Author Topic: Should I get an MBA?  (Read 18988 times)

bb11

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Should I get an MBA?
« on: September 13, 2015, 04:51:47 PM »
I posted this question on my journal but wanted to ask on a more general forum to get more responses. I'm 26, live in NYC, networth is just over $100k, annual income $80k, annual expenses $20k. Please see my journal for a more thorough description of me: http://forum.mrmoneymustache.com/journals/bb11-wants-to-explore-the-world/

And now here's how the discussion came up on my journal, starting with easypeasy's question:

Quote
Quote from: easypeasy on September 12, 2015, 02:15:01 PM
bb11 - Just catching up on your journal and I wanted to add my $0.02 that you should think twice about biz school, especially if you like your job now and have a good compensation growth trajectory.  The opportunity cost of leaving the work force for two years is a big deal and even if you do secure the $180K per year job at the end it'll take your gross earnings ~7 years to get back to where you would have been if you stay the course on your current path of earning $75K / year.  I think you said you don't have a specific FI date, but if it's anywhere in the 10 year range this may not make sense financially. 

Of course, there are other reasons to go to grad school if you are truly interested in the subject matter, but I'm generally cynical about the value of an MBA (if that's what you are going for).

Hey easypeasy, thanks for the comment. I am talking about a MBA. I've talked to several MMM's with MBA's or other advanced degrees and the reviews have been mixed. For me, it's hard to see how the calculations don't work, given the right parameters. Let me explain in a bit more detail:

Opportunity Cost:
 the programs are 21 months long, but you do a three month internship in the summer, and the typical internship pays a higher rate than I currently make. So the real opportunity cost is 18 months. Assuming I make $80k annually over that time frame the opportunity cost is about $85k.

Tuition:
 Basically I'm not going to go if I have to pay full tuition, since that is between $90-140k depending on the program. I am applying to a bunch of the lower end of the top 20 schools, which are the schools where my career goals (management consulting) are realistic from, but I am also a strong candidate with potential for scholarships. I'm looking to get a full-tuition scholarship at just one of the schools I apply to, with a half scholarship being about the minimum. The cost would be how I decide between the schools.

Pay:
 After doing an MBA, a typical management consultant would make about $180k their first year. Take a look at Michigan's employment report (one of my target schools):

https://michiganross.umich.edu/sites/default/files/uploads/Programs/FTMBA/pdfs/14_mba_data_full-nc_.pdf

About 37% of their class goes into consulting, with median salary of $135k, signing bonus of $25k, and performance bonus of $25k. You might think 37% is not a great chance, but of course many people want to do other things like investment banking or general management. I think my chances of landing such a role would be quite high. Pay tends to escalate quickly and often consultants are over $200k in their first couple years. If I stick with it for ten years or more I'm probably at $500k+. Here's a bit more about the salaries and progression (http://managementconsulted.com/consulting-salaries/2015-management-consulting-salaries-undergraduate-mba-interns/#).             
Also see: http://managementconsulted.com/summer-internship/the-truth-behind-consulting-salaries-from-analyst-thru-partner/

For my current job, I do like it a lot and I'm pretty good at it (I also think I'd like consulting). Progression will be slow though, I could break $100k at around age 30-32 and make manager a few years after that which is maybe $150k or so. Hard to know really what will happen. Managers typically have spent 8-10 years in the field. As for FI, I don't see myself retiring before 40 regardless of how well I do, but who knows. I will hit the basic parameters for FI at around 35-36 based on current income/spending.

Projection:
I've made several models with different assumptions about how my career will progress until age 40. Please see the one attached to this post. The numbers you see for each year are how much I'll have saved in thousands. I break even about 3.5 years after the MBA and end up $100k ahead in year 7. I think anything beyond five years out should be taken with a grain of salt, but I've tried to be pretty conservative here.

My assumptions:
I get a half scholarship so spend $60k on tuition.
I make $80k while I would have been doing my MBA. From there salary jumps to $90k (Year Work1) and then raises $5k annually after.
Consulting tends to have high burnout so I am only in consulting for 5 years. I make $180k the first year, $160k the second, $175k the third and fourth, and $200k the fifth. After that my income is a flat $150k the remaining years, just to be conservative.
I also assume that I spend more after getting a MBA. :) The first two years in both projections I  keep my spending at $20k, then for the non-MBA version I spend $23k annually for the remaining years. But in the MBA scenario I bump my spending up to $25k, and then after five years bump it to $30k.

As you can see, even assuming I pay half tuition, leave consulting fairly unsuccessfully and without any future income growth thereafter, and spend more money, I still come out ahead. I'd think at that point I'd have an advantage by having a graduate degree from a prestigious university, having the network, and getting stronger work experience. But again, even assuming those differences don't matter, I'm looking good. I'd also value the degree intrinsically, so it has some intangible value beyond just the money. I want to hear where I'm missing but I think it's a good risk to take.
« Last Edit: September 18, 2015, 10:47:21 AM by bb11 »

chasesfish

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Re: Should I get a MBA?
« Reply #1 on: September 13, 2015, 05:14:01 PM »
I wouldn't quit school to go get your MBA.  I've run these calculations 100 times in my field, haven't gotten my MBA, and pretty happy with the decision.

The only thing to me that makes sense in your situation is an Executive MBA while maintaining your current job.  You can almost cover it without debt and the only change is to your savings rate.  It sounds like you'll get over 100k by the time your in your early 30's on your current career trajectory.

Now I'd only consider getting an MBA after I reach FI because 1) I keep enjoying working and it betters my skills or 2) I want to peruse a second career in academia. 


Exflyboy

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Re: Should I get a MBA?
« Reply #2 on: September 13, 2015, 05:18:57 PM »
Got my MBA.. made absolutely zero difference to my career as far as I can tell.

Yankuba

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Re: Should I get a MBA?
« Reply #3 on: September 13, 2015, 05:53:05 PM »
My brother got an MBA from a top school and it was a bust. The people who get the shiny jobs post-MBA (eg management consulting) are the people who had elite jobs pre-MBA. My brother wanted to do brand management but he didn't have the work experience. The people who got the brand management jobs were the ones who were doing it pre-MBA. The people who get the finance jobs are the ones that did finance pre-MBA.

Do you currently work in management consulting? MBAs help you in your current field but it's hard to use them to jump off to other fields.

chasesfish

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Re: Should I get a MBA?
« Reply #4 on: September 14, 2015, 05:45:59 AM »
One other thing to add, Management Consultants jobs also come out of need.

I work in Banking, in 2008-2010, we had a lot of professional level bank employees in their 20s get hired away to become consultants for the Big 4.  Most of them didn't have MBAs, but they had the basic training to become consultants.  It was a huge industry for a few years because of the regulatory pressure for all Bank's internal systems to look the same.


Axecleaver

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Re: Should I get a MBA?
« Reply #5 on: September 14, 2015, 08:54:45 AM »
My two cents, based on my experience working as a Senior Manager for KPMG for a couple of years, in between other MC roles. I've specialized into healthcare MC and your industry (finance, for example) may have different outcomes.

Quitting your job to get your MBA is a losing proposition. If you do want to pursue an MBA, do it while you're working. Even better if you can get the company to pay for some or all of it - all Big 4 firms provide some form of tuition assistance. Many schools have "executive MBA" tracks where you can go all weekend, with a major travel week scheduled somewhere in there that requires you to take a week of vacation. They tend to be very expensive.

Are the salary estimates you're using based on real data, or did you take it from that article? You're more likely to move up in the MC world by working harder than your peers, than you would if you quit to get an MBA and start all over again. Those salaries in the article are not realistic for management consulting in my experience. They represent the top 10-25% of the curve for the manager roles and higher.

Especially the partner salaries. It's well known that the jump to partner comes with a pay cut, and you're required to buy in to the partnership, which isn't discussed in the article. Until you build your own book of business, count on reduced compensation for a few years. Most firms (I know KPMG does, at least) now require a "test run" period in between senior manager and partner, called "director" where you get the worst parts of the Senior manager role (ie, all the work) and partner (none of the money or bonuses).

