I call it the MBA money trap because thousands of kids a year chase that, sometimes very expensive, MBA to find themselves deep in debt with one of the most popular degrees in education. I think many kids in high school get sold this dream with the thinking that as soon as they have it, job offers will come pouring in.
Nothing could be further from the truth. Many years ago, I thought of pursuing this charming piece of paper only to find out, what I truly wanted out of life, I couldn’t get through the MBA route. I became seduced by the MBA vision of the mid-level executive sitting in the corner office, not doing a whole lot for top pay.
Or, maybe it was the lure of the type “A” personality portrayed on TV of what an MBA holder looks like. Either way, what I found out when I peeked behind the curtain was something much different. I saw a world of kids getting out of school, deep in debt, having no job to support their degree, and working at the drive-through at McDonald’s because their first student loan payment was due and they still hadn’t found a job in their field.
Financial Advice for College #1 | The market for MBA graduates is way over-saturated.
I first started noticing some articles that the market for that degree had become saturated unless you were a top graduate of one of the Ivory League schools. That was quite a few years ago. When I started researching this article, I found pretty much the same sentiment.
Schools were cranking out MDA degrees faster than the job market could place them. This is terrible news for any kid currently enrolled, and it’s only going to get worse as long as schools are making money off of selling the degree. As long as our media and culture continue to push the stereotypical idea of the highly paid, underworked, type “A” personality executive, the problem will not likely get solved.
There is just too much money being made selling education to tell anyone ‘Don’t Do It!’ I found an article published by Business.com. They see the market as flooded by the lower level. Everyone is competing for a few positions, and the rest are accepting shrinking salaries to try and get employed.
Financial Advice for College #2 | If you are trying to be an entrepreneur, an MBA won’t give you the skills you need.
Many MBA programs don’t concentrate on entrepreneurial skills. Some do. Stanford University has an entrepreneurial program. You can listen to many of the talks on a podcast called “EntrepreneurialThoughtLeaders.” I’ve listened to this podcast, and it is excellent. Their program for entrepreneurship is most likely excellent also, but it is Stanford. This is a top-notch school and ranks as one of the best in the country.
If you get in, you will most likely get an excellent education and a hefty bill for that education to boot. If you are looking to be an entrepreneur, the MBA will be the wrong direction to follow. Read some books. Listen to some podcasts.
Give yourself your education and save the thousands of dollars of debt you will need to pay off. Make imaginary payments to yourself and put that money into investments while you are young. That money will go to better use than a degree you can’t use. Or get a degree in a hot in demand area like the tech field.
Financial Advice for College #3 | You will most likely be deep in debt paying off a degree you can’t use.
College here in the United States isn’t cheap. And, it’s getting worse as you go along. Our educational system is a capitalist system. Colleges are there to make money. Money in the form of student loans is easier to get now than ever before. This is a dangerous mix causing a ton of student debt just piling up.
If you are getting a degree you can’t find work for, is it worth getting the degree? Then we will stack on the fact that those payments will begin to come due at regular intervals. If you aren’t working in the field in which you are trained, it’s like buying a car you can’t drive, but you have a loan, and you need to make those monthly payments. Maybe the car looks good parked in the driveway.
Financial Advice for College #4 | Bootstrap your own company instead of wasting time with college.
Give yourself your education and bootstrap your company as you go along. Some of the smartest business people in the world advise failing until you succeed. They say failing is the best teacher.
Give yourself the ultimate education by actually running a business. You will probably be happier in the long run. I found an article at Entrepreuer.com listing some of the best resources for free entrepreneurship education. Here is the link.
The significant part about this list is that they are all free and some of them are from top-notch universities like MIT. (it doesn’t get much more top-notch than MIT) After you have some education under your belt, come up with an idea and do a little research to see if there is a need for it. You don’t want to spend a ton of time creating something no one will buy.
Then build a small version of what you want to sell and start doing it. Do you want to sell a service? Get out and sell the service before you get in deep and start hiring people and spending a ton of cash. Save your money on an MBA and go out and build something.
Financial Advice for College #5 | Get a specialized degree then sidestep your way into business management.
It seems businesses these days would rather have specific degrees in specific areas of expertise. If you are in the IT field, it would be probably easier to get a job in the IT field. (which is clamoring for people) Then, you may be able to sidestep into a management position with your IT degree and just some general business savvy and self-learned knowledge.
A core part of business management involves knowing your market and understanding how the product fits into that market. The specialized knowledge from an IT degree would be much more beneficial than a full-blown MBA. Plus, if you have student loans and need to start supporting yourself right out of school, an IT degree will get you a job much faster.
The amount you will spend to get that MBA is not worth the return. That money is better to spend starting a company or getting a degree in a separate field than proving yourself into a management position. I don’t like seeing people getting suckered into financial traps and I think the cost of pursuing the MBA is a financial trap. I believe you can earn more money and have a better life with the money you will spend on the MBA education.
Take that money and spend it getting yourself financially free and living a life of your design. The path of the MBA is to a job with a lack of freedom.
Till next time, be safe,
Kevin