TL;DR: An MBA is revered among some as an instant path to riches. Reality is that MBA programs are just really good marketers and have sold society on their product. Before you jump into an MBA program and sacrifice >$500K in direct and indirect costs, consider whether you can achieve your goals some other way. If you try hard enough I think you’ll see that an MBA is not what you’re really looking for, and it will probably take you further away from your long term goals (see Ramen Retirement?). Don’t believe the hype!
For most, an MBA is a waste of time and money. I’m not saying this to be provocative or prove a point that I was smart enough to avoid one. In fact, I studied ‘business’ in undergrad! I’m only sharing this because there are a lot of things wrong with our education system and this is one that I understand particularly well given my previous education, career, and life choices.
For many, the only great reason for doing an MBA is to take two years of vacation without blowing a complete hole in your resume. Two years to have fun, figure shit out, meet your husband or wife. An excuse to party with people of similar backgrounds and interests, under the guise of having something meaningful to do. If you’re thinking about getting an MBA, consider the following points before you do. It might save you two years of life and hundreds of thousands of dollars.
You don’t need it to “learn business”
You want to learn how businesses run, and how to manage people? Then do it. Reading about business from a case book is about as useful as learning about intercourse in sex ed. There’s no substitute for experience. Also, there’s something ironic about being taught how to run a business by people who have never successfully done it themselves. I suppose the only successful business they’ve run is the business school itself which is generally a money making machine for any college.
A lot of people think you can go to school and you can study for how to make money but the reality is there’s no skill called business what you’re actually trying to figure out is what product or service does society want but does not yet know how to get. You want to become the person who delivers that and delivers it at scale so that’s really the challenge of how to make money.
Huge direct financial cost
An MBA will cost you upwards of $200-300K after tuition, living expenses and the excessive, extravagant vacations you will no doubt enjoy (because you deserve it!). The good news is that banks are more than willing to lend it to you. America loves it when you borrow money… it makes you a productive member of society, focused on paying down that mountain of debt at the expense of health, happiness and sharing your gift with the world.
Huge indirect financial cost
Not only will you pay for the privilege of sitting in class all day, but you’ll give up two years of potential earnings. Let’s call it another $200K of after tax savings, give or take a few dollars.
Huge indirect opportunity cost
Aside from the lost earning potential, you also lose two years of real learning, progress, personal and professional development. If you know what you want to do ‘when you grow up’, there is no way sitting in a classroom learning about Porter’s Five Forces will make you better suited to do it.
You don’t need to “pay for connections”
People talk about the ‘network’ they take with them when they leave business school. Bullshit. A candidate that wants to work with me cold-emailed me the other day indicating his interest in joining my team – did I care what school he went to? No. I cared about what he had done, why he was interested in joining us and what he wanted to do with the rest of his life. LinkedIn is your network now. You can find anyone on there. If you’re smart enough to get into an MBA program, you’re probably smart enough to figure out how to contact a potential employer, and if you know what you want then you’ll know exactly what to say.
You won’t find your path in a classroom
Do you really need to fork out $500K to figure out what you want to do with the rest of your life? An MBA won’t really help you with this. The only thing it will do is provide a mountain of debt that needs servicing, which will force you to choose some path (any path!?) to get a steady paycheck and pay down that debt, delaying your well deserved Ramen Retirement. You’re better off choosing an area of interest and going deep. Doing that, you’ll actually learn about a new industry, become a relative expert, and potentially have something useful to contribute back to the world.
Do you really want that job in finance?
An MBA is perhaps the most certain way to break into the world of finance. If that’s what you REALLY want to do, then perhaps an MBA is for you. But for your sake, please dig deep on this one. Most times when people say they want to work in finance, what they’re really saying is ‘I want to get paid $200-300K when I graduate’. Nobody says ‘I want to work 80-100 hour weeks for the next couple of years, sacrificing evenings, weekends, health, family and happiness to get a pitch book to a CEO that will probably never read it’. That said, I do believe there are some people who are 100% suited to a life in finance, but they are a rare breed. If you’ve read this far, you’re probably not one of them.
Education in general, and an MBA in particular is really expensive. Too often people get one because it’s an easy decision… in fact it’s a non-decision, a deferred decision, and an expensive one at that. Everything you need to know about business can be learned by doing it. If you want something more tangible, try reading The Personal MBA by Josh Kaufman. Or replicate a ‘real world MBA’ a la Tim Ferriss. We’re not in the 1950’s anymore. The corporatocracy is crumbling. You don’t need a piece of paper to validate your worth. Carve your own path, build your own brand, and you’ll be better off for it.