MBA worth it?

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DoctorPhysics
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MBA worth it?

Post by DoctorPhysics » Sun Jul 21, 2019 12:00 am

Hi there, just like the title says.. is an MBA worth it? They look very expensive, 75k/year to 200k/year if I read what I browsed correctly.

So is an MBA worth it? As in a worthwhile investment on future career growth and likely income?

Nathan Drake
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Re: MBA worth it?

Post by Nathan Drake » Sun Jul 21, 2019 12:09 am

The answer to this and most questions is “it depends”

A top 10 MBA could yield a lucrative consulting or banking position, but expect to work A LOT (60-80+ hour weeks). Burnout is high.

If you’re making 50k or less and want to break into high five figures or low six figures, it could possibly work out as well.

It gets difficult to determine the worth if you already make high five figures or low six figures and have no desire to go into consulting or banking for the long haul.

But of course degrees and careers have more factors involved than simple ROI

Vanguard Fan 1367
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Re: MBA worth it?

Post by Vanguard Fan 1367 » Sun Jul 21, 2019 12:57 am

My wife got an online MBA from Webster University. I don't know what the fees are currently but I am thinking that they may be less than 75 to 100K yearly. I am glad she got the MBA because they taught her Boglehead ideas so that she will go along with self directed investing and low fee index funds. So for us it was worth it.

maroon
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Re: MBA worth it?

Post by maroon » Sun Jul 21, 2019 1:04 am

I also think it depends.

I attended night school at the local public university; my employer at the time paid 80% of my tuition costs.
An MBA isn't strictly required for my position, but many of us in this job have earned an MBA.
For me, the expense was worth it. Then again, I paid considerably less than $75K per year.

msk
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Re: MBA worth it?

Post by msk » Sun Jul 21, 2019 2:10 am

OP has a PhD in physics? What age? I had a PhD in physics at age 26 and definitely an MBA at age 28 would have been useless for the career path I ended up with (multinational upstream oil with a Fortune 10). Among the toolkit I had the most useful was being able to code. Career progression went through engineering, economics and planning, HR, engineering management, general management. I had a few staff who did MBAs mid career but IMHO that never made any difference to how upper management viewed them. An excellent geologist was viewed as fundamentally a geologist, and lumbered with supervising other geologists regardless of being pre or post MBA. How he progressed further depended on his overall Emotional Quotient profile, but this was a Fortune 10 corporation and we prided ourselves of being able to train any bright monkey to any required skill level internally. When interviewing prospective staff, I would say that an MBA might have tilted me towards viewing the interviewee as more of a generalist than purely as a geologist (or whatever) but this probably matters among young potential employees (< 35?). For upper echelons the only thing that matters are actual accomplishments, not paper qualifications. If the OP is young enough (< 30?) and he feels strongly that a technical (physics leaning) career is not what he wants for the next decades, then an MBA might be appropriate. If he has to ask whether it's worth the $ then I expect the answer is No. I suspect that stock market firms are full of quants who do not have MBAs. Physics is "natural philosophy". You can dabble in anything the day you leave college. OK nobody will let you do surgery on his brain, but nevertheless you can work productively on surgical robotics, even if your PhD was in nuclear physics :beer

Prahasaurus
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Re: MBA worth it?

Post by Prahasaurus » Sun Jul 21, 2019 4:07 am

I think it’s practically useless, even anachronistic. Paying so much money for such a general education - you will obtain a superficial knowledge of many business subjects, just enough to get you into trouble - no longer makes sense. Yes, I grant you that you may make some interesting personal contacts getting your MBA, and there is value in that. And you may pick up some helpful info in subjects such as accounting or corporate finance that can be of some assistance during meetings. But is that in any way worth the outrageous price for the degree? I think not.

I have an MBA. I think 20 years ago it was a good career move, especially for someone with only an engineering degree (like me). But I’m very skeptical there is much value in 2019 in getting an MBA.

Maverick3320
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Re: MBA worth it?

Post by Maverick3320 » Sun Jul 21, 2019 5:54 am

DoctorPhysics wrote:
Sun Jul 21, 2019 12:00 am
Hi there, just like the title says.. is an MBA worth it? They look very expensive, 75k/year to 200k/year if I read what I browsed correctly.

So is an MBA worth it? As in a worthwhile investment on future career growth and likely income?
Which MBA are you seeing that costs $200,000 a year?

Boglegrappler
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Re: MBA worth it?

