Get an MBA or Invest?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills

Get an MBA or Invest?

Postby kingjimmy » Fri Aug 30, 2013 8:48 am

Hello,

I wanted to get your opinions. I work for one of the largest banks in the country as a mortgage underwriter in the loss mitigation/foreclosure side of the bank, and have been doing so for just over 2 years. I make a decent living. My base salary is 51k, and I get about 5-8k in bonuses throughout the year. My fiancee (soon to be wife in 37 days) works as a library teacher. She makes about 40k. Altogether we make just under 100k per year.

I have an undergraduate degree in theology, as well as a post degree certificate as a paralegal in corporate banking and finance. Due to the nature of the mortgage industry, and my lacking a 4 year financial degree, I've been considering going back to school to work on an MBA at UNC Charlotte. I've thought about doing this so as to make myself more marketable should things slow down and I eventually get laid off, or so that I can possibly climb the corporate ladder into more senior levels of management one day. However, it seems in the mortgage industry that an MBA isn't something a lot of people have... even in upper management. The job across all positions has always had a "on the job training" nature about it, and there doesn't seem like a lot of formal education that can prepare you to work in this industry, as so much of it is driven by ever changing political whims and legislation.

Career wise, underwriters tend to max out at about 75-85k a year. Managers don't make much more than I do, unless you move up to more senior levels of leadership, then you can make about 115k per year. As it stands, I'm not even sure if I want to be a manager one day. I'm pretty content being a happy little worker bee, as I am very good at my job. But I'm so good that management has already started to court and groom me a bit to one day become a leader within the company.

With that said, an MBA would cost me about $30,000 to pursue. Do you think in my case, it would be worth purusing? Or would I be better off taking the $30,000 and just investing it long term? It seems that an MBA might increase my salary potential one day. But then again, I know plent of MBA's who have jobs making less than I do. I worry though, that the hit I would take to my 401k for the next several years while I pay for college instead of investing might significantlly reduce my long-term returns.

Thoughts?

Thanks,

Jimimy
Jimmy | http://www.bigbadbanker.com
kingjimmy
 
Posts: 76
Joined: 26 Aug 2013
Location: North Carolina

Re: Get an MBA or Invest?

Postby Andyrunner » Fri Aug 30, 2013 8:58 am

Id say wait and see if your bank will pay for your MBA. If they want to groom you to be a leader then they will most likely pay for your MBA. Your manager would have a good idea if this is possible, bounce the idea off him that you are looking at going back and ask him if it would help you in the long run. If anything it would stress your a driven employee.

I would also say if you get laid off use that as an excuse to go back for your MBA. This would help support your resume when applying for new jobs. It says I got laid off and I didnt want to sit around the house collecting unemployment so I advanced my education.
Andyrunner
 
Posts: 191
Joined: 3 May 2012

Re: Get an MBA or Invest?

Postby gvsucavie03 » Fri Aug 30, 2013 9:00 am

You've gotta do what you love and are passionate about. If you can combine this with a career track that is an upward spiral of income/promotions, then you scored the touchdown. If you really won't love the field you are heading towards, you will be miserable. It is not about the money.... you have to do what you will enjoy and benefit most from.

Figure out how long the MBA will take, divide that into $30,000, and start setting aside that amount each month from your current take-home pay not only as a savings/sinking fund account, but so you and your soon-to-be wife can feel what its like to live off of the remaining amount. I paid $25,000 for my master's degree out of pocket in 3 years making less than what you do and I'm so happy we don't have additional student loan debt! You don't want a net income reduction when you have to start paying student loans after you get the MBA... I think that will make you regret the decision and cause you to be unhappy.
gvsucavie03
 
Posts: 362
Joined: 16 Feb 2013

Re: Get an MBA or Invest?

Postby bengal22 » Fri Aug 30, 2013 9:11 am

short answer: MBA will gain you more income than you ever will earn from your investment. i would not delay
User avatar
bengal22
 
Posts: 717
Joined: 3 Dec 2011
Location: Ohio

Re: Get an MBA or Invest?

Postby ClevrChico » Fri Aug 30, 2013 9:11 am

I would make sure the company is paying the cost for you to go back to school. I've never heard of a medium-large company not doing this. Even some retail stores offer tuition reimbursement.

Large banks have a lot of room to negotiate packages, although they can be extremely stingy too. Be firm. :-)
ClevrChico
 
Posts: 199
Joined: 3 Apr 2012

Re: Get an MBA or Invest?

Postby kingjimmy » Fri Aug 30, 2013 9:23 am

I'm definitely passionate about my job and enjoy what I do. It's pretty cool helping people keep their homes who might otherwise lose them to foreclosure. I don't forsee myself changing industries, career paths, or companies anytime soon.

And my company does offer up to $5k a year in tuition reimbursement. But it has to be based on business need.
Jimmy | http://www.bigbadbanker.com
kingjimmy
 
Posts: 76
Joined: 26 Aug 2013
Location: North Carolina

Re: Get an MBA or Invest?

Postby jpkuva » Fri Aug 30, 2013 9:26 am

I don't see pursuing an advanced degree and investing as mutually exclusive, just different investments. When my siblings and I were growing up my Mom would always say "there are two things no one can ever take away from you, your religion and your education". I think you need to consider pursuing an advanced degree as an investment in yourself. Pursue the MBA if this fits into your career goals, manage any related debt as best you can. I paid for my graduate degree out of my own pocket. It absolutely helped me achieve the job I have. Never for a minute do I regret the investment I made, and it's an accomplishment for which I am very proud. I still remember the day I walked across the stage on a rainy day at UVA. My Dad, who never went to college, wept as I received the diploma...this alone was worth the price of tuition. Best of luck.
Last edited by jpkuva on Fri Aug 30, 2013 9:56 am, edited 1 time in total.
jpkuva
 
Posts: 48
Joined: 21 Apr 2008

Re: Get an MBA or Invest?

