To MBA or Not To MBA: Deciding Whether Business School Is Worth It

I remember the moment I got my college diploma, I swore I'd never go to school again. At the end of the day, we forget the majority of things we learn and who wants to do homework anyway?

All this changed when the Dotcom bubble exploded and I was left wondering whether I'd be the first person let go given I had recently joined my current job in 2001. Last in First Out, or LIFO as they say.

We had gone through 5 rounds of layoffs in 1.5 years, and I heard the 6th one was just right around the corner. As long as the firm would have me, I'd keep on working, but just in case, I needed a backup plan. I decided that surfing back home in Hawaii was not the proper backup plan so I came to a compromise and applied to the nearest part-time MBA program, which so happens to be ranked Top 10 in US News & World Report and the WSJ.

The program promised the rigors of the full-time program, with the same professors and international opportunities all within 3 years. Upon looking further into my company's policies, they offered to pay for my MBA so long as I was in good standings. The MBA program was a hedge, just in case I was one of the casualties, as one could potentially transfer to the full time program once accepted.

The 6th round came and went, and I was still left standing. Unfortunately, the company tuition reimbursement policy was canceled just two weeks before my acceptance. I decided to join anyway b/c at the end of the day, the economy was still shaky, and I didn't want my application time spent go to waste. What the heck I thought. Be grateful for the opportunity.


1) Money. The MBA cost on average $28,000/yr for three years ($84,000!).  It's slightly cheaper to get an MBA online, however the quality is never guaranteed.  I borrowed $18,500/yr via FAFSA loans at 2.5% and funded the difference. Painful? Absolutely, since I still owe money which is a subject I'll talk about later. Worth it? Absolutely, even if the firm didn't reinstate the tuition reimbursement policy in my second year, and ended up paying for 75% of the overall tuition.

I readily admit that just like how you tend to tell your friends that $100 meal with your significant other was darn good (even if the $2 double cheeseburger at In N Out Burger was just as good), one has the proclivity of overstating their MBA experiences given the tremendous amount of time and tuition spent. However, getting the MBA was truly a priceless experience to me.

2) Insecurity. When I asked my fellow colleagues or friends to apply during the last downturn, the majority made the excuse that they were just too busy. 20+ hours extra a week, on top of a 50-65 hour work schedule is no easy task. But, what motivated me was FEAR OF FAILURE!

I was petrified that I was going to get laid off before attending and during at least the first 2 years of school. I didn't want to face my friends and family and tell them I was unemployed in case that day came. If I did get laid off, I'd just simply tell them I'd decided to go to business school on my own volition. This was my pride talking.

3) Rejection. The other main concern my friends had were the fear of rejection. What if we applied, and got our managers to write us glowing recommendations and the school rejected us? Would our managers then think we were second class citizens? This is a valid concern, which needs to be weighed carefully if you don't have a great relationship with your manager.

However, it takes a good relationship with your manager for her to write you a glowing recommendation anyway. And if she looks down upon you for trying and planning ahead, well…. I would say you're manager may not be around much longer, and it's best to get a recommendation from someone else senior. Keep your application process a secret until you get the notification.

4) Health. I went from roughly 160 pounds to 170 pounds during my three years. It was sad since one of my great passions is playing sports. Furthermore, I endured a lot of stress and moments with heaven where all I wanted to do was curse at the world. These curses were all confined to the 2nd half of the year, where the novelty of school wore off, and the ass kicking really began.

Thankfully, the 2nd and 3rd years were only from 9am to 4pm, and consisted of self-chosen electives. It's been four years since I graduated, and I'm back down to my pre-MBA weight thank goodness.

5) College Football and other fun things. Class was always on Saturday, so I could never watch any college football, not even my own Hokies. I couldn't take my girl out for a morning walk in the park, nor did I have the energy to take her out for dinner at times. These are opportunity costs, but thankfully the campus had free wifi where I could occassionaly slack off and check the scores, watch some video, and IM friends!


1) Confidence. You learn a wealth of information you otherwise may not have any clue regarding. I had no idea how to model financial statements, create business plans, or figure out effective marketing campaigns. Now I have some idea. The information you learn breeds confidence in your abilities to communicate and tackle tasks.

Better confidence, leads to better production and perhaps a better position within the firm and pay. I was promoted to VP after my first year in business school at 27, but i'm not entirely sure whether me going to business school had much to do with it. Perhaps after finishing business school, the degree helped validate the firm's decision to promote me, and to promote me again one year after business school.