Post by Boglegrappler » Sun Jul 21, 2019 6:22 am

The question is too general to answer usefully.

Its liking asking if a college degree is worth it. Well, are we talking about an electrical engineering degree from Stanford, an English degree from Penn State, or a kinesiology degree from Western Mountain State? You also have to factor in the personal skills of the person earning it.

Top graduates from top MBA programs likely think their investment is worth it. I know several who do, including some recent ones.

To me, the greatest value in getting an MBA is the opportunity to be recruited to a new job or field by successful companies who come to your campus looking to hire people onto relatively defined career paths. If you're going to stay in the same job and careeer path that you are currently traveling, I'm not sure it is worth it. Probably not. In that case, as implied in many of the posts, what really counts is if your bosses think it's worth it.

SQRT
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Re: MBA worth it?

Post by SQRT » Sun Jul 21, 2019 6:32 am

Boglegrappler wrote:
Sun Jul 21, 2019 6:22 am
The question is too general to answer usefully.

Its liking asking if a college degree is worth it. Well, are we talking about an electrical engineering degree from Stanford, an English degree from Penn State, or a kinesiology degree from Western Mountain State? You also have to factor in the personal skills of the person earning it.

Top graduates from top MBA programs likely think their investment is worth it. I know several who do, including some recent ones.

To me, the greatest value in getting an MBA is the opportunity to be recruited to a new job or field by successful companies who come to your campus looking to hire people onto relatively defined career paths. If you're going to stay in the same job and careeer path that you are currently traveling, I'm not sure it is worth it. Probably not. In that case, as implied in many of the posts, what really counts is if your bosses think it's worth it.
Agree.

I got an MBA part time in 1979 when I was 29. Already had a CPA. MBA was not useful at the place I worked when I got it, but certainly helped me get my next job and advance quickly there. That was 40 years ago. Now? No idea.

ETA: I think it was worth it from an intellectual point but it was so long ago I’ve forgotten.
Last edited by SQRT on Tue Jul 23, 2019 8:05 am, edited 1 time in total.

runner3081
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Re: MBA worth it?

Post by runner3081 » Sun Jul 21, 2019 8:07 am

As others have stated, it really does depend.

Being in healthcare, the prestige of the school does not exactly matter a ton (at least in my experience).

The program I went through was about $40k.

I completed the program back in 2011 and, initially, it did nothing for me initially. However, it allowed me to get hired into a role with a better organization and then promoted into a job that requires a masters.

Long story short... In only 8 years, the degree has already paid for itself about 3x in salary.

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bengal22
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Re: MBA worth it?

Post by bengal22 » Sun Jul 21, 2019 8:38 am

For me it was definitely worth it. It helped me getting promotions within my company plus getting an outside lucrative job after first retirement. It can be the difference when all things else are equal.

BTW I got my MBA at night via tuition refund so my cost was zero. Except for time. It was tough with 2 small children so get it early.
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley

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Cyclesafe
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Re: MBA worth it?

Post by Cyclesafe » Sun Jul 21, 2019 9:23 am

At age 26 this chemistry major got an MBA from a reasonable school (USC), quit a sales job at one chemical company, to move to another much more successful chemical company but also in a sales capacity. Within 4 years, however, I was in product/brand management, and within 12 years was an executive. Of course, within 19 years I was laid off when the company was sold, but WTH, I was able to retire.

IMHO an MBA from a reasonable or better school makes sense if it can be earned while working and one's employer foots the bill. Why not? But one must be willing to start over somewhere else to maximize the "degree's" value. OTOH, honestly speaking, the skills gained in my MBA course were actually nothing that I otherwise wouldn't have picked up by just by reading or working in sales, or wherever (other than in a lab).

I don't think this has changed much.

But when I got my MBA, the degree was appreciated much more than it seems to today. I think I would consider not disclosing it to an employer if my MBA were from a lesser school. I would just pretend that my unexpected "wisdom" was innate.
"Plans are useless; planning is indispensable.” - Dwight Eisenhower

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AerialWombat
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Re: MBA worth it?

Post by AerialWombat » Sun Jul 21, 2019 9:36 am

Western Governors University. $3800/term. Many people have finished the MBA in a single 6-month term. Not prestigious. All online. No networking, no recruiting. But it’s a legit MBA.

