Thursday, August 28, 2008

And I am a MBA ! ! !

"The taste of the pudding is in eating" - only if every pudding could be tasted and rejected based on the report.
I was sold the MBA dream. Even now I am still not out of that dream. Now, I must confess that whosoever sold that dream to me (unfortunately I can't remember exactly the face) must by now have become some Sales head. Otherwise (s)he is not being utilized properly.

Just a few minutes back I was brushing through a journal when an advertisement popped up. It detailed about a hotel (not even 5 star !). I found it as distant it was 3 years back as now. I am not sure what god damn degree I have hooked on to.

I am still planning to have a good vacation at some place in India (Foreign vacation is as distant as the shore) - to my horror I realized I am woefully out of cash to sponsor it beyond 2 days ! Not sure if anything has improved after 2 years of slogging.

A few days back, I was just wondering about the total cost of this degree. If we include opportunity cost (as is customary for any business plan) for the years spent inside campus, it would come close to 12 lacs without even considering fringe benefits.

By now readers and all MBA aspirants should have started cursing me. The idea is not to demonize the dream, but just to ruffle a few feathers here and there. Now when I look back at such decisions I amaze at my consuming capability !

I was just curiously listing down the couldn't things post MBA, and believe me it became scary -
  • I can't work as a techie
  • I can't think of a pressure less life any more
  • I can't accept any job offer that comes my way (see I have a brand to sell)
  • I still can't afford to stay in Taj or in an exotic resort
  • I am still not a frequent flyer in any of the airlines
  • And god damn it, even now, I have to think twice to sponsor myself for a flight to see my parents !

I was just calculating the benefits of doing MBA !
But to be fare, I had got a wonderful campus life, some wonderful friends and some enchanting views about life.
Alas ! all these are intangibles and as our dear prof used to say - "only cash in hand is the proof of liquidity".
Am I still so illiquid in the market as I was 3 years before?
Only if the taste of the pudding could be done earlier.

14 Comments:

At 2:47 PM , Blogger SRK said...

Disagree! Strongly!

but what's a discussion without facts... so here goes...

Cost of MBA course: 4,00,000
Opportunity Cost: 8,00,000 assuming your salary as an engg is 4 lacs p.a.
So, total cost = 12 lacs

now, an MBA earns atleast 25K a mth more than an engg at the same age... correct me if i am wrong... in my case, i make atleast 30-35K pm more than a usual B.Com guy...

so, net-net, u make atleast 2.5 lacs on a "take home" basis p.a. more than an engg...

which, at a 10% discount rate means u recover ur invst by the 8th year... and u hv a career which is 25 yrs long... more than makes up, purely on numbers...

now, u might argue tht engg techies go onsite and this entire equation goes out of the argument... well, i'll say MBA grads go abroad and make 10 times as much too...

so, compare an avg engg wid an avg MBA and do the math...

let's not even get into the intangible benefits of the ability to faff around on any topic w/o knowing an iota of it...

 
At 2:59 PM , Blogger Stambhit said...

@ SRK...
As expected out of a Finance person, that too MBA.

Let's use facts to dissuade facts -
I am discounting a B.Com or B.Sc degree (only because in India it is very hard to find a job after such a degree, but no offense to these people, and I have always believed that engineers are the most pampered people in this population infested country) and counting on my record as a sample, which, mind you, is lower than average record.

Counting my salary when I left and when I joined back to industry, my friends got 2 hikes. And at present most of them earn around 8 lakhs p.a. FYI, those who have changed jobs earn more than this.
So the calculation of 2.5 lakhs more CTC does not arise.

At my calculation, it is hardly 25-50K more per year.

However, for the freshers, its always a win win situation as their base is always 0 when they enter into MBA.

However, the reason behind this was not to dissuade people from going for MBA but just to divert my attention from those glittering advertisements which continue to bother me. [:)]

 
At 3:10 PM , Blogger SRK said...

Stam...

For starters, tell me how many engineers earn 8 lpa? and what is the likelihood tht they will experience 20% hikes in pay year after year? Compare tht wid how many MBAs make 10-12 lpa and are likely to get hikes/promotions etc... i maintain tht thr is a glass ceiling based on edu qualification...

2. the problem wid ur comparison is tht u r comparing a top cadre engg grad wid a not so top b-school grad... not u personally, mind u... the level of a college in general... but if u were to take IIT enggs, take IIM cream to compare...

3. the test of viability is in the mediocrity... i can look at Sachin/Dhoni and SRK/Amir and say being a cricketer/actor pays much more than any MBA can dream to make? compare a mediocre MBA wid a mediocre cricketer/actor... compare an avg engg wid an avg MBA..

i wud still say thr advantage is more to the tune of 2-3 lacs pa...

 
At 3:26 PM , Blogger Stambhit said...

@ SRK..

Agreed.. But the problem in comparison (as said by famous Tagore) is that, the focus always shifts back to oneself. [:)].

However, as is the case, I am yet to be a millionaire.. So in MBA terms, I am not so top grade.. Hahaha..

 
At 4:36 PM , Blogger spiderman! said...

I will agree on the spirit of the post. MBA is 'supposedly' a long term investment. Only time will tell whether it has added value to us or not.

As far as consumption and spending is concerned, even if you were to earn exactly double of what you are right now, you will still be thinking twice about taking a flight home. Spending is ALSO about attitude and not just income.

 
At 4:57 PM , Blogger R. Anand said...

#stam: i fully endorse your post.