Postby WendyW » Fri Aug 30, 2013 9:27 am

bengal22 wrote:short answer: MBA will gain you more income than you ever will earn from your investment. i would not delay

I did a fulltime MBA, and between the years of lost salary and tuition, I figure I am in the hole to the tune of $300,000+.

I don't expect that I will ever recover this amount, as my post-MBA job doesn't pay significantly more than my pre-MBA job did.
WendyW
 
Posts: 338
Joined: 8 Dec 2012

Re: Get an MBA or Invest?

Postby simplesimon » Fri Aug 30, 2013 9:40 am

I think you recognize that if you become a commodity, you become expendable. I don't think an MBA on your resume will necessarily improve your position, but it definitely will give you the business education and "more tools in your toolbox" (MBA's love tools) to help you think about the big picture. I agree with an above poster that the education in itself is an investment. I am a very different, more educated person from when I started my MBA and when I finished. I went from healthcare operations to banking and don't regret one minute of it.

I also wouldn't rush the decision. 2 years of work experience is well below the average 4-5 years work experience (more for part-time programs) of MBA students.

I have a few friends that are in an MBA leadership program in Charlotte (likely at your bank :P ). It might be worth it to see what people in those programs think of the MBA. On the other hand, if you're getting trained to be management without one then you don't need an MBA! Although I will say that the salaries in these types of programs are over $90k.
simplesimon
 
Posts: 2430
Joined: 25 Feb 2008
Location: Boston, MA

Re: Get an MBA or Invest?

Postby kingjimmy » Fri Aug 30, 2013 9:55 am

It definitely wont' be a rushed decision. It'd probably be another 2-3 years before I apply. By then I should be promoted another position or two within the company. I'm just getting married and will probably wait a year or two before having kids. I would rather have my car paid off, and have my fiancee's car paid off before I begin. As it is, I would need some foundational economics/finances classes before I could even formally take the program. I might look to take those classes at the local community college and see how well I do at those before enrolling in an MBA program. Some of our senior management doesn't have an MBA. They just have just spent a zillion years in the mortgage industry. Most of them at least have an undergraduate degree in some financial/business related field though. But a senior VP I know of doesn't even have an undergraduate degree.... so... it's possible to get pretty far without one. But I know some of our internal job postings definitely require some sort of financial degree to get ahead.

Thank you all for your continued thoughts. They are much appreciated.
Jimmy | http://www.bigbadbanker.com
kingjimmy
 
Posts: 76
Joined: 26 Aug 2013
Location: North Carolina

Re: Get an MBA or Invest?

Postby rrppve » Fri Aug 30, 2013 9:58 am

Investing in getting an MBA will be the better financial choice provided that you utilize the MBA. What I mean by this is that within 2 years of getting the MBA you need to take a job that requires an MBA and has a career track for people with MBAs, think consulting, investment banking, executive management, wealth management, etc.
Just getting an MBA and staying in the same job or type of job is unlikely to yield significantly different results in terms of income. It may give you a boost in job mobility.
Good luck.
rrppve
 
Posts: 73
Joined: 12 Aug 2012

Re: Get an MBA or Invest?

Postby Texas hold em71 » Fri Aug 30, 2013 10:06 am

My husband got his MBA in his twenties (no kids, fewer responsibilities at work). I waited until my forties (kids, more work stress). I think getting it earlier for that reason alone makes sense. I would recommend working and going at the same time. It may take longer but financially it will be easier on you as a couple.

I would say my lack of an MBA has not harmed me financially (I also have a CPA though) and my husband's definitely helped him. Both of us had employers footing the bill at relatively inexpensive schools. Our MBAs would not land us jobs on Wall Street. So consider the weight of an MBA required for what you want to do. If you are happy being a worker bee, then don't spend more than necessary on the degree.

Don't assume that because current management is filled with non-MBAs that it will stay that way. My employer was that way for a long time. Now it takes an MBA to get an entry level position.
Texas hold em71
 
Posts: 522
Joined: 18 May 2013

Re: Get an MBA or Invest?

Postby Tycoon » Fri Aug 30, 2013 10:07 am

WendyW wrote:
bengal22 wrote:short answer: MBA will gain you more income than you ever will earn from your investment. i would not delay

I did a fulltime MBA, and between the years of lost salary and tuition, I figure I am in the hole to the tune of $300,000+.

I don't expect that I will ever recover this amount, as my post-MBA job doesn't pay significantly more than my pre-MBA job did.


I'll second this. I can throw a rock and hit a dozen employees with MBAs where I work. The place is full of them. With very few exceptions earning the MBA did nothing to enhance their earnings. Earnings are mostly proportional to work ethic and drive, not one's degree.
User avatar
Tycoon
 
Posts: 190
Joined: 28 Mar 2012

Re: Get an MBA or Invest?

Postby Texas hold em71 » Fri Aug 30, 2013 10:13 am

Tycoon wrote:
WendyW wrote:
bengal22 wrote:short answer: MBA will gain you more income than you ever will earn from your investment. i would not delay

I did a fulltime MBA, and between the years of lost salary and tuition, I figure I am in the hole to the tune of $300,000+.

I don't expect that I will ever recover this amount, as my post-MBA job doesn't pay significantly more than my pre-MBA job did.


I'll second this. I can throw a rock and hit a dozen employees with MBAs where I work. The place is full of them. With very few exceptions earning the MBA did nothing to enhance their earnings. Earnings are mostly proportional to work ethic and drive, not one's degree.


