Move back w/parents or sign 1 year lease

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Move back w/parents or sign 1 year lease

Postby ssquared87 » Tue May 14, 2013 11:27 am

I've been struggling with this for the past few weeks. I currently live in NYC and have to decide whether to stay in the city, or move back in with parents. I am 26, and hoping to start an MBA program in about a year. I am planning on funding it completely with loans and any financial aid/grants that I am awarded. The loans can be used to cover tuition and additoanl living expenses...most schools will allow you to borrow about $30k above the tuition for living expenses per year

Here is current financial situation (note I am maxing out my 401k contribution, so the monthly income is lower than you'd expect for my base):

Monthly income (after tax and retirement contributions) $3,500
Current 401k: $25,300
Current Roth IRA: $26,500
Current Money Market: $11,000
Rent if I stay in NYC: about $1,500 a month

Obviously I dont have enough cash to get me through 2 years of an MBA program, but the student loans allow you to take out money to cover living expenses. If i stay in NYC, I could save about $1,000 a month in cash and have about 24-26k in cash by the time I start MBA.

If i move back with parents, I could save $2,500 a month and have about $40k in cash by the time I start MBA. It would be hard to live with parents for a year, but rent is so expensive in NYC, and I hate making someone else rich with my money. On the other hand, we're talking about $18k difference. In the scheme of things, and given that I'm taking out at least $150k in loans for my MBA, does the $18k really make any material difference?

After MBA, I'm hoping to get into consulting or private equity, so min salary would be $140k plus bonus when I graduate, so around $180 all in, assuming I get a job.
Last edited by ssquared87 on Thu May 16, 2013 4:15 pm, edited 1 time in total.
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Re: Move back w/parents or sign 1 year lease

Postby hand » Tue May 14, 2013 11:35 am

My bias is towards moving in with parents if this is an option. Cost savings is substantial and important, but flexibility and ability to move at a moment's notice for school / your first job are important.

$18k / yr in saved rent makes for a lot of hotel stays, vacations when living with your parents is too much.

I do note a bit of a disconnect in your post... you are HOPING for a consulting or PE job, and EXPECTING a $140k salary. One of the big educational topics of the day is whether expensive schooling is "worth-it" or if schools are pricing themselves out of relevance. Make sure you do the math for your situation to make sure you get $150k of value out of the MBA.
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Re: Move back w/parents or sign 1 year lease

Postby TxAg » Tue May 14, 2013 11:43 am

What do your parents say about it?

I dearly love my folks, but once I was out of the house...I was out of the house. No way I was moving back in. It would have infringed on both our freedoms.
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Re: Move back w/parents or sign 1 year lease

Postby BW1985 » Tue May 14, 2013 12:14 pm

What school are you planning on attending? Any way to take night classes while still working full time and having your employer cover some/all of the cost? My employer covered my tuition, granted i didn't go to a prestigious school, but it saved me alot of money. Plus I was able to keep the income during those two years.
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Re: Move back w/parents or sign 1 year lease

Postby retiredjg » Tue May 14, 2013 12:51 pm

You can take your contributions (not the earnings) out of your Roth IRA. It would be better to do that than to accrue loans if the loan interest is high like 6% or more. Ordinarily, it's not a great idea to raid your retirement accounts, but education is an exception in my mind if it prevents or reduces high interest debt.
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Re: Move back w/parents or sign 1 year lease

Postby ssquared87 » Tue May 14, 2013 12:53 pm

Hand: Agree, I am biased towards moving back also. It will suck that I can't take a girl home, but if I want to have a night out, I can get a hotel once or twice a month in NYC and still be ahead by over $1200 a month. Been reading up on the articles about B-school cost/benefit, but most seem to agree that the top 5 or 10 schools are worth it because of exit options and network etc.

TxAg: that's my biggest fear. Parents dont care, I'm an only child and they are both retired, so they miss having me around...problem is I don't miss them so much that I want to give up my social life to go back ;)

BW: Looked into that already. Problem is I don't really see a future in my current organization. If i take the $15k a year they contribute towards tuition, which is like 50k range for part time at NYU, I'd be stuck here another 3 years after MBA, and I'd miss the recruiting, which essentially is the whole reason why I'm going for an MBA.
Last edited by ssquared87 on Thu May 16, 2013 5:00 pm, edited 2 times in total.
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Re: Move back w/parents or sign 1 year lease

Postby ssquared87 » Tue May 14, 2013 12:57 pm

BW1985 wrote:What school are you planning on attending? Any way to take night classes while still working full time and having your employer cover some/all of the cost? My employer covered my tuition, granted i didn't go to a prestigious school, but it saved me alot of money. Plus I was able to keep the income during those two years.



Were you looking to change careers/company after MBA? How challenging was it to keep up with the material and work? My work schedule is essentially 9-5, so not crazy hours
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Re: Move back w/parents or sign 1 year lease

Postby OverTheHill » Tue May 14, 2013 1:13 pm

TxAg wrote:What do your parents say about it?

