Got paid 360k, do I go to Bschool?
Hi Everyone,
Never posted on here, but thought I'd get some opinions.
My background: I'm 5-6 years out of undergrad (target school) and work in AM doing equities at a good firm (not Fido, Wellington, Cap - think Putnam, Loomis, MFS). I recently got in to Wharton, Sloan and Tuck for business school (class of 2018) and was wondering if I should take the plunge. I make ~300k a year (+/- depending on how we perform). I like my job, but recognize that the investment industry is consolidating and under structural pressure from passives and was thinking that business school might provide some opportunity to go and try something different like technology, consulting or private equity.
Pros of going to school:
1. It would also be a lot of fun.
2. Might open up more senior level roles later - C-level roles that might not be open to someone with a BA (?)
3. Might open up new career opportunities in industries with more structural growth opportunities like tech, consulting, VC/PE.
4. Want to live in Boston and Tuck, Sloan feed heavily into the Boston recruiting scene.
Cons of going to school:
1. The opportunity cost (200k + 600-800k in lost compensation)
2. The fact that any career switch would either entail a big pay cut (consulting, tech)
3. Or is unlikely (PE).
In an ideal scenario I'd be able to network my way into a decent growth equity type firm, but I know that switch is difficult. I could also go work at a consulting firm and try to make the switch in a few years to a small company at a senior level and hope it takes off. I really loathe the idea of working at a bank.
Am I being stupid going to business school and trying to break into PE? Or should I stick it out in AM because I'm making a decent amount of money with reasonable hours? I already make what a lot of guys who went to top tier MBA programs make at my firm and in theory there's upside if we keep growing. I know there's no crystal ball, but not really sure what to do here.
Thanks,
Confused Millenial
If I can have your job, then yes, you should go!
FUCK NO
I don't understand how someone gets to this level financially and instead of thinking "let me use all this extra money to start my own business" or "let me learn more to start my own business in my current field" or "let me collect these paychecks and see how far up I can move within the company then retire early" its "let me go to b. school, forgo my paycheck, and be no closer to true financial independence". The lack of imagination makes me want to cry.
Coming from somebody who did investment management both pre and post MBA...
No. Your individual performance, attitude, and contributions to a firm matter far more than a MBA.
Another analyst role? Probably. A PM role? No.
I encountered two different attitudes when interviewing for post MBA positions. Some firms looked favorably upon the MBA for its academic and experiential components. On the other hand, some firms had a very negative attitude towards it, i.e. "Why did you need a MBA? Were you damaged goods? Why leave the industry?" I found it very hard to overcome the latter attitude where it existed.
Bottom line is you don't need a MBA to advance in the investment management industry.
Possible but difficult. Investing in public equities is very different than private equity. I had a former IM colleague attempt this at a consensus top 5 MBA program and he/she got no traction.
If that's what you're passionate about, absolutely. Trying it for novelty? Definitely not. Keep in mind you'll be taking a huge pay cut upfront. More importantly, you may not be that good at those fields.
By the way, "tech" is a broad term. Tech firms hire for a wide variety of roles such as corporate finance, strategy, business development, marketing, product management, etc. Each of these roles has different career paths, compensation profiles, and lifestyles. Just saying you want to "go into tech" is totally meaningless and shows you haven't given it much though.
You'll also find that you'll be competing against people with engineering backgrounds that are very, very sharp. Think you have an edge against them? They can learn finance a lot easier than you can learn engineering.
I agree with everything you're saying about IM. Keep in mind that every industry has headwinds though. Also, your role within a given industry is very important. Uber is a great company but most of the finance guys there will never make what you're making. You need to find an industry where your skillset is a revenue driver and you are highly valued. You're in one of those industries already. Finding another one may not be as easy as you think.
Hi All,
Thank for all the thoughtful replies! I have some follow up questions:
models_and_bottles Why did you go back to get an MBA if you were going back to IM? What's compensation in IM like post-MBA? I was also wondering how difficult it is to make the jump to a bigger firm like Fido/Cap/Wellington?
What is it about VC/PE that make it so hard to break into from IM? What skillset/experience am I missing?
@MBAGrad2015" What is compensation like for product managers/corporate strategy types in tech? What is the long term compensation upside for those career tracks? I would say most analysts where I am make somewhere between 400-800k and PMs move up from there and range from high six figures to low-to-mid single digit millions depending on fund size/performance, but these jobs are VERY difficult to obtain
What percentage of people who go into consulting post MBA get promoted to engagement manager, partner, etc. at each level? I know that it's a triangular structure, but just curious how that works. What is comp like at the various levels?
Also presumably, the CEOs of large corporations that you see coming from MBB are people who were already partner level in consulting? Or they took big entrepreneurial risk (which I suppose you can take without an MBA)?
