I have really been impressed by the comments here recently at Free Money Finance -- both the quantity and the quality. You all are really taking the time and effort to add your (often insightful) thoughts and are making this a better blog as a result. Thank you.
Today, I want to highlight the comments around my post on "The Value of Education" which, in summary, said "the more education you have, the more you make over your lifetime" (on average). The comments started with the following:
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.
So here's one person who's experienced what the article stated. Then I got a question (based on my post where I noted an MBA had been a good investment for me) from Geoff:
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.
Here's how I responded:
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 as well as all the links with it to get more info.
Michael then responded to Geoff's question with his perspective:
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.
I thought Michael had some very good comments that I forgot to note in my first response. So I added:
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.
Finally, Geoff wrapped it up with his conclusion/thoughts:
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.
Good discussion by all. Thanks for participating and adding lots of value to this topic!
I think it's a proven fact now trat the best investment is the one made in education. It'll pay you back many times as much. And many times more if they teach you to rightly use your advantages.
Posted by: Lilian | March 29, 2006 at 02:33 PM