Slicing Through Money's Mysteries
Updated: 12/09/2022 by
There are very few occupations that provide the ideal combination of riches and status. Being a professor is one of them.
Tenured professors are able to make six-figure incomes and earn valuable pensions. Getting a PhD or a post-doctorate is the pinnacle of academic achievement. Meanwhile, most people respect professors for their positive contributions to society.
After I retired from finance in 2012, I considered getting a PhD. Given I had enough passive income, I could afford to return to school for several years. With a PhD, I would then have the option of becoming a university professor.
Teaching is something I thoroughly enjoy doing, as hopefully evidenced by my writing on Financial Samurai. I’m always curious about new concepts and theories because the world is always changing.
Stanford University had a Communications Department that offered a PhD program so I drove down to meet with some professors. I showed them what I was up to on Financial Samurai and they were not impressed.
But I did meet with the head of the Master’s program for Journalism who was really nice. She encouraged me to apply. But I decided not to after auditing one of their courses on starting your own WordPress site. At the time, I had been operating Financial Samurai on WordPress for almost four years. I also already have a Master’s degree in Business Administration.
Within a month time period, I realized getting a PhD and becoming a professor was not possible for me. First, you have to have taken the prerequisite courses. Second, you have to have great grades and test scores. Third, you need to have a clear idea of what problem you want to solve or research.
Even if I got my PhD in communications, it is extremely difficult to get a professor job at a major university. Only the best of the best get tenure at a top 25 university. Most remain associate or assistant professors for their entire careers. See the comments section from department chairs and professors for more insights on the difficulty of becoming a tenured professor.
Not one to give up on my dreams, I looked into becoming a public school teacher instead. Then I found the ultimate job of being a high school tennis coach. The job would fulfill my desire to teach a subject I was passionate about.
Recently, three things happened that made me want to consider becoming a professor again. These reasons show why being a professor has the ideal blend of riches and status.
Reuters reported official property records show that Sam Bankman-Fried’s FTX, his parents, and senior executives of the failed cryptocurrency exchange bought at least 19 properties worth nearly $121 million in the Bahamas over the past two years.
Given real estate is my favorite asset class to build wealth, my eyes lit up once I saw the news. An eight-figure real estate portfolio is a great way to set up my family for life.
The average Stanford professor makes about $250,000. Given Sam’s parents are tenured professors in their late-60s, let’s say Joseph Bankman makes $400,000 and Barbara Fried also makes $400,000.
A combined income of $800,000 is a top 1% income. With a 20% down payment, Bankman and Fried could comfortably buy up to a $4,000,000 vacation property in the Bahamas.
But from the sound of the Reuters article, it looks like Bankman and Fried bought a vacation property worth $16.4 million in the Bahamas!
Here are some pics of a $16 million property in the Bahamas called the Hibiscus Estate Residence in Crescent Bay. I love the infinity pool on one side and the beach on the other side.
Here’s a great view from one of the main bedrooms overlooking the ocean and sunset. You can grade papers in the outdoor hot tub while having a yummy beverage! It’s great to be an elite!
We can conclude being a professor is a very lucrative profession. Using my income formula for buying property, Bankman and Fried would have to have made over $3.28 million to afford a $16.4 million vacation property.
Or, Sam Bankman-Fried misappropriated client funds to buy properties for his company, himself, his executives, and his parents. It is hard to say because private companies have the right to buy properties for business use.
Or maybe Sam Bankman-Fried and his executives are simply following my guide on turning funny money into real assets to remain rich. Creating a conglomerate is a popular way to hold onto a fortune and build an empire. If FTX disappeared, at least they would have luxury properties to enjoy.
Call me naive, but it doesn’t make sense for tenured law professors at a prestigious university to be a part of misappropriating funds. It would ruin their reputations and their remaining years of life. Who would want to spend over a decade in jail during your twilight years?
When I’m 67 years old, I’d rather just enjoy what I have and lead a simple life. Upholding the family name for my children would be important. But maybe I’ll change my mind in 22 years.
One of my son’s friends has a mom who works at Stanford. She’s not a professor, but a scientist with a PhD. When her son graduates high school, her son will have a leg up in admissions if he applies to Stanford. And if he gets in, he only has to pay half the cost of tuition.
My tennis buddy, who also works at Stanford corroborated this benefit. In fact, he joked he’d be willing to adopt my kids when they are in high school to help get them in, for a fee of course. Even if they didn’t get into Stanford, they would still get half the Stanford tuition a year toward any school my kids attend.
In other words, let’s say Stanford’s tuition is $60,000 a year. If my kids attend The College of William & Mary, we would get $30,000 a year to pay for their attendance at William & Mary. Not bad! Other universities pay 100% of tuition for faculty and staff children who attend their parent’s university.
