10/28/10

So I read this article a few minutes ago, and I wanted to share it with you guys (as well as some quotes below).
http://poetsandquants.com/2010/10/04/why-josh-kauf...

* Kaufman believes that MBA programs "teach many worthless, outdated, even outright damaging concepts and practices."

* "Business schools don't create successful people," insists Kaufman. "They simply accept them, then take credit for their success. With heavy debt loads and questionable returns, MBA programs simply aren't a good investment--they're a trap for the unwary."

* Instead of paying up to $350,000 in tuition and forgone earnings to go to Harvard, Stanford or Wharton, Kaufman says a better way to learn business is to open the pages of classic business texts and learn on your own.

* Much of Kaufman's argument rests on a study published eight years ago by Stanford Business School professor Jeffrey Pfeffer of Stanford University and Christina T. Fong of the University of Washington. The pair analyzed 40 years of data and studies and came up with a provocative and startling conclusion: "There is scant evidence that the MBA credential, particularly from non-elite schools, or the grades earned in business courses are related to either salary or the attainment of higher level positions in organizations."

* "Unless you want to be a consultant or an I-banker (where a top MBA is nothing but a screen for admission)," Godin wrote, "it's hard for me to understand why this is a better use of time and money than actual experience combined with a dedicated reading of 30 or 40 books."

* "If you want to work in an industry that uses the MBA as a screen, you are effectively buying yourself a $150,000 interview," he contends. "If you want to do anything else in business, if you want to start your own company, get a job in another field, you don't have to have an MBA. It's better if you don't because of the debt."

* And even for consulting, investment banking or Fortune 50 positions, Kaufman says, the benefit is ephemeral. "The effect (of the degree) is strongest immediately after graduation," he says, "then largely wears out within three to five years. After that, you're on your own. Hiring managers no longer care so much about where you went to school. They care more about what you've accomplished since then."

* Kaufman estimates that all of these firms combined, from Goldman Sachs to McKinsey & Co., probably hire no more than 5,000 to 10,000 MBAs a year out of the more than 200,000 people who are getting MBAs around the world. The other 190,000 to 195,000 are getting MBAs they don't really need.

* "Going to Harvard all told can cost you about $350,000. That is mortgage level debt. Put that through an amortization schedule at a 6.8% rate of interest. It's a $2,200 monthly payment over 30 years. You are spending $821,000 when you account for the interest. The cost is enormous."

Comments (85)

Best Response
10/28/10

Lots of good points made here.

I personally am not in the "rah rah" crowd who thinks the MBA is the be all end all - it's not necessary. However, I'm not in the other extreme who thinks the experience is worthless either. As with anything where there isn't a definitive answer, it's somewhere in between.

To go by Mr Kauffman's main point in his article, going to a top b-school is as much a waste of money and time as it is for someone who buys a Porsche.

Using his argument, it's like saying "why bother with that BMW or Benz, when you can just get a $30 bus pass? They both get you to the same destination, and in traffic, it may be even more efficient to take the bus pass."

While the "knowledge" you learn in b-school can be an investment, the "brand" is a consumption good, much like buying a luxury car - it's a depreciating asset.

And most applicants know that. They know that the "brand" of their degree matters less and less as they get older. They know that the actual "knowledge" is not worth $150K.

But they are still willing to pay the money for the privilege of going. Because it's not just about the "knowledge" any more than it is about "getting from point A to point B" when deciding whether to buy a car, or take public transit.

If you look at it from purely economic terms, of course it may not make sense. Just like buying a Porsche won't make sense if you can settle for a Hyundai -- but for many people who have the *opportunity* and ability to buy the nicer car, they will buy the nicer car -- yes, some rich folks pride themselves on driving their 1984 Honda Civic, but many will "waste money" to pay a premium to buy a depreciating asset like a nice car.

Is an MBA necessary? No. But is it a great experience that those who have it are glad they did it? Hell yes.

A lot of applicants aren't naive. Most already make good money -- quite a number now are well in the six figures when they're applying. And they know they're not going to get a huge bump up in salary/comp when they get out.

But they still want to go.

People go to b-school for more than just "career advancement." In fact, the career may not even be the most important reason.

When you cut through all the "essay narrative" crap, it's mostly for personal reasons. It's for the experience. The chance to reinvent one's self, to step away from the workforce for 2 years, make new friends, and recharge. To find more time for personal stuff - relationships, marriage, personal interests. To find out what other life/careers are out there that they wouldn't have otherwise explored. And so forth. A lot of intangible things that go beyond just the "knowledge" of accounting, marketing, etc. And yes - the chance to graduate from a "prestigious" institution - especially for those who haven't had that - that may not have any tangible effect on your career, but the ego is a powerful thing.

In a way, the reasons for going aren't that much different than why people go to college for their undergrad degrees - it's not purely just for getting a job or for the "academic education", but for the life experience itself. And b-school is an extension of that - whether that experience is worth it or not is entirely subjective.

While the hype surrounding the MBA may make the degree overrated - to take the other extreme view that it's useless isn't really constructive or correct either. Especially from someone who hasn't had the experience. The author bemoaning the value of an MBA (when he himself doesn't have one) is sort of like a Hyundai owner laughing at the foolishness of a Porsche owner because they are both on the same road -- yes, one driver is paying a LOT more to be on that same road and heading to the same destination, but it's an *entirely* different experience en route. :-)

Or, to use yet another analogy -- why bother eating at a nice restaurant for $100/person when you can go to McDonald's and get the same calorie count for $5?

A top tier MBA is a luxury good. The author's book is not. Both can serve a purpose, but there's room for both.

Accepted.com
10/28/10

As the OP, I feel I should chime in on this article.

First, with regard to actually learning from an MBA program, I think most people on WSO are in agreement that MBA programs are not about teaching you anything. Furthermore, IMHO, a lot of other educational backgrounds will give you the tools to be an autodidact. Studying something really challenging in undergrad or grad school, and really pushing yourself will payoff I believe. After struggling to understand fixed point theorems and abstract algebra, teaching yourself MBA-level finance will be a breeze. It's like weight-lifting for the mind.

Second, I think people will say that MBA programs give you a strong network, alumni base, contacts, recruiting, etc. Interestingly enough, the article didn't touch on this stuff at all, even though it's what WSOers will probably say is the best reason for getting an MBA in the first place. I guess what I'd like to ask you guys, is whether the price is worth it? For one thing, one of my friend's who earned an MBA truly believes the stuff about networking is hype. He claims he and many of his classmates networked hard, but it didn't pay off. I'm actually skeptical of my friend's opinion, so what I find more compelling is the advice on websites like this one and M&I. Namely, that networking is about picking up the phone, calling people, reaching out, etc. So, do you really need to be in an MBA program to get the benefits of networking? Wouldn't it be much cheaper (and maybe even better) to actually have a job (so you're learning and making money) and commit yourself to reaching out to X number of people a week, read the "Networking Like A Ninja" guide, etc?

10/28/10

i think it's pretty much accepted that an mba is just a credential, not something you need to actually learn something about business. i've also heard that if you can't get into a top 10 mba program then it's not worth the time and money, which is held up by a lot of what other people have said.

as far as whether or not it's worth it to get a harvard (or some other top-tier) mba, my feeling is that it is worth it long-term, especially if you're going into consulting or finance.

but yeah, a lot of people get degrees they don't need and can't use. surprise, surprise. look at all of the people who get Ph. D's in English then can't find jobs. just because someone's interested in business doesn't mean that they automatically make smart business decisions.

10/28/10

Bingo.

I thought about getting an MBA:
http://www.wallstreetoasis.com/forums/i-got-a-730-...

Yes, the MBA is pretty much a useless credential. You need a JD to practice law and an MD to practice medicine, but you don't need an MBA to practice business. Does it it give you any knowledge that would make you better investment banker or consultant? No, obviously not.

