SubscribeI volunteered to create a quick summary document for my school’s International Programs department outlining what I’ve learned about Bocconi and the city during my time here and am sharing it here. Feel free to take a look if you’re interested: Bocconi Study Abroad.pdf
The awesome exchange crew - stolen from Steph
“… cuz in this moment I just feel so alive.”
So this is my “official” end. I’m leaving Barcelona tomorrow, which means that, as of this posting, I no longer have any set plans to see anyone else from the exchange crew again. Most people have already left Europe, and those that are still here are traveling around. There are a few people left in Milan, and I’ll probably hang out with them, but really, there’s no saying what’s going to happen.
So like I said, it’s the end.
I’ve had a blast. The people I met were incredibly fun and really cool people. Without them, this exchange would have probably been miserable, since I can’t say for sure that I would have survived Italy if not for their social support 
. Through all of the ups and downs of living in a new country, going to a new school, and essentially, starting a new life in only a few months, I never stopped having an amazing time. I’ve learned a lot about myself, about others, about life in general. If I could have this sort of experience for the rest of my life, I would never have a reason to complain.
As I start to transition back into the world of a second year MBA student at Stern, I can’t help but look back at the whole experience, and as I do, I know that I got everything that I set out to get from it. At the same time, I can’t help but wonder what it’ll be like when I get back. A whole new class of first years, meeting up with people I haven’t seen in more than half a year, reconnecting with the oGolf crew, worrying about post-graduation life. It will be close to starting all over again.
Before closing out this chapter, I have to give thanks to a small handful of people that made the most effort to connect with me – you truly made this exchange unforgettable (everyone should know that I had a blast with them, these guys were the ones that just ended up tolerating me the most ):
- Priji – I said it at Just Cavali and I’ll say it here. I’m unbelievably glad you were on this trip and that I met you. You were by far the most influential person on this trip for me, and, I’m guessing, for others as well. Always a good attitude, always upbeat and energetic, and always down to earth. Not many like you, stay just the way you are.
- JoJo – You rock. Plain and simple. One of the coolest chicks I’ve ever met – awesome attitude, always fun-loving, incredibly smart, ambitious, just all around super cool.
- Patelathon – Oh how I’ll miss the crazy sayings and exaggerated expressions. You are one chill dude. Loved hanging out with you.
- Shuperman – You made me think. And you made me remember that life isn’t only about just having fun. And you also taught me a lot. This exchange would have been a lot more dull without you. You’re a super smart guy in business and academics. No doubt in my mind that you’ll have an awesome career.
- Steph – Incredible attitude, incredibly social, and incredibly down to earth. Hanging out with you was a blast, you’re one of the warmest, most welcoming people I’ve met.
- Gus – Glad that our “Please don’t go, Gus” group worked . You’re a blast, man. Super glad you stuck around and that we got to travel together as much as we did. You made things so much fun. Stop being so sketch.
Best wishes and best of luck to everyone in the future. You know how to get in touch with me when you’re in NYC (the greatest city in the world!), you better do so.
Last year I wrote an article for my school’s newspaper on the tradeoff between getting an MBA and jumping straight into entrepreneurship. I didn’t want to post the article so close to when it was published in the paper, but it has been some time now, and I felt like it would be a good time to put it up. Below is the original text of my op ed for all my fellow entrepreneurially-minded colleagues.
Rapid Prototyping vs. Synergizing
Is An MBA Worth It For Entrepreneurs?
Shanif Dhanani – MBA1, Aspiring Entrepreneur
If you take a walk through the untamed jungle of a large, well-known business school, you’ll find many interesting species. You’ll undoubtedly come across the consultants. These students can be found in large numbers and in all areas, though they’ll frequently be grouped in pairs, practicing market sizing or calculating profit margins. You may also come across a large drove of students in black suits and shoes so shiny you may need to avert your eyes. These are the financiers, and can be easily identified by their discussions of yield curves and their love of circular arrangements. You’ll also encounter students engrossed in high-level discussions of segmentation, social media, and targeting. Feel free to say hello, they are the marketers, a very friendly bunch.