Management consulting is a pyramid scheme - it works by making people lower on the pyramid trade their lives for a lottery ticket that they can make it to the top of the pyramid. The majority of the people at the bottom will never make it past manager. Many wash out as senior associates. Take a look at median compensation for partners - they're usually in the 300-400k range, which means half of partners make less than that. Only the exceptional can expect to make a million a year, and they have to trade a lot for that privilege.

It's also pretty incompatible with early retirement. An MC life is one where you trade your life early for a roll of the dice to get to the top of the pile, and if by some miracle you get there, you'd be foolish to give up that spot before your mandated retirement age (60 in most partnerships).

Easye418

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Re: Should I get a MBA?
« Reply #6 on: September 14, 2015, 09:15:07 AM »
Got my MBA.. made absolutely zero difference to my career as far as I can tell.

May I ask if it was from a top B School? 

Personally, I went with a mid-grade MBA and took out a different way to view business that has helped me greatly.  However, just from working with business professionals and listening to them has been FAR more valuable.

I put it this way....MBA has gotten me interviews and I have sealed the deal. 

As to the OP, keep in mind $180k on Management Consultant sounds great...until you realize you are working 100hrs a week and traveling for long periods of time. 

I passed for a family.  (Not saying you can't do both, I chose not too.)

My two cents, based on my experience working as a Senior Manager for KPMG for a couple of years, in between other MC roles. I've specialized into healthcare MC and your industry (finance, for example) may have different outcomes.

Quitting your job to get your MBA is a losing proposition. If you do want to pursue an MBA, do it while you're working. Even better if you can get the company to pay for some or all of it - all Big 4 firms provide some form of tuition assistance. Many schools have "executive MBA" tracks where you can go all weekend, with a major travel week scheduled somewhere in there that requires you to take a week of vacation. They tend to be very expensive.

Are the salary estimates you're using based on real data, or did you take it from that article? You're more likely to move up in the MC world by working harder than your peers, than you would if you quit to get an MBA and start all over again. Those salaries in the article are not realistic for management consulting in my experience. They represent the top 10-25% of the curve for the manager roles and higher.

Especially the partner salaries. It's well known that the jump to partner comes with a pay cut, and you're required to buy in to the partnership, which isn't discussed in the article. Until you build your own book of business, count on reduced compensation for a few years. Most firms (I know KPMG does, at least) now require a "test run" period in between senior manager and partner, called "director" where you get the worst parts of the Senior manager role (ie, all the work) and partner (none of the money or bonuses).

Management consulting is a pyramid scheme - it works by making people lower on the pyramid trade their lives for a lottery ticket that they can make it to the top of the pyramid. The majority of the people at the bottom will never make it past manager. Many wash out as senior associates. Take a look at median compensation for partners - they're usually in the 300-400k range, which means half of partners make less than that. Only the exceptional can expect to make a million a year, and they have to trade a lot for that privilege.

It's also pretty incompatible with early retirement. An MC life is one where you trade your life early for a roll of the dice to get to the top of the pile, and if by some miracle you get there, you'd be foolish to give up that spot before your mandated retirement age (60 in most partnerships).

Thank you for the two cents.  This correlates with what I have derived from working with them.  For me, I was working with top CPG consultants and it was ridiculous how hard they got worked and how long they were on the road.  Wouldn't want that lifestyle for a second. 
« Last Edit: September 14, 2015, 09:18:45 AM by Easye418 »

bb11

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Re: Should I get a MBA?
« Reply #7 on: September 16, 2015, 10:09:47 AM »
Quote
The only thing to me that makes sense in your situation is an Executive MBA while maintaining your current job.

Part-time MBA's don't make sense to me for two reasons. They don't provide hardly any scholarships so to go to a good school is even more expensive than stopping work and going full-time. Example:

I get a full scholarship for NYU full-time so stop work for 18 months. Total cost is just the opportunity cost for not working: $85k.
I do the part-time NYU program. Tuition is $120k, and for part-time all that is available is the $10k Langone scholarship. No missed work but my total cost is $110k.

The second reason is I really don't need a MBA for my current job in marketing. My boss even told me so when I asked her for recommendations. I'd be getting a MBA to switch to an extremely high paid industry like management consulting or investment banking, which is much easier to do from a full-time programs due to the internship and on-campus recruiting. Part-time MBA's don't easily facilitate a career switch, which is the only reason I see to go. And again, me doing this in contingent on receiving a large scholarship.

Quote
Got my MBA.. made absolutely zero difference to my career as far as I can tell.

From where? That makes all the difference. Going to a local state school wouldn't improve my salary. Baruch College for example is decently respected in NYC, but the average MBA grad makes less than I'm already making. But look at any employment reports of the top MBA programs, management consulting is usually the most common career choice, and all of those guys are making 2-3 times what I'm making.

Quote
My brother got an MBA from a top school and it was a bust. The people who get the shiny jobs post-MBA (eg management consulting) are the people who had elite jobs pre-MBA.

Your post is interesting, it's completely divergent from everything I've heard from people who have gotten their MBA and/or work in MC. Generally MC is very easy to switch into from top MBA programs. While I do have a good job, I work in marketing currently. I don't believe this would be an issue though.

My two cents, based on my experience working as a Senior Manager for KPMG for a couple of years, in between other MC roles. I've specialized into healthcare MC and your industry (finance, for example) may have different outcomes.

Quote
Quitting your job to get your MBA is a losing proposition. If you do want to pursue an MBA, do it while you're working. Even better if you can get the company to pay for some or all of it - all Big 4 firms provide some form of tuition assistance. Many schools have "executive MBA" tracks where you can go all weekend, with a major travel week scheduled somewhere in there that requires you to take a week of vacation. They tend to be very expensive.

Are the salary estimates you're using based on real data, or did you take it from that article? You're more likely to move up in the MC world by working harder than your peers, than you would if you quit to get an MBA and start all over again. Those salaries in the article are not realistic for management consulting in my experience. They represent the top 10-25% of the curve for the manager roles and higher.

Especially the partner salaries.

Thanks for the great info. My company doesn't provide much tuition assistance, and as I've said a part-time MBA doesn't make sense (unless I could find another company that would pay the entire tuition at a top program).

You're probably right regarding the partner salaries. That's why I never include anything like a partner salary in any of my projection models. You still think management consulting is a bad deal for the consultants? I feel like $180k total comp is pretty damn nice. If I could do that for a few years and parley it into a management role somewhere else it seems like I'm getting a very nice deal, particularly if I don't have to pay the tuition for school.

Axecleaver

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Re: Should I get a MBA?
« Reply #8 on: September 16, 2015, 12:46:07 PM »
Quote
You still think management consulting is a bad deal for the consultants? I feel like $180k total comp is pretty damn nice. If I could do that for a few years and parley it into a management role somewhere else it seems like I'm getting a very nice deal, particularly if I don't have to pay the tuition for school.
It's a pretty nice lifestyle while you're single and have few friends/family/attachments, and you don't mind that your work is your entire life. The work was generally very engaging and interesting. I had some great bacchanalian experiences on the client, especially when I worked with the finance guys on the TARP projects. The pay is great, benefits are above average, and bonuses can be really big for the top 10% performers.

But it's very difficult to maintain once you have a family you like or interests outside work. I found the organization to be extremely insular and hard to penetrate, as a senior guy joining late in his career (at 40). They hired me because I had expertise they needed to break into a particular industry. But, I was treated very differently than folks who joined as associates and drank the kool aid. Each firm has its own rituals, too.

Partners are not permitted to admit a mistake, and lying about things was extremely common among the leadership. The mark of true power in the organization was when a partner didn't need to lie anymore. When you met one of those guys, you knew they were someone special with a lot of political capital to throw around. There were multiple overlapping hierarchies within the firm, all hidden, and never discussed, that I found hard to navigate. Ultimately it wasn't a good cultural fit for me, but it's a pretty good life even if you never make it past the manager role.

