Toxic Workplaces: How to Stay Positive
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Keeping a positive mindset in a toxic work environment can be an extremely difficult task. I've spent some time in toxic work places and motivating workplaces and there is a vast difference between employee moral …

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The MBA: To do or Not to Do

Submitted by on Wednesday, 12 May 2010No Comment
The MBA: To do or Not to Do

Ever since I obtained my MBA i’ve been swarmed with people asking me about whether they should do their MBA or not. Is it worth the investment? What used to be a few thousand dollars now can cost anywhere from $50,000 to $200,000 to complete. Is it really worth that price tag?

There are a few things you really need to understand before entering the program especially what you’re looking to get out of. I often ask people “why do you want to do your MBA?” and get the generic response of it might help them get a better job, more pay or solve their “I hate my current job” syndrome. The truth be told, its not a magic potion. The MBA really is a skill set that you can add to your toolkit. The benefits would really depend on the independent person. First ask yourself the main reason why you are doing it. If you think its a salary increase then a simple NPV calculation would do. To do this you need a few numbers including what you make now, what you can expect to make (a good indication is the annual salary survey the school publishes) and the length of time of the program as well as the good old discount rate. Historically the real rate of return in Canada has hovered around 3% so lets use that for comparison. If you make $70,000 today in year 1, wont make cash for 2 years due to your program but rather have a cash out flow (-$50,000 per year) and expect to make $100,000 after graduating in year 4 to 10 ┬áthen you have an NPV of $545,233 but lets say you continue to make $70,000 for the 10 years then you have an NPV of $597,114 in which cases financially the MBA is not worth it. The only way it’ll be worth it if your NPV is more than $597,114 in this case you would need to be making around $110,000 to make it worth it (you can find how to do a cash flow statement online).

If your goal is to further your education and gain broad exposure then I think an MBA will be most beneficial to those with a non business background. When I was in business school I often heard a lot of my fellow students with a business background commenting on how this is repetitive or of little value to them contrary to myself who found a lot of value in it given I have an engineering background.

One common trend that I notice while working in the corporate world and often you might hear your professors mention that an MBA is becoming the standard degree required to move into upper management and perhaps one day the standard degree required for a corporation to even look at you for an entry level role. Therefore strategically I do feel the MBA has value for long term sustainability of ones career. Furthermore to really distinguish yourself from others you should supplement your MBA with something else of value like a CA/CMA/CFA/PMP which are all respected elite designations and all focus on some degree of leadership and strategy.

Whatever decision you do make, think it through, make it with a clear conscience and think strategically about what is best for your future. Keep a positive outlook and remember short-term pain could mean long-term gain.

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