Skip to comments.A Harvard MBA's radical quest to erase his debt
Posted on 05/17/2012 6:31:39 AM PDT by SeekAndFind
B-school grad Joe Mihalic went on an extreme financial diet to pay down over $90,000 in debt in just seven months and charted his story through an anonymous blogging project.
When he graduated from the Harvard Business School three years ago this month, the economy was a wreck. Nearly one in four of his classmates didn't have a job at graduation in May 2009. Yet, Joe Mihalic, then 26, was able to land a job with Dell (DELL) in Austin, Texas, at twice as much as the $52,000 a year he made before earning his MBA. But there was some overhang from his experience in Boston: roughly $101,000 in loans that he had to borrow to get the degree, even after Harvard gave him $54,000 in fellowship support.
Mihalic, of course, is hardly alone. The average debt of a Harvard MBA last year was $77,880, up from $73,110 a year earlier. Wharton MBAs, however, racked up average debt loads estimated to be an unprecedented $114,000, and the median financial burden for an MBA from a top-10 business school from the Class of 2011 is about $88,500. Despite Mihalic's six-figure burden in the midst of the economic downturn, he gleefully jumped into a free-spending lifestyle that had defined his MBA experience. He bought a 2004 BMW M3 in the same month he graduated from Harvard. From Thursday to Saturday nights, he did the town with pricey dinners and drinks. For his 28th birthday, he barhopped with friends in a black stretch Hummer. Though Mihalic had budgeted $850 a month for entertainment, he was commonly spending $1,300 monthly. But there was one place where he didn't slough off. For 21 months straight, he dutifully made the monthly $1,057 payments on his student debt.
(Excerpt) Read more at management.fortune.cnn.com ...
It wasn't until last summer, when he checked his balance, was he thrown into shock. After paying out more than $22,000, he still owed $90,717, a sum that exceeded his after-tax salary for a year.
All this article does is prove that a Harvard MBA isn’t worth the paper it’s printed on.
interest rates are a rip off. pay cash
IF they forgive one cent of student loan debt on the backs of taxpayers, CW2 should be commenced immediately.
A Harvard MBA could not figure out what the amoritization schedule of his student loan was. (Blank) Unbelievable.
“Though Mihalic had budgeted $850 a month for entertainment, he was commonly spending $1,300 monthly.”
Well, there ya go. Mr. Hah=vad MBA here did not have the discipline nor concept of an expense.
When I graduated from college I did not own a car, took public transportation and lived with 4 roommates in a rented apartment. I paid off my loans in 3 years.
This guy is living like a fool.
No wonder Harvard MBAs have destroyed many a company.
I live in Boston and don’t eat $100 dinners nor do I take international vacations. In fact I don’t know anyone who does.
He did do all that. And more.
I’m probably in the minority here, but I am not judging this guy on what he figured out and when. It reminds me of obese doctors and nurses that finally realize that they are fat.
I also think there may be some positives:
1. He might get a few friends raised in debt culture to think twice about what they are doing.
2. He shows that you can still breathe even if you do all of the things he did (and a lot of people probably only need to do 2 or 3).
3. His behavior changed his attitude towards money/things and might change his voting habits to be more conservative.
It seems it just taught him to spend like a big shot before he actually was a big shot. It went against everything he had learned in life before he got to that school.
I knew people like this in Law School.
God bless this guy, that he was able to get back to reality. And it really is a blessing that he knew what reality looked like, because he came from a functional, modest, church-going family. I wonder how many people at Harvard Business School have that advantage.
Yup. Many years ago when my Mom was at Stanford for her MBA, she had a classmate who was a Harvard grad and my Mom asked her why she didn’t attend the same school for her MBA. The other lady replied “because all they do is lecture you that being successful financially is evil.”
I’m glad to see he put that MBA of his to work to help overcome his debt situation.
A self-imposed austerity program worked!
Now if we could only get our city, state, and federal governments to do the same!
I took one 3 hour (and it was quarter hours, not semester hours) class on Engineering Economy way back in engineering school, and doing interest rate calculations and amortizations of that sort has been trivial for me ever since. I most recently did a mortgage re-fi analysis spreadsheet from scratch in Excel in the last year or so (no dice, it doesn’t pay for me - I have too little interest left to pay, almost all principal in my payments now, which end pretty soon, and which is my only debt).
No wonder American business is having a tough time, if they’re hiring numbnuts like this to lead things. At least he finally woke up on his debt and lifestyle issues.
student loans should be forgivable in bankruptcy. This would mean that worthless degrees would be financially unsustainable. Also, losses on such loans should fall back on the university. Give a worthless degree to students, the university is on the hook for the loss.
At least he paid off his debt. However, I am not sure how smart he is. Not contributing to his 401K at a place like DELL is really dumb. If needs be, max it out and then borrow it back.
I sure hope he has nothing to do with Dell’s financial ops or strategy.
Had to come to Texas to pay his Yankee debt.
no way should student loan debt be wiped ever.
Every college student in America would just simply get any degree at any college they wished at any college at any price, then immediately declare bankruptcy.
They got the product... (the education) which can not be taken away from them... thus the debt shouldn’t be able to be erased.
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