Do some additional research on the firms you might like to join. You could probably land an associate job at one of the MC firms today if you kept at it. Work with their recruiting office. They love to hear things like "Working at xxx has been my dream since I was in high school." There are probably some online guides on how to break in to these places. Take a look at the boutique firms, they may even have roles for marketing guys.

Once you're in the door, you just need to work super hard (I averaged 82 hours a week for the first year - including Thanksgiving, Christmas, etc.) make your chargeability numbers, and help with business development that turns into wins. Do that and you can move up pretty fast.

I think there are some other MC'rs or former MC'rs here on the boards who can help, and I'm sure there are some good forums out there for the aspiring MC.

jeromedawg

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Re: Should I get a MBA?
« Reply #9 on: September 16, 2015, 01:11:42 PM »
The consensus seems to be that MBAs are more useful if you're already working and in a higher-profile position to start with. It can help with making transitions into higher mgmt or executive positions but you still need to be networking with peers. To their perspective it only makes you look more valuable but if you're already networking with them and jockeying for positions, I don't know how much benefit it will be of...other than perhaps a bigger salary increase. That said, if you have to pay for it yourself, it's probably not worth it unless your work can "guarantee" you something lol. If you have tuition assistance that can cover most or all of it though, it might not be a bad idea assuming you have the time and actually would enjoy going back to school.

My former lead in QA had his career path planned out to go up to product management. And he did just that. Got his Masters in CS first, then did his MBA, all through pretty much full coverage via our tuition assistance program. He's a few years younger than me and he's now a senior product manager. But I will say that he did a lot of networking and established relationships across open channels as well. Had he just relied on his MBA, I don't think it would have been as fruitful. So moral of the story is that he used his resources *very* wisely and jumped on opportunities as they came up.

Me? Eh, I've showed some interest in product management but dunno if that's for me. Going back to school? I'd rather not... MBA? Meh... I'm happy where I am I guess. But if an opportunity comes up that I really really want and a prereq is getting your MBA, maybe... but probably not LOL. Even if it's fully covered, it's still your time being occupied. A product manager here told me an MBA is highly desirable for getting into that kind of position, but not necessary. I think you just really need to have a good grasp on the business and all the drivers. I suppose going for your MBA can help if you don't have a keen sense on that kind of stuff.

catccc

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Re: Should I get a MBA?
« Reply #10 on: September 16, 2015, 01:23:56 PM »
No, don't do it.  MBAs are a dime a dozen and from what I've seen, they don't help your career much, unless you were already on a specific path, like others have noted.  A friend of mine paid for a very expensive MBA from Duke (I believe that's a top program) and he doesn't make much more money than me, stayed with the same company in the same position before and after his MBA, and now has loans to contend with.  Not worth it.

I happen to work in accounting, and if you are going for your CPA, it could be worth getting an MBA for the extra credits needed beyond a bachelors to sit for the exam.  Or you could go take a bunch of cheaper fun classes at a community college.

You are already earning 75-85K without it and you are on a website that promotes a frugal lifestyle and living well below your means.  Expecting to earn $180K/yr after getting your MBA seems highly unrealistic, and why do you want to do that, anyway?

I do have a single, kid-free friend that out earns me by about 100%.  She has an MBA, but again, she's with the same company in the same position as she was before getting the MBA.  Her salary is a function of her position and industry, and was sizable before the MBA.  If you look at our lives, all she has to show for it is more stuff/more problems with storing stuff/owning stuff, etc.  If you compare our balance sheets/net worth statements, it is clear that my one-income family of 4 with a fraction of her income is in a better financial position than she is.

Just saying if you are trying to get ahead in the FIRE game, chances are an MBA is not the ticket you are looking for.

« Last Edit: September 16, 2015, 01:28:25 PM by catccc »

bb11

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Re: Should I get a MBA?
« Reply #11 on: September 16, 2015, 03:09:06 PM »
Quote
No, don't do it.  MBAs are a dime a dozen and from what I've seen, they don't help your career much, unless you were already on a specific path, like others have noted.  A friend of mine paid for a very expensive MBA from Duke (I believe that's a top program) and he doesn't make much more money than me, stayed with the same company in the same position before and after his MBA, and now has loans to contend with.  Not worth it.

Thanks for the message. Duke is a top program. Do you know if your friend did the part-time or full-time? It would be rare to have done the full-time and gone back to the same position.

CPA is not relevant for me. I don't think $180k is realistic, it's right there in the employment reports for the schools. See the Michigan report in the OP, or here are the reports for Duke, Cornell, and Virginia:

http://www.fuqua.duke.edu/documents/mba_recruiting/DukeMBAFinalEmploymentStats2013-2014.pdf
https://www.johnson.cornell.edu/portals/32/pdfs/cmc/CMC%20Employment%20Report%20for%202014.pdf
http://www.darden.virginia.edu/uploadedFiles/Darden_Web/Content/Rec_Co/Hire_an_MBA/Employment_Report_2014-15(1).pdf

At all of these schools the median pay for consultants is ~$180k. As for why I'd want it, I'd probably be able to save $100k or so a year. While I don't have a FIRE date am not even sure when I'd want to retire, saving more is generally a good thing. I also think the work would be really interesting and it helps get you to a position of more responsibility, which I would like to be in. I don't see myself retiring before 40 at least (you never know of course), so we're talking a minimum of 15 years in the workforce to go (I'm 26).

Easye418

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Re: Should I get a MBA?
« Reply #12 on: September 16, 2015, 03:18:10 PM »
Quote
No, don't do it.  MBAs are a dime a dozen and from what I've seen, they don't help your career much, unless you were already on a specific path, like others have noted.  A friend of mine paid for a very expensive MBA from Duke (I believe that's a top program) and he doesn't make much more money than me, stayed with the same company in the same position before and after his MBA, and now has loans to contend with.  Not worth it.

Thanks for the message. Duke is a top program. Do you know if your friend did the part-time or full-time? It would be rare to have done the full-time and gone back to the same position.

CPA is not relevant for me. I don't think $180k is realistic, it's right there in the employment reports for the schools. See the Michigan report in the OP, or here are the reports for Duke, Cornell, and Virginia:

http://www.fuqua.duke.edu/documents/mba_recruiting/DukeMBAFinalEmploymentStats2013-2014.pdf
https://www.johnson.cornell.edu/portals/32/pdfs/cmc/CMC%20Employment%20Report%20for%202014.pdf
http://www.darden.virginia.edu/uploadedFiles/Darden_Web/Content/Rec_Co/Hire_an_MBA/Employment_Report_2014-15(1).pdf

At all of these schools the median pay for consultants is ~$180k. As for why I'd want it, I'd probably be able to save $100k or so a year. While I don't have a FIRE date am not even sure when I'd want to retire, saving more is generally a good thing. I also think the work would be really interesting and it helps get you to a position of more responsibility, which I would like to be in. I don't see myself retiring before 40 at least (you never know of course), so we're talking a minimum of 15 years in the workforce to go (I'm 26).

Don't take this the wrong way, everyone said "don't do it" and you keep making points for doing it.  I assume this means you want to pursue it (nothing wrong with that). 

If it will make you happier, by all means, go for it. 
If you want to earn $180k a year as a MC (work a hell of a lot), go for it.

CheapskateWife

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Re: Should I get a MBA?
« Reply #13 on: September 16, 2015, 03:58:56 PM »
I got my MBA through Regis 10 years ago...and like another poster indicated, it helps get the interview; I seal the deal.

My situation was different though, was active duty army and leaving work for an Executive MBA wasn't on the table.  But MBA in my jammies?  You bet.  So I knocked it out.  Met and married DH and have become the trailing spouse...you want to know what helps get my foot in the door?  I am far more educated than my peers, and continue to pursue certifications and credentials as my field and the market changes.  Unlike other military spouses, when I want work, I have work.  The MBA is a huge part of that equation. 

