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How your earning potential changes when you earn your MBA

10.20.2015 | By:
Reach your earning potential with an MBA.

When it comes to earning your MBA degree, you may have many things motivating you. It may be the promise of more opportunity, encouragement from your employer or a thirst for more knowledge. Many MBAs are motivated by something more concrete: money.

Graduate school is an investment of your time and money, and in the end it's important to truly feel like the experience and knowledge you gained there was worth it. But how will your earning potential change once you're handed your diploma?, which offers job opportunities for students and graduate students, reports, "According to research from the Association of MBAs, graduates can earn 18% more than those without an MBA. During a further three to five years of work, an MBA holder's salary goes up again. In fact, the average of salary increase on pre-MBA salaries can be as much as 53%."

It's important to be realistic when it comes to your post-graduate salary, however. According to Business Insider, "The average U.S. MBA student expects to earn $140,000 on graduating, a 240% increase from the average current pre-enrollment salary of $58,000." In reality, the statistics came nowhere near that increase from 2012 to 2013.

"Students outside the U.S. have even higher expectations, with prospective Indian MBAs expecting a 469% increase, and South Africans, a 387% bump."

Nunzio Quacquarelli, the founder and managing director of QS Quacquarelli Symonds, told Bloomberg that, "There are some candidates who are genuinely delusional, but candidates are pretty thorough MBA salaries have been very robust, and they continue to be quite robust. But that's not the perception among most applicants. MBA applicants are a little bit risk-averse and cautious."

Of course, there are many things that affect your earning potential beyond education:

  • Amount of on-the-job experience
  • The specific role you are hoping to fill
  • The industry you would like to work in (Non-profit, government)
  • Location
  • Job performance

And don't forget networking. While the hard work you put into your degree will ultimately take you to the peak of your career, it's also very important to grow your network. The connections you make while earning your MBA degree may just be the people you call upon for advice or guidance when stuck on something in your career.

Yes, your MBA will most likely lead to a higher salary. However, you should also focus on the other benefits of earning your MBA. You will make important connections and open the door for opportunities you could not have taken advantage of with just a bachelor's degree.