Last summer, I was reborn. After working for over 20 years in the corporate world, I suddenly found myself out of work – and not by my own choice.
Like many closely-held companies, my employer ran into financial problems and decided to lay off some of the higher paid employees to try and quickly right the ship.
During my work history, I had been out of work once prior. In that situation, I had actually quit my job and started a new company. Unfortunately, my timing then was not great as shortly after, we entered the great recession. It was taking much longer to ramp up than I had planned and while that was happening, I was offered a full-time position. It was too good to turn down, so I took the job.
I can say that having both quit a job without another steady salary lined up and been laid off, I would go with the layoff any day. Once you get over the initial shock of the layoff, it’s a much better position to find yourself. This is especially the case if you can negotiate a severance package to provide time to figure out your next steps. If you want more guidance on negotiating a severance, consider purchasing How To Engineer Your Layoff, by Financial Samaurai.
Now That I’m Free, What Should I Do?
But back to my rebirth last summer. After the layoff, once I had a chance to process the situation, I started thinking about next steps. That’s when I launched this site. I knew writing was something I wanted to purse, but personal finance blogging was a new experience for me. I spent quite a bit of time thinking through what I wanted to say and I spent time developing the site. I wasn’t worried about getting anything done quickly, I was really just playing around.
After a few months, things did start coming together.
Fast forward and the result is what you see on this site today.
But now I am faced with a new opportunity.
In addition to this site, I also provide financial advisory and management consulting services. And in order to expand the capabilities of my advisory business, I am looking to add credentials, specifically I am planning to sit for the CPA exam.
But is a CPA worth it?
For those not familiar, the requirements for earning a CPA vary somewhat from state to state. But the essential requirements are the three E’s which include education (a bachelors degree with at least 150 credit hours including 30 accounting hours), experience (1 to 2 years working for a licensed CPA), and exam (need to pass the uniform CPA exam).
The good news is that it appears that I have met all of these requirements with the exception of the accounting classes. I need an additional 21 hours of accounting. There are a few different ways I can earn the required accounting credits:
- Community college
- Local university
- Online state school
- Online for-profit school
How Much Does It Cost to Get a CPA?
The criteria that I’ve established for evaluating these options is as follows:
- Cost. As I discussed in a prior post, the cost of college can be significant and varies quite a bit across different schools. For the four options mentioned above, the cost breaks down as follows:
- Community college – $90 per hour ($1,890 total)
- Local university – $300 per hour ($6,300 total)
- Online public school – $500 per hour ($10,500 total)
- Online for-profit school – $750 per hour ($15,750 total)
- Flexibility. The flexibility of taking classes online as opposed to the need to sit in a classroom ranks pretty high in the evaluation. While a portion of the community college classes are offered online, all of the local university classes are in a classroom. And obviously, all the classes at both the online public school and the online for-profit school are online.
- Time to complete. In that having a CPA will allow me to provide services beyond my current capacity, the longer it takes to earn the certification, the longer before I can begin selling these services. So again, this could be a significant factor in my decision.
- Credibility. Lastly, with the proliferation of online education, the question of credibility has become an issue. In the case of a bachelors or masters degree, having earned your degree from a credible school is vitality important. The time, money, and effort required to earn a degree shouldn’t be negated by the lack of credibility from the conferring school. But unless I plan on actually earning a degree rather than just taking the minimum classes required to sit for the exam, I’m not sure credibility is as much of a factor as the other elements.
What Is the Best Way to Earn Accounting Credits?
I can pretty quickly eliminate both the local university and the online for-profit options. Unless I plan on getting an actual degree, I’m not sure why I would spend the additional money to attend the local university rather than the community college. Similarly, I’m not sure what benefits justify the additional cost of the online for-profit school over the online public school.
That leaves the community college and the online public school options. Again, the cost difference of more than $8,000 between the two options is significant and difficult to overlook. If I can make the community college classes work, that’s going to be the best option.
The only caveat to this is the time to complete. I need to do additional research to determine how long the classes will take at each school.
What do you think? Is a CPA worth it? How much value can I put on the flexibility of online classes?
