placement. While this is clearly valuable, the network, some knowledge, and the "stamp of approval" that comes with an MBA all part of what you're paying for.
Think of it this way... if you are valuing a company and looking at its financial history and you see that in the company's core growth years, it never spent any money on capex, would you invest in that company?!?
Sorry, I had to...
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