I dearly love my folks, but once I was out of the house...I was out of the house. No way I was moving back in. It would have infringed on both our freedoms.

I was the same way, although my parents died many years ago. After I left for undergrad school, I never lived at home again. I spent a few days at Christmas and would go home for certain major things, but I never spent more than two or three nights for Chrismas, and less for other events. I'm sure I would have been welcomed with open arms by my Mom, but my Dad would have wondered why I didn't have something better to do with my time, even though he personally enjoyed seeing me. It's just the way I was raised. My Dad expected us to be adults, and that's the way it was. I worked during holidays and summers, but I did so in the town where my university was located. This remained the same until after grad school and my first real money job, which also wasn't in the town I grew up in. I never had any desire to return to my hometown, even though I had many happy memories from my life there. I just wanted to be my own person, and that's the way my parents wanted us (me and my brother) to turn out.
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Re: Move back w/parents or sign 1 year lease

Postby DTSC » Tue May 14, 2013 2:15 pm

Depends on the parents, of course.

In my case, the money save by living with my parents would soon be spent on therapy...
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Re: Move back w/parents or sign 1 year lease

Postby Grt2bOutdoors » Tue May 14, 2013 2:23 pm

DTSC wrote:Depends on the parents, of course.

In my case, the money save by living with my parents would soon be spent on therapy...


Not if the girl lets him sleep over at her place more frequently than 1 or 2x a month. :wink:
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Re: Move back w/parents or sign 1 year lease

Postby Dulocracy » Tue May 14, 2013 2:37 pm

When I started my law firm, I stayed at my parent's house again. I was concerned that it would be awkward for all of us. My parents and I had a talk about how I was starting a business, so they wanted me to be able to focus on that and save money. We also discussed that I was a grown man who had a life. They did not have a problem if I invited a girl over to the house for the evening, so long as we were not throwing parties or burning the house down. It was a surprising, but logical conversation. I would suggest having a similar conversation. While I believe I was ultimately only there for 10 months or so, it worked well for all involved.

I am of the thought now more than ever that you should absolutely live with your parents to save the money. Your financial future will be much stronger for it.
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Re: Move back w/parents or sign 1 year lease

Postby DVMResident » Tue May 14, 2013 3:11 pm

Stay with your folks. If you *really* can't stand it, lease/sublet a place over winter break.

I've been in 2 graduate programs and both times my apartment was nothing more than a place for a bed, a frig, and a stove. You'll be busy and not home that much anyways.
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Re: Move back w/parents or sign 1 year lease

Postby BW1985 » Tue May 14, 2013 3:52 pm

ssquared87 wrote:
BW1985 wrote:What school are you planning on attending? Any way to take night classes while still working full time and having your employer cover some/all of the cost? My employer covered my tuition, granted i didn't go to a prestigious school, but it saved me alot of money. Plus I was able to keep the income during those two years.



Were you looking to change careers/company after MBA? How challenging was it to keep up with the material and work? My work schedule is essentially 9-5, so not crazy hours


No I was looking to get it while I was still in my early 20's and without a family since I knew it would be more challenging later in life. I work in a technical field so an MBA can help me move into management and/or differentiate me for peers on job interviews. I think the difficulty level really depends on the school & program. My MBA program was specifically set up for working professionals so the workload was set up to match - mostly group projects, case studies and presentations. Very limited memorization, studying, exams, etc. I had the same work hours as you and went to class 5:30-8:30 two days per week. One class at a time, every 5 weeks we'd start a new class. Program was about 18mo long.
Last edited by BW1985 on Tue May 14, 2013 3:54 pm, edited 3 times in total.
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Re: Move back w/parents or sign 1 year lease

Postby thebogledude » Tue May 14, 2013 3:53 pm

ssquared87 wrote:In the scheme of things, and given that I'm taking out at least $150k in loans for my MBA, does the $18k really make any material difference?


I much rather have that 18K parked in a broad index fund and not touch it for 50 years. You're future self will thank you.
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Re: Move back w/parents or sign 1 year lease

Postby camiboxer » Tue May 14, 2013 5:02 pm

It will suck that I can't take a girl home,


Learning that a guy lives at home with his parents at your age is a big turn off *typically* so you might not have anything to worry about in that department! :oops:
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Re: Move back w/parents or sign 1 year lease

Postby DTSC » Tue May 14, 2013 5:44 pm

camiboxer wrote:
It will suck that I can't take a girl home,


Learning that a guy lives at home with his parents at your age is a big turn off *typically* so you might not have anything to worry about in that department! :oops:


Again, money saved will be spent on therapy!
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Re: Move back w/parents or sign 1 year lease

Postby Rodc » Tue May 14, 2013 8:06 pm

In your shoes I personally would not have moved home. I love my parents and we got along fine. But I would not have moved home unless the situation was truly dire. I would have found a school I could afford and a place I could afford. In fact that is exactly what I did.

