QuoteOriginally posted by: mynetself I don't have numbers, unfortunately. If you have them, please bring them on. And apologies if my comment made you think I was questioning your undoubtedly superior ability to 'get' things. It was not meant to.How long are you working in finance?Is this how you act everytime someone disagrees with you?QuoteIt proves nothing. And I will admit that it is my own interpretation that his concern was about me, or anyone else for that matter, getting rich as a potential future money donor to the Maths department. Happy to be wrong though.So what was the point of appealing to that anecdote as evidence?QuoteWhile I have no problem in the claim that a Masters at Baruch *is* a rational choice, the real problem lies in the Micky Mouse colleges. (How much is the fee for a Baruch MFE? Is it 50k only?) For one thing, not everyone is admitted to the best colleges. (How many applications and how many places?) What makes you think that *you* will? (Not you, TinMan, personally but a generic wannabe quant.) And if you don't, you're left to play with Micky Mouse or nothing. What's the choice now? Doesn't the same mickey mouse label apply to Phd's?How many Phd places are available at the 'best' colleges?QuantnetThe average tuition for their top ten is 47k, Baruch is 21k.Only one of those courses is 2 years duration, and half of them you can do part time so you can keep earning while attending.In the UK, the part time Oxford Msc is £25k, Imperial and Warwick are full time or part time and again around 25k.QuoteQuoteYour metric of risk is loan defaults? Really?Yes. An easy brush off of your comment is that unless you come up with a better risk metric, we'll have to stick with this one.LOL, it may be an 'easy brush off', but it's still asinine.Having no metric is better than one which is completely meaningless, which is what loan defaults are in this case.Why? Because like you say, Phd students don't take out loans, they get funding.Therefore they can't default, so by your reasoning a Phd is risk free.No wonder you think it's less risky, your model is fundamentally flawed.QuoteOn a more serious note, loan default is the risk metric when asking banks form money, either as a private or as a corporate entity. All they care about is whether you will be able to repay the loan Again, flawed.The bank don't care if you flip burgers or sell a kidney.Their perception of risk is different in this case because they don't care about the outcome outside of you being solvent.QuoteI was implicitly talking only about the financial risks and rewards. What you are talking about here is the "psychological/satisfaction factor". And this is, I think, more difficult to quantify. Come up with a metric, please.We're not talking about anything psychological at all, we're talking about embarking on an educational path in order to get into a particular kind of career.The metric is the number of people who start on the path and get where they want to go, like I said, maybe a recruiter can tell you that. QuoteThe reason I have only focused on the financial aspect is that PhD associated frustration can be (relatively) easily dealt with by just quitting. And then time will heal your frustration. But time won't extinguish your massive loan...But you haven't focused on the financial aspect, you've only focused on one part of the financial aspect.You still haven't mentioned opportunity cost.What if for instance I study at Warwick for 2 years part time?I'll be earning say 50k a year at the time so I can afford the loan repayments, so by your logic there's no risk.After 2 years I've got my qualification, as opposed to being 2 years into a Phd, with a stipend of 30k but salary foregone of 100k.How's your model holding up now?QuoteThis is something I really don't understand. How is a PhD more volatile? What is the greater payoff? The greater payoff is that some jobs specify a PhD.QuoteAs you say, with an MFE you're out of the market for 1-2 years and then you're into the business again, making good money. Isn't that a greater reward than entering the market after 4 years? So what is the bigger reward that PhD offers?Greater potential reward, greater chance of coming away with nothing. i.e. More volatile.QuoteAs for the 4 year median earning of an entry level quant, it's a lot. But you will have to multiply this by the probability of getting a quant job with an MFE in the first place. And my proposal is (nr MFE quants hired per year)/(nr MFE students per year). Seems pretty good to me. Obviously, if you assume a Bruch MFE, then it will have to be (nr Baruch students)/(nr Baruch applications). Happy for you to pick your favourite one...Baruch actually publish those statistics:Baruch27/29 is not too shabby.I've no particular view on the Baruch programme, but they're the only ones I know of that publish figures like this.So I could borrow 20k, study at Baruch part time over two years and have a 27/29 chance of a job earning an average of 90k.Or do a PhD for 4 years, which by your logic is less risky because there's no student loan.QuoteYour reply tries to unmake mine but you propose no alternative.I do have an alternative, don't model the risk of an educational choice by whether you haver to take out a loan or notQuoteThis is kinda easy, especially in a discussion where personality aspects (frustration/satisfaction) will have a role at least as big as the financial rewards. What I have been concentrating on here is the financial aspects of the story, and the reason is that a (perhaps defaulted?) loan spoils a LOT in your life --- you will have a big problem obtaining a mortgage with a defaulted loan in you credit history. So how about we try to first evaluate the financial aspects of the problem and then move on to the more delicate issue of "2-3 yrs into the PhD, frustrated and dissatisfied"?Then you should consider all of the financial aspectsQuoteWould you agree that, financially at least, the PhD is the safer route? (A bit of a rethorical question, really, as I already know the answer...)LOLFor anyone interested there's a discussion on Quantnet about the article:Quantnet

