I've been toying with the idea of an MBA since I was about 23. I did an MS in Econ (had planned to do a PhD in it, and decided to pull out prior to dissertation). Anyway, I'm now 28 making ~80K/year (work only 40-45 hours a week) and working in pseudo-IB in Dallas for one of the 4 mega-banks in the US.

The downsides for me are that #1 I would have to go deep into debt to pay for it, sell my house, live like a student for longer, and #2 I am not guaranteed to get any real ROI. When I look at my current salary compared to the McComb's estimated salary medians (stated as around 120K/yr + signing bonus and annual bonus), it's hard to trust those numbers. If I could be assured to land a sweet gig like that in 22 months, then I'd probably sign up right away. I guess it's just hard to believe that lessons you learn in business school (I've known some very dim MBA students) are really worth that much money.

So, I guess the question I should be asking (and you guys can answer) is, "how much of the post-MBA salary data can be purely attributed to the education/diploma you receive?"

[This message has been edited by careerchange05 (edited 6/18/2012 2:34p).]

Another thing to think about...

If you love and know you want to continue on with your career path and field and that an MBA will get you to the next level in that field, then go for it. In my case, I got an MBA with emphasis in my original job field and am now in a new field where MBA's don't really do too much for you. So, I'm now getting paid the same as my peers (made more when it was grad vs undergrad in my old field) and am still paying off an MBA degree that does nothing for me on my new career path. So, if you're getting one for your CURRENT field, make sure it's one you love and see yourself in for a LONG time.

[This message has been edited by zmurda (edited 6/18/2012 2:47p).]

That's what I'm afraid of, zrmuda. I've already gotten myself plugged into a field that sort of requires an MBA and don't really want to change. I look at the folks above me and it's split into 1/3rds for the most part. About 1/3 of them have an MBA, about 1/3 of them have a PhD, and about 1/3 of them have either no grad degree or an MS like I already do. So, my concern is I wouldn't really get enough of a bump to make it worth it.

http://www.happyschoolsblog.com/forbes-2011-mba-rankings/

However, I look at a chart like this, and wonder...

To the OP, I would count yourself lucky coming out of college with a 3.2, a degree that doesn't typically lead to much, and nearly pulling in 6 figs.

In my time dealing with MBAs (both applying to school, working with them to get a degree, and running into them in the professional world), I have found that you can break them down into three buckets.

1) Career changers

2) Box checkers

3) People without plans

Honestly, unless you are in bucket 1, it's hard to justify a big name, debt financed MBA. If you are just in it to check the box, why not choose the local, part time school for the half the price? Likewise, unless you have a plan for what you want to do with your MBA, it's a pure crapshoot whether or not there is a ROI to be had. However, in a similar vein, if you really want a career that requires a MBA, you need to go to the biggest name school you can. Those student loans are buying a network and a career pipeline that few can access without tons of networking and some luck.

For the OP - If you have a good idea that you want to go into one of the typical, high ROI MBA routes, by all means get an MBA. However, as many on this thread have pointed out, it's very risky to take out debt for a degree that by most measures is a rehash of Freshman and Sophomore undergraduate business classes.

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For the OP - If you have a good idea that you want to go into one of the typical, high ROI MBA routes, by all means get an MBA. However, as many on this thread have pointed out, it's very risky to take out debt for a degree that by most measures is a rehash of Freshman and Sophomore undergraduate business classes.

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Well said. I think you're asking this question based on your career advancement, but if actual learning is a part of your consideration, I'd say you don't learn a whole lot in an MBA program. Thankfully, I was able to take a few career-specific electives with other non-MBA grad students, and I learned a ton in those classes. But, the business MBA classes felt like the "advanced" or "AP" versions of the basic business courses.

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When I look at my current salary compared to the McComb's estimated salary medians (stated as around 120K/yr + signing bonus and annual bonus), it's hard to trust those numbers. If I could be assured to land a sweet gig like that in 22 months, then I'd probably sign up right away. I guess it's just hard to believe that lessons you learn in business school (I've known some very dim MBA students) are really worth that much money.

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http://www.happyschoolsblog.com/forbes-2011-mba-rankings/

However, I look at a chart like this, and wonder...

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That chart is highly misleading. The post-MBA salary numbers are not for those that are just starting after receiving their MBA. It's comparing Pre-MBA salary, which tends to be a very small window, to post-MBA salary, which will basically be nearly a lifelong career for most people.

It's unknown how people who were capable of getting into a highly reputable MBA program would have compared in their regular careers without an MBA.

Average starting salaries for McCombs are NOT 120k + bonus.

