Pre-MBA steps: I began planning for my MBA in June 2013
- Saving: I started saving 20-30% of net income each month for B-School living cost from 2013 to 2015.
- Investment: I bought a small piece of land in India (home country) and some ETFs with the intention of selling in 2020 (post appreciation - assumption) to clear off the loan as a back-up plan. My savings bank interest rate in the UK is 0.1% p.a. and I was targeting medium-term asset classes that could offer 8-12% p.a within my risk tolerance. You can pick asset classes you are comfortable with. Real estate in an emerging market can sometimes be pretty good (lots of conditions apply).
- I took the redundancy option at work and obtained a decent severance package (3-month pay) that I used to pay part of my first-year tuition fees to reduce the amount borrowed via Prodigy Finance.
Steps taken during MBA: August 2015 to June 2017
First year
The first two terms were intense with academics, and very little time to do anything else other than survive. I dipped into my savings to survive in London and adjust to the new phase of life.
Tip: Minimise living costs without compromising the quality of life. Try to find a place near campus, but not too expensive. You do not want to be commuting a lot as you may miss the various events on campus.
Create a budget (rent, groceries, eating out, travel) and stick to it religiously.
Rental example: I could have rented a room in a flat for anywhere between GBP 800 to GBP 1200 per month within my preferred radius from school. I always picked the lower end. This resulted in a saving of GBP 3000-4500 per annum which is nearly 15% of my first-year loan principal amount.
My co-founder, Farid, and I started AssetVault in the third term of the first year. We raised funding before the summer and I was able to get an internship stipend for my work. We even hired paid interns from my class and other early-career LBS programmes.
Note: You are allowed to work 20 hours per week on a UK student visa. This means you can work part-time internships to create an income during your FT MBA. If you are able to create a small but sustainable flow of income during the second year of MBA then you are well on your way to paying off your loans early. What you do in your second year makes a huge difference to how soon you pay off your loans.
Second year
I got plenty of free time as academic load reduced. I chose to do the 21-month version with the exchange programme (I did mine at Haas. It was awesome - Go Bears!) and a Global Business Experience in Peru (absolutely magical).
I used the second year to continue to work on my start-up and took electives wherever I could make AssetVault the group project. For instance, eg. Discovering Entrepreneurial Opportunities, New Venture Development, Financing the Entrepreneurial Business, Business Model Canvas (Haas) and others. This helped my project group members work on a ‘live product’ with customers. I was able to perform customer development with the help of some of the brightest minds from LBS and Haas. Plus I continued to get a stipend for the work I put in.
At this point, I was using all my non-study time on my start-up and making good progress.
AssetVault won several awards in 2017 and acquired new clients. Due to this traction, I managed to obtain the Tier 1 Exceptional Talent Visa and this gave me greater freedom to live and work in the UK. If you are an international student, it is definitely worth looking at.