So maybe that's not helpful for the OP, but for someone else contemplating an MBA program, this perspective might be helpful.  Oh, and I didn't have any scholarships...totally worth the $25K I paid for it.

Frugal D

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Re: Should I get a MBA?
« Reply #14 on: September 16, 2015, 03:59:46 PM »
MBAs help you in your current field but it's hard to use them to jump off to other fields.

This is actually incorrect. The entire purpose of an MBA is that it allows you to pivot. Management Consulting might be the only single job that has upside with an MBA, but it's absolutely not necessary. The real reason kids who started in management consulting leave to get their MBAs is because they are burned out, want a 2 year vacation, and firms will pay for it.

LeRainDrop

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Re: Should I get a MBA?
« Reply #15 on: September 16, 2015, 07:19:55 PM »
I think there are some other MC'rs or former MC'rs here on the boards who can help, and I'm sure there are some good forums out there for the aspiring MC.

I'll try to get my brother on here to weigh in.  He was hired as an associate consultant for Bain out of college, worked for a few years both there and in an externship obtained through Bain, next got his MBA at Wharton (UPenn) on Bain's dime, and then returned to Bain as a consultant.  He "owed" two years of post-MBA work there in exchange for that tuition coverage.  Based on my own conversations with his friends at Bain and at Wharton, it seems that the people headed to those top management consulting firms after the MBA are largely the same people who worked at those firms before the MBA.  Also, the folks at those top firms generally went to top MBA programs -- like, really top, not middle-top.

Terrestrial

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Re: Should I get a MBA?
« Reply #16 on: September 16, 2015, 07:20:24 PM »
I have an MBA from a top 25 - worth it for me.  I did it exec style nights/weekends, got a decent chunk of it paid for by employer.   I didn't switch industries though, just helped to fast track me and perhaps open a door or two....but I also work in an industry where MBA's are uncommon and where a top 5 type program is not important like in top tier IB/MC. 

I will echo what others have said, an MBA doesn't guarantee you anything, it might give you a half step on others, it's mostly about killing it at your job/interview and earning it for yourself (though I do believe skills and knowledge obtained through b-school help in this regard).  I'd say for at least 1/3 of my friends from b-school, they didn't get an appreciable benefit career-wise.

A couple comments on the brochures that you are using to evaluate your salary potential:
-You have to remember what the brochure is for - marketing material to get kids to pay them $100k+ to go to b-school.  Have you verified these salaries independently?  I know personally that these can be skewed - kids that get great offers tend to report them, perhaps even exaggerate them, kids that don't tend to not report at all or sugar coat it.  I submitted mine when I was done, but they don't make you so you are not getting the 'full' class, and at least at my school they aren't verified. 

-I didn't dig into the material in any depth...but most of the actual median reported salaries seem to be in the 130k range.  They also include the signing bonus, which is a one time payment, so perhaps your first year would be at ~180k.  I don't work in MC but another 50k/year would be a pretty large bonus, and is probably not 'guaranteed', at least to that full an extent.  There probably is a group of people making that much, the ones who really kill it or fall into a very fortunate situation, but I'm going to go out on a limb and say this isn't the 'average' person's experience.

My advice is try and talk to a few newly minted MBAs in your preferred field and get their real take on both compensation and work-life balance.  Try and meet a few who have actually made the field change you are proposing to ensure it's a realistic goal, especially for the compensation level you are expecting.  Don't make a very expensive/important decision based on a few biased brochures and a few clowns like us on the internet.  Before I decided to go to b-school I talked to a few other people in my industry about it as well as some grads from my school to get the full picture - it was very informative.


« Last Edit: September 16, 2015, 07:22:03 PM by Terrestrial »

LeRainDrop

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Re: Should I get a MBA?
« Reply #17 on: September 16, 2015, 07:47:16 PM »
I will echo what others have said, an MBA doesn't guarantee you anything, it might give you a half step on others, it's mostly about killing it at your job/interview and earning it for yourself (though I do believe skills and knowledge obtained through b-school help in this regard).  I'd say for at least 1/3 of my friends from b-school, they didn't get an appreciable benefit career-wise.

I got some input from my Bain/Wharton brother, and he definitely agrees with this.  The MBA is not an automatic ticket to the big leagues.  He personally believes it is very risky if the OP's goal is to go into consulting because there is still a TON of competition for consulting at these places.  Top schools are interested in knowing why you want to leave your current job, why you want to get an MBA, and why you think their particular program will help you get where you ultimately want to be.  The candidate him/herself needs to seal the deal with the employer, as the degree/school alone is not sufficient.  My brother confirms that completion of a true top MBA program is generally necessary for post-grad employment with the big 3 consulting firms, although there are many more hired by the big 3 post-MBA than those big 3 hire pre-MBA, so there certainly is some room to move into that realm even if you weren't there before.

Quote
I didn't dig into the material in any depth...but most of the actual median reported salaries seem to be in the 130k range.  They also include the signing bonus, which is a one time payment, so perhaps your first year would be at ~180k.  I don't work in MC but another 50k/year would be a pretty large bonus, and is probably not 'guaranteed', at least to that full an extent.  There probably is a group of people making that much, the ones who really kill it or fall into a very fortunate situation, but I'm going to go out on a limb and say this isn't the 'average' person's experience.

My brother says that the starting salary PLUS bonus for management consultants in first year post-MBA at Bain (and probably also BCG and McKinsey, possibly also Deloitte) is ~$170k, but there is also a 20-25% pay raise built in.  In most instances, tier 2 would pay a little lower and niche would be significantly lower.  Glassdoor can help with researching compensation.  Essentially, the figure the OP quoted as "typical" for all management consultants just out of their MBA program -- ~$180k --does not seem right and does not align with my brother's first-hand knowledge, which I trust; instead that figure represents the high end of first-year MCs at the big 3 consulting firms only.
« Last Edit: September 17, 2015, 09:31:41 AM by LeRainDrop »

MaggieDrsg

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Re: Should I get a MBA?
« Reply #18 on: September 16, 2015, 09:10:43 PM »
I second most of what Terrestial said.

Knowing several people who have gone through top 10 MBA programs and some of them working for the types of firms you're aiming for, I am really curious how much time you've spent talking to people doing what you want to do.  You seem to enjoy things like day trips, vacations, down time, hanging out with friends all over the city in the evening, cooking, etc.  I'm not saying consultants don't have any of that, but it seems like such a huge difference from your current lifestyle getting all of your hours in, traveling for work at their whim, "networking", etc.  If I were planning to go to one of these programs, I would increase the in-school networking/social budget and really consider upping the convenience expenses when you're life is consumed by your laptop.  Looking the part is more important than many jobs, and while working, efficiency in time may easily trump the expense of purchasing the attire you need versus scouting out deals.

It sounds like you may also be looking for more influence/autonomy in your work life to move up, and I may be reading that incorrectly, but your first years of working (depending on your current job setup) you may run into the opposite.  As a consultant fresh out of school, I would expect that many things need to be done at all or done a certain way because someone else above you said so.  I think this may be even moreso the case without coming from a background that the firm looks at as a shoe-in.

Would you consider trying for the part-time MBA if you were able to get some scholarships or tuition assistance?  You're crossing that out as an option though it doesn't sound like it is impossible, just less likely, but being in the top section going to a top consulting job with a selectively reported income number you're taking as almost a given here.

vagon

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Re: Should I get a MBA?
« Reply #19 on: September 17, 2015, 01:20:52 AM »
Management consulting is a pyramid scheme - it works by making people lower on the pyramid trade their lives for a lottery ticket that they can make it to the top of the pyramid. The majority of the people at the bottom will never make it past manager. Many wash out as senior associates. Take a look at median compensation for partners - they're usually in the 300-400k range, which means half of partners make less than that. Only the exceptional can expect to make a million a year, and they have to trade a lot for that privilege.

