CFA or MBA? They're completely different

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CFA or MBA? They're completely different

As someone who has gone down the CFA and MBA paths, I wish that people would stop comparing the two. They are fundamentally different, but are both popular and helpful personal and career development steps.

A traditional MBA teaches students how companies work. The MBA will provide you with broad brush strokes on all the key departments and functions: management, accounting, finance, information technology, operations research, finance, strategy, and marketing, supplemented by the academic bases of economics and statistics needed to understand the basic intellectual tools behind some more specific functional applications.  MBA students have room for electives in things like investing, international finance, real estate, or more discrete topics like options, or higher level courses in any of the basic subjects.  For someone like me, who worked in finance before getting their MBAs, the education was incredibly valuable -- indeed 50X more valuable in my estimation than the relatively narrow CFA Charter, which I earned after the MBA, and after the CFP.

By comparison, the CFA Charter is a three-year baseline cram course in investment formulas and calculations.  It covers a lot of useful material, but because of the way the course is structured - as crammer with 20 topics at a time, very few people who take it ever retain much from it. 

Attaining the CFA Charter is also very stressful.  Anyone who asks me if I recommend taking the CFA exams always gets the opportunity cost speech about what else they might be doing with their time. - Is studying 300 hours per exam really the highest and best use of their time?  For many, the answer is "yes," the CFA is perfectly worthwhile for them in their circumstances, but if anyone says, I am dithering between taking the less expensive CFA (before you NPV the $500 per year dues over your career) and the more expensive MBA, I usually lean towards the latter, so long as the school they are considering is more than a paper mill.

It's also worth noting that career-wise, I have held a few jobs where the MBA was a requirement, but none where the CFA was more than a nice to have.

Eric Beyrich is an equity portfolio manager and co-chief Investment officer

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