Which is better, an MBA or PhD?

"Where do you guys think the best salary and/or overall job opportunities in finance exist for a current physics student? A PhD, possibly in mathematical finance, or an MBA."
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It's funny that polpolik and only a few others understood the framework of the original poster's question, which was asking which degree would offer the best salary and/or overall job opportunities in the market.

The OP doesn't even seem to care about which route will make him the best trader. He's obviously more concerned about landing a high paying job and getting fat bonuses than trading his own money.

And then it's so amusing to observe FXScalper come in expressing so much insecure frustration and crying in here that there's A TON of hope for high school drop-outs without GEDs. In fact, he's even making absurd suggestions that there's more hope for drop-outs without GEDs than people with higher education while also regarding PhDs as foolish chumps.

Well, that's a common self-comforting role in ET, and FXScalper, the high school drop-out, quintessentially embodies that element to the full degree. Look. Acquiring a PhD or MBA won't necessarily make you a top trader. That's a given. However, it will offer the candidate supreme opportunities in the working world and more financial security in life.

But if you don't even have a simple GED, you don't really have too many roads to take and trading a small account for retail Oanda is really the only rope you can grab since you're not even qualified to be in a low paying back-office role. I'm not even sure if Best Buy hires people without high school diplomas.
 
Fxscalper is like a redneck from Alabama who hit the lottery big time.

"Well, son, all's you gotta do is spend yo day huntin them deer, come home to your wife with purdy lips, watch Tv, drink some bud, and play the luttery. Look at mee, I gots no educasyon but I'm sure richer than them Ha Skool Graduets"
 
the most important degrees for making money are:
- a decent degree of intellectual talent
- a good degree of creativity and salesmanship (marketing savvy)
- a very high degree of drive and passion

the alphabet degrees (PHD, MBA) are usually a manifestation of some, if not all of the above, but never a necessity to make it to the very top of any business-focused profession.

strangely, the alphabet degrees are typically a requirement for admission into the middle ranks of any decent-paying business-focused profession.
 
Quote from mrclean:
Why only if I want to teach?
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Because only if you want to be a professor you will be at a disadvantage if you don't have a PhD.

Lack of a PhD is not a serious disadvantage for the finance job market. As I said. If you need to know anything taught at a PhD program, you can either audit, read something or just hire a PhD.
There is no need to waste 4-6 years of your life getting a PhD if you don't want to teach. Plus MBAs make more money than PhDs.

If you need to feed your ego, need to have a piece of paper saying you're smarter than the rest of the world, go for the PhD, but that will cost you money and time.
 
Quote from rufus_4000:

I have a doctorate, but not in finance, so maybe I am biased here. First of all, MBA and PhD are substantially different degrees, even if one does not plan on a career in finance.

MBA, IMO, is a professional degree, it teachs the basics of business analysis and management. In finance, MBAs tends to be research analysts, bankers, basically everything except quants. If you want a good (great) future in finance, I would recommend that you focus on the top-flight b-schools as your MBA, which means you will need working experience. Only getting an MBA from a top flight school can you have a fairly good chance of doing finance at a top house.

PhD, on the other hand, is an academic degree, it focused on in-depth research on one or more academic problems. Keep in mind that these problems may have little relation to the real-world finance problems at all. Which is why most quants in finances actually have hard-science phds. Finance PhDs tend to get on the strategists path, not a desk quant. It is just my opinion, but I won't recommend anyone to do a PhD and think about getting into real-world finance at the same time, you need to focus the 4-5-6 years on pure research in order to get your degree, not think about what you will do with it after. Instead focus your attention on publishing some good papers, getting your hand around some interesting problems should be your focus. Yes, if you can publish one or two papers in top end journals (JoFinance, JoFinEcono, JoQuantFin, etc), you can easily write your own ticket to any top financial firm, it is that easy. 3-4-5 of B-level papers (JoBusAndFin) helps too, but not even close to having a single A paper will help. To make a physics comparison (since you are a physics major), it is as difficult to get published on JoFin than JoPhysics. The paper rejection rate is at least 85%, and the review cycle is around 9-14 months.

My take is that if you want to make money, think about the MBA path, really. Only invest the 4-5 years for a PhD only if you like the academic and research aspect. In both cases, a top school is important, MBA much more so, in PhD, who your supervisor is matters more.

Hope this helps.
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wow....
thanks for all the clarifications...

my take is that those suited for the suit jobs are good at looking that way...

those taking these jobs (read opportunities) as traders that participate on these threads are not suit types....

just a thought....
 
Quote from polpolik:

"Where do you guys think the best salary and/or overall job opportunities in finance exist for a current physics student? A PhD, possibly in mathematical finance, or an MBA."

That was the original question, Fx. He wants to know what can give him the best salar and job opportunites in finance and not which one would give him the most income from trading.

I do agree that education cannot make you a successful trader but that wasn't the focal point of this discussion.
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absolutely great point. Both have great qualities as mentioned by a few posters. Unfortunately, I have neither. However, I am pursuing a masters for the sake of having one. As you see in this thread, several are looking backwards instead of looking forward. Then there are have nots speaking about something they themselves have not acquired (ie MBA/PhD). I will provide some incentive on what is what and some background of the arena I currently operate in. None of this will mention trading.

