Photo: Business Insider
There has been a lot of recent discussion on these forums as well as in the media regarding the value of an MBA. As a longtime member of the community and someone who recently made the decision to pursue an MBA, I thought I’d share some thoughts.You can see my full background story here: http://www.wallstreetoasis.com/forums/how-i-got-in…
In summary, I went to a relatively unknown undergrad in New England where I received a degree in MIS. I went on to do two years of investment banking at an MM doing sell-side M&A. I then did two years of MM leveraged buyouts in a pre-MBA role before switching to a competitive MM leveraged buyouts shop in a partner track role (post-MBA role with no MBA).
Despite the fact that I am on a partner track without having an MBA, I made the choice to pursue b-school. I’ll have six years of experience when I matriculate this fall. I am very happy in my current job and will likely pursue very similar opportunities upon graduating. I won’t be receiving any employer sponsorship nor have I been guaranteed a position when I graduate. I’ll be attending one of the M7 schools (not H/S/W – they all rejected me).
First of all, I don’t think an MBA makes sense for everyone. It ultimately comes down to a combination of career path, adversity to risk, financial situation, geography, etc. There is no one-size fits all formula; you’ll need to decide for yourself if it is a good fit for you. There is also no hard and fast line for which MBA programs are worth it and which ones are not. For some people, only Harvard/Stanford/Wharton are worth it. For others, a top 50 program could be the boost they need to get on the right track. Ignore any discussion where people try to value an individual school without regard to the applicant’s individual circumstances.
Many people cite the cost of an MBA, combined with the opportunity cost, as the single biggest reason that it is “not worth it.” For me, the cost was never a consideration, though the total cost of attending will likely exceed seven figures (opportunity cost included). I like to believe that I have very modest expenses in life relative to my income. I don’t enjoy expensive dinners, don’t drink more than a few drinks when I go out, and I have no interest in a fancy car/boat/yacht. I’ve saved all of my annual bonuses without ever having to pass up an opportunity due to money. For me, the biggest inhibitor of maximizing my happiness has always been a lack of time, not money.
Wealth alone doesn’t bring happiness; it just enables us to afford experiences and things that make us happy. While the cost of an MBA is very high, I view it as an opportunity to have unforgettable experiences while I’m young without negatively impacting my career. Without including the five vacations (week+ long) that I’ve taken in the nearly six years I’ve been working, I haven’t had more than two straight weeks off since high school! This summer I will take advantage of my nearly three months off before school to build my language skills in Latin America, explore cities in Europe I’ve never been to, and visit friends and family in the U.S. that I haven’t spent time with in years since I live in a different city. And the best part is that employers won’t view it as a “hole in my employment history” as it is generally accepted to take time off before starting an MBA program. I don’t think I will have another opportunity like this for the rest of my career unless I lose my job or retire.
Money aside, I also place a lot of value the learning aspect of business school. Given I have an MIS degree, everything I know about finance has been learned on the job. While I am rapidly reaching the point where intricate accounting / finance knowledge is not required to be successful in my job, I do encounter situations where I have no idea what my CFO is trying to explain to me. Things such as utilising standard costing come intuitively to my peers who studied accounting, but require extra effort for me to understand. There is also a whole world of finance that I have never been exposed to (derivatives, hedging, heck the entire stock market) that I feel will improve my ability to perform my job. This is an often overlooked part of business school that I think people should take into consideration when thinking about applying.
Even if you completely negate the learning aspect of an MBA, the intangibles alone are reason enough for me to get an MBA. These intangibles come in many forms: (1) credibility, (2) network, (3) executive presence, (4) risk mitigation, and (5) option value.
Credibility. The combination of attending undergrad at a university few on Wall Street have heard of and working at small institutions, there is nothing in my bio that gives me credibility. Sure, I can eventually earn respect through performance and results, but often times a lack of credibility can prevent my ever being given that shot. I’m constantly meeting with people that judge my credibility. Current and prospective executives of investments, bankers, lenders, and down the line when I am more senior, limited partners. For me and many others, attending a top tier MBA will enable me to gain this credibility.
Network. This is the one intangible benefit of an MBA program that people latch onto, and rightfully so. I can’t begin to count how many times I’ve seen senior professionals tap into their alumni network to learn more about a particularly industry, transaction, or opportunity. Furthermore, if you’re looking to change jobs, having a network of people that are willing to take your call and assist you is invaluable.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.