How "good" are MBA schools?

For b-schools.

Harvard Enrollment: 1,821
Chicago Enrollment: 2,573
Penn Enrollment: 1,702
Col Enrollment: 1,242
MIT Enrollment: 781
Stan Enrollment: 764

Thats just a few of the top b-schools. Their sizes are HUGE, esp since half are part of the graduating class every year. What kind of doors does an MBA open on average? What % get 300k their first year out?

 
bryan1:
300K...maybe the top dogs. The avg for harvard is 100K -ish.

It seems like the average salary numbers from top B-schools are very skewed. I wish they'd provide the averages by industry, because the overall averages take into account people who work for nonprofits, or work elsewhere outside of financial services.

I'm sure that $100k in no way reflects the average total compensation of an HBS grad who is walking into a BB IBD Associate gig, or anything comparable to one.

 

Avg comp at most of the top 10-15 MBA programs is around 150K. But that is across all career fields. For finance (S&T, VC/PE, IBD, DCM/ECM, IM, etc.) you're looking at 175K-225K, depending on how you count your stub and signing bonuses. For top HF and PE shops you're looking at 200-300K, with a handful of people between 350-500K (and I mean a handful at most). Then the consultants are probably looking at around 150-175k, while marketing and management are probably at 120K. Don't forget the gov't jobs (CIA, FBI, State), Media & Entertainment, non-profit, etc, all of which recruit a decent number from the top schools, and all get around 75-120K, which brings the average down a bit.

 

Know someone exiting Columbia this year, 200K without bonuses, in finance. Don't know what the overall class average is though. Obviously, also depends on past work experience, etc.

 

So in finance coming from one of those schools, 150k I guess is a reasonable expectation, knowing it can be a little higher or lower. That doesn't seem like a lot. Market for law in NYC is 190k and thats 3 years out of college.

How come the b-schools are so large? Why don't they have incoming classes that are 100-300 students like law schools do?

 

I don't know where you got 190k from, according to vault you can expect 160k at Cravath, Swaine & Moore.

B-schools are probably so large because they want to increase the size of their alumni.

 

Additionally, in "top tier" finance, I think that $150k represents the salary, I don't think that includes bonus (other than signing).

With the reasonable expectation of a 100% bonus, that would put the number at $300k, likely a little high.

I know of a couple places in RE Asset Management (i.e. not IBD) that do $90-110k for associates plus a 100% bonus target, so $180k-$220k. Bonuses are almost always significantly above target at both these shops. (no carry at associate level)

If that's RE AM comp, I expect BB IBD Associate pay to be higher.

 

Guys, there is little to no variation for 1st year Associates out of an MBA program. You WILL make, as a 2007 grad, a $45K signing bonus, $10-15K relo, and a $95K salary. Then you will get a stub after 6 months, and this year stubs were $45K. So that's $195K-$205K rate for the first 6 months. That applies to IB, S&T, Research, and DCM/ECM. No variation at all. For your first full year (i.e. 6 months through 18 months after graduation from your MBA program) you will make $95K or $100K base, plus bonus. Average across the street this past year was roughly $200K, so you're looking at $300K avg comp for you first full year. Of course, variation starts here, in that a crap group in IBD or crap desk in S&T may yield you less, while a great group or desk in either field could yield you $100K more. But those are the current numbers for "standard" jobs. HF/IM, PE/VC will be more for good firms. No one in finance makes less right out of a top b-school. And only Wharton and HBS have large classes of 800-900+ each. Tuck has around 240 in a class. Everyone else in the top 15 is somewhere in between.

 

The reported comp that bschools put out will most likely only include salary and maybe other small stuff. They usually break out signing bonuses separately, and year-end bonuses wouldn't be in the comp figure because they aren't guaranteed.

A lot of schools will break out the figures based on type of job though, so you should be able to find that.

6-18 month period for '06 MBAs was probably in the 250-350 range all-in for BB in NYC, as was stated earlier.

 

An MBA is a very "american" degree. In Europe (at least continental Europe) an MBA is just not worth the money. For example in Germany a lot of top tier consultants have a phd in a STEM subject and most i-bankers have specialized master degrees. The value add of an MBA (network, opening new perspectives and interacting with people from different sectors while already having some professional experience) can be strong depending on what you want to do. But most of these things are much more university than degree related. If you go for a specialized degree at a target university in Europe you will have the network and student diversity of a top tier MBA program for less money and a more valuable skill set while having access to the same companies and jobs.

