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Financial Engineering vs MBA vs Economics (which can be a good career choice)

The answer to this question really depends on what you wanting to be doing each and every day. The other thing that you have to consider is what you are genuinely good at. There are of course exceptions to this rule, but let's look at how each of these credentials are viewed by prospective employers and how they have done in the past. I will also look into the future prospects of the respective qualifications.

Financial Engineering

Let me get this out of the way before I delve in further. If you want a Wall Street job and to make over $100K a year, your best bet is either an MS in Financial Engineering (FE) or an MBA. An MBA mostly focuses on soft skills and is ideal for fields such as investment banking and consulting. On the other hand, an MS in financial engineering (a fairly new qualification) is a hard skill that is in demand in algorithmic trading and quant jobs.

The good thing for MS in FE holders is that there is a shortage for this specific credential. There will be a lot more MBA graduates in the future compared to MS in FE graduates. The MS in FE has been designed to take jobs in Wall Street and other financial hot beds that used to go to doctorates in physics and computer science. The MS in FE can be a valuable degree when candidates already have quant experience and quant majors like computer programming and mathematics.

MS in Economics

As for the MS in economics, there is one major flaw with it. An MS in economics doesn't make you the best in your field because you will need a PhD for that. The top economics schools don't offer the terminal MS in economics and applicants will have to shoot for the PhD. Applicants can of course choose to exit with their master's after enrolling, but this is only after they take up the PhD offer.

In contrast, an MS in FE and an MBA can give you that big ticket as you enter the job market. Again, this depends on which school you went to. Some schools you want to consider for an MS in financial engineering are New York University, UCLA and UC-Berkeley. As for an MBA, schools such as Wharton, Harvard and Stanford are great choices. However, these lists are not exhaustive.

With an MS in FE and an MBA, the high rewards are there. At the same time, they can cost a lot which is not the case for something like an MS in economics. An MS in economics will put you on track for a research position in academia or a similar type position in industry. If you want to make top dollar in finance, you would do better getting a BS in economics and then getting finance experience. You may also top up your undergraduate degree with qualifications like a CFA or a CPA depending on your interests.

You actually may learn more with an MS in economics with programs like MATLAB, Stata and IBM SPSS being a prerequisite. But the value of an MBA is in the connections built. If you ended up at Harvard, the contacts with C-level executives and alumni are really priceless.

In summary, each one of these qualifications portrays different skills. It is up to the applicant to see what they want to do. If you're reading this article, my guess is you have a college degree and hopefully some years of work experience. This will guide you to choose the program that suits you the best.