The Students For Fair Admissions v. Harvard University lawsuit provided an unprecedented look at how Harvard makes admissions decisions. Using publicly released reports, here are the preferences Harvard gives for recruited athletes, legacies, those on the dean’s interest list, and children of faculty and staff (ALDCs).
A 46.7% admit rate for ALDCs versus a 6.6% admit rate for non-ALDCs is a huge difference! If you’re an Asian applicant, then it becomes even more tempting to become a university professor to help equalize the admissions process for your kids.
From point one, we learn some professors can afford extremely expensive properties on their salaries. But how exactly? Let’s look at legitimate ways in which professors can earn more money.
I spent two-and-a-half years writing, editing, and marketing my book, Buy This, Not That. During this time, I realized there are many bestselling nonfiction authors who are professors.
Here are just a few from Portfolio Penguin, the imprint that represents me.
These professors have smartly leveraged their status as professors at leading universities to become authorities in their respective fields. With such authority and status, they are then able to sign lucrative book deals every couple of years.
Given one of a professor’s responsibilities is to publish, publishing a book on their expertise is right down their alley. With so many connections, a professor can easily draw on many other experts to provide great value and referrals to promote their book.
Let’s say you make $250,000 as a professor. Due to your status and platform, you sign a $100,000 – $1 million book deal. Just from salary and book deals alone, you could make $300,000 to $750,000 each year as a professor. Books usually take two years to produce and advances are paid out in three or four installments.
See: Making Money Traditionally Publishing A Book
After publishing a Wall Street Journal bestseller, professors can then make extra money speaking. A one-hour speaking gig can pay anywhere from $1,000 – $50,000. Since speaking to a classroom is part of the job, doing paid speaking gigs should be a cinch.
I’m sure when we invited Malcolm Gladwell to speak at the Credit Suisse Asia Investment Conference in Hong Kong, my firm paid him somewhere in the six-figures. Flights, hotel, and meals were all paid for.
Then there are the consulting fees a professor can earn in their respective fields. Corporations or wealthy benefactors will pay professors to do research on a project to advance their product or ideology.
In 2022, Stanford professor Jo Boaler charged $40,000 for eight hours of consulting work to the Oxnard School District. $5,000/hour to help public school teachers teach mathematics better is pretty good!
In other words, there are endless ways in which professors can make a lot of money beyond their day jobs. Intellectuals with expertise in their field are always in high demand.
It is simply not true the saying, “Those who can’t, teach.” Instead, some professors are not only teaching but are also making bank.
The income potential and status combination of being a professor may be unbeatable. The only other profession that combines both riches and status is being a doctor. Lawyers, bankers, strategy consultants, and techies get paid well, but don’t command as much respect.
Being an author is not bad on the status front. However, it is brutally difficult to make a living as a writer alone. Most authors need day jobs to survive. Even if you are one of the ~0.3% of authors who make a national bestseller list, the money from one book advance may only be enough to support you.
As a professor, you could make a top 0.1% income and nobody would know. In true stealth wealth fashion, you could easily blend in with the middle class and actually be embraced by the majority. To feel included and respected is wonderful. So is job security and a lifetime pension!
The only problem with becoming a professor is the amount of education one needs to become one. Tenured professor positions at universities are scarce. Therefore, maybe the second-best solution is to become an adjunct professor.
An adjunct instructor is a part-time faculty member who is hired on a contractual basis. They may teach for only a few semesters before they return to their industry full-time.
Although you won’t make a lot of money as an adjunct professor, you will gain some status. Hopefully, as an adjunct professor, you’re already making plenty of money elsewhere.
If there is anybody from Berkeley or Stanford out there looking for an adjunct professor to teach personal finance, investing, real estate, branding, book publishing, and online entrepreneurship, shoot me an e-mail! Once my daughter attends preschool three days a week in 2023, I’ll have more time.
All I request is a private parking spot near campus and a lunch voucher! Thanks for your consideration.
Readers, do you think being a professor is the ideal occupation for income and status? If not, what occupation do you think provides a better combination?
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Filed Under: Career & Employment
Author Bio: I started Financial Samurai in 2009 to help people achieve financial freedom sooner. Financial Samurai is now one of the largest independently run personal finance sites with about one million visitors a month.
I spent 13 years working at Goldman Sachs and Credit Suisse. In 1999, I earned my BA from William & Mary and in 2006, I received my MBA from UC Berkeley.
In 2012, I left banking after negotiating a severance package worth over five years of living expenses. Today, I enjoy being a stay-at-home dad to two young children, playing tennis, and writing.
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November 27, 2022 at 7:36 am
At this point I can only wish I had become a professor 🙂
My daughter is in year 2 of PhD at an Ivy…and her long time steady is in year 2 of being a professor at same school.