2) Friendships. You meet a great many friends who you would otherwise have never known. Spending 6 hours every Saturday for 3 years is bound to let you meet some people. There's no better way to become great friends through hardship. And, I must admit by the 2nd half of the first year, many of us were feeling the pains of juggling both work and school. We just had a 3 year reunion at a friends BBQ down in Palo Alto. It was so great to see them again, many with new born children. Congrats guys!

3) Experiences. Your experiences shape who you are, and generally, the more you experience, the more well-rounded you become. Going to Brazil, a country I would never otherwise have visited, made me love Brazilian culture and people. I never would have known about the tech industry the way I do now, if it wasn't for school either. Over 50% of my classmates work in tech in Silicon Valley.

4) Credibility. You may gain credibility and a little admiration from your manager and colleagues if you are able to maintain your work quality, while going to school. Never complain about your workload. Your manager realizes the sacrifices you are making, and may be more positively predisposed come raise or promotion time. The key thing is to never led your school responsibilities affect your work responsibilities.

5) Everything else will seem easy. After 3 years of work and school, every weekend seems like a real vacation! No last minute homework to do on a Friday night, and no need to wake up at 7:30am Saturday to make it to class by 9am anymore! Yihaw! Not only do you feel every weekend is like a vacation, you can tackle much more in your career!

Ever notice baseball players swing two bats when they are on deck? Or what about when football players chain a tire around their torso, and drag that tire during sprints? They do it b/c when i comes time to bat or bust the gap, it becomes that much easier.


Absolutely! I attended school for the pure sake of learning, and not just with the goal of getting “A's” because I already had a job and needn't impress anyone. The professors were wonderful, and actually served as real-time consultants for my job at hand. I was forced to manage my time properly, and gained the discipline of juggling both a career and 20+ hours of class and study time a week.

The study abroad trip to Sao Paulo and Rio were priceless experiences as were the off-sites and the friendships I've made. Make no mistake, there were trying times where all I wanted to do was quit as the workload mounted, but I kept reminding myself that school was only 9 months a year on Saturdays from 9am-6pm, and summer or winter “vacation” was just around the corner!

I would continue to be positively predisposed if I had to pay the entire $84,000 in tuition. Amortizing $84,000 over a 10-30 year time frame doesn't seem too much at all. One can also potentially write off the entire tuition amount if you are in financial field, another interesting topic.

If you were to ask me whether going full-time would be as worth it, I don't know for sure because I don't know where I'd have ended up.

The pros of going full time over part-time I believe are: 1) a rest from work to recharge your batteries, 2) the ability to truly delve into other business fields and switch careers, and 3) build even tighter relationships with classmates.

The cons are: 1) You lose two years of career advancement and salary 2) you're two years older, but hopefully at an elevated title and salary, 3) you may not be able to get in the field of your choice b/c you still have to interview well and snag that job post graduation.

The more I think about it, the more I believe that education is one of the bigger keys to success. From a very basic level, if the American home-buying community was truly educated on the dangers of option ARMS, and knew the discipline necessary to utilize that cashflow difference wisely, maybe there wouldn't be such a world of hurt in mortgages. Education is what sets us free to help make rationale financial decisions.

The MBA is only a life stamp credential that shows you either decided to bust your butt for 3 years of your life to go part-time, or take two years off from work to go a different direction. An MBA graduate shouldn't feel entitled to think the world owes them something just because they sunk $200,000 in lost wages and tuition over two years.

The MBA is simply a tool for people to use to perhaps get their foot in the door, and utilize certain skills to make them perform better at their jobs. If you're joining an industry where nobody has an MBA, then you may have wasted your time. However, if there is an employer who has a majority of MBAs and CFA employees, well then, your degree is probably necessary.

Remember, we forget most of what we learn anyway. So don't ever let someone with an MBA big-whig you into thinking they're better than you. And if you want to get an MBA, make sure you are financially able to afford to do so, and realistically assess whether the school that has accepted you is ranked highly enough to get you into your industry or firm of choice.

The world's richest people don't have MBAs (Gates & Buffet), so the degree is definitely not a precursor to success. However, if there's a choice between having the degree, and not having the degree the employer may very well choose the candidate with the degree for the same compensation if all else is equal. Since the trend has been towards more MBAs in the work force, inevitably, more senior personnel will have their MBAs over time. You just have to ask yourself, whether it is worth it to you or not.


* You got fired and can't find reasonable work.
* You hate your job, and want to try your hand in a new industry.
* You plan to work for at least 10 years after you get your MBA & leverage it. Some get their MBA, get married, & don't work afterwards.
* You really want to learn more about academic business and your employer requires it for you to get promoted.

