Wealth Check: Can I do an MBA and save for a house as well?

A recent graduate has ambitious plans to save up for expensive postgraduate study and buy property in Nigeria – both within four years. Maryrose Fison reports

The patient

Twenty-two-year-old graduate and trainee accountant Obiocha Ikezogwo is keen to get a handle on her finances so she can realise her dream of doing an MBA and purchasing a property overseas. Having grown up in Nigeria, Obiocha would like to reconnect with the place she calls home and get her foot on the property ladder there within four years. She feels that having an MBA will boost her business skills and help her to build a business in Nigeria in the future.

With an annual salary of £24,700, her main outgoing is her accommodation in Wallington, Surrey, where she shares a three-bedroom house with her father, paying £480 a month rent.

The cost of doing an MBA will be quite substantial, as the courses she would like to apply for cost in the region of £42,000 for a full-time two-year course. But Obiocha is in a relatively good position in that her father has generously committed to pay up to half the fees. She is also prepared to apply for sponsorship and grants to help make up the remaining £21,000.

Her dream of buying a property in Nigeria would be initially for a rental income, and she is aiming for a three-bedroom house in Lagos, ideally around the Lekki or Victoria Garden City suburbs.

The cure

With no student loan or credit card debt, a well-paid graduate job and a manageable monthly rent, Obiocha is in a good position to start saving. But if she wants to begin an MBA course within four years and take out a mortgage on an overseas property, she will need to begin putting a sizeable chunk of her monthly earnings away regularly, and consider an additional part-time job if she doesn't extend her timeframe.


In order to save enough money to do an MBA, Obiocha will need to keep a watchful eye on her outgoings. Dennis Hall, managing director of London-based Yellowtail Financial Planning, says this will be crucial if she is to save enough money for the course within four years. "Budgeting is a skill that everybody should acquire as early as possible," he says. "Having an understanding of her personal financial cash-flow will help Obiocha as she seeks to achieve her goals."

Mr Hall calculates that she will need to save £437.50 per month if she is to save up £21,000 within four years but she could maximise her savings by putting the money into a cash ISA.

"This level of savings fits within the current cash ISA limits and a cash ISA would be the ideal place to start regular savings because the interest will accumulate tax free," he says. Another alternative would be to open up a monthly savings account with her bank, HSBC. "Depending on the type of HSBC account Obiocha has, she may be able to open a monthly savings account with an interest rate of between 4 per cent and 8 per cent for the first 12 months. This is not an ISA, so the interest would be taxable, but the rate is better than most ISAs."


With Obiocha's limited savings and the possibility of not attracting sponsorship, the financial planners feel she may need to rethink her timeframe. Mike Stafford, a certified financial planner and partner at Hertford-based Stafford and Co, suggests Obiocha consider deferring her purchase for a further few years so she can raise sufficient capital. "The combination of an MBA fund and the house purchase fund looks unlikely to be achieved in the four years, so she may have to defer her purchase for a further couple of years," he says.

Before committing to a property purchase, he recommends she consider the type of mortgage she may be able to secure and the level of capital she will need to obtain this.

"Obiocha will need a mortgage to assist in the purchase of her property and the maximum advance she is likely to get is 80 per cent. The type of property she is interested in is likely to cost in the region of £120,000 in today's terms. This means she will need to raise a 20 per cent deposit of about £24,000," he says. "As she is not a resident in Nigeria, she will be advised to open a Non-Resident Nigerian (NRN) account at a mortgage company there and she will need to have serviced that account for at least six months to qualify for a mortgage."


As Obiocha has a considerable amount of capital to accumulate in order to achieve either of her financial goals, she will need to maximise her savings as much as possible. Mr Stafford recommends she takes this into consideration when choosing whether to begin saving into a pension as well.

"Now is not the time to start investing in a pension plan," he says. "However, the terms of her employment may require her to contribute to a company pension scheme. In due course, when she sees that her two main priorities are being accommodated she might consider pension planning. If she stays in the UK, she will benefit from compulsory employer contributions under the proposed Nests workplace pensions scheme."

However, the financial planners feel Obiocha shouldn't leave pension saving too long. Each pound saved under the age of 30 is worth £3 saved in her fifties because the pension investment has much more time to grow and benefit from the initial tax relief given.


While the prospect of contracting a serious illness is unlikely to be at the forefront of the mind of a twenty-something, Obiocha should consider the potential value of taking out critical illness insurance now when she could have access to better rates.

Alok Dhanda, managing director of the Newcastle-based financial planning firm Dhanda Financial, says he has on more than one occasion seen a client in their twenties who has been struck down by a serious illness and needed this kind of financial support.

"Obiocha is in a great situation as she is single, young and healthy, so there aren't too many demands on her finances. This is the perfect time, then, for her to set up a critical illness policy, as it will be a lot cheaper now than when she grows older," he says.