Whether an MBA has practicality for you is impossible to say without knowing anything about your current career. I’m a serial entrepreneur and don’t think an MBA would have made a bit of difference in my career. I also wouldn’t hire somebody with an MBA just because they had one, because I would assume that person will bring with them “what they learned in biz school” that just doesn’t apply to a small business in the real world.
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vu8
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Re: MBA worth it?

Post by vu8 » Sun Jul 21, 2019 9:38 am

Only if it comes out of a VERY GOOD university such as U Penn, Harvard, Yale, Princeton, NYU Stern, Stanford, Berkeley, Duke or U Michigan. Basically if it's not a well known quality U you're wasting time and money.

jello_nailer
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Re: MBA worth it?

Post by jello_nailer » Sun Jul 21, 2019 9:42 am

Or... take the tuition money and start your own business. You will get a school of life MBA faster than you imagine and earn you major street cred. It ain't bgagging if you can do it. The hire your own MBA's.

Me thinks there are more wealthy business owners than wealthy "MBA's for the heck of it maybe it will help me in my job" types.

I went the owner route, sold to a F100 company, now my direct reports are the later above, getting their annual 3.2%.

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Re: MBA worth it?

Post by Valuethinker » Sun Jul 21, 2019 10:13 am

DoctorPhysics wrote:
Sun Jul 21, 2019 12:00 am
Hi there, just like the title says.. is an MBA worth it? They look very expensive, 75k/year to 200k/year if I read what I browsed correctly.

So is an MBA worth it? As in a worthwhile investment on future career growth and likely income?
You need to think about what your career goal is.

Remember that practical experience in business is favoured over anything. Every business is different. Start ups are very different from large multinationals, etc. If you want to work for a big 4/5 internet company like Amazon it's better to have that job, or to find one in a competitor, and find out what it's really like.

MBAs are used to 1. make contacts 2. add prestige to your CV (many CEOs for example are Harvard snobs) 3. learn something. Once you are over 30 the utility of a full time MBA to your career diminishes sharply.

You can change career, change level, change location (country, typically) - it's hard to do all 3 in your first post MBA job.

1. if you want to work for a top flight employer and it's a career switch, then a top 10 MBA is worth it (providing you are under 30). You will at least get access to interviews with investment banks, consulting firms etc. - the kids who have already been in those fields (those elusive top of class at West Point or Annapolis, youngest promote to captain, 3 years at McKinsey, 3 years at Goldman ... and under 30 ;-)) will be trying to get jobs in Private Equity or Venture Capital.

Worth reading Philip Delves Broughton on Harvard - I think he went back to journalism. Also someone a long time ago wrote about Stanford "Postcards from Hell".

It's worth employing an MBA admissions consultant to help you with your application. Probably a couple of thousand bucks well spent. And do nail that GMAT - you need to be in the high 600s to even be considered for a lot of schools (unless you have an amazing previous career and academic record) and there is a technique for those tests.

The "top 10" vary but include: Harvard, Stanford, Booth (Chicago), Wharton, Columbia, Sloan (MIT), Kellog (Northwestern), LBS, Insead, Tuck (Dartmouth), perhaps Darden (UVA) .. that list is fairly stable but there are no doubt others (there are several different rankings but the schools have learned to "game" the rankings). Harvard and Stanford stand out in terms of selectivity and therefore in terms of what they might do for your career.

Business Week used to have an MBA admissions discussion board which was helpful.

2. if you want to work in the trading side of Wall Street, probably better to try to get a job directly with a bank. Approach headhunters that do quant recruiting, read every book you can find on quant in Wall Street (Derman, Bookstaber etc. but also the technical ones). CFA is useful as a "know the jargon" qualification so you could start on that too (it's not hard, but the volume is enormous - you are going to have to commit 9-5 every weekend now to December for Level 1, and tbh I'd probably shoot for June 2020 for Level 1, even though it means you would take 3 years. Unless you have a lot of free time Level 1 & 2 between now and June 2020 is just a brutal amount of work).

Read all the popular books about flash trading as well.

There are Masters in quant finance out there - Columbia has one for sure, there are others. A friend has quite a good risk job on Wall Street, having done one of these (after an MBA). I don't know much about this world, but it's worth investigating. Paul Wilmott's website Wilmotts.com (?) has some good chat about these.

3. if not 1, then consider a part time or exec MBA, depending on your current working. You can get an MBA from a school like Columbia or Wharton or Chicago, on that basis. You won't have quite the same amazing classmates, and the time management stress will be extreme, but it's a useful credential to have.