US NEWS & WORLD REPORT 2020 AVERAGE STARTING SALARY (Average age of graduate: 28.5)

1 Harvard $130,000
2 Stanford $130,000
3 U. of Pennsylvania (Wharton) $145,000
4 M.I.T. $113,500
5 Northwestern (Kellogg) $133,000
6 Chicago $136,000
7 Dartmouth (Tuck) $109,000
8 UC Berkeley (Haas) $118,000
9 Columbia $144,000
10 NYU (Stern) $128,000
11 Michigan (Ross) $104,000
12 Duke (Fuqua) $114,000
13 Virginia (Darden) $121,000
14 Cornell (Johnson) $117,000
15 Yale $115,000

Wealth Planning Recommendation

College tuition is now prohibitively expensive if your child doesn't get any grants or scholarships. Therefore, it's important to save and plan for your child's future. Check out Personal Capital's new Planning feature, a free financial tool that allows you to run various financial scenarios to make sure your retirement and child's college savings is on track. They use your real income and expenses to help ensure the scenarios are as realistic as possible.

Personal Capital College Planning Feature

Once you're done inputting your planned saving and timeline, Personal Capital with run thousands of algorithms to suggest what's the best financial path for you. You can then compare two financial scenarios (old one vs. new one) to get a clearer picture. Just link up your accounts.

There's no rewind button in life. Therefore, it's best to plan for your financial future as meticulously as possible and end up with a little too much, than too little! I've been using their free tools since 2012 to analyze my investments and I've seen my net worth skyrocket since.

Personal Capital Retirement Planning Comparison Chart


Start your own business: One of the best ways to make more money is to take matters into your own hand and start your own business online! It used to cost a fortune and a lot of employees to start your business. Now you can start it for next to nothing with Bluehost. Brand yourself online, connect with like-minded people, find new consulting gigs, and potentially make a good amount of income online one day by selling your product or recommending other great products.

Not a day goes by where I'm not thankful for starting Financial Samurai in 2009. I have maximum freedom now thanks to working on my side-hustle while working for 2.5 years. You never know where your journey will take you!

Pro Blogging Income Statement
You can start your site for next to nothing and potentially make a lot of extra income. This is a real example.

Refinance Your Student Loans

Check out Credible, a student loan marketplace that has qualified lenders competing for your business. Credible provides real rates for you to compare so you can lower your interest rate and save. Getting a quote is easy and free. Take advantage of our low interest rate environment today!

Updated for 2020 and beyond. 

19 thoughts on “To MBA or Not To MBA: Deciding Whether Business School Is Worth It”

  1. I’d love to get your thoughts on my situation as well.

    We live in NYC and I got into Texas – McCombs (full-time) this year. But deferred because my wife got a promotion making $150K and I got a new job as a result making $100K (this really comes in handy w/ the new baby).

    I got a 40% scholarship to go and they’ll likely hold on to it but does it really make sense to spend $60K to make an extra $10-15K? When I lose 2 years of income? Right now $117K is the average pay for MBAs from UT.

    Or should I start looking more into PT options?

    I’d love to hear your thoughts!

    1. Making $250,000 in household income is great. With the new baby, losing your income will feel extremely stressful.

      I did part time at Berkeley for three years, continue to make money, got a promotion after I graduated, and didn’t miss a beat. I would not go to business school full-time if I were you.

  2. Hi Sam-

    Wonder what your thoughts are on my situation:

    -27 years old making 140K as a Media Account Manager at a large Tech firm in NYC
    -Left finance for the work life balance in tech – never work more than 40 hours/week and have been promoted every year (started out making 75K 3 years ago)
    -No idea what I ultimately want to do – feel like I’m working up the “comp” latter instead of advancing my career
    -Boss recently suggested I keep working but get a PT MBA so I “don’t limit myself”
    -In 2 years if I stay on my team I’ll probably make 160-170K

    My fear is that I’ll work for 3 years on a PT MBA and have nothing to show for it. I totally understand people who make are making 70K, quit to get a FT MBA and then start out at 130K – they probably feel great about it.

    I am starting to get a lot of 120K job offers for various roles at tech start-ups that include equity. Not sure where to go from here. Any thoughts?

  3. I am going to UCLA for the full-time MBA. Didn’t make too much before business school but made moves into stocks and real estate. Now the savings is funding business school. Average base salary is $114K and also $20K bonus. It pays for itself in five years.