This.  In fact most corporate jobs are this, just on a less competitive scale. So then the question becomes unless you want to compete (doesnt sound like you do if you're considering lower teir schools), what makes you think you'll be able to out-compete the people in your MC firm who couldn't give a damn about work-life balance?
Maybe take the same drive to a mid-teir corporate and enjoy the relative ease for slightly lower pay.

Yankuba

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Re: Should I get a MBA?
« Reply #20 on: September 17, 2015, 07:39:59 AM »
MBAs help you in your current field but it's hard to use them to jump off to other fields.

This is actually incorrect. The entire purpose of an MBA is that it allows you to pivot. Management Consulting might be the only single job that has upside with an MBA, but it's absolutely not necessary. The real reason kids who started in management consulting leave to get their MBAs is because they are burned out, want a 2 year vacation, and firms will pay for it.

I'm basing my statement on my brother's experience and the experiences of his classmates. My brother got an undergraduate degree from an Ivy and his MBA from an Ivy and he couldn't pivot. The same was true for many of his classmates. They graduated during a tough job market, so maybe that has something to do with it.

I also have a friend who got an MBA from a non-elite school and it did zero for her - she's now overqualified for the work she is doing.

Just my two cents
« Last Edit: September 17, 2015, 07:44:31 AM by Yankuba »

bb11

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Re: Should I get a MBA?
« Reply #21 on: September 17, 2015, 08:03:30 AM »
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Don't take this the wrong way, everyone said "don't do it" and you keep making points for doing it.  I assume this means you want to pursue it (nothing wrong with that). 

Yes absolutely I want to pursue it. As I said in the OP I put quite a bit of value on the degree itself, regardless of money. So far people have posited reasons for not going that I don't fully agree with, so that's why I've debated back. Certainly if I see something positive that is unjustified I will do the same.

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-I didn't dig into the material in any depth...but most of the actual median reported salaries seem to be in the 130k range. 

Yes, typically it's $135k. I have verified this with many people. That's why in the projection I drop my total income down to $160k in year two. The bonuses are still high but typically start at around $25k.

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My advice is try and talk to a few newly minted MBAs in your preferred field and get their real take on both compensation and work-life balance.  Try and meet a few who have actually made the field change you are proposing to ensure it's a realistic goal, especially for the compensation level you are expecting.  Don't make a very expensive/important decision based on a few biased brochures and a few clowns like us on the internet.  Before I decided to go to b-school I talked to a few other people in my industry about it as well as some grads from my school to get the full picture - it was very informative.

I began studying for the GMAT in March 2013, so I've been researching this for 2.5 years. It's not as though I just started thinking about it. I've talked to several dozen people in a variety of capacities. My biggest problem is that most people aren't very good at analyzing costs and looking at total return on investment. I trust people here more for things like that. But I'm very aware of the culture of MC in general.

Quote
I got some input from my Bain/Wharton brother, and he definitely agrees with this.  The MBA is not an automatic ticket to the big leagues.  He personally believes it is very risky if the OP's goal is to go into consulting because there is still a TON of competition for consulting at these places.  Top schools are interested in knowing why you want to leave your current job, why you want to get an MBA, and why you think their particular program will help you get where you ultimately want to be.  The candidate him/herself needs to seal the deal with the employer, as the degree/school alone is not sufficient.  My brother confirms that completion of a true top MBA program is generally necessary for post-grad employment with the big 3 consulting firms, although there are many more hired by the big 3 post-MBA than those big 3 hire pre-MBA, so there certainly is some room to move into that realm even if you weren't there before.

Completely agreed.

Quote
My brother says that the starting salary PLUS bonus for management consultants in first year post-MBA at Bain (and probably also BCG and McKinsey, possibly also Deloitte) is ~$170k, but there is also a 20-25% pay raise built in.  In most instances, tier 2 would pay a little lower and niche would be significantly lower.  Glassdoor can help with researching compensation.  Essentially, the figure the OP quoted as "typical" for all management consultants just out of their MBA program -- ~$180k --does not seem right and does not align with my brother's first-hand knowledge, which I trust; instead that figure represents the high end of MCs at the big 3 consulting firms only.

Yes it's the big three (McKinsey, Bain, BCG) as well as Deloitte, Accenture, and PwC. Some of the others pay only slightly lower.

Quote
Knowing several people who have gone through top 10 MBA programs and some of them working for the types of firms you're aiming for, I am really curious how much time you've spent talking to people doing what you want to do.  You seem to enjoy things like day trips, vacations, down time, hanging out with friends all over the city in the evening, cooking, etc.

True. I've spent quite a bit of time talking. I have a friend who is a partner at A.T. Kearney (he doesn't think I need to get a MBA fwiw), another who's an analyst at BCG, and another who was a post-MBA associate at Monitor/Deloitte and now has his own practice. Those guys I've talked to a lot. Then there are all the random contacts and informational interviews I've done. I do enjoy those things. On the flip side I've worked two jobs for most of my post-college career, and business travel I've really enjoyed.

Quote
Would you consider trying for the part-time MBA if you were able to get some scholarships or tuition assistance?  You're crossing that out as an option though it doesn't sound like it is impossible, just less likely, but being in the top section going to a top consulting job with a selectively reported income number you're taking as almost a given here.

Yes definitely. It's just that none of the good programs give scholarships (unless I missed one; although how realistic a non-New York part-time programs would be is another issue). So I think the only realistic way would be if I switch employers. That is a possibility, but I need to be at my current job for awhile longer I think. I also need to find employers with really good tuition reimbursement programs. I've already sent in a few B-school applications and was planning to send some more in the next few weeks. My thought was to look for full or near full scholarships and if I don't get them continue working and explore a better part-time option.
« Last Edit: September 17, 2015, 08:05:29 AM by bb11 »

rmendpara

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Re: Should I get a MBA?
« Reply #22 on: September 17, 2015, 11:08:52 AM »
An MBA is generally useful (even if expensive) if it helps you get into a career path that you do not reasonably expect to be possible without the degree. Commonly this is banking and consulting which hire the vast majority of mid/upper level employees from grad schools.

So long as you manage to get into a major consulting firm, you can expect to make $120k + bonus for your first few years. Thereafter, it really depends on what you want out of your career and if you needed the MBA and consulting job in between to get there.

The scholarship or other benefits could sway the decision slightly (maybe extends the payback by another 1-2 years), but assuming you intend to work for 10+ yrs after the degree, it's not likely the degree and time won't pay off.

Everything hinges on what you get into afterwards and if that is likely to leave you finally better off...

tvan

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Re: Should I get a MBA?
« Reply #23 on: September 17, 2015, 11:46:10 AM »
I have an MBA and an MS in IT.  In order of highest to lowest value this is what I got from finishing them.  Hope this helps.

1.  Knowledge from other Peers in the program - A lot of these programs have people who are in higher level jobs than yourself.  You can learn a ton from them, the networking is awesome.  3-4 hour classes are hard after working a 9 hour day, but once you are in there the stuff you learn is absolutely great. 
2.  High level management skills - The view is high level, so you learn more about strategy.  This is very useful in the real world.  Focusing on what's important vs. xyz data point.
3.  Putting "MBA" next to your name - This definitely places you ahead of most (not all) people when you are trying to get an interview.  I would say experience still trumps those three letters 75% of the time.  But all else being equal you will get an interview before someone that doesnt have the three words.
4.  Salary - probably the least valuable and most overrated thing about an MBA.  You have to use the skills you took from the MBA and give you company value before you expect any return here.

These are my "hindsight" points:

1.  Doing the night classes paid off - plus my company covered about 50% of the tuition (that to me is additional income)
2.  I probably wouldn't do 2 masters.  I was pretty burnt out after the MBA.  It only got worse with the second.  Nobody seems to care about a Masters in IT either (surprisingly I thought this would be the differentiator vs. other MBA's but it hasn't been)
3.  Salary - nobody is going to crown you CEO just for getting an MBA.
4.  If you are going to do it - make sure you do it before kids, pets, and for the most part a girlfriend/wife/SO.  It's hard on your family to be gone 15 hours a day (assuming you also work Full Time)

tvan

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Re: Should I get a MBA?
« Reply #24 on: September 17, 2015, 11:50:14 AM »
I'll also add that I finished both programs Beta Gamma Sigma (top 10% of class) with a 4.0 and nobody seems to care about that.  That's a bit discouraging because other students definitely didn't' hold their own during project work. 

bb11

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Re: Should I get a MBA?
« Reply #25 on: September 17, 2015, 11:58:35 AM »
Quote
An MBA is generally useful (even if expensive) if it helps you get into a career path that you do not reasonably expect to be possible without the degree. Commonly this is banking and consulting which hire the vast majority of mid/upper level employees from grad schools.