QuoteOriginally posted by: TinManQuoteOriginally posted by: AbhiJ I agree with your point that MFE is a low risk-low reward path , while PhD is a more volatile option. But here we need to quantify PhD ?? There are people on this forum who have PhD in Finance from Top Schools in US, it translates to 60 hour weeks for 6 years. There are also people on this forum who have PhD in Engineering/Physics from mid-tier schools where they had to work relaxed 35-40 hours a week for 4 years. These effort required in the former PhD is twice the latter. Thus not all PhDs are same. I humbly don't think the latter PhDs are better than MFEs from CMU/Berkeley(else bank won't pay them equally). It basically boils downs to how smart you are. There are IMO holders picked straight after bachelors/masters by IBs. For the benefit of people on this forum I am posting the views of a guy who is doing a PhD in Finance.PhD is a very different kind of degree from MBA/MS. You can?t compare them. PhD is a long term commitment of 5-6 years, it is high risk degree and returns are not sure. You need to like doing research work to be able to do well in PhD. If you are not sure about research work in finance, or you are not sure whether you want to go for PhD, I would advise you against going for it. Unless you are 100% sure of doing and enjoying research work, in my opinion, you would be better off pursuing MBA/MS from a good institute in US. Do not think that PhD in Finance is going to launch you in a big way on Wall Street. Although it might, but you can get there much faster with MS in Fin Engg. Your best bet for a quantitative career in finance is MS in Fin Engg.Exactly.I don't think you can consider all Phds homogeneous either, there is no one Phd that you can consider 'typical'.Just that you can't consider that path the less risky one.It amazes me that potential quants can analyze these things without considering opportunity cost and risk.The decision they make is up to them. But at least frame the decision correctly.TinMan,You have to bear in mind for many people in the third world getting money to do an MFE is virtually impossible... The PhD is just the ticket out of a craphole.

QuoteOriginally posted by: EscapeArtist999 TinMan,You have to bear in mind for many people in the third world getting money to do an MFE is virtually impossible... The PhD is just the ticket out of a craphole.Fair enough, that's a very restrictive constraint in that case.That would make any trade off pretty irrelevant.

QuoteAfter 2 years I've got my qualification, as opposed to being 2 years into a Phd, with a stipend of 30k but salary foregone of 100k.After your MS/MFE you may think you are qualified but trust me you are not and your employer knows that. In fact you are easily replaceable with any one with a BS and some common sense. The only reason your employer hired you is because your degree acted as a filter for HR.MBA/MFEs are just cash cows for Universities. The more people they can suck into their exclusive and highly selective programs the more money they will make. Given the rate new MFEs are coming up I wouldnt be surprised if MFE becomes the new standard for entry into Banks.You seem to be confused about a PhD. A PhD (in US) is awarded by producing and defending original work as opposed to an MBA/MFE which you can easily buy.Now like everything else not all PhDs are created equal but if someone has published good peer-reviewed stuff in reputed journals then he or she is up to the standard.

QuoteOriginally posted by: staliQuoteAfter 2 years I've got my qualification, as opposed to being 2 years into a Phd, with a stipend of 30k but salary foregone of 100k.After your MS/MFE you may think you are qualified but trust me you are not and your employer knows that. In fact you are easily replaceable with any one with a BS and some common sense. The only reason your employer hired you is because your degree acted as a filter for HR.MBA/MFEs are just cash cows for Universities. The more people they can suck into their exclusive and highly selective programs the more money they will make. Given the rate new MFEs are coming up I wouldnt be surprised if MFE becomes the new standard for entry into Banks.You seem to be confused about a PhD. A PhD (in US) is awarded by producing and defending original work as opposed to an MBA/MFE which you can easily buy.Now like everything else not all PhDs are created equal but if someone has published good peer-reviewed stuff in reputed journals then he or she is up to the standard.I'm not speaking specifically about me, I'm speaking hypothetically about choosing between 2 alternatives.Someone with an MFE is not qualified but someone with a BS is?Like I keep saying we all know MFEs are cash cows, that's not the point.The point is like you say, if there is a HR filter that dictates you must have an MFE or similar then that's the minimum you need.Especially if it becomes a standard for entry into banks.So then your choice becomes 1-2 years MFE full time or part time, or ~4 years for a PhDWe all know what the difference is between a PhD and an MFE.The question is one of the riskiness of pursuing one over the other.

QuoteThe question is one of the riskiness of pursuing one over the other.The risk you are talking about means different things to different people.However as I have said above the number of PhDs a US university can churn out is restricted by external funding, number of professors willing to baby-sit and the ability of the student to deliver. There are no such limits for MFEs and in theory you can quickly have a situation where there are zillions of unemployed MFEs. Which one would you rather be?With a science PhD you have the option of being a quant, a scientist in a national lab or industry (100s of them) and a faculty anywhere in the country. With an MFE your _only_ option is being a nobody at some bank in 2-3 cities with long commute times.