In my opinion, certain MBA programs only benefit a certain type of professional. And nothing beats skill and experience in this job market.

I am DYING to hear what people have to say about this, but I have a feeling most will be mum because what this guy is saying is so true despite what most people on this forum believe. In fact, this thread should be put on the front page blog. Are you hearing me, Mr. Moderator?

---
man made the money, money never made the man

10/28/10

it does benefit people. wall street finance especially more so than anything. which is what this forum is for.

In reply to shorttheworld
10/28/10
shorttheworld:

it does benefit people. wall street finance especially more so than anything. which is what this forum is for.

How does it benefit people? I know that is a basic question, but I am trying to kick-start a conversation.

And I am expecting a basic answer that I have already heard. So lets hear it.

---
man made the money, money never made the man

In reply to shorttheworld
10/28/10
shorttheworld:

it does benefit people. wall street finance especially more so than anything. which is what this forum is for.

How does it benefit people? I know that is a basic question, but I am trying to kick-start a conversation.

And I am expecting a basic answer that I have already heard. So lets hear it.

---
man made the money, money never made the man

10/28/10

Yeah, MBA is the ticket for admission to many top jobs. I think there is value if you come from a non business background, but it is pretty commonly accepted that your not going to really learn anything.

People will keep getting MBAs as long as people recognize them as something special.

10/28/10

^ Midterms so don't have much time but off the top of my head:

Philosophy 101 utilizes more or less the exact same material for schools ranging from Princeton to PodunkU. Does that mean that the substance that students ultimately take away is the same? No.

I always questioned the worth of an Ivy-league degree. After, all, aren't most of the classes the same? You don't need (and you rarely get) a *star*-professor teaching you undergraduate courses. They're the fundamentals, and they are taught the same everywhere.

The *value* of a "good" school is your peers - and I don't mean only in the sense that you're making a lot of friends who may one day be rich and powerful people (although yes, that is definitely within the realm of possibility). The human mind is enriched most when it is challenged by powerful and motivating experiences and modes of thinking. A Harvard MBA will teach you finance as you can learn in a book - true. But at Harvard / Wharton / Stanford / other elite schools, you will LEARN FROM YOUR PEERS.

Granted, this does not necessarily translate into direct monetary gains (although I'm sure having a Harvard MBA will not hurt over a lifetime). Are you paying a lot of money? Sure. But would you not agree that *enlightenment*, challenging yourself to think in new ways through meeting some of the most capable people in the world, is extremely valuable in its own right?

This article's point is right - people who get into HBS are tremendously successful in their own right upon gaining admissions. However, I would argue that these people still gain to benefit tremendously from the overall learning experience as described above, which can only be found in an academic environment.

10/28/10

For non finance people it is a great exposure to overall business. Your classmates also add a lot to the equation. The network you build, the second chance at a career, etc are all tangible benefits.

I think you could get all these things for free, but that would require a lot of outside the box thinking.MBAs off a prepackaged experience.

10/28/10

oh geeez that's bad grammar... guess thats what consistent all nighters do to you.

10/28/10

He also basically reinforces the point that if you want a high-level finance career then you need an MBA, or atleast an advanced degree in finance. I went to a shitty undergrad school where I learned hardly anything useful from my finance degree. There was no way I'd get a decent job in finance with that degree, and I quickly realized how much I hated selling life insurance and mutual funds (which was about all I was qualified for). So I bit the bullet, took a year off, borrowed a bunch of money and got a Masters in Finance from a much better school. For me it was well worth the debt and lost income for a year because it got me into a career I never would have been able to get into otherwise, and my income is a multiple of what I was making a few years ago before going back to school. On the other hand, I have friends who went back to get an MBA from the same shitty school they went to for undergrad, and they're still struggling to find a job making $60k a year. I think it all comes down to knowing what you want to do and knowing what you need to do to get there.

10/28/10

Did anyone actually click on the link? It's some asshat trying to sell his online MBA program, of course he's going to say that.

10/28/10

Top hedge fund/Private equity comapnies do not want their protegees to go even to top tier MBAs. They think it is waste of time. They will do far better by staying and learning the ropes, once they are in PE/Hedge fund.

In reply to TNA
10/28/10
Anthony .:

Yeah, MBA is the ticket for admission to many top jobs. I think there is value if you come from a non business background, but it is pretty commonly accepted that your not going to really learn anything.

That's unsustainable. Eventually employers and MBA candidates are going to have to wake up and realize that this is EXACTLY the case: a 150K MBA is a nothing more than a ticket to a POSSIBLY better opportunity and that you learn very little that is applicable to the real world.

Anthony .:

People will keep getting MBAs as long as people recognize them as something special.

I think paradigm is starting to shift and MBA's are losing their special-ness.

---
man made the money, money never made the man

In reply to Stringer Bell
10/28/10
Stringer Bell:

Did anyone actually click on the link? It's some asshat trying to sell his online MBA program, of course he's going to say that.

Yeah, I urge people to click the link and read the article. But, I don't completely agree with that description. It's from some kid guy who was an assistant brand manager at P&G, and taught himself a lot of things he would of learned in an MBA program. So, he started a website where he recommends books that will allow you to do the same. He also consults, but that's another story because his website is not a subscription service or anything like that.

In reply to Stringer Bell
10/28/10
Stringer Bell:

Did anyone actually click on the link? It's some asshat trying to sell his online MBA program, of course he's going to say that.

Really? The link wouldn't work wen I clicked on it.

But most of what that guy says is pretty bang-on.

---
man made the money, money never made the man

In reply to mulandee
10/28/10
mulandee:

Top hedge fund/Private equity comapnies do not want their protegees to go even to top tier MBAs. They think it is waste of time. They will do far better by staying and learning the ropes, once they are in PE/Hedge fund.

but a lot of people do b school for switching sell side to buy side.

and for rotation programs, if you have no exposure to xyz industry from your undergrad or a not so good undergrad school in form of non target... all reasons to go back if you so wish.

10/28/10

If you are from WH it is of no use. Though I do agree with you "but a lot of people do b school for switching sell side to buy side." But if you are in buy side, it is waste of time.

10/28/10

I do think the MBA market is becoming over saturated. I still think a T10 MBA will pay off in the long run, but every Podunk school has an MBA. All these lower tier programs are money grabs. I really think people are using the MBA as a vacation and don't want to network to stay in the game without the MBA.

In the future I really think you will see more 1 year MBAs and more MSF/MFE degrees. No need for people with banking exp who want to stay in finance to get a generalized masters. Problem is finance is snobby and there are not enough top tier specialized masters out there. In the future I hope to see this change. Everytime o speak with adcoms at to schools I am always pushing for them to look at a standalone MSF or specialized program.

In reply to TNA
10/28/10
Anthony .:

In the future I really think you will see more 1 year MBAs and more MSF/MFE degrees. No need for people with banking exp who want to stay in finance to get a generalized masters. Problem is finance is snobby and there are not enough top tier specialized masters out there. In the future I hope to see this change. Everytime o speak with adcoms at to schools I am always pushing for them to look at a standalone MSF or specialized program.

Agreed. I think specialized finance degrees are the way to go and I am VERY disappointed that finance recruiters have'nt figured that out.

I think MFinance should be the trend going forward, too. But we'll see.

---
man made the money, money never made the man

In reply to shorttheworld
10/28/10
shorttheworld:

but a lot of people do b school for switching sell side to buy side.

and for rotation programs, if you have no exposure to xyz industry from your undergrad or a not so good undergrad school in form of non target... all reasons to go back if you so wish.

The MBA is not necessary for that kind of switch, and the necessity is becoming less and less relevant.

I know for my field (commercial real estate finance) the MBA is irrelevant when compared to direct experience. You can be a hotshot baller from HBS, but if you try to break into commercial real estate with an engineering pre-MBA background, its not happening in today's job market. This is the trend going into the future, and I assume that will be the case for fields that don't have rotational-type development programs (like PE, HF, CRE, etc.).