So long as you manage to get into a major consulting firm, you can expect to make $120k + bonus for your first few years. Thereafter, it really depends on what you want out of your career and if you needed the MBA and consulting job in between to get there.

The scholarship or other benefits could sway the decision slightly (maybe extends the payback by another 1-2 years), but assuming you intend to work for 10+ yrs after the degree, it's not likely the degree and time won't pay off.

Everything hinges on what you get into afterwards and if that is likely to leave you finally better off...

This is mostly what I've been thinking. As someone who expects to work 15+ years regardless of FI, if I can sustain higher salaries for much of it the financial payoff will be there.

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1. Your salary projection is wrong.  $180k is ludicrous as an expectation and sets you up for failure/disappointment.  To find real numbers ignore the brochures and research glassdoor / vault.  Also, I'll echo the other people that said that if you do indeed make $180k this probably means you are working 80 hour weeks, on 100% travel, and are in a firm with an aggressive / competitive culture.  I chose to take less income but be in a more family-friendly job.

Yes that's mostly what I'm going for. Working in the strategy division of the top consulting firms. The Deloitte S&O group, not the Human Capital group. The pay is accurate for the former, not the latter. Human Capital is more like $90k salary and $10k bonus.

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3. Private sector consulting interviews at top firms are based on case studies and not your MBA grades.  My advisor during school told me to practice 100 case studies before doing a real interview.

Yes I've been working on practicing cases. They are central to consulting interviews.

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4. Getting in to the top school and landing a management consulting job requires a high GMAT.  Research what you need and study like hell for it.

Yes I took the GMAT and did pretty well. I scored 730 which is 96th percentile. That's the average for the Harvard and Stanford MBA programs, and generally companies like McKinsey want you to score 700+ so I'd make that cutoff.

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3.  Salary - nobody is going to crown you CEO just for getting an MBA.

Of course. The idea is to break into a position (strategy consulting at a top firm) that would otherwise be difficult to break into.

Quote
I'll also add that I finished both programs Beta Gamma Sigma (top 10% of class) with a 4.0 and nobody seems to care about that.  That's a bit discouraging because other students definitely didn't' hold their own during project work.

You're spot on. Most companies don't care too much about your performance in MBA classes. What I'd hope to bring to the table is strong marketing experience and promotions in two different sectors, lots of experience with cases, strong interviewing skills, a high GMAT, and a top MBA program.
« Last Edit: September 17, 2015, 12:51:51 PM by bb11 »

Trudie

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Re: Should I get a MBA?
« Reply #26 on: September 17, 2015, 12:21:51 PM »
I have my CPA and an MA in a specialized field (health care administration).  I don't directly use my master's.

I have often asked myself whether an MBA would benefit me, and always come to the conclusion that it would not.

First, you have to ask yourself "what" about it is appealing to you?  I knew it could perhaps get my foot in the door on some lucrative career paths, but when I really searched my mind and soul the thought of pursuing those career paths was a real drag.

The landscape is littered with under or unemployed MBAs.  I know the schools vary greatly in rigor and reputation, but the higher education landscape is also littered with MBA programs.  Colleges and universities are struggling for revenue (my husband is in academic administration at a university).  The first option that gets raised when wanting to raise revenue is starting up an MBA program.  It's an easy revenue shot in the arm for the college.  Usually employers will pay.  But the quality isn't always there and MBA programs are a dime a dozen.

I would never quit work to do one.  I would never incur debt to do one.  And I would seriously think about if there are other desirable paths or specific credentials that would be helpful to you.  This is why I decided to go the CPA route in my 30s.  There is no substitute for connections and good mentoring.  And you might want to choose a unique skill set or credential to set yourself apart.  For instance, I spend a great deal of time on employee benefits issues, so if I were re-tooling I'd work on a professional human resource credential and become a benefits analyst or something.

But I'm not... because I'm going to FIRE in about 5 years.  And then I'm going to do something far, far away from my current line of work (other than counting up my stash and doing my own taxes/investments.)

Frugal D

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Re: Should I get a MBA?
« Reply #27 on: September 17, 2015, 01:54:10 PM »
The title of this post is driving me crazy every time it pops up in my "new replies to your posts" section.

It's written "an" MBA, not "a" MBA. You spell it as you would say it.

Ironic that the mistake comes in a higher-education-related post.

tvan

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Re: Should I get a MBA?
« Reply #28 on: September 17, 2015, 03:00:40 PM »
The title of this post is driving me crazy every time it pops up in my "new replies to your posts" section.

It's written "an" MBA, not "a" MBA. You spell it as you would say it.

Ironic that the mistake comes in a higher-education-related post.

"Should I get a Masters in Business Administration" is likely how he/she was saying it.

bb11

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Re: Should I get a MBA?
« Reply #29 on: September 17, 2015, 07:17:17 PM »
The title of this post is driving me crazy every time it pops up in my "new replies to your posts" section.

It's written "an" MBA, not "a" MBA. You spell it as you would say it.

Ironic that the mistake comes in a higher-education-related post.

Is it? "An" is usually before a word that starts with a vowel.

Frugal D

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Re: Should I get a MBA?
« Reply #30 on: September 17, 2015, 07:25:28 PM »
The title of this post is driving me crazy every time it pops up in my "new replies to your posts" section.

It's written "an" MBA, not "a" MBA. You spell it as you would say it.

Ironic that the mistake comes in a higher-education-related post.

Is it? "An" is usually before a word that starts with a vowel.

For words, yes, but "an" goes before acronyms that sound like they start with a vowel. For example, the letter "M".

LeRainDrop

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Re: Should I get a MBA?
« Reply #31 on: September 17, 2015, 07:46:43 PM »
The title of this post is driving me crazy every time it pops up in my "new replies to your posts" section.

It's written "an" MBA, not "a" MBA. You spell it as you would say it.

Ironic that the mistake comes in a higher-education-related post.

Is it? "An" is usually before a word that starts with a vowel.

For words, yes, but "an" goes before acronyms that sound like they start with a vowel. For example, the letter "M".

Frugal D is definitely correct about this point.  "A" versus "an" is based on the sound that follows.  See Grammar Girl's explanation here:  http://www.quickanddirtytips.com/education/grammar/a-versus-an

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A lot of people learned the rule that you put a before words that start with consonants and an before words that start with vowels, but it's actually a bit more complicated than that. For example, here's Matthew with a question:

I've been wondering if it is actually a hour or an hour. An hour sounds more correct, but a hour reads more correct. I'm just curious on what it should be.

The rule is that you use a before words that start with a consonant sound and an before words that start with a vowel sound. . . .

The letters o and m can be tricky too. Usually you put an before words that start with o, but sometimes you use a. For example, you would use a if you were to say, “She has a one-track mind,” because one-track starts with a w sound. Similarly, “She has an MBA, but chooses to work as a missionary.”
« Last Edit: September 17, 2015, 07:58:02 PM by LeRainDrop »

w@nker

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Re: Should I get a MBA?
« Reply #32 on: September 17, 2015, 07:47:22 PM »
H/S/W or bust.  (Harvard/Stanford/Wharton)

Frugal D

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Re: Should I get a MBA?
« Reply #33 on: September 17, 2015, 07:52:42 PM »
H/S/W or bust.  (Harvard/Stanford/Wharton)

Fact. All others are a waste of time and money.

bb11

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Re: Should I get a MBA?
« Reply #34 on: September 17, 2015, 08:55:10 PM »
H/S/W or bust.  (Harvard/Stanford/Wharton)

Full disclosure: I sent in my Harvard app two weeks ago, although my focus has been on schools ranked 10-20.