So my advise would be:

Study in the country were you want to work. Build your network in the country were you want to work. Study for a degree which is common in this particular country in a certain industry - which is a specialized master degree or phd in Europe and an MBA in the States. Stay the course.

 

If you want to work in Asia, wouldn't it just be easier to move there and start working before getting an MBA? Then, after some experience, you can decide whether the MBA is the right move?

 

But won't it also be tough to pay-off American size student loans on an Asian salary? I've thought about teaching English in Asia (which, according to a few of my friends, actually pays better than most private sector work) but my student loans make it non-viable for now (and I only have $35K in student debt).

 

and how would I get a job in Asia without private sector skill sets and a network that MBA provides? the straight military to private sector transition is possible here in the US due to the respect that we are accorded (i think we often get more credit than we deserve on leadership and teamwork "intangibles"). the military's taught me a lot but as an Asian who grew up in Taiwan, I know that Asian society tends to look down upon the military as an outlet for people who otherwise didn't place well in the college entrance exams.

 

I am wondering if he actually speaks with this much emphasis at the end of all his sentences or if he just got a little carried away with the "!!"?

He sounds like he made up his mind already anyways.

Regards

"The trouble with our liberal friends is not that they're ignorant, it's just that they know so much that isn't so." - Ronald Reagan
 

In reading some of your past posts you seem to be WELL off so if you want a grad degree, get one. For the normal person the only reason, IMO, to get one is for advancement or career change.(MBA speaking)

 
txjustin:
In reading some of your past posts you seem to be WELL off so if you want a grad degree, get one. For the normal person the only reason, IMO, to get one is for advancement or career change.(MBA speaking)

I do ok, when I was going for my IBD interview the HR people were booking my flight and I said no I'll take my plane lol. I just invested really wisely in profit generating assets. I don't mess with the markets unless its with gambling money.

I know I won't get into a top 20 and most likely not even a top 50 program. I just considered it, think it would be a good life experience.

Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
 

Why waste your time in b-school? If you do not think you could get into a top 50 program, why not just start a business from the ground up? Or purchase a mismanaged or failing business and build it? That'd be some real education, and you may get lucky and have it take off -- no more worries about lost income.

By the way, what are you talking about when you say profit generating assets? RE? Oil/Gas?

 
STorIB:
By the way, what are you talking about when you say profit generating assets? RE? Oil/Gas?

I have had a few people ask me this in various ways. I will try and find an area on this site to post a thread about this on. If you have an area in mind that you think would be fitting let me know and I will post it there.

Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
 
STorIB:
You could just pm us three and only have to answer about a dozen.

But I swear, if it goes into direct marketing...

Haha

Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
 

I invest in useable land parcels i.e. farm land, forest land, oil ground ect ect. Farm gound is leaseable, and has capitol gains as it increases in value. I was lucky enough to be willed a large acreage when I was still in high school when the easy money boom was just ramping up. I borrowed tons of money aginst that land and got around 1% interest loans from the US farm loan program. The price of an acre of farm ground has trippled since I was willed the land. I just kept buying land and borrowing aginst the apperciated value. I have increased my holdings tenfold since I started just under 10 years ago. I was insanely fortunate to buy close to 700 acers of farm land in Texas that just so happened to be located on the Barnet Shale. Lets just say that was one HELL of a windfall. Prime ground (farm) has gotten to the point that is slim margin for investment. Right now I am looking into forrest land in Alaska that is currently unaccessable. That pretty much is my investment strategy in a nutshell. I will start a thread somewhere on here for Q and A.

Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
 
heister:
I invest in useable land parcels i.e. farm land, forest land, oil ground ect ect. Farm gound is leaseable, and has capitol gains as it increases in value. I was lucky enough to be willed a large acreage when I was still in high school when the easy money boom was just ramping up. I borrowed tons of money aginst that land and got around 1% interest loans from the US farm loan program. The price of an acre of farm ground has trippled since I was willed the land. I just kept buying land and borrowing aginst the apperciated value. I have increased my holdings tenfold since I started just under 10 years ago. I was insanely fortunate to buy close to 700 acers of farm land in Texas that just so happened to be located on the Barnet Shale. Lets just say that was one HELL of a windfall. Prime ground (farm) has gotten to the point that is slim margin for investment. Right now I am looking into forrest land in Alaska that is currently unaccessable. That pretty much is my investment strategy in a nutshell. I will start a thread somewhere on here for Q and A.

Thanks for sharing this. Would definitely like to hear more in another thread. Like the themes of this website , success is a lot of hardwork/talent with some luck thrown in.

