Getting Prepared- What is the GMAT

Why is GMAT Preparation so Important?

The GMAT is one of the primary factors that will determine your acceptance into Business school, as well as your eligibility for merit-based grants, scholarships, assistantships, and other financial aid. A GMAT score is typically the single component that all applicants have in common, and is considered by most schools to be a relatively accurate predictor of how you will perform academically.

Admissions committees will often waive application fees for those who have received GMAT scores in the top percentiles, and studies have shown that graduates from higher ranked business schools typically have the highest starting salaries. Serious preparation is about more than just a GMAT score; it is an investment in your future.

There are several options for preparing for the GMAT such as review classes, reading material, or online review classes. There are even mock test that you can take prior to taking the real test, so there is no excuse not to prepare yourself to take this test. If you are serious about going through an MBA program, it is essential that you do well on this test.

What are the top MBA Programs

So, if you could have your choice of school, which school would it be?

BusinessWeek reveals these as the top 30 full-time MBA programs of 2006:

TOP 30 U.S. PROGRAMS
1 University of Chicago
2 University of Pennsylvania (Wharton)
3 Northwestern University (Kellogg)
4 Harvard University
5 University of Michigan (Ross)
6 Stanford University
7 MIT (Sloan)
8 UC Berkeley (Haas)
9 Duke University (Fuqua)
10 Columbia University
11 Dartmouth (Tuck)
12 UCLA (Anderson)
13 Cornell University (Johnson)
14 NYU (Stern)
15 University of Virginia (Darden)
16 Carnegie Mellon (Tepper)
17 UNC - Chapel Hill (Kenan-Flagler)
18 Indiana University (Kelley)
19 Yale University
20 Texas - Austin
21 University of Southern California (Marshall)
22 Georgetown University (McDonough)
23 Emory University (Goizueta)
24 Purdue University (Krannert)
25 University of Maryland (Smith)
26 University of Notre Dame (Mendoza)
27 Washington University (Olin)
28 Rochester (Simon)
29 Michigan State University (Broad)
30 Vanderbilt University (Owen)

Where do MBA students want to work?

Where do MBA students want to work once they completed their degree?

Fortune lists the top 100 companies for MBA students to work for as well as some other interesting statistics. Here is the top 20 list:

1 McKinsey & Company 18.27%
2 Google 12.55%
3 Goldman Sachs 12.54%
4 Bain & Company 12.31%
5 The Boston Consulting Group 10.67%
6 Citigroup 9.20%
7 Apple Computer 9.02%
8 General Electric 8.12%
9 Johnson & Johnson 8.06%
10 Morgan Stanley 7.26%
11 Procter & Gamble 6.90%
12 Nike 6.79%
13 Lehman Brothers 6.75%
14 Walt Disney 6.43%
15 Booz Allen Hamilton 6.35%
16 Microsoft 6.05%
17 Deloitte 5.89%
18 Bank of America 5.83%
19 BMW 5.14%
20 Merrill Lynch 5.00%

The top 5 preferences for men:

1 McKinsey & Company 24.16
2 Goldman Sachs 16.66
3 Bain & Company 15.86
4 Google 14.87
5 The Boston Consulting Group 13.65

The top 5 preferences for women:

1 McKinsey & Company 13.43
2 Google 12.14
3 Johnson & Johnson 10.52
4 Bain & Company 10.33
5 The Boston Consulting Group 10.07

Here are the industries MBA students (men and women) prefer to work in:

Management consulting 25%
Financial services 23%
Consumer goods 18% 20%
Investment banking 12%
Venture capital 10% 9%

Where do MBA students want to work. Here are the top cities:

New York 14%
San Francisco 12%
Chicago 8%
Atlanta 6%
San Diego 6%
Washington D.C. 5%
Boston 5%
Nashville 4%
Los Angeles 4%
Seattle 3%
Las Vegas 3%
I don't want to work in the U.S. 3%

For those who want an international experience, here are their top choices:

London 25%
Sydney 6%
Hong Kong 5%
Paris 5%
Madrid 3%
Shanghai 3%
Singapore 3%
Tokyo 3%
Amsterdam 3%
Rome 2%
Vancouver 2%
Beijing 2%
Bueños Aires 2%
Zürich 2%
I don't want to work abroad 17

Are MBA's More Beneficial for Men than Women

The Princeton Review tells us that about 30% of business school students are women.

The number of women in top MBA programs significantly lags behind men, with women typically accounting for about 30 percent of enrollment1. While this represents a marked increase over the last 25 to 30 years, it is a proportion that significantly trails the percentage of women in top medical and law schools. This situation highlights dramatic untapped opportunity for women, businesses, and the global economy.

