How to Waste Money on an MBA

Here's a great comment left recently on my post titled Help a Reader: Is an MBA Worth It?:

I'm nearly done with my MBA, only have my dissertation to complete and I now truly believe that anyone in business should have an MBA. It opens a whole world of knowledge that (for me at least) didn't exist before. You must however research very carefully who you get your MBA through - it is vital that it is a recognized institution or you really will be wasting your money. It is expensive but it is an investment in yourself, can't really go wrong with that.

As most of you know, I have an MBA and it's been a great investment for me. That said, unless you do it right, you can easily waste a ton of money and time on getting an MBA. Here's the part of the comment above that I really think is great:

You must however research very carefully who you get your MBA through - it is vital that it is a recognized institution or you really will be wasting your money.

For instance, I have known many, many people who wanted to get an MBA because they saw it as an instant path to career advancement and making more money. So they get an MBA from the cheapest, easiest, least-time-demanding school they can and expect the cash to start rolling in. It never does. Why? Because you need to get an MBA from a school that actually has employers recruiting from it -- the type of employers you want to work for at the salary levels you want. Otherwise, there's a good chance that you'll waste tons of time and money on getting an MBA -- you won't advance in your career and yet be out several thousand dollars and at least a couple years.

There are exceptions to this rule of course. If your company pays for everything, then you'd just be out the time even if you get a worthless MBA. In addition, some people get an advanced degree simply because they love learning. Finally, you could argue that having an MBA from any school could make you a more effective employee -- even in your current job -- which could lead to faster advancement and/or pay increases that what you'd otherwise experience.

But if you're looking to make the most of your MBA degree, look first at what companies recruit at your school (and what they pay), and make it a BIG, BIG part of your decision-making process regarding what school to attend. Otherwise, you risk wasting a lot on getting an MBA.

Comments

[Kira]

Thanks for the reinforcement. I've been wanting to get an MBA, but decided that the only one I'd consider was Thunderbird because of my global objectives, personality traits. Funny enough, I happen to live in AZ, though I've been feeling bad about the price compared to some of the "cheaper" ones. But if I'm going to do it... that's definately where I'll go.

[ryan]

I'm trying to decide between a state school and a private school for an MBA.
15k vs 60k. My only out of pocket costs would be the taxed value on the yearly benefit costs.
I wonder how I would get info on the "company recruiting" mentioned in the article. The schools would probably advertise that in their information sessions?

[Strick]

I'd echo this, and even louder for law school.

If you don't go to a top 20 school or aren't "sure" (whatever that means) of being in the top 5-10% at a non-top 20 school, do not follow the crowd and borrow $100K+ to go. I'm not saying don't go to law school, just don't look at the mega-loans as a viable option. A lot of folks think thats just what you have to do, and the high paying great job at graduation will make the loan payments just a necessary annoyance. The problem lies with the 90% that don't land those high paying jobs.

And, frankly, the happiest attorneys I've seen are those that are not (or no longer) at those "great" high-paying corporate firms jobs and don't have debt.

[FMF]

Ryan --

Ask the admissions office to give you a list of what companies recruit at the school. Also ask for a list of job titles hired last year and what the estimated salary was. They should have this information -- or something like it. My school did 20 years ago and information has only gotten more available since then.

[The Manliness Evangelist]

I read an article awhile back in time that said more people where getting MBA's than 20 years ago and it was essentially cheapening the value of the degree. As you said, there are more junky places offering the degree.

My question is, what is that value in this style of economy where more and more people with degrees are having a harder time finding work than people with high school diplomas who are used to doing whatever it takes to make ends meet.

[thomas]

I have an mba from a non-prestigous school and I know it has helped me.

With any degree or college it basically comes down to work ethic and internships. Having experience in your desired occupation is the best way to get a job.

[poor boomer]

Question: How can one acquire knowledge comparable to that imparted in an MBA program without paying the big bucks for the degree?

[cherryblossom]

Thanks for posting this. I have had a pretty unique opportunity to get an MBA that specializes in the field that I am working in pop up recently. I am holding off for now. One reason is to pay down my current debt. The second is to explore my options and make sure that this is the best thing for me.

[aa]

My friend graduated with an MBA from a not so famous school last year. He's still receiving delivery calls at a takeout.

[Ken F.]

I wanted to echo the comments on the importance of knowing which companies recruit at the schools you are considering for an MBA. I received my MBA from a prestigious school (U. of Michigan) back in 1988 and accepted a job offer from a regional bank that interviewed me on campus. 21 years later, I still work for the same company and have had a very steady career earning a 6 figure salary. I owe a large degree of my good fortune to the fact that my alma mater attracted solid companies to campus for placing its students.

[Shaun Connell]

I'm studying business and economics, and I have to say that I agree with the commentator. If you can get to a nicer school while working + getting scholarships, it's almost a crime not to do it.

[Carrie]

@poor boomer: check out the Personal MBA website at http://personalmba.com/. In a nutshell, it recommends 77 business books you should study. If you check them out from the library, the knowledge will cost you nothing. Even if you buy all of the books, it will be cheaper than tuition!

[cet413]

If you really want to waste money (and time) get 2 MBA's (one in biology and one in psychology) and follow that up with a PhD in Neuro Immuno Pharmacology (a.k.a. giving strokes to rats and studying their brains) AND THEN go to Medical School and adding another $250,000 in debt on that. This is the path my girlfriend took and she is finishing up her last year at Med School and gets to look forward to a $50K Residency salary for the next 5 years.

[Jon]

@cet413: since when can you get an MBA in biology and psychology? are you referring to a M.S.?

also, if she was going for an M.S. in bio/psych, why not just enroll in a PhD program from the beginning?

or, if she was interesting in an MD, why not a joint MD/PhD program?

sure seems like she took the LONG road to success and debt.

[Scott]

Good post. I lost my high paying consulting job recently in the technology field and have thought of applying to MBA/MS programs. However, with the things I am reading, unless it is in the top 10, sounds like a complete waste of time and money. Unfortunately, my undergrad grades were only 3.2 so not even sure if I stand a chance of getting into a top B-school like Harvard or Stanford. Maybe nursing or medical school is better bet with the crappy economy?

[Jack]

I don't have an MBA, just an undergraduate degree in English. I've started and run two successful businesses over the last 22 years that have made me financially secure. I always wanted to get an MBA (I've had several people work for me who had an MBA) until I discovered that most information is free. I just needed to know where to go to get. That saved me a lot of time and money.