#srk: you have not been thru the engg grind and the utopia called software MNC... the actual opportunity cost if i were to calculate would be a lot.. if i were to take a case where me and my friend joined the same co and i branched out to the mba, the costs are too heavy - my friend earns significantly more than i do, has saved much more from his onsite visits, got his periodic hikes and longevity rewards from the company and also has intangibles like titles of "a dependable guy", "a 5 yr expert on the product" and "a loyal guy" not to mention that he is also happily married and enjoying his life with a car house and everything under the sun...

me on the other hand am still not over the costs of the mba, but have to keep up my lifestyle of the mba - not becos i have to show off, but it is becos i have come to expect that of myself.

forget that, i am still trying to get over wot i missed in those 2 yrs... but i have also gained a lot during the 2yrs - which i wud say (not to hurt anyone) has been the cause of all misery...

long live mbas

#hirok: basically we are impatient... i cant wait long term for my investments to bear fruit... i want it and i want it now... and with 21 dec 2012 not very far off, i wanna enjoy every moment without cursing my past...

 
At 2:41 PM , Blogger SRK said...

@ monk, spidey:
Citing examples of one friend, 2-3 companies is not going to help... it is anecdotal evidence and doesn't stand scientific scrutiny... the kind tht is expected from enggs like u...

state facts... take top 15 engg colleges in India... find avg salaries...

take top 15 b-schools... find avg salaries...

then talk...

 
At 2:41 PM , Blogger Stambhit said...

@ R Anand...

Red Letter day !! Rarest of rare occasion where someone has agreed with my view points..

But wots there on 21st Dec 2012 ???

 
At 4:06 PM , Blogger R. Anand said...

@srk: these are things that are way beyond numbers... you should look at it from similar kinds of situations and opportunities...

going by numbers - how many engg grads pass out every yr and how many mbas do that? in my engg we had a batch of 800, which i believe expanded to 1000 or so b4 we left... and how many did we have in mba...

by that example of my friend, it is more like the hindi movies "identical twins get separated and one becomes a thief and other a police" kinda example... we both had equal opportunities and all that and we branched off... presently he is richer than me... and u being a financial student must know that money in hand today is better than slightly more money after a few years...

if u take my conservative opportunity cost of say 10lacs, assuming my friend has saved (invested) 50% of it, he wud still be richer than me, even tho i can practically invest say the whole 10 lacs after nearly 5-6 yrs after he has...


@stam: http://www.viewzone.com/endtime.html

 
At 5:14 PM , Blogger SRK said...

@ monk:

"these are things that are way beyond numbers... you should look at it from similar kinds of situations and opportunities..."

and measure it in terms of what? plus, Stam's blog spoke of being able to afford Taj hotels and vacation to home... so i started off on numbers...

"going by numbers - how many engg grads pass out every yr and how many mbas do that? in my engg we had a batch of 800, which i believe expanded to 1000 or so b4 we left... and how many did we have in mba... "

precisely my point... not every engg can become an MBA... only a privileged few can...

"by that example of my friend, it is more like the hindi movies "identical twins get separated and one becomes a thief and other a police" kinda example... we both had equal opportunities and all that and we branched off... presently he is richer than me... and u being a financial student must know that money in hand today is better than slightly more money after a few years..."

one friend doesn't make a trend... re-read comment about anecdotal evidence... i will say one commerce grad friend became a stock broker and makes crores... doesn't make every commerce or engg grad rich... repeat: the test is in the mediocrity...

"if u take my conservative opportunity cost of say 10lacs, assuming my friend has saved (invested) 50% of it, he wud still be richer than me, even tho i can practically invest say the whole 10lacs after nearly 5-6 yrs after he has..."

ur friend saves 50%???? good for him... if u saved 50% of ur take home, it'll be more than what quite a few engineers actually make...

 
At 12:07 AM , Blogger sumesh said...

Stam, Somehow, cant agree with you. If you go strictly by numbers, even President Of India makes less than software engg at onsite and much much lower after term in office !
You may argue about intangibles (beyond the perks) which if monetised can tilt balance in President's favor.
The same is precisely the point SRK is making.

SRK, very crisp objective comparison. Agree with you entirely, even though I belong to the club who has incurred a lot of "opportunity-cost". One can arrive at any convenient conclusion using anecdotal evidence.

 
At 3:38 PM , Blogger liveyourdreams said...

@Stam,
Its nice of you to bring up this topic. Now I know I am not the only one suffering in post mba penury, that too after fulfilling my foreign salary dream.

@SRK,
As an individual, I (or we) are not interested in "averages". We must always consider our own opportunity costs of doing the MBA vis-a-vis the related benefits. Averages and Analysis etc are for studying population trends, whereas most of us who did MBA from decent B-schools are OUTLIERS. So, even though you are right statistically, Stam's and Anand's point is more valid in this particular case.

For me personally, the greatest benefit of doing an MBA has been 2 additional years of college life and opportunity to know some great people.

 
At 4:19 PM , Blogger SRK said...

whoa... jus when I thot this topic had died down... here comes my old groupie...

and to debate against a group consisting of Stam, Monk, Hirok and PD... tough to win... but I'll try...

Averages matter because they help you make a decision... the reason why I chose MBA, over say continuing my ICWA, is that, on an average I have higher chances of making it big thru an MBA... now, one can argue that there are Cost Accountants who make more money practising as Excise Consultants and so on, but then the success rate is is lesser...

I rest my case...

 
At 1:27 PM , Blogger Tanmay said...

abe salo jhagda kyu kar rahe ho.....chup baitho

 

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