Does MBA make sense for me...?

Question

I have been struggling to make a decision whether or not a MBA is the right move for me. I have BS and MS in Engineering from a Ivy League University. I have been an application engineer and more recently as a product manager at a small firm, with almost 10 yrs of work experience. I will be 35yrs this year. I am currently making about $140k with bonus, but there seems to be little growth or advancement opportunities at this small (family operated) firm. It seems with this slow economy, it's really hard to jump to a more opportunistic job.

I have come to the conclusion that a MBA may be the best way for me to make a break. I am thinking that my post MBA pay will not be significantly better than my current pay, at least in the short-term, but I feel that a MBA is still the best direction long-term. But there is a risk of quitting my current job and not able to find another job when I graduate, given the current weak job market. Does anyone agree or disagree? Post MBA I would like to land some opportunities in operations with larger hi-tech firms, which advancement possibilities. During recruiting, does employers take your pre-MBA salary into consideration, or does everyone start from "clean slate" in terms of salary and job function? Thanks.

shrouded1 · Answer

Its hard for me to comment on all the questions you pose here because I can't relate to much of your situation; but here is a couple of things that I think may help :

Post-MBA pay : Big factor of the industry you end up in. $140,000 is good, but that by no means caps what you can earn staright out of an MBA. If you manage to get into finance for instance, an MBA would typically make $200,000-$250,000 with bonus in year 1.

The job market factor is of course there, if there is a double dip in the economy, you have probably over-commited yourself. But then if you have worked for as long as you have, you might be in a better position than others just because you would already have a network outside and might make it possible for you to be hired with much more ease.

baron · Answer

Thanks for your response. I agree that finance/investment banking can get you in the $200k range. But I am thinking for post-MBA, I may pursue in technical management.

Sailorette · Answer

It sounds like a part time or executive program would be a better fit for you. It would allow you to make that jump from engineer into technical management, but without forgoing two years of your already high salary.

Where are you located? Is there a good PT/EMBA program near you?

Where are you located? Is there a good PT/EMBA program near you?

DrSatisfaction · Answer

I'm not sure if a PT/EMBA program would be the solution for you, since your number one priority coming out of the MBA would likely be securing a high paying job, and for that purpose, the traditional MBA is by far the best.

However, I would recommend looking into some of the 1 year programs. I believe Kellogg has one now in the US. Also consider the programs abroad such as INSEAD, IMD, Oxbridge, etc. From what I understand, IMD is an incredibly strong talent pool for senior management types, which you can transition into fairly easily given your background and work experience. INSEAD is of course excellent as well for consulting, finance, etc. However, the one key I would bring up for these programs is that you need to tell a better story as to why you want an MBA rather than just "my earnings potential is capped at my current job".

With your background, you will likely make more than the average MBA grad if you choose to move into management type of roles. Also, like shrouded1 mentioned, your earnings potential will be huge for the finance jobs.

aveekguha · Answer

The thing I would ask is that would an MBA give me much better leverage for the career I seek. In your case, if the choice is Technical Management, I'm not so sure. Your previous background, both professionally and academically, are probably stronger points in your resume. If the MBA is a check box to excel in this career path, I would choose more inexpensive options (e.g., 1 year programs, etc) to get there since you are not talking a wholesale switch of careers.

Good luck,
Aveek Guha, President, www.mbadaycamp.com

baron · Answer

Thank you all for your feedback. I appreciate it. I still need to take the GMAT, so that is the first hurdle for me.
I am in the San Francisco Bay Area. I am strongly considering Haas PT program, and also Cornell's 1-yr AMBA (my wife is currently there for the 2 yr MBA). So those two schools make sense me. With drawback I can see with a 1-yr is a lack of internship opportunities.

shrouded1 · Answer

I take it you want internship opportunities to try something drastically different from your current job ?
Why else would someone of your experience who wants to go back to a similar job afterwards, to want an internship ?

BlueRobin · Answer

In my opinion, If you did an MBA it will surely benefit you as it would certainly open up new avenues for you, it is natural to be afraid of giving up a safe position and start education again but certainly your profile would see growth.

Yes schools take your salary into consideration so it actually is a plus that you are already making 6 figures.

BlueRobin · Answer

Shrouded, 
Would you care tell which roles specifically you were referring to by saying Finance? 
I am asking because i thought only IB roles get such pay and Finance is a broad term, correct me if i am wrong.

shrouded1 · Answer

The roles I speak about are actually in sales and trading. Not in IB.

An MBA joining as an associate would typically earn that much in year 1 ($200,000+)

As such I am not a fan of IB jobs. (which in year 1 may pay similar as well). S&T in my mind is the perfect arbitrage : The pay is great, The hours are not bad at all (maybe 12 hours a day on avg), The job does not generally involve making pitches & presentations (thats a personal dislike :p), And compared to buy-side roles there is much more job security

BlueRobin · Answer

kudos for the information, but i have to bring this up.

