PhD deciding between MBA and MFE

[Xin Gu]

Hello, everyone! I am 29, have PhD in Mechanical Engineering from a mid-ranked university, am quite good at math and programming, and just started working in NYC as a software engineer in finance industry for 150K. I am considering the following career paths:

1. Continue working in software development, probably get CFA to better understand the domain, but concentrate on pure engineering otherwise. If everything goes well, I will break 200K in 4-5 years on my current job, but 200-220K will be it unless I move into management.

2. Pursue Harvard or Wharton MBA, try to move into management or consulting in finance.

3. Get MFE and concentrate on quantitative finance/software engineering.

Speaking of maximizing the income over the 15-20 years, what would you recommend? I am very interested in comments on #2 and #3, as I have only vague understanding of those career paths. Thank you.

 

[Connor]

Maximizing income in your career is great and all but don't forget to think about the kind of lifestyle you want. How are the hours where you work now? What's the work environment like? Relaxed? Stressful? Consider these things.

2. You are almost too old for these programs and would have a better chance at an executive MBA after a year or two of experience. I think you would need to address why a full-time MBA over executive in application.But as to my point above, you'll probably make more money in management or consulting but will probably also work longer hours and have more stress.

3. Not sure you would need an MFE to do this. Some work experience and maybe the CFA could probably get you there.

 

[Xin Gu]

Connor, thanks for input. My hours and exposure to stress are quite bad right now, so I doubt anything would be significantly worse And actually, I’m fine with that. The only thing is if I am to continue working this way, I would like to earn more, which is why I’m considering all these potential career moves.

 

[kwlmy]

In the next few years, spend some of your time networking with the right people - that may be more helpful in aligning your career path than any degree.

 

[Jose T]

I don't think you're too old. I was about your age when I started an MFE.

I do think (1) is the best bet.

Your first salary out of an MFE or MBA will probably be less or equal to your current salary unless your willing to go back to your old work (then why get the degree?).

You should look at it as wanting to maximizing your wealth after 15-20 years, not your income. Do this by saving and investing money, preferably in a tax deferred vehicle such as an IRA or a 401K. Contribute the maximum to these plans even beyond where your employer matches because not paying taxes on the money is such a huge benefit.

For a 2-year break from your current salary (i.e. not saving money that accrues some yield), plus paying tuition and living expenses out of pocket to be worth it you need to have the expectation of making a multiple of your current salary (150k). In other words, to compensate for your time not working and paying tuition, you need to be paid a lot more because your marginal tax rate is sky high at this point.

It is possible that you will make a lot more than your current salary one day, but, if you do, I don't think it will be a function of whether or not you had a MFE or MBA (luck plays a role).

Moving into management does seem like a good path for you eventually though. If you think an MBA would help that, you could get an MBA part-time. Your employer may even pay for it for you.