27 Jun Thinking About Getting An MBA? Think Again…

Recently had three people at different times ask me if getting me an MBA was worth it. Before I tell you what I said, just know that I like to be right. I don’t like to be wrong. And this is why I read A LOT. I’m not smart like that James guy that just went 32 episodes on Jeopardy and made over $2 million, but I’m kind of close…on like…one topic…as long as I don’t have to answer in the form of a question…and it’s easy.

Okay, so back to this. I didn’t have any empirical evidence on this one…yet. I told all three of them that, but I gave my opinion anyway. I said that I thought MBAs were a dying degree. I wasn’t sure they were worth it anymore for a few reasons:

1. The cost of the degree on top of a 4-year degree is too damn high considering the ROI
2. Many MBA focuses are out of date and touch with current business technology
3. As a business owner who doesn’t have an MBA or business degree, I would say its cheaper to take the money you’d spend on a degree and just start and run a business for two years (this is assuming the average cost of an MBA being about $50,000). You will learn and potentially earn more during that time period.

I felt pretty justified with that reasoning and the girl was leaning in my direction after the conversation. Well, if I didn’t get luckier than a jackrabbit who made it out of a foxhole alive (not sure if that’s a saying, but I’m trying to make it one), but I ran across this article from the Wall Street Journal just a few days later that totally proved me right!

Thank you CNBC for sticking this on the home page. I appreciate it.

To summarize for all of you, here were the general findings of the article:

• For starters, there are NO CAPS for what a person can borrow in graduate schools unlike four year degrees. This incentivizes universities to jack up the prices as unsuspecting applicants think the ROI will pay off in the long run. Historically, that’s been true, but the data is changing on that rapidly.
• More competition to offer MBAs online has reduced enrollment in traditional universities.
• The strong US economy has actually hurt this since companies are competing heavily for top talent. An MBA isn’t required to move further up like it was before.
• Alternative degrees in newer fields like entrepreneurship and data analytics have higher-paying opportunities and steal many MBA applicants.
• There has been a 9% decline in MBA applicants in the past 3 years.

So yeah, the point is, getting an MBA might not be a good idea right now. The ROI just isn’t there. Unless you can find a good school that has ties to an incredible job network in the field you want, the chances are that you would be better off taking that $60k-$100k and using it to start a business, save the money and keep working at the job you have, or just interview at multiple companies until you get a higher position without it. With unemployment at record lows for so long, sometimes just being a body with basic experience is enough.

Also, you have to ignore statistics about MBAs and what they earn in their lifetime. The job market is changing faster than ever and those who had MBAs in 1980 were in a highly-regarded group. Degrees are looked on more as an data-point on a resume and ultimately experience reigns supreme.

Personally, if I had the choice to hire an MBA grad with no work experience vs someone who had been working in that field for 3-4 years with zero experience, I’m likely going with the experienced person. To mirror a GaryVee quote, you can’t get abs by reading about situps.

So if you were sold on getting an MBA, then give it some thought and maybe you’ll realize that it just MBA (Might Be A) good time to skip out on more schooling!