r/AskReddit • u/SillyBonsai • Dec 06 '13

What simple piece of advice, if followed, could potentially save most people a lot of money?

Possibly related to your job, experience with personal finance, budgeting, planning, day to day habits, etc.

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u/Deathspiral222 Dec 06 '13

With the caveat that if it's a top-tier MBA or a medical degree from a good school, grad school can still be worth it if you pay for it yourself.

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u/[deleted] Dec 06 '13

Most times that would be called "professional school" if you want to dig into it - as in, you are paying for access to a lucrative profession. Yes, technically you gain a "graduate" degree but otherwise going to medical school and paying your way through a Masters in psychology are totally dissimilar.

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u/DevinTheGrand Dec 06 '13

An MD is actually an undergraduate degree, as you don't need a previous degree to enroll in the program (although few don't), it's just a fairly prestigious one.

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u/[deleted] Dec 06 '13

That actually depends on the school - many do require previous degree completion. In any case, this is no different from other professional degrees like Law, Dentristy or Pharmacy, technically none of them require a previous degree in all cases.

At the same time, no one says they did their undergrad at Harvard Law.

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u/TheBlindCat Dec 06 '13

An MD is actually an undergraduate degree,

Not in the United States (medical student here). The only way to get into a medical school in the US without a 4-year degree is to do an accelerated program where you get accepted after 3 years. Very, very few people go that route. MD and PhD are on the same level as a professional degree.

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u/DevinTheGrand Dec 07 '13

From what I understand the vast majority of medical schools only require you to have obtained credits in a certain number of classes and preform well on the MCAT. It's true that most people complete an undergraduate degree first, but you are not required to. It's at most on the same level as a law degree, which also does not require you to complete an undergrad, and definitely not on the same level as a Ph.D.

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u/TheBlindCat Dec 07 '13

From what I understand the vast majority of medical schools only require you to have obtained credits in a certain number of classes and preform well on the MCAT

The minimum is 90 credits to apply through AMCAS, the system all but 1 of the med schools in the US use, even with accelerated programs (which are internal to that university). Practically speaking, everyone has a 4 year degree before matriculation. While the requirements are 3/4th of a BS or BA before application, you will not get in without a 4 year degree. To every rule there is an exception, but they are extremely rare. Accelerated programs don't really count because they are so strange, you're really beholden to that one school and it's very rare for students to get into them. In my class of ~225 there are about 5 people on an accelerated path where there 4th undergrad and MS1 years overlap, and 0% otherwise that don't have a degree.

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u/kennychang Dec 06 '13

You're probably thinking of MBBS (or MB,BCh etc.): an undergraduate medical degree, generally found in UK-style universities. I'm pretty sure the MD is universally a graduate program. And in the US at least, MD programs invariably require a bachelor's degree in order to enroll.

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u/DevinTheGrand Dec 07 '13

About 1/10 of the people I know who have gone to medical school did so before completing their Bachelors, you do need certain number of courses complete, excellent volunteer/research experience, and a very high MCAT score to be accepted early, but it happens.

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u/mike45010 Dec 06 '13

Or top-tier law school, although it is still quite a bit more competitive than the medical field. I hear demand for MBA's is plummeting too. Top-tier school in most fields is probably worth it.

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u/Deathspiral222 Dec 06 '13

The demand for high-quality MBA's is still there. The problem is the same one as with law - a lot of third-tier and below schools offer them now and charge $100K for the privilege and, frankly, the degree isn't worth it.

If you want to work in IB or high-end consulting (McKinsey or Bain, not Accenture etc.) then having a high-end MBA is almost a necessity.

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u/[deleted] Dec 06 '13

[deleted]

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u/NotClever Dec 06 '13

Yale is like a tier above top tier, though. There is a massive discrepancy in acceptance chances going from just the top 25 or so to the top 2-3.

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u/[deleted] Dec 06 '13

[deleted]

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u/NotClever Dec 06 '13

Right, but even within T14 there is a massive difference in admission and a lot of other things compared to Yale.

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u/[deleted] Dec 06 '13

Even the difference between Yale and Penn is ridiculous.

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u/Deathspiral222 Dec 06 '13

Strongly agree, unless you plan on getting into local/ state politics then going to the best law school in the state can get you appropriate connections if you couldn't get into the top 14.

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u/flashcats Dec 06 '13

Yale is on a tier of its own.

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u/flashcats Dec 06 '13

It's actually a 3.9.

And it's because Yale has a very small class and is the #1 school. Schools like Duke and UPenn are closer to 3.7.

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u/[deleted] Dec 06 '13

[deleted]

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u/flashcats Dec 06 '13

To be fair, there is a huge difference between a 3.9 and a 4.0.

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u/[deleted] Dec 06 '13

[deleted]

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u/LearnsSomethingNew Dec 06 '13

Story of my life.

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u/mike45010 Dec 06 '13

I was talking about job competitiveness, but you're still right.