4. if you already have significant management &/ or business experience, you might want to think about a Sloan Masters in Management (not related to the Sloan School, which is MIT). These are offered by Stanford, MIT & LBS. I would rank the Stanford one first in terms of access to opportunities post and quality of classmates *but* these will still be conditioned by what your past experience has been.

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Re: MBA worth it?

Post by harrychan » Sun Jul 21, 2019 10:14 am

Depends but most likely no. I'm in IT and a few years ago, I was accepted into the Talent program which was supposed to put me in the fast track to executive leadership team. I had access to talent development and HR. I asked what the % of ELT had advanced degrees, they said less than 20%. I now make over $160k (before bonus) with just a bachelor's.

But if I were to aim for a VP type position at another company, not having an MBA would probably hurt my chances.
This is not legal or certified financial advice but you know that already.

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Re: MBA worth it?

Post by ohai » Sun Jul 21, 2019 10:33 am

Even the best MBA might cost millions of dollars for some candidates. Many people who are considering Harvard Stanford types of schools already have substantial career achievement and have high salaries. If you already entered banking or something from college, you might be making $500k a year after 5 years, which is about the average experience of someone entering Harvard MBA.

Graduating Harvard MBA students make, on average, less than $200k a year upon graduation, although this number presumably increases in subsequent years.

Based on numbers alone, MBA does not make sense for people like this. 1) they lose 2 years of salary, from studying full time, 2) they lose 2 years of career progression, 3) they pay tuition and fees, 4) they lose future investment returns from 1 to 3, and 5) they re enter the work force at potentially a lower rank than they had to begin with.

Maybe someone could argue that the MBA creates a better network and future opportunities. I am sure this is valuable but I'm not sure how to quantify that. Yes, there is a compromise, like part time or executive MBA. Many people do pursue these degrees. However, many people think it's better to just spend that time at work.

cableguy
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Re: MBA worth it?

Post by cableguy » Sun Jul 21, 2019 10:38 am

MBA from a top 25 program yes. Otherwise....its questionable. That's been my experience. Nowadays....name recognition is more important than what you actually learn. Its a conversation piece. Networking. Etc.

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Re: MBA worth it?

Post by stoptothink » Sun Jul 21, 2019 10:52 am

cableguy wrote:
Sun Jul 21, 2019 10:38 am
MBA from a top 25 program yes. Otherwise....its questionable. That's been my experience. Nowadays....name recognition is more important than what you actually learn. Its a conversation piece. Networking. Etc.
My best friend did his MBA at Wharton, in my small circle of friends 4 others did highly regarded programs (Yale, Stanford, 2 UT-Austin). 2 of the 5 absolutely had their career fast-tracked due to a prestigious business school education; Yale, Stanford, and 1 UT remain to be seen, but 5+ yrs out they are kinda doing the same thing they were already doing. All unequivocally agree that what they actually learned in their MBA programs was pretty much useless, but it was great networking and the most straightforward way to get exposure to new employers (who were constantly recruiting on campus).

Topic Author
DoctorPhysics
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Re: MBA worth it?

Post by DoctorPhysics » Sun Jul 21, 2019 12:12 pm

Maverick3320 wrote:
Sun Jul 21, 2019 5:54 am
DoctorPhysics wrote:
Sun Jul 21, 2019 12:00 am
Hi there, just like the title says.. is an MBA worth it? They look very expensive, 75k/year to 200k/year if I read what I browsed correctly.

So is an MBA worth it? As in a worthwhile investment on future career growth and likely income?
Which MBA are you seeing that costs $200,000 a year?
Apologies, I think it was a 2-3 year program, and it likely included the schools estimates for room and board.

Topic Author
DoctorPhysics
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Re: MBA worth it?

Post by DoctorPhysics » Sun Jul 21, 2019 12:12 pm

Maverick3320 wrote:
Sun Jul 21, 2019 5:54 am
DoctorPhysics wrote:
Sun Jul 21, 2019 12:00 am
Hi there, just like the title says.. is an MBA worth it? They look very expensive, 75k/year to 200k/year if I read what I browsed correctly.

So is an MBA worth it? As in a worthwhile investment on future career growth and likely income?
Which MBA are you seeing that costs $200,000 a year?
Apologies, I think it was a 2-3 year program, and it likely included the schools estimates for room and board.

coffeeblack
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Re: MBA worth it?