If you wander around long enough, you may come across a small group of students isolated in a corner, huddled over their computers in faded jeans and graphic tees, talking excitedly and gesturing wildly. If that’s the case, don’t be alarmed. You’ve just unearthed a group of rare business school students. These are the entrepreneurs.
If you observe this group long enough, you’ll quickly start to notice some oddities. Instead of trying to find a job for the summer, they’ll be figuring out how to raise “seed funding”. They don’t do mock interviews, they do pitches and prototypes. Their polished loafers are actually scuffed sneakers and their padfolios are all white and have a picture of an apple with a bite taken out of it. Who are these strange creatures, and why are they here? Believe me, they’ve all asked themselves that very same thing.
When people think of entrepreneurship, particularly technology entrepreneurship, images of pizza boxes, long lines of code, and Red Bull may come to mind. School and homework, though, are generally nowhere to be found. But for an entrepreneur, getting an MBA may make a world of difference.
Entrepreneurs, VCs, and others in the industry are generally split on whether or not an MBA makes sense for an aspiring entrepreneur. Everyone has their own opinions based on their own experiences. Nobody ever agrees, but that’s actually a good thing. Everyone’s situation is different and there will never be a precise formula for how to become a successful entrepreneur. Getting an MBA can be hugely beneficial for some, and a waste of time for others.
Going back to school for an MBA has a lot of upside. Without even considering the thriving social scene and great personal, getting an MBA provides an incredible network of valuable business contacts. Business schools have a myriad of talented people, all working in close proximity. This is extremely helpful for the budding entrepreneur who needs a couple of co-founders to help launch a new business idea, or advice from professors that have been successful in their own ventures. In addition, aspiring entrepreneurs can gain access to classmates from a variety of different backgrounds, knowledgeable mentors, lawyers, counselors, and venture capitalists. Contacts like these are crucial for making a business successful, and one could easily argue that the value gained from them alone makes it worthwhile.
Another benefit of the MBA lies in the formalized education and experience gained from attending business school. It’s always possible to learn about finance and marketing while working through issues on your own startup, but inherently, you’ll encounter a lot of setbacks and major obstacles. At school, you learn the best strategies and tactics for what works before you even bring anything to market.
On top of the formalized education process, business school provides aspiring entrepreneurs a low-risk, safe environment to try their hands at the entrepreneurial lifestyle. A lot of schools have business plan competitions and startup consulting programs, in addition to providing access to more intense programs like InSITE. With these resources, it’s much more feasible to plan a business or gain experience without having to risk all of your money. Business school also does a great job of taking entrepreneurs out of the “build it and they will come” mindset while providing them with a structured way of taking an idea from concept to implementation to sales to growth.
Ultimately, business school can do a lot of great things for the aspiring entrepreneur. But these things all come at a cost – a big cost. Time and money are precious, and going to school devours both. Getting an MBA is expensive and takes two years to complete. That’s more than $100,000 and a significant amount of time that could have been spent developing an innovative product or service and selling it to customers eager to shell out some cash. There’s always the risk that you might miss the boat on your brilliant idea. Also, if you have to take out a loan to cover the cost of school, paying it back as an entrepreneur could be completely infeasible during the first few years after graduation.
Then there are the time management issues. If you’re trying to build a business while in school, you’re going to have to manage your entrepreneurial work with your school obligations. When you combine that with the risk that what you learn in class may not work in the real world, or with the chance that you could get caught up in the chaos of recruiting, you really begin to wonder whether business school is a good idea.
