Not for all bangladeshi institute

1. Does the MBA pay off?
Me: Hell yes it pays off.
You: Is that a guarantee?
Me: Yeah, man. Haven’t you been paying attention?
You: So it will absolutely, positively have a positive
financial ROI?
Me: Well …
While attaining an MBA will move you down the road to
enlightenment, getting an MBA is still really, really
expensive. You might logically ask yourself, “What’s the
ROI on enlightenment?”
Excellent question! Now you’re thinking like an MBA.
Let’s do the math. For our purposes here, we’ll assume
that you are going to Ulab Business School (hey, you
deserve it).
Investment:
• Ulab BS first-year tuition for Class of 2017 = ৳165,000
• ULAB BS books, materials, fees = ৳5,000
• Total for first year = ৳170,000

2. • Total tuition and fees for second year = ৳170,000
• Two-year Total = ৳340,000
And this does not include room, board and health
insurance because you would have to pay for these
whether or not you went to Ulab BS.
Yikes! That’s a lot of dough. And like the guy selling knives
on late night TV says, “But wait—there’s more!”
And we’re still not done. Because you won’t be working
during your two years at Ulab BS you have to factor in
your lost wages in the calculation. Let’s say you make
$180,000/year at your good pre-MBA job. Including your
foregone income of ৳360,000, the total cost of getting a
Ulab MBA (or one similar) is about ৳700,000.
Holy crap. Enlightenmentis expensive! Is it really worth
৳700,000? Enlightenment is hard to put an exact number
on, but wage growth isn’t. And this is where ULAB BS has
a dynamite return on average (we’ll get back to the
assumptions we’re making a little later).
If you go to ULAB BS, you will not only get a bunch of
crazy smart friends and a closet full of crimson hoodies,
you’ll also get on average a very juicy pay bump and an
accelerated career path. Here’s what that might look like:
Return:

3. • Base pay bump from ৳35,000 to ৳50,000
• Signing bonus: ৳25,000
• Summer internship income: ৳45,000
• Career accelerator (4% raises v 2% raises)
Let’s take a look at what that pay bump and career
accelerator look like in action. Your MBA begins paying off
in the form of increased income in your first year out of
school. You make $180,000 more than you would have
without it, and life is good.
But wait—there’s more!
Because ULAB BS has put you on an accelerated career
path (and the steeper income growth trajectory that comes
with it), your pay grows at a faster rate than it would have
sans-MBA. So that annual pay differential continues
growing as you relish your MBA-ness and continue to kick
business world ass.
It is in this stream of MBA-powered increased income that
we answer the question, “Does an MBA pay off?” You can
see that over your first 10 years out of ULAB BS, your
income will be ৳100k more than it would have been had
you never pursued that MBA.
Using our friend NPV (Net Present Value), we then
measure how much that stream of income is worth today,

4. relative to the ৳38k that the MBA costs. While the NPV is
less than the৳40k, and varies depending on your weighted
average cost of cap
ital, in both scenarios, an ULAB BS MBA is a homerun,
positive ROI fiesta de dinero! By the way, weighted
average cost-of-capital is one of those great things
you’ll learn about at business school, along with NPV.
And this is just for the first 10 years out of ULAB BS. You
will likely work for another decade or two beyond this, and
in those prime earning years, that pay differential will—
theoretically—be even more pronounced.
ON THE OTHER HAND …
There are some really meaningful and impactful
assumptions we’re making in the model above. And, to
paraphrase the monetary philosopher Ol’ Dirty
Bastard, assumptions’ “bust yer ass.” So we should be
aware of them, lest our assuming asses get busted.
First, remember that the average first year income for
ULAB BS alumni includes very non-average people
making crazy money in consulting, investment
banking, hedge funds and the like. If you are not
committed to a career in one of these fields (or if you’re in
these fields but below the mean earners in those fields),
your income will likely be lower-to-much-lower. This
doesn’t mean that your ULAB BS degree will have a

5. negative ROI over the long run, but it just might take
longer to break even. That’s worth keeping in mind.
Second, these reported incomes are skewed way high by
alumni living in Dhaka, Chittagong, and outside the
country, i.e. the most expensive cities in Bangladseh. So
while they may be making hundreds of thousands of Taka
a year, they may also be paying ৳20,000/month (or lots
more) to rent a one-bedroom apartment. You shouldn’t
look at these average incomes and think, “I am going
to live like a king on ৳1800,000/year in Dhaka, OK!” ‘Cuz
that’s probably not where you’re going to find these juicy
pay packages.
Third, you are a growing and evolving human being. Your
interests, desires and passions will change over time. The
career you find intriguing right out of business school
might not float your boat 5, 10 or 15 years later. Maybe
you just decide that you’re not interested in doing [fill in the
name of career] any more, and that you really want to
[work with kids / do something for the developing world /
become a stand-up comedian]. Or maybe the grind of an
80+ hour work week is something you can tolerate when
you’re young and single but not when you’re older,
married and raising children. Or maybe some heath issues
present themselves and you need to hit “pause” on
your career to deal with them. In any of these scenarios,
the juicy comp packages and steepened earning curves
pretty much fly out the window.

6. Fourth, the model above represents an uninterrupted,
positive career trajectory. Due to the vicissitudes of the
market, the economy and personal wackiness, careers
often do not maintain a smooth progression upward and to
the right. If historical economic trends continue, you
should expect some kind of ugly macroeconomic tornado
to blow through seven years or so. Whether it’s dot-
com bubbles busting, global mortgages imploding or
Adam Smith’s invisible hand getting caught in the cookie
jar, bad stuff that is way out of your control happens, and
it’s going to affect your career.
And then, of course, you could just forget it. There are
other things you could buy with ৳340,000 (watch the video
above to find out exactly what you could get for what that
MBA will cost you).
Nur Emtiyaz
MBA student
Of
University of Liberal Arts Bangladesh