Author Topic: Career advice: Data Science vs. Quantitative Finance vs. Low-pay Teaching  (Read 11799 times)

CB

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Not sure if this is the best place to ask this, but I noticed in the high-frequency trading thread that there are at least a few people here working in finance, as well as no lack of Com Sci types (which I see as closely related to Data Science).  I'm looking for some advice.

I have an undergraduate dual degree in Mathematics and Statistics, as well as a Ph.D. in Economics; both degrees are from high-quality state schools.  From 2006 (directly out of grad school) to a few months ago I held a tenure-track position at a small state university (heavily teaching-oriented) where my salary was essentially unchanged over six years of service.  Recently I moved into a soft-money position at the same university in order to raise my salary (by nearly 50%) and to move more toward what I like to do: econometric modeling, data visualization, etc.  However, the pot of money that pays my salary sunsets in the summer of 2014 so I need to plan for what I do after that.

The way I see my options are:
(1) Embark on a career shift, potentially double my old salary and hopefully become much more "mobile" geographically.  Both of these would be huge steps forward in progress toward FI.  I'm not getting any younger (currently 41) but I think I can segue into a career in business analytics/data science or perhaps quantitative finance.  I don't have much of a finance background but I'm interested in hearing any advice/input on how to re-train for a quantitative finance career.  I'm certainly a technically-inclined person and enjoy building models and playing with data.  One drawback is that any of these types of jobs will probably require me to move to a large city with the associated cost of living increase.

(2) Go back into a teaching job and stay here, earning 60-70k/year including some summer teaching but with potential difficulty keeping up with inflation.  I don't have what would be considered a "mobile CV" for academics (i.e. I haven't published a lot recently).  I also feel rather shit-upon by administration due to the long-term lack of cost-of-living increases--major low morale among all faculty here. The flip side of this is that the cost of living is relatively low here and the teaching job is low-impact and flexible (wife is SAHM with two kids and I like being able to spend time with them, travel during summer, etc).  This would push FI off further into the future but give some rewards now.

In terms of FI I fully expect to be working another decade as we have two kids to potentially put through college (ages 5 and 8).  We only have about 200k put away in 403(b), Roths, and a 457.  Just started using Mint but estimate we're spending about 40k a year; I've generally saved about 1/3 of gross income per year up to this point but now that I have a ~100k salary I'm hoping we can bump savings way up for the next couple of years.  Our only non-mortgage debt is ~20k in student loans at about 1.5% interest, balanced by ~40k in cash in the bank.

This is probably quite rambling and disorganized, but any advice, input, or general bullshitting you fine folks feel like flinging my way would be appreciated!

$_gone_amok

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Re: Career advice: Data Science vs. Quantitative Finance vs. Low-pay Teaching
« Reply #1 on: September 28, 2012, 10:56:06 AM »
Do you enjoy living in a big city? I know a lot of research labs in the west coast as well as high frequency trading desks in the east coast are looking for people with your educational background and experiences.  I think with the right opportunity you could make 180K or more. However, the hours are generally long and the cost of living high. It is a trade off like you said. 

If you go back to your old job, is it possible for you to apply for some research grants and take in a few graduate students and offer consulting services to make extra money?

arebelspy

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Re: Career advice: Data Science vs. Quantitative Finance vs. Low-pay Teaching
« Reply #2 on: September 28, 2012, 11:27:36 AM »
estimate we're spending about 40k a year; I've generally saved about 1/3 of gross income per year up to this point but now that I have a ~100k salary I'm hoping we can bump savings way up for the next couple of years.

If you spent 40k/yr, and saved 1/3, you must have been making 60k (spending 40, saving 1/3, which is 20 = 60 total).  Is that right, or do you have more precise numbers?

Assuming that's right, and assuming you go from 60k to 100k and keep spending the same, you should be able to save roughly another 30k (with another 10k being spent on taxes, bringing your expenses total up to 50k).  That means you'll be saving 50k/100k.

Using Networthify: http://networthify.com/earlyretirement

50k spending, 100k income with net worth of ~220k (200k in retirement accounts + 40k cash - 20k student loans .. assuming your mortgage is at about what your house is worth, if you're underwater or have equity that net worth number changes), you're at an FI rate of 12.5 years from now.

