How Much IS A College Degree Worth?

Here's an interesting chart from Lifehacker. It shows the median salaries (along with the 25th and 75th percentiles for various majors. It's taken from a report created by the Georgetown University Center on Education and the Workforce called "What’s it Worth? The Economic Value of College Majors"

Here's an interesting part from the press release Georgetown put out:

The top 10 majors with the highest median earnings are:
Petroleum Engineer ($120,000); Pharmacy/pharmaceutical Sciences and Administration ($105,000); Mathematics and Computer Sciences ($98,000); Aerospace Engineering ($87,000); Chemical Engineering ($86,000); Electrical Engineering ($85,000); Naval Architecture and Marine Engineering ($82,000); Mechanical Engineering, Metallurgical Engineering and Mining and Mineral Engineering (each with median earnings of $80,000).

The 10 majors with the lowest median earnings are:
Counseling/Psychology ($29,000); Early Childhood Education ($36,000); Theology and Religious Vocations ($38,000); Human Services and Community Organizations ($38,000); Social Work ($39,000); Drama and Theater Arts, Studio Arts, Communication Disorders Sciences and Services, Visual and Performing Arts, and Health and Medical Preparatory Programs (each at $40,000).

This isn;t surprising - with the exception of Pharmacy (which is also pretty rigorous and exacting), they're all fields that require a lot of math. To quote classic Barbie, "Math is Hard!". So there's a smaller supply of grads (and there's a pretty good demand for these grads, too).

Kissing Up is Good Practice

It's important to be good at the technical aspects of your job. But the "soft" stuff may be even more cirtical - the ability to get along with coworkers (and more important, with bosses) has a lot to do with eventual career success.

Tow researchers (Ithai Stern at Northwestern University and James Westphal at the University of Michigan) recently published a study in Administrative Science Quarterly titled "Stealthy Footsteps to the Boardroom: Executives’ Backgrounds, Sophisticated Interpersonal Infl uence
Behavior, and Board Appointments (here's an ungated copy). They lay out several effective ways of "kissing up" to the boss:

• Go with discomfort: Preface compliments to the boss with something like "I don't want to embarrass you, but..."
• Frame it in question form: Ask for advice - it's just as flattering as a compliment. goes down a lot easier
• Bait and switch: Start out by disagreeing with the boss and then gradually warm to their opinion. Instead of being a "Yes Man", be a "'No,' then 'Yes'" man).
• Go around the corner: Find a third-party (best if it's a close confidant of the boss), and talk admiringly about the boss. Odds are, it will get passed on.
• Look for common ground: Pick a topic (anything from parenting to religion to politics) and make unsolicited statements and opinions about the matter that you think are also held by your target. Positive impressions will lower the red-flags on future praise.
• Look for common groups: Bring up social affiliations that you may have in common.

All in all, pretty clever stuff. Not that I'd ever use any of these, but if I were to...

What You Need For A Job In Investment Management

When this commercial came out, I thought it was great. The fact that it starred the king of the B-Movies, Bruce Campbell (a.k.a. "The Chin") was just icing on the cake. But it's the sort of conundrum that's faced by almost every undergrad trying to get a job in the Investment Banking or Investment Management field:

"If you have it, you don't need it; If you need it, you don't have it. If you have it, you need more of it. If you have more of it, you don;t need less of it....

... The point is, if you've never had any of it -- ever, people just seem to know.

So, if you don't have it, don't try to fake it, because you will get embarrassed. So the trick is to get things on your resume that demonstrate that even if you don't have "real" experience, you at least have the personal characteristics (and some reasonably related background that make you likely to get it.

Of course, the only reason I really did this post is that I wanted to put a video of Campbell up on the blog.

This Reminds Me Of My Past Life

Before becoming an academic, I worked a succession of jobs that didn't suit me, including selling financial services (insurance, mutual funds, etc...), being a headhunter (the executive placement type, not the shrunken head type), and working as an orderly in a locked inpatient adolescent psychiatric ward (which was probably the best possible preparation for working in academia).

But my least favorite job was being a tax collector for the state. I spent my days calling people up and threatening them with dire things if they didn't pay the sales tax they'd collected. So this Dilbert cartoon really hit home:



I think I'll keep this one above my desk to set me straight whenever I start griping about how hard my day is.

Stock Market Conditions and Finance Careers

Lately I've been talking to a lot of students who have concerns about how the current job market will affect their careers. So, I decided to revisit a forthcoming article in the Journal of Finance article by Paul Oyer of Standford titled: The Making Of A Banker: Macroeconomic Shocks, Career Choice, and Lifetime Income. He studies a group of Stanford MBA graduates from the 60s. Here's the abstract:

I show that stock market shocks have important and lasting effects on the careers of MBAs. Stock market conditions while MBA students are in school have a large effect on whether they go directly to Wall Street upon graduation. Further, starting on Wall Street immediately upon graduation causes a person to be more likely to work there later and to earn, on average, substantially more money. The empirical results suggest that investment bankers are largely "made" by circumstance rather than "born" to work on Wall Street.

In the introduction he says:

I estimate that a person who graduates in a bull market and goes to work in investment banking after graduation earns an additional $1.5 million to $5 million relative to what the same person would have earned if he or she had graduated during a bear market and had started his or her career in some other in dusty.

It's an interesting example of how circumstances often make people's careers. It also illustrates the huge differences in career earnings across industries.

You can read a working paper version of the article here.

