PhD: the numbers

Graduate School
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<p>OK. I was trying to analyze whether or not a science PhD would be worth it vs 3 years of work experience + MBA.</p>

<p>I am writing this assuming the person does not want to do research, but rather have a business career…and is toying with the idea of taking that analyst position at a consulting firm with chance at a top 10 mba program after a few years or doing a top technical PhD.</p>

<p>Assumptions:
-PhD stipend stays at 18k years 1-5
-“MBA Route” Salary increases at a fixed rate for years 1-3
-MBA Tuition costs 50k/yr in years 4-5
-Time-Value of Money is 5%
-The job opportunities coming out of the MBA and PhD for non-research positions are similar (ex in mgmt consulting, quant finance, etc)</p>

<p>Assuming a 5% salary increase per year, the “break even” starting salary is 56,000. </p>

<p>Assuming a 10% salary increase per year, the “break even” starting salary is 53,000.</p>

<p>Basically…if you know you don’t want to do research and your goal is mgmt consulting/business/etc…and your starting salary out of u-grad will be greater than 56k…its financially better to work for 3 years and get the MBA rather than spend 5 in a PhD program.</p>

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<p>i dont understand. if you don’t want research or research related jobs, why go to grad school? even though the salary might break even (which i highly doubt), grad students don’t do your regular 40 hours per week schedule. and how would a phd help your career?</p>

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<p>If you don’t want to do research then you shouldn’t do a PhD. Perhaps a MS, but that too is debatable. Good work experience and an MBA from a solid business school will get you a lot further than any graduate degree.</p>

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<p>PhD in math would work…and you could still do hedge or other big paying job. Get yourself and DOD grant perhaps? I don’t see your factor of the cost of graduate school.</p>

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<p>in various threads, exit options for PhD’s (including business careers) were discussed as a benefit for that route. also that a PhD might be better than a MBA since <em>they</em> pay for the schooling, not you. </p>

<p>i was just writing this thread to show that while its possible to do that route, you do lose out in the end financially.</p>

<p>in the end…“never do a PhD for the money” is the bottom line</p>

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<p>Just sticking to the numbers game, a grad stduent can do internships during the summer. Typical internships in engineering pay on a 50-70k annual salary scaled to the summer.</p>

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<p>What about the idea that you might be promoted higher up in a company with a phd in science/engineering than having a science/engineering BS and an MBA?</p>

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<p>BostonEng, I know you were just making a comparison, but you also didn’t consider the generally lower cost of living for PhD students. If you have a job (not that being a PhD student can’t be considered a “job”, I just mean a regular job), you’ll likely be paying not only your normal housing + food costs, but also for gas (getting to and from work), a car (and if you are living so close to your job you don’t need one, your housing expenses in any major city will almost certainly be much higher than at your typical college town/ college campus), etc. </p>

<p>Plus the internships thing during the summer, where a PhD student could probably make 15k-ish over a 3-month summer, bumping that $18k/year stipdent to $33k (this is for an engineering PhD). All of the sudden your big difference in money isn’t all that big.</p>

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<p>I agree with the previous posters. It’s true that a business career may be an exit option for a PhD graduate, but that’s a distortion. The main goal of a PhD program, that sets it clearly apart from business, law, medical or other professional schools, is to prepare junior scholars for a career in research, either in academia as a professor, which also normally involves teaching and advising students, or in industry. PhDs may have certain generic skills or abilities (quantitative, analytical, etc.) that may prove useful in business or management consulting jobs, but, ultimately, they are trained to be scientists, not businessmen or consultants. Opting out of a research career after getting your PhD amounts basically IMHO to throwing your training away.</p>

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<p>bruno:
In some ways, research is very similar to management, especially non-theoretical research. Phd’s on the job often have a budget of their own to work with. They can hire full timers/interns, decide what equipment to buy, etc. A lot of management involved. So getting a non-research career would not be throwing the training away, especially if the benefits are better.</p>

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<p>to hazmat,</p>

<p>for a tech PhD, the school usually pays. and also gives you a small stipend/salary. This is one way they bait you in. (I remember on several offer letters I got, “the economic value of this offer is 250k!”). However, a quick numbers analysis can show that it might not be worth it financially (one point of this thread), despite the salary and free tuition. i did include MBA tuition at 50k/yr in the analysis.</p>

<p>to mathtastic,</p>

<p>I’ve heard from some people PhD is essential (For ex. Bio-tech), but I’ve also heard “You don’t need a PhD to be an Engineer, doesn’t matter” (on a job interview). It seems to depend not only on the field, but also on the culture of specific companies. </p>

<p>Many places offer “Technical” or “Management” tracks. I think a PhD may be helpful on the Technical track (to obtain a position like “Chief Scientist” or “Lead Engineer”) but not as useful on the Management track (to obtain a position like “Project Manager” or “VP-Operations”).</p>

<p>So it depends on what you want. Project managers will make more money but spend alot of their time filling out forms, tracking progress, and dealing with employees whereas Chief Scientist will be working on cutting edge research but will have less money and power.</p>

