I've heard from many admits that they would like to travel before their MBAs but that the cost of an MBA and the lost income are already enough burdens from a financial perspective. Then there's also other issues faced such as health insurance coverage, leases for your apartment, etc. Hopefully this post will change your minds though.
Cost/lost income: Say you decide to travel for 3 months before your MBA. And let's say you earn $4K a month post-tax. So you'll forfeit $12K for the 3 months - that's about the same as the average sign-on bonus after our MBAs! Also, the cost of traveling is probably about the same as the living expenses during that time. The money you save on rent (say $2400 for 3 months) can be used for a round the world ticket. The remaining living expenses (utilities, food, car, nightlife) you save will get you quite far when you back pack! Btw, this is also a great way to use all those frequent flier miles since your travel dates are most likely very flexible.
Update: At LBS, you can also expect to make about $30K through your summer internship and the Second Year Project. Check the stats for 2008 here (expand "Tuition fees and funding").
Health insurance: Yes when you quit your job you'll lose your benefits (in the US at least). But you can either enroll in COBRA, which is quite costly (was $350/month for me). Alternatively, there are travel insurance packages that cover you while on your trip (outside of the US only though!). I paid $260 for a 5 month coverage (no deductibles) with very good coverage (e.g. $1M in medical benefits). The insurance company I used was HTH Travel (picked TravelGap Voyager - plan for those without domestic insurance during travel). There are also a bunch more listed on The US Department of State website. The website also lists non-US providers.
Apartment: Ok if you own your place, then I can't really speak to this. But if you rent, then sublet your place or ask your landlord/landlady if you can terminate the lease 3 months ahead (depending on your terms). If finding someone to sublet is hard for your luxury penthouse then consider subsidizing it with a couple bucks.
Most importantly I believe that the time before your MBA will be your last chance in your life to just take off 3 months (yes I sound so dramatic :-). After your MBA, you most likely have to start that new job soon, then one day you'll have family, and soon you'll rather go to that all-inclusive resort with your kids. So even if you forfeit $20K in total during those three months - it's little cash when considering the amount we'll make over the next 30 years as corporate slaves.
Ok, enough of my crap - but hopefully I could convince some of you :-).
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8 comments:
What about Post-MBA travel?
I finished up a part-time MBA from Indiana University Kelley School of Business in Aug 2007. It was 100% paid tuition, no strings attached. I'd like to travel and work abroad in-between jobs for about 6 months starting July 2008.
Something in business development, consulting, entrepreneurship, or corporate finance would be great.
Hi Bryan,
Traveling in between jobs is also a great thing, but much harder to pull off I think. The nice thing about traveling before an MBA is to know that you have a set plan when you come back from your travels. I don't think any employer will give you a job offer with a start date 6 months out.
So if you do travel and come back, then you'll have to look for a new job which could take months.
Some employers also let you take a couple months off unpaid after you've worked there for 5+ years or so. But that's rare too.
Anyways, don't want to discourage you. Enjoy your journey if you decide to travel/work abroad!
hey thomas...
nice blog entry, that has me rethinking my pre-MBA plan. I was about to actually offer to work til Mid July making sure to get that last bit of money and then have 2 weeks to move and pack my things before I fly off to the States... Now I am reconsidering.
Nevertheless, I think there might be an opportunity to travel post-MBA if maybe not for an entire 3 months.
You are right about whether there will ever be a time again where you can take out that much time, especially without any strings attached (as in: no family ties).
Ah well, life is great and there is always FOMO (fear of missing out)...opportunity cost in anything you do...
You don't have to convince me :) I'm already planning my 6 week travel break. (+3-4 weeks of loafing around at home)
@wipe
yes I'm hoping that after the MBA we can also travel a bit - maybe 1-2 months before the start date of our jobs if we're lucky.
Cool that you're reconsidering your pre-MBA plans. Life's short, we might as well have a good time before we're too old :-)
@mbabound
That's the way to go! Traveling a bit and just taking it easy to charge our batteries before the stress begins.
Hey Thomas - How did you manage to travel on such a shoe-string budget?
Depends on what you define as "shoe-string budget". The money I spent in 5 months could esily have lasted a stingy back packer 1 year. Transportation will be the most expensive part of travelling (while food and accomodation will be where you save). The cheapest place I stayed at cost $3.50 a night (in Laos).
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