  4. Pingback: The 401(k) Participation Rate | Financial Samurai

  5. Thank you for this post. For a long time (well, 6 years since completing undergrad) I’ve been considering going back for an MBA. Working for startups, there is never funds available for the company to cover the cost of the degree. This post summarizes well why I’ve yet to pursue an MBA, though for me there is an added question of whether, once I have kids in my 30s, I will want to pursue an executive position, or if the value of the MBA would be wasted in choosing to work part time or become a marketing consultant. I’m getting towards the older end of the spectrum for a full-time MBA program (being 28), but I can’t imagine working in my current role 70+ hours per week and completing a top-tier MBA curriculum in the evenings and weekends, especially given my lack of experience in math and finance, where I’d have to play catch up probably the whole time. Meanwhile, I’m so fascinated by a lot of the aspects that are part of the MBA curriculum that you speak of above. I can’t see doing this while I’m in my current job, but I plan to re-evaluate when I turn 30, and to seriously investigate the executive MBA programs.

    1. I’ve had numerous female friends who swore they would never be a stay at home mom and work for at least a decade after their MBAs only to never want to go back to business school after having children.

      I’d really think long and hard about spend 2 full years with no paycheck on the degree. Get someone else to pay for it as much as possible if so !

  6. RB @ RichBy30RetireBy40

    Just an update, the MBA tuition write off is a important tax topic more people should know about. Essentially, if you are in the world of finance, and you go back to get your MBA. You are allowed to write off the entire tuition amount IF you go back to finance/consulting.

    However, if you're an engineer, and get your MBA but go back into tech or engineering, you are not allowed to write off your MBA tuition. So essentially, if your firm does not pay for your tuition, you can still save about 30-35% off the bill due to this write off.

    Check with your tax account first of course.



  7. TonyM – Good for you, for doing what you want to do. Maybe I'll join you in 10 year's time. But, for now, I like what I do, and am optimistic this year will be better than the last.

    When I was in college and for the first 3 years working, I cared a lot about where I would be working. After a while, it doesn't really matter b/c everybody from every firm joins your firm. FS

  8. TonyM @

    I am leaving finance because a) I have decided its not only about the money and b) I believe the landscape has changed materially. When the dust settles – this will take 1 year plus – this will become clear c) I have lost a lot of respect for and confidence in the leaders of finance d) I hear you about GS (and JPM) but that is one company. I wouln't base my career choice based on the possibility of being able to work for GS

  9. The worst are the self-entitled kids graduating from one of the Top 5 schools. Unless they come in as humble candidates with a straight head, I will never hire one of them.

  10. Tony – Do you have an MBA or CFA? Why are you leaving finance? The market is coming back quite strongly (+35% from the bottom), and GS just reported blowout 2Q earnings!


  11. TonyM @

    Neither CFAs nor MBAs guarantee anything. Nothing does these days but an accountancy or law qualification may hold up best in the long term. If you do go the MBA route and can afford it, I'd say go all the way and try to do a FT program at top school. If not, skip it.

  12. Financial Samurai

    CFA is a real butt kicking. I admire anybody who can get through those three levels! Sooner they get the credential, the longer they can leverage it in their careers. Thnx for sharing Charlie.

  13. A lot of people I work with are trying to get their CFA. That's another good option for people who want to stay in finance as you can still keep your day job. Just takes a lot of discipline to get enough study hours in. It probably would look good if I had the credential myself, I just don't see myself taking my career in the direction that I would really need a CFA. If I did decide to get a credential I'd probably go the part time MBA route. I wouldn't want to lose my salary, benefits, and work experience for 2 full years.


  14. The one encouraging thing about this recession is that we don't have any big egos interviewing anymore, demanding big sign on bonuses and so forth. The humility is encouraging.

    There's this one girl I know who went to Harvard, and referred to her degree as a special tool. She'd say, "Gap needs an MBA to get this type of work done," or "I'll use my MBA to figure out the solution." It was kind of annoying.

    There's a real need for MBAers to justify they maid the right choice to others by going to school, be it Harvard or Golden Gate University.


  15. The students flocking to full-time business schools now may actually be the ones who couldn't cut it in their jobs. What else would explain a 30% YoY jump in applicants in 2007 and 2008, as well as in 2002 and 2003?

    Come hiring time as a manager, it's important to delve into the responsibilities of the candidate before business school, and discover the true reason for him leaving to go to school. Obviously not all graduates 2-3 years out of a recession are the underperformers, it's just something to think about.


Leave a Comment

Your email address will not be published. Required fields are marked *