This is exactly why I wish to enroll now. Market is tough as it is, and not very forgiving to those who don’t have analysis/FO experience. I’m still used to living as poor as a college kid. "If you are toiling in a back office job paying $60k a year, obviously the opportunity cost of attending is well worth it in the long-run. "
tobias, I think you are cherry picking your numbers here. For starters, the salary number is not as important as total compensation, which is significantly higher for the sort of finance positions we have been talking about here. Also, the average salary number is not especially relevant because it does not reflect the fact that a lot of people decide not to go into finance. It’s not that unusual to see people from top programs (top 3 at least) with top experience coming out in the $250-500K total comp range. There are not a lot of people in 500K range, admittedly, but there are some that go to PE and HF jobs (or were doing so before the job market fell apart) and earn that much. Ironically, the guy in the back office probably needs the top MBA more than anyone else, but he will likely not get in. Top programs tend to accept people who don’t “need” the degree because they have already succeeded on some level.
I hear you on the numbers bromion. It’s just tough to come up with something more concrete on the dispersion of the compensation since all you get is mean/median. The fact that those are close to the same leads me to believe there aren’t a lot of outliers on the high end.
Yeah, that’s true. I would agree that it’s a leap of faith on a certain level. Some people are more willing to take the leap than others, and I respect that choice either way as long as it’s well thought out. I found this SS useful (I didn’t build it): http://www.gmatclub.com/forum/103-t64239?sid=6090089e495b6551b128a63d227a5da0
Wow, if this doesn’t spell out the need to have a top tier MBA in PE at the VP level, I don’t know what does. Below is a link to profiles of Associates and VP’s at Summit partners. Check out the education levels. The majority of Associates have no MBA. Of the 16 VP’s ALL went to HBS or Stanford, with 3 exceptions: Dartmouth, INSEAD, and some foreign dude. That just about sums it up folks…
here’s the link: http://www.summitpartners.com/team/ListTeamByTitle.aspx?id=66&ekmensel=15074e5e_10_0_66_3
Bromion, that worksheet you posted is excellent - it looks like it came from AnalystForum’s own Ryguy. Kudos to him.
it’s true that i’d be giving up a fair amount of salary to go to business school. however, like DirtyZ, KJH, and others have pointed out, the MBA is a good stamp of approval to have, especially if we go into a down economy or if you’re ever in a situation where you have to go head-to-head with another candidate who has pretty much the same credentials, except that you don’t have an MBA and the other candidate does. also, at the VP level or above, whether you’re in banking or PE or some other field, you’re looking at total annual compensation starting in the mid-to-high six-figures. of course, there are a number of ways you can make that type of money, but for me, the most certain way to earn that type of check is to make VP, and the most certain way to become VP is to get an MBA. don’t get me wrong, there are definitely stories of internal promotes here and there, but a lot of that is as much circumstantial as it is skill-based. a top-tier MBA helps you mitigate some of that risk simply because, even if it doesn’t add much in terms of new technical or functional knowledge, it’s just that “stamp of approval” that people in the business tend to look for. so that’s where the value proposition is.
tobias, I see what you’re getting at–I’ve been grappling with this as well. In PE, the majority of the firms still like to see their higher-ups with MBAs or other graduate degrees. (However, I’m not sure Summit Partners was the best choice for the be all end all example.) Anyway, I think this is much less the case with HF, of course, depending on the culture of the firm. From an acquaintance of mine at a top HF, “we don’t value the MBA at all.” So, if you know you want to work for that particular HF for your whole career, and they have this attitude, I think the choice is clear. But if you’re out trying to switch firms, switch careers or trying to raise money to run your own fund, I think the top MBA will definitely be a positive that you can’t really reflect with a NPV calculation.
agreed with VOBA on all the points he mentioned – and yes, the attitude towards MBA’s can be pretty different between hedge funds vs. PE. my sense is that PE firms definitely value the degree more than hedge funds, simply because you have to do a lot more managing, handholding, and relationship building in PE.
I, for one, am not going to waste neither time nor money on MBA. CFA charter is enough, and internal promotions from Associate to VP here have near zero correlation with an MBA diploma (or absence). Time should pass - and if you perform well during your associate gig. you’re promoted to VP automatically. Exceptional, star-level performance may save you 1 year, though (but an MBA cant). This has nothing to do with USA, but, given that LOADS of expats from USA and some European countries are now desperate to get on board, I trust that my understanding of the issue is not far from the way it really is.
