Making Money While in Business School

Getting an MBA is a no-brainer, right? You get to party…er… study for 2 years, and end up with a drastically higher salary when you leave. Good deal, right? Well, if only it weren’t for that pesky loan that you’ll be saddled with upon graduation. Oh, and you may find that returning to living on ramen noodles and Milwaukee’s Best during your matriculation isn’t exactly living the good life. If only there were some way to make some coin while you were in school to ease those pains. Well, never fear, bschoolinsight is here to show you how you, through the power of the internet, can turn that debt to “Aunt Sallie” into a cash making machine. Here are a few ideas to get ya thinking:

Prosper.com

Prosper.com that does some wonderful things for people. It allows people who are in serious financial need and can’t get a traditional loan, to get a loan from other internet users – of course at a much higher rate. Naturally, there is some risk involved here, but I think you’ll find that by making some smart loans of your own, you can generate free money – not RISK free – but free enough to offset the evil capitalized interest that Sallie Mae is gonna pound you with each term. Let’s take a look at an example:

Bob is a new bschool student who, as almost all students do, borrows from Sallie Mae to finance his MBA. Knowing that the educational experience is more than just books and tuition, Bob intelligently adds in some cost of living expenses into his loan. This extra bit frees up the little Bob had in his savings for other things… things like making a loan on Prosper.com for a 30% risk-adjusted return. Numerically, it looks like this:

Sallie Mae loan amount: $30,000

Annual interest: $30,000 * 5% = $1,500

$30,000 Sallie Mae Loan – 25,000 Tuition, books = $5000 left over for room & board

Disclaimer: bschoolinsight DOES NOT recommend you take your Sallie Mae loan money and loan it out to others. Sallie might frown upon such a recommendation. HOWEVER, if the $5000 left over allows Bob to free up… say… $5000 of his own money to make such loans, then so be it! Whether you’re as honest as Bob is between you and Aunt Sallie.

Now, Bob takes the $5000 he was going to let sit in his bank account, and he puts it to work by loaning it out on Prosper.com. Naturally, being an MBA student, he does NOT loan all $5000 to one individual, but rather spreads the risk across multiple loans and enjoys a much higher than market return of 30% or so. Thus, at the end of the term, Bob has earned $1,500, which exactly offsets his annual interest to Aunt Sallie!  Ya gotta love free money!