When should you go back for your MBA if you have a business school degree?
I’ve had plenty of friends go back to get their MBAs. I think I might be one of the few out of my business school who HASN’T gone back to get a post-graduate degree at some Ivy League school. 😛
My reasons for not getting an MBA:
- Don’t actually need it for my job (no requirement to have one so you can climb the ladder).
- Has no value in my career – they couldn’t care less what my titles are
- It’s expensive with no real return on money for me
Therefore, I’d rather NOT spend $100,000 and 2 years of my life getting a second crack at college life.
HOW CAN AN MBA HAVE NO REAL RETURN FOR YOU?
Yes. You heard me.
You should absolutely NOT go back to get an MBA if you can’t get more money to get back a solid Return on Investment (ROI) on your degree.
Using myself as an example, when I graduated from business school, the average starting salary was $50,000, and when you graduate from an MBA, I am told your average starting salary is $100,000.
Seems like a great deal right?
Except it’s not for me.
I am already at pretty much my peak earning salary, where I am able to go to a company and get a job for at least $100,000 today, more around the $130,000 mark.
If I had another 5 – 10 years under my belt, I could get up to $150,000 as a salary (working like a dog, mind you), but the MBA degree not a shortcut to a higher salary for me because nothing can make up for experience.
As a result, I’d rather invest in training specific to my industry to get certifications that matter to clients rather than an MBA that is just a fancy, useless, expensive piece of paper to me.
A certification that costs about $30,000 is worth more to a client than a fancy $100,000 degree. Guess which one I’d rather pay for?
I also don’t want to climb any ladder, and I am happy with my job just the way it is. I don’t want to manage anyone, become a manager, a VP or an executive, and those are the folks who need MBAs.
SO WHAT IS A DECENT RETURN ON INVESTMENT FOR AN MBA?
That you can clear it in 5 years (ideally, 3) with a significantly higher starting salary.
If you’re earning $50,000 now, and you go back to get your MBA, do the calculation of what you can earn AFTER you get that MBA.
So let’s say it’s $100,000, your ROI calculation would go like this:
- 2 years spent in school = – $100,000 (you lose 2 years of pay at $50,000)
- Cost of MBA = – $100,000 (tuition/books assumption, could be more, could be less)
TOTAL: $200,000 in the hole!
None of the above includes living expenses and food costs, because you’d have to pay for those things anyway even if you weren’t getting your MBA.
(Unless you were living at home, mooching off your parents like a parasite, of course.)
$200,000 / 5 years = $40,000 a year
$40,000 + $50,000 (your original salary) = $90,000
But let’s not forget income taxes, so realistically, you’d need to earn over $100,000 to pay back that degree in 5 years, assuming you DON’T cut back on your lifestyle to scrimp and clear your loan faster.
Once those 5 years are up and your loan is done, it is smooth sailing on a 6-figure salary…!
WHAT IF I GO AND GET MY MBA RIGHT AFTER GETTING A BUSINESS SCHOOL UNDERGRADUATE DEGREE?
You could, but what’s the point?
What could you really learn if you go from college to an MBA without getting any work experience?
The whole point of an MBA for me is that you can use that work experience to enrich your learning process.
Honestly speaking, an MBA is not just a piece of paper that you can wave around in front of employers — it’s supposed to actually help you in your career as well.
Therefore anyone who goes back to get their MBA earlier than 5 years out of college is just wasting their money and I don’t really consider what they got to be a real MBA.
I just consider it to be a supplementary undergraduate program in that case.
Why do I say this, especially to you business school undergrads?
IT’S THE SAME AS AN BUSINESS UNDERGRAD DEGREE — JUST WITH MORE $$$$ & OLDER (WISER?) PEOPLE
I’ve looked over coursework for MBA students and it’s pretty much the same stuff as a business undergraduate degree (so if you have one of those, don’t be surprised when things repeat themselves during your MBA).
You learn just about the same concepts and principles (AGAIN), but this time with professors who know that you already understand all of it, but you also get to interact with older students in the class who have had real business experience and can bring reality into the classroom.
Nothing is new in business, and nothing is new in getting your MBA versus a business school degree.
What’s new are the teachers and students, and that critical student interaction and insight of someone who has experience in the working world, has a greater value than some fresh-faced college grad coming back to get her MBA after a year.
It’s really not helping the classroom or helping the environment for learning, if you have only had one year of working or experience under your belt.
That’s barely enough to learn how to ship something online! (I kid.. I kid..)
