Grad School Worth it or not?

50 Replies

Hey BP family,

I wanted to get yall's take on something. So next year I will be graduating from college with Bachelors degree in Finance. My plan after graduation is to start real estate investing as soon as possible. I plan on getting my real estate agent license now while in college so that I'll already have a job after graduating.

But here is the dilemma, my parents want me to go to grad school for my MBA after graduation. At this point I am very tired of school. I've questioned my decision to go to college since technically I don't need a degree to be a real estate gent or real estate investor at that, and now they want me to do 1 or 2 extra years of school for an MBA that I also don't need. I am just really ready to get started investing full time as soon as possible.

It doesn't make any sense to me for me to go an extra $10,000 in student debt to get an MBA that ultimately will not have any other purpose for me than being a back up plan.

So I guess my question is has anyone on here ever benefited from having an MBA as a part of their real estate investing career. And if so are the benefits worth the cost of the MBA?

@Joshua Manning  Unless you want to work for a corporation that requires an MBA to advance, it is not worth your time or money.  I did a two year full-time MBA program and honestly,  besides meeting a few great friends, I found it worthless.  The only way to learn the business is to be in it and not be taught by those who research it on the sidelines.   

There are TONS of great resources here on BP and else where. You'd be better off learning from those and/or working for a REI company in an area you want to invest.

I'm actually in the process of writing a book about this to help folks like you avoid what I did.

Feel free to send me a PM if you want any more details or have any other questions. 

Happy to help!  

@Joshua Manning , after graduating college and law school, I decided to get my MBA as added education--just in case I would need it.  Even though I have not used the degree for a career, I have used the lessons earned in MBA school and these lessons have helped me in my personal/professional life.  I do not regret it one bit.

I think it is always wise to get an education while you are young.  Even though you may never use your MBA, the fact is, companies will hold you as more marketable with a master's degree.  And in ten years or so, if you find the need to want to go back to school, it will be that much more difficult if you are married with children and a position that would not allow you to go back to school.  Personally, I cannot see that many downsides to obtaining your MBA.  Just my two cents.

If you do end up going back for your MBA, there are ways to incorporate classes that should have a benefit to your real estate career. Some schools have a real estate track or focus. Definitely take finance courses and find a school that has entrepreneurship classes.

I'm personally of the opinion that unless it's a top 25 program it's probably not worth your effort. I have a family member who's worked in finance for over 25 years and has told me his MBA is basically a placeholder, and his was paid for by a former employer.

@Caleb Heimsoth Second this. A much starter strategy is to get in with a good company that offers tuition remission or assistance. My master's was largely paid for by my employer, and I got valuable working experience in the field too. 

@Joshua Manning I have a grad degree and have found it very helpful in my field, it was also one of the best years of my life - great break from the working world and I got to try a new part of the country that ultimately became my home BUT I wouldn't recommend an MBA for you at this time for several reasons:
1. An MBA is a degree that makes the most impact after you have several years of actual work experience. Doesn't add much/any value as an entry level employee but can help take you to the next level of management and income once you have experience.

2. Any MBA degree that only costs $10k prob isn't worth the money unless you are talking after scholarships or it is an amazing state school? For Grad school, even more than for undergrad, the school' reputation in your industry is very important. The degree means little if not from a top school (not my opinion, just want I've been told) in your area

3. Please do not take on more debt or spend years of your life on more schooling just to please your parents. I have several friends literally crippled by school debt and others' expectations and it is a long road of unhappiness and taking crappy jobs just to "pay back the loans" - it will also limit your buying power as an investor

Sooo Don't do it! You're an adult, free to choose your own path. you will be happier and more successful following your own internal guidance rather than trying to please others. Best of luck!

@Joshua Manning I would echo what @Caleb Heimsoth claims. To me, Finance is one of those Undergrad programs that work more like a prolonged networking event. If you've made enough blips and have handshakes with the right people, the MBA should be covered. I wouldn't advise going further into debt without a guarantee that the value will follow. 

I don't believe that an MBA will give you information you are not able to find for free on the internet -- but it will give you connections that you are not able to find for free on the internet. You're the one that's graduating with a finance degree, show them why it's not (or is) worth it.   

With the rise of MOOC's, if you do end up needing it for your business, there should be more opportunities to getting that information than the standard multi-year program.  Hopefully the finance sector will be following the tech sector in that regard. 

 Good luck to you in whatever path you choose to take. 

@Joshua Manning

I feel like the advice from @Elizabeth Wilson  is a bit one-sided, although I don't entirely disagree. The MBA IS worthless for many students. But on the other hand, an MBA creates tremendous value for many others. Many people just get the degree because they see the average salary associated with it. This is a mistake. Most of the people I know who got an MBA without any work experience got an entry level job with a low salary. To me, getting an MBA right after undergrad basically says that you are having a hard time finding a job so you just went back to school.

On the other hand, if you get a good job and your employer encourages you to get your MBA AND pays for it, then you'd be an idiot not to do it. And as @Caleb Heimsoth & Account Closed said, if you can get your employer to pay for it, then all the better. (If that's the case, then your ROI would be very high.)

