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Thinking about an MBA

I deal with the public in my city's business district, and meet a fair amount of finance guys - usually investment bankers, financial analysts, or traders.

Because my kid is studying undergrad finance, I now sometimes chat them up about it. I was blown away to hear some big firms in my city are taking guys right out of undergrad, and tossing them into I-Banking at around 80K to start.

Now they have to have a great G.P.A., but they do go directly into I-Banking at a reasonably decent just-out-of-school salary, with the same opportunity to double & triple their income quickly - just like the traditional M.B.A.s do.

In the '80's when I was looking at grad school, an M.B.A from a reputable school was pretty much de rigueur to get into a decent investment banking firm. It seems no longer. So yeah, something seems to have changed (in I-Banking) lately, at least in my city.

(these guys did claim an M.B.A. was good to get for higher levels as time went on, but it was not required for entry - or even at all)

my niece is starting at 106K. I cannot fathom what someone right out of college can contribute that is worth that much but I guess I will learn. but the hours are brutal and she's part of a "team" that basically travels from client to client. Her typical work week-from what her father tells me is like this

Sunday evening-travel to client city. Monday-wed/Thursday, meet with client. Thursday-travel back to home office. Thursday-Friday-work on report for client. Saturday, prepare for trip to next client the following day.
 
I haven't seen many CFOs or CEOs with just an undergrad. They usually have a MBA or some other credential.

Depends at what Level. My late father was accepted into Harvard B school-didn't go. when he died he was the CEO of a decent sized company, and on the board of 10 more including 3 fortune 500 companies. His director fees from those three brought him more than being CEO of a company. My father in law has a degree from a Top Ivy engineering school. He ran a business and sold it. he never had an MBA. he was chairman of a group (years ago) of young CEOs that were all under-perhaps 50 or so. Few of them had MBAs: most were worth well over several million. Now, the companies they ran aren't ones you read about.

Now the guys you read about-yes, many have MBAs. If you want to be chairman of GE or P&G you might need an MBA or a JD--in fact lots of top executives have law degrees rather than business degrees. in fact, a JD is more useful I believe but its harder to get into a top law school and its a three year program than a two year
 
That is really odd. I wonder why that industry is changing so much, and what is the reason behind the trend?

I am not in finance, but this might be something to think about...
I got this from maybe 3 or 4 investment banking guys over the last 6-8 weeks. One was a recently hired B.S.

The feeling I get from them, is a B.S. gets you in the door and you start making money with your future income predominately based upon your abilities. Acquiring an M.B.A. down the road gives you stature. I have no idea how the M.B.A. itself effects one's income, and they seemed to allude to the M.B.A. as more a stature and position thing. The ability to make money (for the firm) seemed to be most prized attribute to have, if I read them right.
 
my niece is starting at 106K. I cannot fathom what someone right out of college can contribute that is worth that much but I guess I will learn. but the hours are brutal and she's part of a "team" that basically travels from client to client. Her typical work week-from what her father tells me is like this

Sunday evening-travel to client city. Monday-wed/Thursday, meet with client. Thursday-travel back to home office. Thursday-Friday-work on report for client. Saturday, prepare for trip to next client the following day.
So it seems the numbers I was told are in the ballpark.

If my guys are right, it seems your niece could be pulling down lower-mid six figures in a few years if she's got talent and drive. Amazing cash for a twenty-something out of an undergrad program!
 
Is anybody here an MBA?

Or does anybody have an opinion on the MBA?

Well.. that depends. What field are you working in? Or, do you plan to start your own company?
 
So it seems the numbers I was told are in the ballpark.

If my guys are right, it seems your niece could be pulling down lower-mid six figures in a few years if she's got talent and drive. Amazing cash for a twenty-something out of an undergrad program!

What is it exactly? Are they traders?
 
So it seems the numbers I was told are in the ballpark.