He also suggests Obiocha consider a "whole of life policy", which would protect her and any children or dependants she has in the future, regardless of her country of residence.

"For £17 a month, she could provide added protection, not only for herself, but for any family or dependants she may have in the future. By opening a policy now, Obiocha can already start accumulating wealth to pass on to children while she is still in the UK, and if she ever moved back to Nigeria, the policy would continue."

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Suggested Topics
peopleBenjamin Netanyahu trolled by group promoting two-state solution
Arts and Entertainment
Kylie performs during her Kiss Me Once tour
musicReview: 26 years on from her first single, the pop princess tries just a bit too hard at London's O2
Life and Style
fashionEveryone, apparently
The erotic novel Fifty Shades of Grey has already been blamed for a rise in the number of callouts to the fire brigade for people trapped in handcuffs
voicesJustine Elyot: Since Fifty Shades there's no need to be secretive about it — everyone's at it
Arts and Entertainment
A new Banksy entitled 'Art Buff' has appeared in Folkestone, Kent
Life and Style
Playing to win: for Tanith Carey, pictured with Lily, right, and Clio, even simple games had to have an educational purpose
lifeTanith Carey explains what made her take her foot off the gas
Arts and Entertainment
The White Sails Hospital and Spa is to be built in the new Tunisia Economic City.
architectureRussian billionaire designs boat-shaped hospital for new Dubai-style Tunisia Economic City
Husain Abdullah returns an interception off Tom Brady for a touchdown
nflLeague has rules against 'sliding to ground on knees'
Arts and Entertainment
Critics say Kipling showed loathing for India's primitive villagers in The Jungle Book
filmChristopher Walken, Bill Murray, Scarlett Johanssen Idris Elba, Andy Serkis, Benedict Cumberbatch, Cate Blanchett and Christian Bale
Life and Style
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Trust Accountant - Kent

    NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

    Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

    £18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

    Law Costs

    Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

    SQL Developer (Stored Procedures) - Hertfordshire/Middlesex

    £300 - £330 per day: Ashdown Group: SQL Developer (Stored Procedures) Watford...

    Day In a Page

    Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

    Isis an hour away from Baghdad -

    and with no sign of Iraq army being able to make a successful counter-attack
    Turner Prize 2014 is frustratingly timid

    Turner Prize 2014 is frustratingly timid

    The exhibition nods to rich and potentially brilliant ideas, but steps back
    Last chance to see: Half the world’s animals have disappeared over the last 40 years

    Last chance to see...

    The Earth’s animal wildlife population has halved in 40 years
    So here's why teenagers are always grumpy - and it's not what you think

    Truth behind teens' grumpiness

    Early school hours mess with their biological clocks
    Why can no one stop hackers putting celebrities' private photos online?

    Hacked photos: the third wave

    Why can no one stop hackers putting celebrities' private photos online?
    Royal Ballet star dubbed 'Charlize Theron in pointe shoes' takes on Manon

    Homegrown ballerina is on the rise

    Royal Ballet star Melissa Hamilton is about to tackle the role of Manon
    Education, eduction, education? Our growing fascination with what really goes on in school

    Education, education, education

    TV documentaries filmed in classrooms are now a genre in their own right
    It’s reasonable to negotiate with the likes of Isis, so why don’t we do it and save lives?

    It’s perfectly reasonable to negotiate with villains like Isis

    So why don’t we do it and save some lives?
    This man just ran a marathon in under 2 hours 3 minutes. Is a 2-hour race in sight?

    Is a sub-2-hour race now within sight?

    Dennis Kimetto breaks marathon record
    We shall not be moved, say Stratford's single parents fighting eviction

    Inside the E15 'occupation'

    We shall not be moved, say Stratford single parents
    Air strikes alone will fail to stop Isis

    Air strikes alone will fail to stop Isis

    Talks between all touched by the crisis in Syria and Iraq can achieve as much as the Tornadoes, says Patrick Cockburn
    Nadhim Zahawi: From a refugee on welfare to the heart of No 10

    Nadhim Zahawi: From a refugee on welfare to the heart of No 10

    The Tory MP speaks for the first time about the devastating effect of his father's bankruptcy
    Witches: A history of misogyny

    Witches: A history of misogyny

    The sexist abuse that haunts modern life is nothing new: women have been 'trolled' in art for 500 years
    Shona Rhimes interview: Meet the most powerful woman in US television

    Meet the most powerful woman in US television

    Writer and producer of shows like Grey's Anatomy, Shonda Rhimes now has her own evening of primetime TV – but she’s taking it in her stride
    'Before They Pass Away': Endangered communities photographed 'like Kate Moss'

    Endangered communities photographed 'like Kate Moss'

    Jimmy Nelson travelled the world to photograph 35 threatened tribes in an unashamedly glamorous style