Bottom line: MBA shouldn't be a 'reset button' for your career.

---
man made the money, money never made the man

10/28/10

many people attend the Business school (HBS or Wharton or Standford) hoping that they can get offers from buy side after they graduate. Only few succeeds. If some has worked in BUY side prior to Business school, they always get prefernce in hiring by the buy side. Things are not so rosy for people who have only prior sell side work experience.

In reply to mulandee
10/28/10
mulandee:

many people attend the Business school (HBS or Wharton or Standford) hoping that they can get offers from buy side after they graduate. Only few succeeds. If some has worked in BUY side prior to Business school, they always get prefernce in hiring by the buy side. Things are not so rosy for people who have only prior sell side work experience.

Bingo

Experience > MBA

---
man made the money, money never made the man

10/28/10

What did Matt Damon say about a Harvard undergrad education in Good will Hunting?

you dropped a hundred and fifty grand on a fuckin education you coulda got for a dollah fifty in late charges at the public library."

This is basically true of many undergrad programs, and certainly true of MBA programs. Does that mean an BA from Harvard or MBA from Wharton is a waste of time or money? Depends.

If you are currently an IT professional and wish to be an investment banker for GS, a consultant for McKinsey or a Brand Manager for Unilever, an MBA from a good school is your only shot.

Whatever, any analysis of the MBA without some variant of the term "career changer" is utter nonsense.

In reply to Buyside CFA
10/28/10
Buyside <a href=https://www.e-junkie.com/ecom/gb.php?ii=1145861&am... rel=nofollow>CFA</a>:

Whatever, any analysis of the MBA without some variant of the term "career changer" is utter nonsense.

Well, an MBA doesn't stand for 'Masters in Career Changing.' It was always intended to educate MANAGERS...basically, guys who have experience in their field and want a education in general business management.

But, you're right. The only chance IT techs have at a job in IB/consulting is a top MBA.

---
man made the money, money never made the man

Accepted.com
10/28/10

Experience is a major reason that people get MBA's. If someone is stuck in essentially an entry level job and doesn't have a big role in revenue creation, how will he move up the ladder? He may yearn to be in management but is at the bottom of the totem pole. A promotion could be 5 years away. However, if he goes to a top business school, he can get experience through case studies and group work that will leave him better prepared should he get into a management track. Additionally, he will now have access to the recruiters from these management programs. Not everything is about technical skills. MBA finance courses are only partly about the actual equations/theories that go into models. Most of it comes down to interpretation and application. I'd like to see the author talk about the benefits of participating in case studies amongst some of the brightest minds in the world.

Do people go to bad MBA programs or get the degree for the wrong reasons? Of course. However, a salesman or operations analyst with dreams of moving up in his company can find great utility in an MBA. Obviously high finance still relies on the MBA as it is a screen. It shows commitment, drive, and a baseline of intellectual capacity.

In reply to craigmcdermott
10/28/10
craigmcdermott:

Experience is a major reason that people get MBA's. If someone is stuck in essentially an entry level job and doesn't have a big role in revenue creation, how will he move up the ladder? He may yearn to be in management but is at the bottom of the totem pole. A promotion could be 5 years away. However, if he goes to a top business school, he can get experience through case studies and group work that will leave him better prepared should he get into a management track. Additionally, he will now have access to the recruiters from these management programs. Not everything is about technical skills. MBA finance courses are only partly about the actual equations/theories that go into models. Most of it comes down to interpretation and application. I'd like to see the author talk about the benefits of participating in case studies amongst some of the brightest minds in the world.

MBA for career advancement... Exactly. But those case studies aren't worth 150K and neither is the privilege of talking about those case studies with like-minded peers. And the author mentions you can read business books and case studies outside of the MBA classroom.

Technical skills might not be everything, but they are becoming more and more valuable in this type of job market. You learn the application of those skills on-the-job.

craigmcdermott:

Obviously high finance still relies on the MBA as it is a screen. It shows commitment, drive, and a baseline of intellectual capacity.

Again, that mentality is unsustainable. Basically, I could get acceptance to HBS but not attend, and use that as a show of commitment, drive, and a baseline of intellectual capacity without the 150K debt...right? The notion that an MBA is a 150K screen is stupid even if its true.

---
man made the money, money never made the man

In reply to mr1234
10/28/10
mr1234:
craigmcdermott:

Experience is a major reason that people get MBA's. If someone is stuck in essentially an entry level job and doesn't have a big role in revenue creation, how will he move up the ladder? He may yearn to be in management but is at the bottom of the totem pole. A promotion could be 5 years away. However, if he goes to a top business school, he can get experience through case studies and group work that will leave him better prepared should he get into a management track. Additionally, he will now have access to the recruiters from these management programs. Not everything is about technical skills. MBA finance courses are only partly about the actual equations/theories that go into models. Most of it comes down to interpretation and application. I'd like to see the author talk about the benefits of participating in case studies amongst some of the brightest minds in the world.

MBA for career advancement... Exactly. But those case studies aren't worth 150K and neither is the privilege of talking about those case studies with like-minded peers. And the author mentions you can read business books and case studies outside of the MBA classroom.

Technical skills might not be everything, but they are becoming more and more valuable in this type of job market. You learn the application of those skills on-the-job.

craigmcdermott:

Obviously high finance still relies on the MBA as it is a screen. It shows commitment, drive, and a baseline of intellectual capacity.

Again, that mentality is unsustainable. Basically, I could get acceptance to HBS but not attend, and use that as a show of commitment, drive, and a baseline of intellectual capacity without the 150K debt...right? The notion that an MBA is a 150K screen is stupid even if its true.

No one disputes the fact that the price of the MBA often exceeds its value, but its not a situation that's going to change any time soon. You can argue all you want that the experience is more valid than the degree and I am in agreement, but it isn't going to change much the same as recruiting efforts for finance aren't going to change. Is there any real validity to the thought process that a BA major from an Ivy would make a better banker/trader than a candidate from a reputable state school with a solid technical background? I don't think so, but in the end it isn't about what is logical (as so much with this industry refuses to kow tow to logic), but rather about what is general consensus in the field. Current consensus is that they want to see that you've got a power MBA name to be a player in many cases... don't like it, then network your ass off and prove 'em wrong...

10/28/10

Everything that you're arguing could just as easily be applied to Undergrad and High School. I could learn the entire curriculum from books.

In reply to craigmcdermott
10/28/10
craigmcdermott:

Everything that you're arguing could just as easily be applied to Undergrad and High School. I could learn the entire curriculum from books.

True, but less so in my opinion. It seems like high school and undergrad are about getting you to a level of maturity and intellectual independence, such that you can teach yourself more advanced stuff (like MBA level texts). Besides, we all know high school is just a daycare for older kids anyway.

10/28/10

Bottom line is, they are getting way too expensive, therefore financially they are not worth it anymore, considering that for most people it takes many years to repay the loans back, especially after the 08 crash.

The whole education system and its costs has reached an unreasonable level.

You have better chances at getting good jobs by making up shit on your resume, than paying off quickly an MBA.

Sad, but true.

In reply to mr1234
10/28/10
mr1234:

And the author mentions you can read business books and case studies outside of the MBA classroom.

To add to this point, wouldn't talking about these things with real world business people be better than with students/profs? Discuss real business stuff with your boss, your coworkers, your friends, etc, seems like a better way to really get a hold on this analysis, but maybe I'm wrong.

In reply to craigmcdermott
10/28/10
craigmcdermott:

Everything that you're arguing could just as easily be applied to Undergrad and High School. I could learn the entire curriculum from books.

Yup. But everything I argued is especially true for MBA degrees.

