My musings on Phd applications that have been read by 100s of prospective PhDs
As a current PhD student in finance at the University of Texas at Austin, I understand the importance of proper preparation for a finance PhD program. Pursuing a PhD in finance can be a challenging, yet rewarding experience. It requires a significant investment of time and effort, but with the right mindset and preparation, it can lead to a fulfilling career in academia or industry. In this article, I will share some tips and strategies for effectively preparing for a finance PhD program, including recommendations for coursework, research, and networking.
Start Early
After completing my sophomore year of college, I decided to pursue a Ph.D. Although starting later than ideal, this did not prove to be detrimental. As an undergraduate business student, I had not previously taken any advanced economics or math courses. Over the next three years, I dedicated myself to taking 3–4 math or economics courses per semester and additional classes during summers. Overall, if you are starting from scratch, it is likely to take 2–3 years to build a strong transcript of math and economics coursework. If you have concerns about starting late, it is advisable to speak with a professor at your school to explore potential options.
Recommended Coursework
When preparing for a finance PhD program, it is important to have a strong foundation in mathematics and economics. I reached out to several finance professors for course recommendations and they all emphasized the importance of taking advanced math and high-level economics courses. These courses will provide you with the necessary skills and knowledge to succeed in a finance PhD program. Below is a list of courses and their impact on how your application is viewed.
Courses you are generally expected to have taken (most take all of these):
Calculus I-III
Linear Algebra
Real Analysis or Advanced Calculus I
Probability and Statistics
Intermediate Micro
Intermediate Macro
Courses that will really boost your transcript (I took none of these):
1st Semester Phd Micro
2nd Semester Phd Micro
Graduate level Real Analysis
Most graduate level proof based math courses
Additional useful but not necessary courses (I took almost all of these):
Econometrics
Game Theory
Advanced micro/macro for undergrads
Differential Equations
Stochastic Processes
Stochastic Calculus
Optimization
These courses will provide you with the mathematical tools and economic intuition that are essential for understanding the models and methods used in finance. By taking these courses, you will be better equipped to understand and analyze financial data and to develop your own research projects. I took every course in the first group, none in the second, and all but optimization in the third with a 4.0 GPA and I was told by a recruiter that my mathematical preparation was a weak point in my application.
Lastly, you do not need an extensive background in finance before starting a Ph.D. program, as many programs include a master-level finance course during the first semester and then delve into advanced empirical and theoretical finance over the next three semesters.
Research
Having research experience is extremely helpful, but not necessary, when applying for a PhD program in economics or finance. One effective way to gain this experience is by becoming a research assistant (RA) for a professor at your university. It is important to note that you do not need to have solo-authored or even co-authored a paper prior to applying for a PhD program. Having research experience greatly enhances your CV for many reasons, including but not limited to the following:
You signal to recruiters that you are genuinely interested in and have an aptitude for research; this makes you a safer bet than a similar candidate with no research experience.
It can provide you with a better understanding of the research process and the types of questions that are studied in finance. This understanding can help you identify potential research areas and focus your research interests, which can be beneficial as you target schools you want to attend.
Actually doing research builds your skillset in data analysis, identifying what is and what is not a good research idea and gets you familiar with the type of data you could use.
What if I did not do research as an undergrad?
If you do not have the opportunity to RA during your undergrad then another great option is to apply for pre-doc RA programs at various universities or the Federal Reserve system. Here is a list of some of some resources for finding research opportunities in finance and economics:
Getting one of these positions is quite competitive. Having a strong transcript, good letters of recommendation from professors who know you well (probably most important), and some prior RA/coding experience will make you a good candidate. I applied to most of the Federal Reserve Banks, and with no RA or coding experience I got interviews with Chicago, Boston and the Board and eventually went to the Board. Outside the Federal Reserve System, I believe there is a higher emphasis on coding skills as professors are looking for RAs to join in on active projects.
As always, talk to professors at your school about your desire to apply for a Phd, they can give you the best guidance on whether you are ready to jump into a Phd or if you need to take some time to get more research experience.
Networking
Perhaps the most important aspect of your application will be the letters of recommendation from your professors. Professors who know you well and can speak to your academic abilities and research potential are often in the best position to write a strong letter of recommendation. In addition to professors who know you well, you want to find professors who are active in the research community. This will make it more likely that recruiters will know your letter writer which increases the recruiters trust in their letter.
Establishing a relationship with a professor before applying to a PhD program can be beneficial in several other ways. First, it can give you an opportunity to gain the professor’s support and guidance as you prepare your application. My professors were hugely influential in me going and getting RA job. They talked me through which schools to apply to and how to craft my application. Secondly, the stronger your relationship, the stronger their letter will be as it will be able to include specific examples of your abilities and work. A letter that says “Steven was a great student and participated well in class” will not go very far.
