Income Tax: Post-MBA Salary Killer

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_(Numbers from USA)_ ** *Current: * Salary = $67,000, After-Tax (25%) = $50,000, Monthly = $4166 Bachelors in Mechanical Engineering. Less than two years of experience, Single, Living in low cost city. Decent disposable income *After ...
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(Numbers from USA)

Current:
Salary = $67,000, After-Tax (25%) = $50,000, Monthly = $4166
Bachelors in Mechanical Engineering. Less than two years of experience, Single, Living in low cost city. Decent disposable income

After MBA:
Student Loan Debt = $70,000(out of $150,000 total cost), 10-year loan repayment plan = $800/month or $10,000 every year
Starting Salary= $100,000. After-Tax (28%) = $72,000, After Yearly Loan Payments = $62,000, Monthly = $5000

Difference in monthly salary = +$834 only

I haven't even considered the higher income tax on bonuses etc you get in most MBA jobs or the fact that my regular job salary increases 5% every year. I know it is better for the long term but it's not like the "dream" some people make it out to be.
The income tax in England is even worse at 40%.


Rahzaa,

Thought provoking numbers.

I assume, based on the total cost of 150K, that these numbers are more in line for most of the top 25 programs. I think one needs to understand that there are ways to reduce this 150K number and those could be
1) Scholarship/funding assistance from the univ.
2) Most of these programs have > 90% internship success rate. Internship salary could be b/w 15K to 30k for the 3 months duration

Also, just like the regular job salary, the post-MBA job salary would also see increments each year.

My point is that there are ways and means in which you can reduce the 150k number based on your financial need.
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1/3rd of all MBA students in top 50 US b-schools are international. The visa restrictions are brutal. There is abundant talent amongst local US students which creates even more competition amongst the International students.

The point is not the discourage applying abroad but be careful and realistic in your approach.

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interesting observation and mathematics. :)

we'd like to hear more from you on this very aspect.

www.raghavabbhi.com | My take on CAT: http://www.pagalguy.com/discussions/all-i-wanted-to-speak-about-cat-25002933/6315307
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(Numbers from USA)

Current:
Salary = $67,000, After-Tax (25%) = $50,000, Monthly = $4166
Bachelors in Mechanical Engineering. Less than two years of experience, Single, Living in low cost city. Decent disposable income

After MBA:
Student Loan Debt = $70,000(out of $150,000 total cost), 10-year loan repayment plan = $800/month or $10,000 every year
Starting Salary= $100,000. After-Tax (28%) = $72,000, After Yearly Loan Payments = $62,000, Monthly = $5000

Difference in monthly salary = +$834 only

I havent even considered the higher income tax on bonuses etc you get in most MBA jobs or the fact that my regular job salary increases 5% every year. I know it is better for the long term but its not like the dream some people make it out to be.
The income tax in England is even worse at 40%.
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