---
man made the money, money never made the man

In reply to rufiolove
10/28/10
rufiolove:

Current consensus is that they want to see that you've got a power MBA name to be a player in many cases... don't like it, then network your ass off and prove 'em wrong...

I have actually been interviewing for post-MBA jobs in CRE, on the basis that I have all the required skill sets without the MBA salary price tag. This might not be the case for some other hi-paying fields, but I think the current paradigm should (and probably will) change.

---
man made the money, money never made the man

10/28/10

I agree with the above statement. The price of the MBA is getting really high. Once it hits a certain level you start seeing people go into specialized masters or PT MBA programs. Even if you dream of breaking into Goldman you need to have a realistic outlook that there is a good chance you might not break in.Nothing like spending nearly half a million for a dream and settling for a 20K bump in salary for something less glamorous.

In reply to TNA
10/28/10
Anthony .:

I agree with the above statement. The price of the MBA is getting really high. Once it hits a certain level you start seeing people go into specialized masters or PT MBA programs. Even if you dream of breaking into Goldman you need to have a realistic outlook that there is a good chance you might not break in.Nothing like spending nearly half a million for a dream and settling for a 20K bump in salary for something less glamorous.

But, if you want to break into Goldman as an associate and you were not an analyst there, you can't argue that having a Harvard MBA isn't going to play a huge factor in being considered.

Hi, Eric Stratton, rush chairman, damn glad to meet you.

In reply to mulandee
10/28/10
mulandee:

Top hedge fund/Private equity comapnies do not want their protegees to go even to top tier MBAs. They think it is waste of time. They will do far better by staying and learning the ropes, once they are in PE/Hedge fund.

You're an idiot and you should never post on this site again. Do you know that at a ton of PE shops worth that are worth their salt you HAVE to have your MBA to get onto a partner track.

10/28/10

^^^^ I like how this dude works for MBA Apply... hahaha talk about full disclosure.

To be fair, I gotta agree with what he's saying though.

10/28/10

I generally think the MBA is useless and most MBAs from top schools are entitled pricks. I would much rather hire a smart kid right out of college who acknowledges that he dosent know shit as opposed to a Harvard MBA who has been taught to think that he actually knows something (which he dosent). I cannot comment on whether an MBA is a "good" investment or a bad one since I have never desired the jobs they are a pre-requisite for such as entry-level banking but I can say that the curriculum seems to turn out people who think way to highly of themselves for no good reason.

10/29/10

That dude started MBA Apply

10/29/10

The "best 99" books he recommends on his site look shitty...surely they CAN'T be what they study at a top Bschool.

10/29/10

Mbaapply might be the best mba consultant out there.

10/29/10

I read this article last week. It was a good read and I agree with pretty much everything mentioned in it. My only issue with it was Kauffman appeared to be telling people to not get an MBA but instead pay him money so he can teach them stuff about business.

Regardless, I want to add a few points:

I think an MS in something like economics or finance is a thousand times more valuable than an MBA. An MBA is largely worthless. Further, if you were to take the time (usually a year to a year and a half [read, three semesters]) to attain the MS, getting a PhD in that field would be just a few years away, making you even more marketable for jobs in high finance. Anyone with half a brain can manage a business, so why should you spend 100k and waste 2-3 years getting an MBA? If that is something you really want to do, go to a school that offers both the JD MBA and enter their joint JD/MBA program and get them both in 3-4 years.

Also, both my father and my uncle are partners in large firms that deal in finance (consultation, M&A, PE, valuation, etc). My dad went to Notre Dame and graduated with an accounting degree in 3 years and passed the CPA on his first try.

My uncle graduated from Iowa and got an MBA from Northern Illinois. Not anywhere close to being a target, but still.

Both are highly educated, professional men who got to where they are today from hard work and by being intelligent. Both have told me the same thing throughout the years: "An MBA is a waste of time and money" (one of them has an MBA and says this), "A lot of our higher up positions call for an advanced degree like an MBA. Guys coming out of top MBA schools like Duke are often weeded out in the first few months." They have stated it is the guys with advanced degrees, experience and knowledge that are the guys that are really worth time and money.

You're born, you take shit. You get out in the world, you take more shit. You climb a little higher, you take less shit. Till one day you're up in the rarefied atmosphere and you've forgotten what shit even looks like. Welcome to the layer cake, son.

In reply to mr1234
10/29/10
mr1234:
rufiolove:

Current consensus is that they want to see that you've got a power MBA name to be a player in many cases... don't like it, then network your ass off and prove 'em wrong...

I have actually been interviewing for post-MBA jobs in CRE, on the basis that I have all the required skill sets without the MBA salary price tag. This might not be the case for some other hi-paying fields, but I think the current paradigm should (and probably will) change.

not wall street finance which this board is concerned with and the focus of the talk.

10/29/10

Good post by MBA Apply.

Personally, I've realized that I want to break into RE, but I'm unsure of whether its RE Dev or RE PE. So I have to weigh a RE Dev degree against going for a regular MBA. Unlike Mr1234, I don't have RE exp, so a generic MBA with a RE focus might be my best shot to break into the industry.

10/29/10

To all the MBA-Bashers:

Have you guys ever seen a Wharton resume book? There are some pretty incredible people in top MBA programs. As long as top MBA programs are populated by 100s of ex bankers, PE analysts, fighter pilots, consultants, entrepreneurs, Olympians with math degrees, special forces officers, engineers and so forth, recruiters for major employers will continue to flock to them.

I have my doubts about getting an MBA but I consider it foolish to make blanket statements about the worth of the degree. I cringe when I hear someone say, "Well my Uncle Lou got an MBA from Northern Illinois Fuckface State 27 year ago and HE says MBAs are a waste of time."

I'm trying to shift to a different industry AND change to a different geographic region - a region with very few alumni from my school. This task is looking harder and harder now that I'm a few years into my career. Barring some cold-calling luck, this change won't happen without an MBA

In reply to TNA
10/29/10
Anthony .:

For non finance people it is a great exposure to overall business. Your classmates also add a lot to the equation. The network you build, the second chance at a career, etc are all tangible benefits.

I think you could get all these things for free, but that would require a lot of outside the box thinking.MBAs off a prepackaged experience.

Did your classmates at Syracuse add a lot to the equation?

In reply to MBAApply
10/29/10
MBAApply:

When you cut through all the "essay narrative" crap, it's mostly for personal reasons. It's for the experience. The chance to reinvent one's self, to step away from the workforce for 2 years, make new friends, and recharge. To find more time for personal stuff - relationships, marriage, personal interests. To find out what other life/careers are out there that they wouldn't have otherwise explored. And so forth. A lot of intangible things that go beyond just the "knowledge" of accounting, marketing, etc. And yes - the chance to graduate from a "prestigious" institution - especially for those who haven't had that - that may not have any tangible effect on your career, but the ego is a powerful thing.

In a way, the reasons for going aren't that much different than why people go to college for their undergrad degrees - it's not purely just for getting a job or for the "academic education", but for the life experience itself. And b-school is an extension of that - whether that experience is worth it or not is entirely subjective.

You confirmed every reason why I think the MBA degree is an over-priced credential.

Basically, you're saying a large part of the utility that MBA grads enjoy is the experience.

Alex, you have to see that paying 150K for an experience is not sustainable going forward. There has to be a point where prospective MBA candidates, MBA recruiters, and MBA administrators collectively realize that the experience costs too much for the intangible benefits.

If I pay 150K for something that was intended to help me progress my career further and faster, it better GUARANTEE me a higher salary and prestigious job. If there is ANY doubt that it would, the risk is no longer worth the reward.

I could buy 2 nice BMWs for 150K. Or buy a small business if I had 150K in my back-pocket. There is SO much I could do with 150K that would give me much greater utility than an MBA, and this should be true for a VAST majority of people who get their MBA.

