Business School Sacrifices

With the day of reckoning moving continually closer (aka bschool acceptance announcements) I'm continually calculating and re-calculating the costs (both literal and metaphorical) of going back to business school right now.

So of course I made some charts.

Business School Cost According to an Average Salary

Assumptions:

• Assume starting business school third year out of school
• Average starting salary is $45K, and average raise is 5-10% per year (I assumed 10%)
• Average MBA cost is technically $40K/year, but I increased it to $52K because it seems like most of the top tier schools hover in that price range
• Income during school years is calculated by using the formula: income-tuition
• An average MBA makes between $76K and $90K, but I instead took stats from HBS, which cites that their average is about $108K (I'm assuming we're all smart folks and going to pretty good schools! Hey a girl can hope!)
• Ultimately, working will still allow you to make more money in the 6 year span (by almost $100K), so it's best for you to stay working if you're just worried about money

But what if you work as a consultant? Your base salary is higher, and the jump might be more significant once you come back to the workforce....

Business School Cost According to a Consulting Salary

Assumptions:

• Assume starting business school third year out of school in June (thus Year 3 only has half of normal salary)
• Average starting salary is $50K, and average raise is ~$10K a year (until you hit Senior Associate level, where you get a pretty good jump- I played it conservative here and said it wouldn't happen until year 6, where at my firm you usually hit this about year 4-5 depending on performance)
• Average MBA cost is technically $40K/year, but I increased it to $52K because it seems like most of the top tier schools hover in that price range
• Because going into consulting after receiving your MBA (average is ~$120K) will give you a higher salary than even HBS' stats ($108K), I chose to err on the higher side
• Income during school years is calculated by using the formula: income-tuition
• Unfortunately, working will still allow you to make more money in the 6 year span (by $164K), so it's best for you to stay working if you're just worried about money

So what did we learn?

• If you're worried about making money- DON'T QUIT YOUR DAY JOB (literally!)

BUT, I think that there are a couple key things to keep in mind that can't be quantified in terms of salary/year, etc.

• Relationships built during bschool- I know this is the number one selling point that schools try to engage people with, but honestly- what other time in your life will you be able to work in small groups with people who've owned their own companies, people who are about to start their own companies and people who've run companies- all at the same time?
• It's probably true that everything you learn in business school, you could probably (with some focus and will power) teach yourself out of a book. However, there is something to be said about being able to learn these concepts in a group environment
• The prestige- it's a stupid reason, granted. BUT, if there's one interview spot, and it's between two equal candidates but one went to Nothing University and the other person went to Stanford GSB, I think it's pretty easy to determine who gets the interview
• Opportunities- scholarships, research work, externships, study abroad case studies and fellowships. Unsurprisingly, the more prestigious schools have more of them (in value and frequency), less prestigious ones scramble
• Frequency of promotions, I find it hard to believe that the average MBA will be promoted at the same frequency with the same bonuses as a non-MBA candidate
• Out years- what happens past year 6? Does happiness increase? Do opportunities increase to move between industries/job roles? I have to believe yes