So is an MBA worth it for entrepreneurs? It depends. The astute consultants out there will realize that I’ve just done a very crude cost-benefit analysis, something that all entrepreneurs need to do before making the decision to come back to school. My take on it is if you’re incredibly focused, have a strong management team, and a highly promising idea, you may be better off going straight into the startup lifestyle. But if you’re still looking to refine your idea, want some time to build up your skillset, or want a safe, low-risk environment to nurture your concept, you can’t go wrong with an MBA. In the end, if you’re a high-performer with a great work ethic, it doesn’t matter. You’ll succeed no matter what you do. At that point, the MBA just becomes something that might accelerate your timeline or simply slow you down for a bit.
In his teachings, Confucius proclaimed the virtues of the five main human relationships: ruler to ruled, father to son, husband to wife, elder brother to younger brother, and friend to friend. It’s easy to see that structured relationships form a key part of Chinese culture. These structures are the source of one of the most important concepts in Chinese culture – that of hierarchy.
During my nearly three weeks in China, I found a large number of instances in which the Chinese proclivity for defined hierarchy came to the forefront of discussion. One of the most interesting of these instances was in how the Chinese rank their cities in “tiers.” Particularly in class, discussion around the Chinese economy was often specified in terms of the first and second tier cities in China.
No one gave a definition of what constitues a first-tier or second-tier city, but somehow, everyone knows. Beijing, Shanghai, and Guangzho are clearly first-tier cities. Second-tier cities are those that still have some growing to do. Third-tier cities are likely those in the western part of the country and encompasses those that have seen relatively low economic development and widespread poverty.
For me, it was very interesting to see the Chinese classify their cities into “tiers,” as if some were better than others. They could have easily differentiated their cities based on economic development, or population size, or a variety of other factors. But the fact that they choose to distinguish between the different “tiers” of cities in their country is a tribute to the great need for general, over-arching hierarchy in Chinese culture.
In the same way that the Chinese classify cities into tiers, they similarly differentiate between the different ranks of universities, politicians, companies, and everything else in Chinese culture using a “tiered” or ranking system. One of the interesting consequences of this ranking lies in the educational system in China. Recently, China Central Television (the government-controlled news program) aired an interview with the Richard Levin, the president of Yale University, on the topic of improving education in China. During the interview, they asked him how China can improve its educational system. His response was very interesting.
He commented that the Chinese need to begin encouraging their students to think more critically in class, rather than take everything that their professors say as dogma. He noted how universities in the US are much more comfortable with students actively questioning their professors and taking part in classrom discussions than their Chinese counterparts. He noted that this practice can be traced back to the traditional practice of “respect for one’s superiors.” Much as the ruled should respect their ruler, and a son should respect his father, students should respect their professors by not questioning what they say. Thus, the hierarchy that I talked about earlier in this post eminates itself in the classroom.
Unfortunately, this may stifle Chinese learning. One of the biggest advantages that students in western universities have is their ability to think critically, to take a hypothesis and analyze its underlying assumptions and the arguments in favor and against its validity. This ability to think critically leads to innovation, invention, and the ability to develop creative solutions to problems. The Chinese, on the other hand, lack this skill. They are very good at taking instructions and executing them effectively, but when it comes to true innovation, they need to “think outside the box.” This truly starts in the schools and universities that mold the minds of the younger generation. As China progresses, there is no doubt that this practice will slowly become more prevalent in class, yet, whether or not it permeates into the larger culture remains to be seen.
One particular fall evening, many hundreds of years ago, an emperor of China was walking through his palacial gardens with one of his most trusted ministers. In fact, this particular minister had even been employed by this emperor’s father, making him one of the longest standing members of the royal court. During the course of the walk, the emperor took out a fan with the minister’s name written on it and handed it to the minister. The minister accepted the fan, examined it, and the two continued their walk silently forward.
The next day, the minister stood up in front of the entire court and emphatically announced, “emperor, I feel I have served this court well and to the best of my abilities. I served your father, and I served you. Now I am getting old, and I ask your permission to retire so that I may spend the last of my days with my family in my home town.” The emperor immediately agreed, allowing the minister to retire in peace.