He makes more $$ annually (in his first year) than my wife and I have ever made combined in a single year (and we do far better than average, live in South Orange County etc).
He has to teach 1 class, for 1 semester, PER YEAR. The rest is research and publishing.
I once joked “so basically you guys just sit around, at your desk, etc…and just “think” all day.” In a small way he agreed w me…. and his colleagues had a chuckle too.
Yes….I should have been a professor…
November 26, 2022 at 4:37 pm
Becoming a professor is lucrative for a very small number of individuals who go down that path. The ones that do achieve financial success in academia probably would have found the same success if they had chosen a different career choice. It all boils down to the same things: networking, intellect and luck. Being an academic professor is the ideal profession for status, but not riches.
November 25, 2022 at 7:24 am
Thanks for the interesting article. I’m a Full Professor at a top 25 private University in the Midwest. The points other profs are making here seem right on, but I’ll add a few of my own. If you’re considering being a professor, you have to really love the work – period – otherwise it doesn’t make sense to pursue this path. You have to be genuinely intellectually motivated. For me, the fascination of science and theory took me through all the (sort of) hard stuff like the PhD and Postdoc at an Ivy. I say sort of because while it was hard to live on a very low salary for all those years (5yr PhD, 4yr Postdoc), the freedom, the creative thought, and the intellectual satisfaction of it all made it worthwhile. The pre-tenure years are VERY stressful and the “publish or perish” saying is real, but if you make it to tenure you’ve got it made – especially at a reputable school with money. Good salary (160K for me), unparalleled freedom, and NO BOSS. I realized early on that I just couldn’t have a boss, and although you have Deans and Chairs that can be annoying and even create some stress, the tenure package protects you from most of the downside (for now anyway).
It’s not true that you have “time off” in the summers, at least not if like me you run a major research lab, but again, you have that freedom and flexibility. In fact, if you add the summers and all the other breaks (Fall Break, Spring Break, etc) together, you’re approaching 4 months per year where you have complete freedom and flexibility. I think it’s one of the best jobs out there, for all of these reasons and the ones you spell out. It’s a long road to get to tenure, but this “long road to riches” is not atypical of doctors who go to med school and then residency and other professions.
There are some aspects of being a professor that are a drag (the administration and service and the social political crap that comes with it), but you can minimize the time you spend doing that by simply learning to say no. The rest of the job (research and teaching for me) is pretty great. Sometimes I have to pinch myself that I get paid to do what I do. Getting paid to develop and test your ideas, write about them, and learn about the world through research is one of the most rewarding paths out there. Add in the amazing students who learn from you (you learn a great deal from them as well), and a few great collaborators and you’ve got it made. Even without any side hustles, you’re looking at an awfully nice life.
I have a thriving consulting and speaking business on the side which generates nearly double the income I make as a professor, and find that I can fit it all in without too much strain (ok, the travel can be a bit much, but you get the picture!)i. A book is my next goal, not just because of the money it might make, but because I see it as a way to give back to society in lay terms all that we’ve learned in the lab.
All things considered, at least for now, I think being a professor is pretty great. The respect is real, and you get paid to think. Amazing!
November 25, 2022 at 7:55 am
Awesome perspective! You’ve hit the hit the nail on the head for me, regarding the respect and getting paid to think. As an inquisitive person who loves to learn, what’s better than that?!
I would say it’s always stressful in any profession before getting to a higher role. It doesn’t matter if you’re a banker, doctor, lawyer, politician, athlete, etc.
I do have one question for you and other professors: How much pull do professors have in getting a student or a friend/acquaintance’s son or daughter into a university?
“ Sometimes I have to pinch myself that I get paid to do what I do. Getting paid to develop and test your ideas, write about them, and learn about the world through research is one of the most rewarding paths out there. Add in the amazing students who learn from you (you learn a great deal from them as well), and a few great collaborators and you’ve got it made. Even without any side hustles, you’re looking at an awfully nice life.”
November 24, 2022 at 2:30 pm
Might be misleading to solely consider the “benefits” associated with professors at private campuses. State school professors typically don’t get benefits for their family members’ education. Furthermore, their salaries are often 10-25% lower than the numbers you noted. Interesting article though.
November 24, 2022 at 8:57 am
Full Professor at the University of California pays $236,419 a year on average. Earners in the top 90th percentile make $387,000. Assistant Professor salary is $114,768 average, $188,000 90th percentile.
Non-STEM is typically well under $100K. Salaries at second- and third-tier colleges and universities are commensurately lower.
My several friends who are professors tell me of the long hours they work. The one nice perk is summers off — that is, unless they opt to supplement their income by writing grants or teaching a summer course.
November 24, 2022 at 10:26 am
Three months of summer vacation is a pretty big perk. I can’t imagine them working more than 60+ hours a week like we did in banking.