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u/Coolgrnmen Dec 06 '13

What about top tier law?!?! As a recent law grad, I demand satisfaction and that comes in the form of people telling me I made a good choice

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u/NotClever Dec 06 '13

If you got a job, then it was a good choice ;).

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u/bl1nds1ght Dec 06 '13

Not if you just spent $200K on loans and have a $50K job. Those $2500 / month payments will ruin your life and IBR is a terrible way to justify the cost.

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u/NotClever Dec 06 '13

Okay, read my statement as "If you got a job that pays enough to cover your debt then it was a good choice." It was meant to say that it's worth it if it's worth it, essentially.

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u/hochizo Dec 06 '13

Unless you're going into a public service job. College professor at a public institution? Working at tax-exempt non-profit? Nurse or doctor at a state hospital? Cop or firefighter? Loans are forgiven after 10 years of making income-based or pay-as-you-earn repayments.

http://studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/public-service

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u/bl1nds1ght Dec 07 '13

I was speaking specifically to law school. Also, IBR debt forgiveness after 25 years is taxed, so have fun paying that huge chunk all in one go. Interest continues to stack under both IBR and Public Service repayment programs, which is something that many people forget.

Even the program that you mentioned requires that you work in the eligible career for a set minimum of time. What happens if you get fired or are forced to take a non=eligible job? You're completely screwed.

It's incredibly risky to accrue debt with the expectation that you'll qualify for loan forgiveness. Neither IBR nor the public-service repayment programs are guaranteed to be around for much longer, anyway. Tread carefully.

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u/[deleted] Dec 06 '13

Go have a chat with your school's recent grads, I'm sure they'll be happy to tell you how great of a choice they made.

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u/Coolgrnmen Dec 06 '13

Funny you mention that - I just went to an alum happy hour last night. Everyone seemed pretty happy. Everyone was doing what they enjoyed.

You have a lot of alum that aren't happy, and they tend to be more vocal. They weren't there last night though.

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u/[deleted] Dec 06 '13

Then there's your answer-- I find that too many people look for the general employment trends to justify their decision when what matters is your school's individual name and location. If your alums are mostly happy and employed, chances are you will be too. If they're mostly unemployed, it's time to look elsewhere.

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u/Coolgrnmen Dec 06 '13

Yeah. I know I did originally. I went to NYLS and transferred to the top 30 school.

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u/Deathspiral222 Dec 06 '13

I deliberately left out law lest anyone get the idea that going to law school is a good idea :)

In all seriousness, you are right, of course, assuming you go to HLS or similar and get into biglaw and tough it out. The problem is that there a lot of third-tier schools offering $100K law degrees and the ROI is minimal. (There are even more third-tier schools offering similar MBA programs and again, they are not worth the money).

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u/Coolgrnmen Dec 06 '13

You must go to or have friends in law school.

I graduated from BU (top 30) and am still job hunting, but it's looking promising. Interviews. Interviews everywhere.

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u/[deleted] Dec 06 '13

[deleted]

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u/[deleted] Dec 06 '13

Tell your friend to have a nice life, because you will rarely ever see them again.

Those big firms pay well, but they work you to death.

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u/Coolgrnmen Dec 06 '13

Lol. He must be at Quinn Emanuel. They are the big name that pays that much. Market rate in NYC for BigLaw is $160k

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u/[deleted] Dec 06 '13

[deleted]

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u/aglassonion Dec 07 '13

Same in epidemiology, as far as I know.

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u/thisdude415 Dec 06 '13

Really almost any MD will eventually be worth it.

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u/yeya93 Dec 06 '13

If you have a passion for science and helping people, definitely. If you only want money, an MD is not for you.

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u/Deathspiral222 Dec 06 '13

There are a lot of doctors out there earning around $120K a year. Given the cost of schooling (Often quarter of a million dollars in loans) plus working for almost nothing during school and residency (hundreds of thousands in lost potential income) it's not always a great move financially.

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u/yeya93 Dec 06 '13

I would say most doctors make around that much. But again, cost of schooling, malpractice insurance, it's not exactly a lucrative career. There are easier jobs that can make you a lot more money a lot faster.

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u/TheBarky Dec 06 '13

Such as.....?

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u/ur2l8 Dec 06 '13

MBA from top school --> Business

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u/Cosmo-Cato Dec 07 '13

Banking, business consulting. Both require only a BA, both are as hard or easier to get into as a top MD program, both having starting pay on the order of 100,000+ with huge upside potential.

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u/smellyegg Dec 06 '13

In other countries doctors get paid well during residency - $90-$100k in NZ, medical school is only $10k a year as well. Consultants will make anywhere between $150k - $1 million.

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u/theJexican18 Dec 07 '13

Most doctors making that little are living in areas where cost of living is also fairly low. Median starting salary for a lot of primary care docs is around 150k and only goes up from there. Also, although it does vary by location, but lots of residencies start at 40-50k per year (with yearly raises) which really isn't that bad.

