How I Saved $170,000 on an MBA and Increased My Salary by 50%

An MBA is a really expensive bet that more than a half million people place each year. Some people go with the top schools to increase their chances of a big payday. That strategy comes at a huge cost and as one who blogs about being frugal I wasn’t willing to take out a huge loan to complete a degree whose value is under ever-increasing scrutiny. What I was willing to do look for a school that offered a good education at a great value. This search led me abroad to Lisbon and even MIT.

I chose to attend The Lisbon MBA, ranked 40th when I applied and currently 80th.  The full-time MBA is a one-year program that includes an one-month expenses-paid trip to study at MIT. The month at MIT was incredible and I’m jealous of the students who get to spend two years there, but everything comes at a cost. There are many positive things I could say about my program, but like gambling it is the experience and outcome that really matter. I will simply say it has been a great experience doing the program with fewer than forty classmates from all over the world while living in one of Europe’s hottest tourist destinations.

Why?

I wanted to study business in college, but being in the Bay Area I saw that many leaders were engineers and figured it would be better to do that first. My career led me to data analysis and it is the field I would like to stay in. After a few years, I thought doing an MBA would be a good time to get a new experience and move up in my career and salary. However, I really do love learning and have always been learning a language, data skill, or personal finance even out of school.

Challenges

Since the program is only one year, I had to prepare prior to the start of the program. Not only did I need to gather documents to get a visa, but I also applied to dozens of summer internships in America. I applied only to ones in which I would be working with data and was lucky enough to spend the summer at a tech company. I noticed that almost all the other MBAs were from top schools, so there is certainly a well-trod path between elite schools and big companies.  However, there is a huge pool of talent as those schools have such a large class size. It was a fantastic summer and I have happily returned to the company. Could I have done the job without an MBA? Certainly. To be fair, I don’t know how much of my college education I’ve applied in my past work experience either. However, since this was an MBA internship, being enrolled in a program was the only path to take.

Savings

So how did I save so much money?  Let’s start with the tuition.  If I went to a top school, and that’s a big “if” because they don’t just let anyone in, it would cost around $140,000 in tuition.  The Lisbon MBA costs €36,000, with the strong dollar earlier last in the year I paid under $40,000, so I’m already a $100,000 ahead.

A one-year program is nine months shorter than a two-year program, so I was able to work four months longer than my American B-school counterparts and will start my job five months earlier. This means an extra $74,000 in income. My internship was two weeks shorter than a typical one, so they earned an additional $4,000 making the total difference $170,000. When adding the differences in cost of living and health insurance I’m sure the difference could top $200,000.

Conclusion

I am not recommending that people enroll in an affordable international MBA simply because it worked out for me. I recommend challenging conventional wisdom and looking for the options that work for you. If you are set on doing an MBA or masters programs there may be a program that doesn’t drown you in debt and caters to your needs. There was certainly luck involved in getting a job I’m happy with, but working with data is quite in demand. The year did at sometimes feel like a vacation, but it was an unforgettable experience.

3 comments

  1. Steveark says:

    I’m curious, do you know the real payout in terms of the money you lost while in school plus the cost of the school compared to the actual increased pay the MBA got you versus what losing a year of experience cost you? How many years will it take to pay out the MBA adding in all the costs associated with it? Heck you are the MBA, you know how to do an “all in” payout analysis better than me!

  2. Shawn @ NMI says:

    This was a really interesting post with some good information.

    This is certainly food for thought. I’ve thought about possibly going back to school for business, but I’ve just paid my student loans off a few years ago and school is so expensive. There’s no way I’d want to get back into debt worth over $100,000!

    The idea of studying abroad with new students in a cool place while getting an advanced degree for cheap(er) sounds awesome. It’s nice to know the option is out there if I’d like to pursue it.

    Thanks for the information! Keep up the good work!

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