So, how do you form a strong relationship with professors? Basically, you just need to talk to them. If you’re in their class, go to office hours and discuss deeper the aspects of the class you find interesting. If not in their class, email them and ask for a few minutes of their time to chat and be specific about what you are wanting to discuss. Tell them about your desire to pursue a Phd and ask for their advice on your preparation. Don’t just receive without being willing to give back, so offer your services as a TA or RA.
The best professors will be those you do RA work for as they will be able to write letters tailored directly to your research abilities. As you work with them, you will naturally form a bond and will likely develop much deeper relationships with them than someone you had a class with for one semester. Thus, getting RA experience is a way to network and get research skills at the same time.
Ultimately, my letter writers were a professor from my undergrad who I had for two semesters in a course where we worked as a team of students under the direction of the professor to manage $1 million of the universities endowment. The nature of this course made it easy to form a strong bond with the professor. The other two were economists I worked with at the Federal Reserve. They were able to directly observe my research abilities and were able to get to know me well over the two years we spent working together. Some of these letter writers had personal connections at the universities I applied to, and I know that at least 1–2 of my 5 interviews came because of these connections.
In summary, networking with professors is an important step in preparing for a finance PhD program. It can help you gain the support and guidance of professors who can provide valuable letters of recommendation, and also potentially serve as a mentor during your PhD program. Seek out professors that you really enjoy learning from and who can write about your specific strengths as a researcher.
There are other aspects that are important to your application that I did not discuss here, for example GRE scores, personal statements, and the more intricate details of the application process. However, I will write an article that goes more in depth to each of these topics.
Overall, pursuing a finance/econ PhD program is a challenging, yet rewarding experience that requires a significant investment of time and effort. However, with the right mindset and preparation, it can lead to a fulfilling career in academia. The key to success is starting early, building a strong foundation in mathematics and economics, and gaining research experience through opportunities such as becoming a research assistant for a professor. By following these tips and strategies, you will be better equipped to understand and analyze financial data and to develop your own research projects. This will ultimately increase your chances of being admitted to a competitive PhD program and set you on the path to success in the field of finance.
Q: What were your credentials when applying?
Undergrad GPA: 4.0
GRE Quant: 168, Verbal: 160, Writing: 4.5
Coursework: See other article
Research Experience: 1.5 years at the Federal Reserve Board with 1 unpublished co-authored paper
Q: What schools did you interview with and get offers from?
I had interviews for Finance with Cornell, Duke, University of Michigan, Ohio State University, and the University of Texas at Austin. I got offers from Ohio State and the University of Texas and was wait listed at Cornell. Ultimately I chose to go to Texas. I had not interviews or offers from Econ programs as I only applied to the top 5.
Q: What resources did you use to determine which schools to apply to?
The main resource was the professors and economists I worked with. I sat down with one professor from my undergrad and several economists at the Federal Reserve Board and got their recommendations for the top 20 programs in finance and economics. This is better than generic ranking systems as they could tailor their suggestions to my research interests.
However, I did use ASU’s Finance rankings based on the number of publications in top academic journals. For econ programs, I used U.S. Newsrankings.
Ultimately, I applied to the top 5 econ programs and to around 15 finance programs all within the top 25.
Q: Should I reach out to professors at the schools to which I am applying?
A: Maybe, as this could get your foot in the door, but only if you have a good reason to do so. For example, I was very interested in a particular research area and there was a school with some top people in that area who I would like to work with. Prior to emailing them, I asked one of my letter writers for his opinion. He thought it would be a good idea due to the fact that I had done considerable RA work in their field and was interested in continuing in that field. However, he made it clear that I should not be pushy and that I was just wanting to make sure that my application was not lost in the shuffle. The end result was that this professor spoke with their graduate coordinator and I got an interview. Overall, reach out if you have a strong interest in their field and simply ask for an extra look at your application, do not ask why or if you will hear back. Use a professional email address if you have one (I used mine for the Federal Reserve as I was an RA there at the time).
Q: What is the most important part of the application?
