Models & Bottle Sourcing

Something I’ve been thinking on (others too) is how much to save up for my hopefully upcoming adventures in business school.  While the cost of MBA programs continues to rise, alarmists journalists keep debating whether the trip back to school is even worth it.  I think if you’re reading my blog, you’re probably on my side of the fence – the side that believes that the degree is absolutely worth the cost.  Today’s post is part I of II (?) focusing on a number of money issues.

As you know from previous posts, I’m looking to go to a top 15ish program, and while spending my days waiting for essays and applications to be released I have, among other things, been scouring the school websites for any bits of data I can find.  While it’s probably overkill, I’ve created a nifty spreadsheet I’ve been keeping with all my findings – hopefully this will not be a complete waste of time.  After all, everyone knows models precede bottles.  As you can see below, I went a bit overboard with the heatmapping, but it helps me visually see what is happening – I can’t be bothered with reading actual numbers, I just need simple colors to tell me what is happening.

Beyond the lsd-esque-mind-bending-array-of-colors, I’ve created tabs for the schools I’m interested in, as well as some others tracking just in case my list changes, as I expect it might.  These individual pages focus  on a couple of things.  I have pretty much every deadline the school publishes, salary numbers, class profile numbers, tuition numbers, top industries students come from as well as go into, top teaching methods, top employers, any writeups about culture/interviews with admissions personnel, and finally any notes that I have for that school.  Again, probably way more data than anyone needs, but I think having it all in the same place should could pay dividends (get it? ha ha).

One of the data points I’ve been tracking is cost.  Cost in terms of tuition, as well as the estimate cost of attendance.  In terms of the tuition costs, they seem to be ever rising, causing the average amount of debt for bschool graduates to top six figures.  according to the WSJ and GMAC, debt has risen from $81,758 in 2010, and $55,594 in 2007. There doesn’t seem to be any end in sight to that, so there really isn’t much to say about it – start saving early kiddos.

The other area I’ve been trying to keep tabs on is the projected cost of attendance.  This number is widely reported among top business schools, and per my slightly aged 2011 data, ranges from $127,144 to $168,000 (McCombs and Wharton, in case you were wondering).  This number is important because, aside from the fact that you’ll be paying this much at least, the COA is used to calculate your maximum Financial Aid eligibility.  I tend to think those numbers are quite low, for a couple of reasons.  First, when you break down the numbers (or cheat and go to a school’s website like Fuqua’s that already has them listed out – good job Fuqua*), you see that the numbers tend to be very optimistic.  Second, the numbers speak volumes in what they don’t include.

Sticking with Fuqua, since I imagine most of you will be like me take the easy way out and base your numbers on their already detailed analysis, you’ll see some particularly egregious offenses.  Housing for first year only costing $7,632?  That is $636/month. I imagine most MBA students wouldn’t be happy living in an apartment for $636/month, if they could even find one.  $4,482/year for food equates to just over $12/day – again possible but not plausible:  I just don’t see many students having that kind of discipline, especially those coming in from lifestyles already acustomed to a lifestyle with a 6-figure paycheck attached.  Aside from the stated costs, the most obvious error is the lack of line items.  There is no fee for the requisite laptop purchase, club activities, recruiting trips, interview trips, and no fee for the less-than-requisite cell smart phone, wardrobe upgrades, costume parties, spring break trips, dinners, nights at the bar, and other shenanigans.

*Some notes before we move on:  The point isn’t to pick on Fuqua – I don’t mean to slander their program at all. If you recall, they’re’ definitely on my application list. They were actually one of the most helpful in getting me started by breaking out their costs in the most detailed manner. I give them credit for that.  Also, keep in mind that Fuqua is in Raleigh – a lower cost of living area than say Stern, located in the Village.  Take the absolute numbers with a grain of salt;  your mileage may vary.   Finally, you may be saying to yourself “but hamm0, i just won’t do all those things.  I’ll live in on ramen, leftover food from presentations, and never go out”.  Sure – that is an option.  I agree that you should be as frugal as you feel comfortable with, but remember that the MBA is an experience.  It is worth it to enjoy yourself every once in a while, lest the pressure overwhelm you.

Next post, I’ll delve more into things I don’t have data on – namely how much should I be saving?

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10 responses to “Models & Bottle Sourcing

  1. Hey Hamm0, great post! I too made a comprehensive spreadsheet when I was applying to bschool, but it didn’t have the glorious heatmapping yours does. I just wanted to mention that you should divide certain Cost of Attendance totals (e.g. housing, food) by 9 months, as many schools assume students will be off doing internships in the summer.

    • Thanks NY. I’d be interested to see how our models differed, as I think I’ve started to hit the wall with mine.

      As for the 12mo vs 9mo thing, I’ve thought about it, but there are a few items like housing that i can see paying for the entire period..that said, internships will definitely generate some positive cash flow. Its all how you want to account for things, I guess. Thanks for reading!

  2. Mmmmm, heat maps (homer Simpson voice).

    And for all the worth it/not worth it stuff: try putting a dollar value on an MBA that helps someone attain a new desired career, or get more satisfaction out of their life!

    • I 100% agree. Some of the financials are quantifiable, but other parts of the equation have highly different values for each an every person.

      How is the GMAT prep coming?

    • Unfortunately WordPress limits the size in my current theme. You should be able to right click/view image to get a readable version.

      Let me know if that isn’t working for you and I’ll try to find a better solution.

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