QuoteOriginally posted by: TinManQuoteOriginally posted by: EscapeArtist999 TinMan,You have to bear in mind for many people in the third world getting money to do an MFE is virtually impossible... The PhD is just the ticket out of a craphole.Fair enough, that's a very restrictive constraint in that case.That would make any trade off pretty irrelevant.And bear inmind that many of the PhDs are foreign. What would be ineteresting is to compare what preportion of PhD quants are from the third world against what preportion of all sci3nce PhDs are foreign born.

QuoteOriginally posted by: TinManQuoteOriginally posted by: staliQuoteAfter 2 years I've got my qualification, as opposed to being 2 years into a Phd, with a stipend of 30k but salary foregone of 100k.After your MS/MFE you may think you are qualified but trust me you are not and your employer knows that. In fact you are easily replaceable with any one with a BS and some common sense. The only reason your employer hired you is because your degree acted as a filter for HR.MBA/MFEs are just cash cows for Universities. The more people they can suck into their exclusive and highly selective programs the more money they will make. Given the rate new MFEs are coming up I wouldnt be surprised if MFE becomes the new standard for entry into Banks.You seem to be confused about a PhD. A PhD (in US) is awarded by producing and defending original work as opposed to an MBA/MFE which you can easily buy.Now like everything else not all PhDs are created equal but if someone has published good peer-reviewed stuff in reputed journals then he or she is up to the standard.I'm not speaking specifically about me, I'm speaking hypothetically about choosing between 2 alternatives.Someone with an MFE is not qualified but someone with a BS is?Like I keep saying we all know MFEs are cash cows, that's not the point.The point is like you say, if there is a HR filter that dictates you must have an MFE or similar then that's the minimum you need.Especially if it becomes a standard for entry into banks.So then your choice becomes 1-2 years MFE full time or part time, or ~4 years for a PhDWe all know what the difference is between a PhD and an MFE.The question is one of the riskiness of pursuing one over the other.Actually for many front office jobs it was the case that the BS was qualified, but the MFE wasn't - but I believe there are many other factors at play. I also think things vary between the US (NY) and UK(London) quite a bit.

TinMan, we are not gonna get to the end of this without numbers. But I would bet you 1k that there are large numbers of MFE-like graduates struggling to get a job in finance. Which means they have thrown their money and time away. Whereas there are not many PhD's in the same situation, if nothing else because not all PhD's want to go into finance. And also because those who do, might not be from a top Uni, like myself, and still get in.

QuoteOriginally posted by: mynetselfTinMan, Whereas there are not many PhD's in the same situation, if nothing else because not all PhD's want to go into finance. And also because those who do, might not be from a top Uni, like myself, and still get in.This is not necessarily true. When I go to recruitment events, I find almost 100s of resumes of Engineering and Science wanting to get into Finance. Among these, there are those with experience and those without experience. Some are not even sure as to why they are applying for Finance except that it pays them more than the engineering jobs. If you need people with raw intelligence, proven ability to do research and programming then one could ( I guess) hire one of these PhDs & then train them. Otherwise, on most occasions you would need experienced people having analytical/coding skills. That being said, PhD is sort of a validation of such ability but having PhD does not necessarily mean the candidate would be a star researcher. There are several PhDs who can't do any research in Finance - they end up just being a quant programmer.

Cryptic26, I'm not questioning this. You can bet though that there are many other PhDs who did not send their CV in. In the maths department where I did mine, I was the only one interested in quant jobs. And I don't believe elsewhere is particularly different. But a PhD that applies to finance just because pays well and doesn't get the job can apply to some research oriented industry and get the job and still have a decent pay. An MFE that doesn't get the job in finance has, on the other hand, wasted time and money. And a job in some other sector will pay him less than the PhD...

STOP with the generalizations. People are making blanket statements left and right here. You cannot lump all Bachelors and MSc's and MFE's in the same pot. I personally don't know much about the MFE's. I can first-hand say that I learned more job-relevant skills in my MSc at a good-but-not-reknown Uni than I did in a 4 yr BA at an Ivy league. I also worked at MBA admissions at the Ivy where I was an undergrad and can tell you the MBA means a whole lot of nothing. It's just easier for employers to stop by at this business school and pick up some folks than it is to hire Jr's cousin and fraternity brother.

QuoteOriginally posted by: staliQuotePhD is a very different kind of degree from MBA/MS. You can?t compare them. PhD is a long term commitment of 5-6 years, it is high risk degree and returns are not sure.The biggest difference is that you earn a PhD (by doing original work) and you buy an MBA/MFE degree. Good US schools dont just give you a PhD and you have to defend your work (during prelims/finals, in journal publications etc.) in front of experts.What you are saying that PhDs are smarter and academically more superior than MFEs. I don't know how it discredits what you have quoted earlier.

For me it's simply not the same thing (MBA/MFE/PhD). And I would like to point out that for me SKILLS are more important than the DEGREES you had

You are totally right, but in this world you can get an interview for the skills you are supposed to have BECAUSE you have a degree. If my skills don't get tested because I don't have a degree, then I infer the degree is more important than the skills themselves.