While I agree with your last statement does your employer currently promote non-MBAs over MBAs as a rule?
Texas hold em71
 
Posts: 522
Joined: 18 May 2013

Re: Get an MBA or Invest?

Postby kingjimmy » Fri Aug 30, 2013 10:13 am

One of my friends and coworkers is also an underwriter, and he has undergrad/graduate degrees in accounting. And he does the exact same thing I do for a living. In fact, I'm pretty sure I get paid more than he is, and all I have is a degree in theology. I think there is much to be said about one's personal drive. Senior management comes to me for escalated issues and my managers regularly hold me up as a leader within my department in front of the entire team. So, it seems like I could easily work my way into a loan officer or manager position within a few years. One doesn't need a degree for that. But if I were to ever aspire to become something much higher than a low/mid-level manager, I could see how a financial degree of some sort could benefit me in the long run. Maybe even an MBA.
Jimmy | http://www.bigbadbanker.com
kingjimmy
 
Posts: 76
Joined: 26 Aug 2013
Location: North Carolina

Re: Get an MBA or Invest?

Postby kingjimmy » Fri Aug 30, 2013 10:16 am

Texas hold em71 wrote:
Tycoon wrote:
WendyW wrote:
bengal22 wrote:short answer: MBA will While I agree with your last statement does your employer currently promote non-MBAs over MBAs as a rule?


Kinda hard to say. I can't say I've seen too many people with MBA's in my line of work. The two people in my department that have masters degrees (one an MBA and one in Accounting) aren't any higher up the ladder than I am. In fact, the guy with the MBA quit. He was in a position lower than me, making probably only $12 an hour, and management HATED him.
Jimmy | http://www.bigbadbanker.com
kingjimmy
 
Posts: 76
Joined: 26 Aug 2013
Location: North Carolina

Re: Get an MBA or Invest?

Postby Andyrunner » Fri Aug 30, 2013 10:31 am

kingjimmy wrote:It definitely wont' be a rushed decision. It'd probably be another 2-3 years before I apply. By then I should be promoted another position or two within the company. I'm just getting married and will probably wait a year or two before having kids. I would rather have my car paid off, and have my fiancee's car paid off before I begin. As it is, I would need some foundational economics/finances classes before I could even formally take the program. I might look to take those classes at the local community college and see how well I do at those before enrolling in an MBA program. Some of our senior management doesn't have an MBA. They just have just spent a zillion years in the mortgage industry. Most of them at least have an undergraduate degree in some financial/business related field though. But a senior VP I know of doesn't even have an undergraduate degree.... so... it's possible to get pretty far without one. But I know some of our internal job postings definitely require some sort of financial degree to get ahead.

Thank you all for your continued thoughts. They are much appreciated.


Convince the company its is a business need, use their 5k to help pay for your MBA, and take your time doing it, 3-4 years to get it all done, so they pay most of it. Im all for it if its on the companies dime.

As far as upper level VPs not having MBAs, that is because they were grandfathered in. If it comes down for a new VP canidate, a person with an MBA will win over you.

No go get it done on the company's dime. Youll want it done before you have kids...trust me.
Andyrunner
 
Posts: 191
Joined: 3 May 2012

Re: Get an MBA or Invest?

Postby robby152 » Fri Aug 30, 2013 10:37 am

While I agree with the many that are saying MBAs can be a dime a dozen today (with junior colleges and online universities allowing you to 'get your mba', as if everyone should get it, I do think that it depends on what type of school you attend and how you perform in school. I went to a good school, right on the top 50 bubble, and performed well. Based on this, I got a great job upon graduation that doubled my previous salary. Now, that job has landed me into independent consulting and it is working out very well for me. So, I think having the three magic letters by your name can help if it is from a reputable school and you perform well in the program. However, I probably never would have done it had I not gotten a great scholarship. So, my advice is to study your brains out for the GMAT and see what scholarship they offer you. I studied like crazy for 4 months and it paid off. I like the earlier comment about having your employer foot the bill. I think many people can get trapped in false paradox of thinking a situation is either A or B (pay 30K or don't go). Here is some lame MBAish advice for you based on the book Built to Last - reject the 'tyrrany of the OR' or however it was phrased and embrace the something something of the AND. In other words, look for the creative third option. Have your cake and eat it too. In this case, maybe you can get the MBA and not pay an arm and a leg. Maybe still work part time. Maybe have your employer pay for all or part. Maybe get a scholarship. All of these could drop your out of pocket costs to 5-10K, which could make it much more appealing for you. Best of Luck!
User avatar
robby152
 
Posts: 94
Joined: 3 Jan 2008

Re: Get an MBA or Invest?

Postby Texas hold em71 » Fri Aug 30, 2013 10:37 am

I guess the comment about liking being a worker bee concerns me. It is probably generational :D . My parents raised me to trade work stress for personal financial stress.

Do you think the job you are in (and maybe the loan officer position that would come next) would make you happy professionally and personally for another 20 years? If so, then maybe you don't get the degree. A lot of people support a family on that salary. If you think you can accomplish all of your goals then maybe investing makes more sense for you.

I waited and it has not harmed me, but it would be nice not to take tests in my 40s.
Texas hold em71
 
Posts: 522
Joined: 18 May 2013

Re: Get an MBA or Invest?

Postby kingjimmy » Fri Aug 30, 2013 10:59 am

Texas hold em71 wrote:I guess the comment about liking being a worker bee concerns me. It is probably generational :D .


LOL. Yeah. Well, from what I can tell of the management here is that they spend an awful lot of time sitting around looking at reports and then discussing reports, and then running fire drills and micro managing people to death when things on their reports don't look right. Sometimes those are good things. But often I feel there is a disconnect between senior levels of management and reality. They make things that don't matter matter simply because something is off in reporting. Thus, I am happy being a worker bee. I feel like I get actual things done.