Post by coffeeblack » Sun Jul 21, 2019 12:21 pm

I think if you want an MBA you need to first know what direction you want to go in your career. Then see if the MBA will help in both income and accelerating your career path. In my opinion An MBA for the sake of an MBA is not worth it. If this was 25 years ago I would still say the same thing. But perhaps then it was worth a little more.

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Bogle7
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Re: MBA worth it?

Post by Bogle7 » Sun Jul 21, 2019 12:47 pm

It depends.
Mine (Babson College) cost me about $100 + some gasoline.
My employer (Digital Equipment) paid for everything: tuition, fees, books.
It was a mentally easy after getting a MS Engineering (RPI). I basically just had to show up and do the homework.

It helped me get some jobs more easily. Not sure it got me more money.

ny_knicks
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Re: MBA worth it?

Post by ny_knicks » Sun Jul 21, 2019 3:31 pm

Yes - with the following caveat.

Go to a top 25 school that is well regarded and places well at companies you want to work for. Understand what jobs are available to you out of the program and what they pay. It’s easy to figure out just look at the employment reports on the schools website. Ensure that there is a significant gain in salary and that you wouldn’t be able to make that jump to the new position in the time it will take you to payoff the degree (including lose wages) without it.

If all of that applies then yea it’s probably worth it.

I attended a top program where students average salary going in was $60k and the average start salary after graduation was $120k. For the vast majority of my class it was likely worth it.

For those who go into IB / Consulting the payoff is even higher. You can go from $60k salary to $350k+ all in comp within 2 years of graduation and have your resume stamped with those jobs before the age of 30.

The payoff period is quite short in these cases ($60k x 2 years lost wages + $120k in tuition = $240k all in cost for the MBA). The incremental $290k can pay that back pretty quick.

MBA gets a bad rep sometimes but I saw it work out for a lot of people first hand.

Tdubs
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Re: MBA worth it?

Post by Tdubs » Sun Jul 21, 2019 4:33 pm

The discussion has, logically, focused on whether an MBA was "worth it" professionally. Did anyone find it intellectually "worth it"?

ModifiedDuration
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Re: MBA worth it?

Post by ModifiedDuration » Sun Jul 21, 2019 4:34 pm

vu8 wrote:
Sun Jul 21, 2019 9:38 am
Only if it comes out of a VERY GOOD university such as U Penn, Harvard, Yale, Princeton, NYU Stern, Stanford, Berkeley, Duke or U Michigan. Basically if it's not a well known quality U you're wasting time and money.
An MBA from Princeton?

Good to know that someone won’t be wasting their money getting an MBA from there.

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Re: MBA worth it?

Post by willthrill81 » Sun Jul 21, 2019 5:23 pm

DoctorPhysics wrote:
Sun Jul 21, 2019 12:00 am
Hi there, just like the title says.. is an MBA worth it? They look very expensive, 75k/year to 200k/year if I read what I browsed correctly.

So is an MBA worth it? As in a worthwhile investment on future career growth and likely income?
Here's a response I wrote to a similar question earlier this year.
willthrill81 wrote:
Fri Feb 08, 2019 4:54 pm
Having taught in multiple MBA programs myself and being in on many conversations on both sides of the fence, I can tell you that there are only three types of MBA that still have significant added value for a large proportion of those get them: (1) an executive MBA from a solid program, (2) a 'general' MBA from one of the top B-schools, and (3) a specialized MBA.

Executive MBA programs at good B-schools really can improve students' knowledge and skills in the workplace, and networking is a huge benefit as well. Be prepared to cough up at least $70k for a good one.

A general MBA from a top B-school still tends to carry significant weight in many, perhaps even most, industries. Networking is a big feature here as well. The cost can be obscenely high though, easily $200k.

A specialized MBA that focuses on a relatively new, 'hot' area can provide students with both good skills and connections in a niche area, where the connections tend to count the most, and may be valuable to many companies interested in expanding into the new area, although this added value can degrade rather quickly if the industry quickly moves past that area or it becomes saturated with similar graduates.

A general MBA from a typical university is, in my experience, not usually very helpful from a career perspective, although you can find many instances where they were. Mine was useful to me simply because it showed me that I wanted to continue my education in a different direction, and that new direction completely overhauled my career for the better.

YMMV.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: MBA worth it?

Post by Boglegrappler » Sun Jul 21, 2019 8:49 pm

An MBA from Princeton?

