What is an MBA Worth?

This is purely and individual question. You can look at the pros and the cons as well as the personal and lifestyle factors, but one of the most important issues is the financial impact. That is, the cost and the return on investment (ROI) related to the MBA.

Costs of the MBA

What is an MBA worth? First you need to look at the costs. There are both "hard" and "soft" costs involved with pursuing an MBA. The soft costs include the many personal and lifestyle factors involved. Sometimes, these can be the biggest costs. However it is difficult to quantify soft costs.

There are two types of "hard" costs when it comes to the MBA. See the following explanation:

* Direct Costs - tuition, fees, books, and supplies (such as a laptop). These costs are derived by the school. That is, the costs are directly incurred as a result of the your MBA program. These costs are often the most visible too.

* Indirect Costs - travel, relocation, living expenses, and opportunity costs. These costs are incurred indirectly as a result of pursuing an MBA. These costs are not always as visible and make up "the rest of" the costs.

MBA Return on Investment

What is an MBA worth? You also have to look at the return on investment (ROI). ROI simply means that invested resources (such as MBA costs) should return an even greater amount of resources. Financially speaking, ROI should be considered in any investment decision.

There is really one "hard" return on investment involved with the MBA. See the following explanation:

* Greater Earning Potential - This is usually what MBA students are after in one form or another. A graduate degree will often prompt a promotion or enable you to move to a better job. While often expensive, an MBA degree can greatly increase the graduate's earning potential. The earning potential should be viewed in the long-term rather than the short-term (it is likely that you will be working for a long time).

There are "soft" returns on investment also. These may include greater prestige, enhanced knowledge, or even the sense of accomplishment. But because these are hard to quantify, I have not included them on the ROI list.

What is an MBA worth? Add up the costs and see what kind of future earnings it will bring. If this result is favorable, then the MBA may be worth it for you.

Christian LeCheminant is an advocate of the Master of Business Administration (MBA) degree. He holds an MBA from Southern Utah University (SUU). For more MBA information, visit http://www.mba-options.com