As it turns out my almost 26 year old daughter just moved home for similar reasons. She is working two jobs and saving hard for graduate school and to move to a new city in a few months. She did not want to sign a year lease when she was leaving in a few months. We get along fine. I have two 12 year old sons at home who love their sister dearly and the three of them get long famously. But frankly I liked it better when she was living in her own apartment and look forward to her moving on. it is not at all terrible, but it is not ideal either. Home for a few months is totally doable. Longer term not so much.

I read a study a couple of years ago of adult kids living at home in a very wide variety of societies around the world. Something like 87%, consistent across locations, of parents were unhappy having adult kids living at home. Most adult children were more burden than helpful. Almost exactly as many of the adult children said their parents liked having them home because they were so helpful! The kids were delusional.

I'm an only child and they are both retired, so they miss having me around


Likely a nice polite white lie. :) I'm sure they like to see you. Some. Every day is a different matter.

I suggest as polite as your parents might be, they probably are not thrilled. If you do move home, I suggest you do about double what you think it takes to "pay your way". Clean the house, do their laundry, cook dinner, take out the trash, buy some of the groceries. And don't make them ask or wait for a list of chores. Do not revert to being a teenager sitting around playing video games all Saturday afternoon, asking "Hey Mom! What's for dinner?" Only in this way do you have much hope of ending up in the 13%.

Also, I'd like to see the ages of all the posters ragging on how hard it is to live with their parents. I bet you all lunch you don't have 26 year old kids. If so you'd be singing a different tune. You might just not be so wonderful to live with as you suppose. :)

Best of luck.
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Re: Move back w/parents or sign 1 year lease

Postby BestWishes » Tue May 14, 2013 8:19 pm

It depends on how well you and your parents can live together. Like roommates in college who should discuss living arrangements and sign contracts, you and your parents should talk about how to live together more like "roommates". Who is going to do what chores? Who is going to pay for what? Rules on guest? Etc, etc, etc.

If you think it can work, definitely save the money. It sounds like MBA is going to cost you a lot already. Also don't be so sure about getting $140+ in consulting and private equity. I don't know much about private equity but my son is into consulting. Offers from the big 3 are very hard to get.
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Re: Move back w/parents or sign 1 year lease

Postby tfb » Tue May 14, 2013 8:30 pm

Move back. More efficient use of resources. Otherwise you only make landlord happy.
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Re: Move back w/parents or sign 1 year lease

Postby ssquared87 » Wed May 15, 2013 1:24 pm

BestWishes wrote:It depends on how well you and your parents can live together. Like roommates in college who should discuss living arrangements and sign contracts, you and your parents should talk about how to live together more like "roommates". Who is going to do what chores? Who is going to pay for what? Rules on guest? Etc, etc, etc.

If you think it can work, definitely save the money. It sounds like MBA is going to cost you a lot already. Also don't be so sure about getting $140+ in consulting and private equity. I don't know much about private equity but my son is into consulting. Offers from the big 3 are very hard to get.


Good point on getting into big 3, its very challenging, and PE is much more challenging. On the other hand, assuming I get into a top 10 MBA, I should have plenty of options
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Re: Move back w/parents or sign 1 year lease

Postby Random Musings » Wed May 15, 2013 3:14 pm

If a fulle time MBA student, will be around the campus a lot during the school year - not as much time will be spent at home anyway. Hopefully you can intern after the first year.

Why pay for something that you won't use too much besides as a place to crash? As long as your parents and you are comfortable with it - do it.

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Re: Move back w/parents or sign 1 year lease

Postby ssquared87 » Wed May 15, 2013 3:21 pm

Random Musings wrote:If a fulle time MBA student, will be around the campus a lot during the school year - not as much time will be spent at home anyway. Hopefully you can intern after the first year.

Why pay for something that you won't use too much besides as a place to crash? As long as your parents and you are comfortable with it - do it.

RM


Good point, but my concern is not during the MBA. Question is what should I do for the year between now and when I start MBA. The schools I am looking at are all away from home, so I'll definitely have to get a place
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Re: Move back w/parents or sign 1 year lease

Postby falk » Wed May 15, 2013 4:15 pm

In some way or another you will be costing your parents money whether it be utilities, rent, etc. Is that really the right course just to better your income at your age especially with retired parents? Think about the undue hardship on them and be independent. It is not like you are suffering and without a job right now.
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Re: Move back w/parents or sign 1 year lease

Postby campy2010 » Wed May 15, 2013 4:52 pm

ssquared87 wrote:
BestWishes wrote:It depends on how well you and your parents can live together. Like roommates in college who should discuss living arrangements and sign contracts, you and your parents should talk about how to live together more like "roommates". Who is going to do what chores? Who is going to pay for what? Rules on guest? Etc, etc, etc.