November 24, 2022 at 7:36 am
Wonderful article. I’m in my early 30s and graduated with a masters degree in the humanities from Oxbridge. Have been on the lower rungs of academia for 7 years working as an adjunct lecturer at a university in Singapore. Its tough at the bottom. Colleagues with PhDs are also making the same hourly rate. The prestige of being in academia has clearly seen better days. Students can be a handful and occasionally disrespectful.
Passion, or wisdom for that matter, clearly doesn’t pay the bills. What I did to mitigate the impact and instability of this industry was to be highly disciplined in creating a dividend and bond portfolio since my halycon days as an undergraduate.10 years of investing and compounding. Almost shy of seven figures. Would say I am doing OK. Private classes, research projects and consulting are ways to strengthen one’s cashflow in academia and turbocharge a portfolio.
The best thing about this industry is the time and location freedom. Bosses rarely micromanage and colleagues are a pleasant bunch. 80% of the tasks can be done virtually. In my case, geoarbitraging and moving to a lower cost country (Malaysia) was possible and eventually became a reality as borders reopened post-pandemic. Hope this helps!
November 24, 2022 at 7:22 am
I am a tenured professor at a research university. My income has been flat for about 5 years so I’m not with you on income. I got my PhD 21 years ago and my base salary is $92k. People do treat me like I have status, though.
November 24, 2022 at 7:21 am
dad was a professor. he was obviously classy and educated and spoke beautifully. he was considered very respectable. we lived around and mixed freely with people who had more money than us. his university salary was not huge, but he also had a sideline business as a consultant in his field. mom explained to me that his education and title as professor elevated his status. btw, in the u.s.(where we were ) the title of “professor” is a specific thing, not everyone in academia has it, but in Europe practically anyone who teaches gets called “professor”
November 24, 2022 at 6:20 am
Sam, Like you, I once dreamed of being a college professor!
Made the Ph.D program at a University of California school and lasted about six months, before dropping out. You see, I had started a business to “work my way through graduate school”, (a ridiculous idea!) and discovered that I was passionately in love with real-world business, rather than lovey Tower shenanigans. The program was ideologically divided, and many (most) of the professors were utterly self absorbed jerks. But I digress.. being a grad school dropout was one of the most fortunate decisions I’ve ever made! The business was awesome, and ran successfully for more than a decade when I sold it. Then I started another business and just sold it after 17 years! I shudder to think how miserable my life would have been as a professor of anthropology. Lol.
November 24, 2022 at 7:01 am
Must feel good to know you at least got into a PhD program and could get one if you wished. Best of both worlds!
Hope you made a lot of money with your business sale and have some new to look forward to. Cheers
November 24, 2022 at 8:58 pm
My family is in a very good place now with the recent sale of the business. Looking for the next opportunity. Coincidentally reading your article today about Luck, which resonates strongly with me. I often reflect on my life path and realize how many lucky turns and opportunities fell my way. The only thing I can say is God has some plan for me and I usually seem ready to go with the flow when opportunity knocks. Not to say that there isn’t hard work involved, but I tell my young adult kids, “Always be ready to recognize opportunity and be in the best place possible to seize the chance for success”. That means you must be prepared, disciplined, and optimized, or you may not be ready.
November 24, 2022 at 5:24 am
Hi Sam – Long time follower and reader here. First of all, don’t mean to sound negative here. But, if you go to transparent California and look up public university professors, they make boat load of money. The Dean of my business schools at a UC made over $1M a year! Ridiculous!
No offense to professors out there. I think professors in STEM should make such money.
However, Dean of business or management? Give me a break. These fat salaries and extensive staff at these UCs are culprit for highly inflated degrees. They should cut the fat and make degrees affordable!
Now that I let that out, yes, I do agree professors make good money. Hope they can sleep at night on backs of 18-22 year old kids in debt.
November 24, 2022 at 11:49 am
Unis/colleges are filled* with useless administrators who more often than not obstruct the running of their institutions, yet almost all have six figure salaries. This seems insane (and it is), but many might not know the reason this happens: they are patronage jobs that are passed out to curry political favor. It would be better if these people were just paid off to not show up to work.
* Not ALL administrators are useless, but the useless ones outnumber the good ones about 5:1.
November 23, 2022 at 7:33 pm
Sam: There is a lot of disinformation out there, so let me offer my 2c. I was Chair in a department of economics at a public university. Yes, the top of our field is extremely well compensated. Our star (~45 year old) has a package of 500k after receiving a full professorship offer from an Ivy League. I would not be surprised if their TC is closer to 700k with the extra consulting and grants that they are running. Also, the lifestyle of a professor is hard to beat.
