Starting analyst salary for undergrad vs MBAs
Q1. Totally aware that there are many paths and "It Depends" to my question: If my career interest is within investment banking - does it make sense to
a) spend on target undergrad ($350K), and get priced out of MBA
b) go for semi-target undergrad USC ($220K with merit) + T20 MBA later ($350K, and 2yrs opportunity cost)
(Edit)
My takeaway from the excellent responses on this thread
Go for the best school that admits you. Top undergrad can propel onto good career path, MBA may not be needed at all.
Q2. To some extent, this relates to what is the holy grail for success after 5 years in IB -- become an associate, or exit to buy side? what compensation does each step fetch? does non-Ivy T20 MBA (WUSTL Olin, Georgetown McDonough) get me to success any faster??
This is my understanding of investment banking ladder (courtesy WSO forums!), please do correct:
- Analyst 1st year from Undergrad target schools (Wharton, NYU Stern, UMich) -- $110K + 50% bonus --> $165K. If Undergrad from non target like UNC, my chances of getting I-banking jobs might be lower, but if I make it, compensation is at par. Then Salaries grow linearly like Analyst 2nd year, 3rd year to ~ $200K
- If you are decent performer, you get promoted to Associate in about 3 years, comp jumps to ~$250K. (if you don't get promo, goto step4 MBA)
- After Associate, next goal is to exit on buyside/Private Equity. Typically takes 2-3 years. (if you dont get there, goto Step4 MBA)
- MBA will fetch you Associate level (~250K) directly, and ideally exit to Private Equity (~350K).
Pretty hard to go from non-top 20 MBA to IB. And MBA assoc -> PE is not common either
USC is a perfectly good school... you will have all of the options for IB, and later PE from there. Even if you have other semi-targets that are cheaper they may be worth considering
A top 20 undergrad (Georgetown, USC, Notre Dame etc) is an incredible opportunity. If you have a better school then consider that too, but at the current prices I would 100% jump on the T20 but forget the MBA for now. A good undergrad more prestigious and respected accomplishment than an MBA (as someone who went to business school).
All possibilities in the world are open to you from a top undergrad, whereas MBAs have decidedly more limited and challenging opportunity set (which is still amazing for people that need a second chance due to unknown school, unknown work experience, lack of career direction, etc.)
I wouldn’t even think about MBA in your case other than if you need Harvard, Stanford, or Wharton down the line for a mandatory promotion requirement.
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