MBA: overpriced ego boost?

The focus on education seems to be different in Canada versus the US; In Canada, it seems like everyone is trying to get designated (Chartered Accountant, CFA, etc) rather than placing weight on an MBA. But, the MBA seems to be alive and well in the US.

I am currently deciding between an MBA and CFA. The variables I am considering is the return on investment and time value of money. e.g. finish an MBA in 1 yr for approx. $70k and get back to working/building business or take 3 yrs for an CFA for approx. $5 to7K (assuming first time passes). I know both really well and that they can take an individual down different paths but I am sure I can work with anyone of them. And I am not interested in becoming a walking alphabet e.g. GORDON GEKKO, MBA, CFA, CPA, CA

Let me know your thoughts.

Also, I am up here in Canada anyone got any comments on Queens MBA versus other Canadian MBAs.

 
Best Response

It is hard to provide you with valuable and insightful advice when you, on one hand, inquire about the MBA degree but, on the hand, frame the MBA negatively with the topic title of "MBA: overpriced ego boost?" For some reason, you seem to already have a biased and negative perspection of a MBA...

The MBA differs from the CFA or CA in that the latter two simply represent a designation from a passive governing institution, which provides you accreditation for a technical skill set. The MBA is a time-honored degree that signals your commitment (both cost in time and money) to an employer and provides:

1.) Recruiting channels: Pre-MBA salaries at top schools average around $55,000 - $75,000 whereas exit salaries are around $125,000. The MBA allows someone to quickly monetize on the degree with strong employment placement into associate-level positions at top firms (i.e. BB banks / MBB consulting). A CFA / CA may only tangentially help with recruiting whereas a top MBA provide you with one of the only proven entry-points into investment banking. Associates in IB make $250,000 to $325,000 in his/her first non-stub full-year whereas a CFA / CA doesn't even see a tangible increase in salary...

2.) Network expansion: A MBA at a top school develops a strong personal and professional network that may provide a lot of future benefits as we mature. Finance is a small world and your network is crucial for your long-term success as you try to get promoted, land client relationships and join different organizations. A CFA / CA doesn't come close in this regard. I would guess that an average MBA at a top school probably gets to expand his/her professional network by about 500 acquiantances (whether it be students / alums / professors) in the span of two years...

3.) Education through perspectives: A CFA / CA provides you with a technical foundation that you may (or may not) get in a MBA... However, the MBA also teaches you so many different other perspectives ranging from top finance professors, successful alums / industry leaders as well as your bright business school classmates. If you want a more comprehensive / relevant education, business school is going to be more pertinent than a few CFA textbooks

 
Vancouver Canucks 2011:
It is hard to provide you with valuable and insightful advice when you, on one hand, inquire about the MBA degree but, on the hand, frame the MBA negatively with the topic title of "MBA: overpriced ego boost?" For some reason, you seem to already have a biased and negative perspection of a MBA...

The MBA differs from the CFA or CA in that the latter two simply represent a designation from a passive governing institution, which provides you accreditation for a technical skill set. The MBA is a time-honored degree that signals your commitment (both cost in time and money) to an employer and provides:

1.) Recruiting channels: Pre-MBA salaries at top schools average around $55,000 - $75,000 whereas exit salaries are around $125,000. The MBA allows someone to quickly monetize on the degree with strong employment placement into associate-level positions at top firms (i.e. BB banks / MBB consulting). A CFA / CA may only tangentially help with recruiting whereas a top MBA provide you with one of the only proven entry-points into investment banking. Associates in IB make $250,000 to $325,000 in his/her first non-stub full-year whereas a CFA / CA doesn't even see a tangible increase in salary...

2.) Network expansion: A MBA at a top school develops a strong personal and professional network that may provide a lot of future benefits as we mature. Finance is a small world and your network is crucial for your long-term success as you try to get promoted, land client relationships and join different organizations. A CFA / CA doesn't come close in this regard. I would guess that an average MBA at a top school probably gets to expand his/her professional network by about 500 acquiantances (whether it be students / alums / professors) in the span of two years...

3.) Education through perspectives: A CFA / CA provides you with a technical foundation that you may (or may not) get in a MBA... However, the MBA also teaches you so many different other perspectives ranging from top finance professors, successful alums / industry leaders as well as your bright business school classmates. If you want a more comprehensive / relevant education, business school is going to be more pertinent than a few CFA textbooks

I think your IB Associate statistics are a bit inflated. According to Glassdoor it's more like 130-160. Maybe a couple lucky people might make more.

 
Croato87:
Vancouver Canucks 2011:
It is hard to provide you with valuable and insightful advice when you, on one hand, inquire about the MBA degree but, on the hand, frame the MBA negatively with the topic title of "MBA: overpriced ego boost?" For some reason, you seem to already have a biased and negative perspection of a MBA...

The MBA differs from the CFA or CA in that the latter two simply represent a designation from a passive governing institution, which provides you accreditation for a technical skill set. The MBA is a time-honored degree that signals your commitment (both cost in time and money) to an employer and provides:

1.) Recruiting channels: Pre-MBA salaries at top schools average around $55,000 - $75,000 whereas exit salaries are around $125,000. The MBA allows someone to quickly monetize on the degree with strong employment placement into associate-level positions at top firms (i.e. BB banks / MBB consulting). A CFA / CA may only tangentially help with recruiting whereas a top MBA provide you with one of the only proven entry-points into investment banking. Associates in IB make $250,000 to $325,000 in his/her first non-stub full-year whereas a CFA / CA doesn't even see a tangible increase in salary...