I would say that you shouldn't get the MBA without 2 - 5 years of work experience first. If you do decide to pursue it after that, then find a way to integrate your real estate business into your education. I'm currently getting my MBA and whenever I do a project or make a presentation, I make it about real estate investing. By the way, I've generated leads and potential partners doing this. And to be honest, I find that accounting, finance, marketing and economics courses are highly relevant to the real estate industry.

I mean, HELLO?! Is not the value created in large multifamily generated from increasing net operating income?! Pretty sure some of that is covered in business school..  haha 

@Joshua Manning  Federal courts decided last fall that MBA tuition is 100% tax deductible IF you already have a job when you start the MBA and the MBA is helping you progress in your career.  Of course, this means do an executive MBA program that allows you to have a job and doesn't require you drop out and go to class during the day.  I just finished my executive MBA at Duke and many of my classmates wrote off $60k a year for two years against their income.  I wrote off $25k total over two years because the GI Bill picked up the other $95k for me as a scholarship.

@Cary Ferguson Jr -  You are absolutely right.  I should not have said worthless because there are things that can be learned, but only that there are many other ways to do it that are cheaper and less time consuming.  

I started my MBA after working for 18 years in various industries and for myself. The degree was my second masters and the hope was that I'd learn how to manage and grow our REI business better.

I had a full scholarship to go and in retrospect wish I had spent those hours working on our business instead.

I think that self-study, networking and specific training/mentoring are the best avenues for knowledge in the REI. Or if you can work for someone in the industry that is a great way to be mentored and learn the market.

Just my two cents. :)

So I'm 26 now. graduated in 2013 from Olin business school at WashU with a major in finance. up until I found real estate I was also in the struggle bus to get an MBA vs. not. Honestly if you want to end up going full time as self-employed by 30 or something, I wouldn't get it. If you are a self learner you can do way better spending those days learning what you actually want to do.

However, I still think you should finish your degree and get a good starting position somewhere. That W2 income for a couple years is so important for building credit and capital. Even now I'm still at Wells Fargo in the MBS division (and plan on being here for a while) even though my rental income is 3x my salary.

Whatever networking you could do in grad school, do now in undergrad so not a huge loss there either. my 2 cents

@Joshua Manning the decision on an MBA should be based on career goals and income potential. In some professions, like teaching, you get an automatic increase in salary with a masters degree. In some companies, they only consider people with MBA for management positions. Doctors need even more schooling. In your case, your path is real estate. Real estate doesn't really require any degree. I know many brokers, flippers and buy-and-hold investors that have no post-secondary education. Education doesn't hurt you and can bolster your credentials, but in real estate it is more important to have experience and capital (either cash or access to credit). Going into the bank with 5 deals behind you and no college degree is better than no deals and an MBA.

Sadly sometimes people think an MBA or higher degree guarantees them a good job and high salary. There are plenty of out-of-work MBA holders. Sometimes too qualified for the jobs available and not qualified enough for the job they should be seeking. Middle managers are often the first to go in a recession.

Most of the wealthiest people in the world never even finished college. It is because they had burning ambition and realized time was their biggest asset. School got in the way of bigger plans. 

I have a bachelor degree in finance. I had even considered going for my MBA after undergrad but I was derailed. I had an uncle who was involved in real estate and asked me if I would like to join him in building houses. I was interested and just thought I would try it as a lark. Best move I ever made. Old classmates have been jealous for years as they slave behind the desk making the man richer.

Get your masters degree now.  Enjoy the college life a little longer.  Once you leave college its really hard to go back, speaking from experience here.  It was the best time of my life.

IMHO and I only have many decades of experience to draw on. An MBA is an educational scam and will be revealed in its own time. This is a profit center for the educational industry. The master plan is to keep the youth of the country in debt forever and pay interest to financial institutions. This affects your credit rating and FICO score thus prevents you fro achieving personal independence by being a slave to an employer that does not enable you a way out. You pay for many years and can never pay it off no mater what promotion you get. You become a slave to big business. Your credibility never grows. This is a long term loser plan unless you are planning on being a corporate slave for life.

Make the decision on your own, because you are the one paying for it. Would you buy a car just because someone told you to? What about a house? If no to both then why more specialized education that you'll likely never use? If you just want the college experience you can get that for free by just hanging out on campus at the college. Just my 2 cents

If you have an undergraduate degree in finance and have some basic accounting knowledge the MBA isn't going to add a ton of value unless it is from a top school.  I think you're better off working for some time period and gathering some capital to get your investments going.  Capital accumulates and compounds so having more of it now will benefit you long term.  

I'm a lifelong learner and think school should be part of what you do for your whole life.  I've rarely met anyone that regretted knowing more.  There is certainly a cost/benefit here though.

In the real world sales and marketing skills are very valuable.  Since you already have the finance piece covered I'd probably focus some on those areas if you decide to do more school.  

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