QUESTION FOR MJ–WHY DOES A MED. DR EARN MORE THAN A QUANT?

[Archimedes27]

Dear Mark

Here’s a question, an answer to which I would I really would value, in view of your experience.

I recall some time ago on your website, a poster asked whether they should take up the offer of a place at Medical School or become a Quant.

If I remember correctly, your advice to that person was to study medicine, since it will make more money. This is not blind flattery (I never give any), but your answer really did cement into my mind your integrity.

I am now presented with the same dilemma – Medicine or QA.

Here are some figures which you recently stated (I’m aware you quoting very approximate ballpark figures, and were, as you stated, very probably out-of-date).

QA entry level salary definitely between GBP 40K and 60K [plus bonus?]

QA salary after a couple of years, maybe GBP 90k package

QA salary after 5 years anywhere between GBP 120K and 250K [including bonus?]

(Source: http://www.markjoshi.com/books/phpBB3/viewtopic.php?f=9&t=731#p2251 )




Despite what you may read in the press, the vast majority of Medical Doctors in the UK do not on average earn 120K GBP per annum. Here are some realistic figures for Medical Doctors’ earnings in the UK, gained from a bona fide source (the BMJ):

F1 trainee (immediately after graduation): 27K GBP pa, equivalent to 10 GBP per hour
Specialty trainee 3: 47K GBP pa, equivalent to 18 GBP per hour
Salaried general practitioner: 69K GBP pa, equivalent to 34 GBP per hour
Staff grade: 81K GBP pa, equivalent to 18 GBP per hour
Consultant: 100K GBP pa, equivalent to 44 GBP per hour
GP partner: 110K GBP pa, equivalent to 45 GBP per hour
Consultant physician: 180K GBP pa, equivalent to 48 GBP per hour
(Source: http://careers.bmj.com/careers/advice/view-article.html?id=20000354 )
85K GBP pa is in fact a realistic lifetime *maximum* salary for the vast majority of Medical Doctors in the UK.


Mark, why do you say that Medicine makes more money?

(a) Is it the relatively short length of a career of a Quant –the half-life of Quant career is 5 years, compared to the lifelong career of a Medical Doctor?
(b) Is it because a Medical Doctor has a final salary pension?
(c) Is it because a Medical Doctor will probably never be out of work, whereas a Quant’s career will be peppered with periods out of work?
(d) Is it because a Quant will make the bulk of their earnings in five years, and then probably leave QA to take a less well paying position (many become Maths schoolteachers), whereas a Medical Doctors earnings continue to rise for a considerable period after graduation?

Thanks in advance Mark….and thanks for the excellent website and maintaining your approachability.

[mj]

i don't really remember the discussion.

i do remember a medic in the US who said he earned 500k US asking if he should
switch to quant and me giving him a "no"

ultimately i'd advise doing some thing that you find interesting and that is in accord with your values.

The current job outlook for quants is not superb. WHen it will pick up who knows.

I don't think many people really want to spend their career as a desk quant.

Doctors have the virtue they can live anywhere. Earning 85k as a rural GP in a nice part of Scotland strikes me as rather a good life.

[Archimedes27]

Dear Mark

Thanks for the response.

You say ‘The current job outlook for quants is not superb’. Presumably, you mean the depressed outlook for gaining a first job in QA, along with poor job security once that first job has been obtained? Or do you mean the depressed outlook for experienced Quants in gaining a more senior position (and hence gaining a longer career in Quantitative Finance)?

Thanks again.