If considering boosting your career or your business through an MBA, you will want to know what the return on your investment might be, as well as the timeframe in which you’ll recover your initial monetary contribution.
The tuition fee you pay will depend on where you are planning on studying and often, but not always, where you live. Prices will differ for an MBA, based on the school you’ll be studying at but also the country and city the campus is based in. For example, studying a 1-year MBA at the Hult International Business School in London will set you back $60,000 in tuition costs. Top universities in different countries will have different tuition fees, ranging from £53,000 to over £170,000 for the most expensive ones. However, it’s good to keep in mind that and MBA continues to be a reliable magnifier of salary potential.
Besides tuition fees, you’re also looking at the cost of living for a year without a salary if you you’ll be studying full-time. Most of the best business schools tend to be located in cities with important global business links. Living costs are, therefore, higher. In London, you can expect to need around £13,000 for accommodation and £8,000 for spending money. The Hult Business School also advises students to have another £980 for insurance, £400 for library costs and £1000 for extra course costs.
You also need to consider the cost of funding your course. If you’re lucky, then you have saved up the cost of your tuition fees already or have an employer or relative who is willing to support you financially. Otherwise, you will need to borrow the money from a financial institution. Most business schools look for talented students regardless of their ability to cover the costs by themselves, so check to see what scholarships and bursaries are available when you apply.
Most people take an MBA in a single year, but there are part-time options, especially Executive MBAs which are aimed at those already working. If you plan to study full-time, then you will be taking a year out of your career. Moreover, even with part-time study, you will be taking some attention and effort away from your work to put it into study. This is a non-financial cost consideration as is the emotional cost of moving to a new town or city. Studying full or part-time is a big commitment and you will have to miss out on other aspects of your life to concentrate on your studies. However, it bears extremely rewarding fruit.
Trying to financially quantify the connections you will make while studying and future career opportunities that these will open up is difficult. You’ll be creating bonds not only with visiting lecturers and contacts you meet while out on placements, but also fellow students and alumni as well. These will end up opening new doors, facilitating your career progression offer opportunities you may have otherwise not had.
Post-MBA salary expectations
What you’ll expect to be paid post MBA depends on the sector you end up going into after graduation. If you enter the Financial industry, then you can expect to earn a higher salary than those entering Marketing, for example. Average post-MBA salaries in the US are around $142,000 after 5 years, but again this is highly dependent on what you go into. Globally, a post-MBA salary of around $100,000 is what graduates from some of the best business schools can expect.
When will you recover the costs of the MBA?
Money-wise, it all depends on what you earn before your MBA, what you spent funding your MBA and your living expenses during your studies. Some calculations come in as taking around 4 years to payback an MBA and after 10 years a return on your investment of $210,000, generally you’ll need to adapt that to your own specific circumstances.
What you will get with an MBA is an opportunity to meet experienced professionals who can help and assist you in your career plans. You will also meet and become friends with people who will go on to be colleagues in the future. If you have a business idea, then you will also gain the entrepreneurial skills to develop and build your idea.