Good to know that someone won’t be wasting their money getting an MBA from there.
:happy

Not sure what the gist of the comment was--perhaps making the point I'm about to make; but Princeton is unique among top ranked universities in that its reputation derives almost entirely from its undergraduate students. While it has very recognized graduate school programs in the arts and sciences, it does not have a law school, a medical school, or a business school. Harvard, Yale, and Stanford all do.

So there is no Princeton MBA.

KlangFool
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Re: MBA worth it?

Post by KlangFool » Sun Jul 21, 2019 8:55 pm

OP,

No, it is not worth it for you. If you have to pay 75K to 200K per year and you have no idea whether it is worth it for you, it is not worth the money.

KlangFool

investlikeafool
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Re: MBA worth it?

Post by investlikeafool » Sun Jul 21, 2019 9:23 pm

KlangFool wrote:
Sun Jul 21, 2019 8:55 pm
OP,

No, it is not worth it for you. If you have to pay 75K to 200K per year and you have no idea whether it is worth it for you, it is not worth the money.

KlangFool
+1

rascott
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Re: MBA worth it?

Post by rascott » Sun Jul 21, 2019 9:44 pm

I got mine a decade ago from a state school, part-time evening program. Can't say I got much benefit out of it, maybe I did to some degree with job offers over the years, but not counting on it.

My cost was $0, paid for by employer, so was kind of a no-brainer. I would be very leery of spending any serious money on one, unless it was a top tier institution.

rascott
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Re: MBA worth it?

Post by rascott » Sun Jul 21, 2019 9:47 pm

Tdubs wrote:
Sun Jul 21, 2019 4:33 pm
The discussion has, logically, focused on whether an MBA was "worth it" professionally. Did anyone find it intellectually "worth it"?
No. :D

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Re: MBA worth it?

Post by HEDGEFUNDIE » Sun Jul 21, 2019 9:55 pm

Tdubs wrote:
Sun Jul 21, 2019 4:33 pm
The discussion has, logically, focused on whether an MBA was "worth it" professionally. Did anyone find it intellectually "worth it"?
Yes.

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Re: MBA worth it?

Post by Nissanzx1 » Sun Jul 21, 2019 9:58 pm

I though about it for a few years... decided to keep the money. I know a few people here who have one, they don’t make much more than me...

I’m sure up and coming people on the coasts can really make big money with an MBA climbing the corporate ladder. Nothing wrong with that.

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Re: MBA worth it?

Post by rocket354 » Sun Jul 21, 2019 10:03 pm

Get an MBA only if you know why you are doing it. Career change is a legitimate reason, but it's not something to just do on a whim. Also, being able to elegantly and succinctly communicate why you want an MBA will help you get into a better program.

As far as costs go, estimates you'll find online are often high for a few reasons.

First, they count full sticker price of the program, whereas many programs will offer some form of scholarships/grants. Very few people pay full sticker, even ones that don't have employers footing the bill.

Second, they count room and board. If you have a family and will have to pay for two places at once because you don't want to pull your kids out of their school district, maybe this makes sense. But if you can and do move then it doesn't matter--whether you stay at your job or go to school you have to pay living expenses. So there is no additional expense for this (although definitely count something if you have to move). For many people, their expenses might actually go down as they get some small apartment they only have to be in for 21 months.

Third, they count opportunity cost of salary. This is a legitimate cost, of course, but there are two mitigating factors: first is that if your salary is $60k/year, you don't lose out on $60k, you lose out on what you'd earn after tax. Second, most MBA programs are structured so that you are expected to get an internship during the summer. For a lot of people this is the highest paying (by rate) job they've had to that point in their lives. But regardless, you will work during the MBA program and earn back some of that lost salary.

All told you should take into consideration all costs, but also all mitigating factors. Only then can you determine if it's the right move for you.

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Re: MBA worth it?

Post by HEDGEFUNDIE » Sun Jul 21, 2019 10:06 pm

Here is what I tell friends who have gotten into a top MBA program and are concerned about the cost: you will more than likely make millions and millions of dollars in income over your lifetime, whether you get an MBA or not. So don’t focus on short term factors like cost. Instead focus on long term factors like the people you’ll meet, the education you’ll get, and the growth mindset you’ll hone.

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patrick013
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Re: MBA worth it?

