Quit Your Mediocre Job And Get An MBA

Going to college is an investment, but many people assume that just any college is a good investment. I know a lot of people who have gotten liberal arts bachelor’s degrees and ended up stuck working in restaurants for years, unable to find a real job. This example is a waste of an education. All that money and time spent and they are no better off than someone who didn’t go to college at all. And they probably have debt to pay back.

I decided to wait over a decade to go to school until I decided what I wanted to do and came up with a coherent plan to actually get a return on this huge investment.

If you find yourself working a mediocre job which you hate, then maybe it’s time to do more. So what would happen if you just quit your job today, take out student loans, and go to school for an MBA?

According to research done by US News in 2016, 88% of students who get an MBA find a job within three months making an average of $126,919. That’s the average. Consider the average person for a moment and ask yourself whether you’ll be ahead of that curve. According to Bloomberg, the average person triples their previous salary when getting an MBA from ~$50k to ~$145k.

Cold Turkey

Imagine quitting your job today and starting the path to your MBA tomorrow.

To save money and improve your chances of getting into a good school, you decide to start by finishing the IGETC and Assist.org at a community college. If you’re not working at all, then tuition is free, and you will get about $3k/semester in financial aid. Let’s assume you take out about $20k in student loans along with that financial aid to cover living expenses while getting through Assist.org and IGETC. This number is deliberately high; my own amount was much lower. And I went full-time at two different community colleges to speed up the process.

Now it’s time for a four year school, BUT since we did IGETC and Assist, we’re already halfway done. Let’s assume we decide on a mid-range state school like San Diego State University and a bachelor’s that actually has job potential like engineering, marketing, or computer science rather than something pointless like psychology or art. There are cheaper options and more expensive options out there, but the important thing is to get a degree that is actually going to mean something to an employer, otherwise what’s the point?

According to CollegeData.com, average cost (Includes tuition, room and board, supplies and other expenses) for in state students at San Diego State University is $28,224 minus an average financial aid award of $11,400. So that’s $16,824 per year. Since we did the IGETC and Assist at community college, we’re only spending two years here which comes out to a total of $33,648 which goes onto a student loan.

Alright so now our total loan principal is $50,648 and we have a valuable bachelor’s degree. Time for that MBA.

Bloomberg has really comprehensive research on this, and they put the average cost of an MBA in the US at just $53k plus living expenses. There is no financial aid for Masters students so let’s add another $20k in debt to cover living expenses while we are doing the Master’s program.

Now we have our MBA and debt of around $123,648.

Less Debt Than Income

Remember from above that within three months on average, MBA grads will be making an average of $126,919/year. We could pay all of this debt off the first year if we are as frugal as we have been while in college, or more likely we will spread it out over the next few years and enjoy some of the fruits of our labor. The point is that this amount of debt is trivial for an MBA grad. On average, the total amount of debt is LESS than the starting annual salary.

Having student loans and paying them off is a  great way to demonstrate you are creditworthy. Once you get past the educational hurdle and triple your income, you will be able to do things you never could have before.

Just Do It

It’s scary to leave the comfortable routine and reinvest in one’s future, but it makes sense for anyone smart and capable to make a choice like this, especially if they are tired of wasting time doing mediocre work for mediocre rewards. Life is too short!

Betting on JDST Overnight For Trump Speech

A perfect $JDST moment. Markets are down ahead of a big trump speech tonight. BUT, they are down because retailers are down. And Trump’s plan is seen as positive for the markets. I got half my portfolio in at $16.26. Tomorrow morning, money will flow out of gold and into defense and whatever kind of infrastructure he mentions. #jdsttothemoon

 

UPDATE: Opened up almost 9%. One of my all-time best single trades. This did almost 15.2% growth in 24 hours.

A Conversation and a Pivot

While driving Uber, I recently gave a man a ride to his hotel from a business dinner.

He told me he was an investment banker visiting from Chicago and asked if I had any investments.

I told him about my strategy of trading Gold ETFs on volatility and asked for input on it.

He said it sounded like a great idea, if I stick to metrics like RSI as I sometimes do, and further suggested I could diversify by looking for buying opportunities in other commodities as well.