So the looking forward part is a simple Q... What would an advance degree provide? The answer is a matter of agreeing that for certain opportunities, either may be mandatory just to get the foot in the door. As a result, it is understood that without either, certain opportunities will not be available simply because one "cannot fake the funk". This is certainly true in my field, credit derivatives.

Although I am only a pseudo-quant & programmer, my knowledge base stems largely from my EE background. This knowledge base is what allowed me to be able to analyze credit derivatives and to understand and know what is what from a risk and modelling perspective. Rather than put some more examples before you, I'll post some tangibles. So at my former employer, I was finally given the OK to bring in a Quant (PhD in physics from Carnegie Mellon). Although it was largely for my own desire to learn more from then, it was also to leverage their mathematical intuition. PhD in a way forces them to find out what is what in matters of their field or related field. It is a highly developed skill. At the same time, we brought in an MBA for marketing.

The PhD signed on at a salary of 225k with a guaranteed minimum of 100% bonus. The MBA was signed on at 85K and minimum of 75% bonus. With my B.S., I was a more towards the PhD spectrum of the two. Did we have a common ingredient? Sure we had top tier schools etc... However, we all were aware of the same perception which was that what we had asked for was the market average. These are the rates today. I have since stepped into a different oppotunity same arena and as you may have guessed, things are even better. So you will likely see traders here talk about why work for someone why this or that etc... My outlook has always been opportunity. I am still a bit too young apparently and thus still need these vehicles to unlock and open doors. Today I both trade & work. My work allows for me to learn in trading at my own expense. When looking forward, I certainly regret not having an MBA or even a PhD. Reason being, whereas 30 or 40 years ago a BS was a great differentiator, nowadays MS, MBAs, and PhD are the differentiators (ie. most have at least a bachelors). In the future, I see the PhD will be the differentiator... The structured finance arena is ever expanding and many companies are willing to pay top dollar to someone and sometimes even anyone who can slice and dice up the quantitative aspect a few dozen ways...

I hope this helps. Presumably, you are interested in what you can expect as compensation. These are the tangible figures in NYC and the mean. If you can trade also with what you know, as does a close friend of mine (MS in Financial Engineering), his comp is 7 figures. As I tell all of my friends don't short sell yourself and don't fake the funk neither.

Regards,
MAK
 
Quote from Grob109:

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For me the key is using the first part of the 18 months to exact the rewards (just the method which is easily conceded to me) for what I am going to share or deliver to the needy (the outfit that wants to get the capital continually over time).

I take several cuts it turns out and they are less and less obvious.

The sequence I design for is as follows: comission units (x), market additions (xM), overrides (kxM), leverage(BkxM), and finally growth(nBkxM). X is in the range of .01 to .05; M builds up from the model (1) to 250 over the ramp up; K ranges between .15 and .30; B ranges between 12 and 20; and n is usually 4 per annum. Relative to the money flowing all seem to be neglible as the needy see and face me. My personal capacity is handling 5 needy's and my preference is about 3.

To look at a current opportunity, I see the net commission varying by a factor od almost 3. I am using all of these by not working exclusively and this enables me to mix the commissions as I desire. I max "flow". In the 18 months ramp up, the K keeps advancing linearly with an advance at leat quarterly. Leveraging occurs only once and is not shared with the needy at all. n is the purpose of what I do.

There is no way any quant (PhD) or MBA can do the n thing in a career working for a corporation. It is necessary for anyone who wnats max income to not be staff for a corporation. The corporation (needy) has to relate to you as the source for meeting their needs to inflow money.

To use excerpts from this thread and provide examples. Gates is not the wealthiest. In contracting with the wealthiest, the hook had to be new markets. Two avenues were designed to create the flow. Both were "outreach" to a growing segment of the population. Key asked Q in the first two hour meeting: When to you start Germany?
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Having sat in a few MBA classes at the ivory tower, this material is not even on their radar yet. Who's radar would this be on? I only wish I had the time to think this way. Surely the math here will look unreal to most. It is a limitation of perception for sure. I crunched these numbers... The piece I have yet to get a grasp on is how incentive is delivered to those who are employed. In other words, is there any downside to those who are employed on the inside in figuring out exactly what you have laid out and then taking their new knowledge and building the same construct (ie. the introduction of competition)? But then again, you mention that they "volunteer" the time? What is the employees return as opposed to the employers?...

Regards,
MAK!
 
sitting in on a few MBA classes is not the same as being under obligation and holding your career breath that those classes and degree will hold promise of employment....

so perhaps there was a commitment missing there...

I wish I could have understood what you were trying to say. sentence structure and grammer would really help here.

I guess you were saying that the employee could take that inside "know how" and open a boutique and compete with previous employer...


that has happened to the extreme with the explosion of all these upper crust (read: successful) hedge funds...

they were the core departments that brought in so much capital profits to the big boys on Wall Street, and they simply bolted and reformed after getting capitalization....

wow, what a country....

PS. the degree improves the person in addition to making them much more better and attractive to corporate divisions and recruiters (humor intentional :D)
 
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