Bumping an old thread because I want the perspective of some graduates. I'm going to pay for Kellogg almost completely in debt. My plan had been to do consulting 1-2 years after to pay it off, and then settle into a high paying job with less hours/travel. I'm on the slightly younger side, and will be just turning 29 when I graduate business school. This thread seems pretty anti-consulting, but I figure a one or two year investment in a job I don't love in order to pay off debt and get my resume gold-stamped seems like a good strategy to me. Then I'll be 31 and can start a family (I have a long-term girlfriend who will be willing to put up with all of this). I grew up poor in a shitty neighborhood, and I want to be able to send my future kids to private school and all that. Wondering everyone's perspective on this strategy?
Also I'm starting to consider Deloitte over MBB, since it seems to be a less stressful environment (I don't want to ruin my health in the two years), is this a worthwhile choice for my strategy, or should I just got for the best.
Your plan sounds great. The only problem with your plan is that probably every other MBA graduate has something along those lines.... working 1 year in any job is not going to get you far. You should expect that it will take you some time and money to recover from bschool poverty (i.e. you will have to renew your wardrobe as you will probably be 20 lb fatter and you will need new stuff anyway; you will need new furniture, new luggage, deposits, and personal treats). Most do not realize these expenses you will have to incur after starting a new job.
Many graduates (over 50%) do change their job within the first year, but that's usually not because the second job is so amazing, rather because they settled for one as their first one (not what they wanted or less pay than they wanted or a company that did not fancy). It will take some time to settle into a rhythm. After that happens, you will be promised a promotion within a year, so you wont' leave. It will take 2 to get the promotion of course. Then why leave if you just promoted. Next thing you know it's been 4 years; you have a 1-year old, and your mind really changes when that happens (you become very safe, defensive, and very focused on your family; that is reflected in many of your choices). Transformation after my first child was pretty substantial and gave me a huge kick in the ass.
I think you will be fine with any job in terms of ability to pay your debt back. By no means you will be rolling in cash but you will be able to meet your financial obligations and live a modest life as most of us do. You will hear it over and over in the FinAid presentations that MBA students have one of the lowest default rates (better than Law or Med school if my stats still hold). Also, think about all the other poor slobs - they are taking the same loans and applying for the same jobs after graduation. I have to say that the key to savings/wealth or whatever you want to call is keeping your expectations and standard of living as low as possible (i.e. not buying that BMW you always wanted, and not moving into a penthouse). It is amazing how fast money goes out and $150K seems to last a lot less than I remember half that amount lasting me. You can poor as a consultant making $180K or rich as a mid-level manager making $100K. Making money is only part of the equation and spending is usually what it all comes down to.
I don't want to depress you here, but a bit more to the point of spending. I have been lucky enough to work with some high end consultants (Individuals making $250 per hour, and that puts them at $400-500K per year). They drive average cars, live in average houses, and have to control their spending. I had a heart-to-heart conversation with one of them and he was baffled that even while making that much money he still have to watch spending pretty carefully. It is spending that kills you and here I think you will have an edge having come out from a humble background with low expectations (though you will have a struggle with the proving the world the opposite and risk wasting money on things like private school for the sake of private school - I have a whole rant on that below). Try to live like Warren Buffet or Charlie Ergen. (Here is an example of MBA applicant making $150k per year with only $30k saved anybody-else-doing-a-top-10-almost-completely-with-debt-169433.html#p1350402
What happens after graduation and in 2 years is that your plans CHANGE.
- You get kids because your wife is 29 and she wants to have the first one before she turns 30 (many reason to do that... though to me it was presented as an ultimatum rather than cost/benefit analysis).
- You may change your preferences and habits; you won't be able to pull all-nighters as easily any more and red-eyes will get old (though it took me till about 34 to reach that point in my life).
- I think your plan is fine and consulting is as good of a job as any; sometimes it comes down to who can offer you the best paycheck or any job above 100K. This is where your previous experience plays in quite a bit. Business school is business school but what else are you bringing in to the table. You will have 10 of your other classmates apply for the best jobs (same ones), what makes you stand out? Perhaps they are all hungry 29-year olds but with existing consulting experience.
- Sometimes choices are made for you
I am sure this is the last thing you want to hear and you just brought it up as an example, but it is a pain point for me as we are in the middle of many school decisions. I salute you for planning your life out and you can achieve the goal of private school though for many it is not worth it. Many areas in the country have great schools and you don't have to spend $25K or $30K per year for your 2 angels. That's basically a race-car every 2 years. Instead with a bit of strategy and careful planning you can put your kids into the best programs in your town but this is way too premature for you. The only reason I am bringing it up is that people become rich by not pissing away their money; I feel private school is an extreme expense that could often be avoided unless you love living in Memphis or Atlanta which both I hear have horrendous public school systems.
This is probably more than what you signed up for. At the end, whichever job/path you take or it chooses you, it is fairly safe to assume you will succeed. Many have before you and you did an amazing job with your apps, so you are worth something
You don't need to stress or worry about the future. You can relax now and look forward to a new environment, smart people (some stupid ones too), and a chapter in your life like no other. At the same time, if you can have a plan - a list of goals , priorities, and milestones you will be more successful than 50% of your classmates (more than 80% if you actually write them down).
P.S. You can't do worse than I did. That should always warm you up on those cold Chicago nights when you stay up till 3 am freaking out about an internship.
Thanks BB, it's really awesome of you to write such a detailed response. You bring up good points about private school, if I live in a nice area, the public schools are probably pretty good. The good thing is, the girl I'm probably going to marry, has her own career plans that will take some time, so she'll at least be willing to wait until around 32 to have kids...so should give me 2-3 years to build up some capital and experience haha,
But ya you're right, I'll be fine, I'm just going to relax and not worry about the debt too much (but be careful with spending money of course). I'll focus on getting a good consulting job/internet, and not worry what comes afterwards yet, it's too early for me to really know what will happen and what I'll want to do at that point.
Good point too and living modestly, my first few years out of college I spent too much money, and it's definitely coming back to bite me. I'm glad I spent my money on trips and experiences, but I really didnt need $200 jeans, $14 cocktails, and taking the cab to work all the time because I wanted an extra 10 minutes of sleep. That type of stuff really does add up quick.