The only thing I could concede to is perhaps if you have never been to business school or you have never had the case method in your business school, and you go to get your MBA where you learn by doing real life business cases, then it could be a new experience for a way of learning and whole new material… but honestly, still a waste of time and money before working 5 years if you already have a business school degree.
MBAS ARE REALLY MEANT FOR PEOPLE WHO WANT TO CHANGE THEIR CAREER
Most of my friends from business school who went back for MBAs did it for 5 reasons:
- Climb the ranks — You NEED the MBA to grow professionally
- Switch careers — they’ve realized that they REALLY hate accounting 😛
- Lost their jobs and were at a loss for what to do — I call this the “Recession Education”
- As a refresher — …more applicable to the older group of students*
- Company was paying for it — 100% FREE! Hard to say no to a free education.
*I know a VP who went to get his MBA at 40 because he never went to a business school, and although he was already a VP, it was necessary for his job and was a business refresher to make him think of how to solve problems differently.
All of the above 5 reasons are valid reasons, but more importantly, they’re because people wanted to change their careers and truly improve them based on their actual observations of the industry, not just to kill time and waste money.
So how in the world can you want to change your career and your life if you haven’t even begun!??
Going and getting your MBA a year or two out of school is a waste of time and money, both for you, and for the students who are in the class.
For those of you who need an MBA and then a PhD to get anywhere professionally in the business, why don’t you try and figure out if it’s really the career you want by working in it for 5 years before investing large sums of money into these diplomas?
What if after 5 years, an MBA and almost starting a PhD later, you realize that you REALLY HATE your job and wish you could do something else but you have way too much invested to pull out now?
Wait at least 5 years to get the maximum benefit from it, both for your own good and to benefit others.
The only ones who benefit 100% of the time, are the colleges who WANT you to go back and get your MBA so that they can keep raking in the student dough, but you have to stop and ask yourself if it really benefits you, your career and if it’s what you REALLY want.
BUT WHO IS REALLY GOING TO ASK WHEN I GOT MY MBA?
True. Who IS going to ask when you got your MBA?
Except maybe.. you know, recruiters who want to see your degree and know when you graduated.
When they see that you graduated college in 2012 and got your MBA in 2013, they’re going to roll their eyes.
Sure, it’s going to be great that you have an MBA and a title, but it’s basically going to mean nothing to do them.
You’d still need experience to make that MBA worth anything, which is the whole reason why people wait 5-10 years to get their MBA so that it means something.
Otherwise, you’re just cheating yourself, really. You’re getting this degree to just get it, but not to have actually learned anything from it.
Frankly, people with MBAs before 5 years of actual work experience, are still undergraduates in my eyes, fancy title or not.
They only know marginally more than they did a year ago after they graduated from college, and could be making a huge mistake in throwing more money towards an education they’re going to end up wasting.
I’m a financial controller and at this point in my career, my experience and the companies I’ve worked for trumps whether or not I have an MBA. I’ve also supervised staff at a big four cpa firm and there is no difference between an MBA and non-MBA.
I do agree about the career change, used to be a teachers’ assistant in college for a professor who taught accounting courses to MBA candidates and the material was a breeze for an accounting major. It was definitely more geared toward someone who had a non-business major seeking an MBA. There are exceptions though, there is a private university in Honolulu that has an MBA with a concentration in tax and I heard it’s pretty intense but that program is geared toward those with a law or accouning bachelor’s.
I was just reading on Learnvest yesterday about people with massive student loan debt. It’s not just the type of degree that affected them but really the decision to go out of state or to a private university. I feel like students should have a mandatory finanical counseling before signing up for student loans (they have a counseling requirement for reverse mortgage, why not student loans?).
Grayson @ Debt Roundup
I did not go back because my field is more on the experience. While I probably could get a higher paid position, it would take way too long to get the return on investment. Experience is more important to me.
*snicker* I love that Fed Ex ad.
I went back around 8 months after I received my undergrad degrees. That is mainly because the job that I was hired on for (and the one that I still have), required that I receive my MBA eventually. I have been working full-time since I was 16 though, and had business management experience when I was in undergrad. So I was able to use and apply what I was learning from my MBA classes as I was taking the classes, which I thought was helpful.
With my AACSB-accredited MBA, I basically went $50,000 in debt in order to make myself less desirable to prospective employeers.
For those that say going through an MBA program gets you contact, just stop it! There are cheaper ways to fill out your rolodex.
Please, please, please do not make the same mistake I did!