However, this is a 1/1,000 outcome. There are 2,000 graduating PhDs per year. Only 50 get a tenure-track position in a major university. Of those, less than a third will make tenure. Of those who make tenure, less than a fifth will continue publishing at the frontier of the discipline and get real raises. In academia, raises are 0-2% without outside offers and these offers come by every 5 or 10 years, even for stars. So you see a lot of salary inversions, which means that entering assistant professors outearn professors with 30+ years of experience.
Further, economics is one of the few fields together with business, medicine, computer science, engineering, and law with relatively high salaries and robust job market. These fields all have in common a high demand from students and good outside options. In humanities and other biological and social sciences, top salaries are closer to 100k, there are much much less job openings, no job mobility, and almost nothing to do except being a professor.
Being a professor is great, but only for the very few. Like every other job.
November 24, 2022 at 3:20 am
I totally endorse this comment. I am a full professor in economics at a top public university in Australia. My salary is about USD 125k per year, which is good but nothing that special in US terms. This would be typical for lower ranked research universities in the US. Only a small elite make high salaries as professors (medical professors are top). Professors who publish best selling books are very rare. OTOH being a professor is a good job (if they can get it) for the run of the mill novelist who doesn’t make a lot of money from writing. Consulting can be important in some fields though there is competition between spending time on academic research which keeps your prestige high and working on consulting, which brings in the dollars. Finally, clearly the Bankman-Frieds were doing something shady.
November 24, 2022 at 3:50 am
Great statistics. Thanks for sharing! I’ll refer to this comment in the post to emphasize the difficultly of becoming a professor.
The $500K total comp and tenure for the 45 year old sounds great! Although it sounds like he is a unicorn, other aspiring professors can always dream. I think more of us should ask ourselves, “Why not me too?” More often.
If only 50 receive tenure a year, it’s all the more befuddling why professors Bankman and Fried would partake in something so suspect. Let’s see what happens.
November 24, 2022 at 9:40 am
November 23, 2022 at 5:40 pm
Sam instead of “invest in the heartland” or as you say frequently “invest in 18 hour cities” you should personally start thinking like people that actually live in the heartland do…. If you did than your question about being a professor being the best would be answered….
College and professors are both entities that times have come and gone and that society has been overly kind too….there optimization has peeked and will soon be declining greatly.
The need for college and its debt, it’s practically and utility is greatly overvalued. The access to the internet, blogs, chat spaces, internships, mentors, peer groups in addition to information that directly pertains to any persons interest is available for free an in in abundance.
Regarding professors compensation and respect… I expect both to go down greatly going forward. Why should they be any different from anything else that can simplified with great cost reductions access by artificial intelligence ? …
Lastly , regarding college and “ten year” and prestige what is it based on? Why do they deserve these accolades?
What companies have they built?
How many salaries have they paid?
How many printed “papers” have influenced positive thoughts and change directly to peoples lives?
November 23, 2022 at 5:20 pm
I retired a few years ago as a mechanical engineering department head from a large, land-grant university in the mountain west region. I can tell you that a typical starting salary for an assistant professor in an engineering department would be ~$90-100k. (More or less depending on the university and location.) This would be a 9 month contract. The faculty member could typically earn another 3 months salary over the summer, typically through research contracts.
New assistant professors work for 5 years on annual contracts before going up for tenure during year 6. Those first 5 probationary years are extremely stressful for most faculty. Along with tenure comes promotion to associate professor and perhaps a 15% raise. Usually another 5 years before the faculty member then goes up for promotion to professor. Both levels of promotion, at least in an engineering discipline, require significant research output at most universities.
The tenure track positions are not easy to obtain. We would typically get 100-200 applications for an opening. For your readers who want to pursue the tenure track path I would recommend getting your PhD at a reputable school, and choosing your PhD advisor very carefully. Nearly all qualified PhD students have their tuition waived (or paid for) and receive a stipend on the order of $20-40k per year.
Overall, I would agree with Sam in that as a tenured professor your opportunities are limited only by your ambition and abilities. Another nice benefit is that you need not worry about corporate layoffs and then wondering how to make the next mortgage payment.
November 24, 2022 at 3:53 am
Thanks for the insights Robert. $100K as an assistant professor in the Mountain West region sounds pretty good to me, especially if you have a partner who works too.
Job stability and future pension sounds great.
November 23, 2022 at 4:45 pm
In 2022, Stanford professor Jo Boaler charged $40,000 for eight hours of consulting work to the Oxnard School District. $5,000/hour to help public school teachers teach mathematics better is pretty good!
This is a complete joke… I grew up in Ventura the city that is next to Oxnard. I spent my whole life until I was 50 there. The reason kids don’t succeed in math in Oxnard is because there parents don’t make it a priority. It is a city that has a low income threshold and many low income people that are struggling to make life happen.
