Never assume that just because a person holds an MBA, he knows how to run a business; the road is littered with MBA-sporting CEOs who ignominiously drove their companies into the ground. Conversely, there are just as many CEOs — guys like Microsoft’s Bill Gates and Oracle’s Larry Ellison — who achieved phenomenal success without the fancy business school sheepskin.
The bottom line: If guys like Gates and Ellison can successfully run some of America’s biggest companies sans an MBA, then it certainly follows that mastery of complex hokey financial theories aren’t required for you to be an effective household CEO either.
Photo Credit: Patricia Drury
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I know plenty of people that have MBAs in finance, but they can’t even handle their own money! They’re wasting it on leases and rent-to-own furniture. Sometimes I simply can’t believe it.
Passion drives business, having a good foundation doesn’t hurt though.
Gates and Ellison may not have MBAs, but I bet a lot of their employees do. You are right, it takes more than education to run a company. I have known many people who did not even graduate from high school who are very effective entrepreneurs. Education, grades and degrees can be overrated when it comes to running a business.
I do have an MBA, but I can’t say it has helped me manage the household finances. I think you need common sense and the ability to not spend.
@Life: Rent-to-own furniture, huh? Yikes. That *is* bad.
@Jenna: Great point. If my word limit was 110 words instead of 100, I would add that to my article!
@krantcents: Yep. All true. I think Jenna really nailed it when she said passion drives business.
@Everyday: To run a household effectively, I agree you need common sense. I’d also argue a strong sense of personal responsibility too.
Sometimes an elite education and high IQ can doom a business to failure due to overconfidence. Look at the crash of the financial industry when mortgage backed securities and their derivatives crashed. The best and brightest created models where that could never happen. The models were wrong.
The last person I spoke to about money with an MBA told me they like their mortgage because of the tax deduction and I’m pretty sure their house taxes alone would qualify them to itemize.
You’re right as usual.
I have an MBA, and one of my concentrations was Finance. But yes, I still agree with you Len:) It doesn’t take an MBA to be a responsible CEO of one’s own financial life. At the most basic level takes the understanding of, and the ability to: make money, spend less than you make, then take that difference and invest it. Do that, and you’re on track.
Dave Ramsey said on his show a few weeks ago “I love MBA’s. I have quite a few that work for me!” (I think he only has an undergrad btw.)
One thing in favor of MBA is it can get your foot inside the door. The rest can be history when it happens with or without MBA. If someone is successful with MBA, then the MBA gets in the forefront. Otherwise, success does not and must not demand MBA.
The comments I’ve read so far covers practically all the points!
I think we all can concluded that it’s the person behind piece of paper that makes the difference and not the paper itself (even if the paper does have the name Harvard somewhere on it)…
Len – I completely agree. An MBA is nothing more than a piece of paper. I was listening to a finance radio show and a guy called in who was almost 100k in credit card debt. Long story short, he was some MBA who thought that he could take out an intro rate credit card, invest the money in stocks, then pay it off when the time came. Unfortunately for him, the market crashed on him, and he ended up holding the bag. A regular guy would have thought that too risky.
The interesting part about graduate school (MBA-finance), it has NOTHING TO DO WITH PERSONAL FINANCE.My dad was a successful entrepreneur with a bachelors in electrical engineering.
@Darwin: I know. Those models were junk.
@First Gen: “You’re right as usual.” I saved that comment (Loved the “as usual” part!) and smugly sent it to the Honeybee. She won’t buy it though.
@Squirrelers: Yep, it’s definitely not rocket science. I think a lot of folks think otherwise, though.
@Pineview: LOL! That’s a good one.
@Doable: And it’s a good thing success doesn’t require an MBA, or there would be a lot more failure in America than there is right now!
@Money: I agree. When I do an interview, the degree is only used in the very rare case where I need a “tie-breaker” between candidates that are evenly matched in every other way.
@Jeff: Yikes. Why am I not surprised at all by that?
@Barb: That is another very good point. Perhaps universities should add a 500 level course in Personal Finance to their curricula?
No doubt, but for many the MBA isn’t about a qualification for a particular job, it’s about wanting to continue one’s study post graduate. Not every person who studies the Bible plans to be a religious leader, either, right?
I won’t argue with that statement, Joe.
this is the same with any facet of life. can’t expect everyone to be an expert or even be good at what they do because of their degree. the truth is that most people could pretty much wipe their ass with their degree.
example, my cousin has an MBA and has utterly failed in the business world as an accountant. however, I with one year down in business school, have made thousands with nothing but common sense and perhaps business sense.
so how does one person who is a genius when it comes to booksmarts ( my cousin) fail and I ( 82 average in high school) flourish and already have a stock portfolio double the size of hers?
degrees mean nothing but i’ve gotta get it….
Be careful, Keith. While I am glad you have done well so far, your track record is just a wee bit short to be making comparisons to your cousin. A lot of people make money over the relative short-haul … the trick is to do it over the long march of time. Best wishes on your continued success!
An MBA is still useful and you will really learn a lot from it – No doubt about that. The knowledge you learned will help you on management, including managing people, sales, marketing and raising funds. These are the benefits of MBA – must have in any financial sector.