If you think it can work, definitely save the money. It sounds like MBA is going to cost you a lot already. Also don't be so sure about getting $140+ in consulting and private equity. I don't know much about private equity but my son is into consulting. Offers from the big 3 are very hard to get.


Good point on getting into big 3, its very challenging, and PE is much more challenging. On the other hand, assuming I get into a top 10 MBA, I should have plenty of options


IMHO, you are focusing on the wrong financial question. You should spend a bit more time thinking about whether $120k tuition + $180k lost salary is a necessary investment for your career. If you hate your job, then find a new one. A new degree and MBA recruitment is not the only way to transition between companies/fields. It is a very real possibility that you will end up with a job that you could have transitioned to without a MBA degree. The job market for MBAs, even T-5 MBAs, is very saturated. A significant pay bump is not a guarantee.

My advice is to think very seriously about the consequences of essentially spending $300k on a degree program, particularly the portion taken as student loans. At ~7% interest, it only makes sense to pay down the debt as quickly as possible and sending $20k-$30k or more to the government each year will seriously impact your ability to save for retirement, buy a home, go on vacation etc. for quite a few years. Day after day, I read the many "pay debt or invest" threads on these boards and it is truly sobering to see how our generation is being stunted financially by expensive degree programs and the burden of high interest student loan debt. Invested properly, that money would go a long way toward funding your retirement.
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Re: Move back w/parents or sign 1 year lease

Postby hand » Thu May 16, 2013 2:26 pm

campy2010 wrote:My advice is to think very seriously about the consequences of essentially spending $300k on a degree program, particularly the portion taken as student loans. At ~7% interest, it only makes sense to pay down the debt as quickly as possible and sending $20k-$30k or more to the government each year will seriously impact your ability to save for retirement, buy a home, go on vacation etc. for quite a few years. Day after day, I read the many "pay debt or invest" threads on these boards and it is truly sobering to see how our generation is being stunted financially by expensive degree programs and the burden of high interest student loan debt. Invested properly, that money would go a long way toward funding your retirement.


Eloquently stated, when I did the math for myself, I could not justify the lost wages + tuition + debt related costs to attend a full time MBA program. Without external funding (parents/employer) for tuition, I just could not get the numbers to work. Perhaps the OP could focus on switching into an I-Banking / Consulting job now that would pay MBA tuition down the road.
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Re: Move back w/parents or sign 1 year lease

Postby Grt2bOutdoors » Thu May 16, 2013 2:38 pm

campy2010 wrote:
ssquared87 wrote:
BestWishes wrote:It depends on how well you and your parents can live together. Like roommates in college who should discuss living arrangements and sign contracts, you and your parents should talk about how to live together more like "roommates". Who is going to do what chores? Who is going to pay for what? Rules on guest? Etc, etc, etc.

If you think it can work, definitely save the money. It sounds like MBA is going to cost you a lot already. Also don't be so sure about getting $140+ in consulting and private equity. I don't know much about private equity but my son is into consulting. Offers from the big 3 are very hard to get.


Good point on getting into big 3, its very challenging, and PE is much more challenging. On the other hand, assuming I get into a top 10 MBA, I should have plenty of options


IMHO, you are focusing on the wrong financial question. You should spend a bit more time thinking about whether $120k tuition + $180k lost salary is a necessary investment for your career. If you hate your job, then find a new one. A new degree and MBA recruitment is not the only way to transition between companies/fields. It is a very real possibility that you will end up with a job that you could have transitioned to without a MBA degree. The job market for MBAs, even T-5 MBAs, is very saturated. A significant pay bump is not a guarantee.

My advice is to think very seriously about the consequences of essentially spending $300k on a degree program, particularly the portion taken as student loans. At ~7% interest, it only makes sense to pay down the debt as quickly as possible and sending $20k-$30k or more to the government each year will seriously impact your ability to save for retirement, buy a home, go on vacation etc. for quite a few years. Day after day, I read the many "pay debt or invest" threads on these boards and it is truly sobering to see how our generation is being stunted financially by expensive degree programs and the burden of high interest student loan debt. Invested properly, that money would go a long way toward funding your retirement.


Kind of scary when you think about it - the OP works in a financial ratings agency which is supposed to provide independent objective financial opinions on the state of business or operations. Kind of an oxymoron isn't it? Being advised to think about the consequences of his own personal situation - sounds like the OP thinks the tradeoff of debt is worth the MBA and I would agree but only if OP can get into a Top 5 program and only if those who've graduated those very same programs have landed employment with targeted firms and at the expected rate of pay. That is one tall order, not all who graduated found employment and of those who did, pay was less than expected!
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Re: Move back w/parents or sign 1 year lease

Postby campy2010 » Thu May 16, 2013 3:15 pm

Grt2bOutdoors wrote:
campy2010 wrote:
ssquared87 wrote:
BestWishes wrote:It depends on how well you and your parents can live together. Like roommates in college who should discuss living arrangements and sign contracts, you and your parents should talk about how to live together more like "roommates". Who is going to do what chores? Who is going to pay for what? Rules on guest? Etc, etc, etc.