If my guys are right, it seems your niece could be pulling down lower-mid six figures in a few years if she's got talent and drive. Amazing cash for a twenty-something out of an undergrad program!

the people from my class in Law school who went to the biggest law firms on wall street 30+ years ago were offered starting salaries close to that. But these were people who had passed the bar exam and were thus licensed as attorneys and could be billed out at well over what they were paid. Regional firms-like the one I went to work at in Cincinnati, were starting people in the 40-60K range. they normally billed first year associates out at (this was 1985 or so) at 70-100 an hour and expected 1850 or so billable hours. Lots of those "billable hours" were discounted or marked down by the billing partner for various reasons but if you had 1500 of your hours billed you still made the partners of your firm a hefty hunk of change because your total compensation package might have been 75K after insurance benefits etc on top of the salary. at the big big firms there were often 2-5 associates for each partner and that is where the huge salaries come from: senior associates at the big wall street firms might have been pulling in 200K a year but were billing 2000 hours at 250 an hour and that is lots of money for the partners. senior associates at those big big city firms are usually top of the line attorneys by the time they reach that status (5-8 years out) and are working their asses off to make partner-in their current firm or to be hired away by a client or another firm.
 
the people from my class in Law school who went to the biggest law firms on wall street 30+ years ago were offered starting salaries close to that. But these were people who had passed the bar exam and were thus licensed as attorneys and could be billed out at well over what they were paid. Regional firms-like the one I went to work at in Cincinnati, were starting people in the 40-60K range. they normally billed first year associates out at (this was 1985 or so) at 70-100 an hour and expected 1850 or so billable hours. Lots of those "billable hours" were discounted or marked down by the billing partner for various reasons but if you had 1500 of your hours billed you still made the partners of your firm a hefty hunk of change because your total compensation package might have been 75K after insurance benefits etc on top of the salary. at the big big firms there were often 2-5 associates for each partner and that is where the huge salaries come from: senior associates at the big wall street firms might have been pulling in 200K a year but were billing 2000 hours at 250 an hour and that is lots of money for the partners. senior associates at those big big city firms are usually top of the line attorneys by the time they reach that status (5-8 years out) and are working their asses off to make partner-in their current firm or to be hired away by a client or another firm.

My eyes rolled back in my head... I am so tired of the billing and budgeting, which is another reason I am thinking of going industry. The budget constraints they put on us is so unreasonable sometimes.
 
I also wonder how going for the MBA is different from and undergrad. Is the class style a lot different? Is the homework and exam structure different?

From my understanding the MBA focuses a lot more on working on cases as well as working in groups. I would also ensure that an MBA is needed for the industry you want to enter. I would attend an information sessions for some universities you would like to go to, they can tell you more.
 
This is good advice. I am thinking about it, but I may not need it. I am actually thinking of changing my career path and getting a new job. I am an accountant considering going from public to industry.

Are you on the tax side of things or auditing?
 
What is it exactly? Are they traders?
The 3 or 4 guys I mentioned above were investment bankers, working for investment banking firms.

I don't know their exact sub-specialties (mergers & acquisitions, IPOs, etc.)

But they were describing getting into the investment banking firms on the first wrung of investment banking.

I've also run into financial analysts and traders, but did not include them in this discussion because I was speaking specifically of investment bankers.

FWIW, I once worked on an exchange floor as a side-step from engineering when I wanted a change from technology.
 
the people from my class in Law school who went to the biggest law firms on wall street 30+ years ago were offered starting salaries close to that. But these were people who had passed the bar exam and were thus licensed as attorneys and could be billed out at well over what they were paid. Regional firms-like the one I went to work at in Cincinnati, were starting people in the 40-60K range. they normally billed first year associates out at (this was 1985 or so) at 70-100 an hour and expected 1850 or so billable hours. Lots of those "billable hours" were discounted or marked down by the billing partner for various reasons but if you had 1500 of your hours billed you still made the partners of your firm a hefty hunk of change because your total compensation package might have been 75K after insurance benefits etc on top of the salary. at the big big firms there were often 2-5 associates for each partner and that is where the huge salaries come from: senior associates at the big wall street firms might have been pulling in 200K a year but were billing 2000 hours at 250 an hour and that is lots of money for the partners. senior associates at those big big city firms are usually top of the line attorneys by the time they reach that status (5-8 years out) and are working their asses off to make partner-in their current firm or to be hired away by a client or another firm.
Thanks for sharing that.

I can only add one recent data point:

A relative started several years ago right out of law school at $160K in Chicago. He was very near the top of his class at U of C.

(He also quit in 6 mos deciding big-law was not for him!)
 