I am not trying to belittle your experience. But I have a cousin who did his MBA at UCLA and an uncle who did his MBA at UChicago, and they both say pretty much exactly what you said: its all about the experience. I think that's complete BS. Again, no offense, I really mean that.

Also, I don't think the experience is the best thing to point out when you are discussing the benefits of the MBA. It really is beneficial to people with non-business backgrounds, THAT should be emphasized.

Patrick, I know you got your MBA. I know you have something to contribute. This is your website. Let's here it.

---
man made the money, money never made the man

In reply to Yung Gekko
10/29/10
Yung Gekko:
Anthony .:

For non finance people it is a great exposure to overall business. Your classmates also add a lot to the equation. The network you build, the second chance at a career, etc are all tangible benefits.

I think you could get all these things for free, but that would require a lot of outside the box thinking.MBAs off a prepackaged experience.

Did your classmates at Syracuse add a lot to the equation?

I cannot tell if this is a legit question or if you are trying to be a little cunt. Regardless, yeah, I made some great friends at Syracuse.

10/29/10

Here is the thing. Until there is an industry accepted alternative to the brand and experience an MBA offers people will still demand it. It is commonly accepted that you go to get a different name on a piece of paper and network with other amazing people. Right now there is nothing else to replace it.

Side note, I met some John Hopkins MSRE guys last night. They had great things to say about the program and said they had zero intention of getting an MBA.

In reply to Buyside CFA
10/29/10
Buyside <a href=https://www.e-junkie.com/ecom/gb.php?ii=1145861&am... rel=nofollow>CFA</a>:

To all the MBA-Bashers:

Have you guys ever seen a Wharton resume book? There are some pretty incredible people in top MBA programs. As long as top MBA programs are populated by 100s of ex bankers, PE analysts, fighter pilots, consultants, entrepreneurs, Olympians with math degrees, special forces officers, engineers and so forth, recruiters for major employers will continue to flock to them.

Exactly. Those guys were successful BEFORE Wharton, not because of Wharton. Those guys will get the LEAST benefit from Wharton.

Buyside <a href=https://www.e-junkie.com/ecom/gb.php?ii=1145861&am... rel=nofollow>CFA</a>:

I'm trying to shift to a different industry AND change to a different geographic region - a region with very few alumni from my school. This task is looking harder and harder now that I'm a few years into my career. Barring some cold-calling luck, this change won't happen without an MBA

And there is always the probability that it won't do what you want it to do for you, especially if you are trying to switch careers. You still want to sink that 150K?

I'm not trying to tell you to not do the MBA. That's all you.

---
man made the money, money never made the man

10/29/10

Yeah, I think that is something never talked about. Suppose the tech guy quits his job and drops 300K or whatever on a top MBA because he wants to be an associate. What happens if that doesn't happen. Every year there has to be some people who don't break in or who get jobs that might only pay 20-30K more than their previous job. Not taking anything away from a top program, just saying that no everyone walks away making money off a Harvard MBA.

In reply to Yung Gekko
10/29/10
Yung Gekko:
Anthony .:

For non finance people it is a great exposure to overall business. Your classmates also add a lot to the equation. The network you build, the second chance at a career, etc are all tangible benefits.

I think you could get all these things for free, but that would require a lot of outside the box thinking.MBAs off a prepackaged experience.

Did your classmates at Syracuse add a lot to the equation?

Beat it, loser. You're a waste of internet bandwidth.

---
man made the money, money never made the man

In reply to TNA
10/29/10
Anthony .:

Yeah, I think that is something never talked about. Suppose the tech guy quits his job and drops 300K or whatever on a top MBA because he wants to be an associate. What happens if that doesn't happen. Every year there has to be some people who don't break in or who get jobs that might only pay 20-30K more than their previous job. Not taking anything away from a top program, just saying that no everyone walks away making money off a Harvard MBA.

There you go. The majority of candidates don't break into hi paying fields, even if they are from HBS/CBS/Wharton. They just have a better chance than guys like me. And they paid 150K for that chance.

---
man made the money, money never made the man

In reply to shorttheworld
10/29/10
shorttheworld:
mr1234:
rufiolove:

Current consensus is that they want to see that you've got a power MBA name to be a player in many cases... don't like it, then network your ass off and prove 'em wrong...

I have actually been interviewing for post-MBA jobs in CRE, on the basis that I have all the required skill sets without the MBA salary price tag. This might not be the case for some other hi-paying fields, but I think the current paradigm should (and probably will) change.

not wall street finance which this board is concerned with and the focus of the talk.

Maybe I wasn't clear the first time, so I will repeat so you can understand.

The current trend in CRE is that the MBA is not very valuable. I think that mentality will shift over to the financial industry. And that is relevant to this board.

---
man made the money, money never made the man

In reply to mr1234
10/29/10
mr1234:

I could buy 2 nice BMWs for 150K. Or buy a small business if I had 150K in my back-pocket. There is SO much I could do with 150K that would give me much greater utility than an MBA, and this should be true for a VAST majority of people who get their MBA.

I think this opportunity cost argument is the main reason I question the value of the MBA. I hate to think that when I'm 40, I could have saved much more money if I wasn't paying off MBA loans, and as a result don't have the same ability to start my own business, invest wisely, or take a huge pay-cut and work for some startup with ridiculous upside.

In reply to TNA
10/29/10
Anthony .:

Yeah, I think that is something never talked about. Suppose the tech guy quits his job and drops 300K or whatever on a top MBA because he wants to be an associate. What happens if that doesn't happen. Every year there has to be some people who don't break in or who get jobs that might only pay 20-30K more than their previous job. Not taking anything away from a top program, just saying that no everyone walks away making money off a Harvard MBA.

This is just an anecdote, and maybe not that meaningful, but my "MBA-friend" was telling me about this as well (just to be clear, he went to a program ranked between 15-20, and graduated in 2009 which was obviously a bad job market). He basically said that most people trying to switch careers weren't able to, and many of them had to take relatively shitty jobs. And he was a career changer who got a pretty good job offer. He also doesn't buy the salary statistics posted on MBA websites (thinks they're biased upward), but that's another story.

10/29/10

Go to www.quantnet.com and check out some of their discussions on MFE programs. You see a huge lack of transparency in a lot of programs pertaining to placement and salary. Schools really do not want to tell the full truth. Buyer beware!

In reply to Buyside CFA
10/29/10
Buyside <a href=https://www.e-junkie.com/ecom/gb.php?ii=1145861&am... rel=nofollow>CFA</a>:

I have my doubts about getting an MBA but I consider it foolish to make blanket statements about the worth of the degree. I cringe when I hear someone say, "Well my Uncle Lou got an MBA from Northern Illinois Fuckface State 27 year ago and HE says MBAs are a waste of time."

I cringe when misinformed dipshits such as yourself fall into the whole "iBanking = Finance" (and by this I mean the only thing in finance is investment banking) mindset and seemingly believe that an MBA is your ticket to success in this sector of business.

Sorry, both my father and my uncle are highly educated, intelligent and accomplished professionals at firms dealing in what everyone in this board is busting their ass to try and get into. They both make millions and live more than comfortable lives. And to paraphrase Gekko, "I'm not talking about the $400,000 a year wall street schmuck, flying first class, being comfortable."

Am I saying that an MBA from a t10 MBA school like Harvard will not help you at all? Nope. The connections you stand to make from graduating from one of those schools are invaluable and the main reason you are going there, not for the education. What are the chances of everyone on WSO actually getting into a t10 MBA program? I am guessing at or below 50%

I am simply relaying the information given to me from accomplished financial professionals to the rest of WSO. If you don't like it, then don't listen to it. But those are the words from guys that have gone through it already and are accomplished.

You can mock my uncle's NIU MBA all you want, but he has made it. You are commenting on an internet forum TRYING to make it.

You're born, you take shit. You get out in the world, you take more shit. You climb a little higher, you take less shit. Till one day you're up in the rarefied atmosphere and you've forgotten what shit even looks like. Welcome to the layer cake, son.