If you think it can work, definitely save the money. It sounds like MBA is going to cost you a lot already. Also don't be so sure about getting $140+ in consulting and private equity. I don't know much about private equity but my son is into consulting. Offers from the big 3 are very hard to get.


Good point on getting into big 3, its very challenging, and PE is much more challenging. On the other hand, assuming I get into a top 10 MBA, I should have plenty of options


IMHO, you are focusing on the wrong financial question. You should spend a bit more time thinking about whether $120k tuition + $180k lost salary is a necessary investment for your career. If you hate your job, then find a new one. A new degree and MBA recruitment is not the only way to transition between companies/fields. It is a very real possibility that you will end up with a job that you could have transitioned to without a MBA degree. The job market for MBAs, even T-5 MBAs, is very saturated. A significant pay bump is not a guarantee.

My advice is to think very seriously about the consequences of essentially spending $300k on a degree program, particularly the portion taken as student loans. At ~7% interest, it only makes sense to pay down the debt as quickly as possible and sending $20k-$30k or more to the government each year will seriously impact your ability to save for retirement, buy a home, go on vacation etc. for quite a few years. Day after day, I read the many "pay debt or invest" threads on these boards and it is truly sobering to see how our generation is being stunted financially by expensive degree programs and the burden of high interest student loan debt. Invested properly, that money would go a long way toward funding your retirement.


Kind of scary when you think about it - the OP works in a financial ratings agency which is supposed to provide independent objective financial opinions on the state of business or operations. Kind of an oxymoron isn't it? Being advised to think about the consequences of his own personal situation - sounds like the OP thinks the tradeoff of debt is worth the MBA and I would agree but only if OP can get into a Top 5 program and only if those who've graduated those very same programs have landed employment with targeted firms and at the expected rate of pay. That is one tall order, not all who graduated found employment and of those who did, pay was less than expected!


That is exactly the crux of the issue. The T-5 MBA programs like their potential student to think that the job market is rosy for their grads and do a great deal of marketing to relay that message, but a newly minted MBA really isn't worth what it used to be (more grads, fewer jobs). I went to graduate school with a T-5 MBA program and was dating an MBA student at the time. Witnessing the recruitment process was truly eye opening and frankly a little bit shocking. Essentially, the big 3 consulting companies only hired former consultants with an Ivy league pedigree. The mid tier consulting firms would hire non-Ivy leaguers but favored those who came from consulting. PE jobs were even more difficult and were essentially offered to the Ivy league guys with family connections. The "transitioners" tended to go back to jobs similar to those that they held previously with maybe a slight bump in pay and responsibility. Honestly, most could have been promoted to those positions with a few more years of experience and some hard work in the office. Full disclosure, this was coming out of the recession so maybe it is a little better now, but somehow I doubt it. The T-5 MBA pitch is not that dissimilar to the Biglaw carrot that law schools dangle in front of the law grads. Some reach those high salaries but most don't.
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Re: Move back w/parents or sign 1 year lease

Postby ssquared87 » Thu May 16, 2013 3:42 pm

campy2010 wrote:
Grt2bOutdoors wrote:
campy2010 wrote:
ssquared87 wrote:
BestWishes wrote:It depends on how well you and your parents can live together. Like roommates in college who should discuss living arrangements and sign contracts, you and your parents should talk about how to live together more like "roommates". Who is going to do what chores? Who is going to pay for what? Rules on guest? Etc, etc, etc.

If you think it can work, definitely save the money. It sounds like MBA is going to cost you a lot already. Also don't be so sure about getting $140+ in consulting and private equity. I don't know much about private equity but my son is into consulting. Offers from the big 3 are very hard to get.


Good point on getting into big 3, its very challenging, and PE is much more challenging. On the other hand, assuming I get into a top 10 MBA, I should have plenty of options


IMHO, you are focusing on the wrong financial question. You should spend a bit more time thinking about whether $120k tuition + $180k lost salary is a necessary investment for your career. If you hate your job, then find a new one. A new degree and MBA recruitment is not the only way to transition between companies/fields. It is a very real possibility that you will end up with a job that you could have transitioned to without a MBA degree. The job market for MBAs, even T-5 MBAs, is very saturated. A significant pay bump is not a guarantee.

My advice is to think very seriously about the consequences of essentially spending $300k on a degree program, particularly the portion taken as student loans. At ~7% interest, it only makes sense to pay down the debt as quickly as possible and sending $20k-$30k or more to the government each year will seriously impact your ability to save for retirement, buy a home, go on vacation etc. for quite a few years. Day after day, I read the many "pay debt or invest" threads on these boards and it is truly sobering to see how our generation is being stunted financially by expensive degree programs and the burden of high interest student loan debt. Invested properly, that money would go a long way toward funding your retirement.