Yankuba

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Re: Should I get a MBA?
« Reply #35 on: September 18, 2015, 08:58:32 AM »
H/S/W or bust.  (Harvard/Stanford/Wharton)

Full disclosure: I sent in my Harvard app two weeks ago, although my focus has been on schools ranked 10-20.

Good luck!

tvan

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Re: Should I get a MBA?
« Reply #36 on: September 18, 2015, 09:03:30 AM »
H/S/W or bust.  (Harvard/Stanford/Wharton)

Fact. All others are a waste of time and money.

So you have gone through ALL the other MBA programs and confirmed they are in fact an entire waste of money?  Cool story bro.

Frugal D

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Re: Should I get a MBA?
« Reply #37 on: September 18, 2015, 10:29:49 AM »
H/S/W or bust.  (Harvard/Stanford/Wharton)

Fact. All others are a waste of time and money.

So you have gone through ALL the other MBA programs and confirmed they are in fact an entire waste of money?  Cool story bro.

You can probably guess my stance on MBAs in general, but regardless of my opinion, don't MBAs just intuitively go against a mustachian lifestyle? I'm probably offending the entire community of mustachians with MBAs, but when you think about the purpose of an MBA, it is in direct conflict with FIRE. People who generally want an MBA are your typical 9-to-5ers who are content climbing the corporate latter through their 50-60s to attain an executive title and a lavish lifestyle. Again, speaking broadly and generally. People wanting to FIRE at age 35 are not considering an MBA in their late 20s.


bb11

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Re: Should I get an MBA?
« Reply #38 on: September 18, 2015, 10:54:04 AM »
Note to all: the topic header is fixed. The grammar police can rest easy. ;)

H/S/W or bust.  (Harvard/Stanford/Wharton)

Fact. All others are a waste of time and money.

So you have gone through ALL the other MBA programs and confirmed they are in fact an entire waste of money?  Cool story bro.

You can probably guess my stance on MBAs in general, but regardless of my opinion, don't MBAs just intuitively go against a mustachian lifestyle? I'm probably offending the entire community of mustachians with MBAs, but when you think about the purpose of an MBA, it is in direct conflict with FIRE. People who generally want an MBA are your typical 9-to-5ers who are content climbing the corporate latter through their 50-60s to attain an executive title and a lavish lifestyle. Again, speaking broadly and generally. People wanting to FIRE at age 35 are not considering an MBA in their late 20s.

Perhaps. I'd say that's just one possible way to live "Mustachian". My dreams might not be entirely fitting with MMM's, but who cares? I don't want to retire at age 35, so it makes no sense to tailor my life by that standard. I do find many other ideas and advice from this community valuable. And I do want to be FI, just not necessarily RE, or at least not that early.

That said this debate combined with some recent talks with people IRL has caused me to hesitate on finishing up my remaining school applications. I have it pretty good right now so at the very least grad school needs to be a very ideal situation to justify upsetting my current momentum.

Frugal D

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Re: Should I get an MBA?
« Reply #39 on: September 18, 2015, 11:17:21 AM »
Note to all: the topic header is fixed. The grammar police can rest easy. ;)

H/S/W or bust.  (Harvard/Stanford/Wharton)

Fact. All others are a waste of time and money.

So you have gone through ALL the other MBA programs and confirmed they are in fact an entire waste of money?  Cool story bro.

You can probably guess my stance on MBAs in general, but regardless of my opinion, don't MBAs just intuitively go against a mustachian lifestyle? I'm probably offending the entire community of mustachians with MBAs, but when you think about the purpose of an MBA, it is in direct conflict with FIRE. People who generally want an MBA are your typical 9-to-5ers who are content climbing the corporate latter through their 50-60s to attain an executive title and a lavish lifestyle. Again, speaking broadly and generally. People wanting to FIRE at age 35 are not considering an MBA in their late 20s.

Perhaps. I'd say that's just one possible way to live "Mustachian". My dreams might not be entirely fitting with MMM's, but who cares? I don't want to retire at age 35, so it makes no sense to tailor my life by that standard. I do find many other ideas and advice from this community valuable. And I do want to be FI, just not necessarily RE, or at least not that early.

That said this debate combined with some recent talks with people IRL has caused me to hesitate on finishing up my remaining school applications. I have it pretty good right now so at the very least grad school needs to be a very ideal situation to justify upsetting my current momentum.

I didn't mean to discourage you in any way. I threw that out their for the community in general to opine on.

There is real value in getting into H/S/W for the networking opportunity. You'll meet kids who you'll one day start companies with. The question is just opportunity cost relative to an unknown outcome.

bb11

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Re: Should I get an MBA?
« Reply #40 on: September 18, 2015, 11:29:44 AM »
Note to all: the topic header is fixed. The grammar police can rest easy. ;)

H/S/W or bust.  (Harvard/Stanford/Wharton)

Fact. All others are a waste of time and money.

So you have gone through ALL the other MBA programs and confirmed they are in fact an entire waste of money?  Cool story bro.

You can probably guess my stance on MBAs in general, but regardless of my opinion, don't MBAs just intuitively go against a mustachian lifestyle? I'm probably offending the entire community of mustachians with MBAs, but when you think about the purpose of an MBA, it is in direct conflict with FIRE. People who generally want an MBA are your typical 9-to-5ers who are content climbing the corporate latter through their 50-60s to attain an executive title and a lavish lifestyle. Again, speaking broadly and generally. People wanting to FIRE at age 35 are not considering an MBA in their late 20s.

Perhaps. I'd say that's just one possible way to live "Mustachian". My dreams might not be entirely fitting with MMM's, but who cares? I don't want to retire at age 35, so it makes no sense to tailor my life by that standard. I do find many other ideas and advice from this community valuable. And I do want to be FI, just not necessarily RE, or at least not that early.

That said this debate combined with some recent talks with people IRL has caused me to hesitate on finishing up my remaining school applications. I have it pretty good right now so at the very least grad school needs to be a very ideal situation to justify upsetting my current momentum.

I didn't mean to discourage you in any way. I threw that out their for the community in general to opine on.

There is real value in getting into H/S/W for the networking opportunity. You'll meet kids who you'll one day start companies with. The question is just opportunity cost relative to an unknown outcome.

That was my idea behind applying to H. That the value there is just very far beyond the other programs because of the people you'd get to know. There are currently 40 Fortune 500 CEO's with MBA's from Harvard, which is pretty ridiculous when you think about it. Almost 10% of the group. Source: http://www.usnews.com/education/best-graduate-schools/top-business-schools/articles/2012/05/14/where-the-fortune-500-ceos-went-to-school

Otherwise I've been focusing on the 10-20 ranked programs where my salary and MC goals are realistic but I stand a stronger chance of getting a full-tuition scholarship. However, given some of the discussion I'm less sure that even that is a strong ROI. $85k opportunity cost for one of those degrees?

golden1

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Re: Should I get an MBA?
« Reply #41 on: September 18, 2015, 11:49:37 AM »
My DH just got his MBA. 

He got his at night, and he did it with two kids, a full time job and wife working full time.  To say that it was a few brutal years would be an understatement.  He got his work to pay for most of it so that was good. 

In his case, he got a lot of utility out of it in terms of networking.  During the process of getting his MBA he also started his own company, and he leaned on his professors and peers for advice, which really was invaluable to him.   

He got a very modest salary bump out of the whole thing plus stock options from the new company that could be worth a fair bit in the future.   

