Decision making in postgraduate education.

Unlike the past, when a degree is required to get ahead, a lot of professionals are faced with the question on what kind of post-graduate qualifications to obtain.

As I've gone through this process twice, here's my two cents worth based on what I've gone through :

i)  CFA or MBA ?

An MBA is especially attractive if you have only 2 years of experience in the working world. For technical professionals, am MBA gives you the chance to make another attempt at a fresh career as a management associate if you dislike engineering or do not see yourself doing technical work.

When I was faced with a choice of CFA or MBA, it was not such a straightforward choice for me. I don't have a problem being technical for a the rest of my life - there was too little coding in my life and I wouldn't mind doing more R&D ! In fact,  I hated politics, bureaucracy and processes. My real problem was that I don't really understand how money works which can be lethal because I don't see a lot of 40-something IT professionals in my workplace in those days.

The CFA program gave me a chance to really study exclusively about how capital is accumulatated. I really don't have to waste any time on marketing, organizational behaviour or operations management. All I studied was accounting, economics, statistics and various asset classes. The Masters of Applied Finance I applied for was also cheap at about $11,000 in 2001. The CFA exams were just examination fees, like all the MCSE, CGEIT and PMP exams I took.

What eventually broke the tie and made me decide on investments was the simple notion that the CFA program is hard. It had a ridiculously low pass rate and the program did not hesitate to maintain high standards when the test takers from China and India started figuring that this may change their life. I saw the rigorous standards as some sort of a moat. The fact that I passed will stand out even if I never obtained the charter.

Was it a good decision on hindsight ? You be the judge.

I never jumped to banking and finance. My salary stagnated the longer I stayed in IT outsourcing but I just kept getting less sleep everyday.  I just did more and more IT work as an operations manager, compliance, audit and finally as a project manager in the government which make me swear off IT for good.

The knowledge, however, came in useful in a time when there isn't any books on investing in local stocks. My income flow from my investments eventually exceeded my earned income which bought me enough time for a more drastic career re-roll.

ii) EMBA or JD ?

The second time round things were a lot easier. if I were to take the EMBA, half of my fees would have been wasted as I would have already done most of  the quantitative modules. The only thing I liked about MBA programs like the one at Harvard's is their case approach which was basically real-world problem solving. I used to devour books on the Case method as I loved the way MBAs dissect a very ephemeral problem and come out with a reasonable plan of action.

Eventually I chose the JD program because it was something which I was not naturally inclined to excel in. Every module was sufficiently alien to me that I would probably learn a great deal even if I were to scrape through every semester. The fact that it's possible to get more philosophical during class discussions was also something I look forward to when analyzing cases.

As for how good this gig will be for my career, only time will tell. There is a very strong and firm moat surrounding legal work in Singapore - this is a public knowledge. But I must be able to convince someone to offer a training contract to a 42 year old.

The biggest opportunity cost is that I would not have been able to network had I signed up for an EMBA program, that might actually be more relevant and would build on my 14 years of experience in IT.

In summary, these are the criteria which I think would be relevant to anyone choosing a postgraduate qualification :

a) Program that you qualify for must be hard and as exclusive as possible. 

The program must exclude as many people as reasonably possible ( But still take you in ). The CFA excludes by having ridiculously low pass rate. The JD program admits only about 40 a year and sets you back $80k once you factor in the textbooks.

This goes back to the notion that we invest based on economic moats. A postgraduate qualification is an expensive investment.

b) Program must teach you something completely new.

You need to benefit from the program and not just develop incremental skills. If I  just want to pick up Python or Big Data , I have Coursera and Udacity to make it happen for me.

c) The Program must be useful and respected in society.

I chose Engineering over Science, Finance over Economics, Law over Humanities. Yeah, it's a pattern.

In a difference society, I may choose otherwise We still live in paper and money conscious Singapore. Education in local institutions is expensive, if you want to part with some dough, you need to convince yourself that this is going to give you new skills and capabilities that companies will want to pay for.

c) The Program must change you in a fundamental way.

This is perhaps the most important. Take away all the skills and knowledge, each discipline confers a certain attitude which should change you for the better.

Engineering made me very comfortable with numbers and grounded me as a concrete thinker. When I am on the job, I try to cut through the bullshit and figure out what needs to be done to get things to work.

Finance gave me the tools to appraise the value in all things. When folks with me dubious numbers, I know the fundamental limits of all asset classes. I know that no one will provide you a free lunch and there's something in it for everyone. There's a little game theory in that.

I have yet to figure how Law will change me, I suspect that I will learn to respect the context a lot more after my course and there are no straightforward answers to issues concerning fellow human beings. I hope to become a lot more strategic and big picture in all my dealings. Hopefully, getting into an argument with me will be a lot nastier ( Oh yes, I will ensure that with my choice of CCA ! ).

At the end of the day, Financial Independence should be meaningful.

If my passive income does not allow me to make a couple of bad, foolish or sub-optimal moves just for the heck of it, then it would not be worthwhile. Crazier folks have quit the workforce on a portfolio of a smaller size.