I'd run some numbers on each of those three options and see which will make you happiest balanced with how long FI will take for each one.
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Jamesqf

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Re: Career advice: Data Science vs. Quantitative Finance vs. Low-pay Teaching
« Reply #3 on: September 28, 2012, 11:54:42 AM »
Humm...  You were making $60-70K per year teaching, and you consider that "low pay"?  I think an attitude adjustment is needed.

Now that that's out of the way, what do you like to do?  Is what you'd have to do to get the bigger bucks (moving to city, etc) worth in terms of aggravation?  If you did do the move and hated it, how hard would it be to reverse?

CB

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Re: Career advice: Data Science vs. Quantitative Finance vs. Low-pay Teaching
« Reply #4 on: September 28, 2012, 12:55:10 PM »
$_gone_amok:

Culturally I think we would enjoy living on the West coast since we are a multicultural/bilingual household; our largest annual expense is a family visit to Japan and being on the West coast would help with that a bit. The cost of living is certainly scary, though some good friends recently moved from the midwest to Silicon Valley and view the downsides (living in a small apartment, paying more for food, etc.) worth it.  I guess a large part of it depends on salary and job.  If I landed a 150k job with Google (not necessarily likely in the short run) I would jump on it.  A 120k job in the SF financial district, probably not.  A 180k job in the financial district, probably would.

As for my old job, it is basically a dead end.  The school doesn't have any graduate programs in my area and in general we don't have research resources available.  I suppose one idea would be to find a full-time consulting gig, then once I'm established and/or have approached my FI goals I can cut back to part-time and/or pick up some teaching.  The thing that sucks is that I am really great as a teacher, but the pay sucks compared to my qualifications.  There's also always the option of pursuing additional soft money for my current position to keep things rolling, but that has its own risks.

arebelspy:

Ballpark I earned 60-70k as an assistant professor, so yes your numbers are correct, but the 100k job is only for the next two years.  I have gone through all sorts of scenarios on networthify and have a pretty good idea where I stand.  I guess I have two areas of uncertainty for the future: salary and cost of living.  If I stay put cost of living will remain relatively low, but after two years my salary will revert back to something that still won't keep up with inflation.  If we move I have the potential to increase my earnings, but with a potentially large increase in cost of living.

Jamesqf:

Yes, since I started out at that same salary six years ago and new hires are now paid considerably more I considered my pay to be sub-par; when I started it was probably right about the median household income for our area, but given my qualifications I expect to be worth more.  Going back to that job will likely mean a gradual erosion of my real pay, so I see increasing my salary (in order to accelerate savings) as important.  You're right, though, I probably deserve a little face-punching (perhaps some mild slaps) for referring to that amount of salary "low-pay," but for a single-earner four-person household in our area, it's nothing to write home about.

What do I like to do?  I like sitting in front of the computer writing code that allows me to play with complex data, I like interacting with others, I like demonstrating things I've discovered, I love traveling.  I guess part of what I'm trying to do is find my answers to your questions about whether or not it's worth relocating/retooling.  On the one hand, if the salary/cost-of-living ratio is high enough, I could make great gains toward FI.  On the other hand, as you point out, I might be miserable.  Going back to a low-paying (go ahead, give me a mini-face-punch) university lecturing job wouldn't necessarily be difficult, but I might not have a lot of choice about geographic location.

Thanks all for sharing ideas/thoughts.  Any advice on getting into quantitative finance?  I've looked at graduate certificate programs (e.g., Stanford Center for Professional Development) but I'm not sure they're worth it.

Another Reader

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Re: Career advice: Data Science vs. Quantitative Finance vs. Low-pay Teaching
« Reply #5 on: September 28, 2012, 01:23:18 PM »
When the soft money position ends, are you guaranteed a tenure track teaching position?  How has the time in this position affected your time to reach tenure?

At 41, I would be skeptical about moving to Silicon Valley and getting a high tech, high pay job unless I had skills that could not be easily replaced.  Most folks are entering the third quarter of their tech careers at your age.  More time absorbed going to school is not going to help your chances, especially without the industry employment background.

