MBA: A Realistic Guide for Aspiring Professionals
Part 1 - What you need to know before you apply
With MBA applications surging in response to a tough labor market, I've been getting many questions about whether an MBA is worth it. While I know most of you probably don’t think of this topic as one of my niches, I’ve got plenty of thoughts to share—and I’m diving in anyway! So, consider this the start of a series where we’ll explore everything you need to know about the MBA, whether you need it, how to get the most of the program.
These views are based on my own experiences and opinions. Each person’s career journey is unique, so take what resonates with you.
What is an MBA?
The story of the Masters in Business Administration (MBA) program traces back to the turn of the 20th century, when Dartmouth College’s Tuck School of Business, founded in 1900, launched the first advanced business degree—a Master of Science in Commerce. This degree laid the groundwork for what would become the world’s first formalized management education. Eight years later, in 1908, Harvard Business School created the first MBA program. With a faculty of 15 and an initial class of 80, it focused on teaching future managers the fundamentals of business practices.
By the 1980s and 1990s, corporate M&As and globalization dominated the economy, creating a need for talent capable of navigating these increasingly complex financial environments. In response, MBA programs adapted, with schools like NYU and Columbia gaining reputations for their finance tracks. Investment banks began recruiting MBAs to fill analyst roles, as specialized finance courses prepared graduates as prime candidates for Wall Street. At the same time, consulting firms like McKinsey and Boston Consulting Group sought out MBAs for their analytical and strategic abilities, recruiting them to solve high-stakes business challenges.
Furthermore, MBA programs introduced structured recruiting processes to connect students with coveted internships and full-time positions at investment banks and consultancies. In many ways, MBAs became “factories” that produce talents for investment banking (IB) and consulting—one could almost call the degree a “Master of M&A, LBO, and Business Casing.”
Aspiring professionals are attracted to these programs for high salaries and the foundation they provide for becoming high-power career tracks—or advancing to the CEO’s seat—while employers rely on MBA graduates to excel in demanding roles. Although IB and consulting remain the most common paths today, technology is rapidly emerging as a close contender.
Get MBA for the right reasons
Getting an MBA can be incredibly valuable—but only if you're doing it for the right reasons. If you're aiming for a dramatic career pivot into a high-caliber profession, an MBA can be a powerful tool. From my experience, those who know their goals and stay focused got the highest returns on their investment.
But let’s be honest: there are a lot of misguided reasons why people pursue an MBA. Some think it will make up for a non-target undergrad background, or they hope it will fix dissatisfaction with their current job. Spoiler alert: it won't. If anything, it could leave you in a higher-paying job but with more suffering.
Going in solely for a higher salary without understanding what it takes to succeed in fields like IB or consulting often leads to disappointment. Of the 55% of my class who went into IB or consulting, maybe less than 10% are still in the professions six years after graduation. The allure of a strong starting salary hooks many, but few consider the long-term earnings picture. Most end up in corporate roles that I argue you could have gotten without an MBA (but might only take more years)—few make it to a Managing Director in IB or a partner at a consultancies.
During my conversations with classmates at my MBA orientation, I was struck by how many of them lacked clear post-MBA goals. When I asked what they were targeting, many responded, “I don’t know, maybe investment banking or consulting.” It’s surprising that people would spend over $300,000 just to “explore options.” The reality is, by the time recruiting begins a few months in, the window to decide is small, and the aforementioned usually ends up getting neither IB or consulting.
An MBA is a big investment, and without clear goals and focus, you will be very disappointed. It's important for you to know why you want an MBA and what you hope to achieve from it, as you can pursue this degree once in your life.
MBA is an expensive decision
An MBA costs you money, a lot of it. To start, there’s the tuition, which has steadily climbed over the years. Tuition alone is around $150,000 at Harvard, $175,000 at Stanford, and $170,000 at Wharton1. And this doesn’t include the class trips and networking events often considered essential to the MBA experience. These excursions can add up to another 5-figure expense, as students tend to spend heavily on lifestyle and social activities.
Then there are living expenses. Many top programs are located in high-cost cities, where housing, food, and transportation add up quickly over two years.
But perhaps the most substantial cost is the foregone salary. For those leaving high-paying roles, stepping away for two years can mean missing out on significant income that could otherwise go toward paying down debt, investing, or supporting a family.
Beyond the salary, there’s also the opportunity cost of the work experience you miss out on, especially if you plan to return to your prior profession. Those two years could have been spent building expertise or advancing to higher roles.
I see an MBA as buying yourself two years to grow into a stronger professional. You’re buying the opportunity to signal to the world that you’re open to roles in a new field while you spend these two years building the needed foundational skills. The school provides you with the “sales channel” to top employers in those fields.
However, no sales channel can compensate if the product—you—isn’t compelling. And that brings me to my next point.
Avoid “garbage-in garbage-out”
An MBA program is ultimately about what you make of it; it won’t inherently transform you into top talent. Instead, it offers access—to employers, alumni, and professors.
You could spend your entire week partying, or you could stack your schedule with case competitions and mock case interviews to stay focused on landing that product manager role at your dream tech company. Thanks to non-grade disclosure policies, you’ll graduate regardless. But I argue your career prospects will diverge significantly based on how you chose to use those two years. Remember: MBA takes two years, but you have decades of career ahead of you after MBA, invest in yourself for the long-term.
For IB and consulting, landing a job is relatively straightforward compared to private (PE), hedge fund (HF) or venture capital (VC). However, the real grind begins once you’re in the role.
