100 Words On: Why You Don’t Need an MBA to Manage Your Finances

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


  1. 1


    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.

  2. 3


    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.

  3. 5


    @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.

  4. 6


    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.

  5. 7


    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.

  6. 8


    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.

  7. 10


    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.

  8. 11


    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)…

  9. 12


    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.

  10. 13


    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.

  11. 14


    @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?

  12. 15


    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?

  13. 17

    keithrackett says

    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….

    • 18

      Len Penzo says

      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!

  14. 19


    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.

  15. 21


    So true, Len. I was shocked one day when talking to the CFO of the last company I worked for. She admitted that she took all of her investments and moved them to cash at the beginning of the most recent recession….worse yet, she STOPPED CONTRIBUTING!!!!

    I couldn’t believe my ears…she is supposed to be the smart, educated one. That was a big eye-opener for me.

  16. 22


    The MBA was originally intended to complement a technical undergrad degree–say engineering–to help the recipient succeed in management as his or her career advanced. Over time, it morphed into little more than a ticket to a higher salary. I have a MBA (and a BS Chemical Engineering). While the MBA curriculum was all new to me and so worthwhile, I could never understand how anyone who had a decent business undergrad education could get a lot of incremental value out of it. Incremental knowledge value, I mean.

  17. 23

    Frugal Pediatrician says

    My husband and I went to medical school across the river at Harvard Med, and we were always so amazed at how NICE HBS was. Our medical school facilities were certainly nice enough, but we called the business school “the country club.” We would wander over there sometimes and wonder what those nicely dressed students were studying and why their dining hall was so nice. We of course were not allowed in (medical students). Our medical curriculum was certainly not cut throat like Hopkins, but we were working really hard those 5 years. I still wonder what those kids were doing the 2-3 years they get their MBA. Honestly, they were just hanging out and networking. Really.

  18. 25


    Couldn’t agree more (and I am a professor in a Business School). From what I’ve seen, an MBA is like a Boss suit – it is a label rather than a foundation of skill and competence. In fact one of our MBA students jokingly said that he’ll sue the Business School because his company’s profits have declined since he got the degree :).

  19. 26

    David C. says

    I know an MBA who decided he wanted to start all over after his divorce, so he walked away from a mortgage and a car loan, letting them go into foreclosure. He then filed bankruptcy shortly afterward. I was totally stunned as he is a rather smart guy.

    A degree doesn’t guarantee knowledge or judgement, as I went to college with a future lawyer, who I would be terrified to have working my case, even if it was a traffic ticket.

  20. 27

    Karen Kinnane says

    I run estate sales and did one for the Mother of a Marketing Professor in Princeton’s MBA program. I sat with the two of them at the Mom’s kitchen table, handed them a contract, timeline and list of information about the proposed sale. I explained pricing, discounts as the sale progressed, bundling of items, when money was to be counted, picking up items from floor as sale progressed to fill tables, removing folding tables as they emptied to make the sale continue to look full and not picked over, when expenses were deducted, advertising, signs, permits, free / economical way to get rid of the remains of the sale efficiently the day after the sale, the entire deal, in 20 minutes. After signing the contracts, the marketing professor told me, “We spend an entire semester at Princeton teaching what you just covered in 15 minutes.” I don’t have an MBA but I landed the sale and it was wildly successful.

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