2.) Network expansion: A MBA at a top school develops a strong personal and professional network that may provide a lot of future benefits as we mature. Finance is a small world and your network is crucial for your long-term success as you try to get promoted, land client relationships and join different organizations. A CFA / CA doesn't come close in this regard. I would guess that an average MBA at a top school probably gets to expand his/her professional network by about 500 acquiantances (whether it be students / alums / professors) in the span of two years...

3.) Education through perspectives: A CFA / CA provides you with a technical foundation that you may (or may not) get in a MBA... However, the MBA also teaches you so many different other perspectives ranging from top finance professors, successful alums / industry leaders as well as your bright business school classmates. If you want a more comprehensive / relevant education, business school is going to be more pertinent than a few CFA textbooks

I think your IB Associate statistics are a bit inflated. According to Glassdoor it's more like 130-160. Maybe a couple lucky people might make more.

I work in banking and my numbers are quite accurate, based on street numbers from bulge bracket banks. Glassdoor's numbers are way off. Check out http://wallstreetcomps.com/ for better information...
 

thanks for your thoughts Vancouver Canucks 2011. i didnt intend to speak poorly about the MBA, the title was more addressed to me and if I was getting the MBA for the right reasons.

 
damn.analyst:
thanks for your thoughts Vancouver Canucks 2011. i didnt intend to speak poorly about the MBA, the title was more addressed to me and if I was getting the MBA for the right reasons.
I am biased myself and believe that for 80% of kids in business, the MBA is always a good idea and something you should pursue. However, there are two caveats:

1.) Do you necessarily know what you want to pursue? If so and you know with relative certainty that you won't need a MBA to advance, then don't get a MBA. Unfortunately, there are very few fields in finance that doesn't require a MBA for upward mobility and you pretty much need to be in it to have that privilege (i.e. Investment banking analyst direct promotes, junior hedge fund employees or wealth management, etc...)

2.) You can get into a top 20 school. Ideally, you want to go to a top 10 but anything in the top 15 will get the job done for you. Top 20 is still possible but outside of that, it becomes a lot more difficult.

In summary, if you don't know what you want to do or if you want to career-switch or if you simply want to take to years to better yourself, consider the MBA. In a lot of tracks, whether it be F500 corp fin or marketing or consulting or private equity, the MBA is required for most people to move up (once you hit a certain level). If you want to pursue business / finance long-term, you should seriously consider it.

 

CFA is good if you have an asset management/research type job, enjoy it, and want to move up in your company/industry. MBA is useful for switching industries, networking, and providing access to recruiters that you normally would not have access too. Someone in, say, economic consulting who wants to break into equity research would have a difficult time doing so with just a CFA (although I've seen it happen so it's certainly not impossible) where as it would be a much easier transition for someone in bschool.

 

CFA is only useful in asset management or research. It is a credential to show that you are committed to that particular industry, that you understand the ethics behind that industry, and that you understand all the finance required to be effective in an investment analysis type role. It is also a networking credential, but almost all CFA's work in a small, niche industry.

MBA's are everywhere, on WS, at F500, consulting, NGO's, GO's (is this a term lol?), etc et al. Its a degree that provides you with all the benefits mentioned by Vancouver (in his excellent, SB awarded answer), including networking, potential salary increase, and education.

looking for that pick-me-up to power through an all-nighter?
 

CFA is only useful in asset management or research. It is a credential to show that you are committed to that particular industry, that you understand the ethics behind that industry, and that you understand all the finance required to be effective in an investment analysis type role. It is also a networking credential, but almost all CFA's work in a small, niche industry.

MBA's are everywhere, on WS, at F500, consulting, NGO's, GO's (is this a term lol?), etc et al. Its a degree that provides you with all the benefits mentioned by Vancouver (in his excellent, SB awarded answer), including networking, potential salary increase, and education.

looking for that pick-me-up to power through an all-nighter?
 
<span class=keyword_link><a href=//www.wallstreetoasis.com/finance-dictionary/what-is-london-interbank-offer-rate-libor>LIBOR</a></span>:
CFA is only useful in asset management or research. It is a credential to show that you are committed to that particular industry, that you understand the ethics behind that industry, and that you understand all the finance required to be effective in an investment analysis type role. It is also a networking credential, but almost all CFA's work in a small, niche industry.

MBA's are everywhere, on WS, at F500, consulting, NGO's, GO's (is this a term lol?), etc et al. Its a degree that provides you with all the benefits mentioned by Vancouver (in his excellent, SB awarded answer), including networking, potential salary increase, and education.

Thanks LIBOR!

Very few people who get their MBA from a top school end up regretting it. Besides, the MBA and CFA aren't mutually-exclusive - a bunch of people get both!

 

you're thinking of your choices purely in terms of numbers. I think it's hard to put a figure on the value of networks and the number of opportunities that spring up from an MBA. moreover, how do you apply the time value of money to arguably the best two years of your life? food for thought.

Capitalist
 

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