@MBAGrad2015" What do you mean when you say there's lots of client hand holding stuff at MBB and not so much big picture strategy stuff?
models_and_bottles @MBAGrad2015" Lex120 Exit options later is something I've wondered about if the industry keeps consolidating. I think I can do well doing what I do, but does having an MBA provide me some sort of "cushion" should I get pushed out and need to switch careers? Or will it be dwarfed by my experience in a few years time?
Thanks, Confused Millenial
"Am I being stupid going to business school and trying to break into PE?" Yes
"Or should I stick it out in AM because I'm making a decent amount of money with reasonable hours?" Yes
"Cons of going to school: 1. The opportunity cost (200k + 600-800k in lost compensation)" Your "con" is what most sane people would consider a Dealbreaker
"I make ~300k a year...reasonable hours...I like my job" There are maybe 20 people in the entire world who get to put this sentence together. I'd stay put, OP.
"Confused Millennial" is very much an accurate description. OP, assuming you're not trolling us, I'm really surprised you got into several top MBA programs due to your uncertainty about what you want to do. What did you talk about for your short and long-term post-MBA career goals?
Here's my 2 cents, so take it for what it's worth. Lot of other posters have hit on similar themes.
I graduated last year from a top MBA program that has very strong finance placements (Wharton/Columbia/Booth). I can say with absolute certainty that most of my classmates would KILL to be where you are at now. You went to a target undergrad, pretty young, work at a big well-known mutual fund, AND making $300K/year? You really hit the jackpot here. In my opinion, the only real reason to go is if you want to transition into an industry that recruits at the school and that you are unable to break into otherwise. The industries that best fall into this category are banking and consulting and to a lesser extent tech. Given where you are at, I have no idea why you would consider consulting. Aside from the paycut, it's not a good fit for most hardcore finance types. People mistakenly assume that MBB consulting is very big picture strategy, but lot of the work is now less strategy and increasingly more client focused. There's a lot of BS that some people just can't deal with. I think after having worked at a long-only mutual fund, you may find MBB to be annoying. As for tech, most of my classmates who went into it are doing product management type roles or corporate finance at the usual suspects: Google, Facebook, Apple, Amazon.
Given your background, your odds of breaking into PE or VC are very low. They don't do OCR, but some of them will post jobs on the school's job board during spring; most of it though will be through your own personal networking. PE and long-only mutual funds are totally different beasts, so I think you will find it to be a tough obstacle to overcome. You are certainly more competitive for long-short equity hedge funds, and if you go to Wharton, you may gain some traction there since some of those funds post jobs for summer internships. Keep in mind though that you will be competing against people who worked at top bulge bracket banks and PE firms before b-school, and hedge funds have a big preference for BB+PE pedigree.
This brings me to another point. Finance is an extremely diverse industry, and due to the specialization of skills and knowledge involved in various areas of finance, transitioning to a different focus (i.e., long-only mutual to long-short equity hedge fund) is far more difficult than people realize. The task is even more arduous if you take 2 years off from the workforce to attend b-school, where you will spend a lot of time just fucking around (lot of employers have lost respect for MBAs because they know that it's just partying and traveling, and I've had multiple interviews where they made fun of MBAs). So in many ways, given your current situation, you will be taking a step backwards by going to b-school.
Finally, I want to address one of the pros you mentioned: life-long network. A poster earlier talked about his dad who went to a top business school in the 80's and having easy access to his roommate who is now a major financial firm CEO. I think it's very dangerous to rely on those personal anecdotes. Is it possible that one of your good friends from school end up being a total hotshot? Yes. What are the chances of that happening? Very low. Let's get real here. HBS alone graduates around 900 students EVERY year. How many of them end up becoming the next Bloomberg, Schwarzman, Dalio, Dimon, Klarman, Black, Immelt, Sandberg, etc.? Very few. The reality is that the vast majority of MBAs become comfortable white collar professionals making six figures. Not a bad life at all. But true glory is out of reach for nearly all of us. In addition, studies have shown that most MBAs only stay in touch with a few of their classmates within 10 years after graduation. I saw this firsthand with older alums I talked to. People get busy with work, families, children, other important obligations, and naturally they fall out of touch. Heck, I've been out of school for less than a year, and already my social life is drastically different from what it was when I was in school. Back then, my whatsapp would be going off nonstop regarding various social events, and I would get constant messages from people wanting to hang out. Now, things are more subdued, to put it mildly.
In summary, the BEST reason to go to b-school is to leverage its on-campus recruiting and other resources to break into an industry you really want to work in and that you are unable to gain access to otherwise. Everything else is secondary and fluff. Think long and hard about what you REALLY want to do after b-school.
You posted 5 days ago that you're studying at a target school, you asked when 1st year analyst programs begin, and you're listed as an intern...