This week in Managerial Finance we looked at investing. By the nature of investing there is an
element of risk. Risk is the price of
opportunity for profit. I’ve always
considered getting an education to be an investment, albeit one in which the
returns are often not readily quantifiable but an investment nonetheless. Education is the same way. When considering getting a masters degree I
looked hard and long at two alternatives to the MBA program. First I looked at a Master of Science in
Management because quite honestly the content of that degree program was much
more along my interests. I also looked
hard and long at a Master of Science in Leadership. But when looking at an education from the
perspective of being an investment, the MBA just stood out on paper as the
obvious choice. Why?
1.) The MBA can readily demonstrate with consistency the amount of money a
graduate can expect to earn over a given period of time using average market
salaries. The Master of Science in
Leadership however was much, much to vague, varied and quite frankly I don’t
think that it has been researched all that much.
2.) The MBA of all the management and business degrees
available had the highest dollar amount in return on investment. I cannot remember the specific data, but the
Master of Science in Management did not come close to the average salary of the
MBA holder in the marketplace. This
could be because of the reputation of the MBA or the hard skills required in
the MBA program. Whether it is
reputation or imparted knowledge that pays I do not know but what I did know is
that it could be consistently quantified to be more valuable than the MSM. Since we are looking at an investment here, I
wanted the highest yield possible.
3.) There is an element of risk. I’m not great at mathematics. I make no secret of it. The MBA however has a friggin metric TON of
math involved in the program so there is the risk that I may fail in a course
or even in the program, whereas with the MSM or MSL I have a high probability
of success. Suffice to say the risk was
the price of the opportunity in this case.
However in order to alleviate some of the risk I chose a school that was
less expensive than say the Wharton School of Business.
4.) Lastly the MBA has gives me something that the other two
programs cannot, instant recognition of worth in the marketplace. Now I do not believe for an instant that any
masters degree is worthless, but the MBA has name recognition. It has a reputation that precedes its
holder. The MBA requires little if any
explanation whereas other masters degrees may not.
Just some things to consider if you are looking at the MBA vs. other masters
degrees.