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MBA Diary

My $125,000 MBA investment: Was it worth it? Add to ...

Aubrey Chapnick is an MBA graduate with a focus on finance and strategy from the University of British Columbia’s Sauder School of Business in Vancouver. He previously worked as a consultant at the global leadership development firm Lee Hecht Harrison Knightsbridge and has experience in business development, sales and project management. He also worked this past summer as a capital markets rotational intern, focused in mining investment banking and Canadian consumer products/retail equity research. This is his sixth and final entry for MBA Diary.

Now that it’s over, it’s time to reflect – 16 months, a gruelling workload and lots of cool experiences. I’m sad the MBA is over.

With degree in hand, I’ve been asking myself the big question: “Was the MBA worth it?” To answer this and shed some light on my experiences for prospective and current students, I want to walk through three core aspects of my degree: the numbers, the experiences and the risks.

The numbers

Since August of 2015, when I left my most recent job to move to Vancouver to attend Sauder, my MBA investment has been approximately $125,000. This includes the opportunity cost of forgone after-tax income from my previous job, tuition, living expenses, books, entertainment, travel and so on. The MBA was a big financial investment.

With all investments comes an expected return. After completing the degree and securing a position at one of North America’s fastest growing tech companies back home in Toronto, I’m happy to report that my pretax income has increased more than 50 per cent, and I’ve moved into a positon of much greater responsibility than the one I had before entering the program.

Based on a range of scenarios with respect to the amount that I plan to save year-over-year to pay off the degree, my assumed payback period works out to be around 10 to 12 years. (For the sake of simplicity, I’ve assumed a fixed rate of saving that does not take salary increases, life events and promotions into account and, as such, the true payback period could be much shorter.) Over all, the MBA certainly provided me with a nice jump in salary and enhanced job scope, but at this point, the true payback period is difficult to approximate with great precision.

The experiences

I am of the belief that no business decision can be seen in purely financial terms, even an MBA.

In addition to getting a good education, I got to do some pretty cool things while at school. Some of these experiences included: working in investment banking and equity research during my summer internship, traveling to Japan to consult for a multibillion-dollar beverage company, participating in a week-long exchange at Yale School of Management to study behavioural economics and marketing, working as a teaching assistant and facilitating a class for other masters-level business students.

Most importantly, however, I got to meet some incredible people that I would have never been able to otherwise. Each of them challenged me and enabled me to grow from a professional and personal perspective. Looking back on it all, there is no question that they were the ones who made my experience so great and I’m very thankful to have met them.

The risks

Although what I’ve mentioned all sounds great, it would be imprudent to forget that going down the MBA path does not come without risks.

Firstly, as market forces are changing, the value of the degree is also changing. Given how many people are setting off to go to business school, coupled with those who already have their MBA, the pure differentiation factor that the degree used to bring is, in my opinion, fading. There is still lots of value to be gained from getting an MBA, but holders of the degree will need to become more creative about how to leverage the skills they gained and sell themselves to employers.

Alternatively, if you are looking to leverage the degree to change careers, you need to be mindful that this will still be difficult even with an MBA. It is possible to successfully pivot but the road will be hard and expectations need to be managed.

Networking is the most important thing for finding a good job after school, especially for career changers. Most programs have career support services but they by no means hand a job to you.

Secondly, many prospective MBAs whom I’ve spoken with feel the degree will help them get rich overnight. If this sounds like you, I implore you to take a step back and think about what you are hoping to gain from the degree. Earning an MBA is about pushing yourself, learning, making connections and deep personal and professional development. There can certainly be large financial returns in the long term but it’s important to set realistic salary expectations upon graduation given your level of experience and postdegree industry.

Lastly, enrolling in an MBA can carry difficult personal impacts. The program takes a reasonable amount of time to complete, which carries life and financial opportunity costs, and it can be very stressful and may consume all of your attention. As such, you may lose touch with friends from back home if you go out of town and, if you stay local, you may feel torn between school-related activities, new friends and the old life you led before getting into the program. A number of my classmates and I went through this and it was quite hard at first. These are all important things to consider.

Closing thoughts

In retrospect, I’m glad I made the choice to go back to school. While my MBA experience was by no means perfect, it provided me with a lot of great knowledge, experiences and close, new friends.

Choosing to enroll in an MBA, however, is a complex decision that requires a lot of upfront work. For all those considering the degree, put in the effort to see if it is the right move for you given your respective career and life stage.

For all those who are now enrolled, enjoy the journey as much as you can. It goes by way too fast, and chances are you may not find yourself doing another postgraduate degree.

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