Few of my friends question me indirectly questions like:
- What are you trying to achieve by doing MBA ?
- Will you really make more money after MBA in USA ?
- What if you do not make more money after MBA ?
- Why dont you do it online ? You get the MBA degree
I have explained the differences between MS and MBA and if one should apply for MS or MBA in US after Bachelors in previous articles. Here, I will try to give my answer to above questions.
If you think logically, what my friends are asking is correct. What if I really do not make more money, is my degree going to be waste? Let’s try to analyze the question and possibilities by using some math ! Imagine you are spending $60,000 towards your MBA in USA. What is the Return on your investment for $60,000 ? When will you be break-even? When will you make more money from the MBA degree?
Traditional Thinking of MBA and earning after MBA
If everything goes well and you get a job promotion and make $5,000 more every year then it takes 12 years for you to break-even. ( I am taking a very minimum hike scenario, in reality you may get more, but for discussion let’s look at worst case scenario as base case ) . Even if you get promotion even at the age of 45, still you will be break even financially. Let’s look at the best case scenario, imagine you get that promotion at age of 35, and then you are making $50,000 dollars on top of your investment. What I have explained above is just layman’s thinking of finances and how most of us looks at finances…This is probably not the right way to look at MBA. It is not just about making more money…
My perspective, what does MBA really give you?
After my personal experience of studying MBA courses, here is what I think about MBA. In MBA, you study about many concepts of Business that can be applied to personal life. MBA really gives you the ability to make better decisions financially and personally. Doing MBA online is the worst thing that you can ever do. In fact, you learn NOTHING and may only learn just bookish material. You should go to MBA classes and discuss with professor and fellow classmates. You learn from knowledge and business situations of other companies explained by your fellow classmates. Bringing their companies experiences to class. Classroom is a place for exchange of ideas. Online, you may read the articles and do discussions online.. but it is not the same….
Few things that I learnt in MBA
- How does Financial Markets work ? How can I invest ?
- How does Marketing work ? What makes a product good ? What makes a brand good ? How can I demand customer service ?
- How does Sales work ? How not be tricked by Sales people ?
- How does Economy work ? How to save or spend based on Macro economic conditions ? Where to invest in terms of Macro economic Crisis ?
- How to identify a trend and predict the future if I have a set of data ? How can I implement the data analysis concepts to real life ?
- How to create a Business Plan ? How to start a business ? How to create a Marketing Plan for business ? How to sell ? Everything about Entrepreneurship
- What is Strategy ? How to think Strategically ? Looking at 1 year from now or looking at 30 years from now ? What is best ? what is your strategy for personal life or career ?
I can keep on writing….The key point is, strategically thinking : two to three years of my life and $60,000 of investment is totally worth the time and money for MBA because, if I can make more educated decisions by using logic and knowledge for the next 30 years of my life, I will get at least 20 times more than I invested in my education. Just imagine, if I can invest my savings money 2% better with the knowledge I gained, I make a lot more… Also, imagine I can save and buy better products in the next 30 years, I am saving a lot too. The first case is making profit, the second case is cutting loss by not choosing bad products, both of these are adding value… Some may argue, you do not need MBA to get all these, you can study and learn all these. Come on guys…tell me, How many of you will take time to study all these with dedication, unless you have tremendous self-discipline ?
My view of MBA and investment on MBA :
You are investing in yourself to make educated decisions in future based on logic and knowledge. MBA is not just for getting a better job or making more money. You cannot really measure the value of all your decisions by just money. It is more than money ! If you are passionate and want to learn and grow, I personally think MBA is a something right to consider… You may make a ton of money, you may be intrigued to open a company and you may succeed in making millions, you may be failure as an entrepreneur,….or you may not make an extra dime in job or business, but still you know how to manage your finances and other things at hand with more knowledge and logic…
Image Credits : http://www.flickr.com/photos/markhillary/3593836225/