What to Consider When Thinking About the ROI of an MBA

ROI of an MBAAn MBA at a top-ranked business school doesn’t come cheap. If you’re thinking about the ROI of an MBA, ask yourself these three questions. Will an MBA help if you plan to change careers? Do you expect to receive a large salary boost with the degree? Can an MBA accelerate your path to a leadership position?

Paying $100K+ to earn an MBA sounds painful, but most business school graduates experience a substantial salary increase. Plus,the majority report having greater job satisfaction and the ability to advance quickly and, thus, earn more in shorter time.

But First…Why Go for an MBA?

Ask yourself what you plan to do after your MBA. If you know what your long-term goal is, that’s a great way to start. What do you need to know to accomplish that goal? How does your resume need to look? What skills do you need to build? And who do you need to know? Think about the aspects of that future that will be developed through your MBA and your short-term post MBA career.

How to Calculate Return on Investment

Students of two-year MBA programs have the largest investment expense because they miss two years of employment. They need to recoup the cost of the MBA degree plus the opportunity cost to get a positive return on their investment.

Prospective students should consider payback time with projected cumulative growth, and average growth rate, when looking at return on investment as a motivating factor for pursuing an MBA.

Top MBA has an easy formula you can use to sketch out your ROI post-MBA, and 10 years down the line. But keep in mind, the value of the MBA degree varies depending on your post-graduation plans. The brand of the business school where you earn the degree is also a factor.

“Transformation” is a Key Component of the ROI of an MBA

When it comes to deciding whether business school makes sense for you, remember that the choices you make – ranging from the cost of the city you decide to live in, the field you move into, the school you choose – will all impact your financial return on investment.

Your personal return on investment, however, is something quite different. Transitioning into a lower-paying but more rewarding job may be well worth it. You can’t measure that kind of personal satisfaction in dollars and cents.

““It is a transformative experience that enables an engineer to become a financier, a high school teacher to become a marketing executive, or an auditor to become a mergers and acquisition specialist for a top corporation,” Paul Danos, former dean of Dartmouth’s Tuck School of Business, once said. “I know of no other educational experience that can match the total value proposition of a 2-year full time MBA.”

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