You wasted $150,000 on an education you coulda got for $1.50 in late fees at the public library. Good Will Hunting
I recently finished reading The Personal MBA. I say “finished”, but it’s not really a book you read front-to-back and then put away. It has already been revisited, reread, and dogeared quite a few times. The Personal MBA is a reference book; the kind you come back to over and over for sage advice in specific situations.
I was pretty blown away.
I had heard of the book awhile back but had ignored it for awhile because of the title. I confess I am biased against the value of an MBA, and that stopped me from picking up the book.
But I’m really glad I finally did. I can see the value of the MBA curriculum. I was wrong to dismiss it. But I still think MBA programs should slowly die and are a huge waste of money. Their value is in the piece of paper you get, not what you learn. Worse still, the industry sometimes uses this credential as a proxy for leadership. An MBA degree does not a leader make.
And I got about 95% of what you learn for $10 from a book instead of $30,000 plus.
Experience and Apprenticeship
The best way to learn is by doing. This is more or less true in different fields. In math, there’s a huge need to understand a lot of theory. But in business, a lot of learning is experiential. Is it valuable to understand a Profit and Loss Statement and things like Gross Profit Margin? Sure, but you don’t need a class in it. You need to run a business and have the need to track it over time to ensure the business can survive and grow.
Business schools have it backwards. 4 Undergrad years of theory and classroom learning and maybe a 3 or 6 month internship is not the solution. And an MBA is usually just classes with no internship. And yes, I know schools have projects and such to be more practical, but they’re just not real if no money is involved. As quoted in the Personal MBA:
A business is a repeatable process that makes money. Everything else is a hobby.
A better solution is an apprenticeship of a couple of years at a real business with, at most, a few months of classroom time.
And you know what? You can do that without a grad or undergrad program, and certainly without paying tens of thousands of dollars.
529s and Trends
There are different kinds of majors in college these days. I’ve tried to define them before as Careers and Fields, and I came up with this metric:
If there are PhDs in a college major, and those PhDs perform the same work as an undergrad at a more advanced level, then it’s a field. Everything else is a career.
Some examples: Physics, Economics, Psychology, Math, Engineering, and Education are all fields. Business, Marketing, Journalism, Hospitality, Communications are all careers. There’s some overlap here (like engineering and education that can be both), but in general it’s a useful way to think about a college major.
When I think of the insane costs of college and graduate degrees these days, I end up feeling fairly conflicted. On the one hand, there’s a huge amount of value. On the other, I can’t justify the cost.
Separating college experiences between Fields and Careers resolves this conflict for me. For the most part, spending huge sums of money studying for a career is not worth it. But the same money can be tremendously valuable in a field.
Said another way, if my kid is interested in marketing, or business, or the hospitality industry, or even computer programing, I don’t want them to have to go to four years of school before they can get started. I want to get them started in their career at 18. There’s no better way to learn how to run a business.. then by running a business. And there’s no shortage of ideas and energy in an 18 year old kid.
On the other hand, if my kid wants to do physics then they should probably go to university for that.
The reason Careers became majors in the first place is because the college degree became a credential for employers. I think over the next couple of decades we’ll see some changes in this trend. The credential is already all but worthless in today’s job market because everyone has one.
I hope this happens, and I want to plan for it. We’ve got 529 college funds for our 3 kids, but I also want to have pots of money available to them for other ventures. The 529 money will be there for college if they need it. But if they want to start a business instead or do an apprenticeship in a career they like, I’d like to give them a pile of books and a pile of money.