As a Westerner, one could read this story and wonder what the heck is going on. The emperor gave a thoughtful gift to his oldest confidant and mentor and the very next day he retires? It doesn’t make sense.
Here, as in all of China, the devil is in the details. The key thing to note is that the emperor gave his minister a fan, with the minister’s name on it, in the fall. The weather was cool, and a fan was unnecessary. Because the fan had the minister’s name on it, the emperor was implying that, like the fan, the minister was also unnecessary. But instead of firing him flat out, the emperor gave the minister a chance to “save face”, a very important aspect of Chinese culture, by allowing him to retire.
This anecdote actually illustrates many of the key nuances of Chinese culture that I’ve been exposed to during my time here in China. Over the past two weeks, I’ve been taking part in lectures, classes, presentations, corporate visits, and, of course, the requisite tourism, all as part of Stern’s “Doing Business In China” program.
Over the course of the next few weeks, I hope to write several posts on a variety of topics that I’ve learned about while on this trip. This first one corresponds to the first lecture I received on Chinese culture. It was given by professor Li Ma, who is part of the Department of Organizational Management at Peking University, China’s premier educational institution.
During the course of his lecture, he discussed the value systems and incentive structures that Chinese workers, and the Chinese population as a whole, live by. One of the key concepts was that of saving face, which relates to the more general concept of living in a harmonious, de-individualized, respect-based culture. The Chinese are very group-oriented. They thrive on having high social status within their immediate social, professional, and familial lives. They value having close relationships and value relationships within their immediate circle, almost at the expense of relationships with those that are farther away.
For example, the Chinese will do almost anything for close friends, and usually consider them honorary family members. However, they’ll readily bump, shove, and push their way past other Chinese people that they see on the street. Similarly, they’re more favorable to giving jobs, favors, and money to those that they’re close to at the expense of strangers. This reliance on close relationships is known as “guanxi”, and is a common force in everyday business in China.
Many businesses here will leverage their guanxi with government and private sector officials to increase their customer base, find new clients, develop exclusive sales contracts, and hire employees. In fact, at some points, it begins to border on what Westerners would call corruption and bribery. But to the Chinese, guanxi is anything but. It’s a way of life. It is the epiphone of what Chinese culture is all about – extremely strong close relationships and much weaker relationships with those outside of one’s “circle of trust.”
This leads to a very interesting way of life in Chinese culture. Oftentimes, Chinese people will do anything to maintain harmony, even when this could lead to potential problems down the road. For insance, one of the examples that professor Li gave us was that a spoken “yes” by a Chinese person can mean “yes”, “maybe”, “I don’t know”, “if you say so”, or “I hope I have said this unenthusiastically enough for you to understand that I mean no.”
As you can guess, this leads to a culture that is very high context, where details matter, and where what’s spoken is hardly what’s meant. When it comes to business, this still plays a role, but is slowly changing. Chinese workers will usually do what their boss tells them with no hesitation. Managers will often exert significant influence over those below them, but will usually not provide any push back to their own bosses. They’ll often seek to please others at their own expense, and at the expense of productivity and, possibly, good business. Interpersonal relationships, perceptions of fairness, and social standing all play a huge part in Chinese business.
This is slowly changing, as new Chinese employees are much more materialistic than previous generations. They’ll usually spend more than their parents, and they work hard to one up their friends and colleagues with the newest products. With that said, they’re still Chinese, and the concepts of harmony and social order are still important to them.
In general, the average Chinese person will work very hard to please others around them. They’ll bend over backwards to make life easier for their friends, family, and guests, often to the point of inefficiency and inconvenience for the very same people they try to please. Understanding this, and being respectful of it, is the first step in doing business in Chinese culture. So the next time you’re in China, trying to close a multi-million dollar deal, and your hosts spend all of their time trying to wine and dine you and none of their time in the meeting room, take it as a good sign. You’re building guanxi with them, and once you start negotiating, it will be a much more smooth operation.