In your shoes, I would at least consider staying in the teaching job if it were guaranteed and developing a side business doing consulting, possibly related to the soft money position.  I also would ask that the teaching pay be increased to reflect what a newer hire that started at a higher salary would be making at your level.

Once the kids are in school full time, is your wife considering getting full or part-time employment?  That could make a big difference in your FI date.

CB

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Re: Career advice: Data Science vs. Quantitative Finance vs. Low-pay Teaching
« Reply #6 on: September 28, 2012, 02:36:27 PM »
When the soft money position ends, are you guaranteed a tenure track teaching position?  How has the time in this position affected your time to reach tenure?

Nothing guaranteed.  The door has been left open for me to apply for tenure should I want to.

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I also would ask that the teaching pay be increased to reflect what a newer hire that started at a higher salary would be making at your level.

Unfortunately pay can't be negotiated individually due to union rules.  If I were re-hired in a non-faculty position that might be possible.

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Once the kids are in school full time, is your wife considering getting full or part-time employment?  That could make a big difference in your FI date.

True, through we're not really sure about her employment prospects locally.  One of the reasons we decided she'd be a stay-at-home-mom was that her outside employment opportunities were either very limited in pay or would require a commute that would eat up much of her earnings.  Also elementary school ends before 2pm here so she has her hands full starting around 1:30pm weekdays.

Another Reader

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Re: Career advice: Data Science vs. Quantitative Finance vs. Low-pay Teaching
« Reply #7 on: September 28, 2012, 03:12:06 PM »
It sounds like your return to teaching is not guaranteed.  If a new hire has taken over your teaching responsibilities, wouldn't someone have to leave for you to return to the classroom?  Is it possible you will simply be out of a job when the soft money job ends?  If that's the case, I would take an entirely different approach to the future. 

I'm confused about your union and what role it plays.  Aren't there written job classifications with compensation and step increases set by the union contract?  Why would a newer hire with the same years in a teaching position make more than you?

I don't know why you say you are "worth more" because of your qualifications.  It does not sound like your university is having any trouble attracting tenure track assistant professors in your field at the starting salary level.  Your qualifications are worth only what an employer will pay for them.  I can tell you from growing up in a place with a large, prestigious public university, most financially successful professors (parents of my classmates) had side occupations such as consulting. 

In your shoes, I would leverage my contacts in private industry into some informational conversations with their contacts about where I could use my education and experience in their organizations.  I would also use my vacation time to visit the areas I was interested in living and talk to as many people as I could meet that could help me figure out if the transition was feasible.  I would start now, especially if there were a good chance I would be out of a job in two years.

Bank

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Re: Career advice: Data Science vs. Quantitative Finance vs. Low-pay Teaching
« Reply #8 on: September 28, 2012, 03:21:58 PM »
If I were you (and you decide to stay in academia) I would explore consulting work on the side, particularly as an expert witness.  One of your colleagues at the University may have more information on this, as I believe it is fairly common among professors.  At $500 for a beginner to more than $1,000/hour for a seasoned expert, you may be able to dramatically boost your earnings without much additional time away from your family. 

Jamesqf

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Re: Career advice: Data Science vs. Quantitative Finance vs. Low-pay Teaching
« Reply #9 on: September 28, 2012, 11:26:29 PM »
Yes, since I started out at that same salary six years ago and new hires are now paid considerably more I considered my pay to be sub-par; when I started it was probably right about the median household income for our area, but given my qualifications I expect to be worth more.

I think this is a different issue, and one that needs to be looked at.  Why are you being paid less than new hires, when presumably you are better qualified than they?  Could you obtain a similar teaching job elsewhere at "new hire" pay levels?

If relocating to the West Coast appeals, but living/working in the high cost of living Bay Area doesn't, keep in mind that there's a lot of Northern California outside of there.

CB

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Re: Career advice: Data Science vs. Quantitative Finance vs. Low-pay Teaching
« Reply #10 on: September 30, 2012, 08:54:45 AM »
It sounds like your return to teaching is not guaranteed.  If a new hire has taken over your teaching responsibilities, wouldn't someone have to leave for you to return to the classroom?