Kind of scary when you think about it - the OP works in a financial ratings agency which is supposed to provide independent objective financial opinions on the state of business or operations. Kind of an oxymoron isn't it? Being advised to think about the consequences of his own personal situation - sounds like the OP thinks the tradeoff of debt is worth the MBA and I would agree but only if OP can get into a Top 5 program and only if those who've graduated those very same programs have landed employment with targeted firms and at the expected rate of pay. That is one tall order, not all who graduated found employment and of those who did, pay was less than expected!


That is exactly the crux of the issue. The T-5 MBA programs like their potential student to think that the job market is rosy for their grads and do a great deal of marketing to relay that message, but a newly minted MBA really isn't worth what it used to be (more grads, fewer jobs). I went to graduate school with a T-5 MBA program and was dating an MBA student at the time. Witnessing the recruitment process was truly eye opening and frankly a little bit shocking. Essentially, the big 3 consulting companies only hired former consultants with an Ivy league pedigree. The mid tier consulting firms would hire non-Ivy leaguers but favored those who came from consulting. PE jobs were even more difficult and were essentially offered to the Ivy league guys with family connections. The "transitioners" tended to go back to jobs similar to those that they held previously with maybe a slight bump in pay and responsibility. Honestly, most could have been promoted to those positions with a few more years of experience and some hard work in the office. Full disclosure, this was coming out of the recession so maybe it is a little better now, but somehow I doubt it. The T-5 MBA pitch is not that dissimilar to the Biglaw carrot that law schools dangle in front of the noses of the law grads. Some reach those high salaries but most don't.



Very well thought out on all these points. As many have stated, it is a huge investment, and post-MBA salary is not guaranteed. That being said, MBA gives me the chance to get into consulting or i-banking. I am a former consultant at a mid-tier firm, but would not be able to get into a top 5 consultancy without MBA even with connections.

For I-Banking, there is about a 5% chance of getting in given my current situation. With an MBA from a top 5 program and my connections I probably have a 60% chance or so of getting into IB vs the 5% chance I have now. Spoke to lots of people in the industry and they just cant do anything until I get MBA, they say applicant pool is too competitive, and my experience is seen as somewhat weak, especially on the quant side.

So unfortunately, I'm in a situation where I have to do the MBA...probably will pay off but may not.
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Re: Move back w/parents or sign 1 year lease

Postby campy2010 » Thu May 16, 2013 3:48 pm

As you well know, both consulting and I-Banking have strict up or out policies and most transition out after a few years. So, in your best case scenario where would you want to go post-consulting or I-Banking. Can you get there from where you are now without an MBA or with a low-cost/part-time MBA?
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Re: Move back w/parents or sign 1 year lease

Postby Grt2bOutdoors » Thu May 16, 2013 3:50 pm

ssquared87 wrote:Very well thought out on all these points. As many have stated, it is a huge investment, and post-MBA salary is not guaranteed. That being said, MBA gives me the chance to get into consulting or i-banking. I am a former consultant at a mid-tier firm, but would not be able to get into a top 5 consultancy without MBA even with connections.

For I-Banking, there is about a 5% chance of getting in given my current situation. With an MBA from a top 5 program and my connections I probably have a 60% chance or so of getting into IB vs the 5% chance I have now. Spoke to lots of people in the industry and they just cant do anything until I get MBA, they say applicant pool is too competitive, and the ratings agency experience is seen as a detriment since Wall St. thinks ratings agency people are rejects.

So unfortunately, I'm in a situation where I have to do the MBA...probably will pay off but may not.


Then you have a real problem, you attend and graduate Top 5 MBA, then come interviews where they talk about your past work experience - you are a reject in their eyes and you honestly believe for one moment that attending a full time MBA program is going to erase that work experience, line of thinking and convince those who hold the carrot in front of you? I know you are 26, but that is just plain naive.

I know of folks applying for junior analyst slots at the white shoe i-banking firms - one slot, over 600 applicants. That is what you will be up against or more for the grad level slots and if you don't have a godfather at your target firm, well your chance of success is about equal to having all 5 numbers plus the powerball in this saturday's drawing: 1 in 175 million.
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Re: Move back w/parents or sign 1 year lease

Postby ssquared87 » Thu May 16, 2013 4:52 pm

Grt2bOutdoors wrote:
ssquared87 wrote:Very well thought out on all these points. As many have stated, it is a huge investment, and post-MBA salary is not guaranteed. That being said, MBA gives me the chance to get into consulting or i-banking. I am a former consultant at a mid-tier firm, but would not be able to get into a top 5 consultancy without MBA even with connections.

For I-Banking, there is about a 5% chance of getting in given my current situation. With an MBA from a top 5 program and my connections I probably have a 60% chance or so of getting into IB vs the 5% chance I have now. Spoke to lots of people in the industry and they just cant do anything until I get MBA, they say applicant pool is too competitive, and the ratings agency experience is seen as a detriment since Wall St. thinks ratings agency people are rejects.