Image from Rambis (Flickr)
Total as of 6/2/2011: $203,223.38
In the past, I’ve periodically written articles detailing the true costs of business school from my point of view as a current business school student.
Whenever I incur a cost that is related to school (and yes, I realize that assessing whether a cost is related to school is subjective), I record it in a spreadsheet that keeps a running tally of what I’ve spent. Eventually, I’ll add in the positive cash flows that have resulted from my attendance at school, but seeing as how I don’t have any of those yet, we’ll just ignore them for now.
This post is not only a follow on to the series of posts I mentioned above, but it’s also a special post because of a significant milestone that I just reached. As of June 2, 2011, just 11 days shy of the two year anniversary of my first b-school-related expense, I’ve broken the $200,000 mark. First off, I have to say that I can’t believe 2 years have already gone by since I started planning this whole experience. Has it been worth it? For me, yes. I’m a completely different person now than I was when I started this journey. I’ve experienced so much. On the one hand, it’s hard to imagine that two whole years have passed. Time has flown. Everything I’ve seen and done has kept me so active and busy that I never had the chance to see how much time was going by. I still very distinctly remember the process I went through in deciding to apply to school (I also very clearly remember the series of events that led up to it). It seems like that time was so recent, nowhere near two years ago.
At the same time, I can barely remember all of the little details and daily activities of life two years ago. My life now is in New York, doing what I really love, around people that consistently motivate me and teach me new things, in a city where I feel like anything is possible. And in that environment, those two years actually represent a lifetime.
With respect to the costs, I have to reiterate that the total amount I listed above includes the opportunity cost of not working. In fact, that cost represents more than half of the total cost that I listed. So no, I didn’t actually pay $200,000 out of my pocket, but if you were to take a look at my true net worth had I not gone to business school, that’s the number that would represent the difference (more or less).
Obviously, this isn’t entirely accurate. There are a lot of subjective costs I choose to include or leave out, and had I not gone to business school, I know for a fact that I would have ended up doing something different than what I was doing at the time. But in recording these costs, I’m not trying to partake in an exercise of complete accuracy. I’m trying to find out the true magnitude of what it costs to attend business school. But feel free to judge my numbers as you wish. I’ve shared my spreadsheet for everyone to see, and if you want to take a look, just click the link below.
https://spreadsheets0.google.com/ccc?key=tUCdEcQ2OgZNYWguoMJT1Hw&hl=en#gid=0
So, the first year of business school is over. In some ways, it feels like I had been in school for years. In others, it feels like only a few months have passed. I still remember when I was sitting in my apartment in Arlington filling out applications. Hard to think that that was more than a year ago, almost two years, really.
In any case, a lot has happened in the past year, but I wanted to really quickly focus on some of the things that I’ve learned (or at least should have learned) in classes, which were, admittedly, one of my lowest priorities during the school year. Below, I’ve listed a couple of key takeaways for every class that I took.
Teams and Leaders
This was a BS class at the beginning of the first semester to get everyone acquainted with their new study groups. Nothing to mention here.
Finance
Diversification is the key to reducing risk. Oh, and also, arbitrage or supply and demand drive the markets, at least in theory.
Marketing
I was supposed to have learned quite a bit in this class. The professor saw to it that any learning that took place was accidental… In any case, the key takeaway here is that you have to know the people you’re selling to and proactively create campaigns to get them to buy the things that they don’t really need.
Strategy
If you can create value for your customers, they’ll buy from you – just don’t get into a price war.
Micro Economics
Supply and demand rule the world. You can make pretty graphs to prove this.
Accounting
Firms can do a lot to fake you out on their financial statements. Make sure you credit and debit to the right sides. Never become an accountant.