Every aspect is important but this would be my unofficial ranking:
Letters of recommendation
Prior research experience
Good grades in high level math and econ courses
CV/Resume, Personal statement and Research Proposal
GRE Scores — Quant 167 or up
The letters serve two purposes, first they give recruiters a more objective view of your abilities. Second, your writers may have personal connections with recruiters that enhances the effect of their letter. Prior research experience gives your desire to apply more credibility (i.e. its easier for recruiters to believe you want to do research after you have experience doing it). Good grades in high level math and econ courses shows that you will be able to succeed in the first few years of coursework. Your personal statement is how you can show why you are a good fit for the specific school. My personal statement was 80% the same for each school, but I always had one paragraph dedicated to why the specific school would be a good fit for me. Usually this meant I searched the faculty list and found 1–2 professors I would be interested in working with. The GRE is no fun, but study hard and do well.
Q: How to select letter writers?
Your letters or recommendation are likely the most important aspect of your application, so choose them wisely. Once you choose them, make sure they agree to do it, they are sticking their neck out for you so you want to make sure they are fully willing before you start entering their info on applications.
Now, how to pick? First and foremost, they should be intimately aware of your skills and abilities as this will allow them to share specific examples of why they believe you can become a successful researcher. A professor you barely know but got an A+ in their class is not a great candidate. A professor you spent several months or years doing RA work would be great. Secondly, choose those who are active in research. They will be more well known by the recruiters and your letter will always be taken better if the recruiters know the letter writer. However, do not just go to the highest cited professor at your school and ask for a letter, they need to be able to give a strong and personal recommendation.
Q: Where can I find research opportunities?
Here is a list of some of some resources for finding research assistant opportunities in finance and economics:
These positions are highly competitive so browse some of the qualifications to see what you need tool up on.
Additionally, ask around at your university, you very well may be able to do RA work as an undergrad that is sufficient for you to get into a Phd.
I did not get any experience prior to graduating, so I applied to positions in the Federal Reserve System and ended up spending two years at the Federal Reserve Board.
Q: What courses should I take before applying?
Many universities list various courses, but after speaking several professors and getting feedback on my transcripts during Phd interviews, here is my list:
Group 1 — Courses you are generally expected to have taken:
Calculus I-III
Linear Algebra
Real Analysis or Advanced Calculus I
Probability and Statistics
Intermediate Micro
Intermediate Macro
Group 2 — Courses that will really boost your transcript:
1st Semester Phd Micro
2nd Semester Phd Micro
Graduate level Real Analysis
Most graduate level proof based math courses
Group 3 — Additional useful courses:
Econometrics
Game Theory
Advanced micro/macro for undergrads
Differential Equations
Stochastic Processes
Stochastic Calculus
Optimization
I took most of the courses in groups 1 and 3, but none in group 2. I was told my coursework was weak relative to others and that it would have been good to take additional graduate level math and econ, especially the econ courses as doing well in those is a very strong signal that you will do well in your Phd coursework. Note that to take all of these courses will take several years if you are starting from Calc I.
Q: How to write a good personal statement or research proposal?
Emphasize why you are interested in pursuing a Phd, be convincing and honest as schools don’t want to invest in you but then you drop out after a few years.
Highlight the skills you have that will make you a great researcher. Use specific examples from your work as an RA or an undergrad/masters thesis.
Discuss your area of research interest, what questions have you worked on and some you may want to work on.
Be sure to highlight why school X is a good fit for you. You will do this for every school, but try to find a genuine reason why you are specifically applying to school X. I typically wrote about 1–2 professors I would want to work with as it relates to my area of interest.
Most importantly, send an initial draft to your letter writers and get their feedback.
Q: What if I do not know what area of research I am interested in?
This is not a problem at all. Most people either don’t know going in or think they know and then switch. One of my mentors emphasized the fact that there is so much you do not know prior to doing the first two years of coursework that it is almost impossible to know exactly what you want to do. If you think you know what you want to do then tell people that, but do not make something up.
Q: What GRE score do I need to have to be competitive?
A: First note that GRE scores are only a small part of your application. Transcripts, research experience and recommendation letters carry a lot more weight. I got a 168 on quant, 160 on verbal and 4.5 on writing. Overall, this is about where you want to be to have a shot any school. From those I talked to, about 167 or up on quant is the key and as long as you do reasonably well on the others you will likely not be dropped from any school due to your GRE. Again, this is only part of your application, if you have stellar letters, transcripts and research experience then you can get by with a lower GRE score.
Q: How to do well on the GRE?
There are tons of websites offering courses and guides on how to be successful with the GRE. However, I recommend just a few things:
Get the Official GRE study guides and study the quant material until you know how to do any kind of problem without having to think about it.
Download the Magoosh vocabulary app and study it any time you have a few spare minutes (e.g. riding the bus, waiting in line, etc.)
Take several practice tests, I took 6 in total. Often sites like the Princeton Review will offer free tests.
