A Ph.D. in finance opens up students to many potential job opportunities, but there are some serious drawbacks to getting a Ph.D. in finance. The decision to acquire a Ph.D. in finance is something very personal, and it may not be the right fit for all individuals.
Not for Love of Making Money
Many people believe that if they get a Ph.D. they will make more money than they otherwise could with an MBA or similar graduate degree. The first thing to keep in mind is that getting a Ph.D. does not entitle you to a job that an MBA or similar finance or business degree does not. You can still become a high-ranking executive, with a six-figure salary, whether you have a Ph.D. or a master’s.
Remember that the term Ph.D. literally means “Doctor of Philosophy.” Philosophy is the act of thinking, theorizing and researching. That is what a Ph.D. especially prepares candidates to do, according to an online article. There are, therefore positions within companies that are suited to a Ph.D. because they involve research surrounding how money flows and works. However, from a money-making standpoint, there is little that a Ph.D. can do that an MBA cannot.
Those considering a Ph.D., therefore, should do so not for a love of making more money or a higher wage, but for the love of acquiring knowledge, doing research and sharing that information with others. The work done by those with a Ph.D. is valuable to business executives and economics experts, but that doesn’t mean that they will offer you substantially more money or a better position for it. The fact is that many Ph.D. graduates work in academia, not business. That said, there are many options for graduates to explore, as detailed in this article.
The Cost of a Ph.D.
There are two significant costs of a Ph.D. that must be considered. The first is obviously money. College is an expensive endeavor, and many people do not do paid work while acquiring advanced degrees. Some Ph.D. candidates get their schooling paid for by various institutions because the work they do getting the Ph.D. will then be provided to these organizations for free, and they consider that information worth the cost of tuition. Without such sponsoring, gaining a Ph.D. can be a financially daunting affair for those not already of comfortable wealth.
The second, no less significant cost of a Ph.D. is time. Gaining a Ph.D. requires, on average, an additional four or more years of study after a graduate degree. This means that at grand total, a Ph.D. graduate has invested four years of undergraduate tuition, another two or three years of graduate education and another four or more years of doctoral education. Unless they took a break to get work experience in-between, they will be at least six or more years behind the average graduate in job experience. While getting advanced degrees does generally mean higher pay, it often lags behind someone who has been climbing the career ladder for the last six years while the Ph.D. graduate was toiling away in school.
The decision to pursue a Ph.D. in finance, or any other field, should not be taken lightly. A Ph.D. candidate must have a clear vision of what they want to do for the rest of their life. They will be sinking over a decade of life and hundreds of thousands of dollars into education, and they will need to be sure it is worth it to them.
