In the early days of this blog, I wrote how a key part of increasing your net worth was to maximize your income. One way to do this is to get a college education -- even beyond a 4-year degree if it suits your disposition. Why? Consider this from Money magazine:
The money you spend on a college degree still yields a sizable return on your investment. Over a working lifetime, the typical college graduate earns about 75% more than a high school grad does. On average, that difference totals $1 million more -- easily enough to re-pay those student loans and then some. The payoff from graduate school is even bigger: People with advanced degrees earn two to three times as much over their lifetimes as those without a college degree and increase their average total earnings by as much as $2 million.
Personally, I would be making a fraction of what I make today if I hadn't gotten my MBA. It opened the door to my first job (at a Fortune 500 company) that set my career on the right path.
Just after going back and finishing my bachelor's degree, I got a job making $11k more than the job I was in. I also would not have been able to get that job as it was classified as bachelor's degree required.
Now, after getting my MA, I'm at about $10k more than the job I got after first degree. I don't think that I can say the degree got me all the $10k because I would have had raises and such that would have put me at least 50-60% of the way to where I am. The real key is not the money I earned from it but that it was in a different field and helped me switch careers.
Posted by: abileneblues | August 29, 2005 at 05:42 PM
It's good to hear that an MBA was a good degree choice for you. I'm considering it now for myself. Would you say that this is still a good degree to work toward now? I've heard mixed opinions on the matter.
Posted by: geoff | August 29, 2005 at 06:50 PM
Geoff --
There are so many "it depends" in this answer that I'm not really able to answer it. That said, an MBA worked for me because:
1. I went to a top 25 school but had an Assistantship -- so I left with very little debt (around $5k) versus friends who left other schools with $50,000 plus (and they held the same job I did at the end of school).
2. The school had top-flight companies recruiting there and I got a job with one. After that, no one cared that I had an MBA, they just cared that I had great experience. (However, I could NOT have gotten the initial job with just a BS degree.)
That's really my formula for success. If you can repeat it, then it's obviously a good deal.
You may want to check out this post (http://www.consumerismcommentary.com/2005/08/24/online_mbas_making_the_grade) as well as all the links with it to get more info.
FMF
Posted by: FMF | August 30, 2005 at 09:12 AM
Thanks for the response, FMF. And I'll check out that Consumerism Commentary post.
I suppose for me is it about making sure that I have a degree that gets me in the door. An MBA makes sense to me because of the little classroom time (a year to two years of additional schooling) and that it is appealing to employers initially. This has been an issue for me, having seen plenty of people get advanced degrees and never make back the investment of time and money for that degree. Although there is something to be said over following your passions. But when you're trying to find a career that will work for you sometimes passions have to take a backseat to reality. Unfortunately there is a need out there now for people with a degree that will mean nothing to their employers once you have the experience. This is one of those things that's tough to swallow but you have to get over it.
Posted by: geoff | August 30, 2005 at 02:14 PM
Geoff --
You're thinking you need an MBA to "get in the door." I take this as further evidence of my suspicion that the MBA field is getting crowded. My opinion, and the opinion of those I have asked on the subject, is that if you're not going to go to a top-25 school, don't bother. An MBA from a for-profit outfit or your local state school is less-than-worthless (because it costs not only tuition, but forgone wages and work experience). That is not to say that there isn't a large demand for other post-graduate degrees, such as traditional Master's programs or the PSM (Professional Science Masters), which is an applied science degree in fields such as financial mathematics and biotechnology (more info at http://www.sciencemasters.com/).
If you're going to devote two years to something, make it something that will make you stand out. It sounds like you're thinking "get in the door" means get a job. I would think it's more like it will simply include you in some massive sad pool of underemployed resumes. Right now I work with three MBAs, but they all went to the same school (Kellogg).
Only you know if an MBA is right for you. I would simply say make sure you're capable of devoting the time to *excel* in a *nationally-recognized* program that's going to let you stand out from the crowd when you graduate. Advanced degrees certainly pay off, but they are not created equal.
