Among the high-powered analysts and hedge-fund superstars, obtaining an MBA is losing its attraction. Even degrees from the most prestigious schools like Harvard and Wharton are viewed as a waste of time and money if the student could be earning hundreds of thousands of dollars a year as a stock analyst or millions as a hedge fund manager.
At funds that manage $1 billion to $3 billion, people with just a few years of finance experience will make $337,000 this year, Mr. Zoia says, and those with five to nine years of experience will average $830,000, up 6 percent from last year. These estimates include analysts and researchers but not portfolio traders, who can make much more because they sometimes share in profits.
This seems obvious. If you’re making six or seven figures a year, taking time off of your job for a two-year full-time program is a bad move financially. If that program is expensive, the loss is even greater. In fact, such a move would be seen by future employers as poor financial decision. I can understand why the MBA would be overlooked for a job in which financial analysis is a component. In many cases it shows a poor grasp of cost-benefit analysis.
Not everyone is making six figures when they decide to enroll in a business school graduate program. Also, for someone switching careers or considering entrepreneurship, the MBA can be a gateway. While the article contains some good points for those in high-performance finance careers, there are millions of other perspectives out there.
Just like all college degrees, MBAs are more common. This commoditization causes devaluation. Having a masters degree in business once set someone apart from the crowd, but now it is the crowd. If your goal is to set yourself apart from other people, say, in competition for a career, there are other ways to stand out. According to the article, having a superior stock trading record is a surefire way to rake in big bucks.
Before deciding to undertake any graduate or postgraduate degree — particularly if it involves leaving salary on the table — figure out what your goals are. If your goal is to finish life with the most money, more school (particularly business school) may not be the best option. If lifelong education is part of your personal mission, go for it. If you want a degree only for its potential boost in income, you may have to look at the latest data to determine if your chosen industry perceives the degree as the asset you are hoping it is.
Updated June 24, 2016 and originally published September 18, 2007.