This should be a statement about a professor that is greedy and doesn’t care about poor kids in homes that don’t have the ability or are too close to the poverty line, worrying about feeding them to care about there kids math scores.
November 23, 2022 at 2:21 pm
As usual, great article Sam!
I’m well versed in this area.
I like to say that professors are just like professional basketball players. Some professional basketball players play for the G-league and make 50k a year. Then on the other end of the spectrum you have super star basketball players in the NBA that make 50 million a year.
Being a professor is very similar to that. The level of success of a professor depends on the hustle of that individual. Some professors stay at the adjunct level and make 12k a year, then you have some professors that get tenure at a college or university, but they just teach their courses then go home and watch tv. They make anywhere between 50 -100k a year.
THEN you have the go-getters. Those professors that write books, do public speaking, write multi-million dollar grants, teach university courses in the Summer (which can equal up to 20-30% of your base salary). It’s not uncommon for professors like this to make anywhere from 100k – 500k+ a year. Regardless of the university they work for.
THEN you have some business and medical professors who can make over 1 million a year at top-notch schools.
A Ph.D is like a good suit. The suit (Ph.D) may get you in the door, but it’s the person inside the suit that’s going to get the job.
November 23, 2022 at 3:34 pm
“I’m well versed in this area.” Can you share how you are well-versed in this area? Are you a professor yourself?
I must be mainly competing with the go-getter professors then. Because all I see is success books published by professors from my imprint, Portfolio Penguin. So that is the bar I set.
Maybe it’s not healthy! And maybe the bar is warped. But that is my standard I’m used to.
November 23, 2022 at 4:26 pm
Yes. I became a professor after I retired from my 1st career. I’m tenured and have a few side hustles in my new career.
Your post is 85% accurate (except for Bankman and Fried. They accepted the “gift”, and forfeited their lives, for their son).
Most of the success of professors depends on “what” they teach and “what else” do they do. Example – A professor of English doesn’t have a large base salary. But if they have talents and use those talents to create side hustles, then they can greatly increase their income.
Here’s my Hypothesis, Sam. The top 5% usually make it no matter what their profession is.
A Top 5 percenter can start off doing fries at McDonalds. 15 – 20 years later, that person will be a Regional Manager for McDonalds, OR own their own McDonalds.
Cream rises to the top.
November 23, 2022 at 4:34 pm
Ah, McDonald’s, my first job! Scared me straight to study hard to not have to work at McDonald’s again.
Do tenured English professors have different base salaries than tenured STEM professors at the same university? Doesn’t seem very fair if so.
Congrats on having the dream job! That’s cool you got tenure after your first career. Seems like that would be hard to do, depending how long your first career was.
November 23, 2022 at 5:50 pm
Ha! You have just proven my “Top 5%” Hypothesis! From McDonalds to world’s greatest modern-day Samurai!
Absolutely! Professors of different majors make different incomes. For example, A Music Professor literally makes half the salary of an Economics Professor (the salary structure for professors mirrors that of the private sector). The highest paid professors are business professors. Followed by medicine and Law. Then Computer Science. Surprisingly, STEM falls in somewhere after these fields.
My transition from my 1st career to higher ed was a smooth one. I retired from K-12 public education as a superintendent (which means I already had my Ph.D). It wasn’t hard after that to transition to becoming an Education Administration Professor.
Kind of like a retired military soldier transitioning into Law Enforcement. Very smooth transition.
November 23, 2022 at 11:22 am
I followed the path of achieving FIRE via corporate America then transitioning to being an adjunct.
Being an adjunct at a top tier business school in the Midwest has been everything that I had hoped.
Since attaining more and more corporate success may have enticed me to forgo my long term goals – I had to carefully manage my upward corporate career so that I did not jeopardize my longer term goal of retiring early and having a nice work-life balance all while being an adjunct.
This may not be the path for everyone, but for me it has been sublime.
November 23, 2022 at 3:35 pm
Great to hear the adjunct professor route has worked out well for you! Now I’m more motivated to try in Fall 2023. My buddy is an adjunct professor at Stanford, teaching investing. But he crushes it at his day job.
November 23, 2022 at 9:59 am
After getting my MBA (it was necessary to be accepted by the faculty hiring board), I was sent by my employer to serve as an assistant professor at the University of (insert name of large eastern state here).
Teaching didn’t turn out to be too hard, and I had all summer (when the work week was four days) to prepare my lesson plans. They also turned the heat off to the buildings during Christmas and Easter breaks so I had to work from home many years before COVID.
I had a nice office in a historic building with fancy wooden furniture and a view of the old central part of the campus (bonus: where the coeds came to sunbathe on nice days).