 

Why not do a specialized masters. One year, decent network and plenty of fun. You could do a RE program at MIT, John Hopkins or NYU. All great names. I think USC or UCLA has a program also. You could do an MSF and look at the usual suspects. Would help you if you went back into finance also.

 
ANT:
Why not do a specialized masters. One year, decent network and plenty of fun. You could do a RE program at MIT, John Hopkins or NYU. All great names. I think USC or UCLA has a program also. You could do an MSF and look at the usual suspects. Would help you if you went back into finance also.

Thanks man,

Yea I was looking into it more for the experience then for anything else. I don't really need the career boost, just looking to expand my network for no reall apperent reason.

Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
 

I'm grappling with whether or not to start the application process for Fall 2010 right now. I've already started discussions with my current firm about staying for an unprecedented 4th year or being promoted internally (our titling is a formality only, my duties would not change).

I've always been a big proponent of business schools when it gains you access to a network you would otherwise not have, or it is a requirement to move upward in an industry (such as mine). But now, I'm trying to avoid it at all costs. In order for me to continue on the PE track I'm currently on, I need to attend a handful of top B-schools (and in actuality, probably only 3 will lend me the credibility I need) - and we're looking at upwards to 30% more competition these days. In addition, the access to a job network? Well I'm making the bet that in December 2010/January 2011, the private equity job market will have rebounded to the point where internships will be available again. Friends at HBS have told me that in 2008 only a handful of students were able to secure internships that did not include them returning to their previous firms.

So I basically ask myself - why leave a great job and great pay where they obviously need me just to face increased competition, the pain-in-the-ass application process, huge tuition costs, and the prospect of no jobs?

 

Initially my response to this thread was "what a stupid post" as the value of an MBA really depends on the individual. With that said I am in the exact same situation as GameTheory, 4 years in PE, great pay, love my team, great lifestyle, unlimited upside/growth and meaningful work. I am beginning to reach the point in my life where I either need to go now or just forget about it all together. I anticipate preparing applications for the fall solely as a back-up plan with the intention of only applying to top schools.

A lot of PE guys have top MBAs and it seems to be a pre req. I agree that the primary purpose of an MBA is recruiting/network but I dont think you can overlook the importance of a 2 year vacation where you can focus on personal growth, interests and career development.

Not sure we have the appropriate audience on the board but it would be nice to hear from post MBAs and their experiences. Have a good weekend.

 

I am in a similar situation to jbs and GameTheory. I will say that I am much more bullish on an MBA for a few reasons.

  • it enables a much smoother transition if you ever decide to get out of your particular branch of finance or finance altogether
  • great networking (especially if you go to a top school) - to elaborate beyond what's already mentioned, it's the best place to source new talent and grow your "market intelligence" (beyond the specific benefits of insider job postings, etc.)
  • if you want to start your own fund, company, etc. it gives some heft to your profile to potential investors/sources of money
  • last chance to really "vacation" - after that, you can't really take any significant time off without looking like a flake

The cons are somewhat limited in my mind. Frankly, the money is irrelevant, especially over the course of a career. Opportunity cost is there but it's mostly monetary as the MBA will buy you "seniority"/cred etc. Again, not really a big deal.

I am suprised that this thread does not have more postings...there seems to be such a stigma that a top MBA will let you into banking/pe/etc., but in reality it is no different than any other opportunity. It is what you make of it. I had a friend of mine who went to Columbia, but had worked and lived in NY prior. He did not participate much in the networking events, etc. just hung out with his friends and in the end it really hurt him. On the flip side, I had a friend move to Chicago to go to school there and he was new to the city, took everything in, went to all the networking events, really enjoyed it greatly and landed a very awsome job.

 

I'm graduating in the next few weeks from b-school and am going into banking. I think the value of the degree is realized on a graduated scale upon graduation. I don't think I'll make a lot more money next year than I made the year before school. But 10 years down the road I believe (I hope) that I will look back and see that having this degree, the education, the access to network and the pre requisite for many business situations (jobs/deals) have increased my ability to make money for my family and to have an impact on my community in one way or another.

I know that's very idealistic and I hate that kind of idealistic crap most of the time but thats what I'm telling myself right now to justify the loan payments.

 

Wingman, curious, you are about to finish the MBA program, I supposed you've already gone thru "debt counseling". So what's your debt load with the MBA? Considering that debt burden and this current economy, do you think it is worth it?

My debt load is roughly 65,000 and my estimated monthly payments (just checked with my loan accounts online) are 600 dollars per month.

