Given the difference in lifetime earnings, why are you not willing to consider the investment?

It's like if I say: should I have my honeymoon in Hawaii or in my brother's caravan, bearing in mind that I am not willing to consider paying for Hawaii?

[quote]Given the difference in lifetime earnings, why are you not willing to consider the investment?

It's like if I say: should I have my honeymoon in Hawaii or in my brother's caravan, bearing in mind that I am not willing to consider paying for Hawaii? [/quote]

Thank you Duncan! I should have been more precise on that point: I have considered the long-term return on investment / lifetime earnings, and am forming the view that it may not justify the incremental debt. These are my reasons:

a) I have not seen any long-term or longitudinal data on post-MBA salaries. Therefore I can't make an assessment on whether Cambridge would actually increase lifetime earnings, unless I infer from the short-term data (e.g. FT rankings and so on, which seem to be 3 year???) which show Said and Judge salaries to be higher. If there is any data that would allow me to see the actual extent of earnings differential over the long term - I'd hugely appreciate if I could see it!

b) I am not keen to consider consulting, therefore this excludes I believe the largest exit route for Judge / Said MBAs, which offer the most lucrative salaries and bonuses. The higher cost of Judge and Said MBAs vs Warwick would drive me towards these jobs; as I'm not interested in them, the ROI for Judge and Said would be lower.

c) Extra debt - in addition to existing undergrad debt - imposes an additional mental burden that could affect performance on the course, and beyond. In addition, I'd have to delay certain life goals e.g. housing and so on. Numerous studies have documented the adverse impact of student debt and delaying these critical life milestones - it's not just an additional long-term tax like some suggest.

d) In general, I don't want to HAVE to focus on higher salaries in order to justify opting for the higher fees of Oxbridge. An MBA was meant for me to open doors, and choice of industries - not all of which will deliver the highest salaries - not narrowly funnel you into a small set of jobs. Warwick would in that sense offer much more flexibility given the lower pay-off hurdle.

In all, and apologies for the ultra long post, this is largely about cost: if Oxbridge were a bit cheaper, I'd probably go for them. But considering my particular circumstances above, I'm not seeing the ROI.

This is my reasoning: what are your thoughts? I would really appreciate your view on this. It is really helpful to have someone cast their experienced eye on these situations in which one can get bogged down! Thank you!

You can see that in the third year alone there is a $40k salary gap, and you are not convinced that the lifetime total salary gap will be more than £40k? The earning gap widens, rather than shrinks, because of momentum. Honestly, I think you are scared of success and have rationalised your way out of it.

[quote]You can see that in the third year alone there is a $40k salary gap, and you are not convinced that the lifetime total salary gap will be more than £40k? The earning gap widens, rather than shrinks, because of momentum. Honestly, I think you are scared of success and have rationalised your way out of it. [/quote]

Well I have to say I find the salary data a bit confusing. For example, the FT ranking for Judge implies a high 3 year salary at around $160k USD. But of course this is adjusted for PPP, and with over 50% of a typical Judge cohort going back to - potentially lower cost, and lower paid - countries, surely this doesn't mean a lot to someone who wants to work in the UK? The only non-adjusted (UK) salary figures I've seen are from the Judge website itself, which suggests an average starting salary of under £70k, which isn't that high. After tax, and even assuming rapid salary increases, I am not seeing the 3 year ROI you refer to - particularly given the much higher cost of Oxford / Cambridge (additional £40k) over Warwick.

And given that I understand most post-MBA jobs are sourced through networking: surely it's more down to the aptitude and drive of the individual candidate to find these roles? Is it really the case that Oxbridge is so much better (an incremental £40k better!), and will open so many more doors, than hard graft at Warwick will? I understand that Oxbridge may have a good relationship with say, consultancy, but that is not what I want to get into.

Duncan, as you can probably tell, I'm grappling in the dark here a bit. If I am barking up the wrong tree, I'd really appreciate your view on this. In particular, I've struggled to understand the salary data, so if you should shed any light on these area, that would be really helpful in coming to an informed view on ROI!

I am not aware of a longitudinal survey of MBA earnings outside of the rankings. Let's look at what the ranking data suggest. We can also compare that to other public data, like emolument.com
- The FT data look at salaries after 3 years. Indeed, PPP influences the number. However, I can't see any reason Oxbridge's premium over Warwick would reflect only differences outside the UK, and salaries would be the same inside the UK. That makes no sense: Oxbridge students earn more before their MBAs; they are more able; they are 9th and 10th in the FT100 for career progress (compared to 46th for Warwick). There is a huge Oxbridge premium generally, worth hundreds of thousands of pounds on average: https://www.telegraph.co.uk/education/universityeducation/11918904/Oxbridge-graduates-earn-double-200000-Russell-Group-premium.html
- There is a substantial premium in salaries. I am sure that emolument.com has incomplete data, but even a few point are useful. Using its data, Warwick MBAs earn an average of $115,000. That's just below the UK average of $117,000. At Cambridge, it's $132,000. At Oxford it's $124,000. Another study on startling salaries shows a £10k annual premium over Warwick for Oxbridge and £20k for LBS: https://www.f1gmat.com/top-mba-uk-fee-salary
- Focus on lifetime value, not RoI. £50k on an MBA that boosts your earnings by a NPV of £1,000,000 is much more than £5 on letterbox seal that cuts your lifetime power bill by £200. The seal has a better RoI, because RoI is a ratio. But the MBA is a better investment because it produces a life-changing increase in income.
- Salary gaps widen over time. They don't narrow. Look at people on LinkedIn. Do the Warwick MBA. Get hired by Dell as a account manager. 10 years later, you are a sales manager at DXC. Do the Oxford MBA. Join Omnicom as a digital strategist. 10 years later, you are a senior product manager at Amazon.
- Mind the gap. After the MBA. most people will have a 35 or 40 year working life. Your thesis is that the present value of the premium of Oxbridge over Warwick is under £1000 a year. How is that credible?
- One extra point: Salaries are not the only compensation. Warwick MBA starts at Barclays on £60k basic. Cambridge MBA starts at Accenture on £70k basic. Bigger bonuses, larger pay rises, better access to shares and stock options, more likely to own major equity in a business later on, lower cost of capital.... These gaps widen.

I just want to say that that is an excellent overview of the comparative value of different MBA programs.