See:

http://www.mccombs.utexas.edu/MBA/Full-Time/Career/Statistics.aspx

Of those that found jobs and reported their salaries (in other words, this data skews higher than reality), the median is around 100K with 15K in guaranteed bonus.

That's certainly good compensation, but if you're already making about 80K? Is it really worth it to spend 110K in tuition, fees, living expenses (with signing bonus included) and forego another 100k in after tax/after expenses income for two years of working?

That's 210K that could otherwise be invested in the market, earning between 15-20K per year historically over a 30 year period.

Not to mention the accrued salary progression for two additional years of work experience. By the time you graduate with an MBA, you may have a promotion or salary increase that brings your compensation up to 90K.


So, you're looking at a 90K salary + 15-20K in market earnings from savings for a total compensation of ~105-110K without an MBA, versus a total compensation of 115K with an MBA from a top school.

If you need to take out student loans @ 6.8% interest, the costs of financing the MBA would at this point exceed the marginal difference in total compensation. And at the end of the day, you'd be left with 200K less in principal with yearly income being roughly equal (pre-MBA salary + investment income having a slight advantage due to lower taxes on long term capital gains and dividends).

This, of course, assumes you don't go into a consulting job/invetment banking job where you will be working grueling hours and where most will burn out after a few years, but are earning a higher income.

I've looked extensively into this myself with a similar age and salary as yourself. I would love to get an MBA, but I'm not going to pay for it myself and lose out on two years of income. Unfortunately my current company will only pay for me to get an engineering masters and not an MBA. Which is why in a year or so I'm going to be looking for a company that will.


[This message has been edited by AggiEE (edited 6/18/2012 8:27p).]

I finally remembered where I put my chart.
Note: This chart is 5 years old. I've had a couple more positive salary adjustments since I put this chart together including a raise this year. I guess the economy is looking up

[the image was removed because it was causing a malware warning for numerous users -staff]

[This message has been edited by TexAgs staff (edited 7/31/2012 10:29a).]

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That's certainly good compensation, but if you're already making about 80K? Is it really worth it to spend 110K in tuition, fees, living expenses (with signing bonus included) and forego another 100k in after tax/after expenses income for two years of working?

That's 210K that could otherwise be invested in the market, earning between 15-20K per year historically over a 30 year period.

Not to mention the accrued salary progression for two additional years of work experience. By the time you graduate with an MBA, you may have a promotion or salary increase that brings your compensation up to 90K.


So, you're looking at a 90K salary + 15-20K in market earnings from savings for a total compensation of ~105-110K without an MBA, versus a total compensation of 115K with an MBA from a top school.

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There seems to be a lot of assumptions based on some of the things I posted regarding my income. Which is fine, because I think my compensation is probably unfamiliar with most of the posters on this board.

I'm basically an independent contractor...but I work for a company who provides me with the usuall benefits of any company...let me put it in perspective:

I've already posted what I make currently with a B.S. And I can stress enough this is 100% commission. There is no guarantee of me making any amount of money with my job, nor is there any guaranteed accrued salary progression.

I have a male co-worker, that I know has to be making over 100k, and he has zero college education.

I have another male co-worker, who has a bachelors and masters, and he's making considerably less than me.

I could technically be making just as much as I am right now without the degree. Paging Captain Hindsight....

Here's another curveball for you. When you move into management, everything is still pretty much commission based. I had a co-worker get promoted and moved to a different area of Texas who is now the head of her department. She was making more money as an assistant BEFORE she was promoted and moved.

So obviously after looking at the big picture, and realizing I could be busting my ass getting promoted and still not necessarily having an improved income (or even worse depending on location), I'm going to start considering options. Especially since these jobs will require even more of a time investment.

You could call this a quick knee-jerk reaction, but justified considering my current situation and what I see coming down the road. Which is why I'm asking questions trying to get as much insight as I can so when I do make a decision it's the right one.

And maybe an MBA isn't the best route for me to take regarding going back to school part-time. But due to the experiences I've gained since joining the workforce 4 years ago, it was the first thing that came to mind.

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And maybe an MBA isn't the best route for me to take regarding going back to school part-time. But due to the experiences I've gained since joining the workforce 4 years ago, it was the first thing that came to mind.

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Why?

Because the more I learn about financials, management, trend analysis and projections at my current job the more I enjoy it. And I'm sure there's other ways a person could go back to school to further their education in this area to make them more marketable to different companies....the reason I first thought of MBA though is simply cause one of my best friends is working on his right now, and what little I knew about MBA programs was still more than I know about anything else regarding business related masters programs.

What was your undergraduate degree in? Whatever you majored in would really decide it for me. If it was something in liberal arts, the MBA might not be the most rational option unless you had test scores to back it up. I went to a Boston business school after graduating with a Bachelor's in liberal arts, and the admissions guy told me there was a good chance it had to do with test scores. How robust is your past work experience?