Being an LO sounds, from what I can tell, like a pretty good job. It pays well and seems in keeping with what I wouldn't mind doing. I don't have the desire to be the next CFO in the bank. But... I am keeping my options open. Also, as far as careers go, it seems like long-term having 5-10+ years of underwriting experience under my belt makes me a lot more employable/marektable long-term, as it seems like it is an actual job skill per say. Sometimes I wonder what the exact job skill of my senior managers actually consists of. Looking over reports and managing risk? I might be tempted to blow my brains out if that's all I did for a living :-)

One of the senior managers got axed recently because they weren't very sharp. I wonder, even though they have 20+ years in management at the bank, what they've gone to do after getting axed from here. I guess they could apply at another bank for a management position. I've known some very experienced managers who managed hundreds of people lose their job, only to be lucky to grab a low level managment job at another company after long term unemployment. Managers seem to talk a good game, but their actual game is kinda weak.

Just some random thoughts...
Jimmy | http://www.bigbadbanker.com
kingjimmy
 
Posts: 76
Joined: 26 Aug 2013
Location: North Carolina

Re: Get an MBA or Invest?

Postby RadAudit » Fri Aug 30, 2013 11:18 am

Most banks can come to believe that there is a business need for an employee who is a mortgage underwriter to earn a MBA. So, getting an educational reimbursement shouldn't be that difficult. Additionally, they get the advantage of increased performance / employee contribution while you are going to school and another advantage is decreased chance of turnover while you are in school - it'll cost them $ to find and train a replacement for you.

The expected payback and return of getting an MBA at night and avoiding the lost wages of going full time is a calculation most MBA candidates should be required to make before they go that route.

Best of luck.
"Everything will be all right in the end. If everything is not all right, then it is not the end." - The Best Exotic Marigold Hotel
RadAudit
 
Posts: 1287
Joined: 26 May 2008
Location: Second star on the right and straight on 'til morning

Re: Get an MBA or Invest?

Postby stan1 » Fri Aug 30, 2013 11:26 am

kingjimmy wrote:
Texas hold em71 wrote:I guess the comment about liking being a worker bee concerns me. It is probably generational :D .


LOL. Yeah. Well, from what I can tell of the management here is that they spend an awful lot of time sitting around looking at reports and then discussing reports, and then running fire drills and micro managing people to death when things on their reports don't look right. Sometimes those are good things. But often I feel there is a disconnect between senior levels of management and reality. They make things that don't matter matter simply because something is off in reporting. Thus, I am happy being a worker bee. I feel like I get actual things done.



Events of 2008 made mortgage lenders very risk adverse, which often results in oversight, reports, micro management. Given that you mention Charlotte, NC you might even be working for the devil incarnate (Bank of America/Countrywide/Merrill Lynch).
stan1
 
Posts: 3142
Joined: 8 Oct 2007

Re: Get an MBA or Invest?

Postby kingjimmy » Fri Aug 30, 2013 11:29 am

Ha. No. I work for one of the good guys: Wells Fargo.
Jimmy | http://www.bigbadbanker.com
kingjimmy
 
Posts: 76
Joined: 26 Aug 2013
Location: North Carolina

Re: Get an MBA or Invest?

Postby kingjimmy » Fri Aug 30, 2013 11:37 am

How flexible is an MBA for the future should I decide to switch career paths? I would probably get an MBA in a management type concentration since it seems in keeping with my current career path. But should I decide I want to become a financial advisor or investment banker one day, would I probably be forced to retool again one day? What MBA concentrations allow for the greatest career flexibility?
Jimmy | http://www.bigbadbanker.com
kingjimmy
 
Posts: 76
Joined: 26 Aug 2013
Location: North Carolina

Re: Get an MBA or Invest?

Postby stan1 » Fri Aug 30, 2013 11:46 am

Personally I would get a general MBA with a broad cross section of accounting, marketing, finance, MIS/IT, leadership, and operations research classes. Then I would work with my supervisor to get some job experience in these areas on your resume. Note getting experience does not necessarily mean working IN that department; you can get plenty of experience in these areas WORKING WITH other departments. I've found that most managers are very supportive of putting their best employees in cross-departmental special assignments. I always remind the people I mentor to think about the breadth of their experience as well as the depth. After a few years you'll have a very strong resume that shows good experience and hopefully good results/metrics that communicate your accomplishments.
stan1
 
Posts: 3142
Joined: 8 Oct 2007

Re: Get an MBA or Invest?

Postby Christine_NM » Fri Aug 30, 2013 12:10 pm

kingjimmy wrote:How flexible is an MBA for the future should I decide to switch career paths? I would probably get an MBA in a management type concentration since it seems in keeping with my current career path. But should I decide I want to become a financial advisor or investment banker one day, would I probably be forced to retool again one day? What MBA concentrations allow for the greatest career flexibility?


My employer paid for my MBA. The tradeoff was that my concentration had to be IT. That was OK for me, but the point is, if the employer pays, your educational opportunities may limited to what your employer deems useful at the moment.
Savor the moment.
User avatar
Christine_NM
 
Posts: 1446
Joined: 20 Feb 2007
Location: Albuquerque

Re: Get an MBA or Invest?

Postby Phineas J. Whoopee » Fri Aug 30, 2013 12:43 pm

I'm going to give my usual advice, with additional comments based on what you've said about yourself.

First, never attend graduate school for any subject you aren't intensely interested in.

Second, you're planning massive new demands on your time, money, and attention before you even are thinking of applying to grad school. If you want to succeed in any master's program you have to prioritize it.