No one has taken over my old position; they covered courses by spreading the load around current faculty (in an already very small department) and just dropping one course from the schedule.  My "line" is still open but the provost could certainly yank it from the college/department.  So yeah, there are no guarantees but I knew that going in.

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Is it possible you will simply be out of a job when the soft money job ends?  If that's the case, I would take an entirely different approach to the future. 

Yes, that's certainly possible.  Thanks to your and others' comments, I'm starting a plan to line up more soft money down the road.  If I can set up a steady stream of contract research work things might work out fine: we could stay here and have both (relatively) low cost of living and higher pay.  That sort of work is usually more financially rewarding in the private sector but to make that move I will need to do a bit more "retooling."  Thus my interest in branching off into quantitative finance or something similarly remunerative.

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I'm confused about your union and what role it plays.  Aren't there written job classifications with compensation and step increases set by the union contract?  Why would a newer hire with the same years in a teaching position make more than you?

I've always been confused about our union; I think its existence hinders rather than helps most faculty.  There are no compensation rules (an asst. prof in English is paid about 70% less than a new Finance person) and there are no cost-of-living increases built in.  The union negotiates each year with the administration on pay and benefits, and they have a horrible track record for getting improvements in either.  They have negotiated a grand total of 2% in salary increase over the last 7 years and have been unable to stave off benefits cuts.  There are steps for promotion, though only three ranks.  Even if I had gone for associate (the next rank up) the increase in salary would have only been 5%.  People are also regularly denied promotion for political reasons, so there are no guarantees even if you merit promotion.

As for newer hires getting more, look up the terms "academic salary inversion" or "academic salary compression."  Unless you're a major producer at a large R1 institution you're not going to be all that mobile.  University administrators know this and behave accordingly.  If they want to hire new faculty, they have to pay market rate which is often higher than existing faculty, particularly when salaries don't keep up with cost of living increases.  Existing faculty can either suck it up or hit the road, but at the lower end of the academic market (like my university) hitting the road is difficult.  In a way I'm extremely lucky because I have skills with private sector appeal; the guys in Anthropology, for example, have to just suck it up.

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I don't know why you say you are "worth more" because of your qualifications.  It does not sound like your university is having any trouble attracting tenure track assistant professors in your field at the starting salary level.  Your qualifications are worth only what an employer will pay for them.  I can tell you from growing up in a place with a large, prestigious public university, most financially successful professors (parents of my classmates) had side occupations such as consulting. 

Evidence that I'm worth more is that I was able to achieve a large increase in my compensation for less-annoying work (no classroom demands, no committees to sit on, etc.) without great difficulty.  Granted I greatly increased uncertainty about future employment, but I'm okay with that.  My institution is about as far as you can get from a large prestigious public university and still call it a "university."  Some of my colleagues and I refer to it as "The University that aspires to be a Community College."  But your point about consulting is well-taken.

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In your shoes, I would leverage my contacts in private industry into some informational conversations with their contacts about where I could use my education and experience in their organizations.  I would also use my vacation time to visit the areas I was interested in living and talk to as many people as I could meet that could help me figure out if the transition was feasible.  I would start now, especially if there were a good chance I would be out of a job in two years.

Great advice, thanks!
« Last Edit: September 30, 2012, 08:58:25 AM by CB »

CB

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Re: Career advice: Data Science vs. Quantitative Finance vs. Low-pay Teaching
« Reply #11 on: September 30, 2012, 08:57:38 AM »
I think this is a different issue, and one that needs to be looked at.  Why are you being paid less than new hires, when presumably you are better qualified than they?  Could you obtain a similar teaching job elsewhere at "new hire" pay levels?