Is it worth it? I think it is in the long run. Is it hard to get out of school in a bad economy and have a lot of insecurity about my job and making my payments, yes? But, I do think that it will end up being worth it in the long run to have done this.

 
IBnutz:
Was the guy in that article kidding himself by spending all that money on an MBA from a school like Notre Dame and expecting to break into banking?

What an idiot.

It says he invested $70K. I thought MBAs cost more like $150K ($80K - $100K for tuition, the rest for living expenses).

wingman12:
My debt load is roughly 65,000 and my estimated monthly payments (just checked with my loan accounts online) are 600 dollars per month.

And here wingman says his MBA only led to a debt load of $65K. Do MBA programs offer a lot more funding than I realize, or were these two individuals just extremely lucky to wind up with a much more manageable level of debt?

 

If you are a career changer and never did banking before, B-School is a must have in order to get into banking. The only exception is: you are a top tier analyst and you will make it to associate without the MBA. I believe that a top tier analyst who can make to associate is less than 10%. Correct me if I am wrong.

 
veloso77:
If you are a career changer and never did banking before, B-School is a must have in order to get into banking. The only exception is: you are a top tier analyst and you will make it to associate without the MBA. I believe that a top tier analyst who can make to associate is less than 10%. Correct me if I am wrong.

Isn't internal promote rate 10%? Those aren't the top 10%, those guys are good but either didn't want to or couldn't make it into PE

 

I'm interested to see what bank hiring practices are like when hiring picks up again.

If the surest way in is through an associate gig, I'd say b-school is worth it. Although I'd hope banks realize that a lot of talent was laid off/couldn't get into the industry and they consequently start looking closer at apps for jr positions that don't come from b-schools.

However, I would say that across the board, b-school is only worth it if you get into a top 10 (top ~20 maybe, depending on the alumni network and your chance meetings).

 

An MBA, even a PT MBA, can definitely help a career changer break into finance and banking in particular. I know it's possible because I did it myself. Still, the transition represents an enormous amount of work above and beyond what's going on in the classroom. Too many people think that they will just go to b-school, spend 10 minutes retyping the resume with the letters MBA on it, and then watch the offers roll in. Probably not ever how it worked but most certainly not in a market like this.

 

I am kind of unclear as to what level of schooling you are entering. So you are about to graduate from high-school, or its singapore equivilent, and you can afford either an UG in the US or a UG and a masters in your home country? You cannot, to my knowledge, take a bachelors degree OR a Masters in the U.S. - you need a bachelors before a Masters. Perhaps I am the only one confused

"I am not sure who this 'Anonymous' person is - one thing is for certain, they have been one hell of a prolific writer" - Anonymous
 

I see now. Well if you are planning to pursue a graduate degree, then I think it makes more sense to go for a less expensive undergraduate and then shoot for the stars with a graduate US school. I am not sure how undergraduate degrees from Singapore are considered by US grad schools, perhaps reach out to admission counsellor for a few different US schools and ask (Make sure you include state, 'semi-target' and target schools to get a good opinion)?

In terms of whether to pursue a graduate degree at all, it really depends on what you are planning on going into. I am graduating from UG soon, and while I may puruse a masters, I am content studying for the CFA (June test!) as I beleive in the field I want to pursue a Masters and CFA are similarlly ranked (aside from top-tier B schools) and the price of three CFA exams is nothing compared to a masters.

If the thread gets picked up, prepare for ten thousand different opinions

"I am not sure who this 'Anonymous' person is - one thing is for certain, they have been one hell of a prolific writer" - Anonymous
 

It's pretty difficult to get sponsorship out of UG. My roommate in UG was turned down from a number of social marketing positions, he was able to find a great opportunity towards the end of April and joined a software sales start up backed by a serial entrepreneur.

Of 20 or so international acquaintances and friends. Two others are still working in the US. One for a large data organization the other started his own business. I've also heard stories of deportation.

I would consider how willing you are to compromise your short-term job prospects and how employers will look at hiring you (sponsorship is expensive).

Power, gold, crackers-every bird has its price
 

I am guessing he had just finished his A levels/diploma in Singapore. I do not think you are able to work in the U.S , you would require a work permit or something like that. Also, if you come back to Singapore, you will probably earn the same if not slightly more than the same candidate from Singapore. It is true that American education (especially the degrees from the ivy leagues) are favored upon more than the local education by the local employers.

