Is it smart financially to go for your MBA? Statistics don’t help much, in this case, for a number of reasons. First of all, it’s very hard to find out the methods and sources used in inquiries published by the institutions themselves. Secondly, there are major differences between taking an MBA at a top school or a second-tier school, as well as differences regarding the duration and modalities of the programs. Finally, and despite its dilution over time, the added value an MBA brings to your career is difficult to define; for instance, a fellow student who later turns into your major client can alone justify your investment.
So, which questions must you ask yourself to come to some conclusion?
1 – How much does an MBA cost?
MBA price tags vary widely across the globe: such a program is clearly much more expensive in the US than in Europe, where even postgraduate education tends to be somehow subsidized by taxpayers. The most expensive MBA programs in the market can reach almost US$200,000 in tuition fees alone. In Europe, tuition fees average somewhere between 20,000 and 80,000 euros. Impressive as these figures may be, they don’t reflect the actual cost of an MBA.
Tuition fees cover the academic side of the program, but don’t usually include study materials and textbooks; access to the school’s additional services (canteens, libraries, study rooms, language and computer labs, gyms, etc.); campus parking space; academic or professional international experiences during the program; study trips; field research projects; internships; conferences, book launches and gatherings at embassies or other relevant venues; and so forth. Tuition fees also don’t include travels, commutes, visas, and living expenses. Finally, there’s an opportunity cost to be considered (basically, all that you could be doing and the money you could be earning were you not enrolled in an MBA). Summing up, an MBA is an incredibly expensive venture.
2 – What are your motivations and post-graduation goals?
Most education analysts agree that taking an MBA isn’t worth it for people who don’t hold — or don’t wish to hold — managerial positions. When it comes to hiring and promotions, trends fluctuate, and you’ll always find those who believe that someone who’s risen in life with an MBA would’ve done it anyway. Think about your aspirations and talk to hiring managers, executives and investors you’d like to work for (or with) and ask for their opinion and advice.
3 – Is making more money your sole reason to take an MBA?
This is the easiest question to answer: don’t take an MBA just to make more money. Nowadays, no single stamp on your CV automatically corresponds to a higher salary.
In the end, taking an MBA will help you make more money and does make financial sense if — and only if — you choose a recognized program at a renowned institution that doesn’t saddle you with an impossible debt. And also if you make the most of every single opportunity to learn, develop your soft skills, network, and plan your post-graduation life. Summing up, the question you should be asking yourself is: is it wise for me to take this MBA?
Good luck thinking your decision through and contact us or request a meeting if you have any questions!
Marta Andaluz is Director of Marketing and Admissions at The Lisbon MBA, a joint venture between two top European Schools based in Lisbon: Católica-Lisbon and Nova SBE. They offer a 1-year Full-Time MBA and an Executive MBA in collaboration with MIT Sloan School of Management.
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