I hope you’re correct too, but Xsellside explained he is going for the MBA because even though he has the Charter, he’s getting tired of hearing, “Well, if you had your MBA, then…” It is a shame I agree and for awhile I did not care for the MBA, but I feel those additional letters behind one’s name will account for more opportunities with higher salaries.
KJH Wrote: ------------------------------------------------------- > It is a shame I agree and for awhile I did not > care for the MBA, but I feel those additional > letters behind one’s name will account for more > opportunities with higher salaries. Please tell me you’re not a proponent of putting MBA after your name (e.g., John A. Smith, MBA)… An MBA is a degree that you buy. The level of academic rigor is limited. The hardest parts are the sacrifice of your salary, the sacrifices of your family (if you have one), and the additional debt you’ll be saddled with when you’re done. I’m not a fan of putting the degree after your name because you can get an MBA from the University of Phoenix and still call yourself John A. Smith, MBA.
Good points by all. I appreciate the comments and although you haven’t changed my mind, I can understand why some highly paid individuals might choose B-school.
akanska Wrote: ------------------------------------------------------- > I don’t think I’ll be able to consistently study > until I have a deadline. Considering booking a > date to help me with that… > > Numi, have you considered going abroad? My top > choice is Insead; its quite a stretch, but I’m > gonna try anyhow. The idea of spending a while in > Singapore is extremely appealing, as well as the > single year module. Hope you signed a pre-nup.
One argument against and one argument for b-school: Against – I have several close friends and family members on Wall Street who did not go to b-school (or take the CFA for that matter) and are currently working in either investment banking or hedge funds making well into the 7-figures per year. I can’t imagine that an MBA would add any incremental value to their future compensation and they certainly didn’t need an MBA to get to where they are now. For – I have a friend who is a total slacker, who has held 8 different jobs in 4 different industries in the last 10 years with no direction or career goals but has a very solid educational background – same college as me, a masters degree from a top 10 school, and an MBA from a top 3 school. He lands interviews at north of 80% of the firms he applies to (some of which I am sure wouldn’t even consider me) and at one point in time was even making more money than me with less experience at a fund of funds that he just decided to “test out” for the fun of it. Human resources trips over themselves to get people with his scholastic background in the door and are willing to overlook the 1 job per year for the past decade thing.
IMHO, if you want to work in finance, the value of a Top 5 (or 10) MBA dimishes significantly once you pass the age of 26-28. Age is certainly an issue when it comes to recruiment of Associates at banks. There might be outliers, e.g. a 35 years old associate -but this is very rare. Nobody cares where you graduate from once you are 10 years in the industry, and is raking in millions of fees for the firm. At the VP level and above, the only thing that matters is how much revenue you bring in. I have worked on transactions with some of the biggest private equity guys, and hell do I know where they graduate from (or do they have a CFA, for that matter)? Of course not, and I can’t care less . A lot of people talk abt the networking that a MBA can bring. But I tend to think that if you are really good at what you are doing, you will be the first guy others think of when it comes to a transaction, regardless if you have a MBA or not. I can’t imagine a situation where a HBS alum would only speak to another HBS alum – he would most likely engage his trusted advisers/ associates; and this trust is built upon previous dealings. Working together in a project in school is completely different to working together in a real transaction. No doubt a Top 5 MBA has a lot of value. But if you already graduate with a good undergraduate degree, you are pretty much already ‘rumber-stamped’. In any case, a MBA can only bring you there, it will not keep you there. Having said that, if you are 26 or 27 and work in finance (or a career switcher), MBA is definitely one of the best choices you will ever make.
farley013, Your “for MBA” argument is precisely what I would hope to achieve. You want an interview at a top shop - done. You want to switch jobs with relative ease- done. You want leverage with your current employer to make more money - done. You want a promotion over your co-worker who doesn’t have his MBA - done. You want instant credibility from potential business partners when you put your card on the table - done. You want a built-in lifetime network of CEO’s and high rolling golf buddies - done. You want to walk into any bar in NYC and walk out with a hot gold digger for a one night stand - done. The list goes on and on. Top 5 MBA - sign me up. Done.
farley013 Wrote: ------------------------------------------------------- Human resources > trips over themselves to get people with his > scholastic background in the door and are willing > to overlook the 1 job per year for the past decade > thing. I have to ask, what is his background?
Undergrad in engineering, jobs in technology, internet, fund of funds, and hedge funds.