Full disclosure: I do not have any advanced degrees. I am also currently in the job market, and expect to decide between two extremely attractive job offers over this holiday weekend.
Posted by: Michael Blackburn | August 30, 2005 at 03:05 PM
I have to agree with Michael. I know several people who went to ABC MBA school and went back to their old job (at the same pay), but all the people I know who went to Harvard, Wharton, Northwestern, etc. did much better coming out of those programs.
That said, these programs are very expensive, so you may want to look down the list a bit. When I said I went to a top 25 school, I mean I went to one ranked #24 1/2, not #1. But tuition was a fraction of #1 and I ended up with the same job that those who went to school #1 did. Not a bad investment.
Posted by: FMF | August 30, 2005 at 03:27 PM
First off: Michael, congratulations on the job offers. Best of luck with your future employment!
Thanks, to both of you, for the responses. Good to hear varying opinions on the matter, that's for sure.
It's a tricky game to play. I understand where both of you are coming from. Michael, when I was saying I've seen many people get advanced degrees not to have them pay off, I'm speaking directly to your concerns over a graduate degree being less than worthless. Namely, you get a MA or a Ph.D. and lose the opportunity for income and pay tuition. Not to mention that the average income coming out with something like a Ph.D. just doesn't validate the time spent on the degree. But then again, if you can increase your earning power through addition education then that would appear to be a good move to make.
I just have a suspicion that I've taken my undergrad degree as far as I can where I am right now (well, actually I know I have). So now it is time to find that next "thing" that will give me an edge in the job market.
Posted by: geoff | August 30, 2005 at 04:20 PM
hi, im julie.
stop fighting, and concentrate on your education instead of being here.
EDUCATION IS IMPORTANT! :)
i hope you guys had a good thanksgiving all you Canadians!
Posted by: julie | October 11, 2005 at 11:43 AM
I believe the stats of course, but I think there's more to it. What one gets a degree in, and not just the fact that one gets a degree, period, plays a large role in determining the financial payoff a getting a degree or other further education.
Education alone is not always enough to make a large difference. Especially with the cost of schools nowadays, it's not a decision to be taken lightly. It all depends on what you study and whether the field and position you will go into is expected to bring in enough money to make the education worth it.
Many grad programs are nothing like MBA programs as far as earnings go and do little to nothing in helping graduates increase earning power. All that may seem obvious, but I think it is worth mentioning.
Posted by: m | October 03, 2007 at 12:01 AM
I believe the stats of course, but I think there's more to it. What one gets a degree in, and not just the fact that one gets a degree, period, plays a large role in determining the financial payoff a getting a degree or other further education.
Education alone is not always enough to make a large difference. Especially with the cost of schools nowadays, it's not a decision to be taken lightly. It all depends on what you study and whether the field and position you will go into is expected to bring in enough money to make the education worth it.
Many grad programs are nothing like MBA programs as far as earnings go and do little to nothing in helping graduates increase earning power. All that may seem obvious, but I think it is worth mentioning.
Posted by: m | October 03, 2007 at 12:01 AM
I have been working almost 20 years with a bachelor's degree in Finance. I have no asprirations to be in management. I have a great job in a specialized field, earned value, which honestly is not exactly where I want to be. If I stay in the field, it could be quite lucurative. I'm considering an MBA with a concentration in Sustainability or Finance which would be a part time program paid for by my company. I don't know if it will help me get ahead but it certainly wouldn't hurt me. I just wonder if it is worth the time when I work full time and have 2 small kids at home and a mildy supportive husband.
Posted by: tm | July 15, 2009 at 08:58 AM
TM --
Will it get you where you want to go and can your personal life tolerate it? If yes, then you should consider it. If no, then it's likely not worth it IMO.
Posted by: FMF | July 15, 2009 at 02:52 PM