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

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?

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!

Published by

Jason Hull was the co-founder of Broadtree Partners, a firm that acquires $1-5MM EBITDA companies. He also was the co-founder of open source search consultancy OpenSource Connections, a premier Solr and ElasticSearch firm. He and his wife FIREd (financial independence retire early) at 46 and 45, respectively. He has a BS from the United States Military Academy at West Point and a MBA from the University of Virginia Darden Graduate School of Business. He held a CFP certification from 2015 - 2021. You can read more about him in the About Page. If you live in Johnson County, Texas or the surrounding areas, he and his wife are cash buyers of Johnson County, Texas houses.

7 thoughts on “Why a MBA or a Degree in Finance Doesn’t Guarantee You Know About Personal Finance

  1. Agreed. I learned much earning my MBA, but the most important things I got out of it are the ability to check that box on HR’s checklist when I’m looking for my next gig, and the incredibly vast network of amazing fellow graduates I can reach out to for assistance in my alumni network.

    Learning is great. Practice is great. But nothing beats the experience in the trenches, so to speak.

    1. I definitely got a lot out of my MBA, and it was what allowed me to make a career transition out of the Army. I learned things like P&L statements, which were a foreign concept to us in the Army, where we were told to go on a mad spending spree every September lest we lose funding for the next year. Even though I don’t utilize the alumni network like I should, I have amazing classmates.


      You’re right. The trenches are far superior for practical application. I remember one of the Capital One executive VPs commenting “yup, you can tell the new MBAs…they’re full of these bright ideas that have never seen the light of day.” I winced just a little hearing that, particularly given that it was during my presentation.

  2. I have to chuckle at this Jason, because I think your point most likely applies to every field.

    When I do resumes for people, I lead with: Expertise has been acquired through formal training AND practical application in…

    I usually don’t divulge which is which, because if they get in the door, they can do that in the interview. Most applicants are usually unbalanced in these two areas, so I grill them for experience–even in a student project. This begins to clue them in that naming a course they took isn’t really very impressive.

    So, people, even people with fancy degrees, need to be trained to think about their experiences as having value, often above the education leading to getting that experience. It’s a hard concept for some to grasp.

    Good info, as usual.


    1. While I’d never try my own surgery to save a few bucks, I’d be equally as wary about going to a doctor whose biggest claim to fame was that he went to X University for med school. When I had my last knee surgery, what sealed the deal for me was the doctor saying “I’ve done thousands of knees; yours will be a snap.” It was a snap, fortunately. It wasn’t his first rodeo either, since he’s the official orthopedic surgeon of the Fort Worth Rodeo! 🙂

      You are right; I unwittingly made the point about almost any field!

      1. To tie Fields, the comedienne, ironically made that point on Merv Griffin show, saying, “I don’t want to see my doc’s degree, I want to see his report card. How did he do in gall bladder, if that is what I’m having done.”

        Wish she had followed up her comedy in real life. She died on the OR table having elective cosmetic surgery, because no one knew she was on anti-coagulants. Tragic.

        But I always thought the doc report card was a good idea, and way more important than which school doc attended.

      2. At least a Dr. is required to have a medical degree to practice. I agree with the article 100%, but in an industry with virtually NO minimum requirements I think stressing formal education is important. I would take a young kid with a CFA or CFP over a 50 year old broker with nothing but an undergrad in marketing any day. I think the minor learning mistakes a young CFA would make pale in comparison to the danger of working with an “experienced” broker who does not have the foggiest idea what duration and convexity mean…

        1. Hi Eric – Thanks for commenting!

          What you rue is why I took the CFP exam! It is a shame that the barrier to entry in the field (Series 7/63) is so low. The Series 65 exam was, for all intents and purposes, a cakewalk.

          But, there are ways to exhibit knowledge without appending “, MBA” after your name. Doting on an MBA to create the halo effect can be misleading, particularly when so little of the curriculum relates to personal finance. Sure, I’d have been better prepared to sit for the CFA exam subsequent to my MBA, but investing is a (smallish, in my opinion) subset of personal finance; whereas it’s the whole enchilada for a CFA. Plus, to me, there are far better ways to squeeze improved financial performance than trying the institutional investing alpha approach and its appurtenant risks.

          I’m with you: give me a 25 year old CFP over a 50 year old snake oil dealer every time.

Leave a Reply Cancel reply