Post by patrick013 » Sun Jul 21, 2019 10:13 pm

Like everything else the MBA is probably an overcrowded degree. Not everyplace needs one.
You can't just be from an east coast school and know alot of people you have to be able to
do something as well. The S&P 500 type company is the place where they can be most useful.
That extra knowledge about accounting, finance, human resources, should make their regional
and divisional offices well staffed. Or the engineering/MBA thing where operations and new
technology needs to be looked at smartly as well. I don't think big companies got to be big
companies without some MBA's in certain positions.
age in bonds, buy-and-hold, 10 year business cycle

Nachalnik70
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Re: MBA worth it?

Post by Nachalnik70 » Sun Jul 21, 2019 10:18 pm

Got my MBA in 1996 from Temple’s Fox Business School. Back then the whole thing cost me $20k which has paid for itself many times over. A lot of high paying jobs out there won’t even consider you if you don’t have these three letters next to your name. The program itself was totally useless, though...

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Re: MBA worth it?

Post by Valuethinker » Mon Jul 22, 2019 2:44 am

Boglegrappler wrote:
Sun Jul 21, 2019 8:49 pm
An MBA from Princeton?

Good to know that someone won’t be wasting their money getting an MBA from there.
:happy

Not sure what the gist of the comment was--perhaps making the point I'm about to make; but Princeton is unique among top ranked universities in that its reputation derives almost entirely from its undergraduate students. While it has very recognized graduate school programs in the arts and sciences, it does not have a law school, a medical school, or a business school. Harvard, Yale, and Stanford all do.

So there is no Princeton MBA.
In fact that's a common trap to assess whether someone knows what they are talking about. Throw in "Princeton" as an MBA school, and see if they query it.

I took it either as as such a trap, or the poster was speaking very generally.

A related trick is for a very long time London School of Economics (part of the University of London) did not have an MBA programme. In fact the prestigious ("top 10") MBA in London is from London Business School, a totally different institution (also a college of U of London). LBS not LSE ;-).

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stickman731
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Re: MBA worth it?

Post by stickman731 » Mon Jul 22, 2019 5:00 am

I have been in the chemical industry for 30 years and have seen a lot MBAs.

My one recommendation would be to have a detailed plan on what you want to do with it. I have interviewed many job candidates and have seen my company had tuition re-imburse to get MBAs, but I would say that less than 10% had a clear, detail plan of why the got it and what they were going to with it.

So many think - "I got my MBA now they will hire me" and pay me more because I have it.
Last edited by stickman731 on Mon Jul 22, 2019 9:48 am, edited 1 time in total.

ER2023
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Re: MBA worth it?

Post by ER2023 » Mon Jul 22, 2019 5:50 am

I agree with others - it definitely depends. I completed my MBA after I hit my career peak, it was just something I wanted to finish. Honestly, I wouldn't do it again unless it was a big-name school and I was in my twenties/early thirties. I learned everything I needed to know at work, so I basically just had to spend too much time doing the "busy" homework. However, I may need it for a part-time career in my retirement - we will see.

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orthros
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Re: MBA worth it?

Post by orthros » Mon Jul 22, 2019 8:10 am

Jumping on the 'it depends' bandwagon with my own story and some hopefully practical advice.

I was making low-$20s back in the mid-90s in a semi-deadend job with a fairly useless science degree, given my job.

I was offered a full ride at the time plus $1,000 a month TA stipend. So my cost of attendance was about $24K in foregone gross income, $20K net.

My salary tripled and I received a sign-on bonus of about $25K, making my payback on the project.... my first day of working in my post-MBA job.

Obviously, in my case it was a great move. But some of the elements to consider as to WHY:
1) I went to a top 25 MBA school where almost everyone was employed and the starting salary was significant, although nowhere near Harvard levels
2) I had a desire to stay in the Midwest. My MBA would have been a lot less valuable if I had a burning desire to go to Silicon Valley or the East Coast
3) Ironically, my low salary pre-MBA made the ROI calculations a ton better. Some of my peers gave up $60K+ jobs to get their MBA and were self-funding. That was a much, much tougher row to hoe.
4) I was able to get a scholarship, a TA job and graduate without debt. Today, that seems like a pipe dream based on my conversations with recent MBA grads
5) I also got an internship for 12 weeks over the summer which, at the time, paid $850 a week or about $10K for the summer. I netted at least $9K which dropped my foregone income to $11K over the 2 year period. If your school has an excellent intern program, it will both help the financials and make attaining full-time work a whole lot easier.

