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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.

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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.

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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.

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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.

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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

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David Brooks

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Last Updated on May 21, 2019

How to Be More Creative and Come up with Incredible Ideas

How to Be More Creative and Come up with Incredible Ideas

Regardless of how creative you already consider yourself to be, there’s a good chance you would like to level up your creative abilities.

You might want to write a better song, think of better solutions to problems at work or around the home or maybe paint a picture.

In any case, the good news is that creativity is not born: it’s made, and each one of us has the potential to be more creative and come up with incredible ideas.

“Creativity is any act, idea, or product that changes an existing domain, or that transforms an existing domain into a new one.” — Mihaly Csikszentmihalyi

The definition of creativity is broad, and reminds us that creativity is not limited to artists or musicians. It does however require that we have some kind of impact on the domain in which we create.

Creativity also emphasizes values.

“The process of having original ideas that have value” — Ken Robinson

This makes up for what Csikszentmihalyi misses out. For instance, we can make a change in the world without adding significant value. Any destructive act, like smashing a window, creates change, but it doesn’t necessarily create valuable change.

In short, there isn’t one single definition of creativity It’s up to us to find a definition that feels true and useful. When you know what your standard is, It’s much easier to embrace creativity and start to cultivate it.

And in this article, you will learn how to be more creative and take a good look at what goes into the creative skill:

1. Cultivate Focus

In order to create, there needs to be a focus on creating something, whether it’s a song, a theory, a product, or a sculpture.

You could also call this “drive” – it’s the initial spark that drives the solution to a problem, or the will to get on your laptop and start typing.

However, it’s worth noting there are different stages to the creative process: the divergent stage and the convergent stage.

In the divergent stage, we want a broad focus – we want to be willing to let in lots of different inputs, ideas and insights. This is the time for brainstorming all possible ideas and solutions.

In the convergent stage, we start to narrow our focus, like a camera lens. At this stage, we start to drill down to a handful of ideas or solutions, discriminating throughout the process.

How to cultivate focus?

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Take a 20 Minute Walk

Walking away and getting your heart rate up is the best free tool you have in regaining your focus.

I know it might seem counterintuitive to take a break right when you’re at your busiest, and especially when you’re drowning in your massive to do list, but the effects it will have on your clarity and ability to focus are undeniable.

Walking is physiologically proven to release stress, and clear your mind. In fact, most of my most brilliant ideas (and some pretty terrible ones too) have occurred on my daily walks.

If you give this technique a try, what you’ll find is that you’re much more productive than you were before you took a breather.

Over time, if you do these walks daily, you’ll quickly find that your to-do list starts to feel a lot less significant, and a lot more doable. It’s all about keeping razor focused, and that’s what short daily walks will gift you.

2. Build a Structure

When I wake up in the morning, I start the day with a structure in mind. I know that 15 minutes will be dedicated to meditation, 30 minutes to coffee and reading, 20 minutes to yoga and so on.

The structure of this morning routine might be boring, but the act of each task in itself has the potential to be, on some level, “creative.”

The point of structure is that it gives you the space to make time for something you want to do. It helps you carve out the time to do your creative work. Once you begin that thing in itself, you are free to go about it however you’d like.

Without structure, we can lose focus and can feel overwhelmed with possibility. If you’ve ever looked at a blank page and felt too overwhelmed with possibility to make a mark on it, you’ll know what I mean. How much easier it gets when you are given some guidelines or a deadline?

The trick is finding the right amount of structure for you and your creative needs. Too little structure and we feel overwhelmed. Too much structure, and we risk feeling limited and stifled.

Again, it’s worth thinking about creating in those two stages: divergent (less structure) and convergent (more structure.)

How to build a structure?

Create a Morning Routine

Your morning routine doesn’t have to be rigid or so arduous you dread waking up. In fact, it should feel like the opposite. When you get a routine that works for you, you’ll look forward to starting the day.

We all have different needs and preferences which can shape our ideal routine. In the book, Daily Rituals: How Artists Work by Mason Currey, you can be inspired over 160 different creators’ daily routines, from Charles Darwin to Pablo Picasso.

Experiment with any that take your fancy, and see how you feel with a bit more structure to start your day.

You can also take a look at this article about morning routine for inspirations: The Ultimate Morning Routine to Make You Happy And Productive All Day

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3. Find Motivation

There is a theory that suggests: people will be most creative when they feel motivated primarily by the interest, satisfaction, and challenge of the work itself — not by external pressures. This is also known as intrinsic motivation; a drive that comes from within.

Think of a time when you did some of your best work — chances are you were totally absorbed in what you were doing, to the exclusion of everything else. You were completely focused on the work itself, barely noticing time flying by.

Now think of a time when you felt under pressure to perform. Maybe it was an exam, or a commission for an important client, or maybe your boss had told you “there’s a lot riding on this.”

Notice the difference? In the first memory, you were driven by intrinsic motivation, which made it relatively easy, even enjoyable, to be highly creative.