Third, you like your job and an MBA isn't necessary to advance. Furthermore, you don't think you'd like doing what the senior leaders do.

Fourth, my experience in industry is that graduate degrees are valued or disvalued as credentials depending mostly on the politics of whoever's in charge. Some like education. Others distrust it. An actual, exact quote (which I've remembered all these years because it was so striking) was about two candidates who seemed similarly qualified; the HR VP insisted we hire the one with worse undergraduate academics; he said (and I'll repeat this is an exact quote): "A students make grades. C students make money."

I vote no. Take the $30,000 and put it in a savings account. You'll need the extra cash once you're married and a parent.

Hope that isn't a downer.

PJW
User avatar
Phineas J. Whoopee
 
Posts: 1974
Joined: 18 Dec 2011

Re: Get an MBA or Invest?

Postby simplesimon » Fri Aug 30, 2013 1:36 pm

kingjimmy wrote:How flexible is an MBA for the future should I decide to switch career paths? I would probably get an MBA in a management type concentration since it seems in keeping with my current career path. But should I decide I want to become a financial advisor or investment banker one day, would I probably be forced to retool again one day? What MBA concentrations allow for the greatest career flexibility?


Your best chance at career switching is actually right after the MBA is completed and typically with a full-time program. Unless you get relevant work experience, you will not be able to switch into investment banking simply because you have an MBA. This applies to any job you want to eventually switch to.

An MBA curriculum typically includes all the core/general business management classes (accounting, marketing, finance, strategy). It's hard to say which concentration gives you the most flexibility, but for anybody that ends up in management, its the soft concentration like Organizational Behavior or Leading Change type tracks that's most recommended.

I don't think you need to get an MBA if you're able to move up w/ your company without it and you're content w/ the salaries you expect to make. But if you really want to learn new things, be back in school and network with people, and benefit in these other non-quantifiable ways, it's a great option.
simplesimon
 
Posts: 2430
Joined: 25 Feb 2008
Location: Boston, MA

Re: Get an MBA or Invest?

Postby JupiterJones » Fri Aug 30, 2013 3:08 pm

Phineas J. Whoopee wrote:First, never attend graduate school for any subject you aren't intensely interested in.


Strongly seconded.

There are so many conversations here about whether getting such-and-such a degree or major is "worth it", considering only the salary aspect of it.

Well what's wrong with getting a degree simply because you value knowledge? Because you enjoy the subject matter? Because you want to better yourself?

Which isn't to say that the monetary value of the degree shouldn't be considered. Only that it should be the second consideration, not the first.

I would go as far as say that the only degrees you should pursue are those that you would be interested in even if they didn't lead to a pay increase. Because they often don't. Plus, why spend all that time and money on something you're not passionate about? (Those students who are primarily studying a subject for career advancement seem to do the lousiest at it anyway.)
Stay on target...
User avatar
JupiterJones
 
Posts: 1735
Joined: 24 Aug 2010
Location: Nashville, TN

Re: Get an MBA or Invest?

Postby kingjimmy » Fri Aug 30, 2013 3:26 pm

Good thoughts. It should be noted I studied theology at my undergraduate because of my passion and personal interests. If I go back for grad school it'll be strictly for professional pursuits. However it is worth noting that I have always had a strong desire to learn. I love learning just about anything, and highly enjoy academic stuff. I did fairly well in school and have always found things like research papers and test taking fun. I'm a pretty analytical guy by nature. I get it from my dad who was nicknamed "Dr Why" at one job he had years ago. If you could pay me to be a full time college student, I would be. Maybe that's what I'll do when I retire :-)

I would probably do well at school again. I just don't want to invest the time on energy into something that doesn't pay back. Especially since I'm soon to be newlywed and starting a family in a couple years. It might not be the best lifestyle choice I could make.

Thanks for your thoughts :-)
Jimmy | http://www.bigbadbanker.com
kingjimmy
 
Posts: 76
Joined: 26 Aug 2013
Location: North Carolina

Re: Get an MBA or Invest?

Postby Christine_NM » Fri Aug 30, 2013 3:46 pm

Have you tried online courses in business and finance, like at coursera.org ? That would give you a risk-free trial of what a degree program would be like. I've taken their courses just for fun, and it is not near what you would get in a real program, because you don't have to push yourself as hard. But you can try different areas and see which ones you get tired of and which continue to interest you.

I highly recommend coursera even if you reject the idea of trying for a graduate program.
Savor the moment.
User avatar
Christine_NM
 
Posts: 1446
Joined: 20 Feb 2007
Location: Albuquerque

Re: Get an MBA or Invest?

Postby bengal22 » Fri Aug 30, 2013 8:31 pm

WendyW wrote:
bengal22 wrote:short answer: MBA will gain you more income than you ever will earn from your investment. i would not delay

I did a fulltime MBA, and between the years of lost salary and tuition, I figure I am in the hole to the tune of $300,000+.

I don't expect that I will ever recover this amount, as my post-MBA job doesn't pay significantly more than my pre-MBA job did.


I had just the opposite experience and found that strong performance coupled with my MBA degree helped differentiate me from others. It was definitely a benefit that would be worth $30K(OP estimate). Did not know MBA costs 300K. Wow. I earned mine while going to school at night.
User avatar
bengal22
 
Posts: 717
Joined: 3 Dec 2011
Location: Ohio

Re: Get an MBA or Invest?

Postby johnep » Sat Aug 31, 2013 8:29 am

The MBA is an investment too, an investment in your career. Considering your under grad degree is in a non business major, I think an MBA can be a good career move but only if you have aspirations for a management career long term. It can provide more career opportunities but you have to able to take advantage of those opportunities based on your ability and effort, not your degree. Charlotte has a good program. Best wishes.
johnep
 
Posts: 905
Joined: 28 Dec 2011
Location: North Carolina

Re: Get an MBA or Invest?