Stefan @Mllnnlbudget says
From somebody who is doing their cpa currently I would definitely say yes. There is an abundance of job opportunities for somebody with a cpa. The time and cost to get it can quickly be repaid! Border and dedication is the hardest part in my opinion.View Comment
Financial Slacker says
That’s my thinking too. I’m not sure I really want to be an accountant, but having the CPA is a requirement for most CFO jobs.View Comment
As someone who is a CPA, I would say it depends.
At the very least, I will say the accounting courses will likely have a very high ROI in and of themselves, so I would recommend taking a few at least. The ROI comes over time, so it won’t be an immediate return, but the mindset of accounting will help out in everything you do moving forward.
There’s a video where Warren Buffett mentions the same thing about accounting and goes on to say a local college offers the same level of accounting courses than the ones you would see on an ivy league campus. Seeing as how accounting is as much of a science as you can get in the business world, I would have to agree. Much of the learning will likely need to be self-taught, in either case.
On another hand, I would suggest picturing yourself in five years with still another ~20 years before the standard age of 65. That’s 20 years you could be putting that CPA to work. You could even provide services after the age of 65.View Comment
Financial Slacker says
The short-term ROI would be even better than you know as I have a number of existing clients that need a CPA to prepare their audited financials. Currently, I have to refer the business to a third-party, but with a CPA, I would pick up that additional revenue.
And even if I don’t want to be an accountant for the next 20 years, it’s a great credential that can open many doors.View Comment
Working Bee says
I think in your case, CPA is a tool to help to build up the credentials. CPA exam is just another exam. Try to get it completed with less cost and time. Some community college does offer cheap online accounting classes with credits, so you might want to explore that. I took my CPA exam over the course of 5 months. For me, it’s worth it since the company was paying for it. Two months later, I had a promotion but I believe it’s cuz my hard work, not because the CPA..:)View Comment
Financial Slacker says
That’s exactly right. I’m not sure I really want to go into accounting, but having the credential can open doors.
I feel confident that I can learn the material and pass the test. I self-studied for all three levels of the CFA and passed those.
It looks like the quickest and most flexible way to get through the required classes is online, but it may also be the most expensive. I’m researching other online options that might get me there in the same timeframe for less money.
But to be honest, I think timeliness may be more important than cost at this stage.View Comment
Thias @It Pays Dividends says
A CPA helps give you credibility. I believe that I got a interviews just because I had my CPA because a lot is focused on what certifications you have. Is it worth the cost to get that credibility? If you are working individually with clients I say yes. If you are in the corporate world, I don’t think it is as important. I will keep mine up now that I have it but I don’t think it add as much to my career bow that I am in private industry. Good luck! The happiest day of my professional life was getting notice I passed my last test because it meant I was finally done!View Comment
Financial Slacker says
I have been slowly coming to the same conclusion that the additional knowledge would be beneficial. But the real value is the additional credibility which would help me both getting new private client business as well as getting in the door for corporate CFO roles.View Comment
Hi Slacker, hope you’re doing well. I just wanted to chime in as a CPA myself, who actually works in investment banking. You mention CFO above and I just wanted to note is very different from many typical CPA type jobs.
CFOs are generally long-term, forward looking minded, they need to have strong financial background, particularly in modeling, understanding budgeting and things like M&A. For this type of position, if it is what you are seeking, I would highly suggest an online MBA from a solid school. There are relatively cheap options out there, it’s what I did, and you kill two birds with one stone. An MBA/CPA combo will likely never go hungry.
I just personally believe taking random classes to fulfill the credit hour requirement is a waste of money, get some more career advancing letters with it 🙂
Financial Slacker says
Thanks for commenting, DividendStacker. What you are saying makes good sense.
I actually already have my MBA in Finance. I earned it many years ago and have spent the last 20 years or so working in corporate financial roles (FP&A, treasury, M&A). I also have a CFA, but I am finding that even though the role of a CFO is not just to be an accountant, there are many companies that are requiring the CPA designation even to get in the door.
I also see the CPA as a benefit working freelance. Many times, it’s easier to start with accounting, tax, payroll, even bookkeeping services to develop a relationship. Over time, as the client needs additional financial advisory services, you can fill that need. I’ve found it a little more difficult to sell financial advisory services as a stand-alone service, although more recently, I have had some pretty good success.View Comment