With the “Holy Trio” of PE, VC, and HF, jobs are harder to secure, but the on-the-job lifestyle tends to be more manageable. It comes down to whether you want the pain now or later. Most will choose the former, and that’s why most MBA programs send half or more than half of their class to IB and consulting, not to the “Holy Trio.”
The common perception is that you don’t learn much during MBA in the classroom, but I disagree. Many enter business school with a focus on fun—which is their choice, as it’s their time and money. Yet those who make an effort to learn and seek guidance from the right classmates, alumni and professors can gain a lot.
Not the smartest will make the most money, but actively seeking wisdom from those who’ve walked the path you want to follow can make all the difference as you navigate corporate advancement, investment acumen or entrepreneurship post-MBA.
It’s more than just overall MBA ranking
It’s a mistake to blindly choose M7 or make decision based on USNEWS ranking. You need to under schools’ relative strength in relation to your goal.
For example, the location of your school plays a major role in shaping the network you’ll become a part of. Alumni networks tend to cluster geographically: Berkeley Haas alumni are largely based in California, NYU Stern graduates cluster in the Northeast, and UT Austin McCombs alumni dominate Texas.
The network you buy into is for life, comprising both your classmates and alumni who earned their MBA at your school. Ideally, it’s best to attend a school located in a region known for the industry you want to pursue. For example, if you’re set on a career in tech or venture capital, attending Stanford or Berkeley and living in Silicon Valley is ideal. That said, personal circumstances can change over time that geography loses its relevance.
Schools also have industry strengths, typically as a result of their location. For tech and venture capital, Haas and Stanford are strongholds (along with other California-based schools like UCLA and USC). McCombs likely has a robust presence in Houston’s energy sector. In finance, schools like NYU, Columbia, Wharton, Booth, and MIT Sloan excel, providing access to top finance networks and opportunities in major financial hubs.
For management consulting, Booth, Kellogg, Harvard, Sloan, and Tuck are well-regarded. Those looking toward nonprofit careers often turn to Yale SOM. If you’re interested in working in the southern U.S., Darden (UVA) and Fuqua (Duke) might be stronger options.
I won’t dive into my niche of public equity research and investing, because I have discussed it in a prior article.
Each MBA program’s location and industry focus shape not only the opportunities you’ll have in school but also the network and career paths accessible long after you graduate. Make sure you don’t choose based solely on overall ranking.
I try not to advocate for any particular school, but the point here is that if you receive an offer from both Harvard and Columbia and you want to pursue public equity investing, it’s not definitive that you should choose Harvard, the higher-ranked school.
Why MBA remains required for some paths?
Mutual funds often have associate programs that last two to three years before asking associates to leave. But why is that? Why not promote associates who have already adapted to the firm’s investment process and understand the expectations of portfolio managers? Unfortunately, the mutual fund industry is as much about sales as it is about beating the index, if not more. Credentials like a CFA or an MBA help bolster a fund manager’s credibility with limited partners (LPs), who tend to place greater trust in candidates with recognized qualifications and titles.
This reliance on credentials is why mutual funds rather hire analysts who hold a CFA and/or an MBA from prestigious schools like Stanford, Harvard, or Wharton. These credentials make team members look great in marketing materials, making them valuable assets to the fund’s image. Whether they beat indices, the only reason why active investing deserves to exist, is almost irrelevant.
Investment banking is another industry known for its rigid recruiting practices. Missing the entry point straight out of undergrad often means that obtaining an MBA is the last structured way to break in as an associate. While there are other paths into investment banking, they require significant persistence and typically take more time, with lower chances of success.
The same is true in management consulting, where an MBA serves as a key credibility marker, particularly when consultants are tasked with securing new clients. Clients often perceive a top MBA as a sign of expertise, signaling that the consultant has been vetted through a rigorous education and belongs to an elite network.
As you can see, despite some areas of the corporate world becoming more merit-based (such as technology), some paths remain rigid and brand-focused. This creates an environment where professionals, regardless of their actual skills or experience, feel compelled to obtain an MBA to enter and advance, which, of course, is good cash flow for the business schools.
Conclusion
When considering whether an MBA is worth it, avoid relying solely on the opinions of current students and alumni. People who have an MBA are naturally biased - they’re inclined to justify their investment. They’re likely to feel that they gained something valuable from the experience, and they probably did. I think my MBA was worth it, for example. See? I’m biased too.
But just because others found value doesn’t mean an MBA is the only way to reach your goal. Many successful people achieve the same outcomes without ever setting foot in an MBA classroom. So, when seeking advice on whether an MBA is the right path for you, remember this inherent bias.
Thanks for reading! Let me know what topics around MBA you want me to dive into.
Next time, I’ll discuss the learning opportunities that happen both inside and outside of business school during your MBA. Talk to you later.
If you want to advertise on my newsletter, contact me 👇
Resources for your public equity job search:
Research process and financial modeling (10% off using my code in link)
Check out my other published articles and resources:
📇 Connect with me: Instagram | Twitter | YouTube | LinkedIn
If you enjoyed this article, please subscribe and share it with your friends/colleagues. Sharing is what helps us grow! Thank you. 🙏
per Perplexity
I graduated with a M.Sc. in finance but I’ve always eyed an MBA at a highly ranked school. Is my approach of getting my MBA after getting M.Sc. in Finance a practical approach ?