Advertising
Advertising

CFA or MBA? 11 Facts to Help You Decide

CFA or MBA? 11 Facts to Help You Decide

After years of financial work, most financial practitioners would schedule a self-improvement plan, especially those who would like to start their own businesses. The common question is that whether one should take a CFA test or get an MBA degree for career development. Indeed this is a big decision.

The MBA, short for Master of Business Administration, covers various areas of business such as accounting, finance, marketing, human resources, and operations in a manner most relevant to management analysis and strategy. On the other hand, CFA, short for Chartered Financial Analyst, covers special, specified skills and concepts in asset management, private wealth management, equity research, and ratings advisories in financial institutions.

An MBA could enlarge your social network and widen career choices, but a CFA gives you accuracy and rigor in financial areas. You may need to spend years of full-time study and finish the graduation thesis for an MBA, but you may spend even more years of hard studying to pass three exams before you could get the CFA charter certificate.

Advertising

Below are 11 factors that might help you decide which one you should get.

1. Cost

It should be noted that an MBA degree from any top university is a high-cost and expensive self-enhancement project. The total all-in cost (tuition fees, modest living expenses, forgone salaries, etc.) of a 2-year top MBA program is around $275k to $325k. The cost of a CFA is much lower, at about $1,000 to 1,500 per level, less than $8,500 (on average) for all three level tests if you take part in additional prep classes.

2. Time

If you want to get a MBA certificate, you need to spend two years of full-time study. That means if you’re not brave enough to quit your job and focus on the MBA degree, it would be a dilemma indeed. However, the CFA would cost at least 250 hours of self-guided study before you can sit the six-hour exam. You could make the CFA program study as part-time task.

Advertising

3. Content

The purpose of these two certifications is obviously different, therefore the content is of course different. Getting an MBA certificate means you’re going to get comprehensive and all-inclusive training and knowledge in management analysis and strategy. MBA covers various courses like accounting, finance, marketing, and human resources, while CFA program will deliver you special, specified skills, and concepts on asset finance exclusively.

4. Application procedure

To apply for an MBA program, you need to prepare a lot of things, including an online application, recommendation letters, resume, admission essays, university transcripts, GMAT or GRE score reports, English language proficiency, etc. For the CFA, you need an international travel passport. Also, you need to meet one of these 3 requirements for CFA application: four years of professional work experience (does not have to be investment related), a bachelor’s (or equivalent) degree, or be in the final year of your bachelor’s degree program.

5. Teamwork

Task requirements differ from each other. Unlike the MBA requires group tasks, the CFA has no teamwork requirement. It’s totally upon your own schedule. If you can, you could study and finish all CFA programs individually.

Advertising

6. Pass rate

Only 37% of CFA test takers passed December 2012’s CFA Level I exam. In June 2012, 38% passed Level I, 42% passed Level II and 52% passed Level III. On an average, 60% would fail in CFA test, with even low pass rate across total 3 levels. On the other hand, 95% of Harvard MBA test takers could pass the MBA test.

7. Job Prospects

With MBA degree, you get broader job prospects and wide career choices. But with a CFA certificate, since it delivers specific, specialized knowledge in finance industry, your career choices are greatly narrowed but financial career could be greatly sharpened and improved to another level. “An MBA can take you into all sorts of industries,” said Skiddy von Stade, CEO of financial recruiting firm OneWire. “A CFA is for a stock picker that really wants to be an analyst. The CFA carries a lot of weight with asset managers. It’s an analytically driven test.” Outside of finance, the CFA is of little use, while the MBA is more widely recognized.

8. Benefit/Compensation

It’s important to know the return of CFA and MBA. According to the calculation from PayScale, a compensation research firm, the compensation differs a lot. Median pays of 0-5 years of experience are $72,000, $87,000, $57,000 and $63,000 respectively for people that hold a CFA and no MBA, CFA and MBA, MBA and no CFA, and an MBA in finance and no CFA. These differences stay constant for CFA and MBA holders of 5-10 years of experience.

Advertising

9. Learning

Some CFA certificate holders said that MBA programs teach things they could learn from college class, while CFA programs deliver knowledge that couldn’t be learned from college.

10. Partnering relationships

CFA Institute has started partnering relationships with multiple business schools into their class offerings. Some exam materials are even delivered in these courses. This would surely result in reduction of CFA test difficulty. More students are now expected to take Level I of the CFA exam directly after graduation.

11. Achievement

The founder of the CFA Institute is Benjamin Graham, one of the most legendary and valuable investors. With the profound knowledge gained from CFA tests… who knows? You could become the next Benjamin Graham. In contrast the broad coverage of MBA makes it becomes hard to become a great master.

Featured photo credit: FGV via flickr.com

More by this author

David Brooks

An expert in web content editing and multimedia solutions

13 Things To Learn About A Blu-ray Player iPhone with sakura 10 Things You Need To Know About iPhone 7 country 10 Things Only People Who Used To Live In Villages Would Understand self-improvement education CFA or MBA? 11 Facts to Help You Decide

Trending in Productivity

1 Success In Reaching Goals Is Determined By Mindset 2 Have You Fallen Into the ‘Busy’ Trap? Here’s Your Way Out 3 How to Increase Brain Power, Boost Memory and Become 10X Smarter 4 Do You Want to Know the Secret to Living a Fulfilling Life? 5 6 People Management Tactics to Lead a Diverse Team to Success

Read Next

Advertising
Advertising

Last Updated on November 15, 2018

Success In Reaching Goals Is Determined By Mindset

Success In Reaching Goals Is Determined By Mindset

What do you think it takes to achieve your goals? Hard work? Lots of actions? While these are paramount to becoming successful in reaching our goals, neither of these are possible without a positive mindset.

