Determining whether an MBA is worthwhile for your financial future
There is always plenty to consider when it comes to determining the value of any type of educational degree, both undergrad and graduate. Lists of the schools where you get the most bang for your buck are always headline-grabbing, and analysts even try to compare the future financial value of potential college majors to determine which lead to the most affluent careers.
One type of degree that people are particularly interested in, regardless of the field they work in, is the MBA. If you are wondering about the value of going back to school for your business degree, the following information can help you make that determination.
“An MBA is only worth the expense, time and effort when the graduate plans to work in a business-related field, in management, or as a company founder. For those working in other industries, unless they are in management or leadership roles, an MBA may not be useful,” says Adam Hayes, CFA for Investopedia.
It is important to have a specific career plan in mind in order to properly determine whether an MBA is right for you. If you want to start your own business or need to add some credentials to your resume, getting an MBA could be exactly what you need. Furthermore, if you work in a field where all advanced positions are held by people with MBAs, it could also be in your best interest.
If you are hoping to advance in your current field by getting your MBA, you should look to see whether the higher-ups at your company or in your field have MBAs. If most do not, then it is reasonable to think that you also may not need one to receive a similar promotion. If you have lots of experience in your field and have already achieved a leadership position, you may not need an MBA to prove your worth to a new company, even if many of the other employees have them.
If you have determined that an MBA is important for your desired career, it is important to note that not all MBAs are created equal. Schools with highly selective admissions carry an air of prestige that many people feel will help them get ahead. Not everyone can get into these schools, obviously, which is why they have earned their reputations. This leads potential students to wonder whether they should forgo getting an MBA if they can do so only at a second- or third-tier school.
“A new analysis done exclusively for Poets&Quants by PayScale, which collects salary data from individuals through online pay-comparison tools, shows that the MBA — even from schools that lack global or national cache — delivers hefty seven-figure income over a 20-year period,” says Fast Company and BusinessWeek former editor John A. Byrne in a contribution to LinkedIn.
This analysis used information from graduates of the top 50 U.S. schools to determine median pay and bonus pay over a 20-year career span. The estimates were conservative because they did not include compensation in the form of retirement benefits, health care or stock, which all add hugely to the overall value of a job.
“For the most part, the results are exactly what you would expect: The highly ranked, big-brand schools tend to deliver the highest earnings over a 20-year period,” according to Byrne. “Harvard Business School’s MBAs come out on top, with median income of $3,233,000.”
It’s no surprise that you will definitely get the most value if you can get into one of the top-tier schools. However, when you consider the fact that graduates from all top 50 schools analyzed earned a high income over the span of 20 years, it is clear that you shouldn’t rule that MBA out if you can’t get into a top-tier school.
If you think carefully about the career you hope to have in the future, you can make a good determination of whether an MBA is necessary for potential job candidates and whether that MBA can be earned at a school you can feasibly get into. Speak with us if you have any questions about financing your college dreams.Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.