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I'm asking on behalf of a friend.

He currently holds a temporary position at one of the top research institutes in the country. I know that he is excited about his work because he talks enthusiastically about it all the time. He'd ramble on happily for hours about the developments in his field and how the work done at his institute has a very real effect on society.

However, he has recently been offered a place to study for a PhD at the same institute. Though a great opportunity he is rather worried about the financial cut he would have to suffer if he takes up the offer.

Given all the stuff that's around on the net about how you should not do a PhD if money is really important to you, I'm wondering what a person in his position should do (i.e. loves research, but really wants to earn money) and what I should say to help him make a decision.

For what it's worth I'm a PhD student too (studying a different field at a different university)

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    You can always earn money after PhD. Plus a lot of R&D positions require advanced degrees (and the pay is quite substantial). – Cameron Williams Apr 15 '15 at 4:14
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    While there's some good insight below, a hefty dose of skepticism should always be applied to the answers of questions which take the form "will career choice x make me lots of money?" The answer, my friend, is blowin' in the wind... – ebrts Apr 15 '15 at 8:47
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    If he wants to earn a lot of money he should not allow others to ask for him without paying them or expect to get FREE advice from the internet. Want a lot of money and require people to answer my questions for free are two contradictory terms – Alexandros Apr 15 '15 at 9:35
  • @Alexandros He doesn't know that I asked it here yet. I just figured it would be easier for me to ask the question myself rather than convince a confused and stressed out guy that writing a question here for strangers on the Internet to answer is a worthwhile use of their time. – Dissa Apr 15 '15 at 11:58
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You shouldn't do a Ph.D. if you don't love research. You also shouldn't do a Ph.D. if you want to get rich now, since it will require a number of years living on a graduate student stipend.

However, most STEM field Ph.D. graduates have ample opportunities to make lots of money, including:

  • Founding a startup based on technology developed during their Ph.D., or joining somebody else's startup
  • Selling out, particularly if they have a solid mathematical background: there are any number of hedge funds and such that are desperately hunting for magic dust to give them an edge.
  • Just about any industry job will pay a well-suited Ph.D. well - not enough to make you rich, but enough to live a very comfortable life-style.

Of course, there is the danger that by the time one finishes a Ph.D., they may have become twisted such that they are no longer quite so interested in money per se, as happens to many of us.

10

How much money do you want to make, exactly?

This is actually the most important aspect of the question, because "how much is enough" is a very hard question to answer, and violates many assumptions we have about wealth, our own happiness, life direction, and how the world works. And yet it can also dictate how we direct our efforts, so it's important to answer this question personally - there is no one-size-fits-all answer.

In the US, consider the following educational-income statistics:

Median annual earnings of full-time year-round wage and salary workers ages 25–34, by educational attainment: 1995–2012

Or, even better, this one from Wikipedia made from Census data:

Historical median personal income by education, from 1991 - 2010, using Census data P-16, "Educational Attainment—People 25 Years Old and Over by Median Income and Sex". Wages are adjusted for inflation in 2010 dollars.

So if you just want to be above-average in personal income, it really doesn't matter what path you pick - a 2-year degree will likely put you there, depending on field.

Note that a doctorate here is shown to gain higher income than a Master's, but note you could likely make more money skipping both and focusing on the professional degree instead (medicine, law, engineering, etc). You'd likely make more than a PhD with possibly less time spent.

But I Want To Be Rich!

How rich, exactly? If you just want a low-six-figure yearly income, you can do that with a Master's, PhD, professional degree, or even a Bachelor's in a high-paying field (like computing, for instance). So it doesn't matter.

But do you want to be, like, 1% rich? You're going to need a bigger boat.

Wealth of different percentages *Note: This is income per family, not personal income as previous notes.

Even when accounting for the household-vs-personal income, no one is going to give you a $500,000 yearly income simply because you have a degree - no matter what it is or what school you got it from.

So how did those people get there?

Who are the 1%

The best bet is in executive management, so probably an MBA - the previously discussed professional degree. Having a Master's or PhD is not a disqualification, but it isn't a requirement either.

The truth is, though, being this rich isn't a question of being a wage-earner - you need to be an owner too:

Sources of expanded income

So save a lot, preferably marry rich if possible, and buy wealthy stuff too:

What the rich own

In the end, PhD and Master's pay more than most educational attainment levels and, on average, pay pretty similarly - though some jobs are not available without a PhD, some jobs give preference away from PhDs, etc.

Ultimately, whether or not to do a PhD is not a question of wealth maximization - because if you want to max wealth you should probably do something else. If you are just ok with an above-average income, though, you are ok either way! So enjoy your education and decide based on other factors - or drop out and get a professional degree :)

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If you want to earn a lot of money, a Ph.D. is a horrible, horrible idea. It is very expensive in terms of time, and there are certainly research jobs out there in the private sector. Also, your advisors won't know anything but how to place you in an academic job, and real academic jobs are slowly becoming harder and harder to get.

Get a masters in the field you're interested in, do research while in your masters, and go out and find something in the private sector.

  • He does have a Masters in the field. It's just that there aren't too many research jobs in the country in his particular field so it might take quite a while to get a different job – Dissa Apr 15 '15 at 13:46
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    I think you may be a little biased. Compared to the vast majority of careers, someone with a Ph.D. makes significantly more money (assuming STEM). – James Apr 15 '15 at 15:03
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    @James: almost every study shows that the opportunity cost of getting a Ph.D. makes the degree have a negative ROI. You're almost universally better off getting five years of job market experience. See, for instance: brighthub.com/education/postgraduate/articles/78167.aspx Your salary is more coupled to your existing salary than to your education, and someone in a STEM field with five years experience will make more than a fresh-out Ph.D. – Jerry Schirmer Apr 15 '15 at 17:16
  • @JerrySchirmer: True story about those studies. It has generally been shown to be true that 5 years of industry experience leads to higher total income accumulated (usually by some middle age) than a PhD does. But what those studies leave out is the research component. In order to break into a research position, particularly one with a nice salary, you need a PhD. The OP wants to do research and make money. Those jobs do exists, but you need a PhD or need to be a hyper-exceptional Masters degree holder...or know a guy – marcman Apr 16 '15 at 6:39

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