Discover the Potential Value of an MBA Degree

An MBA degree will undoubtedly equip you with the necessary business acumen to succeed. While a substantial investment, an MBA may also pave the way for increased earning potential over the life of your career. Consider the costs of a program carefully. In the end you will most likely find that the benefits of an MBA degree clearly outweigh the initial investment.

by Jami J. Rodgers
jami.rodgers@MBA-Business-Schools.com
MBA-Business-Schools.com Columnist

The Financial Benefits of an MBA Degree

An MBA degree can significantly enhance your earning potential. According to The Graduate Management Admission Council (GMAC), average salaries for MBA students prior to beginning an MBA degree program were $50,000 in 2002. After completing their MBA degrees, graduates were expected to earn $75,000, exclusive of signing bonuses and other compensation. In an average completion time of two years for MBA programs, the average MBA student increased his average annual income by approximately 30 percent.

The Earning Gap: MBA Degrees Keep You on the Upper Edge

According to statistical analysis conducted between 1995 and 2003, the annual salary growth potential for MBA and other professional degree holders averages more than two percent above inflation rates. In contrast, the annual salary growth potential for those with undergraduate degrees alone averaged one percent or less above inflation. As you can see, this one percent advantage over non-MBA degree holders can add up to a significant amount over the course of your career. The increased earning potential clearly offsets any costs of initially obtaining your MBA degree.

An MBA Degree: Is it worth it?

In conducting your own return on investment analysis, be sure to consider the opportunity costs at stake. If you choose a full-time MBA program over a part-time one, factor in any lost wages that you will forgo in pursuit of your MBA degree. In general, pursuing an MBA degree can increase your earnings over time. The Association to Advance Collegiate Schools of Business (AACB) reports that at the peak of most MBA degree holders’ careers, average salaries are around $120,000 per annum in 2003 dollars. Once you have considered the potential value of your MBA degree and its possible pay off over the long term, you should be able to rest assured that you have made a wise investment in your future.

Sources

Graduate Management Admissions Council
The Association to Advance Collegiate Schools of Business
Cline, Thomas W., and Davies, Antony. 2005. ROI on the MBA. BizEd January/February. (PDF)

About the Author

Jami J. Rodgers—who is currently pursuing MBA school admission— works in acquisition management for the federal sector in Washington, D.C Jami holds a B.S. in Spanish with a business option and an international studies minor from The Pennsylvania State University.

Posted on February 7, 2007 at 2:03 PM

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