Both men and women report extremely high levels of satisfaction with their careers as a whole: 86 percent of women and 89 percent of men are very satisfied or somewhat satisfied with their careers overall. They also report high levels of satisfaction with the value their current employers put on their MBA (85 percent of women and 83 percent of men), as well as with job opportunities in their industry (77 percent of women and 78 percent of men), and with their current positions overall (82 percent of women and 84 percent of men).

Women do still struggle to make their place:

Although having an MBA sets you apart, there are still barriers to advancement that women often face in corporations and firms. What continues to hold women back from reaching the top spots in corporate America? According to Catalyst's study, Women in U.S. Corporate Leadership: 2003, the top five barriers are2:
• Lack of significant general management/ line experience
• Exclusion from informal networks
• Stereotyping and preconceptions of women's roles and abilities
• Failure of senior leadership to assume accountability for women's
advancement
• Commitment to personal/family responsibilities

Over the years, Catalyst has documented the slow but steady rise of women to the top of corporate America. And while there may still not be a lot of women there, they tell us they certainly want to be. So what have successful women done to get ahead thus far?

Hints for Women When Trying to Get Ahead

In her book, Be Your Own Mentor, Catalyst President Sheila Wellington shares advice on how to overcome barriers and strategies for getting ahead once you have your MBA3. Below are the highlights from Sheila's "Eight Axioms for Advancement," described in detail in the book. They provide useful reminders for women navigating their careers.

Catalyst's Eight Axioms for Advancement

1) The best isn't good enough.
Successful women consistently tell Catalyst that performing beyond expectations is critical for advancement. By repeatedly impressing people with outstanding results, you will gain the recognition, respect, and credibility needed to succeed.

2) Time is of the essence.
In order to integrate your work and personal lives in ways that allow you to succeed in both, plan effectively. If the timing isn't right for you to accept an assignment, make sure you communicate your interest and specify when you will be available for it later. Try to anticipate the times in your career when you will be able to be most focused, and use those periods to make major career efforts.

3) If you don't blow your own horn, nobody else will.
Don't wait for people to notice your accomplishments. Successful work deserves public recognition-inside as well as outside your organization. Make sure your colleagues, team members, and-most importantly-your boss, know what you've accomplished.

4) Expertise impresses.
Develop an expertise in a unique specialty. As a result, people will look to you for that knowledge and you will build credibility and standing. Figure out what information or expertise might be lacking at your organization and learn as much as you can about it.

5) Nothing comes to she who waits.
Catalyst research repeatedly shows that taking initiative is critical to getting ahead. Actively pursue high-visibility assignments and advancement opportunities. When you learn about a project that interests you, approach your boss with your plans for completing it, and then do it.

6) It's not just corporations that need to diversify.
You need to gain a broad range of experience to succeed. Build experience in positions with bottom-line responsibilities such as operations or sales. Also, consider making both lateral and downward moves that will give you cross-functional experience. Seek out a structured succession-planning process at your organization.

7) Fortune favors the brave.
In order to advance, you must take risks. Demonstrate your willingness to take on new, different, and difficult assignments that will allow you to show off your talents and prove your executive potential.

8) Money matters.
Make sure you get paid what you're worth. Because women often accept or reject job offers without asking for more money, they tend to start at lower salaries than those who negotiate. Do your research to find out what salary you should ask for-check with recruiting firms, the Internet, other companies advertising similar positions, and current or former employees for information. Also, when your workload gets heavier, ask for more pay.

As a GM of a logistics company, I agree with most of Shelia's hints, however, I think that the key is to be an exceptionally strong performer. If you perform, there is no need to "blow your own horn" because people will be aware of your accomplishments. Knowledge of the business that you are in is the key. You also have to be aware of what motivates your employees. Many managers tend to treat everyone the same, however, different people have different motivators and a good manager will acknowledge and act on that.

How do I pay for an MBA

Once you decide to make the commitment to obtain an MBA, it is necessary to decide how to pay for your decision.

Career Journal provides some valuable information regarding the subject of how to pay for an MBA..

How to Pay For
Graduate School


Terri Cullen gives some sound advice in the Wall Street Journal Online

Calculate Your Need
The first steps in mapping out a college-affordability plan is to figure out how much money you'll need to attend school, how much debt you can reasonably afford to carry and, most importantly, how much time you anticipate being without a regular paycheck while you're pursuing that degree.

To determine how much debt you should be capable of shouldering, college-planning Web site FinAid.org offers calculators for master's students as well as doctoral students.