10/29/10

Josh Kaufman...isn't he the guy that's always trying to steal Vinnie Chase from Ari Gold?

In reply to Midas Mulligan Magoo
10/29/10
Midas Mulligan Magoo:

Josh Kaufman...isn't he the guy that's always trying to steal Vinnie Chase from Ari Gold?

That would be Josh Weinstein

10/29/10

Nefarious said "I cringe when misinformed..."

Calm down, Hoss. I don't want to fight you or Uncle Lou and I didn't mean to knock anyone's school. I'm just a bit confused....

In your initial post you said:
"Both have told me the same thing throughout the years: "An MBA is a waste of time and money""

In your last post your said:
"Am I saying that an MBA from a t10 MBA school like Harvard will not help you at all? Nope."

My point was this: A variety of factors determine whether an MBA is worthwhile. You initially just parroted the advice you heard many years ago without doing any of our own research or understanding the complexity of the decision.

Now that's enough. I won't argue with an 19 yr old who thinks BUYSIDE refers to an investment bank...

10/29/10

ahhh shit, my bad. I misread that. nevermind.

10/29/10

everyone's saying it's "so expensive"...wtf? I thought you RECEIVED a ton of money in the NBA, not the other way around.

In reply to Buyside CFA
10/30/10
Buyside <a href=https://www.e-junkie.com/ecom/gb.php?ii=1145861&am... rel=nofollow>CFA</a>:

Nefarious said "I cringe when misinformed..."

Calm down, Hoss. I don't want to fight you or Uncle Lou and I didn't mean to knock anyone's school. I'm just a bit confused....

In your initial post you said:
"Both have told me the same thing throughout the years: "An MBA is a waste of time and money""

In your last post your said:
"Am I saying that an MBA from a t10 MBA school like Harvard will not help you at all? Nope."

My point was this: A variety of factors determine whether an MBA is worthwhile. You initially just parroted the advice you heard many years ago without doing any of our own research or understanding the complexity of the decision.

Now that's enough. I won't argue with an 19 yr old who thinks BUYSIDE refers to an investment bank...

Congratulations, you're the dumbest fucking person I have run into on WSO thus far. I am not 19, nor am I still in college. The advice that I heard "many years ago" was just recently retold to me a week ago. This isn't some bullshit I heard when I was 12 and ran with it.

Them telling me that an MBA is worthless and me seeing that there is value in getting an MBA from a t10 school are two completely different ideas entirely. I am sorry your minuscule mind is flipping trying to grasp that intricate concept.

I am not going to argue with you anymore because it is apparent that you not only know about finance and business, but you ARE finance and business. This has to be the case, I mean both "buy side" and "CFA" are right in your username.

You're born, you take shit. You get out in the world, you take more shit. You climb a little higher, you take less shit. Till one day you're up in the rarefied atmosphere and you've forgotten what shit even looks like. Welcome to the layer cake, son.

10/30/10

Yo Nef, Buyside's comments throughout the thread have been pretty moderate. He is also legit. Might want to ease off on the insults and hate considering you are rather new here.

10/30/10

First and foremost my question is who the fuck is Josh Kaufman and why should anyone care what he thinks?

This is a largely stupid article.

One of the first points he makes is how expensive MBA's have gotten these days and consequently un-worth-it, partially as a result of that ever increasing price tag. That in and of itself eliminates any shred of credibility. Personally, the $150K price tag is not the major (economic) consideration. The real thing I struggle with is losing 2 years of income, which is several times a multiple of the 2 years MBA expenses. If I go to b-school I'll idealy (and on currently on track to) leave a $250-350K a year income on the table for 2 years. Opportunity costs, tuition, room & board = $600-800K. So even if MBA programs have jacked up their tuitions 50% in the last 4 years, that $50K is a less than 10% increment to my existing cost of an MBA. 300K lost comp x 2 years + 100K tuition = 700K total cost, 50K increase in tuition 50K/700K = 7% increase. So right off the bat, his cost argument is moot. The increasing tuition cost has a minimal impact on the big picture 2 year economic cost of an MBA.

Second, this idiot proposes that because he read a bunch of textbooks he is equivalent to a Harvard/Standford MBA. Time after time, I've heard the same thing: people who go to (elite) business school tend to keep going and continue to excel and torpedo through their careers while their non-MBA-getting counterparts tend to stall out and hit a cieling of sorts. This is what I've heard Jamie Dimon say. This is what I've heard Steven Schwarzman say. And when I hear them say something, I don't have to ask "Who the fuck is Steve Schwarzman and why should I give a shit about what he says?"

Third, he bases most of his argument on this stupid fuckin academic study. I've done an academic study as well and I'll have you know there is very little difference between an academic white paper and a pitch book valuation, other than the formatting. I came up with my conclusion first (its human nature) and the data just happened to support my presumptions. For every study telling me one thing, I can find 10 more telling me the other.

Forth, am I the only one seeing this, he worked at P&G for a number of years, alongside well-educated professionals, and now is launching a brand of his own. If he had worked alongside a bunch of SUNY Oneonta communication majors would he have the same knowledge and insight he has now? Probably not.

So in sum, this douch is sophmoric and pretty immature in my personal opinion. He fails to acknowledge that 90% of what he knows he learned from working alongside harvard and wharton MBA's, and not from reading textbooks. He seems to think that the sole cost of an MBA is the $'s spent, and the sole benefit is the textbooks lessons taught. He doesn't recognize that one of the primary reasons and benefits of an Elite MBA is the fraternity and professional network you develop, the team work and management skills taught, and all the past experiences all your peers bring with them and share collectively.

Lastly, this article is making this kid out to be some sort of deeply innovative, cutting edge entrepreneur. Since when was a self-taught MBA cirriculum groundbreaking? The article says if Josh Kaufman would have pursued an MBA, he likely would have gone to Harvard or Stanford. Did he get admitted to either of those institutions? Because admission is a little known requisite to getting an MBA. I didn't read the entire article so I could have missed that he did in fact get into Harvard and Stanford. I've probably shared this before, but throughout college my college experience and even after it (non-target) it was very challenging to get into IBD. It was an uphill battle and one I started with a handful of friends and classmates. Only a few of us had the drive, luck and persiverience to crack our way in. The ones that fell by the wayside still to this day insist they see no value in a banking job, as if they had the option of accepting one. They'd just as soon quit trying because they're intropectively defeated and don't think they're good enough (and Im not saying there is such a thing as not being good/smart enough for banking), than acknowledge externally that failed, often under the guise of "I dont want it."

Truth be told, I may or may not get an MBA. And I've heard several people tell me that "You need to seriously consider the benefit it will offer you, because everyone is different and it very well may not be of much value to you while it may be very valuable to someone else." But almost all of these people are significantly older and are themselves graduates of MBA programs I'd be interested in attending. So I value their opinions. I have absolutely no interest in listening to a 28 year old with a undergrad from cinncinati U (not that theres anything wrong with that) who runs a web site telling me the merits of not getting an MBA. Shame on that web site for presenting him as if he's some sort of oracle on all things MBA.. and primarily promoting his product, which is all he's doing.

In reply to Marcus_Halberstram
10/30/10
Marcus_Halberstram:

First and foremost my question is who the fuck is Josh Kaufman and why should anyone care what he thinks?

This is a largely stupid article.

One of the first points he makes is how expensive MBA's have gotten these days and consequently un-worth-it, partially as a result of that ever increasing price tag. That in and of itself eliminates any shred of credibility. Personally, the $150K price tag is not the major (economic) consideration. The real thing I struggle with is losing 2 years of income, which is several times a multiple of the 2 years MBA expenses. If I go to b-school I'll idealy (and on currently on track to) leave a $250-350K a year income on the table for 2 years. Opportunity costs, tuition, room & board = $600-800K. So even if MBA programs have jacked up their tuitions 50% in the last 4 years, that $50K is a less than 10% increment to my existing cost of an MBA. 300K lost comp x 2 years + 100K tuition = 700K total cost, 50K increase in tuition 50K/700K = 7% increase. So right off the bat, his cost argument is moot. The increasing tuition cost has a minimal impact on the big picture 2 year economic cost of an MBA.

