A Day in the Life of a Mathematician-Turned-Finance-Wizard

A Day in the Life of a Mathematician-Turned-Finance-Wizard

16 mins read

Take Sam for Example, Sam had always been good at math. It came easily to him, and it was fun! He got good grades, and his teachers and parents encouraged him to take as many advanced math classes as he could in high school and college. So when Sam entered grad school to study mathematics, it wasn’t surprising that he soon began dreaming of becoming a professor.

If you’re interested in math and money, you may be wondering what the day-to-day life of a mathematician-turned-finance-wizard looks like.

Sure, most days look pretty similar in terms of tasks, but there are a lot of differences that make this job quite interesting! Here’s an average day from someone who spent the last year working in the finance industry – or as she likes to call it, the best year of her life!

The power of math

More than many people realize, math is at work in finance. Sure, those who are involved with trading and portfolio management might not know how to solve for an equation, but they often use statistics to their advantage.

And for mathematicians themselves, knowing about market changes (and stock market trends) can be incredibly helpful when figuring out where to direct research grants and faculty positions at universities.

Those who pursue careers in finance also come from all kinds of mathematical backgrounds; PhD students may be interested in consulting with financial companies or working on quantitative trading desks once they’ve received their degree, while graduate students specializing in applied math may find jobs on Wall Street or at insurance companies. The possibilities are endless!

Qualification needed to get into Mathematical Finance

The first step to become a Mathematical Finance Wizard is to get your doctorate degree. For example, if you have a Ph.D. in Mathematics, and interested in becoming one, you need to have an excellent command of differential equations and calculus on top of theoretical concepts such as probability, stochastic processes and statistical mechanics.

Without these basic prerequisites, it will be very difficult for you to compete with other candidates who do possess these necessary skills that are needed when working on finance problems. Financial analysts usually also complete several years’ worth of working experience before they can land good jobs at some large financial firms.

 The second step is to get through recruitment. If you have already made it through university, applying for Mathematical Finance jobs would be easy because there will be more than one option available for you, but when you don’t have a qualification, it becomes quite hard to land one.

You may not even be qualified enough to land an entry level job at some companies that do hire people without degrees; these firms usually want employees who can demonstrate competency and problem solving skills and candidates with no degrees are usually unable to provide any formal evidence of their mathematical capabilities.

The easiest way to avoid these issues is by getting your doctorate degree first and then apply for Mathematical Finance jobs later on.

An introduction to derivatives

By understanding derivatives, you’ll have a better grasp on how financial markets function and even where to look for opportunities. At its most basic level, a derivative is just an investment contract between two parties.

The derived value depends on an underlying security or asset and can be traded, bought and sold just like stocks and bonds. For example, an option to buy Microsoft shares at $25 that expires in six months is based on Microsoft stock. An interest rate swap exchange between two banks is based on interest rates.

 So, while they may sound scary or complicated at first, once you know what a derivative is and how it works, you’ll be able to easily identify them when you’re watching financial markets. You’ll also be able to understand why they play such an important role in your portfolio.

As long as you don’t go overboard with speculation and you stick to investing based on your own strengths and weaknesses, adding derivatives can add some impressive firepower to your portfolio.

From grad school to Wall Street

While undergraduates typically don’t have to worry about earning a living while they study, most grad students face real financial pressures. Take your PhD work to Wall Street: As an assistant professor at Yale University, you might be making $71,000 or more on your first day.

But as an assistant professor at Vanderbilt University, you might only make $52,600—and that’s actually on par with what newly minted Ph.D.s earn in industry! It should come as no surprise then that several postdocs recently polled by The Scientist said they would rather work for Wall Street than continue their lab careers.

 So how do you go from graduate school to Wall Street? The first step is choosing which industry best fits your skills and interest. Each financial sector—finance, hedge funds, and others—has its own culture, career opportunities, and pay scales.

Many academic mathematicians find work as quantitative analysts (QAs) in investment banks like Goldman Sachs or J.P. Morgan Chase. These analysts use their mathematical know-how to design new financial products such as stocks or bonds for clients.

