Is An MBA Worth It

This article discusses whether going back to business school and getting an MBA is worth it or not.

Why get an MBA?

Most people to back to business school and get an MBA for three reasons:

  1. Their employer is paying for it
  2. They feel “stuck” in their current job
  3. They want to relive their college days

The answer to the question “is an MBA worth it?” depends significantly on which of the above categories you fall into (note it may also be helpful to compare a CFA vs MBA).

#1 – Your employer is paying for your MBA

If your employer is paying for your MBA then it’s pretty much a no-brainer to go get your MBA.  The only downside is that it usually ties you to your current company for a few years as most employers clawback the tuition if you leave for another job before a certain amount of time.

Other than the workload of doing an MBA, there is almost no reason not to do an MBA if your boss is paying for it.  They may use it as leverage against you, and lock you in, but the ROI is incredible if it’s free (obviously).

#2 – You feel stuck in your current job

If you feel like you can’t move up at your current company and/or want to try something new then doing an MBA can be a good option.  But, it has to be carefully weighed against the cost (including the opportunity cost).

The benefits on the numerator side of the equation include: networking, skills development, corporate recruitment programs, personal development, and however much additional income you earn as a result of your new job post MBA.

On the denominator you’ve got the direct cost of tuition, books, and travel as well as the opportunity cost of forgoing your current compensation for the duration of the program (unless you’re doing a part-time MBA).

Once you’ve compared these two sides of the equation you can make an informed decision about doing an MBA.  The answer will be different for everyone.

#3 – You want to relive your college days

There are many people who go back to business school for the lifestyle.  It may be the perfect opportunity to have a reset and get back into more social activities.  For some people this involves reliving their undergrad days in college, with no shortage of pub nights and team events.

It’s hard to calculate the ROI on a good time.

So, is an MBA worth it?

It depends on all of the above.

Add up all of the benefits and compare them to all of the costs.

If you can extract huge value from an MBA by getting a huge raise, promotion, or new job (and you extrapolate that over several years) then it’s probably worth it.

If you more or less keep the same job or just partied the whole time you’re probably better off taking a bunch of amazing online courses and calling it a day.

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