Postby grok87 » Sat Aug 31, 2013 8:51 am

I would do the CFA.it is a lot cheaper and you can still work while you do the exams. That is also true of a part time MBA I guess. I have heard that the only Mba's that are "worth" it are the full time ones from top 10 schools. For everyone else, ie part time mbas at smaller or local schools, I think WendyW's experience is sadly very typical...
Cheers,
grok, CFA | "You can only convince people who think they can benefit from being convinced."- Taleb
grok87
 
Posts: 6295
Joined: 27 Feb 2007

Re: Get an MBA or Invest?

Postby eddiejov55 » Sat Aug 31, 2013 9:15 am

bengal22 wrote:
WendyW wrote:
bengal22 wrote:short answer: MBA will gain you more income than you ever will earn from your investment. i would not delay

I did a fulltime MBA, and between the years of lost salary and tuition, I figure I am in the hole to the tune of $300,000+.

I don't expect that I will ever recover this amount, as my post-MBA job doesn't pay significantly more than my pre-MBA job did.


I had just the opposite experience and found that strong performance coupled with my MBA degree helped differentiate me from others. It was definitely a benefit that would be worth $30K(OP estimate). Did not know MBA costs 300K. Wow. I earned mine while going to school at night.


MBA + lost salary from obtaining MBA cost WendyW $300k - not just the MBA.

OP - I would toss in the WHERE you obtain your MBA is just as important in this discussion. If you're not going to one of the top tier institutions then the value of the MBA might not be as great as you expect. You need to have a firm handle on your expectations so that you look at this objectively. There are fields where MBAs are a waste of time. There are fields where an MBA is a requirement. There are fields where an MBA is a ticket to greater opportunity. Make sure you have a firm handle on which path your MBA will fall into.

I cannot stress enough that the WHERE you obtain your MBA is very important in many fields where this degree is important. Why don't you start studying for the GMAT and take a few practice tests to see where you shake out? If your score is going to put you outside the top 20 business schools, then maybe rethink the importance to you?
eddiejov55
 
Posts: 98
Joined: 9 Jan 2012

Re: Get an MBA or Invest?

Postby ieee488 » Sat Aug 31, 2013 9:54 am

eddiejov55 wrote:
bengal22 wrote:
WendyW wrote:
bengal22 wrote:short answer: MBA will gain you more income than you ever will earn from your investment. i would not delay

I did a fulltime MBA, and between the years of lost salary and tuition, I figure I am in the hole to the tune of $300,000+.

I don't expect that I will ever recover this amount, as my post-MBA job doesn't pay significantly more than my pre-MBA job did.


I had just the opposite experience and found that strong performance coupled with my MBA degree helped differentiate me from others. It was definitely a benefit that would be worth $30K(OP estimate). Did not know MBA costs 300K. Wow. I earned mine while going to school at night.


MBA + lost salary from obtaining MBA cost WendyW $300k - not just the MBA.

OP - I would toss in the WHERE you obtain your MBA is just as important in this discussion. If you're not going to one of the top tier institutions then the value of the MBA might not be as great as you expect. You need to have a firm handle on your expectations so that you look at this objectively. There are fields where MBAs are a waste of time. There are fields where an MBA is a requirement. There are fields where an MBA is a ticket to greater opportunity. Make sure you have a firm handle on which path your MBA will fall into.

I cannot stress enough that the WHERE you obtain your MBA is very important in many fields where this degree is important. Why don't you start studying for the GMAT and take a few practice tests to see where you shake out? If your score is going to put you outside the top 20 business schools, then maybe rethink the importance to you?


The OP is talking about attending University of North Carolina - Charlotte which doesn't even show up in any of the MBA rankings.
http://www.businessweek.com/bschools/rankings/
http://www.economist.com/whichmba/full- ... epth=77633
http://grad-schools.usnews.rankingsandr ... a-rankings
ieee488
 
Posts: 1325
Joined: 10 Dec 2009

Re: Get an MBA or Invest?

Postby WendyW » Sat Aug 31, 2013 10:53 am

eddiejov55 wrote:MBA + lost salary from obtaining MBA cost WendyW $300k - not just the MBA.

OP - I would toss in the WHERE you obtain your MBA is just as important in this discussion.

I attended a top-15 but not-top-10 school (e.g. Duke/UVA/Michigan/Cornell) but had the misfortune to graduate during the 2008/2009/2010 aftermath of the financial crisis.

A fulltime MBA at a decent school is a big bet that usually -- but not always -- pays off.

If I was going to do everything again, I'd probably go part-time at a less prestigious local school. Less potential payoff, but also much less risk.
WendyW
 
Posts: 338
Joined: 8 Dec 2012

Re: Get an MBA or Invest?

Postby Valuethinker » Sat Aug 31, 2013 11:30 am

kingjimmy wrote:Hello,

I wanted to get your opinions. I work for one of the largest banks in the country as a mortgage underwriter in the loss mitigation/foreclosure side of the bank, and have been doing so for just over 2 years. I make a decent living. My base salary is 51k, and I get about 5-8k in bonuses throughout the year. My fiancee (soon to be wife in 37 days) works as a library teacher. She makes about 40k. Altogether we make just under 100k per year.

I have an undergraduate degree in theology, as well as a post degree certificate as a paralegal in corporate banking and finance. Due to the nature of the mortgage industry, and my lacking a 4 year financial degree, I've been considering going back to school to work on an MBA at UNC Charlotte. I've thought about doing this so as to make myself more marketable should things slow down and I eventually get laid off, or so that I can possibly climb the corporate ladder into more senior levels of management one day. However, it seems in the mortgage industry that an MBA isn't something a lot of people have... even in upper management. The job across all positions has always had a "on the job training" nature about it, and there doesn't seem like a lot of formal education that can prepare you to work in this industry, as so much of it is driven by ever changing political whims and legislation.