My eyes rolled back in my head... I am so tired of the billing and budgeting, which is another reason I am thinking of going industry. The budget constraints they put on us is so unreasonable sometimes.

one of the main reasons why I joined the DOJ was that I was tired of the billing crap that often took more time and effort than actually trying cases (and that is what i really liked doing-trying cases). keeping track of every 10 minutes of your time in a 11 or 12 hour day. Its why the DOJ gets some of the very best attorneys in the USA-people who want to try cases and do what is right. Its a well know fact that if you work for a firm your first duty is to the firm and the client. at the DOJ we were told our first duty was justice. and this means-in some cases-I would settle a case even though I probably could have won it because that was the right thing to do. that wouldn't fly at a firm in many cases. but I had a case where a woman was injured working for a federal agency and unjustly fired. she was not "disabled" under the then definition of the term legally and since she was a temporary worker (some agencies have people who work-often for years-90 day appointments because they cannot get on as permanent workers) she didn't have contractual or union protections. I told the agency head that the woman was treated improperly and the top of the agency agreed as did the head of my section and we made the employee whole again. I met tons of people in the department who had top of the line credentials and who worked tons of hours for a lot less than they would make at say Sullivan and Cromwell or Cleary and Gottlieb but they liked trying cases, not worrying about every billable second.

that's another thing that you have to take into account in addition to accepting the cost of obtaining an MBA or a JD
 
Thanks for sharing that.

I can only add one recent data point:

A relative started several years ago right out of law school at $160K in Chicago. He was very near the top of his class at U of C.

(He also quit in 6 mos deciding big-law was not for him!)

yeah U of C is at the very very top of the pecking order in terms of Law schools. If you are order of the coif and/or law review at U of C, you are in contention for the very most prestigious jobs for young lawyers-from Supreme Court Clerk (U of C is almost as well represented in that exclusive club as Yale, Harvard and Stanford), or the big bucks law firms or as associate professors at law schools-including the really exclusive ones
 
my niece is starting at 106K. I cannot fathom what someone right out of college can contribute that is worth that much but I guess I will learn. but the hours are brutal and she's part of a "team" that basically travels from client to client. Her typical work week-from what her father tells me is like this

Sunday evening-travel to client city. Monday-wed/Thursday, meet with client. Thursday-travel back to home office. Thursday-Friday-work on report for client. Saturday, prepare for trip to next client the following day.

I'm not so sure it's compensation for value added/produced but compensation for potential (its retention) and of course the brutal work itinerary unless she's responsible for pulling in/maintaining big accounts/deals, in which case... why the **** indeed are they assigning someone fresh out of college to that?
 
I'm not so sure it's compensation for value added/produced but compensation for potential and of course the brutal work itinerary unless she's responsible for pulling in/maintaining big accounts/deals, in which case... why the **** indeed are they assigning someone fresh out of college to that?

the best i can figure is sort of being an apprentice as part of a team. doing lots of grunt work too.
 
Mostly tax

Going to be a lot of tax practices for sale in the not too distant future with all the boomers retiring/getting ready to retire. I did 9 years with bigger firms before buying my own 19 years ago. Worth it to get out from top heavy (at the time) firms. Stressful at times, but I don't regret it. Would not go into auditing now days as a small practitioner. You're going to have to evaluate trading if trading one set of bosses for another is worth it if you move to industry. I did a short stint in the private sector, hated it worse than anything.
 
yeah U of C is at the very very top of the pecking order in terms of Law schools. If you are order of the coif and/or law review at U of C, you are in contention for the very most prestigious jobs for young lawyers-from Supreme Court Clerk (U of C is almost as well represented in that exclusive club as Yale, Harvard and Stanford), or the big bucks law firms or as associate professors at law schools-including the really exclusive ones
I grew-up near U of C.

I can't describe the respect I have for the school and it's alumni.

They do believe in their "life of the mind" moniker, and they are not afraid to buck the trends and go it alone! Cf Milton Friedman and the "Chicago School"!

Last I checked a few years ago, the still had a "Great Books" option for undergrad! :mrgreen:
 
the best i can figure is sort of being an apprentice as part of a team. doing lots of grunt work too.

Yeah, that's pretty much what I'm figuring; it's the premium they're paying for keeping what they perceive as promising talent around and developing it.