Data Mining for Business Intelligence
Given a large dataset and some previous transactional history, you can find patterns that differentiate and segment your customers. Use them to make good, data driven decisions.
Pricing Strategies
Don’t price your product based on what it costs. Instead, take as much of the value that you create from your customer as profits for yourself.
Macro Economics
GDP is a measure of final goods produced in a country. Inflation comes from printing too much money because governments can’t keep their hands out of the piggie bank. The Fed controls all.
Trading Strategy and Systems
There are patterns in asset prices. Find them, trade on them, profit.
Foundations of Entrepreneurship
Find a good team, build a product that people like, solve all of the operational, marketing, sales, and technical problems along the way, and maybe, just maybe, you’ll be able to exit with some semblance of enough equity that you kept hidden in a dark corner, away from the VCs, that you’ll be able to pay your expenses and recover some sort of life balance.
I was having a conversation with a couple of my business school friends last night about careers and recruiting – not surprising considering it’s on everyone’s mind at all times in an environment like this. The conversation turned to entrepreneurship, as it often does when I’m around, and one of my friends said that he noticed that everyone at school that’s doing something entrepreneurial is already pretty well off, financially. After mulling it over for a bit, I had to agree with him. Obviously I can’t say that every entrepreneur here doesn’t have to worry about money, there may well be really ambitious people that are still worrying about income. But from my experiences and the people that I know, a lot of entrepreneurial students aren’t worrying about how they’ll survive for the next five years.
A majority of business school students have to take out loans to quit their jobs and come back to school. I’m fairly sure that the MBA is the most expensive Masters program out there, so it’s not surprising that you don’t see too many “struggling” entrepreneurs at school. After all, imagine how much stress you’d be under if you had to pay off more than $100,000 worth of loans after graduating and you didn’t have an income stream.
For an aspiring entrepreneur, the cost of an MBA most be prohibitively expensive. For an entrepreneur, it’s hard enough trying to raise money just to keep working. Paying tuition is likely out of the question for many. Despite all of the hooplah around institutional venture financing, I believe only a small minority of ventures actually receive angel or VC investments. This is truly a shame because I’m of the opinion that getting an advanced education doesn’t hurt one’s prospects of future success (obviously there are exceptions like Bill Gates, but for the majority of people, an education can only help).
It would be interesting to see if the cost of school, whether it be an MBA, MIS, ME, MS, or any other advanced degree, is reducing the rate of entrepreneurship in the country. Of course, without somehow reducing the cost of school for aspiring entrepreneurs, we’ll never be able to test this, but it would be an interesting study for the government to take on. Until then, we may remain in a perpetual state of the rich getting richer.
Image from http://www.flickr.com/photos/drh/2202062825/sizes/o/
Now that we’re well into our first semester of the second semester of our first year, I thought it would be a good time to take a look back and see how this entire b-school journey has played out thus far.
Last semester was intense. Classes were unfortunately a big source of the hassle, but at the same time, I was still trying to get a lay of the land. I signed up to be an officer of two clubs, got my hands dirty with a couple of different entrepreneurial things, continued trading and trying to build up Intigril, went out like crazy, and all-in-all had a whirlwind four months. I was burnt out.
The good thing is that the first semester of business school is supposed to be the worst. So far that seems to be the case. During my first semester, I’ve become a lot more focused. My classes are less intense but more interesting (that’s one of the benefits about not having to take all of the required core classes for the whole semester). Last semester I took Accounting, Foundations of Finance, Strategy, Marketing, and Microeconomics – hated three of them, and had to work like crazy for all of them. This semester I’m taking three night classes (Data Mining for Business Intelligence, Trading Strategy and Systems, and Foundations of Entrepreneurship – Technology Focus). I’m also taking my last required core class (hallelujah!) – Macroeconomics. Finally, I’m taking an intense study abroad course called “Doing Business In China” which also counts for 3 credits. I really like all of them except for Global Econ, and even that is manageable because I like the content. Plus there’s a lot less work for them.
