Why a MBA or a Degree in Finance Doesn’t Guarantee You Know About Personal Finance

The Differentiated MBA

Ooh! Shiny!

“When it comes to success in business, an MBA degree is optional. But a GSD, which is only earned by Getting Stuff Done, is required.”
–Christine Comaford

“The only thing interfering with my learning is my education”
–Albert Einstein

Shortly after I graduated from West Point, I took charge of a tank platoon deployed to Bosnia. Everything they’d taught us at school, or, rather, the lessons I took away from it, said to establish yourself, show that you knew what you were doing, and earn the respect of your soldiers – classical referential leadership.

Thus, I did everything. Maintenance, leading PT (physical training for the non-military readers), leading patrols, you name it, I did it.

After about a month, my platoon sergeant decided to explain to me what the real parameters were. He was from Arkansas, went to Ole Miss, and played cornerback there (“the most I ever hurt was after I tried to tackle Herschel Walker”). He started with “sir, we need to have a talk.”

We went to the chow hall and found a quiet corner.

“Look, I know you know maintenance. I know you can navigate [apparently a rarity amongst newly commissioned officers]. I know you are in better shape than almost anyone here. That’s all fine.

“But, we need to get all of that book learning out of your head because that’s not how the real Army works. Your job is to show up when we leave on a mission, keep the company commander off my back, don’t get us killed when we’re out there, and, otherwise, get the [censored] out of the way and let me do my [censored] job.

“Are we clear?”

Thus was my first initiation into the realities that there’s a real, tangible difference between book learning and street learning. My job, as it boiled down to, was to hand off missions to my platoon sergeant (or first sergeant), step back, and watch magic happen. The real secret to being a successful platoon leader was doing almost nothing, which was way, way, way different than any of the lessons we learned back at West Point.

I saw the same thing happening with the company I co-founded. We’d bring in interns or recent college graduates who had computer science degrees. They’d be full of vim and vigor and confidence about how to develop software. Then, our experienced people would have to sit them down and teach them about how to actually develop software – usually in ways which weren’t taught in any of the books or courses because either

  • Their ways actually worked, whereas the book-taught methods didn’t, or
  • We were working on platforms and using methods so new that academia hadn’t yet had the chance to learn about them or write books about them.

We may have burst their bubbles about what they thought they knew, but after spending a couple of months with us, they knew more about software development than they’d learned in three or four years of college.

I’m sure you can guess where this is going.

Just How Much Did My MBA Contribute to My Personal Finance Knowledge?


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I went to one of the best business schools in the nation to get my MBA. I’m not telling you that to brag, but, rather, to illustrate that if an extremely high caliber business school doesn’t prepare you to be a financial planner, then it’s pretty safe to assume that other schools aren’t going to either. There is one exception that I’m aware of—Texas Tech’s personal finance program—but they don’t issue a MBA.

MBA is short for Master’s in Business Administration. It’s a curriculum designed to help you, generally, start somewhere in the middle of a corporation, and add value and work your way up the corporate ladder. You learn about marketing, brand management, corporate communications, and business finance. You’re armed with information about how to value companies and make decisions about debt and equity financing in the capital markets. You learn accounting and the basics of GAAP so that you can function in the CFO or comptroller office. You learn strategy. You learn the basics of entrepreneurship.

Ironically, I learned enough about stock valuation and options strategies that I convinced myself that I knew what the heck I was doing and could make money investing in individual stocks. I learned about the Efficient Market Hypothesis, CAP-M, alpha, and other terms of the “sophisticated” investor, and my Monkey Brain went wild telling me I knew it all.

I didn’t.

I did learn one applicable skill in business school which I use today – I took a couple of deep quantitative modeling classes. I can build a pretty mean model and understand how to portray the potential ups and downs of your life to educate you about risks and tradeoffs and help you rationally think about what could happen to you, both good and bad. But, a model does not a financial plan make, nor does it guarantee success in life.

You’d think that, now that I’m on the other side of a successful business sale, I’d have learned about starting up and running a business. Maybe I missed those classes, but I didn’t really learn anything in business school that I can recall really helping during those seven years. I’d guess that the closest applicable lesson I learned was in valuing private companies (like we were), but I was also smart enough to hire someone who spent a decade running similar deals.

That’s not to say that my time in business school wasn’t valuable. It was. I learned how companies work, as compared to the Army, where I was encouraged to spend everything I could so that we’d get budgeted more money the next year. I made great friends. I got a chance to transition from being in the military to being a civilian. I went to a lot of parties.

But, I really learned very little about the applicable skills necessary to either a) be successful with money, or b) guide others in doing so.

A degree in finance will teach you how to either work in corporate finance or to work as an investment banker in Wall Street. A MBA will teach you how to be a brand manager, a general manager, or, potentially, an entrepreneur.

Neither of them teaches you about personal finance, so someone who tries to tell you that they can help you with your money because they have a MBA or a degree in finance is misleading themselves (because they believe it) and you (because there’s very little carryover between the two fields).

Yes, the appropriate academic credentials are nice. Passing the CFP exam means that I took useful personal finance courses and that enough of it stuck in my head to demonstrate a baseline of personal finance knowledge.

That’s a bare minimum standard.

The rest of a planner’s credentials should rest on that street knowledge. What works? What doesn’t? How do you help someone to keep them from defeating themselves the first time that Monkey Brain rattles the cage and refuses to play along with the plan? What’s necessary to be financially successful in life? What was it like for them? Are they financially independent? How did they get there?

If you’re looking for a financial planner, don’t be afraid to dig a little deeper. Don’t be distracted or overimpressed by the academic baubles that the person will throw at you. Find out the true story. Discover how there’s empathy, alignment, and a similar story to where you are and where you want to go. If that person is leading with the fact that he or she has a MBA or a degree in finance, then you’re watching a papering over of cracks in the skills necessary to actually help you out. Don’t fall for it.

Oh, and one unsolicited piece of career advice for all of you who are reading and have a MBA:

Don’t put “,MBA” in your signature line. It shows weakness. Name me one Harvard MBA who does that.

MBAs: snow or substance? Let’s talk about it in the comments below!

About Jason Hull, CFP®

Jason Hull, CFP®, is the Chief Technology officer of myFinancialAnswers, an online comprehensive financial planning service.

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