Career wise, underwriters tend to max out at about 75-85k a year. Managers don't make much more than I do, unless you move up to more senior levels of leadership, then you can make about 115k per year. As it stands, I'm not even sure if I want to be a manager one day. I'm pretty content being a happy little worker bee, as I am very good at my job. But I'm so good that management has already started to court and groom me a bit to one day become a leader within the company.

With that said, an MBA would cost me about $30,000 to pursue. Do you think in my case, it would be worth purusing? Or would I be better off taking the $30,000 and just investing it long term? It seems that an MBA might increase my salary potential one day. But then again, I know plent of MBA's who have jobs making less than I do. I worry though, that the hit I would take to my 401k for the next several years while I pay for college instead of investing might significantlly reduce my long-term returns.

Thoughts?

Thanks,

Jimimy


EDIT

I wrote the below, and it's wrong. Because I confused UNC- Chapel Hill B School (which is highly ranked) with UNC Charlotte.

This reverses my advice. Go for a part time or exec MBA, for full time you really have to stick to the top 15 (or top 10).


Original (incorrect) post

UNC Charlotte is one of the top rated public university MBAs in the country. It's definitely in the top 20 MBA programmes (*all*) and it verges on the top 10.

I think you would, personally, gain so much by spending 21 months in that programme in terms of your personal growth, the contacts you would make, how you would feel about yourself and your readiness for senior management.

I can't say you'd make more money, this might not be a good financial decision, but as a decision for you as a person, I'd say go for it.

Note that recruiters look at Full TIme and Exec MBAs very differently. The former are seen as high quality (if from 'name' schools). The latter are just less selective (even at top ranked schools) and so don't have the same career impact.

If you can get your employer to sponsor you for an exec MBA and you like your job, then that's a viable route as well. But don't delay, the optimal time to start a FT programme is under 28, and an exec programme probably under 31-21.
Valuethinker
 
Posts: 23709
Joined: 11 May 2007

Re: Get an MBA or Invest?

Postby WendyW » Sat Aug 31, 2013 12:04 pm

Valuethinker wrote:I wrote the below, and it's wrong. Because I confused UNC- Chapel Hill B School (which is highly ranked) with UNC Charlotte. This reverses my advice. Go for a part time or exec MBA, for full time you really have to stick to the top 15 (or top 10).

Got it. [OT comment removed by admin LadyGeek]
WendyW
 
Posts: 338
Joined: 8 Dec 2012

Re: Get an MBA or Invest?

Postby kingjimmy » Sat Aug 31, 2013 10:29 pm

I definitely plan on doing it part time if I do it. Thanks for the very thoughtful conversation. I decided with encouragement of my fiancee to sign up for UNC Charlotte's information sessions and the chance to sit in on a class and further explore my options. Because of the nature of my undergrad studies in college I'm going to have to take some math and econ classes before I can take any grad level classes at UNCC. Not to mention taking the GMAT or GRE. So... it's probably still a year away. But their program looks to be pretty impressive. I compared it to some other competitors in the area and they don't seem to hold a candle to UNCC.
Jimmy | http://www.bigbadbanker.com
kingjimmy
 
Posts: 76
Joined: 26 Aug 2013
Location: North Carolina

Re: Get an MBA or Invest?

Postby Paddington79 » Sun Sep 01, 2013 10:15 am

As someone who got an MBA recently (half paid for by employer, half funded by me via loans/scholarship/etc) - I would really look hard at what you hope to gain from it. The MBA has helped my earning potential, but as yet I have not reaped the investment and I'm not sure that it gave me the edge I was hoping for. (Then again I graduated right into the height of the recession, which may color my view.)
I would advise you to get ahead as much as possible within your company, apply like hell to see if you could get a fellowship, and do all you can to get someone else like your employer to pay for it. Don't make the full investment on your own!
Paddington79
 
Posts: 32
Joined: 23 Jun 2013

Re: Get an MBA or Invest?

Postby grok87 » Sun Sep 01, 2013 10:33 am

kingjimmy wrote:I definitely plan on doing it part time if I do it. Thanks for the very thoughtful conversation. I decided with encouragement of my fiancee to sign up for UNC Charlotte's information sessions and the chance to sit in on a class and further explore my options. Because of the nature of my undergrad studies in college I'm going to have to take some math and econ classes before I can take any grad level classes at UNCC. Not to mention taking the GMAT or GRE. So... it's probably still a year away. But their program looks to be pretty impressive. I compared it to some other competitors in the area and they don't seem to hold a candle to UNCC.

Looks like the estimated cost for the degree (doing it part time) is $21,000.
Seems like that's very reasonable.
grok, CFA | "You can only convince people who think they can benefit from being convinced."- Taleb
grok87
 
Posts: 6295
Joined: 27 Feb 2007

Re: Get an MBA or Invest?

Postby tibbitts » Sun Sep 01, 2013 11:34 am

The $30k seems like a non-issue to me, for someone with a family income of $100k. The issues are the time involved, and the probability of completing the degree - and time is a big factor in determining the probability of completion. Given the circumstances you've described, I suggest looking for the roughly-business-related M-degree that you're most likely to complete. Realistically, you aren't going to be competing for jobs with Harvard MBA grads, so ignore all the comments about top-10 schools being the only ones worthwhile. The issue is about competing with people who have a B-degrees vs. you having an M-degree. Given most else being close or equal, you'll win more times than not - or at least you won't eliminated from consideration based on the lack of a graduate degree.