So unfortunately, I'm in a situation where I have to do the MBA...probably will pay off but may not.


Then you have a real problem, you attend and graduate Top 5 MBA, then come interviews where they talk about your past work experience - you are a reject in their eyes and you honestly believe for one moment that attending a full time MBA program is going to erase that work experience, line of thinking and convince those who hold the carrot in front of you? I know you are 26, but that is just plain naive.

I know of folks applying for junior analyst slots at the white shoe i-banking firms - one slot, over 600 applicants. That is what you will be up against or more for the grad level slots and if you don't have a godfather at your target firm, well your chance of success is about equal to having all 5 numbers plus the powerball in this saturday's drawing: 1 in 175 million.


I'm not sure, people I have spoken to seem to say once you have an MBA, certain positions on Wall St look at past experience, but focus much more on the MBA, your activities there, and your interview skills. If I get an interview I can overcome the weakpoints on my resume, but getting an interview is the hard part.

PE and Hedge Funds though won't even look if you haven't done PE or IB beforehand, so those positions are probably unrealistic targets for me, at least until I have a few years experience in a more relevant role.

Seems that I need to do more research though on current exit options without an MBA. I think I just defaulted to that option because it is the "typical" path.
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Re: Move back w/parents or sign 1 year lease

Postby campy2010 » Thu May 16, 2013 5:36 pm

ssquared87 wrote:
Grt2bOutdoors wrote:
ssquared87 wrote:Very well thought out on all these points. As many have stated, it is a huge investment, and post-MBA salary is not guaranteed. That being said, MBA gives me the chance to get into consulting or i-banking. I am a former consultant at a mid-tier firm, but would not be able to get into a top 5 consultancy without MBA even with connections.

For I-Banking, there is about a 5% chance of getting in given my current situation. With an MBA from a top 5 program and my connections I probably have a 60% chance or so of getting into IB vs the 5% chance I have now. Spoke to lots of people in the industry and they just cant do anything until I get MBA, they say applicant pool is too competitive, and the ratings agency experience is seen as a detriment since Wall St. thinks ratings agency people are rejects.

So unfortunately, I'm in a situation where I have to do the MBA...probably will pay off but may not.


Then you have a real problem, you attend and graduate Top 5 MBA, then come interviews where they talk about your past work experience - you are a reject in their eyes and you honestly believe for one moment that attending a full time MBA program is going to erase that work experience, line of thinking and convince those who hold the carrot in front of you? I know you are 26, but that is just plain naive.

I know of folks applying for junior analyst slots at the white shoe i-banking firms - one slot, over 600 applicants. That is what you will be up against or more for the grad level slots and if you don't have a godfather at your target firm, well your chance of success is about equal to having all 5 numbers plus the powerball in this saturday's drawing: 1 in 175 million.


I'm not sure, people I have spoken to seem to say once you have an MBA, certain positions on Wall St look at past experience, but focus much more on the MBA, your activities there, and your interview skills. If I get an interview I can overcome the weakpoints on my resume, but getting an interview is the hard part.

PE and Hedge Funds though won't even look if you haven't done PE or IB beforehand, so those positions are probably unrealistic targets for me, at least until I have a few years experience in a more relevant role.

Seems that I need to do more research though on current exit options without an MBA. I think I just defaulted to that option because it is the "typical" path.


Sounds like you have it figured out. Just be careful looking at the percentages of students hired by IB or consulting. A large proportion of those folks came to the MBA programs from those firms. The picture can be much different for the "transitioners". But, it is great that you're doing your due diligence and talking to folks on the ground. Good luck with the application/interview process.
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Re: Move back w/parents or sign 1 year lease

Postby lostInFinance » Fri May 17, 2013 1:32 am

Honestly, I think part of growing up is moving away from home. If you're already taking on $150k of debt for b-school, $18k more isn't that much more money in the grand scheme. Also, could you find a middle ground where you find a shared apartment closer to the suburbs with lower rent?
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Re: Move back w/parents or sign 1 year lease

Postby ssquared87 » Fri May 17, 2013 9:50 am

lostInFinance wrote:Honestly, I think part of growing up is moving away from home. If you're already taking on $150k of debt for b-school, $18k more isn't that much more money in the grand scheme. Also, could you find a middle ground where you find a shared apartment closer to the suburbs with lower rent?


Hahah the $1,500 a month rent is shared...could get down to 1300 or so if I go to a less desireable are of Manhattan. If I wanted to leave manhattan, could go to Astoria in queens, but at that point I may as well be living with my parents....the commute is about an hour from my office, not much going on there in terms of bars/restaurants, and it's not really my scene socially. I'd basically lose all the benefits of being in Manhattan, and still have to pay about $1k in rent anyway
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Re: Move back w/parents or sign 1 year lease

Postby lostInFinance » Fri May 17, 2013 5:13 pm

ssquared87 wrote:
lostInFinance wrote:Honestly, I think part of growing up is moving away from home. If you're already taking on $150k of debt for b-school, $18k more isn't that much more money in the grand scheme. Also, could you find a middle ground where you find a shared apartment closer to the suburbs with lower rent?