In my opinion, I think you have done great for yourself. I also feel that an MBA will only make you stronger and more competitive for a new position or new job. Remember education and knowledge is power. There are many MBA concentrations depending what you are looking for or interested in, my son is starting an MBA in Spring of 2026 with a concentration in Management for TAMIU. I would recommend you to look into this MBA program online from TAMIU, it is an accredited program and the whole program is about 11k. They do offer other concentrations. Good luck to you and hope this helps.

how much does a MBA help?

How much does an MBA help?

A lot.

BostonMike said:

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If you are not currently in business and there is no room for you to move up then you might consider an MBA.

An MBA is expensive. If you choose to pursue it then you need to get into the best school possible. Yes, there are people that only graduated from HS that are smarter than MBAs, but our society likes the piece of paper more than the person. I wish it weren't this way, but it is.

In conclusion,

Yes to MBA if it is a top tier school. No the MBA if the school is average. It will take you 10-20 years to pay off that debt.

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Just to give you a counter argument. I attended the full-time program at Rice for my MBA. Rice has a strong MBA program, but it's not Chicago, Wharton, Harvard, etc.

I paid off all of my student loans within three years of graduation. It has helped my career immensely having the piece of paper. Did I learn anything in the program that I didn't know before having a BBA - Finance from A&M? No, but as a previous poster said, the paper means something to many.

I will say that the market into which you graduate is beyond your control, but it has a huge impact on the pay you receive when you graduate. If you start out at a lesser salary than an MBA who graduates in a tight labor market, good economy, you'll likely lag that individual for many years. Once again, this is beyond your control and purely a function of luck.

I graduated back in 2006 in a fairly tight labor market. I got hired on by a major a very good starting salary. I had a friend that graduated a year before when the market was not so great. My offer far exceeded hers. It does have an impact.

The idea that if you can't get into a top 5 or 10 program, you shouldn't bother is not what my experience has been. Was I an anomaly? Maybe.

RightWingConspirator said:

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BostonMike said:

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If you are not currently in business and there is no room for you to move up then you might consider an MBA.

An MBA is expensive. If you choose to pursue it then you need to get into the best school possible. Yes, there are people that only graduated from HS that are smarter than MBAs, but our society likes the piece of paper more than the person. I wish it weren't this way, but it is.

In conclusion,

Yes to MBA if it is a top tier school. No the MBA if the school is average. It will take you 10-20 years to pay off that debt.

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Just to give you a counter argument. I attended the full-time program at Rice for my MBA. Rice has a strong MBA program, but it's not Chicago, Wharton, Harvard, etc.

I paid off all of my student loans within three years of graduation. It has helped my career immensely having the piece of paper. Did I learn anything in the program that I didn't know before having a BBA - Finance from A&M? No, but as a previous poster said, the paper means something to many.

I will say that the market into which you graduate is beyond your control, but it has a huge impact on the pay you receive when you graduate. If you start out at a lesser salary than an MBA who graduates in a tight labor market, good economy, you'll likely lag that individual for many years. Once again, this is beyond your control and purely a function of luck.

I graduated back in 2006 in a fairly tight labor market. I got hired on by a major a very good starting salary. I had a friend that graduated a year before when the market was not so great. My offer far exceeded hers. It does have an impact.

The idea that if you can't get into a top 5 or 10 program, you shouldn't bother is not what my experience has been. Was I an anomaly? Maybe.

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Rice's MBA program is ranked top 25, and Rice's overall ranking is top 20. Its still a prestigious school especially locally, its not like you got an MBA from University of Phoenix lol. If you want to stay in Houston and make great money, then an MBA from Rice is probably your best bet.

Fair point. I did only apply to Rice as we owned a home in Houston and had no intention of moving. Had a daughter and a wife so was not going to uproot them. It worked out.

I'd say it depends greatly on your field.

In mine. Zero relevance.

You can get the book education for free now a days so:

1) focus on the network
2) if you just need the credential go cheapest possible

I debated one for years and never did it, but just worked on my network in my industry to build my brand and have gotten to where I want

Different ways to achieve your goals

View on Executive MBA? Seems more career enhancer or catalyst for position/career change. Not like companies recruit for Executive MBAs like they for full time programs. I see the value in the network and curriculum.

Accounting. Industry.

In the last couple years i've noticed Gen Z folks with a year or two experience getting MBAs. From lower tier programs. Its odd because there really is no benefit of getting an MBA like that internally. I'm assuming it is to help externally. But if everyone is doing it, it feels like getting one from a lower tier program is a waste of time. But what do i know.

knoxtom said:

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Used to be the MBA was one of the items needed to become an executive with a top company. Now most would say it has changed into having a law degree.