Another Investment Banking Blog

I was recently reading Mergers & Inquisitions (one of my regular reads), and saw this a mention of the blog titled Investment Banking Resumes. It's written by Anna Maria D'Souza. Here's her profile:

I am a headhunter and have nine years of experience in recruiting senior investment bankers. I have a mission to help young people to start and build an investment banking career.

If you're considering a career in investment banking, the site looks like it'll be well worth your time. A lot of the site is very "inside baseball", with information on compensation packages of star performers. But there are also a lot of useful tips on resume writing, cover letters, etc...

It'll be added to my blogroll the next time I Update

CareerJournal: The Best and Worst Jobs

Here's a nice piece from Career Journal on a recent survey of "best and worst jobs".

The study, released Tuesday from CareerCast.com, a new job site, evaluates 200 professions to determine the best and worst according to five criteria inherent to every job: environment, income, employment outlook, physical demands and stress. (CareerCast.com is published by Adicio Inc., in which Wall Street Journal owner News Corp. holds a minority stake.)

The findings were compiled by Les Krantz, author of "Jobs Rated Almanac," and are based on data from the U.S. Bureau of Labor Statistics and the Census Bureau, as well as studies from trade associations and Mr. Krantz's own expertise.

One theme that sticks out is that math skills are in style: six of the top ten jobs require some serious math chops. In fact, the top three spots are listed as "Mathematician", "Actuary", and "Statistician", and there a few more in the 11-20 range.

Of course, one man's meat is another man's mess, so a terrible job for someone else might be a great one for you, and vice-versa. In the end, you'll be happiest if you find a career that fits your passion. But until you figure that out, take more math classes.

Read the whole thing here.

An Excellent Resource On Investment Banking Interviews

I've been a long-time reader of Mergers and Inquisitions (at least, I've read it since its start).

The guy who writes it ("The Inquisitor") has a couple of years experience in investment banking, but left the industry a while ago to pursue other interests. He writes most often on the process of getting a job in investment banking, what the life of a low-level investment banking scut-puppy is like, and so on. He's funny, seems to know his stuff, writes well, and links to this blog, so I couldn't ask for more.

A student of mine is going today to visit an alumni at a major investment bank. The alum is an Managing Director at the firm and has taken the student under his wing. He invited the student to spend the day at the bank, and is having him squired around by a couple of mid-level folks to help the student learn more about the firm and hone his pitch for when he gets his internship interview.

As part of his preparation, I had the student read all of M&I's posts. He also bought this guide the M&I blogger put together, titled Breaking into Wall Street: 200 Investment Banking Interviews and Answers. He had me look it over and give him my impressions. So here they are:

If you're trying to get a banking job (or even a job in investment management), buy this guide before you go on your interviews. Don't ask questions - just buy it. It lists quite a few technical questions (like "what are the three financial statements, and how do they link together?", or "when do you capitalize and when do you expense outlays?") along with clear, succinct answers. But more importantly, it spends a lot of time on how to put together a consistent, compelling "story" about yourself that will sell well with an Investment Bank (or at least, how to avoid saying things that will get you eliminated).

The biggest mistake most new applicants make is that they don't take the time to put together a consistent narrative about who they are and why it fits with the firm at which they're interviewing. This guide will help them to do thexactly that.

The only addition I'd like to see is a few pages on structuring a resume - what to do and what to avoid. I realize the author provides that service for a fee, and might be considering doing that as a separate guide. But putting this in the guide would make it even better. However, even with that shortfall, this guide is worth its cost many times over.

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Some Quick Tips For Summer Internships (Investment Banking and Otherwise)

Mergers and Inquisitions is rapidly becoming one of my favorite blogs - it's got a lot of good advice for those trying to get into the Investment Banking field. In his latest piece, the Inquisitor (nice name, BTW) puts up some helpful tips for those on a summer IB Internship. With minor modification, much of the advice holds up pretty well for almost any internship, no matter what field. Here's my take on the "important" stuff, with a few more thrown in to boot:

• Don't expect to work on a high-profile things. There's big money involved and high stakes, so they're not going to put it in your hands. So don't ask to do an LBO model right away. Expect to do a lot of grunt work - in any event, if you get a job offer, you'll be doing a lot of this anyway.
  
• Don't screw up. Ask questions if you're not sure. But don't ask the higher-ups. That's what (1) your peers, and (2) your "Analyst Master" are for. Never go higher up the food chain (like a Managing Director). Just. Don't.
• On a related note, Always check your work - multiple times. Get a reputation for doing sloppy work and you won't get an offer.
  
• Don't bad-mouth the competition. Word gets around, and there's a lot of shop-hopping. The person you bad-mouth the competition to this month might end up there next month.
  
• Even if you are working long hours (and you will be), stay cheerful and upbeat. Even if they know it's fake, it still scores points.
• Don't try to suck up to anyone above your analyst.
  
• When in doubt, keep your mouth shut, and don't brag. Chances are, the company folks around you will know far more than you. If they do, you'll get exposed as a poser or a jerk. If they don't, they won't appreciate your "superior" knowledge. So keep your yap shut - you almost never get in trouble for keeping quiet.
  

Read the whole thing here.

Alumni Networks Matter

Ever wonder how much impact a school's alumni network has on career success? In the world of Wall Street, apparently quite a lot. In this article, DealBook reports on the school connections of major Wall Times figures. Apparently, there's a lot of "school clusters".

If you want to see a pretty cool visual of the relationships, click here (it comes up small, but click on the image to enlarge it).

You could interpret the relationships as anecdotal evidence that networks matter. But I think it's just as likely that these top schools are the major producers of future "masters of the universe". So it's not surprising to see a lot of big form Wharton (for one example) or Harvard (for another).