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 How Do You Change a Habit (According to Psychology) 2 How to Find Your Keystone Habits to Change Your Life 3 7 Steps to Start Living Your Dream Life Right Now 4 10 Reasons Personal Growth Is Important No Matter Your Age 5 5 Learning Management Systems (LMS) for Effective Learning

Read Next

Advertising
Advertising
Advertising

Last Updated on November 15, 2019

How Do You Change a Habit (According to Psychology)

How Do You Change a Habit (According to Psychology)

Habits are hard to kill, and rightly so. They are a part and parcel of your personality traits and mold your character.

However, habits are not always something over-the-top and quirky enough to get noticed. Think of subtle habits like tapping fingers when you are nervous and humming songs while you drive. These are nothing but ingrained habits that you may not realize easily.

Just take a few minutes and think of something specific that you do all the time. You will notice how it has become a habit for you without any explicit realization. Everything you do on a daily basis starting with your morning routine, lunch preferences to exercise routines are all habits.

Habits mostly form from life experiences and certain observed behaviors, not all of them are healthy. Habitual smoking can be dangerous to your health. Similarly, a habit could also make you lose out on enjoying something to its best – like how some people just cannot stop swaying their bodies when delivering a speech.

Thus, there could be a few habits that you would want to change about yourself. But changing habits is not as easy as it seems, why?

What Makes It Hard To Change A Habit?

To want to change a particular habit means to change something very fundamental about your behavior.[1] Hence, it’s necessary to understand how habits actually form and why they are so difficult to actually get out of.

The Biology

Habits form in a place what we call the subconscious mind in our brain.[2]

Our brains have two modes of operation. The first one is an automatic pilot kind of system that is fast and works on reflexes often. It is what we call the subconscious part. This is the part that is associated with everything that comes naturally to you.

Advertising

The second mode is the conscious mode where every action and decision is well thought out and follows a controlled way of thinking.

A fine example to distinguish both would be to consider yourself learning to drive or play an instrument. For the first time you try learning, you think before every movement you make. But once you have got the hang of it, you might drive without applying much thought into it.

Both systems work together in our brains at all times. When a habit is formed, it moves from the conscious part to the subconscious making it difficult to control.

So, the key idea in deconstructing a habit is to go from the subconscious to the conscious.

Another thing you have to understand about habits is that they can be conscious or hidden.

Conscious habits are those that require active input from your side. For instance, if you stop setting your alarm in the morning, you will stop waking up at the same time.

Hidden habits, on the other hand, are habits that we do without realizing. These make up the majority of our habits and we wouldn’t even know them until someone pointed them out. So the first difficulty in breaking these habits is to actually identify them. As they are internalized, they need a lot of attention to detail for self-identification. That’s not all.

Habits can be physical, social, and mental, energy-based and even be particular to productivity. Understanding them is necessary to know why they are difficult to break and what can be done about them.

Advertising

The Psychology

Habits get engraved into our memories depending on the way we think, feel and act over a particular period of time. The procedural part of memory deals with habit formation and studies have observed that various types of conditioning of behavior could affect your habit formations.

Classical conditioning or pavlovian conditioning is when you start associating a memory with reality.[3] A dog that associates ringing bell to food will start salivating. The same external stimuli such as the sound of church bells can make a person want to pray.

Operant conditioning is when experience and the feelings associated with it form a habit.[4] By encouraging or discouraging an act, individuals could either make it a habit or stop doing it.

Observational learning is another way habits could take form. A child may start walking the same way their parent does.

What Can You Do To Change a Habit?

Sure, habits are hard to control but it is not impossible. With a few tips and hard-driven dedication, you can surely get over your nasty habits.

Here are some ways that make use of psychological findings to help you:

1. Identify Your Habits

As mentioned earlier, habits can be quite subtle and hidden from your view. You have to bring your subconscious habits to an aware state of mind. You could do it by self-observation or by asking your friends or family to point out the habit for your sake.

2. Find out the Impact of Your Habit

Every habit produces an effect – either physical or mental. Find out what exactly it is doing to you. Does it help you relieve stress or does it give you some pain relief?

Advertising

It could be anything simple. Sometimes biting your nails could be calming your nerves. Understanding the effect of a habit is necessary to control it.

3. Apply Logic

You don’t need to be force-fed with wisdom and advice to know what an unhealthy habit could do to you.

Late-night binge-watching just before an important presentation is not going to help you. Take a moment and apply your own wisdom and logic to control your seemingly nastily habits.

4. Choose an Alternative

As I said, every habit induces some feeling. So, it could be quite difficult to get over it unless you find something else that can replace it. It can be a simple non-harming new habit that you can cultivate to get over a bad habit.

Say you have the habit of banging your head hard when you are angry. That’s going to be bad for you. Instead, the next time you are angry, just take a deep breath and count to 10. Or maybe start imagining yourself on a luxury yacht. Just think of something that will work for you.

5. Remove Triggers

Get rid of items and situations that can trigger your bad habit.

Stay away from smoke breaks if you are trying to quit it. Remove all those candy bars from the fridge if you want to control your sweet cravings.

6. Visualize Change

Our brains can be trained to forget a habit if we start visualizing the change. Serious visualization is retained and helps as a motivator in breaking the habit loop.

Advertising

For instance, to replace your habit of waking up late, visualize yourself waking up early and enjoying the early morning jog every day. By continuing this, you would naturally feel better to wake up early and do your new hobby.

7. Avoid Negative Talks and Thinking

Just as how our brain is trained to accept a change in habit, continuous negative talk and thinking could hamper your efforts put into breaking a habit.

Believe you can get out of it and assert yourself the same.

Final Thoughts

Changing habits isn’t easy, so do not expect an overnight change!

Habits took a long time to form. It could take a while to completely break out of it. You will have to accept that sometimes you may falter in your efforts. Don’t let negativity seep in when it seems hard. Keep going at it slowly and steadily.

More About Changing Habits

Featured photo credit: Mel via unsplash.com

Reference

Read Next