Second, this idiot proposes that because he read a bunch of textbooks he is equivalent to a Harvard/Standford MBA. Time after time, I've heard the same thing: people who go to (elite) business school tend to keep going and continue to excel and torpedo through their careers while their non-MBA-getting counterparts tend to stall out and hit a cieling of sorts. This is what I've heard Jamie Dimon say. This is what I've heard Steven Schwarzman say. And when I hear them say something, I don't have to ask "Who the fuck is Steve Schwarzman and why should I give a shit about what he says?"

Third, he bases most of his argument on this stupid fuckin academic study. I've done an academic study as well and I'll have you know there is very little difference between an academic white paper and a pitch book valuation, other than the formatting. I came up with my conclusion first (its human nature) and the data just happened to support my presumptions. For every study telling me one thing, I can find 10 more telling me the other.

Forth, am I the only one seeing this, he worked at P&G for a number of years, alongside well-educated professionals, and now is launching a brand of his own. If he had worked alongside a bunch of SUNY Oneonta communication majors would he have the same knowledge and insight he has now? Probably not.

So in sum, this douch is sophmoric and pretty immature in my personal opinion. He fails to acknowledge that 90% of what he knows he learned from working alongside harvard and wharton MBA's, and not from reading textbooks. He seems to think that the sole cost of an MBA is the $'s spent, and the sole benefit is the textbooks lessons taught. He doesn't recognize that one of the primary reasons and benefits of an Elite MBA is the fraternity and professional network you develop, the team work and management skills taught, and all the past experiences all your peers bring with them and share collectively.

Lastly, this article is making this kid out to be some sort of deeply innovative, cutting edge entrepreneur. Since when was a self-taught MBA cirriculum groundbreaking? The article says if Josh Kaufman would have pursued an MBA, he likely would have gone to Harvard or Stanford. Did he get admitted to either of those institutions? Because admission is a little known requisite to getting an MBA. I didn't read the entire article so I could have missed that he did in fact get into Harvard and Stanford. I've probably shared this before, but throughout college my college experience and even after it (non-target) it was very challenging to get into IBD. It was an uphill battle and one I started with a handful of friends and classmates. Only a few of us had the drive, luck and persiverience to crack our way in. The ones that fell by the wayside still to this day insist they see no value in a banking job, as if they had the option of accepting one. They'd just as soon quit trying because they're intropectively defeated and don't think they're good enough (and Im not saying there is such a thing as not being good/smart enough for banking), than acknowledge externally that failed, often under the guise of "I dont want it."

Truth be told, I may or may not get an MBA. And I've heard several people tell me that "You need to seriously consider the benefit it will offer you, because everyone is different and it very well may not be of much value to you while it may be very valuable to someone else." But almost all of these people are significantly older and are themselves graduates of MBA programs I'd be interested in attending. So I value their opinions. I have absolutely no interest in listening to a 28 year old with a undergrad from cinncinati U (not that theres anything wrong with that) who runs a web site telling me the merits of not getting an MBA. Shame on that web site for presenting him as if he's some sort of oracle on all things MBA.. and primarily promoting his product, which is all he's doing.

Well said. I'd like to append that I think T10 MBA's appeal to certain people more than others. T10 MBA's are big part of "the track". Getting paid in finance is great, but I think it's well established that anyone who's been successful in the field was/has been driven by something other than greed. My dream school is Wharton, not because I might make me and extra $2M in my lifetime or whatever, but because it'll look baller as shit on my resume and limit said glass ceilings.

I think people look at MBA programs all wrong. I think it should be viewed as an opportunity in your career to take your work & academic experiences so far and retool/analyze your skill-set with similar (in accomplishment) individuals in an academic environment; and possibly to creep on some undergrad co-eds/get wasted every night for one last time.

10/30/10

Wow, looks like I missed out on a lot. Seems there are some valid points on both sides.

I think the KEY here is that it is a very PERSONAL decision and one that needs to be evaluated in detail based on your specific circumstances and goals (note: Marcus is looking at it the right way). Having recently graduated from Wharton I'll try to give an unbiased opinion and some personal issues I considered when deciding if the MBA was right for me:

1) Timing: I had worked in banking for 2 years and MM PE for ~ 4 years...I needed to step back and reevaluate. What did i really want to do...could I make WSO a real business? If I got into a top 5 MBA, would the cost be worth it if I was going to start my own business anyways? Isn't that just an expensive insurance policy? Would the entrepreneurial programs at Wharton/MIT/ or HBS really help me? Definitely questions I considered.

2) Perception: I could have stayed at the PE fund, but a lot of the senior guys at my MM PE fund looked only to hire VPs with MBAs (maybe bc they all had Tuck+Wharton+HBS degrees)...if I was going to stay in PE, would not having an MBA limit me down the road?

Here is what I found:

1) The timing was great and the network is simply awesome. When I left my job in June, I made the decision to chase WSO full time as hard as I could for 2 years to see if it was viable / realistic. If it didn't work out, I could always go back into PE or join a start-up (I assumed having Wharton on my resume would make this easier, and I think that is hard to argue against). Sure, I would have spent a shitload of money (if I had not received a fellowship) but I also would have had an incredible network and I was set on going (for me, the opportunity cost was also offset by some of the major benefits of going back to school: time to think, time to chase my business, building a very strong network, etc).

Fast forward and I was lucky enough to be admitted to the Venture Initiation Program, won the Wharton Venture Award so I could work on WSO full time over the summer ($10k) and Social Innovation Award at PennVention ($2.5k) for RecWave.com (which flopped...lets hope jdOasis.com does better). Point is, I was given a ton of support $ wise AND very valuable advice.

In a world of "who you know", I think the $500k-$1 million in opportunity cost for smart / driven individuals is going to be minor speed bump for the majority of the students. Some will undoubtedly not ever recover the full cost of the MBA, and others will be closer to break even, but I would argue that is the minority. What % exactly that is...who knows... On a personal level, I can tell you that WSO would not be anywhere near what it is today without the help of my classmates. They were all super supportive and gave me some great ideas.

But NONE of that matters for you - do you need an MBA to be successful, hell no. Does it sharpen your critical thinking abilities? I say yes, but it depends on where you are in your career, your maturity level and what your goals are. Again, it is a very personal decision. I know some of my classmates that were thrilled and others that were disappointed since they couldn't get the job they wanted straight out of Wharton (horrible market in 2010) -- but I honestly think the majority of them would agree it is a positive NPV decision.

2) I disagree with the notion that the degree loses significant value with time because i would argue the majority of the value is from the close network you build. I would bet the majority of my classmates will be kicking some major ass in 5-10 years, and I can say anyone from my cohort and another 200+ people from my class would help me in a second if I asked for it, even 10 years down the line (not to mention the huge alumni network). THAT is major value.

Yes, and it was fun as hell.

Patrick
(clearly I have no ability to organize my thoughts since I numbered certain paragraphs / points with no real rhyme or reason - enjoy)

In reply to WallStreetOasis.com
10/31/10

Thanks Patrick, I was hoping you would chime in.

WallStreetOasis.com:

I disagree with the notion that the degree loses significant value with time because i would argue the majority of the value is from the close network you build. I would bet the majority of my classmates will be kicking some major ass in 5-10 years, and I can say anyone from my cohort and another 200+ people from my class would help me in a second if I asked for it, even 10 years down the line (not to mention the huge alumni network). THAT is major value.