That reduced workload lets me focus entirely on my passions – entrepreneurship and trading (would have loved to throw in some guitar in there, but that can come later). Unlike last semester, where I was always at school late, studying or finishing up an Accounting homework (which, by the way, took 30 minutes to an hour on average every two nights), I can work with the startup guys or figure out how to tweak my trading returns. It’s much more fulfilling. I feel like now I’m actually able to be in a somewhat real startup environment.
As a corollary to that, though, I’ve lost touch with a lot of the people I used to hang out with. It’s definitely a bit of a shame, but the great part about that is I’ve really gotten to know the people that I spend a lot of time with, and feel like I’ve made some solid friendships. It’s sad that I had to sacrifice some “acquaintanceships” for that, but such is life. Regardless, I’m definitely in a much more calm and focused state of mind now (I think the renewed focus on yoga, meditation, and working out also helps with that).
Finally, this semester also has some great things in store. I’m going to Japan, a country I’ve always wanted to visit, in a week. As I mentioned above, I’ll be going to China. I may even have the chance to go to Korea for a week in the summer. Speaking of the summer, I’m also planning on continuing with oGolf and the trading as I go forward.
The takeaway from all of this is that I still strongly believe coming back to school to get my MBA was a great idea. The fact that I get to be in New York City while I’m doing it is icing on the cake. Stern is a great place, lots of cool people, and I feel extremely fortunate to have gotten to know the handful of people that I now consider close friends.
It took a semester for me to really figure out where I stand, what I want to focus on, and what I can expect, but now that it’s done, I’ve gotten into my groove, and this place truly does feel like where I want to be. There’s no unrest like there was when I was in DC, so all is well for now.
Image from Rambis (Flickr)
Total as of 2/1/2011: $168,725.94
Yesterday, I discussed one of the main benefits of attending business school – finding out what you don’t know. Today, I’m going to discuss the biggest drawback: its cost.
Business school is expensive, very expensive. But it’s not just the tuition that racks up the huge costs, it’s the books, the going out, the apartment, and most importantly, the opportunity cost of not working.
All of these intangibles serve to greatly increase the actual, economic cost of attending business school. When I first decided to start the process of applying, I wanted to account for all of the school-related costs as accurately as possible, both for my own curiosity as well as to help others truly realize what it is they’ll have to sacrifice to attend school. Because of this, I’ve been keeping a running spreadsheet with both the costs as well as the benefits that come with attending business school (though, admittedly, right now there has only been one economic benefit – not having to directly purchase a gym membership).
The goal is to keep an accurate, realistic tally of all of the expenses that come with business school, and later on, once I start reaping the economic benefits, see how long it takes to break even.
Currently, as of February 1, 2011, my total accounting and economic costs total up to about $168,000. You can find a breakdown and the exact number at the Google Docs spreadsheet below. The large majority of these costs come from lost wages due to not working. Without this number, the total cost would be around $78,000 – still a large number, but by no means as damaging as the former. It’s important to keep in mind that lost wages are necessary to include in the total summary. Opportunity costs are a very real incurred cost. If I hadn’t come to business school, more than likely, I would have been working.
One could make the argument that, instead of working, I could have chosen to go into a low-paying startup or worked on my own business. Though this argument is true, I fall into the minority, and most people reading this would likely not have chosen to do that, so, for the general b-school population, it’s important to include these costs.
One thing to keep in mind is that I chose to stop working in the middle of March, while school started in late August. Had I chosen to work until then, I could have saved about $45,000, so if you’re in a different scenario, feel free to add that amount back into the total.
So without further adieu, here’s the link to the spreadsheet (and feel free to check it periodically, as it is open to viewing for the general public)
https://spreadsheets0.google.com/ccc?key=tUCdEcQ2OgZNYWguoMJT1Hw&hl=en#gid=0