Chaosplay

Last night, I had a good conversation with my old friend. He is considering going to business school for MBA. He already has masters in Electrical Engineering.

On other hand, I wanted to do MBA last year but then I figured best business education would be to run your own business. Hence, I decided quit corporate world to start my own business.

While we can argue forever about which method is better, I did some simple cost analysis to see which method is more expensive for business education.

Part-time MBA from a recognized school:

• Cost ranges between $50,000 – $80,000 for whole program. Let’s take average of $65,000.
• Part-time MBA can take 4 years, as my friend plans to do.
• Per year cost is approximately $16,000.
• Average salary for Electrical Engineer or Programmer with benefits is $90,000.
• In 4 years, you will earn $360,000
• Minus MBA cost, $295,000

Business Education via Business:

• Cost in terms of lost wages: $90,000 per year
• Cost in terms of using savings for business: $12,000 per year (Just a guess, it’s probably higher).
• Possible income in first 4 years: $40,000 per year (40K is my goal or benchmark to keep going. Hopefully, it is higher).
• 90000+12000 => 102,000 x 4 => 408,000 – 160,000 => $248,000
• Cost of business education via business: $248,000

Wow that’s one expensive MBA.

Of course, above scenario if I fail and return to the corporate world. Also I am hoping in above scenario that my business experience would be recognized as good as having an MBA. If I try to get an MBA after I return to the work force, it will cost me even more.

Then on the bright side, if I succeed in my business then rewards will be big enough to make it worth. God Willing!