In short:

A) Create a simple ROI model in Excel/Google Docs
B) Put in the direct cost of attendance as a negative, as well as the foregone income
C) If there are additional expenses above and beyond what you would spend normally, put those in as well (travel, enrichments, etc.).
D) Offset that by whatever you plan to get from scholarships, teaching assistantships, part-time work, internships, etc.
E) Use a decently modest rate of return - say, 8% or so.. higher if you value your short-term time especially highly
F) Project a post-MBA salary based on statistics from your Career Office for your experience level (# of years working pre-MBA), industry, field (Finance, Consulting, Marketing, etc.). Include sign-on bonuses if that's a standard payout, $0 for this if it's uncertain. I initially plotted my salary as 80% of average salary because I had lower-than-average work experience.
G) Calculate your NPV and your IRR

Good luck!

EDIT: If you need help setting up the spreadsheet, just drop me a PM. It's not overly complex - we could crank it out in well under half an hour.

Arlington2019
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Re: MBA worth it?

Post by Arlington2019 » Mon Jul 22, 2019 11:21 am

I did my MBA for personal knowledge and career growth back in the late 90's and graduated in 2000. Since I was already established in my healthcare career and was not planning on going the NYC consulting route, I looked for a reputable and cost-effective program that would enable me to keep working full time. I went through the Edinburgh Business School of Heriot-Watt University in Scotland via distance learning. All told, it cost me about $7k, and the ROI on it was significant in terms of moving up the career ladder in healthcare administration.

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Re: MBA worth it?

Post by hookemhorns » Mon Jul 22, 2019 11:59 am

There have been many, many threads on this before so you should look up the old discussions. The short answer from my perspective is there are two scenarios where it makes sense:

1) You attend a top 10 MBA program. Despite the high tuition, these programs generally offer good ROI due to their prestige and network.

2) Your employer pays for the MBA, or guarantees a certain promotion/pay raise if you earn one. This becomes a simple ROI calculation.

What does not make sense is attending a mid or lower tier MBA and paying huge tuition to do so. I would say anything outside of the top 20, unless it has a VERY strong local reputation/network, is a waste of money. Any type of online program is basically a joke IMO unless you are doing it to "check the box" for a promotion at your current employer.

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Re: MBA worth it?

Post by Ekhanomist » Mon Jul 22, 2019 12:14 pm

msk wrote:
Sun Jul 21, 2019 2:10 am
OP has a PhD in physics? What age? I had a PhD in physics at age 26 and definitely an MBA at age 28 would have been useless for the career path I ended up with (multinational upstream oil with a Fortune 10)
Just to add to this. If OP has a PhD, it's very likely not to be worth it unless he or she is trying to make a major career change from a technical research role to a management role in business or finance.

The MBA is, in many ways, simply a signal of ability, intelligence and interest. The actual course matter is not that important, unless one is trying to move into a new area (e.g., transitioning from tech to accounting).

The bigger issue though is that OP would be wasting his PhD by going that route--not because of the sunk cost but because of the comparative advantage it provides. What is the point in competing with accountants who have a lot more education and experience in that area? There are many jobs that would appreciate OP's technical background.

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marti038
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Re: MBA worth it?

Post by marti038 » Mon Jul 22, 2019 12:25 pm

It was for me, but not because of what I leaned. Just putting those three letters on my resume seems to have brought more attention to it. I consider it a tie-breaker of sorts or something to help me stand out.

I got mine before I had kids too. No way I'd go back and do it now, but to each his own.

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willthrill81
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Re: MBA worth it?

Post by willthrill81 » Mon Jul 22, 2019 1:26 pm

marti038 wrote:
Mon Jul 22, 2019 12:25 pm
It was for me, but not because of what I leaned.
Apparently. :D
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

Vanguard Fan 1367
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Re: MBA worth it?

Post by Vanguard Fan 1367 » Mon Jul 22, 2019 1:59 pm

willthrill81 wrote:
Mon Jul 22, 2019 1:26 pm
marti038 wrote:
Mon Jul 22, 2019 12:25 pm
It was for me, but not because of what I leaned.
Apparently. :D
I know some really bright people who can't spell. English is a bit of a challenge compared to say Spanish because English is a mix of several languages.

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Re: MBA worth it?

Post by runner3081 » Mon Jul 22, 2019 7:54 pm

Tdubs wrote:
Sun Jul 21, 2019 4:33 pm
The discussion has, logically, focused on whether an MBA was "worth it" professionally. Did anyone find it intellectually "worth it"?
Nope, just jumping through hoops.

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