<story><title>Frugality Is Non-Linear (2019)</title><url>https://scattered-thoughts.net/writing/frugality-is-non-linear/</url></story><parent_chain><item><author>jasonzemos</author><text>&amp;gt; A late career MBA in most cases has vastly diminished signalling&amp;#x2F;credentialing value.&lt;p&gt;That anecdote seems to insinuate the essence of an MBA offers no substantive value, nor does even the achievement of the accreditation itself. It is the timing of the latter which projects the value.&lt;p&gt;Is that a really low or a really high bar?</text></item><item><author>wenc</author><text>I think my take-away is that a dollar consistently removed from one&amp;#x27;s budget and invested will compound and hence there exists a nonlinear relationship between budget adjustments and runway. It&amp;#x27;s definitely a relationship that people desiring financial independence can exploit.&lt;p&gt;However, there&amp;#x27;s also time value to different classes of purchases. For instance, spending money acquiring certain skills early in life allows time for those skills to compound while the same investment later in life may have no utility.&lt;p&gt;The commonly cited example is an MBA: getting an MBA in early career provides more leverage than if it was obtained in mid career or later. A late career MBA in most cases has vastly diminished signalling&amp;#x2F;credentialing value.&lt;p&gt;Frugality (in early life) that optimizes for the date of financial independence (and runway) is not a bad idea, but seems to me that employed in isolation, it may increase the chances of landing on a local optimum when other more favorable optima may exist.&lt;p&gt;People often talk about time value of money... but there&amp;#x27;s also the time value of time&amp;#x2F;age.</text></item></parent_chain><comment><author>wenc</author><text>This is reasoning that I&amp;#x27;ve heard from MBAs themselves (I don&amp;#x27;t have an MBA myself, so would welcome any thoughts from actual MBA holders). The value of an MBA is in signaling, networking and knowledge, roughly in that order.&lt;p&gt;In late career, assuming you&amp;#x27;re doing well-enough that you&amp;#x27;d want to pursue an MBA, you&amp;#x27;d already have amassed quite a bit of business knowledge from the school of hard knocks, that likely exceeds the theory b-schools can teach (although they can definitely still fill in knowledge gaps say in finance or strategy etc.). The marginal value of the theory is even less if you majored in business in college -- the difference between a BBA and an MBA in terms of coursework is generally not substantial.&lt;p&gt;In late career, your experience and success (in different roles) is a generally stronger signal than credentials.&lt;p&gt;In late career, you&amp;#x27;d have developed a fairly good network unless you&amp;#x27;re looking to pivot to a totally different field or industry.</text></comment>
<story><title>Frugality Is Non-Linear (2019)</title><url>https://scattered-thoughts.net/writing/frugality-is-non-linear/</url></story><parent_chain><item><author>jasonzemos</author><text>&amp;gt; A late career MBA in most cases has vastly diminished signalling&amp;#x2F;credentialing value.&lt;p&gt;That anecdote seems to insinuate the essence of an MBA offers no substantive value, nor does even the achievement of the accreditation itself. It is the timing of the latter which projects the value.&lt;p&gt;Is that a really low or a really high bar?</text></item><item><author>wenc</author><text>I think my take-away is that a dollar consistently removed from one&amp;#x27;s budget and invested will compound and hence there exists a nonlinear relationship between budget adjustments and runway. It&amp;#x27;s definitely a relationship that people desiring financial independence can exploit.&lt;p&gt;However, there&amp;#x27;s also time value to different classes of purchases. For instance, spending money acquiring certain skills early in life allows time for those skills to compound while the same investment later in life may have no utility.&lt;p&gt;The commonly cited example is an MBA: getting an MBA in early career provides more leverage than if it was obtained in mid career or later. A late career MBA in most cases has vastly diminished signalling&amp;#x2F;credentialing value.&lt;p&gt;Frugality (in early life) that optimizes for the date of financial independence (and runway) is not a bad idea, but seems to me that employed in isolation, it may increase the chances of landing on a local optimum when other more favorable optima may exist.&lt;p&gt;People often talk about time value of money... but there&amp;#x27;s also the time value of time&amp;#x2F;age.</text></item></parent_chain><comment><author>toby</author><text>Whether it&amp;#x27;s for the essence or the achievement of a particular degree, getting a better job earlier in life has substantial effects on lifetime earnings. Whatever the credential gets you, for whatever reason, it&amp;#x27;s advantageous to have more time to take advantage of it.&lt;p&gt;The parent could have used MD (there are some people who switch careers to become doctors in their 30s) and it would be the same... just having a chance to have been a doctor for longer will put you ahead.</text></comment>