I think my reply to Another Reader covered the first question.  As to the second, that's certainly another option that I plan to check out.  I'm worried about getting stuck in the same mobility trap I'm in here.  I.e., I'll need to do this again another five years down the road.


grantmeaname

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Re: Career advice: Data Science vs. Quantitative Finance vs. Low-pay Teaching
« Reply #12 on: September 30, 2012, 09:44:40 AM »
In a way I'm extremely lucky because I have skills with private sector appeal; the guys in Anthropology, for example, have to just suck it up.
[Off-topic anthro post]
 In case you're friends with anyone in Anthropology, there are a couple of ways they could build side gigs. If you're a physical anthro person, you can do crossover work with the med school or public health school (though if you're at an institution that aspires to one day join the ranks of the community colleges, you may have neither). If you're a cultural person, you can do the same thing psychologists and sociologists do and consult for medical or consumer research companies about survey design (unless god forbid you ended up on the tenure track without a rudimentary understanding of statistics). And if you're an archaeology person, you have it best of all. Archaeology is required for all federal and much other governmental construction, and the firms that do it tend not to have labs capable of the moderately high-tech analyses (high-tech here means an electron microscope for stone tools, or lots of student researchers' time and buckets of water for ancient plants). You can make a decent side gig out of hooking up with one of these companies and working on their data -- and you can publish at the same time, advance your academic career, and be hailed as an up-and-coming future-thinking hero for trying to bring grey literature up into academia and the public eye.

I've spent a good deal of time thinking about this (I may go for an anthro PhD for fun after I FI). Really, as long as you're creative and you don't work in a field totally devoid of economic activity like English (I jest. Kinda.), you can find a side gig.
[/Off-topic anthro post]

CB

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Re: Career advice: Data Science vs. Quantitative Finance vs. Low-pay Teaching
« Reply #13 on: September 30, 2012, 11:53:57 AM »
Interesting and useful ideas on Anthropology, I hadn't really thought about those types of options.  I guess I used Anthro as an example because the Anthro guys I know here are crusty old guys who are essentially RIP (Retired In Place) and not interested in seeking out other options.  Sort of a cautionary tale for me, I think...

Thanks everyone for commenting, it helps to have others to bounce ideas off of.  It's also good to receive some face punching on things about which I'm unrealistic or arrogant as it's hard for me to recognize those things myself.

$_gone_amok

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Re: Career advice: Data Science vs. Quantitative Finance vs. Low-pay Teaching
« Reply #14 on: October 01, 2012, 01:25:01 PM »
The Stanford Professional Development looks interesting and will definitely help if you decide to move to the west coast.

Have you thought about doing research in the private sector? IBM, HP and Microsoft research labs are all working on big data/big analytics that may be interest to you. The pay and location are generally very good, maybe something you should look into if you haven't thought about before.

JohnGalt

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Re: Career advice: Data Science vs. Quantitative Finance vs. Low-pay Teaching
« Reply #15 on: October 01, 2012, 05:17:45 PM »
In a way I'm extremely lucky because I have skills with private sector appeal; the guys in Anthropology, for example, have to just suck it up.

I think this is key.  I have an econometrics background (undergrad and was lured away from grad school by more money at my former employer) and an interest in programming and it's worked out very well for me.  I do lots of data analysis, modeling, and programming (of a sorts) though I'm not directly in the financial sector - but as a consultant I have some clients in that industry.  I'd be happy to talk some more details about my industry and what I've seen in other industries and even pass along some recruiting contacts I made last time I was looking.  I still get emails for positions all over the country from one of them - often looking for someone with your academic credentials - if you want to PM me. 

CB

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Re: Career advice: Data Science vs. Quantitative Finance vs. Low-pay Teaching
« Reply #16 on: October 02, 2012, 07:21:02 AM »
I do lots of data analysis, modeling, and programming (of a sorts) though I'm not directly in the financial sector...

This describes relatively well what I'm doing now, though I'm brushing up on programming skills to improve my modeling flexibility.  I don't necessarily want/need to be in the financial sector; I'll definitely send you a PM later today.  Thanks a lot for replying!

CB

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Re: Career advice: Data Science vs. Quantitative Finance vs. Low-pay Teaching
« Reply #17 on: October 02, 2012, 07:26:48 AM »
Have you thought about doing research in the private sector? IBM, HP and Microsoft research labs are all working on big data/big analytics that may be interest to you.

Yes, definitely interested in those types of jobs.  "Big Data" seems to be a hot item right now, and I'm planning on putting some of my new job's professional development budget into a Hadoop training course for me next month.  Amazon has some current job listings geared towards Econ PhD's that I need to get off my ass and apply for.