Generally if you're making 100k+, you're doing something that probably makes your company more, barring stuff at the very top of the totem pole which is usually overcompensated to varying degrees as the larger firms go.
 
I was considering going for an MBA hard last year. Did my GMAT, got my applications together, but decided not to at the last minute for a few reasons:

1. My employer decided they didn't want to pay for it.
2. The earning potential after an MBA wasn't a big enough improvement over my earning potential before. (I'm already in a technical field)
3. I didn't want to spend 2+ years on a degree that I was doing in a subject I didn't massively enjoy, but instead was just to simply further my career. I'm strongly considering a more technical postgrad now in a more related subject that I'm more passionate about.

I think one of the biggest pro's of an MBA is the network that you can build from it. I've heard from other people that the most valuable things they got out of it were not necessarily what they learnt in the lectures, but from being around business minded, entrepreneurial people. Simply wasn't worth the $60k+ outlay to me though.
 
Yeah, that's pretty much what I'm figuring; it's the premium they're paying for keeping what they perceive as promising talent around and developing it.

Generally if you're making 100k+, you're doing something that probably makes your company more, barring stuff at the very top of the totem pole which is usually overcompensated to varying degrees as the larger firms go.

obviously a firm paying kids 100+K right out of college-kids who don't have a professional degree (like a mechanical engineer or a architectural degree (some schools BS allows you to sit for the boards) is because they think they are getting the brightest and most ambitious graduates. the interesting thing she told me-the firm that recruited her only interviewed students from her class who were varsity athletes.

and who had high grades. don't know if it was due to them figuring such people were good at balancing and budgeting their time well or because such kids are very competitive
 
the best i can figure is sort of being an apprentice as part of a team. doing lots of grunt work too.
One of the guys I spoke with was from DeLoitte, which is considered one of the top firms in my city. He also described team environments and travel.

She might be doing something similar to this:

Deloitte Corporate Finance LLC Analyst Program

They start newbs as analysts, but they are analysts in the investment banking sector and expected to advance through higher level investment banking positions in the firm.

Pretty cool stuff for only an undergrad! And decent starting salaries!
 
obviously a firm paying kids 100+K right out of college-kids who don't have a professional degree (like a mechanical engineer or a architectural degree (some schools BS allows you to sit for the boards) is because they think they are getting the brightest and most ambitious graduates. the interesting thing she told me-the firm that recruited her only interviewed students from her class who were varsity athletes.

and who had high grades. don't know if it was due to them figuring such people were good at balancing and budgeting their time well or because such kids are very competitive

That's probably it; that and they believe that she probably works well as part of a team (a common trait of athletes), particularly if she's expected to work with one as seems to be the case.

Competitive types are most certainly a double edged sword, and you _definitely_ don't want them working in a position where there's a lot of inter-reliance, coordination and teamwork unless they're able to broaden that sense of competitiveness to encompass their group/department/team etc as a whole so as not to create a toxic atmosphere/dynamic.


One of the guys I spoke with was from DeLoitte, which is considered one of the top firms in my city. He also described team environments and travel.

She might be doing something similar to this:

Deloitte Corporate Finance LLC Analyst Program

They start newbs as analysts, but they are analysts in the investment banking sector and expected to advance through higher level investment banking positions in the firm.

Pretty cool stuff for only an undergrad! And decent starting salaries!

Starting finance jobs tend to pay out pretty well, especially if you're going to be actually producing real, direct and tangible cash results for your firm in terms of trading/investing/speculating and fund management.
 
One of the guys I spoke with was from DeLoitte, which is considered one of the top firms in my city. He also described team environments and travel.

She might be doing something similar to this:

Deloitte Corporate Finance LLC Analyst Program

They start newbs as analysts, but they are analysts in the investment banking sector and expected to advance through higher level investment banking positions in the firm.

Pretty cool stuff for only an undergrad! And decent starting salaries!

yeah note the willingness to work long hours. I think that is the main point about having excellent GPAs. I knew dozens of people at yale who were absolutely brilliant but didn't have phi beta kappa keys or summa degrees. and some people who did weren't brilliant but they were smart and they worked their asses off. and that is what the firms such as the one you cited, want.

BB tomorrow night
 
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