I could impress friends and family by taking them to the faculty restaurant for lunch. I had easy access to all kinds of cultural and sporting events, including football games. When I went to the gym at lunch there was a very nice locker room just for faculty, and my own personal locker was always stocked with all kinds of nice clean clothing and towels. I only had to provide my own athletic shoes (and I got to meet people, I once loaned those shoes to a Hollywood star who was on campus for the day because he needed a pair for something and I was the only one anybody knew with feet as big as his were).
The Faculty Senate Meetings I recall as being dreadfully dull but there weren’t too many of them, and the nature of my position was such that I was under no compulsion to publish.
And yes, the full professors tended to have beautiful huge old homes along the sides of the campus so they could stroll into work and, yes, the STEM professors and some of the finance ones were clearly the wealthiest, but none of the others were hurting. Also, my salary was still paid by my employer so I was making quite a bit more than most assistant professors.
It was sad when it came time to go back to my employer. But not so much that I was tempted to seek my PHD and then enter the academic arena as a full-on contestant (more like gladiator) seeking tenure. I did had two aunts, on different sides of the family that never even knew each other, that were sent by their employers to other schools and wound up staying as faculty.
November 23, 2022 at 3:35 pm
Sounds like you had a wonderful experience! Might be time for you to revisit it.
Eating at the professor’s lounge. Now that sounds like a dream come true!
November 23, 2022 at 9:40 am
Great and Interesting Post Sam. I don’t know if I would tout the real estate purchases of SBF’s parents as evidence of good business or benefits of being professors though. Seems like some concerning liability there… I was also pretty surprised that one of SBF’s Dad’s colleagues at Stanford is helping to advise SBF in his legal battles. Seems like this could put the university and these faculty in pretty tenuous positions
Also unbelievably ironic that both his parents lawyers specializing in Ethics and Corporate Morals and Tax law!! Almost like the cliche of the preachers daughter being the most promiscuous. This SBF/FTX story is truly amazing though.. it looks like FTX did not follow corporate norms and as such may have lost its protection and there should be piercing of the corporate veil.. and SBF should be tried directly for the massive fraud he perpetrated. Millennial Madoff is a perfect and fitting nickname..
November 23, 2022 at 10:07 am
Would SBF’s parents really throw away their names and livelihoods just for a $16 million vacation home though?
It’s just hard to fathom at 67.
November 23, 2022 at 2:11 pm
They didn’t do it for the money, Sam. It’s obvious from “Crooked Sam” that he was spoiled rotten. By THEM. They threw away their careers, good name, pension, and potentially their freedom because………SBF asked them to.
November 23, 2022 at 3:36 pm
Is it obvious though? I’m not sure what to believe. SBF is talking to The NY Times and Andrew Sorkin on Nov 30, 2022. Which means he still won’t be in jail or charged of wrongdoing.
November 23, 2022 at 9:36 am
I LOVE this article once again Sam. I have thought for years that being a professor would be the best! After getting my MBA, I considered it for a bit. Working on a college campus seems so fun, creative, and energetic with all those young smart kids walking around. Plus, the colleges’ towns are quaint and have a lot of culture. Good points the readers are posting though. Once again, the rich step over the others to get there. I sure hope no one gets bailed out this time.
November 23, 2022 at 9:42 am
Right?! Imagine walking around campus and always being revered or at least respected by thousands of students every school day. Good energy and lots of hope for the future as a student. University life is a shelter from the daily storms of real life.
Then, when you can made a significant amount of side income in the private sector, you’ve got yourself a great combination.
November 23, 2022 at 9:06 am
I’m a professor at a top southeast engineering public university, with a PhD in engineering, and I can *assure* you that the profession, in general, is nothing like the road to riches and prestige that you think. Note how the examples you discuss are all Ivy League profs – that’s not by accident. However, how many PhDs end up there?? For every, say, Cal Newport, there are *thousands* of equally pedigreed academics who toil in anonymity in public institutions or small privates with nowhere near the level of prestige and financial resources (aka alumni gifts) schools like Georgetown enjoy. Also, your piece totally glosses over how tough it is to get a PhD in the first place. And then there’s the post-doc, which is just about the most dicey position to be in, in academe, and yet a necessary step to gain a tenure-track spot at a top university. I love your content in general, but please don’t extrapolate what you see at the very tippy top of the academic food chain and think it’s all puppies and rainbows for everyone in the field. With all due respect, I think you dodged a bullet by getting rejected for your PhD at Stanford.
November 23, 2022 at 9:13 am
Now now, don’t sell yourself short! As an outsider, I find your profession to be very admirable and high status, precisely bc it is hard to get a PhD and get a professorship job.
If everybody could become a professor, it wouldn’t be a very prestigious occupation.
Perhaps it’s due to my entrepreneurial mindset, but if I was a professor, I would leverage my status to pitch book deals, and become an expert consultant immediately. My long process of publishing my book opened my eyes to what a goldmine publishing can be for professors.