To get a feel for how long you'll be out of work, contact a financial-aid counselor at the school of your choice and discuss your career goals. Determine whether night school is a feasible option, one that would allow you to continue to work at your full-time job while matriculating. Also, many fields of study require extended internships in order to obtain a degree. Ask for guidance on how well these jobs pay, if they pay at all, and include that sum in your calculation.

Now add in all the collateral costs to your pursuing a degree: Will you need more child care? Will your commuting costs increase? Will you have to pay for your own health care? What, if any, additional communications technology will you need to ensure you can keep current your full-time job?

Now brace yourself: When you add it all up, sticker shock may ensue. But there are sources of funding available -- traditional and nontraditional -- to help ease the burden. Let's take a look at a few.

Search for Financial Aid
One big mistake most adult students make is assuming they make too much money, or are too rich to get financial assistance.

"I have a client who really wanted to go to law school, but she was making a good deal of money in her current job as a career counselor and she didn't think she'd be eligible for any aid at all," says Patricia A. Konetzny, a certified financial planner in Maynard, Mass. "After speaking with the financial-aid counselor at her university, it turns out she was eligible for a full scholarship."

The best place to start looking for "free money" such as scholarships and grants is the College Board's scholarship search site, which lets you search for aid opportunities based on your professional, military, religious and social affiliations, among other things. Among the most popular free scholarship and grant search engines online is Fastweb.com, a site operated by career Web site Monster.com (which itself is owned by TMP Worldwide Inc.). But the process takes some time, primarily because you're inundated with annoying pitches from the site's advertisers at practically every stage of your search. The Financial Aid Resource Center's scholarship search page also includes a laundry list of more targeted search engines, some of which are tailored for ethnic students and for various areas of study.

As you begin your search for scholarship and grant money, you'll probably notice a number of scholarship-finding services that charge a fee, and "guarantee" results. Be warned: some of these services may be scams. In its most recent scholarship-scam sweep, the Federal Trade Commission targeted eight organizations that engaged in fraudulent, deceptive or unfair business practices aimed at fleecing students and their parents. The FTC estimates that combined 175,000 victims lost more than $22 million from these eight organizations alone. Financial aid research Web site Finaid.org provides a rundown of red flags that a service may be a scam.

Ask Your Current Employer

Your employer should be your next stop. More companies are adding tuition assistance and other education-benefit programs to their employee-benefits packages in an effort to attract -- and retain -- top talent. Some 80% of the 945 companies surveyed offered some type of tuition-assistance plan in 2001, according to the Employee Benefit Research Institute in Washington, D.C.

But company aid often comes with strings attached. Many employers will want to evaluate your request before reimbursing you for college costs to be sure you're enhancing your current skills, not training for a new career. Other companies require you meet a certain grade-point average in order to receive the funds. And a growing number of companies are adapting the military's take on higher education: You sign a contract that says if your employer agrees to pay you two to four years of higher-education costs, you'll agree to continue to working at the company for an equal or greater number of years. If your employer doesn't offer this option, and you hold a position of some influence in the company, you may want to float the idea yourself.

The Internal Revenue Service allows workers to exclude from taxable income up to $5,250 a year in tuition assistance provided by their employers. (For more information on tax breaks for educational programs, see IRS Publication 508.)

Also, if you, a spouse or a parent is part of one of more than 40,000 worker unions in the U.S., you may be eligible for additional tuition-assistance programs, grants, or scholarships. Check out the AFL-CIO's Web site, under "Help With College Costs," where you can search for union-sponsored scholarships and other tuition-assistance programs.

Various state higher education authorities also offer their own work-related financial assistance plans to nontraditional students. The U.S. Department of Education's Web site includes contact information on all state higher education agencies.

Student Loans

Once you've determined what kind of financial aid you're likely to receive from all sources -- and you're still left with a substantial nut to shoulder on your own -- federal student loans are as close to free money as you're going to get right now.

"Rates are at historically low levels," says Karen F. Folk, PhD., a certified financial planner in Urbana, Ill. She's right, effective July 1, 2002, federal student-loan interest rates for students attending college have dropped to 3.46% for students attending school (or 4.06% for students who've left school), the lowest rate in decades.

Figure out what your student-loan costs will be down the road using FinAid.org's loan-payment calculator, which estimates the size of your monthly loan payments and the annual salary required to manage them. Then you can evaluate the rates and payment schedules of several loans, including total payments, interest paid for different interest rates, loan terms and monthly payments, using the site's loan comparison calculator.

Many adult students who are in the same boat as would-be job changer Ms. Braly, who is still paying off $11,000 in undergraduate student loans, may be leery of taking on more debt. "We really don't want to take out another loan to fund the additional education," she says.