Overall, I studied 2–4 hours a day 5 days a week for 3 months using just the material above. The key is to understand deeply each type of math problem so that you can do them in your sleep. To do this you need to do as many practice problems as you can find.
Q: How much time did you spend on applications?
Unfortunately there is no 1-click application process. You will have to fill out all of your information and submit all your documents for each school. For me, this typically took 2–3 hours per application so start in early November as deadlines start around December 1st.
These answers are based on my experience interviewing with Cornell, Duke, University of Michigan, Ohio State University, and the University of Texas at Austin. I suspect most schools have a very similar process.
Q: What questions will I likely be asked in any Finance Phd interview?
While each school may ask different questions, here is a sample of the questions asked at almost every interview:
Why do you want to get a Phd?
Why do you want to come to school X?
Tell us about some research you worked on.
For the first question you can have the same story for each. Make it specific, I talked about a professor who gave an inspirational speech on the need for good finance professors and then on my desire to cultivate new knowledge. Tell your story in a way that stands out from the others who just talk about the fact that they enjoy research.
For the second question do not lie. You may have only applied because the school was in the top 20 programs and you applied to all 20. Therefore, if you get an interview, do some extra homework on the program. Maybe there is a professor you want to work with, or the department as a lot of people working in field X that you also want to work in.
The third question is most important, they want to hear you talk about research for a few minutes. You can give the same answer to every school. To prepare, pick a research project you worked on most closely. It could be your undergrad or masters thesis, or a paper you worked on as an RA or co-author. The project could be published or just in the initial stages. Talk for 3-4 minutes about your motivation and the initial question, the methods you used to answer the question and your results. Overall, they just want to hear you discuss research and your thought process during it. If it was an RA or co-authored project be sure to highlight your contributions. Be prepared for them to ask several questions and to spend the bulk of the interview on this topic. Prior to my first interview, I wrote out my 3–4 minute spiel and then presented it to one of my co-authors. She was a big help in crafting the way I said certain things and what to include or exclude. You should definitely practice this question with a professor.
Q: What other types of questions could be asked?
Most schools focused on the research question, but they also typically had 1–2 additional questions. I worked a lot with Trade-and-Quote data so some schools asked about my work with that. Others asked relevant finance questions such as “how would you value Bitcoin?”. Overall, you can expect some other questions than those listed above, but they will likely relate to your areas of research interest you put in your personal statement or CV (so don’t lie about those in your application).
Q: How long is a typical interview?
Most interviews were around 15 minutes. We spent the first few minutes about why I want to pursue a Phd, then the next 5–7 talking about my research, a few minutes where they asked other questions, then the last 2–3 minutes were for me to ask questions.
Q: What questions should I ask?
My favorite question was:
Can you tell me about the interaction and mentorship between the students and the faculty?
This way I could learn how closely I would be able to work with professors and I could get an idea of whether the program dynamic would fit well with my personality. The answer varies widely across schools. Some like to be more hands off than others in the development of Phd students.
Usually this would take up all the time, but if not I would ask about what they thought their greatest strengths were as a program.
Q: Who will interview me?
Typically the graduate coordinator along with another 1–2 professors will be present at the interview.
Q: How soon after applying could I hear about interviews?
This varies widely from school to school, but you can typically expect to hear back any time from early February to early March. Additionally, you can use theGradCafe to get an idea of when and how people are hearing. Some schools take longer than others and some only notify you if you were rejected while others only if you are accepted. For example, I got a rejection email from Berkeley finance but my friend did not, while some people on Grad Cafe were getting offers. Then about a month later he finally heard back and got an offer from them (without any interview) because someone accepted another offer. Don’t waste too much time staring at Grad Cafe feeds!
Q: What happens after the interview?
After each interview, I sent a thank you note to the professors involved and then waited to hear back. The schools who gave me an offer typically got back to me in a few days, however those I was waitlisted on did not say anything. Typically their strategy is to not say anything until you are either given an official offer or you are officially rejected. This is just the way it typically is. You can reach out and ask about your status, but this comes with the risk of them rejecting you now instead of keeping you on the waitlist until the end.
Q: How do I decide which offer to take?
If you get more than one offer then congrats! My strategy was to speak to several professors and students from each school to get their perspective. I spoke with my letter writers as well as I could be more up front with them about my thoughts. Ultimately if a school is clearly a tier above then the choice may not be too hard, but if the schools are similar then most people will tell you that the choice will not effect your career that much (I was told this several times). In this case other factors will come into play such as which program best fits your research interest, which one fits your personality (i.e. more vs less hand holding), your family situation, what kind of weather you want to live in, cost of living ect.