4 ms·

This is a good thing. People are realizing that a $500,000+ upfront cost (tuition + 2 years' lost income) had better have an an astronomical ROI. In many cases,

This is a good thing. People are realizing that a $500,000+ upfront cost (tuition + 2 years' lost income) had better have an an astronomical ROI. In many cases, it doesn't. Anecdotally, I went to undergrad at a school with an elite MBA program. It seemed to me that the only hard part of the MBA program was getting in; the MBA students were essentially paying to have a 2 year networking party. Their experience was like being in college, except they had money to spend and grades didn't matter (due to a grade non-disclosure policy for MBAs). Because of this grade non-disclosure, the MBA was significantly easier than the undergraduate degree. Many classes had an undergraduate section and a MBA section - the same material taught by the same professor. After the midterm and final, the professor would post the median test score and standard distribution in order to establish the grading curve. The median score for the MBA section was consistently 1.5-2 standard deviations below the undergrad median. Sometimes a class would be offered to mainly MBAs, but a few undergrads were able to enroll...this was always great for your GPA.

slap_shot 7y ago
I have several friends with top tier MBAs. They all got them in an effort to jump from the sell-side to the buy side, and most saw salary increases from 300-400k to 600k-1M+. The ROI on that specific career move is pretty clear and is really the only path I would personally justify for an MBA. They all say the course load and work is a joke. It's mostly an accreditation to the buy side hiring process and networking.
- arcturus17 7y ago
  I don't know about your friends but the average salary out of an elite b-school is something like 160k in the best of cases [1], not the ranges you mention... Either they're total outliers, or you're talking about something like an exec MBA, or something else altogether. [1] https://www.usnews.com/education/best-graduate-schools/top-business-schools/articles/mba-salary-jobs https://www.usnews.com/education/best-graduate-schools/top-b...
  - slap_shot 7y ago
    They are outliers, in that they all are in the very narrow path that I suggested is the only reason I would, personally, pursue an MBA: the MBA allowed them to jump from banking to Senior Associate roles at elite PE firms (Carlyle, Blackstone, KKR, Apollo). It's by no means necessary, you'll find people at those firms without MBAs - a close friend of mine made the jump directly from banking and is well above the salary range I mentioned, but a top tier MBA helps. It's also worth noting that a majority of compensation from these positions is from the carry on the person's fund (or a blend of all funds, like Blackstone does) and is based on fund performance. This isn't their base or otherwise guaranteed salary.
  - drharby 7y ago
    I'm in the quant side of finance, sellside. His/her numbers check with my experience and knowledge
  - mdorazio 7y ago
    To build on this for others wondering, back when I was considering an MBA program, Wharton had the most reliable numbers [1]. Median base comp for grads is now 130k, at graduation age around 28-30. Really not that great these days. The other problem is when they talk about a salary bump from when students enrolled, they tend to ignore that students likely would have gotten a significant raise + promotion in the same amount of time as the program took to complete, so the perceived value increase is likely overstated. As the GP comment states, for specific career tracks where an MBA is expected and highly rewarded, it's worth it. But for most career paths, the financial ROI is no longer there, especially in tech. I will say that I think a lot of people can benefit greatly from learning basic accounting, finance, statistics, and microeconomics especially people who want to be entrepreneurs. But you sure as hell don't need to attend an MBA program to learn these things. Also, a lot of the other MBA coursework around things like marketing, global trade, operations, and management is either not even close to practical in a small business environment, assumes you'll be managing people who actually know what they're doing, or is useless without actually having significant real-world experience to match the theory. [1] https://mba.wharton.upenn.edu/value-wharton-mba/ https://mba.wharton.upenn.edu/value-wharton-mba/
  - 7y ago
aprao 7y ago
Let me guess, Wharton?

slap_shot 7y ago

I have several friends with top tier MBAs. They all got them in an effort to jump from the sell-side to the buy side, and most saw salary increases from 300-400k to 600k-1M+. The ROI on that specific career move is pretty clear and is really the only path I would personally justify for an MBA. They all say the course load and work is a joke. It's mostly an accreditation to the buy side hiring process and networking.

arcturus17 7y ago
I don't know about your friends but the average salary out of an elite b-school is something like 160k in the best of cases [1], not the ranges you mention... Either they're total outliers, or you're talking about something like an exec MBA, or something else altogether. [1] https://www.usnews.com/education/best-graduate-schools/top-business-schools/articles/mba-salary-jobs https://www.usnews.com/education/best-graduate-schools/top-b...
- slap_shot 7y ago
  They are outliers, in that they all are in the very narrow path that I suggested is the only reason I would, personally, pursue an MBA: the MBA allowed them to jump from banking to Senior Associate roles at elite PE firms (Carlyle, Blackstone, KKR, Apollo). It's by no means necessary, you'll find people at those firms without MBAs - a close friend of mine made the jump directly from banking and is well above the salary range I mentioned, but a top tier MBA helps. It's also worth noting that a majority of compensation from these positions is from the carry on the person's fund (or a blend of all funds, like Blackstone does) and is based on fund performance. This isn't their base or otherwise guaranteed salary.
- drharby 7y ago
  I'm in the quant side of finance, sellside. His/her numbers check with my experience and knowledge
- mdorazio 7y ago
  To build on this for others wondering, back when I was considering an MBA program, Wharton had the most reliable numbers [1]. Median base comp for grads is now 130k, at graduation age around 28-30. Really not that great these days. The other problem is when they talk about a salary bump from when students enrolled, they tend to ignore that students likely would have gotten a significant raise + promotion in the same amount of time as the program took to complete, so the perceived value increase is likely overstated. As the GP comment states, for specific career tracks where an MBA is expected and highly rewarded, it's worth it. But for most career paths, the financial ROI is no longer there, especially in tech. I will say that I think a lot of people can benefit greatly from learning basic accounting, finance, statistics, and microeconomics especially people who want to be entrepreneurs. But you sure as hell don't need to attend an MBA program to learn these things. Also, a lot of the other MBA coursework around things like marketing, global trade, operations, and management is either not even close to practical in a small business environment, assumes you'll be managing people who actually know what they're doing, or is useless without actually having significant real-world experience to match the theory. [1] https://mba.wharton.upenn.edu/value-wharton-mba/ https://mba.wharton.upenn.edu/value-wharton-mba/
- 7y ago

aprao 7y ago

Let me guess, Wharton?