MBA Degree Program: Good Investment or Bad?
Though MBA has become one of the most popular postgraduate degrees in the world and especially in the U.S., there is still doubt whether it is really worth the money people pay for it.
To determine this, one should first answer these two questions:
1. What he/she is expecting after earning the MBA degree.
2. Is he/she able to do this without the degree?
So if you already have a bachelor/master degree in economics or finance, maybe MBA is not worth it, as it doesn’t provide a lot of extra knowledge for you.
On the other hand, the program can be beneficial in several other spectrums, such as networking, making contacts with classmates who are or will be the future top managers or just work in the industries where you want to get hired.
You can easily use this connection to increase your chances getting a good job. However, most of the time, unless it’s a degree from a respectable university, it might not be as valuable as expected even the courses are almost the same there.
MBA degree program provides an opportunity to introduce yourself to different industries and perspectives during the two years of studies. It can be done through clubs, classes, speakers or just conversations with classmates.
People aim to get the MBA for many reasons, such as enhancing their chances to get a high paying job in a reputable company, start their own company, “force” their current employer increase their wages or make a promotion.
Besides being a substantial investment (2 year MBA programs at a top school can cost up to $200,000), the program also costs time and effort and thus lost the income of two years.
To better understand the value of an MBA degree program, it can be useful to take a look at the surveys, in which former MBA students express their opinion on the main questions concerning the benefits of the degree.
The results from the 2016 Alumni Perspectives Survey Report by the Graduate Management Admission Council (GMAC) are listed below:
- 95 percent of MBA degree program holders view their degree as of good, excellent or outstanding.
- More than 75 percent reported that their expectations for the program were met.
- 93 percent would still pursue an MBA degree if they had to do it all over again based on what they do today.
Another report from Fortune, in which participated 14,279 alumni, revealed the following results:
- The alumnus reported base salaries that totaled $1 million more over 20 years following graduation than if they had not taken the MBA.
- Two-year, full-time MBA program graduates recoup their investment, on average, in three-and-a-half years.
- ROI after five years range from 221 percent to 491 percent for a part-time and a full-time program, respectively.
- 89 percent of MBA alums found their degrees professionally rewarding.
You can also consider the alternatives for MBA degree before making a decision. Two major alternatives are:
- Master of Finance degree, which generally takes one year to complete and provides sufficient knowledge to work in trading, investments, asset management or risk management.
- The Chartered Financial Analyst (CFA) program, a self-study program which offers a comprehensive curriculum covering three levels of study. Each level is tested by an exam that is held once every year, except Level 1, which is held two times a year. So the minimum time to become a CFA charter holder is 2.5 years. This program is considered an equivalent to a graduate education, and substantially increases the value of the charter holder as an employee.