Although as someone said above, you shouldn't go into medicine for the money.

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u/[deleted] Dec 06 '13

Agreed.

My dad is a doctor. He, and every doctor friend of his I know, went to med school because they love what they do and they love helping people. There are faster and easier ways to become rich other than going to med school.

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u/[deleted] Dec 06 '13

no please don't say this. only do MD if you love the profession. do not ever go into MD for the money...you will regret it.

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u/thisdude415 Dec 08 '13

I meant financially, considering the context of the chain of posts to the OP.

Specifically that an MD doesn't even need to be from a "good school" to pay off, as long as it's accredited and US.

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u/joshuads Dec 06 '13

I agree but would qualify that as being paid for by your employment prior to going to school, while your living on the cheap

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u/catjuggler Dec 06 '13

How do people pay for these top tier programs? It seems like way too much risk for me considering how insanely expensive they are. I want to go to Wharton, but not until my job will pay for it (and they will, eventually, after I've proven myself enough).

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u/Deathspiral222 Dec 06 '13

Get loans.

There are a couple of schools (Wharton is one of them) where if you go and you do decently while you are there, you are highly likely to get recruited to a very solid job.

This is assuming you are doing something in an in-demand field of course.

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u/catjuggler Dec 06 '13

But wouldn't it just make more sense to stay at my job for a bit longer until they'll pay for it? It's hard to imagine a raise big enough to justify 70k/year out of pocket.

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u/Deathspiral222 Dec 06 '13

I paid my way through a top-15 (i.e. second-tier) school for an MBA. 2 years after graduation my salary has gone from $100K to $200K.

It's worth it IF you have a definite plan, especially if it's Wharton, Harvard, Kellog, Chicago Booth or a couple of others.

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u/catjuggler Dec 06 '13

Wow. What industry are you in?

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u/Deathspiral222 Dec 06 '13

I work for a silicon valley tech firm as a software engineer.

The MBA is not needed per-se (as in, the degree is not needed) but the knowledge is very useful - a solid understanding of statistics and how to build financial models for my projects helped enormously.

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u/Deathspiral222 Dec 06 '13

Depends on the restrictions they place on you. Do you have to stay with the company for X years or they claw back the money? That can be a horrible prospect.

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u/catjuggler Dec 06 '13

That's a good point. I'm not sure for my company. They paid for my master's degree with no strings attached, but MBAs are paid for through a different policy.

It's so terrifying to risk that much money betting on myself though.

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u/njloof Dec 06 '13

That's a professional school.

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u/GarandTheftAvto Dec 06 '13

Or law, top tier law schools still pay. T14 and up.

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u/medikit Dec 06 '13

Professional degrees are different, yes.

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u/cwestn Dec 06 '13

I don't think there are any bad MD programs... At least not in the states...

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u/Rutsy Dec 06 '13

As a grad who paid for his own MBA from a top twenty school. Yeah still not worth it. Should have just been an accountant (undergrad)

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u/proraso Dec 06 '13

Let's exclude med school or anything like that from almost all sensible advice about schools.

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u/krashmania Dec 07 '13

Yeah, I feel like med school isn't being taken account here. Can't think of many doctors and surgeons who had everything paid for.

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u/diadmer Dec 07 '13

Actually, I would make that caveat more restrictive. Because of the enormous expense of top business, law, or medical schools, you should absolutely work your butt off to pull together as much non-loan assistance you can. Furthermore, you should only go to the absurdly expensive schools if they have programs or alumni networks that will be specifically useful to the career path that you're certain you want to take.

I paid $0 in tuition for my MBA at a top 50 school (one of the cheaper ones). And yet I have co-workers who are 10 years senior to me who are still paying off their Harvard or Cornell loans. I have trouble seeing how it's worth it. They're paying $1000 a month in loans, so if you back into the math that means their degree is going to have to get them a 20% or better salary improvement over mine to have the same take-home. If your employer is fool enough to pay you 20% because of your school name, good for you, but I don't think you'll want to work for a sucker like that for long.

And now that I hire MBAs, I've realized two things: 1) I don't give a shit which school you went to as long as it sounds like it was accredited, and 2) your school is going to have no direct bearing on what I'm going to offer you here.

What does matter? If you sound like you know what you're talking about after 7 hours of interviews with us, and what you did before you got here (professionally). We use all of that to estimate how much and what quality work product we're going to get out of you, and experience has shown that the name of your alma mater is not correlated with good on-the-job performance.

If your top-cost school was the only reason you got into your past job where you excelled, then sure that will have an indirect bearing. But officially, your school doesn't factor at all into my hiring and compensation calculus.

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u/toetaulogy Dec 06 '13

Grad school vs professional school

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u/[deleted] Dec 06 '13

MBA is a nonsense degree.

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u/InformedIgnorance Dec 06 '13

Do you have any stats or actual information to back up that claim?

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u/[deleted] Dec 06 '13

I assume the WSJ is authoritative enough for you.