Axecleaver

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Re: Should I get an MBA?
« Reply #42 on: September 18, 2015, 01:06:07 PM »
Quote
There are currently 40 Fortune 500 CEO's with MBA's from Harvard, which is pretty ridiculous when you think about it.
Correlation is not causation. The same things that make people eligible for Harvard make them eligible for being a CEO of a Fortune 500. There are also CEO's on that list without an undergraduate degree.

bb11

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Re: Should I get an MBA?
« Reply #43 on: September 18, 2015, 01:34:28 PM »
Quote
There are currently 40 Fortune 500 CEO's with MBA's from Harvard, which is pretty ridiculous when you think about it.
Correlation is not causation. The same things that make people eligible for Harvard make them eligible for being a CEO of a Fortune 500. There are also CEO's on that list without an undergraduate degree.

I disagree with your point there. First of all, no, being eligible for Harvard does not make you a candidate for a F500 CEO. I'm a pretty competitive candidate for HBS, but I am in no way, shape, or form a candidate to be a F500 CEO anytime soon.

Second, using the the fact that there are a few CEO's without degrees is misleading, and downright dangerous when it's used to dissuade kids from going to college. Usually the people who fit this criteria are CEO's because they founded the companies themselves. It's very unlikely to be in that position and get hired/promoted into a CEO role. Also often these "college dropouts" are the Mark Zuckerberg's or Evan Spiegel's anyway, people who went to Harvard/Stanford and had access to the elite resources and network but chose to stop school because their new venture was so successful.

Finally, the saying is "correlation does not imply causation" for a reason. The two can go hand in hand. While I don't think the actual education at Harvard is that much better than other schools, the brand and network likely plays a huge role in eventually landing these positions. Also, even if one does not find themselves in a C-level role, having a bunch of classmates who end up in important positions obviously gives you a huge leg up in landing something like that for yourself.

w@nker

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Re: Should I get an MBA?
« Reply #44 on: September 18, 2015, 08:57:50 PM »
The decision is really up to you.  I totally agree with posters who say that it is inconsistent with hardcore mustachianism - but I don't think it is inconsistent with the objective of early retirement in general.  It really depends on your desired standard of living post retirement...and the amount of time you can tolerate working.  I have a top 3 MBA, and it undoubtedly improved my retirement timeline.  Sure, if I hadn't gotten an MBA, I could have retired earlier at a modest standard of living.....but with the MBA and the opportunities it has created for me, I can retire not much later with a higher standard of living than I otherwise could have imagined.

Financial considerations aren't all that matters, though.  For me, I wanted to better myself...and to challenge myself...and I did.  Oh...and I guess I am a little vain, in that I wanted the pedigree.  I must say - it's pretty sweet.

And - I was being a bit of a prick with the H/S/W comment.  I wouldn't dip below the top 10, though.  Can't go wrong with the likes of Columbia, Chicago, or Kellogg.
« Last Edit: September 18, 2015, 09:03:41 PM by w@nker »

LeRainDrop

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Re: Should I get an MBA?
« Reply #45 on: September 18, 2015, 09:24:50 PM »
Note to all: the topic header is fixed. The grammar police can rest easy. ;)

Thank you!  Thank you!

lhamo

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Re: Should I get an MBA?
« Reply #46 on: September 18, 2015, 10:03:38 PM »
This memoir about HBS (written by a former journalist who was NOT the typical student) is an interesting read:

http://www.amazon.com/Ahead-Curve-Harvard-Business-School/dp/014311543X


JROH

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Re: Should I get an MBA?
« Reply #47 on: September 19, 2015, 03:27:32 AM »
As a current part time MBA student at a top 25 school I say go for it!  I was on the fence like you but ultimately decided that I wanted to pursue it for my own sense of accomplishment and self worth.  I am one year in and can say that I've really enjoyed the experience.  The classes are interesting, I've met great people and most of all, I feel more active and engaged in my personal and professional life.

I would caution you not go into debt to do it-  I have a pretty well paying job now so I went into my studies knowing they might not translate into more dollars, but rather a more satisfying career trajectory in terms of responsibility, etc.  I waited to go back until I was in a position to cash flow my education without additional debt.

NathanDrake

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Re: Should I get an MBA?
« Reply #48 on: September 19, 2015, 04:32:29 PM »
This is probably less of a financial decision than you think. Sure, you get a top MBA, you'll come out fine financially. There's a wide dispersion of possible returns; perhaps over time you come out better, perhaps the added debt and years spent not working set you significantly back.

I asked this question to the community a few years ago and decided against the MBA. I'm an engineer that FI'd by 30 and I still work, but at this point I have no interest in busting my ass up the corporate ladder.

My investment returns are becoming such a substantial part of my NW that climbing the corporate ladder (and all the hours and stress involved) seems trivial. At this point, I'm more about staying the course and being slow and steady without being adversely impacted during my hours outside of work.

Consulting may be fun for a while, and banking may pay a lot. But neither of those lifestyles is for me, nor do I find the type of work they do (compared to engineering) more interesting or challenging. So I opted out of an MBA.

SondraF

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Re: Should I get an MBA?
« Reply #49 on: September 28, 2015, 07:47:07 AM »
Just going to chip in here because I took the scenic route and ended up in exactly the same place as others who were more direct.

I, too, struggled with the "should I get an MBA" question oh, maybe 5 years ago now.  At that point I already had an MS in Economics and a range of non-corporate work experience, but I just wasn't where I wanted to be.  I got my MS (practically for free due to my father being a professor and getting a reduced rate) at a relatively no-name state school, then moved half-way across the country for better job opportunities.  Connections I made at those jobs helped me through a layoff in 2008-9 by taking on freelance work. It was then I decided maybe the MBA would be the right move for me, as I had figured out by then that I really wanted to do strategy work, and I thought I HAD to have one.

I studied for the GMAT and applied to a far better in-state program than the one that I came from, as it would allow me to take in-state tuition and had a specific focus I was interested in.  At some level, 710 I think it was, I believe the tuition was free or there was some big cut.  I also decided to hedge my bets and apply for jobs in corporate strategy departments, just to see.

In the end I got a 690 on the GMAT, didn't receive a b-school offer, but DID get a corporate strategy job where I learned the exact same frameworks and worked on the exact same projects internally that anyone else coming out of the big firms would learn or do.  I also got an awesome crash course in asskissing, backstabbing corporate culture and how to navigate some serious underhanded politics. 

Now?  I moved to London and got another internal strategy job and my coworkers are all ex-LEK, KPMG, McKinsey, BCG, and Bain. The guys from Bain and LEK have been close to useless and are extremely skilled at passing the buck and doing more or less nothing.  They all have degrees from INSEAD or London Business School.  Every one of them downshifted to an internal role after a few years because they were tired of the travel/tired of asshole partners/tired of 80+ hour weeks.  I make the exact same amount they do and am just as (or more) effective.  I also have a pretty flexible work schedule, never work overtime, and Friday found out that a super juicy project could be coming my way that would have huge ramifications for the business/brand that would otherwise have gone to a big consulting firm hired in. I have mental space to work on my own projects and the best part is that I have no student debt.  My team members (now and before) are folks I would happily start businesses with and they have plenty of networks I can tap into as well.  My resume maybe doesn't say "MBA" on it, but for the direction I want to go (FI/start my own company/freelance), I probably don't need it or never needed it.

Compare this to a friend who went to a Top 25 Exec MBA course essentially on a dare and is now contending with $100K in loans and didn't get an upward boost in her career at all.

I think it can be helpful if you are in a super competitive market and can do it with limited time/financial impact and have a clear path afterwards with the biggest bang for your buck. Or get into H/S/W. Otherwise the school of hard knocks has its benefits.

Also, to conclude, sometimes strategy can be a bit of a dead-end.  Getting from a consultancy to an internal role (in strategy or ops or mgmt or whatever) is not going to be immediate and can take some time.  Internally a lot of people in ops/mgmt can view strategy as the total cost center that it is and treat you like crap AND you have the same challenges of proving to people in other parts of the business that you aren't just an ivory tower wonk but can actually work.  Internal teams are usually quite small and have limited opportunities to move up.  If you cant move up or move into the business, the only real option for more challenge is to start your own business, as a bridge (if that fails) to moving to mgmt at another company.