To that end, I created stocks.cjtrowbridge.com which shows six different groups of ETFs with both bull and bear options along with their current RSI and some automated analysis to find which one might be the best buying opportunity on a given day.

I am  working on expanding this tool to offer signups for automated daily emails. Stay tuned and let me know what you think!

Trade: RLYP ($20.39 => $23.39 / $18.89)

For my first real trade, I have decided to buy shares of Relypsa. This stock has recently been on a run after news of receiving FDA approval for a new drug with a $1b+ market. Nasdaq and Yahoo are reporting that analysts have set an average price target of $32, while the stock is currently trading at $20.

In the past, I have been betting on half the average price target, assuming that target is within the 12 month range.

To be extra safe, I will halve that strategy and bet on a quarter of the price target, or +3/-$1.5 from where I get in in the morning.

Hypothetical Stock Picks: Apple ($104.50)

Recently, lots of companies have been investing in ride-sharing services in order to glean understanding and experience in an industry that will become a big part of the value-proposition for self-driving cars.

Apple, too, has now invested $1b in a Chinese ride-sharing service. Apple has long been rumored to be producing a self-driving car. And this would give them valuable insight into an industry in which they hope to become a major player.

Also noteworthy is Warren Buffett’s recent, sizable investment in Apple. Analysts credit his interest in their P-E ratio, current buyback program, and high dividends.

Nasdaq reports a consensus 12 month price target of $120.

The stock is currently trading at $95, a 26% projected increase.

I will bet +10/-5%

Hypothetical Stock Picks: Amazon ($737)

Amazon is starting to introduce their own versions of more products. These “Amazon Basics” are everything from electronics to office supplies, home goods and groceries. These new products are lower-cost and higher profit than their other offerings, and signal a paradigm shift for Amazon.

They took over the world of online retail by selling other people’s products. And now that the world is theirs, they want to sell their own cheaper alternatives to other people’s products.

The vast majority of analysts rate amazon a “Strong Buy” according to reporting from Nasdaq, with an average price target of $792, well within its 12-month range. The stock is currently trading at $702, a 12% projected gain.

I will bet +5/-2.5%.

Hypothetical Stock Picks: Alphabet ($780)

Normally, Alphabet would be a slow-mover, though a safe bet. But unique circumstances in the next few months which make this a good buy now for faster growth.

Nasdaq reports that 34/35 analysts are currently bullish on Alphabet. Research shows that Alphabet now has more staff devoted to developing their VR division than Facebook and HTC combined, even with Facebook’s expensive acquisition of Oculus. Alphabet’s VR division is also growing much more quickly than the competition. For these reasons, analysts accurately predicted a big announcement from Google at I/O about a consolidated VR platform. Google also announced several other compelling products which affirm analysts average price target of $914. The stock is currently trading at $709, a 28% average predicted increase.

I will bet +10/-5%

Update on My Hypothetical Portfolio: Up 6.3% YTD

I have been Blogging about hypothetical trades and their timing in order to establish a baseline and a reasonable performance expectation before spending any actual money.

Year to date, I am up 6.3%.

 

Hypothetical Stock Picks: Nvidia

Nvidia this week announced a new line of graphics cards which greatly reduces cost while dramatically increasing performance, this puts them firmly on the leading edge of this expensive, niche market.

Consumer sentiment on this new product line has been very favorable. , but there is some danger that their competitor AMD could release a similar product in the near future, but their products typically target a more bargain-minded audience, and each brand has a very loyal following. I feel confident that Nvidia’s line will be the strong leader in this coming generation of performance graphics cards.

Nvidia is announcing earnings this Thursday, and I feel very confident that their announcement will include strong projections for the coming year.

The stock is currently trading at $35; it’s lowest level since late March. It’s range within that time extends up about 6% to $37.

I predict that on the earnings announcement Thursday night, the stock will go up at least halfway through that recent range of 6%. I am currently leaning towards betting +3%, -1.5%.

 

Update 2016-05-10 10:00am:

My bet paid off, and I closed the deal up 3%!