Is An MBA Necessary to Start a Finance Career?

Successful People Have an MBA

You’ve noticed successful alumni, family members, and business leaders you look up to all have it.

MBAs Seem Like They Have An Edge

When you hear them speak, it can feel like people with an MBA have an extra “something” — an X factor they bring to the table that can make it seem like they hover above the ground while the people around them walk.

The History of the MBA or Why the MBA Program Exists

Today, it can seem like an MBA is indispensable to start your career in finance. This isn’t true now and wasn’t true for most of business history.

1. Production

With the Industrial Revolution, there was exponential growth in production possibility due to the development of superior technology.

2. Employment

This led to greater manufacturing labor employment, which led to more and more people having a higher disposable income.

3. Consumption

This higher disposable income led to greater consumption, incentivizing more production.

1. The Wharton School

Joseph Wharton’s donation established the Wharton School at the University of Pennsylvania as the first American business school.

2. The Tuck School of Business

In 1900, the Tuck School of Business opened its door at Dartmouth College, conferring the predecessor of the MBA, a Master’s of Science in Commerce.

3. Harvard Business School

The Harvard Graduate School of Business Administration established the first MBA program in 1908. They began by teaching the classic business theory which is arguably the foundation of modern business school education, Taylor’s scientific management.

Should You Get an MBA to Start a Career in Finance Part I: The Benefits

The MBA program today, keeping up with the times, has changed significantly from its origins. The young graduate entering an MBA school today will walk away with far more than a knowledge of systems and processes.

  • Finance
  • Marketing
  • Accounting
  • Leadership and Organizational Behavior
  • Accountability and Ethics
  • Economic Statistics and Operations

1. Networking

Your network of highly motivated, ambitious, and talented people you can call your friends and peers. If the future CEO of a Fortune 500 company was your roommate for a semester, getting clients for your future investment banking (IB), private equity (PE), or corporate finance firm just got a whole lot easier.

2. Opening Doors

Doors open when you try to walk through them, where they may be shut for others. Especially if you went to a target or semi-target school. Having that school pedigree on your resume is an easy and quick way for future employers to verify that you are a high-quality, talented, and hard-working individual they should hire fast. The name-brand recognition plays a strong role in building client trust and you getting their deal to work on. Clients and employers demand high quality work. A name-brand MBA is an easy way for them to screen you and know that you’re capable of delivering.

3. Mindset

MBAs learn a strategic approach to problem-solving. MBA graduates look at the world a little bit differently than people who haven’t been through the program. A modern MBA program is really an exercise in bringing together the best minds of today to teach the best minds of tomorrow how to make an impactful, positive difference in the world. There are classes in entrepreneurship, law, data science, social entrepreneurship, and a whole lot more.

Should You Get an MBA to Start a Career in Finance Part II: The Costs

We’ve looked at some of the benefits. Let’s look at some of the costs. Getting an MBA to start your career in finance this year…may not be the right choice. Here’s why:

1. Competition

Remember, there are thousands of MBAs looking for a position in finance. Most companies will hire only those with a high GPA and who studied at well-recognized schools.

2. Your Career Path

The importance of an MBA for you will depend on the career you’re seeking. For positions such as financial planner, financial analyst, or trader, an MBA will not necessarily give your career a boost.

3. Cost and Time

An MBA doesn’t come cheap. The financial investment may not bring you a satisfactory ROI. You typically have to invest two years, just to acquire the degree. A few schools have slightly more accelerated programs. As well, part-time studies are possible although not nearly as effective as full-time programs.

Should You Get an MBA to Start a Career in Finance Part III: The Alternatives

So how can you develop the skills you need to get your career in finance started?

1. With Networking

Talk to your dad, his friend, and the friend’s uncle’s dog’s neighbor. As long as they have a job in finance that you want: find them, contact them, and set up a coffee chat with them.

2. Take Certifications And Courses

Become a chartered financial professional and enjoy many of the benefits that MBAs enjoy, at a fraction of the cost and time.

  • Chartered Financial Analyst (CFA): The CFA course requires self-study of 19+ months, after which you must pass three exams. A CFA costs less than $5,000. According to Payscale.com, the salary of a CFA can range from $66,000 to $175,000, depending on the job role. The average annual income for CFAs stands at $93,861.
  • Business Economics Specialist (BEStTM): The BEStTM course requires part-time self-study of less than 1 year, along with a mentored, practical project. The BEStTM certification costs less than $1,000. Economics, engineering, and business undergrads all over North America can now be certified in real-world business economics. For a limited time, mentoring will be led by Jay Moulton, 30+ years in finance and Harvard MBA.

To MBA or Not To MBA: A Conclusion

Jumping into an MBA right out of college is probably not the best way to start your career in finance.

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