Let us compare the earnings of 2 finance PhD friends from a top tier school.
One joins academics and in 5 years becomes a fully tenured professor in a business school at a public university. Another joins an exotic desk in an investment bank and becomes a director in 5 years.
The business school professor will be making in the range of 220-280k. Whereas a director in trading at a bulge bracket bank would be making 250k(base)+350k(bonus) = 600k in current environment. Some of it would be deferred compensation.
The professor would be teaching 1 hour per day and guiding research students etc. for 1 more hour per day. Other than these 2 hours, he would spend say 3 hrs per day on his research. So, he works for a grand total of 5 hrs per day. In the months when universities have holidays, professor workload would be even lesser.
The director on the other hand would be in office for a minimum of 10 hrs per day. So, on per hour basis, their salaries would be equivalent.
However, university professor would get a pension and once he gets a tenure, he has a secure job. On the other hand, the director at WS bank could see his job being axed as recently happened across UBS or in recent history as most of the credit guys saw their jobs gone in 2008.
Most interestingly, the expenses of the guy at WS would be much higher than the expenses of the professor. A big reason is NY or London rent and living costs are much higher compared to say if you are teaching at Santa Barbara.
If professor decides to spend other 5 hrs of his job on doing consulting or writing some software that he can sell or just his own prop. trading, well he could end up making more than the trader at a bank.
Current and ex-WS traders might have a hard time believing that a professor could have a better overall life as well as risk/stress adjusted a better salary + pension, since they have always been made to believe that they are the top dogs, but I have seen this happen in real life many a times.
One joins academics and in 5 years becomes a fully tenured professor in a business school at a public university. Another joins an exotic desk in an investment bank and becomes a director in 5 years.
The business school professor will be making in the range of 220-280k. Whereas a director in trading at a bulge bracket bank would be making 250k(base)+350k(bonus) = 600k in current environment. Some of it would be deferred compensation.
The professor would be teaching 1 hour per day and guiding research students etc. for 1 more hour per day. Other than these 2 hours, he would spend say 3 hrs per day on his research. So, he works for a grand total of 5 hrs per day. In the months when universities have holidays, professor workload would be even lesser.
The director on the other hand would be in office for a minimum of 10 hrs per day. So, on per hour basis, their salaries would be equivalent.
However, university professor would get a pension and once he gets a tenure, he has a secure job. On the other hand, the director at WS bank could see his job being axed as recently happened across UBS or in recent history as most of the credit guys saw their jobs gone in 2008.
Most interestingly, the expenses of the guy at WS would be much higher than the expenses of the professor. A big reason is NY or London rent and living costs are much higher compared to say if you are teaching at Santa Barbara.
If professor decides to spend other 5 hrs of his job on doing consulting or writing some software that he can sell or just his own prop. trading, well he could end up making more than the trader at a bank.
Current and ex-WS traders might have a hard time believing that a professor could have a better overall life as well as risk/stress adjusted a better salary + pension, since they have always been made to believe that they are the top dogs, but I have seen this happen in real life many a times.