As humans, we naturally tend to lean towards a negative outlook when it comes to our hopes and dreams. We are prone to believing that we have limitations either from within ourselves or from external forces keeping us from truly getting to where we want to be in life. Our tendency to think that we’ll “believe it when we see it” suggests that our mindsets are focused on our goals not really being attainable until they’ve been achieved. The problem with this is that this common mindset fuels our limiting beliefs and shows a lack of faith in ourselves.

The Success Mindset

Success in achieving our goals comes down to a ‘success mindset’. Successful mindsets are those focused on victory, based on positive mental attitudes, empowering inclinations and good habits. Acquiring a success mindset is the sure-fire way to dramatically increase your chance to achieve your goals.

Advertising

The idea that achieving our goals comes down to our habits and actions is actually a typical type of mindset that misses a crucial point; that our mindset is, in fact, the determiner of our energy and what actions we take. A negative mindset will tend to create negative actions and similarly if we have a mindset that will only set into action once we see ‘proof’ that our goals are achievable, then the road will be much longer and arduous. This is why, instead of thinking “I’ll believe it when I see it”, a success mindset will think “I’ll see it when I believe it.”

The Placebo Effect and What It Shows Us About The Power of Mindset

The placebo effect is a perfect example of how mindset really can be powerful. In scientific trials, a group of participants were told they received medication that will heal an ailment but were actually given a sugar pill that does nothing (the placebo). Yet after the trial the participants believed it’s had a positive effect – sometimes even cured their ailment even though nothing has changed. This is the power of mindset.

How do we apply this to our goals? Well, when we set goals and dreams how often do we really believe they’ll come to fruition? Have absolute faith that they can be achieved? Have a complete unwavering expectation? Most of us don’t because we hold on to negative mindsets and limiting beliefs about ourselves that stop us from fully believing we are capable or that it’s at all possible. We tend to listen to the opinions of others despite them misaligning with our own or bow to societal pressures that make us believe we should think and act a certain way. There are many reasons why we possess these types of mindsets but a success mindset can be achieved.

Advertising

How To Create a Success Mindset

People with success mindsets have a particular way of perceiving things. They have positive outlooks and are able to put faith fully in their ability to succeed. With that in mind, here are a few ways that can turn a negative mindset into a successful one.

1. A Success Mindset Comes From a Growth Mindset

How does a mindset even manifest itself? It comes from the way you talk to yourself in the privacy of your own head. Realising this will go a long way towards noticing how you speak to yourself and others around you. If it’s mainly negative language you use when you talk about your goals and aspirations then this is an example of a fixed mindset.

A negative mindset brings with it a huge number of limiting beliefs. It creates a fixed mindset – one that can’t see beyond it’s own limitations. A growth mindset sees these limitations and looks beyond them – it finds ways to overcome obstacles and believes that this will result in success. When you think of your goal, a fixed mindset may think “what if I fail?” A growth mindset would look at the same goal and think “failures happen but that doesn’t mean I won’t be successful.”

Advertising

There’s a lot of power in changing your perspective.

2. Look For The Successes

It’s really important to get your mind focused on positive aspects of your goal. Finding inspiration through others can be really uplifting and keep you on track with developing your success mindset; reinforcing your belief that your dreams can be achieved. Find people that you can talk with about how they achieved their goals and seek out and surround yourself with positive people. This is crucial if you’re learning to develop a positive mindset.

3. Eliminate Negativity

You can come up against a lot of negativity sometimes either through other people or within yourself. Understanding that other people’s negative opinions are created through their own fears and limiting beliefs will go a long way in sustaining your success mindset. But for a lot of us, negative chatter can come from within and these usually manifest as negative words such as can’t, won’t, shouldn’t. Sometimes, when we think of how we’re going to achieve our goals, statements in our minds come out as negative absolutes: ‘It never works out for me’ or ‘I always fail.’

Advertising

When you notice these coming up you need to turn them around with ‘It always works out for me!’ and ‘I never fail!’ The trick is to believe it no matter what’s happened in the past. Remember that every new day is a clean slate and for you to adjust your mindset.

4. Create a Vision

Envisioning your end goal and seeing it in your mind is an important trait of a success mindset. Allowing ourselves to imagine our success creates a powerful excitement that shouldn’t be underestimated. When our brain becomes excited at the thought of achieving our goals, we become more committed, work harder towards achieving it and more likely to do whatever it takes to make it happen.

If this involves creating a vision board that you can look at to remind yourself every day then go for it. Small techniques like this go a long way in sustaining your success mindset and shouldn’t be dismissed.

An Inspirational Story…

For centuries experts said that running a mile in under 4 minutes was humanly impossible. On the 6th May 1954, Rodger Bannister did just that. As part of his training, Bannister relentlessly visualised the achievement, believing he could accomplish what everyone said wasn’t possible…and he did it.

What’s more amazing is that, as soon as Bannister achieved the 4-minute mile, more and more people also achieved it. How was this possible after so many years of no one achieving it? Because in people’s minds it was suddenly possible – once people knew that it was achievable it created a mindset of success and now, after over fifty years since Bannister did the ‘impossible’, his record has been lowered by 17 seconds – the power of the success mindset!

Read Next