Hahah the $1,500 a month rent is shared...could get down to 1300 or so if I go to a less desireable are of Manhattan. If I wanted to leave manhattan, could go to Astoria in queens, but at that point I may as well be living with my parents....the commute is about an hour from my office, not much going on there in terms of bars/restaurants, and it's not really my scene socially. I'd basically lose all the benefits of being in Manhattan, and still have to pay about $1k in rent anyway


It sounds like you really want to stay where you're at, so that's what I'ld recommend. On the other hand, if your goal in life is to be a bum, move back with the rents and let mom do your laundry.
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Re: Move back w/parents or sign 1 year lease

Postby ssquared87 » Sat May 18, 2013 10:05 am

lostInFinance wrote:
ssquared87 wrote:
lostInFinance wrote:Honestly, I think part of growing up is moving away from home. If you're already taking on $150k of debt for b-school, $18k more isn't that much more money in the grand scheme. Also, could you find a middle ground where you find a shared apartment closer to the suburbs with lower rent?


Hahah the $1,500 a month rent is shared...could get down to 1300 or so if I go to a less desireable are of Manhattan. If I wanted to leave manhattan, could go to Astoria in queens, but at that point I may as well be living with my parents....the commute is about an hour from my office, not much going on there in terms of bars/restaurants, and it's not really my scene socially. I'd basically lose all the benefits of being in Manhattan, and still have to pay about $1k in rent anyway


It sounds like you really want to stay where you're at, so that's what I'ld recommend. On the other hand, if your goal in life is to be a bum, move back with the rents and let mom do your laundry.


I would, but like to and being able to afford to are two different things...living in NYC under $100k a year is next to impossible if you are trying to save for the future too
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Re: Move back w/parents or sign 1 year lease

Postby maroon » Sat May 18, 2013 12:34 pm

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Re: Move back w/parents or sign 1 year lease

Postby Sheepdog » Sat May 18, 2013 1:06 pm

A son moved in with us for a year as a 25 year old. It worked somewhat, but............
As a parent, we were still parents and had behavior expectations. We had guidelines still, regardless of his age. He had his freedoms except not always in our house. After all, it was our house. We did expect him to contribute to running the house (cooking, house cleaning and maintenance, yard work). We would not be his servant.
We were all pleased when he left though. He still likes us...imagine that.

The point is, be sure you know your ground rules with your parents. If you and they can do so, it is the smart thing for you to live with them. After all, it is not a lifetime and the time will pass very quickly for you to be on your way. You will have saved a load of money for your future.

Good luck in whatever you decide.
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Re: Move back w/parents or sign 1 year lease

Postby frugaltype » Sat May 18, 2013 1:32 pm

falk wrote:In some way or another you will be costing your parents money whether it be utilities, rent, etc. Is that really the right course just to better your income at your age especially with retired parents? Think about the undue hardship on them and be independent. It is not like you are suffering and without a job right now.


He should fork out rent to his parents, just not as much as an apartment rent would cost. He absolutely should do more than pay his way with money and doing chores, but he would still save money.

If his parents are old enough to be retired, they are likely to be glad to have someone do the physical chores like snow shoveling, grass cutting, washing the car, house cleaning, and some of the grocery shopping (they may prefer to do the latter.)
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Re: Move back w/parents or sign 1 year lease

Postby pryan » Sat May 18, 2013 4:51 pm

[Rude comments removed by admin LadyGeek]
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Re: Move back w/parents or sign 1 year lease

Postby brxn » Sat May 18, 2013 8:19 pm

I feel like all of this has to be a personal decision based on your own values and goals/motivations.

For me, moving in with my parents to save some money as an adult would never be an option as a matter of principle. If I had a plan that would require me to take charity from my parents, I would change my plan. From the other perspective, if you were my child, I would not allow you to live with me as an adult ... but not everyone shares that viewpoint.

If you don't place any particular value on your own independence and self-sufficiency, then it's a no-brainer to stay with the parents, because it will be a clear savings for that period of time.

My input would be to get your own place, leave the parents out of it, I think you'll be better off in the long run.
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Re: Move back w/parents or sign 1 year lease

Postby Toons » Sat May 18, 2013 8:33 pm

Sign the lease,figure it out on your own,you will be better off,emotionally and financially(eventually).
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Re: Move back w/parents or sign 1 year lease

Postby lostInFinance » Sun May 19, 2013 12:17 am

ssquared87 wrote:I would, but like to and being able to afford to are two different things...living in NYC under $100k a year is next to impossible if you are trying to save for the future too


If you have a girlfriend, move in with her or have her move in with you. If you share a bedroom, that should cut your rent in half and you could still stay in Manhattan. If you don't have a girlfriend, get one fast.
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