Second thought... more than just about any degree out there, where you get the MBA is of utmost importance. I wouldn't bother unless it was a very top school. And by very top I mean Ivy league, Stanford, Chicago, etc. An MBA from A&M just doesn't carry much weight with the big boys.

Third thought... you don't really learn anything with an MBA. The reason people have always got them is because of the father of the person sitting next to you. That is why it is pretty worthless unless you are at a very top school. You get the MBA as a way to be asked into the club. If the guy sitting next to you's father doesn't have the password to that club, then it is worthless.

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Agree 100%… A 50 year business career here.. An MBA from a Stanford or equivalent is probably worth the time and money with most of the value coming from the "club". Our family office works with hedge funds, The people we deal with are mostly MBA's that have a career path that is specific in purpose. In any job my recommendation is to communicate with the real decision makers in your company and be self motivated to add value to the entity you are working with. Be available and work hard! The real leaders and ultimate highest paid individuals work to raise everyone they work with to be their ultimate best. Help create a team culture in your work with everyone pulling towards a common goal. You do this and you will be a lot of MBA's boss. And the culture you help build will make your job very enjoyable.
As far as an MBA, I would go to law school instead. A basic understanding of contract law, torts, tax law would be much more helpful strictly to stick in your tool box.

Interesting to see so many advocating for a Law degree. TAMU offers Masters of Legal Studies (MLS) with different tracts. One being business law and ethics. Is this worthwhile, or a JD is really more important? Anyone completed the MLS degree?

The secret is out on the MBA. My brother went to a pretty high up one and all they did is just party. That's all it is, networking and partying.

Virtually no effort required unlike say, law school.

careerchange05 said:

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When I look at my current salary compared to the McComb's estimated salary medians (stated as around 120K/yr + signing bonus and annual bonus), it's hard to trust those numbers. If I could be assured to land a sweet gig like that in 22 months, then I'd probably sign up right away. I guess it's just hard to believe that lessons you learn in business school (I've known some very dim MBA students) are really worth that much money.

So, I guess the question I should be asking (and you guys can answer) is, "how much of the post-MBA salary data can be purely attributed to the education/diploma you receive?"

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I'm six years removed from T15 in consulting. My MBA was purely for the initial hiring pipeline.

Certains firms/practices only recruit certain b-schools. It's a defined path in (internship > offer) and fairly defined after that. MBB and the T2s (S&, EYP, LEK, Kearney, et al.) MBA offers are all well documented online. Hell, PwC'ers crowdsource the entire firm's pay (Google PwC salary sheet; they're on cohort model).

If you get into M7, MBB is probably likely, T2 very likely.

T15, MBB is maybe, T2 is maybe, general consulting is very likely.

My T2's MBA offer is $185 + $65 sign. Perf bonus is up to 60% of base.

If wouldn't count on an MBA for a "network." My pre-consulting career was engineering and I never got to the point of needing to check a box for management. My plan was always consulting.

Edit: Lol on law school > MBA. I work with plenty of lawyers (M&A). I'll take my gig over theirs. And they have one of the better outcome jobs and are still miserable.

TxAG#2011 said:

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The secret is out on the MBA. My brother went to a pretty high up one and all they did is just party. That's all it is, networking and partying.

Virtually no effort required unlike say, law school.

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That couldn't be any more opposite of my experience. Then again I graduated 15 years ago before all these options and it being common. Most of my class were working professionals in middle management or low C-Suite there to better position themselves or at the company's request.

I'd agree with this. Yes, I golfed a lot during my MBA program after I nailed down full time employment a year before I graduated, but Rice had a very heavy work load and I worked my butt off in the program. It was definitely not a party.

A few years removed from my T15 MBA, as well.

Funny enough, I got my MBA partly to pivot out of T2 consulting. It was a personal goal of mine to get it and it did help me find my way to my dream career that I think most would consider prestigious even though I've become a bit jaded on it.

That said… the money is never enough. I don't think most MBAs will ever be satisfied with their comp.

And yeah. It was a bunch of partying.
I think if I ever found myself in job trouble my MBA network would be helpful.

I have an MBA from a top (T5) school in the US.
I did not get the career bump I should have gotten, the issue was the recession which hit right then so my batch was screwed. They did not let us do school recruiting the following year. My main advice is you may have a top MBA but you will need to move to a city where your job opps are the best. I did not do that so I paid the price. An MBA's value only comes once you do it.

Many things I would do differently today, but back then I had no idea and I have had no mentors (the few I had were struggling themselveS)