When I was finalizing my decision to go back to school full time for an MBA, I read hundreds of articles and comments from people who wanted to weigh in. I found it to be a fairly polarizing subject. It seems that everyone has an opinion on this, some with first-hand experience and others with absolutely no context at all. Now that I’m a few years out from graduation, I’d like to weigh in with my own thoughts.
I’m not going to argue one way or another but rather focus on what made it worth it for me. The reasons that made it right for me are not the same reasons that would make it right for you. You really need to define where you want to end up and how an MBA provides the best path to help you get there.
The MBA facts
For a top tier full-time MBA program, people give up on average a $60K annual salary and incur tuition costs of about $100K. That’s at least a $220K investment. Once they graduate, they’ll see a salary increase of about 60% and have a payback period of about 4 years.
My MBA experience
These statistics align closely with my financial MBA experience. I made just under $60K prior to school and added about 60% to my salary after graduation. Tuition was about $92K, although I was able to pay off my student loans in less than 2 years.
I had the option to attend my alma mater for almost $65K less, but my wife and I determined that having a completely new and unique experience 1,700 miles away was worth the additional cost to us. I had barely even heard of Indiana before we moved there. I wasn’t even sure if it was a state. After having lived there for two years, it’s now one of my all-time favorite states.
It wasn’t all about the money for us. It was about finding a good program for me while at the same time enabling us to have new experiences and adventures as a family (consisting of me, my wife, and two toddlers). We took a risk, and the payoff was much more than a 60% bump in salary.
Here are some of the things that appealed to us, in no particular order:
- Experiencing life in a completely foreign land– the Midwest.
- Educational diversity – I didn’t want to be in the same business building where I spent my undergrad days. I wanted a new network, exposure to different companies, and a different type of learning environment.
- Fit – The school values closely aligned with my own & had a collaborative culture that resonated well with me.
- Payback – We went into $45K in debt but knew we could get serious and pay it off quickly.
- Differentiation – I had a lot in common with my undergrad peers and wanted to go some place different where I would have differentiated experiences and skills to offer.
- Quality – IU isn’t ivy league, but it’s still ranked in the top 20, which was perfect for me because I’m just not an ivy league kind of guy.
- Music – IU also happens to have one of the top music schools in the nation. My wife is a beautiful violinist (ambiguity intended) with her master’s in musicology, so having the music school resources close by appealed to her.
- Family – The whole Midwest family friendly feel has been a breath of fresh air. I’m still getting used to having my neighbors wave to me when I drive by.
- Friends – We did not know that we would make so many life-long friendships with people from all over the world, especially with other family-types like us.
The list could go on. Could I have had all these things at a cheaper school or without going back to school at all? Maybe. But maybe not. We love where we have ended up, and we definitely would not be here had we not decided to take a chance on a more expensive educational investment.
The bottom line is that for us it was worth it, and we are the only ones who have the perspective to determine that. And we came out of it all with a Midwest-born baby. Can you really put a price on that?
Justifying the MBA
Maybe you don’t know exactly why you want an MBA. The first step is determining why you want one. Maybe you want an MBA “just because.” If that is justification enough in your mind, I think that’s okay. A future employer will probably be looking for a better reason than that, but that may not matter to you. Maybe you’re an entrepreneur wanting to brush up on your business acumen.
Part of the reason I became a CPA was “just because.” I like to challenge myself, and I was in a good position to do it. I already had the credits I needed, and the costs were covered. In retrospect, it was extremely valuable in helping me secure new employment after I was laid off in 2008. I probably wouldn’t use the “just because” reasoning for an MBA, but it really doesn’t matter what I or anyone else thinks.
If having an MBA “just because” is worth the financial investment & potential career delay in your mind, the opinions of others don’t matter. It’s another story if your decision will affect others such as your family. In that case, you obviously better be getting some benefits out of it other than “just having an MBA.” Just don’t let anyone make the decision for you.
Final thoughts on an MBA
I didn’t cover many of the drawbacks here, but there definitely are some. Financial Samurai has a great article on the MBA decision that takes an objective look at pros and cons.
In a nutshell, if you have an interest in getting an MBA and have the chance to attend a top tier school, you should go. If you’re looking at a mid-tier school, just be sure you know what you are trying to achieve and if the program can get you there. Part-time or online programs may not have the same credibility or networking benefits, but again, if they can get you where you want to go, then they are worth considering. If you’re thinking about it and want to talk it out with someone, send me a note. I’d be happy to elaborate on my perspective.
What are your thoughts on getting an MBA or on its value these days?