Comment by wenc | Hacker News Reader

Comment by wenc | Hacker News Reader

I think my take-away is that a dollar consistently removed from one's budget and invested will compound and hence there exists a nonlinear relationship between budget adjustments and runway. It's definitely a relationship that people desiring financial independence can exploit.

However, there's also time value to different classes of purchases. For instance, spending money acquiring certain skills early in life allows time for those skills to compound while the same investment later in life may have no utility.

The commonly cited example is an MBA: getting an MBA in early career provides more leverage than if it was obtained in mid career or later. A late career MBA in most cases has vastly diminished signalling/credentialing value.

Frugality (in early life) that optimizes for the date of financial independence (and runway) is not a bad idea, but seems to me that employed in isolation, it may increase the chances of landing on a local optimum when other more favorable optima may exist.

People often talk about time value of money... but there's also the time value of time/age.

> A late career MBA in most cases has vastly diminished signalling/credentialing value.

That anecdote seems to insinuate the essence of an MBA offers no substantive value, nor does even the achievement of the accreditation itself. It is the timing of the latter which projects the value.

Is that a really low or a really high bar?

A large part of the MBA is access to a network of rich/ambitious/well-connected people. The earlier you have your MBA, the more time you have to take advantage of it.

This is reasoning that I've heard from MBAs themselves (I don't have an MBA myself, so would welcome any thoughts from actual MBA holders). The value of an MBA is in signaling, networking and knowledge, roughly in that order.

In late career, assuming you're doing well-enough that you'd want to pursue an MBA, you'd already have amassed quite a bit of business knowledge from the school of hard knocks, that likely exceeds the theory b-schools can teach (although they can definitely still fill in knowledge gaps say in finance or strategy etc.). The marginal value of the theory is even less if you majored in business in college -- the difference between a BBA and an MBA in terms of coursework is generally not substantial.

In late career, your experience and success (in different roles) is a generally stronger signal than credentials.

In late career, you'd have developed a fairly good network unless you're looking to pivot to a totally different field or industry.

At the time I got mine, it was sort of a necessary stamp to switch from the engineering I was doing in the oil business to a different role in the computer business. But a long time ago. So maybe signaling, definitely credentialing, some knowledge.

For those looking to switch from fairly pedestrian post-liberal arts jobs, the MBA was huge in many cases.

The networking effect has never been big for me. I'm fine with having gotten an MBA. Degrees like the one I got were less expensive in those days and it landed me in a good place. But TBH, my undergrad (from a good school) has probably opened more doors than my MBA ever did. (Had I gone into finance, the situation might have been different.)

I got my MBA mid-career but my undergrad was in music and I switched careers 10 yrs out of college. So, while I'd amassed a healthy amount of business knowledge, the MBA taught me things I'd not learned on the job.

That said, for many in my MBA cohort who had majored in business in undergrad, most I talked to said they weren't learning anything they didn't already know, save perhaps how to use their financial calculators in novel ways.

Lends credence to the 'signaling' of an MBA, more than anything else.

Whether it's for the essence or the achievement of a particular degree, getting a better job earlier in life has substantial effects on lifetime earnings. Whatever the credential gets you, for whatever reason, it's advantageous to have more time to take advantage of it.

The parent could have used MD (there are some people who switch careers to become doctors in their 30s) and it would be the same... just having a chance to have been a doctor for longer will put you ahead.

I'm not sure the comment is really fair but, in general, unless a company is paying for an Exec MBA program for a mid-level exec being groomed for higher level, a mid/late career MBA doesn't make a lot of sense in opportunity cost, etc.

Even if you take out the signaling/credentialing value generally, absent someone trying to make a real career shift (which becomes more difficult as you get older), it's not clear what an MBA--rather than maybe a couple of focused classes--buy you after some point. (But, for that matter, a PhD or other new degree probably buys you less too at some point.)

Reply on news.ycombinator.com