If you had â¬50 k cash and were 27 years old working in a corporation, would you rather: get an Ivy League MBA or start averaging in to create a well diversified long term portfolio? I know that many will respond that it depends on personal goals (ie. revamping your corporate career or building towards a healthy retirement), but I am interested in YOUR choice and the reasons for it. Thanks in advance.
Well, let's see... a well diversified long term portfolio should return.... 10% at very very best? so that's around 5k give or take for the first few years (nevermind compounding since we aren't going to count volatility for now). If you think, with the MBA under your belt, you can earn at least 5k more than you are now, you should go get that degree instead. In reality, if you are risk adverse (in the sense that you are not risk seeking), the hurdle rate should be far less than 5k. Kind of obvious, no? PS... I think they cost a lot more than 50k
The question should have been phrased as 150k vs MBA. And I think the answer is still very clear. I remember in highschool my economics teacher was making the case that 120k in the stock market was a better investment than going to a good college! MY ECONOMICS TEACHER! That's the internet bubble mentality for you.
OK my bad. But the basic premise is the same - either invest in further business education or destine the equivalent funds towards building a long term portfolio.