However, it also depends on what kind of job are you planning to apply for when you graduate. If you are planning to apply for front office banking jobs such as investment banking, having an American education would be beneficial provided that your GPA is great as well. (You can do a search on linkedin and see how many people with first class honors or Summa Cum Laude in investment banking).

Regarding whether business degree is "useless" or not really depends on yourself. In the local context, the engineering degrees are not as highly regarded as compared to in the U.S. This is due to many of the engineering/technology/operations/back office jobs are being outsourced to other countries. Most of the Singapore engineering graduates did not do something that is directly relevant to what they had studied for the past 4 years. In addition, their coursework is tougher and most of them had lower GPAs as compared to those pursuing a business degree. This makes it harder for them to compete with other graduates despite them possessing analytical skills. In short, engineering can get you into banking ; so can other degrees.

Honestly, it really boils down to what kind of job would you like to do when you graduate. If you are really interested in engineering, my personal advice would be to consider whether you are able to have a higher GPA with engineering or business. You can start off with engineering and try applying for a minor or a second degree in business.

In my opinion, it is essential to have soft skills such as being able to communicate well with others. Technical skills such as engineering are important. However, it is very difficult to compete just based on technical skills in Singapore because there are others who are willing to do the exact same thing at the lower cost.

If you are only offered an engineering course in Singapore, I would recommend you to go to the States to study if your parents are able to afford it. I would like to remind you that in the scenario that you are paying for your own education, if you cannot handle the pressure in the local examinations (be it A levels or your diploma), what makes you think that you are able to handle 100k+ worth of debt?

Regarding your last question, I can only offer you my opinion. I feel that it really depends whether you can handle the pressure that you are 100k+ in debt compared to your peers in the local universities. Also, from your post, I can see that you are trying to have options or rather a safety net to fall back on in case things do not work out. Instead of worrying so much, why not just burn your bridges and give the absolute best in whatever degree you have chosen to pursue. It will take a lot of self discipline but it can be done.

I hope my post helps you in making a clearer decision for your choice of degree. All the best for your future endeavors.

 

Thank you everyone for your input! It has been really helpful to me. Just to answer some questions... Yes, i have finished my A levels and will be pursuing an UG degree. I have been offered a spot in a local university, Singapore Management university to pursue business. Not sure if you guys have even heard of the school as compared to the National university of Singapore or Nanyang technological university. However SMU is one of the three public universities alongside NUS and NTU. I would most probably be pursuing a career in the finance track, IB or not, i can't say for sure now, but Kelley has good placement in IB (provided i make it into the workshop). I understand that a non US citizen may not be appealing for employers due to the cost of the sponsorship, so i'll have to make myself stand out somehow, if you guys have any ideas please do share. I would love to work in the US in the future, as i feel that opportunities would be better here, but that is another story altogether. I'm just more concerned as to whether or not pursuing a UG degree at IU-Kelley will be able to help me achieve my goal. Regarding "Singapore -> work for a few years -> US MBA -> banking", i've heard that the brand name of the school which u got your bach deg in matters quite a bit when applying to prestigious MBA programs in the US, hence i believe that i will be disadvantaged with SMU on this part....as it is a fairly new university that nobody has heard of. (it was started in 2000, and is a specialized school in business and social sciences.)

Thank you!

 

Woozy, are you a business or accountancy major in smu? Since you are in smu, would u suggest I go there? I've heard that its really stressful and stuff, is it going to be difficult to get a 3.5 and abv in smu with all the competition? Are the glamourous stories that smu paint about its graduates true, or are they just a select few and not the majority?

 

First of all, there is a difference between major and degree. You can find out more about the difference between double major and double degree on the school's website. Regarding the stress level, I feel that if you are able to handle 4 H2 in A levels, the workload should be quite manageable. It also depends on what kind of CCA you would like to take part in. Honestly, 3.5 is not overly difficult to achieve. However, I personally feel that there is a steep increase in amount of work required from a B+ (3.3) to at least an A- (3.7). For your last question, your definition of "glamorous" might be different from mine but Ill assume that you are referring to front office banking jobs. Personally I feel that SMU places a lot of its graduates into front office position as relative to its student population size as compared to the other universities. (Correct me if I am wrong and you can go search linkedin for local investment banking profiles).

The typical profile will look something like the following: Sophomore: Boutique investment bank / Bank sophomore program for summer internship Junior: Boutique / Bulge bracket investment banking internship + maybe off-cycle internship

Awards: Mostly Magma / Summa cum laude + Dean lister + Lee Kong Chian Scholarship + other academic awards.