In regards to the network value, does that value significantly drop when you get outside of the top 10? Or do programs even in the 20-30 range still have pretty good networks (even if just regionally)?

10/31/10

hey econ, honestly I can only speak for Wharton+ a few others since I only applied to 3 schools.

10/31/10

Getting an MBA is a really personal decision as Patrick says. I can only give personal experience which dosent apply to most here because I have always wanted to manage money at a hedge fund and thats it. I will say that I worked a job for 3 years during a time when I could've gotten an MBA that was considered menial...most people on this board would have mocked it. However, I actually learned about markets and how the business of managing money works as opposed to an MBA where I might have done a couple of case studies on it. Now I do manage money at a hedge fund and I can honestly say that I have had every job in this business from reconciling the books to being a desk assistant to being an analyst to running hundreds of millions of dollars as a PM. None of that would have been possible if I'd gotten an MBA.

I also stand by my earlier post that most MBAs are total tools who think they know everything and actually know nothing. I think this is a function of the culture at top business schools which may make the graduates prepared for some things but makes them totally unprepared to work for me.

11/1/10

@Patrick, I find it interesting that getting even a Wharton MBA needs to be justified; questioning the value of a Wharton MBA wouldn't even have been a discussion just 5 years ago. I believe this will be the trend going forward (not that a Wharton MBA will be perceived as useless, just that it will be valued less). I also find it interesting that people who go through with the MBA cite intangibles (like network, taking time to find yourself, other PERSONAL reasons, fun etc etc) as a major reason for going. Maybe I am naive, but I feel that the MBA (or any grad program) should be about academics FIRST.

You say $500k-1MM opportunity cost is minor for a majority of students. That might be true at top MBA programs, but there is a big MBA world outside of the top 10. I would say that a majority of ALL MBA grads don't get what they pay for. I know I wouldn't.

@Bondarb, Your career track is basically the same route I am taking. I think that is the way to go for a VAST majority of guys who are already in a business-related field that they like. Experience FTW.

So, to summarize:

*Who benefits and how much from an MBA program varies from person to person, obviously.
*In today's job market, the value of an MBA has decreased, and will probably decline even more into the future.
*When factoring cost of attendance and opportunity cost, the risk/reward profile looks pretty pathetic.

I don't care what some of you say, Josh Kaufman does a pretty decent job of explaining why the MBA is not as valuable as some would think, especially considering most of you couldn't offer up any good reasons for the value of an MBA.

---
man made the money, money never made the man

11/1/10

@ mr1234 -- wasn't the whole purpose of this thread to justify an MBA? you clearly are extremely biased against the degree for whatever reason. To answer some of your questions:

If you think that your "network" is an intangible, yes that is naive.

Maybe I am naive, but I feel that the MBA (or any grad program) should be about academics FIRST.

Yes, this is also naive. How many jobs searches have you gone through?

Just because you've decided NOT to go does not mean that it isn't a great choice for some people. I don't agree that a top MBA has dropped in value "in today's job market" which is all I think I can comment on (I didn't go to another school so I don't know what the experience was like there).

Where does the hatred for this degree come from? Why, when you have no first-hand experience yourself do you find it necessary to speak in extremes and absolutes? Are you second-guessing your decision or trying to make yourself feel better about not going?

I am DYING to hear what people have to say about this, but I have a feeling most will be mum because what this guy is saying is so true despite what most people on this forum believe. In fact, this thread should be put on the front page blog. Are you hearing me, Mr. Moderator?

You found an article that agreed with your viewpoint and almost crapped your pants. Yes, the decision is personal - so why are you so adamantly trying to paint a broad shit-stained brush on the whole degree? Either way, I found the discussion interesting, so thanks.

-Patrick

11/1/10

mr1234 i find it ironic a few posts ago you were trying to ask for help deciding on whether to get an MBA and then you turn into a nazi-tastic basher of the degree. and yes the majority of the MBA degrees are crap, from st marys in texas to northern idaho state (if that even exists) but for some people they are a necessity for a change of geographic region, purpose, or just plain skillset or they want to take a look back at things

11/1/10

It's not like I have any "hatred" for the MBA programs, not at all. And my bias is justified in my opinion.

In my profession, my network stems from my professional relationships, not so much from people from my school. I don't see the value in paying a shit-load of money for the privilege of a professional network that you can cultivate on the job while getting paid and getting experience. Again, maybe I am being naive.

mr1234:

*Who benefits and how much from an MBA program varies from person to person, obviously.
*In today's job market, the value of an MBA has decreased, and will probably decline even more into the future.
*When factoring cost of attendance and opportunity cost, the risk/reward profile looks pretty pathetic.

^Not speaking in terms of absolutes and extremes here, am I?

WallStreetOasis.com:

Just because you've decided NOT to go does not mean that it isn't a great choice for some people.

^I agree.

WallStreetOasis.com:

I don't agree that a top MBA has dropped in value "in today's job market"

It's obvious the post-MBA job market is worse today than pre-2007, agree? Lower probability in getting a hi-paying post-MBA job + rising cost of getting an MBA = drop in value of an MBA. The job market sucked in 2008, 2009, and 2010. Things don't look great for 2011. So I don't see the value of an MBA appreciating any time soon.

WallStreetOasis.com:

How many jobs searches have you gone through?

Enough to know that an MBA wouldn't help me and may even hurt me because my industry values relevant experience over an MBA. Outside of IB, MC and jobs that specifically recruit only MBA's, I would assume this is true across the board for other industries. But hey, I realize this a finance focused website.

WallStreetOasis.com:

Are you second-guessing your decision or trying to make yourself feel better about not going?

After participating in this discussion, I am sure I wont be getting my MBA any time soon.

---
man made the money, money never made the man

11/1/10

@shorttheworld:

Yes, I did come here for advice, didn't really learn anything new that I didn't already know before, and then made a PERSONAL decision not to pursue it because of pretty much the same reasons that this Josh Kaufman guy highlighted.

---
man made the money, money never made the man

11/1/10

Let me just say I think most of the bullshit that we have to do in this world is useless and fucked up. Welcome to society where people make decisions based on brand, upbringing, skin color, grammar, clothes, etc. The MBA is not a huge jump in knowledge, but unfortunately right now it is the main way into certain jobs and careers. I think it is bullshit, but oh well, pissing in the wind.

In RE and in sales fields, I think performance and network are what really matters. In banking it is about pieces of paper and bullshit work. C'est la vie.

In reply to Marcus_Halberstram
11/1/10
Marcus_Halberstram:

Time after time, I've heard the same thing: people who go to (elite) business school tend to keep going and continue to excel and torpedo through their careers while their non-MBA-getting counterparts tend to stall out and hit a cieling of sorts. This is what I've heard Jamie Dimon say. This is what I've heard Steven Schwarzman say. And when I hear them say something, I don't have to ask "Who the fuck is Steve Schwarzman and why should I give a shit about what he says?"

That's a fair point. Coincidentally, I was just reading the book "Market Wizards" by Jack Schwager, and on page 312 while he is interviewing Jim Rogers, Rogers says the following: "Columbia is right here and the Dean kept pestering me to teach a course. I told him, 'I don't think people should go to business school.' I thought that, for many people, business school was a waste of time. I still think so."

11/1/10

To unlock this content for free, please login / register below.

  • Facebook
  • Google Plus
  • LinkeIn
  • Twitter
Connecting helps us build a vibrant community. We'll never share your info without your permission. Sign up with email or if you are already a member, login here Bonus: Also get 6 free financial modeling lessons for free ($200+ value) when you register!
11/1/10
In reply to shorttheworld
11/2/10
In reply to econ
11/2/10
3/7/11

What's Your Opinion? Comment below:

Login or register to get credit (collect bananas).
All anonymous comments are unpublished until reviewed. No links or promotional material will be allowed. Most comments are published within 24 hours.
WallStreet Prep Master Financial Modeling