In the second memory however, extrinsic motivation was breathing down your neck, distracting you by whispering about the rewards for success and the horrible consequences of failure: likely making it harder to focus on the task at hand.

For this reason, intrinsic motivation, if you can find it, is what separates the good from great creative work.

This isn’t to say only internal motivators help. I personally get motivated by luring myself to work with a good cappuccino at my favourite cafe. That will get me ready to write or edit or whatever I’ve been avoiding.

How to find motivation?

Connect to Your “Why”

Your “Why” is your fuel: the thing that drives you forward, that gives you a reason to do what you’re doing.

‘He who has a why to live can bear almost any how.’ — Friedrich Nietzche

When you have a reason to do something, a purpose or a goal that matters to you, you can connect your daily actions to it. Then, each act becomes infused with meaning and you find that intrinsic motivation comes naturally.

The trick is to remember your “why” and connect with it on a regular basis.

Think about how you want to feel on a daily basis. What would you like to accomplish in the next year? What would you like for yourself in the next five years? How about in your lifetime?

Ultimately, the tasks you face on a daily basis, or at least some of them, will connect to a greater purpose if you follow this path and you will find you feel more motivated to create and less resistance.

If you aren’t sure where to start looking for motivation, this will help: How to Get Motivated and Be Happy Every Day When You Wake Up

4. Be an Expert in a Chosen Domain

Research has shown that just as expertise in one domain does not predict expertise in other unrelated domains; creativity in one domain does not predict creativity in other unrelated domains.[1]

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So just because you can paint a pretty picture, doesn’t mean you can creatively solve a mathematical problem.

If you’ve taken one of those tests like the Torrance Tests of Creative Thinking, which will ask you to think of a bazillion uses for a pencil, and scored well, unfortunately this is only an indicator of divergent thinking skills. It is not a predictor for creativity all round.

The good news is, you can train your creativity in your chosen domain. Much like a muscle, you can isolate exercises to strengthen it.

Of course you can still do a total body workout – or atotal creativity workout – but it means your creativity-training exercises need to come from a wide variety of domains; not just thinking up uses for a pencil.

How to become an expert?

Make a Mastery Training Plan

Following our physical workout analogy, it’s worth applying the habits of great athletes to your chosen creative domain. For example:

1. Decide what area/s you want to work on

Much like a tennis player who decides they need to improve their serving technique, you can decide what area within your creative domain you want to improve at. Get specific.

2. Decide how much time you can dedicate

Most of us don’t have all day to train like a pro tennis player might, but you can likely squeeze 20 to 30 minutes in a day, if you want to. Whatever the time you can allow is, decide to dedicate yourself to it.

3. Review your progress

Finally, in order to check your progress, you can take regular reviews. Decide what your metrics are, and take time each week to check in with yourself.

How many days did you practice? How did you compare to the previous week? This kind of review can help you stay on track, and actually creates more intrinsic motivation as you see yourself develop.

5. Create a Conducive Environment

A psychologist in 1943 proposed that behaviour is:[2]

“a function of both the person as well as the physical environment they are in.”

I would suggest that the act of creating is a behaviour and that, even though it begins as an internal process, it’s very much affected by and even dependent on the environment we are in.

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I started noticing how environment affects me when I worked in an office. Over time, I realized that the more people who were in or who were talking, the more distracted I was. If I got to the office early before my coworkers arrived, I was twice as effective.

I was even more effective if I was at home. Now that I work from home, I know I’m even more effective when in certain coffee shops. Ideally, places that have high ceilings, gentle lighting, some barely noticeable background music – and excellent coffee.

It’s these little variations in our environment that can really shape our creative output.

If you’re an introvert, you probably do your best work alone. If you’re an extrovert, you probably do your best work in the company of others.

This isn’t to say you should find one way of doing things and stick to it: in fact, varying your environment from time to time is a great way to stoke the creative fire too, which we’ll touch on more later.

How to create a conducive environment?

Add or Subtract Stimuli

Novelty in our environment has been shown to stimulate the release of dopamine, a neurotransmitter that increases our desire to seek out reward.[3]

If you’re looking for creative motivation, adding some novelty into your environment can be just what you need.

On the other hand, some people are highly sensitive and when it comes to having too much stimulation in their environment, they find it difficult to focus.

Experiment with working in different environments. Note how you feel. Note whether you do better creative work or have more interesting ideas when you’re alone or with others.

Try listening to music, people chatting or try being in complete silence. Try a dimly lit room, try working in bright sunlight.

In each case, note how you feel before, during and afterwards and rate the quality of your work.

The Bottom Line

Creativity is not one particular skill or talent one can have. It comes in as many broad and unique flavors as there are people on this earth.

To be more creative, take little steps each day. Acknowledge where and when you feel most inspired, motivated and original and spend more energy in those areas.

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Featured photo credit: Sticker Mule via unsplash.com

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