On a side note, I think it is more important to give your very best than to be so fixated on grades. Also, if by chance you are referring to management associate programs (rotational programs) as "glamorous" , then the profile would be different as it places more emphasis on the individual being all-rounded. Anyway, I am pursuing a degree in business management for your information.

 

Thanks woozy. I'm also concerned about the overall uni experience as well. I know its what you make of it, but smu seems to not have an "ideal" exp...however it is not going to be much of a choice if I attend smu. As you are a current student of SMU, I'd have to ask you this : do you regret going to smu, is it a good school overall that can open doors for your career? I have my doubts, it being a relatively new school and all, its brand name is probably relatively unheard of outside of Singapore. I've heard that this matters when pursuing a post grad progran, is it true?

 

No I do not regret going to SMU despite most of my peers in JC going to the other 2 universities. I am also not going to compare SMU to the other local universities as what is better for me may not apply for you. I am not sure what is your definition of "ideal" experience. Does it mean not staying in a hostel or are you referring to the competition. Regarding the aspect of competition, I feel that it is slightly stiffer in SMU due to everyone trying to outdo each other. However, it really allow me to push myself beyond my comfort zone. Although it is uncomfortable at times where you have very little sleep, I really appreciate the process as it allows me to identity my weakness and constantly improve myself. There will always be competition everywhere and if you feel that it is not your cup of tea, I guess SMU and IB is not really suitable for you.

It is true that your overall university experience is really what you plan to make out of it. There are many activities available during the term, including night cycling, diving, beach parties and case competition (Currently there is one by UBS). However, it is really up to individuals whether they would want to plan their studies such that they can attend the following events or they can just stay inside the library as usual.

Regarding the credentials of SMU, you may want to contact the school itself.

 

Thanks woozy, i apologize if i may have stepped on your toes with my previous comment. I am aware that competition is everywhere, however i am interested in the finance industry, and i am also aware that it is no easy feat to obtain an IB job upon graduation locally. I was no top student in JC, and i am honestly worried that my GPA will not be what i need it to be in order to pursue the career of my choice. I have heard stories of people getting 80/100 for a stats test only to be one of the lowest in class?? Does this kind of thing really happen in SMU? Thanks for clarifying the social aspect of the school as well.

 

I am not sure which stats are you refering to. There is both Stats 101 and stats 151. I have taken stats 101 and from my calculation I got around 83/100 in overall if I didn't remember wrongly. In the end, I got an A- . For 80/100, it might be a B or B+ for my professor. It may not apply for other classes as it depends on your professor and classmates. It is unlike financial accounting where your scores is relative to the cohort (a.k.a bell curve for cohort) but rather within your class.

On a side note, there are no issues with me regarding your previous comment. It is just that if you want front office jobs, you must be prepared to work hard and network a lot. It is great that you have a rough idea of what you would like to do or you are in the process of doing so. Unfortunately, a lot of people in the school have no idea what they would like to do until their sophomore or junior year.

From my experience, the thing about university compared to A levels is that nobody will be "spoonfeeding" as much. Whether or not you would like to work hard/achieve as much exposure as possible is really up to yourself. I do know people who do not have a single A in their A levels but yet they are able to make it to the deans list. Personally for myself, I am trying to improve my grades as well. Cliche as it may sound but it really boils down to being hardworking and managing your time. Although I do not have stellar grades, I felt that I have achieved a lot more than most people that just study purely.

 

The Associate to VP role is the cruelest monster of them all.

Basically you're going from the "small envelope" to the "big envelope". Pressure increases dramatically you must produce or else you are gone in a hurry while juggling some senior Associate roles etc.

Would call Associate to VP a 10% chance from net pool of associates.

Good rule of thumb, if you can get to 150+ all in comp and Associate title, its tough to ever consider an MBA.

Unwritten rule of life in general, make someone money they will promote you. So get ready to grind in year 3 as an associate, also set up a lateral as a back up.

Things hit the fan when you're a high paid non-revenue generating worker.

 
WallStreetPlayboys:
Basically you're going from the "small envelope" to the "big envelope". Pressure increases dramatically you must produce or else you are gone in a hurry while juggling some senior Associate roles etc.

So associates who dont make it to VP, continue to stay in Sr.Associate roles? I thought it's up or out

WallStreetPlayboys:
Would call Associate to VP a 10% chance from net pool of associates.
Wow. That seems brutal. Just 10%? What happens to rest of associates?
WallStreetPlayboys:
Good rule of thumb, if you can get to 150+ all in comp and Associate title, its tough to ever consider an MBA.
Im not in finance industry, so MBA is the only option to become an associate.
 