I read many people saying S&T is a dead end job and how they are trying to get out and can`t. Your saying S&T is the best option? Would you mind clarifying?

shrouded1 · Answer

This is a choice which really depends person to person. There is a lot of jobs in S&T which can be very exciting. There are days where I have traded (by myself) excess of a couple of billion dollars of derivatives. That is huge ! And when you do stuff like that there is very little else that can generate as much of an adrenelin rush. Now to me, having to make pitches and presentations, doing deals where companies are bought and sold sounds like tedious and boring work I would not really want to do. What I want to do and what I very often do is trade in the markets based on this information and try to take positions to express views for or against these deals. Working with incomplete information, but doing all sorts of different stuff. Working on big trades for a few days is good, but executing lots of trades every day is even better ... working on a deal for a few months doesn't cut it for me.

And yes the pay-offs are good. The working hours are not bad at all, the job has excitement, and the pay is certainly above anything else which is not banking.

But as with most things after a while you start taking things for granted and can get bored of it. Now there is no reason why you won't get bored in IB either. Plus I have seen people around me retire in their mid 30s and trust me that is an awesome thing to look forward to. The whole business is young, there are no 50+ people, hardly anyone 40+, and most people between 25 and 32 ... so it is a pretty cool environment tp be working in.

mainhoon · Answer

sh1, new to the whole s&t business.. where could i look up info?

shrouded1 · Answer

a goos source could actually be looking on the websites of the big banks ... db, gs, ms etc

They will have a page for job applications (grad programs) which will have some profiles of analysts and associates and have "a day in the life of" kind of information. That should be a good start

BlueRobin · Answer

Kudos for the good intel (lol u typed goos just kidding),

But i have to clarify that S&T even though you may paint a rosy picture of it, to which everyone of the applicants would want to run, it should be understood that it might be a very niche market, difficult to get in and not readily accessible for internationals.

In the same way, I would say air force is a really high adrenaline job too but many people read the info and just take it for granted like right i am the next top gun or top S&T guy where are my contracts, it might not work that way, and i am sure the market or opportunities for the trade are not so abundant, accessible as GM or IB, its better to be cautionary before considering options, i am certainly not being negative just cautionary for people who tend to read online and start changing direction.

shrouded1 · Answer

Fair point. It is not easy to get in and I guess it is harder now for internationals than ever before. But there is a lot of diversity in the teams. For instance in my team of 12 traders, in London, there is 2 British nationals and no Americans. So we are as international as it gets.

Also something important to consider is the high attrition rate in these jobs. Few get in and even fewer survive. The only reason the pay rises exponentially to the number of years worked is that the pyramid is thin at the top and it starts thinning pretty quickly.

Of all the people in my team who started off as grads with me three years ago, nearly half are gone, either made redundant or moved on to other jobs. And the work at the junior level is often less glamourous and more labourous if you may. So there you go that's the non-exciting side of things. But all said and done if you make it here, just like in the movies you could be the guy/gal phoning someone up to buy a billion of this or sell a billion of that ! Which you gotta admit is pretty sweet ... You can't be top gun if you don't try to get into the air force. Necessary but not a sufficient condition if you may :d

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BlueRobin · Answer

Oh man, i got to ask you, do u walk in euston or kings cross with a long coat and shawl around your neck at 7:00 pm in the evening.

I used to see a lot of those bankers in suits and shawls, looking impatiently at the screens.

your right one has to try to apply to X to be Y, but as an international i dont know how much viable it is be for one to try for an s&t entry level job, because nobody wants an unknown guy to mess up the accounts.

It already costs a lot for a normal person to get an MBA and i imagine as your describing there would be a lot of people trying for the same high paying s&t job.

But even GM isnt that much of a exciting job you dont sit in front of a pc except you have to flatter people all day and take the same kindof decisions day in and day out for nominal fees. You wont get high bonuses or fancy stuff unless its an arms manufacturing.

shrouded1 · Answer

Ha ha ! Walking with a long coat and looking impatiently at train timings ?
You know as an international, I don't have any incentive to live outside London. So I actually live in zone1, no impatient waiting for me. I live close enough to even walk to work now; I used to hate taking the underground, its too crowded and stuffy, and these days I don't have to.

As for the attire, here is the other thing. I am not a "suit" (refer : entourage). So I hate wearing suits to work, and I don't. I would typically be seen either in my informal black wind cheater or a leather jacket. So if you were to run into me, you would not imagine I am a "banker". Thats the thing, S&T is chilled out. We are trading on screens and working on the floor, so we don't have to show up wearing a tie and a suit to work. Formal shirt and formal trousers ... and jeans on Fridays :D

The whole excitement bit as I said is really person to person. What works for me may not work for you. But I disagree that this is not worth trying. The only way to get into the industry is by applygin straight after school. Only two kinds of people get hired, either fresh starters or lateral hires from other banks. There is nearly 0 cross-industry hiring. So its worthwhile taking the shot. Also, given you just get out with a load of debt post B-school, it is a good way to try and get ris of some quickly !

BlueRobin · Answer

Allright my man, i am happy for you are allright and doing well in london,you will have lots of fun & friends in that place as long as you can afford it.

I am sure you must have already done so but but if not, then make sure to check out the gherkin on fenchurch street, i am sure you will love seeing so many financial buildings at one place. Thanks for the information and keep up the good work. By the way your right in saying one*(demographically applicable individuals

) should try if it is worth the stretch.

Does MBA make sense for me...?

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