One of the main reasons the global financial crisis took place was because of excessive debt/loans taken by people in America. Just recently I met someone who had completed his MBA.

This person had recently started working in USA after completing his MBA there. Everything seemed excellent; he had a fancy foreign MBA degree, an expensive car and a high paying job. He was living the American dream and spending quite well, since he has a big fat salary. However one fine day everything changed a he lost his high paying finance job and had to return to India. He had to return his car which was purchased on EMI.

He had spent around USD 150,000 overall to complete his MBA and living expenses and like several other people he had taken a loan. But now the main problem he has is that in India, it is very difficult for him to repay such a large amount of loan.

His father was his guarantor and now the entire family has a lot of stress, thinking how they will repay such a large loan. He has still not been able to find a job here and even if he does find a job, he would be paid much less here as compared to America. Today he and his family are under a lot of stress and are hoping they find a solution. If the bank doesnat get their money back, they will go behind the aguarantorasa assets, in his case his father will have to somehow arrange those funds.

Even though an MBA in India is cheaper than international ones, it does cost a couple of lakhs. Iam sure many of you might be thinking of taking a loan and doing an MBA in India, but before you blindly take a loan, think about the job market and if it really makes sense to take a loan.

Most MBA salaries quoted by institutions are exaggerated. An average MBA graduate can be hired for Rs. 2.5 – Rs. 3 lakhs a year. Visit any regular MBA college and ask the final year students about placements and average salaries, they will tell you the reality. Salaries quoted and the cash actually received in hand is also very different. Quite a sizeable position of salaries are kept variable and performance based, specially in times like now employers get the opportunity to bargain even more. There are colleges, where placements are barely 20%-30% and most students are trying to find jobs on their own or are becoming entrepreneurs.

My simple advice would be to not take a loan today and work for one or two years, to gain valuable work experience and also build earn some money that will be able to fund your own education. Academics and the real world are very different, what can be learnt within six months of working can never be learnt throughout an MBA course.

MBA courses all over the world are considered to be at par with PHDs and LLMs, however in India lately it seems an MBA course has become as common as a regular graduation. This means a huge oversupply of MBA grads and that pushes salaries downward.

Having the funds and then spending it on an MBA, will give you and your family peace of mind after graduating. Working will also give you the necessary confidence and skills needed to make the most of your MBA degree.

Fresh graduates might also not realize that an MBA degree isnat just about lectures and PPT presentation. One of the most important things in business are people and contacts. For instance I remember one of my friends who was in his early 30s joining LBS (London Business School) for creating new business and professional contacts, as he would be getting the opportunity to interact with a lot of influential people.

I can understand how a lot of fresh graduates might be very eager to take an educational loan and immediately join an MBA degree. However donat get carried away by the hype and invest money and two years of your life, speak to people who have completed their MBA degree. They will be able to help you understand the realities much better. Today thanks to the internet and web forums like PagalGuy.com here, it becomes even easier for aspiring MBAs to interact with seniors and people who have already completed their MBA.

A college prospectus is not the best way you can find out more about the college you want to study in, but a simple talk with an ex-student is.

Iam sure that there will be quite a few people who might not fully agree with what I am saying and might put forward a few arguments. I have heard quite a few people telling me that since the job market is bad now, it makes sense to go and do an MBA and be comfortable in a B-school. By the end of two years, everything should be all right and back to normal.

But firstly, how do we know everything is going to be better by the end of two years? What if things are worse than they are today? If the bubble took so many decades to be created, it is quite likely that it will take several years for the bubble to deflate. I agree that today finding a job might be more challenging, however anyone who starts working today will put in his/her best to make sure costs are minimized and efficiency is increased. The real world experience that can be gained from this rare incident will surely teach a lot of new things and will make you stronger. Personally what I am learning in the world of investing is extremely exciting and I thank my stars to have given me this opportunity.

In fact today the economy needs people who are creative and can come up with new solutions. If you are someone who can reduce costs even by 10% because of your skills and knowledge, you will be handsomely rewarded. Companies are more open to new creative ideas when times are challenging as they are desperately looking for new solutions.

An MBA shouldnat be used as something that can help you escape from the challenges of the real world, but instead should be used as something that will give you valuable skills. Education and knowledge are definitely an asset, but ask yourself if an MBA degree is the only way you learn new things?

To move ahead in life, you donat necessarily need to follow what everybody around you is doing, but instead listen to your own heart. What might seem right today, might not necessarily be right tomorrow. Lehman Brothers and Bear Stearns were filled with the best PHDs and MBAs of the world, and we all know what happened to them and on the other hand Dhirubhai Ambani worked as a petrol pump attendant.

Today I know of MBAs who are working in call centres and are extremely frustrated with life. They had a different image in their mind about how life would be after an MBA. It really might not be worth spending several lakhs on an institute which isnat going to help you gain new skills. I hope more people realize this and donat look at an MBA degree to a guaranteed way to success and riches. Have an open mind and spend some time in learning more!

Yogesh Chabria is an investor and bestselling author of Invest The Happionairea Way. In his next book published by CNBC-TV18 and titled ‘Happionaireas Cash The Crash’, he shares little known secrets on how to make the most of the crash. You can find out more about him by visiting www.happionaire.com.