GPMagnus:
So many assumptions, so many years into the future ... trying to DCF a banker's comp these days is very risky ... do an MBA to get skills you do not have or to move a industry/geography. If you already like where you are (e.g. NYC BB), I'd stick to it

Im a career switcher. Currently an engineer(total comp is close to Associate 1 salary and can probably expect a 10% bump every year, not more than that)

Yeah, I know its risky with so many assumptions, but still trying to get an idea of future earnings.

 
GPMagnus:
So many assumptions, so many years into the future ... trying to DCF a banker's comp these days is very risky ... do an MBA to get skills you do not have or to move a industry/geography. If you already like where you are (e.g. NYC BB), I'd stick to it

Let's be clear. It would make ZERO sense to do an MBA if you were already in banking and were offered an Associate promotion if your goal after MBA was to work as an Associate in banking... Regardless of whether you traded up for a better name.

 

You'll be pushed out but you can move to another bank. Ex. Say you don't think you'll get the associate to VP jump from a mid market like jefferies then you could line up a job at say Citigroup just in case, lose 1 year on your progression but be okay.

Think about the associate role what's the age band? Basically 26-33 (roughly) 26 is a A-A and 33 is an MBa guy switching careers.

The VP 10% number includes attrition, the industry is shrinking, you need to be well liked, in the right group, get the rec from the right people, not mess anything up and never complain about the job, lots of moving parts that need to hit on all cylinders. Industry shrinking is the real drag, with a laid off guy from a BB with 5 years experience or a fresh grad... Tough to choose the fresh grad when you have a levered up finance guy with the tools who got caught in a wave of layoffs.

Anyway, given your background actually would advise against jumping in (on a purely financial risk reward) if it isn't for the money then have at it. Just an opinion though.

 

10% from experience is about right in this economy.

Most guys leave which messes up the numbers.

Of 10 guys who go in as an analyst, maybe 1-2 go A-A? So knowing associate to VP is tougher ... Should put you at the 10%ish range.

Number of people qualified for a VP promote is higher than 10%, simply referring to actual moves.

What % were you pegging it at?

 

Also, in my mind this is too simplistic a way to look at the value of the MBA, even from a purely financial perspective. If this were the way it was valued financially than I'd certainly never go, as I already make over 250, but I value it very differently. And again, this is from a purely financial standpoint. You need to consider the tuition and the opportunity cost + first job out of school, but you also need to consider the chance you meet a potential contact there who one day helps you close a big deal which pushes you over the hurdle to MD and increases your lifetime earnings by $10 million. And the albeit smaller chance that you meet someone there who inspires you to start a HF with them and who is so fucking smart that your shop is managing billions in 5 years time and you're a regular fucking george soros - (multiply the 0.1% chance by $500 million, and it'll be a nice little addition to the valuation!). Then you have to look at the "downside protection" the MBA can provide. Look at the probability you'll lose your job in the future, and then look at the difference between the probability of being able to make a career switch or find a new job in the same industry with the mba as opposed to without the mba... etc., etc.,

It's a very tough thing to value. For me personally (and the valuation would be different for each individual person, based on prior experience / post-mba career path plans, etc.), I'd guess the net value (i.e. less costs/opportunity/etc.) of a Harvard MBA could be as much as $5 million, on probability-weighted scenario basis... It's all just a random guess, but I'd suggest not to limit yourself to thinking about what a post MBA associate or VP makes. They both make chump change (and so do I, and most of us... as we're under 30). Think about what the founder of a PE firm with $5 billion in AUM makes... or at least what the best rainmaker in a given group at a BB pulls in... That's big kid money. Granted you may be able to make that without the MBA as well, but my guess is the probability might go up...

 

Total agree with you.There are several upsides financially of doing MBA beyond the first post-MBA job. But it's also hard to imagine how it will be, so my guesstimate is just based on median post MBA earnings. Not all grads(even top MBAs) might go on to start a PE fund or be a good rainmaker. I feel it's always safe to consider a median performance as opportunities to strike gold are there in every field, but only very few may strike it(although there's hope and chance that you might). For ex: I'm moving away from tech - there are plenty of opportunities to make lots of $ in tech, but the median engineer works trying to climb the ladder and maynot found a successful startup. Just my opinion.

 

I agree with most of what's been said.