But in this low interest-rate environment that might be a mistake. After taking out new student loans to cover the costs, you may be able to consolidate those loans under federal loan consolidation program at a much lower rate than you're currently paying. Under certain programs, including one offered by Sallie Mae, you can lower that rate even more.

There's also an interesting alternative to loans for students who are loathe to take on new debt. Myrichuncle.com, a Web site founded two years ago by a pair of entrepreneurial investors, doesn't loan prospective students money -- it invests in their future. If you qualify, the New York investment company will give you the money you need to pay your college costs, and in return you agree to repay at a set percentage of your future income over a certain number of years. Rates for graduate students start at 0.1% per $1,000, for up to 10 years, with a maximum rate of 0.4% per $1,000, depending on such things as your major, your GPA, and the school you're planning on attending. Once you're employed, you're required to show Myrichuncle.com your monthly income statements and annual tax returns.

But note that while more than 1,000 prospective students have applied to the company, only 65 students have received funds -- a sure sign Myrichuncle.com is working hard to ensure that it chooses its "investments" wisely.

Dip Into Retirement Savings

Education is a long-term investment in yourself, so it might seem like a no-brainer to tap your 401(k) to pay for it -- whether you stay with your current employer or not. But borrowing from your retirement savings should be tapped only when all other financial options have been exhausted.

"I don't advise borrowing against a 401(k) to pay tuition costs because you're paying an opportunity cost -- you're not only cashing out in the midst of a bear market, but you risk missing out on any recovery," says Dean Knepper, certified financial planner and CPA with Lifetime Financial Planning in Leesburg, Va. "It's better to keep that money earning tax-deferred interest."

A case, however, can be made for borrowing from your retirement savings if you're absolutely certain you'll be able to pay back the loan within five years while continuing to make new contributions toward your savings. After five years, that "loan" becomes a distribution in the eyes of the IRS, so not only will you not have that cash to count on for your golden years, but you'll have to pay personal income taxes and a 10% early-withdrawal penalty on the money.

MBA Earning Potential Still Rising

The Graduate Management Admissions Council (GMAC)informs us that the average earning potential is rising....

For Immediate Release
May 19, 2006

SALARIES FOR NEW MBAs TOP $92,000

Two-Thirds of Job Offers Include Signing Bonuses,
GMAC Survey Also Finds
McLean, Va.—Newly minted MBAs are commanding significantly heftier salaries in 2006 than their counterparts did last year, with the average business school graduate’s starting base salary topping $92,000, according to new research from the Graduate Management Admission Council® (GMAC®).

Amid a healthy recruiting environment built on strong employer confidence in the economy, the average new MBA with a job offer in hand will earn $92,360 during their first year of employment, up 4.2 percent from the $88,626 graduates in 2005 received. Moreover, two-thirds of job offers to MBAs in 2006 come with signing bonuses that average $17,603, up slightly from last year.

“The MBA continues to demonstrate its strong value proposition,” said David A. Wilson, president and CEO of GMAC. “In a knowledge economy, leadership and management demand a complex portfolio of skills and talents. A selective MBA program gives its graduate those skills.”

In addition to earning bigger paychecks, more MBAs are finding jobs while still in school, continuing a multiyear upward trend. Fifty-two percent of respondents to the 2006 GMAC Global MBA® Graduate Survey said they had received or accepted a job offer before graduation, compared with 50 percent in 2005, 42 percent in 2004 and 36 percent in 2003.

That's good news for those who considering making the investment. The higher the ROI, the more willing you'll be to take the risk.

More MBA Earning Potential Statistics

MBA by the Numbers
Beta Gamma Sigma takes a look at MBA statistics

MBA and Salary Expectations
Of the many questions potential MBA students will likely ask themselves, one of the most important focuses on the financial rewards of earning the degree. Because of the significant
costs – financial, family, time, etc. – individuals often wonder, “Is the MBA really worth it?”

To address that concern, one need look no further than the difference between pre- and post-MBA salaries. A 2004 study conducted by the Graduate Management Admission Council (GMAC) found that, on average, MBA recipients realized a 35 percent increase in their annual base salary.

Furthermore, half of all survey respondents reported that they expected to receive a signing bonus with their first post-MBA job offer. The mean bonus expected from these respondents was $12,421. Of those respondents who had already received and accepted a job offer, the average signing bonus was even higher at $14,801.








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Previous Work Experience
Individuals with significant previous full-time employment typically see higher salaries after receiving their MBAs. Across the board, previous time in the workplace combined with an advanced degree in business equals greater base salaries and larger signing bonuses.

While graduates with less than three years of work experience can anticipate the greatest change in salary – a 58 percent increase on average – graduates with three to six years in the workforce can expect the largest pay boost with an average increase of $22,676.