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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 July 3, 2020

6 Things To Do Every Day To Ensure You Stick To Your Goals

6 Things To Do Every Day To Ensure You Stick To Your Goals

Sticking to your goals can sometimes be challenging. We all want better health, better careers, and better jobs, and we want to cast an impression on everyone that we are living fulfilled lives.

Yet to reach our goals and make every minute of our time count requires commitment, consistency, and hard work. Setting goals is one thing, but sticking to them is another. We have to observe certain daily practices if we want to get the best out of ourselves.

Here are 6 things that you have to ensure daily to reach your goals.

1. Involve Others

You have to be accountable for the actions you are committing yourself to. Involve everyone around you, get them engaged, and talk to them on how they can help you accomplish your goals.

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When you involve others you feel, you have a responsibility towards them as well as yourself. Every day, make sure you are accountable for sticking to your goals. By joining groups or engaging others, you have more motivation to reach your goals.

For example, if you want to read more, try joining a book club. If you want to be a better entrepreneur, join an entrepreneurial organization.

2. Visualize the Rewards

Reaching a goal can be challenging and sometimes, it can be overwhelming. When the journey becomes tough and difficult, try to stick to visualizing your successes every day.

Wake up to visualize what rewards you will get from sticking to meeting your goals. If you want to lose some pounds, visualize yourself already underweight and benefiting from being underweight. The mind has a way of channeling your body and intentions to sticking to your goals and reaching them.

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3. Break Down Your Goals

Try to break down your goals into tiny chunks. The smaller the size of the goals, the more willing and prepared you are to meet them.

For example, if you find it difficult to get out of the house and take a workout at the gym, why not try to break the goal into making sure you are always dressed for the gym daily? By doing this, you demonstrate that you are moving in the right direction, and you can keep this momentum so you can meet the larger goal.

4. Reward Yourself

For every progress you make daily towards reaching your goals, try to vindicate and reward yourself. By doing this you appreciate yourself and the hard work you have put in for the day.

When you reward yourself, you program yourself to benefit from a larger reward in the future. You also propel yourself to gain daily rewards, which can be enticing and motivating. Rewarding yourself serves as a form of positive reinforcement that reinforces your mind and behavior to stick to your goals and stay motivated.

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5. Measure Your Progress

It is easy to become frustrated when you are not getting instant results. Change can be slow and rewards are not always immediate. Still, progress can be measured even in tiny bits, so take time to look back at where you are coming from.

You don’t have to feel depressed about not making that major progress in an instant. But when you journal or snap pictures to document your progress, no matter how small, you will feel grateful and elated to see what difference you have made from where you are coming from up until now.

6. Believe in the Possibilities

If you don’t even believe in the possibility of reaching your goals, how can you expect yourself to stick to your goals in the first place?

By believing in the possibilities of accomplishing a goal or task, you increase your chance of reaching it and eradicating whatever roadblocks or challenges you may face. Believe in what you can achieve.

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What self-belief has over self-control is that while self-control can be depleted but self-belief cannot. We all have an enormous reservoir of how much we can believe in ourselves.

With believing in ourselves comes perseverance, determination, and desire to reaching our goals. Every day, understand that what you need to keep going is your belief toward achieving your goals. Your goals are reachable if you think you can reach them!

Final Words

Due to circumstances in life, people tend to abandon some of their goals in life. You may also feel this way sometimes. In that case, just come back to this article and remember the 6 ways you can help yourself stick to your goals.

People don’t always reach their goals, but you will never know if you can reach them if you don’t stick to them in the first place. As long as you stick to your goals, there will always be the possibility of you achieving them!

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Featured photo credit: Kelly Sikkema via unsplash.com

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