Advertising

CFA or MBA? 11 Facts to Help You Decide

CFA or MBA? 11 Facts to Help You Decide
Advertising

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.

Advertising

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 7 Effective Ways To Motivate Employees in 2021 2 How a Project Management Mindset Boosts Your Productivity 3 5 Values of an Effective Leader 4 How to Motivate People Around You and Inspire Them 5 The Importance of Reminders (And How to Make a Reminder Work)

Read Next

Advertising
Advertising

Last Updated on July 21, 2021

The Importance of Reminders (And How to Make a Reminder Work)

The Importance of Reminders (And How to Make a Reminder Work)
Advertising

No matter how well you set up your todo list and calendar, you aren’t going to get things done unless you have a reliable way of reminding yourself to actually do them.

Anyone who’s spent an hour writing up the perfect grocery list only to realize at the store that they forgot to bring the list understands the importance of reminders.

Reminders of some sort or another are what turn a collection of paper goods or web services into what David Allen calls a “trusted system.”[1]

A lot of people resist getting better organized. No matter what kind of chaotic mess, their lives are on a day-to-day basis because they know themselves well enough to know that there’s after all that work they’ll probably forget to take their lists with them when it matters most.

Fortunately, there are ways to make sure we remember to check our lists — and to remember to do the things we need to do, whether they’re on a list or not.

In most cases, we need a lot of pushing at first, for example by making a reminder, but eventually we build up enough momentum that doing what needs doing becomes a habit — not an exception.

Advertising

From Creating Reminders to Building Habits

A habit is any act we engage in automatically without thinking about it.

For example, when you brush your teeth, you don’t have to think about every single step from start to finish; once you stagger up to the sink, habit takes over (and, really, habit got you to the sink in the first place) and you find yourself putting toothpaste on your toothbrush, putting the toothbrush in your mouth (and never your ear!), spitting, rinsing, and so on without any conscious effort at all.

This is a good thing because if you’re anything like me, you’re not even capable of conscious thought when you’re brushing your teeth.

The good news is you already have a whole set of productivity habits you’ve built up over the course of your life. The bad news is, a lot of them aren’t very good habits.

That quick game Frogger to “loosen you up” before you get working, that always ends up being 6 hours of Frogger –– that’s a habit. And as you know, habits like that can be hard to break — which is one of the reasons why habits are so important in the first place.

Once you’ve replaced an unproductive habit with a more productive one, the new habit will be just as hard to break as the old one was. Getting there, though, can be a chore!

Advertising

The old saw about anything you do for 21 days becoming a habit has been pretty much discredited, but there is a kernel of truth there — anything you do long enough becomes an ingrained behavior, a habit. Some people pick up habits quickly, others over a longer time span, but eventually, the behaviors become automatic.

Building productive habits, then, is a matter of repeating a desired behavior over a long enough period of time that you start doing it without thinking.

But how do you remember to do that? And what about the things that don’t need to be habits — the one-off events, like taking your paycheck stubs to your mortgage banker or making a particular phone call?

The trick to reminding yourself often enough for something to become a habit, or just that one time that you need to do something, is to interrupt yourself in some way in a way that triggers the desired behavior.

The Wonderful Thing About Triggers — Reminders

A trigger is anything that you put “in your way” to remind you to do something. The best triggers are related in some way to the behavior you want to produce.

For instance, if you want to remember to take something to work that you wouldn’t normally take, you might place it in front of the door so you have to pick it up to get out of your house.

Advertising

But anything that catches your attention and reminds you to do something can be a trigger. An alarm clock or kitchen timer is a perfect example — when the bell rings, you know to wake up or take the quiche out of the oven. (Hopefully you remember which trigger goes with which behavior!)

If you want to instill a habit, the thing to do is to place a trigger in your path to remind you to do whatever it is you’re trying to make into a habit — and keep it there until you realize that you’ve already done the thing it’s supposed to remind you of.

For instance, a post-it saying “count your calories” placed on the refrigerator door (or maybe on your favorite sugary snack itself)  can help you remember that you’re supposed to be cutting back — until one day you realize that you don’t need to be reminded anymore.

These triggers all require a lot of forethought, though — you have to remember that you need to remember something in the first place.

For a lot of tasks, the best reminder is one that’s completely automated — you set it up and then forget about it, trusting the trigger to pop up when you need it.

How to Make a Reminder Works for You

Computers and ubiquity of mobile Internet-connected devices make it possible to set up automatic triggers for just about anything.

Advertising

Desktop software like Outlook will pop up reminders on your desktop screen, and most online services go an extra step and send reminders via email or SMS text message — just the thing to keep you on track. Sandy, for example, just does automatic reminders.

Automated reminders can help you build habits — but it can also help you remember things that are too important to be trusted even to habit. Diabetics who need to take their insulin, HIV patients whose medication must be taken at an exact time in a precise order, phone calls that have to be made exactly on time, and other crucial events require triggers even when the habit is already in place.

My advice is to set reminders for just about everything — have them sent to your mobile phone in some way (either through a built-in calendar or an online service that sends updates) so you never have to think about it — and never have to worry about forgetting.

Your weekly review is a good time to enter new reminders for the coming weeks or months. I simply don’t want to think about what I’m supposed to be doing; I want to be reminded so I can think just about actually doing it.

I tend to use my calendar for reminders, mostly, though I do like Sandy quite a bit.

More on Building Habits

Featured photo credit: Unsplash via unsplash.com

Advertising

Reference

[1] Getting Things Done: Trusted System

Read Next