<p>These are generalizations of course, and there are exceptions (I’m sure a talented BS could become Chief Scientist or vise versa).</p>

<p>=========================</p>

<p>to those criticizing the comparison, good points. everyone will have to make their own analysis, and set their own variables. I do think its “fair” to make comparisons based on what you take in, not spend, because hypothetically that car, living in the city, etc. makes you happier.</p>

<p>one thing to note is that many PhD programs are 12-months/yr, IE no summer breaks. That is how mine was before I quit with MS, so I know from first-hand experience.</p>

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<p>another misconception is that studying for a PhD is “party time”. IE, you have the freedom to go to class, go to work when you want…live life up. Be lazy. meet your fellow grad students for coffee every day and discuss how you are saving the world. etc etc etc.</p>

<p>However, the truth is:
-Academia is a business. You are an employee of your advisor for research. You get paid for doing research, and are expected to do the “standard work week”. Sure, there is more flexibility, but you <em>are</em> an employee and are expected to get the work done. If you are lazy you are just delaying the inevitable…IE you will be in there for 8 years
-You could also be a TA , and thus an employee of your students and the university.<br>
-You will be shoved off into the worst offices on campus; out of sight, out of mind.
-Your classmates/cohorts will be mostly foreign. This means your social opportunities may be quite limited, as it may be hard to find common ground.
-You will be “hazed” with fun things like oral exams w/ 3 professors for hours
-The luck factor. Your professor might change schools or get rejected for tenure (screwed). Your research area could go from hot to cold (screwed after PhD). Your results won’t come out as expected (screwed). Your equipment could get screwed up (screwed).
-You are going to spend a significant amount of your life on one project that in the end, will probably not mean much. Oh and you will get paid hardly anything for it.
-The outline and goals of your PhD aren’t concrete. Your advisor’s economic incentive is to keep you there as long as possible (heh, can’t beat smart, ambitious people working for 18k/year). Those 4-8 years of your life (yes its that variable), and then your life after that, are ultimately determined by several faculty who are always pushing for “just another paper” or “just one more semester”.</p>

<p>Meanwhile, your friends from u-grad got nice jobs in the city, are partying it up every weekend, have nice apartments…and then go for an MBA which is surely a more “fun” degree. I am not knocking the academic rigor of an MBA, but for someone that likes business they will have a great time in that program. Also, MBA is filled with other ambitious and successful Americans, so you have alot in common, etc. And finally, MBA is concrete. You see what you are doing and where you are going.</p>

<p>===============================================
the main reason i even posted this thread is I would hate to see other people make the same “mistake” I did and pursue a PhD if they don’t have a passion for research and becoming a scientist.</p>

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<p>I think right there is the fatal weakness of the comparison. The truth is, if you don’t want to do research, you’re probably not going to finish your PhD. Not everybody who enters a PhD program graduates. In fact, I seem to recall reading somewhere that only about 40-50% of all incoming PhD students who actually complete the program. That includes many people who actually do like research, but run into problems anyway. For example, sometimes you just can’t get sufficiently compelling results from your data to put together a passable thesis no matter how much you like doing the research. So if even some people who love research can’t graduate, imagine how it must be for those people who don’t even want to do research. </p>

<p>Now, one avenue that * might * make sense is to get into a PhD program, get the stipend, and then just leave after getting a master’s. This is obviously a lot better than paying for your masters.</p>

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<p>Uhm.</p>

<p>You act like this is some brilliant bit of knowledge. Of course an MBA is going to get you more money. But then you have to work jobs that an MBA gets you.</p>

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<p>Uhh, yeah. It’s a job. That’s why they pay you. This is an epiphany?</p>

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<p>The horror.</p>

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<p>OMG! ASIANS! INDIANS! THE HORROR!! </p>

<p>Maybe if you have trouble finding common ground … it’s not the foreigners fault. And if you really, truly need your precious, precious white people, I’m sure you can find some to hang out with.</p>

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<p>I’d rather be intellectually challenged than sit through stupid office meetings every week</p>

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<p>And none of these mean you can’t get a PhD, just that life crapped on you and you need to readjust.</p>

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<p>(I fixed your quote)</p>

<p>With an MBA, you are going to spend a significant amount of your life on one project that in the end, will probably not mean much. But you will get paid a lot for it, because all that matters is that sweet cash money. How else can you get that sports car and trophy wife? </p>

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<p>Believe me, corporate America has your best interest at heart.</p>

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<p>And in 10 years, who cares?</p>

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<p>Yeah, those PhD students are straight up slackers man. Have you seen those beards? They have to be slackers.</p>

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<p>Is the concrete the reason I get a horrible sinking feeling if I think about being a money-grubbing victim of blind ambition?</p>

<p>P.S. Feel free to completely miss every point I’ve made, poke fun at me for having ambitions other than money, try to convince me that I’m lying to myself, feel superior and tell me how awesome you’re going to be compared to me.</p>

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<p>Haha… Great reply, Mudge.</p>