Is an MBA worth the investment?
Many MBA students decide to pursue their degree without actually thinking about the return on their investment (ROI).
So how does one truly evaluate the idea of getting an MBA vs. the reality of a non-MBA level job? It may feel like everyone is getting an MBA degree when students first begin the process, but that could lead to an overly saturated talent pool in the long run. An MBA may also feel like a good investment, but often upon graduation, business students discover that MBA-level jobs are strenuous with minimal recognition or upward mobility. So, do you even need an MBA?
Return on your MBA
The first thing to consider is your return on investment. Many MBA students do not evaluate what kinds of jobs are realistically available to them upon graduation. They also do not consider if those jobs will provide enough income to justify the expense of paying for tuition. Some questions to consider:
- Is your business school truly sharing statistics that reflect accurate MBA salaries upon graduation?
- Are business school statistics reflecting salaries with higher incomes?
- What exactly is an average MBA salary? Could the numbers be skewed by outliers?
Students are best served to seek out independent sources to verify what levels of salaries MBA graduates can expect and also how competitive are those positions? Be realistic and honestly assess if you even need an MBA.
BOTTOM LINE: If you choose to take on extra student debt, will you be able to get a better paying job upon graduation or, will you be paid at the same level as a non-MBA graduate?
The Everyday Spending Power of an MBA
Consider the amount of time and working hours which will be required when you get your glamorous MBA-level position. Often, MBA-level jobs require many, many long hours which equate to a low per hour salary. This type of scenario also can lead to burn-out when family and friends are traded for long days at the office.
You should also consider taxation of your higher salary. Taxes become far more significant as incomes increase so are you truly making more? Or, does it just appear like you're making more but actually paying more in taxes? Taxes deteriorate your spending power very quickly.
In order to gain a higher salary, will you have to relocate to a larger demographic with a higher cost of living? Your current city may not value an MBA as highly as a larger metropolitan, but be careful, because with big city living comes big city expenses which can eat away at your spending power.
On a final note, a person must figure out what his or her true career goal is. Adding an MBA to your resume when you are truly not satisfied with that type of career path can be highly detrimental to your future. It makes no sense to pay for an expensive MBA, burn-out, and then switch career paths ten years down the road. Keeping a firm grasp on the marketability of an MBA as well as post-MBA realities will guide a potential student down the right path.
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