I just applied to MBA and MFin programs, and from a purely financial standpoint, I don't "need" the degree. I work on a highly profitable BB trading desk and at age 26 made around $500K including bonus. However, the value of a top degree extends well beyond short-term benefits; if you want to be a truly big player in finance (private equity, hedge funds, banking, investment management) I think an MBA from a top program is becoming more and more indispensable. I realized that if you want to have any leadership role, whether it's managing your own portfolio, climbing the ladders at a megafund PE/BB, founding your own hedge fund, etc., it boils down to relationships. Most of us have the raw brainpower and the work ethic but may not have access to the right people. In that sense, an MBA allows one to form lifelong relationships with those who will be the leaders shaping business and industry over the next 30-40 years.

 

A top MBA does two things.

  1. It's an on-the money put option. It provides insurance that even during very bad economic times, you will be able to make six-figures in a respectable professional job.

  2. It's an out-of the money call option. Due to its network, name brand, and relationships you form, there is the small off chance that something awesome will happen due to your MBA. For example, a b-school friend of yours creates a startup 10 years down the road and asks you to join him as his partner. It takes off, you guys go public, and you become filthy rich. Or say a b-school buddy becomes president one day and asks you to be his chief of staff or treasury secretary. These are extreme outliers, I know, but the main point is that an MBA drastically expands the horzion of what is possible. And better the school, the more expansive this becomes.

 
mbavsmfin:
A top MBA does two things.
  1. It's an on-the money put option. It provides insurance that even during very bad economic times, you will be able to make six-figures in a respectable professional job.

  2. It's an out-of the money call option. Due to its network, name brand, and relationships you form, there is the small off chance that something awesome will happen due to your MBA. For example, a b-school friend of yours creates a startup 10 years down the road and asks you to join him as his partner. It takes off, you guys go public, and you become filthy rich. Or say a b-school buddy becomes president one day and asks you to be his chief of staff or treasury secretary. These are extreme outliers, I know, but the main point is that an MBA drastically expands the horzion of what is possible. And better the school, the more expansive this becomes.

agree with point #1 but completely disagree with point #2. That type of thing is much more likely to happen with co-workers than with a guy you went to b-school with 10 years ago (that you probably didn't really stay in touch with). Even then, if a guy has built a successful business, he's never going to bring you on as an equal partner, no matter how good of friends you are. If you both come in at the ground floor and took an equal amount of risk, then sure it's possible. But that's hardly a gift.
 

Some other perspectives on how to value an MBA -

  • regional mobility - the fin'l crisis & globalization have shown that mobility can enhance financial opportunity. An MBA from a Top 4 program w/ a large alumni network can allow you to move to China, Brazil, London, Vietnam, etc and already have a strong professional base

  • network - sometimes senior people prefer to work with other alumnae on staffed deals which impacts mentorship, reviews, and ability to make lateral or entrepreneurial moves. A CFA doesn't necessarily guarantee this. greater cross-pollination, access, and knowledge base via classmates at other organizations. finance is a relationship basis and two academic degrees (networks) is better than one.

  • differentiation - yes there are alot of Wharton MBAs out there but still there are more people w/out MBAs out there.

  • credibility - it is much easier to start a company/fund or secure a CEO position. whether it is reality or not, it just looks better and gives decision makers confidence. it parallels the old adage, no one gets fired for hiring Goldman Sachs.

  • overall optionality - increasing optionality will almost always improve economic outcomes. you won't be limited.

  • opportunity cost - with the current bonus & regulatory environment, right now the opportunity cost of getting an MBA if you work in finance is at an all-time low.

 

Just don't make the same mistake I did and get a JD/MBA and your ROI should be ok assuming you can land and hold onto your IB gig.

"They are all former investment bankers that were laid off in the economic collapse that Nancy Pelosi caused. They have no marketable skills, but by God they work hard."
 

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"The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts." - Bertrand Russell
 

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Beatae officia nesciunt et quidem qui nihil. Alias praesentium non possimus non corporis enim provident. Labore fugiat et voluptatem maxime et omnis sed. Dolorem numquam hic ipsam velit aut. Et sit nobis et minus enim id deleniti animi. Sequi suscipit commodi hic in quidem id.

 

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Sit perspiciatis sed consequatur non. Commodi dignissimos hic quia quae. Aperiam odio porro ullam dolore minima aspernatur voluptas. Mollitia ipsum perferendis accusamus error dignissimos. Velit velit voluptas autem.

Iure necessitatibus aut autem inventore consequatur corrupti quia officia. Aut sapiente nisi eos provident harum et. Eligendi et quasi praesentium aliquid tempore omnis. Nesciunt eos mollitia est vero.

 

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