23 (with a fairly high paying job) and considering a top 25 MBA program in a couple of years:
I want to achieve FI very early, but then "work" in retirement. Early retirement work preferably involves an entrepreneurial combination of Real Estate, Small Business, and Investment Management.
There is a math component to this, as I feel I could earn well over 100k (mid-60s now) after a quality, on-campus MBA. Also missing income for 2 years.
Then there is an emotional, gratification component. I feel I would enjoy business school and laying a foundation in finance/business for my ER work.
Do any Mustachians have MBAs? I am disciplined enough to not let my higher salary influence my spending. I welcome all opinions and advice.
So your total opportunity cost of getting your MBA is:
1) Tuition/fees
2) lost expected wages
I'll ignore living costs, since you'd pay that anyway.
In your case, many private top-25 programs are ~90k (+/- 10k), unless you happen to live in state and can attend Berkeley or a handful of other public ones. Let's assume you don't to be more conservative. Lost earnings will be roughly 140k (70 x 2) total comp and cash value of benefits.
So a total opportunity cost of 230k (midpoint guesstimate).
In order to be "worth it" the value of your MBA, in my opinion, comes in 3 components:
1) expected increase in earnings (i.e. what your MBA will allow you to do that you likely couldn't do before... be careful not to confuse this with gross earnings). Ex: You get a post-MBA job paying 115k vs 65k prior, so your marginal benefit here is ~50k/yr.
2) personal satisfaction (i.e. how much more you can get laid now that you're cool?)
3) optionality in career (i.e. future earnings and opportunities, either financial or otherwise, that are potentially available to you due to your enhanced credentials and network and new/improved skills). Ex: You likely would work in the US forever at X total comp, but having your MBA helps you get into an intl. assignment (assuming this is valuable and something you want) but pays the same X total comp (any additional earnings fall into #1 above).
(1) is possible to come up with a reasonable estimate. (2) and (3) are much harder, but it's usually easier to back out (1) and determine if 2+3 will likely pay off during your career. Assuming a 5-year "normalization" period post-MBA (the time that your MBA really jumps you ahead... assuming that afterwards you either make or break it based on competence/ability/networking/etc anyway), in this scenario you will earn back ~250k in gross value within 5 years (roughly break even from just #1), and zero expected benefit afterwards (again, assuming you would make up for no MBA eventually but just take longer to get to the same place),
plus benefits of (2) and (3).
Conclusion: Seems like you have a solid chance of paying it back, but it all hinges on your expected earnings without the MBA and if it really catapults you into a place with significantly better opportunities.
For what it's worth, I'm in a similar scenario, and am also considering going back for my MBA. I'm at a bit higher comp level, ~95 total comp, so the payback becomes a bit more challenging unless I get into big consulting, banking/research, top tier corp. finance, corp strategy, brand mgmt, etc. I'm also working in a place where I'd be expected to move into a sr. analyst role within 2-4 years (sort of up or out type place) where total comp is likely in the 120k range (base, bonus, cash value benefits, etc) which is also the level that most MBA new hires come in at.
Anyway, tough decision, but for me factors 2 and 3 are really what should help you decide. It's likely you will make back the cost roughly within 5 years, but that's also heavily dependent on your opportunities before your MBA and what they will be afterwards.
Good luck!