Also ignore the observation that lots of people have made it to middle or senior management without M-degrees. It's a generational thing. Especially with the tough job market of the past decade, the bar has been raised - it's just taking a while for the effects to be seen. People who would have only completed a B-degree in a healthier job market have opted for graduate school, and they'll be the people you'll be competing with throughout your career - whether it be for promotions, or to avoid layoffs.

Paul
tibbitts
 
Posts: 4663
Joined: 27 Feb 2007

Re: Get an MBA or Invest?

Postby lindisfarne » Sun Sep 01, 2013 10:13 pm

I'd say you should both max out your retirement savings for at least 3 years (IRA = $5500, 401k/403b = 17500, if your employer will allow that, + any employer contribution). That will reduce your taxable income quite nicely, and give you a nice start on retirement. If you live even more frugally, you can put away more toward retirement (but you won't get the tax deduction). At that point, ask yourself is an MBA worth it? Or should you try for another 3 years of massive savings. After 6 years of that, you might start thinking about how many more years before you can retire early.

Along the way, you could take some undergrad-level courses (start at a community college) that are needed to get into MBA programs. You might get your employer to pay for some of them, since they could contribute to the knowledge you have for your job, and they'll keep the door open if you do decide to go the MBA route down the road.
lindisfarne
 
Posts: 411
Joined: 19 Jan 2013

Re: Get an MBA or Invest?

Postby protagonist » Mon Sep 02, 2013 3:09 pm

I don't know if you will find this useful, but it is worth a read: http://online.wsj.com/article/SB1000142 ... 68564.html
protagonist
 
Posts: 1959
Joined: 26 Dec 2010

Re: Get an MBA or Invest?

Postby topper1296 » Mon Sep 02, 2013 5:26 pm

Christine_NM wrote:Have you tried online courses in business and finance, like at coursera.org ? That would give you a risk-free trial of what a degree program would be like. I've taken their courses just for fun, and it is not near what you would get in a real program, because you don't have to push yourself as hard. But you can try different areas and see which ones you get tired of and which continue to interest you.

I highly recommend coursera even if you reject the idea of trying for a graduate program
.


I'll second checking out coursera. I've taken a couple classes with them so far and my 3rd class starts up in 2 weeks. Financial accounting through Wharton.
User avatar
topper1296
 
Posts: 224
Joined: 3 Apr 2009
Location: Nashville TN

Re: Get an MBA or Invest?

Postby refurb » Mon Sep 02, 2013 5:46 pm

I graduated with my MBA a little over two years ago; I would certainly do it all over again. I ended up going from a well paying, but dead end job (in both responsibility and pay) to a job that pays me double the salary, has much more responsibility and a wide open career trajectory. I could never have landed this job without an MBA.

Unless you can get someone else to pay for it, DO NOT attend an MBA program that is not in the top 15 by rankings. It's just not worth the cost. Now don't think that the top programs actually teach you something the lesser ranked programs don't, they do. What the top programs offer you is: (1) a great network where you can get an introduction to the CEO or VP of that company you're applying to (2) a "brand" that says "[(removed) --admin LadyGeek] that guy must be smart, it's tough as hell to get into that MBA program" (3) a great job placement office that attracts the top companies year after year.

RF
refurb
 
Posts: 1
Joined: 2 Sep 2013

Re: Get an MBA or Invest?

Postby Nathan Drake » Mon Sep 02, 2013 9:01 pm

refurb wrote:I graduated with my MBA a little over two years ago; I would certainly do it all over again. I ended up going from a well paying, but dead end job (in both responsibility and pay) to a job that pays me double the salary, has much more responsibility and a wide open career trajectory. I could never have landed this job without an MBA.

Unless you can get someone else to pay for it, DO NOT attend an MBA program that is not in the top 15 by rankings. It's just not worth the cost. Now don't think that the top programs actually teach you something the lesser ranked programs don't, they do. What the top programs offer you is: (1) a great network where you can get an introduction to the CEO or VP of that company you're applying to (2) a "brand" that says "[(removed) --admin LadyGeek] that guy must be smart, it's tough as hell to get into that MBA program" (3) a great job placement office that attracts the top companies year after year.

RF


So what was your job before and after your MBA?
Nathan Drake
 
Posts: 320
Joined: 11 Apr 2011

Re: Get an MBA or Invest?

Postby jane1 » Mon Sep 02, 2013 10:26 pm

Job mobility and flexibility is the major advantage with an MBA. Even if right now you like your company and industry, things change with time. And you will find you are a lot more marketable and have transferable skills after you get an MBA.
If you do it part-time, the whole process from prep to apply to graduation would take several years. Doing it in your 20s or early 30s will have a larger payoff compared to doing it later in life.
jane1
 
Posts: 82
Joined: 26 Dec 2011

Re: Get an MBA or Invest?

Postby grok87 » Mon Sep 02, 2013 11:07 pm

protagonist wrote:I don't know if you will find this useful, but it is worth a read: http://online.wsj.com/article/SB1000142 ... 68564.html

Good article, thanks. I love the idea of programming boot camp!

This article on the merits of the MBA vs the Cfa is worth reading too.

http://www.forbes.com/sites/investopedi ... a-or-both/
I think it's slightly inaccurate in saying the Cfa takes 4 years. It's 3 exams so in theory you can do it in 2 years...
Cheers,
grok, CFA | "You can only convince people who think they can benefit from being convinced."- Taleb
grok87
 
Posts: 6295
Joined: 27 Feb 2007

Next

Return to Personal Finance (Not Investing)

Who is online

Users browsing this forum: FAST Enterprise [Crawler], Jim85, pennstater2005 and 36 guests