From my perspective, making more money is relatively easy. But no matter how hard I try, I don’t have the patience or intelligence to get top test scores and get straight A’s to get into a PhD program.
Have you written a book or done consulting? Surely it pays well no?
November 24, 2022 at 3:32 am
I haven’t written an academic book let alone a popular book (I have edited a couple of academic books which is really not worth it…). I have published around a hundred journal articles… All the money I have made from consulting in my career adds up to less than $50k. I’m sure I could do much better on that front if I tried but as I said there is a trade off with doing academic research.
November 23, 2022 at 8:59 am
I like all of your articles and enjoys reading them! But for this one, I must say you have very much underestimated the efforts required for becoming a successful professor and earn good salary. I can say this being in academic world.
To everyone: don’t choose academic world by reading this article, especially financial aspects.
November 23, 2022 at 9:06 am
Thank you. Feel free to elaborate on the difficulties you’ve had! Firsthand experience is always great.
Here’s what I wrote. It’s hard to get to the top, like in most professions. But if you get to the top, I say being a professor is great!
“ Within a month time period, I realized getting a PhD and becoming a professor was not possible for me. First, you have to have taken the prerequisite courses. Second, you have to have great grades and test scores. Third, you need to have a clear idea of what problem you want to solve or research.
Even if I got my PhD in communications, it is extremely difficult to get a professor job at a major university. Only the best of the best get tenure at a top 25 university. Most remain associate or assistant professors for their entire careers.”
November 23, 2022 at 8:53 am
Lol, I know several college professors and they are neither rich nor elite. The pressure to publish is intense and obtaining tenure is highly political. I imagine getting tenure at an Ivy League school is akin to winning the lottery
November 23, 2022 at 8:56 am
Ah, so you THINK! Master stealth wealth practitioners.
November 23, 2022 at 8:50 am
It depends on the field. If you are business or STEM professor, the pay and extra perks are pretty good. If you are a humanities professor, you don’t make that much but you still have some perks e.g. the discount on the kids tuition. Think history professor for example. Again it all depends on your field. If you really want to make money while working for a college/university, be a football or basketball coach. The pay is much better even at second/third tier schools.
November 23, 2022 at 8:29 am
I never thought about becoming a professor growing up. I thought about becoming an elementary school teacher briefly in my 20s but was deterred by the requirements since I didn’t have the right undergrad specialties.
Impressive perks for Stanford professor parents!
November 23, 2022 at 8:10 am
You fail to mention the exploitation that this industry engages in. Where all the actual teaching is done by slave labor and their masters enjoy the prestige. ergo..Note the current employee rebellion in the UC/CSU system
November 23, 2022 at 9:26 am
I’ve seen so much extreme language from people lately.. “exploitation”, “slave labor”, give me a break. Unless you have personal experience with slavery or you were sold into forced labor and owned by someone, then don’t use the terms slave labor/masters. It is disrespectful to those who were actually enslaved.
Similarly “Employee Rebellion”… You mean a strike? Unions strike all the time, they do it pretty much every year, its not a big deal. Unions use and potentially abuse the system as well just to get a pay raise..
That being said academia has its issues just like every industry does. Academic administrators can make huge salaries from indirects taken from Professors’s grants and projects, students fees, and endowments. However, academic universities provide critical unmatched educational opportunities and foundational research which helps society and the world. So I hope you can see one day that things are not always black and white, or good and bad.. there is a grayscale and a balance of good things and bad things that industries provide, some weigh heavier to one side or the other..
November 23, 2022 at 10:43 am
Interesting comments. Many good points to consider (except Doug). I am a retired professor from a basic public university. FANTASTIC EXPERIENCE. Academic prep (including PhD) is hard work, getting the job is difficult, being a good teacher is essential to enjoy the experience. In this day and age with students publishing their opinions on social media you are publicly evaluated daily. Be a lazy/lousy professor and you will get fried on social media. Be a good teacher and students will “share the love” – on line. And, on top of all this, defined benefit retirement (rare these days), great health insurance, good long term care insurance available, opportunity for paid sabbatical, 403b with GREAT make up clause, many opportunities for “side hustles”, great schedule, etc. etc. BUT the best and the most important part is the day-to-day interaction/relationship with students who come from all walks of life!! The best people I could ever hope to know! Wow, what a great life and great memories. I am eternally thankful and grateful. Thanks for the article, Sam.
November 27, 2022 at 12:14 pm
My husband is a professor at a state university and heads the RPT committee in his department. Your comments about student opinions is very valid. Many faculty are denied RPT (retention, promotion or tenure) based on poor student evaluations. I remember some awful professors from my University days, 45 years ago, but in the era of on-line student ratings a person who does not have good teaching skills will not do well, even if they are brilliant in their field.
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