Finding an open position

One good place to look for an open position is FINRA’s Job Opportunities page. Your state may also have job sites devoted to finance positions.

If you know what you want, try using Google or Yahoo! Finance and search terms like finance or investment banking. This will help you find postings from small companies as well as large corporations.

Another option is AngelList; if you want to work at one of these startups, it can be an excellent way to introduce yourself and get hired straight out of school. However, keep in mind that most companies on AngelList are very early stage—and given how many people apply for each position, your chances aren’t going to be high.

 For example, if you want to be a trader for an investment bank, look for positions that list roles such as trader or research analyst. If you’re interested in working at a large corporation (like Goldman Sachs or Bank of America) then look for job listings that mention specific departments like investment banking or private wealth management.

While you don’t have to follow these rules rigidly, it is essential that you do some basic keyword research and make sure your resume is relevant to each opening—or there’s little chance of getting hired. Also keep an eye out for what their background requirements are.

On my first day at work

If you’re in finance, you’ll learn quickly that stock analysts aren’t all sipping champagne at their desks—they are buried under stacks of reports, spreadsheets and pie charts. (With a little research, I found that 90% of analysts are high school or college graduates.)

Your work day will be spent combing through financial statements and making sense of past earnings to project future performance.

Aside from crunching numbers, your job entails presenting data to company stakeholders like CFOs and CEOs, then synthesizing their feedback into market reports.

In addition to attention to detail and thorough research skills, math majors develop strong time management skills working within tight deadlines—an essential trait for finance professionals.

 The first day at work for math majors and financial analysts is full of numbers, graphs and research to get done. No pressure! You’ll spend your time focusing on analyzing past performance and making projections for future earnings.

The most important skill you’ll use is analysis—you need to find relevant information about companies that will affect their stock prices.

A degree in math gives you an edge here because these skills are so important that many companies only hire mathematicians who have completed an internship or postgraduate training course.

Plus, being able to handle both critical analysis and writing reports helps you sell your company internally as well as externally when presenting at conferences or events to share your results with peers and investors.

What do a math geek really do?

A Day in the Life of a Mathematician-Turned-Finance-Wizard
Image Credits: Unsplash.com

While at a financial firm, one math geek had to make sure all market prices were correct and that all trade reports were accurate. In addition to double checking math calculations and looking for any mistakes in reports, he would check current business regulations as they applied to his company.

If a law or regulation was being changed, he’d inform his colleagues who work in sales so they could adjust their sales pitches accordingly. Of course, like most finance positions, there’s more paperwork than anything else–making sure important documents are filed properly is a very important part of a math geek’s job description in finance.

 Now let’s take a look at another example: John Doe – an applied math professor who took a position at FinanceCo, Inc. It’s his job to understand and make sense of financial data coming from one company or many companies under FinanceCo’s umbrella.

To start with, he reads company reports and studies industry information. If some information is lacking, he analyzes data or conducts research to gain insights that will help predict future events or outcomes within his business sector.

Although it would seem like hours are spent studying spreadsheets and charts all day long, he likes to visit facilities every now and then to see how they’re operating behind-the-scenes on a daily basis so as not to lose touch with what’s going on around him.

My weekend routine:-

I just wrapped up my weekend routine, where I typically unwind with some exercise. Sunday afternoons are reserved for my weekly yoga class, which I love. Afterward, it’s nice to run into some friends at a new brunch spot or take a short trip to buy groceries for dinner.

On Sundays, I like to make an effort to step away from work and hit reset. Being mindful about putting work out of mind at least once during each week has helped me stay productive—and sane! However much you like or dislike your job, taking time to be present and appreciate other things around you can give you a fresh perspective on your career path.

 While I like to spend my free time relaxing and catching up with friends, some weekends I prefer to spend on a more active note.

Whether it’s an outdoor workout or some kind of physical activity, being active can be really rewarding. If you need help starting your own routine, taking up yoga is one great way to build strength while also calming your mind.

My favorite local studio is Path Yoga. For those with minimal space at home or who live in colder climates where practicing outside isn’t ideal, there are plenty of online resources for working out from home – even if you don’t have any equipment!

Verdict 

The verdict on mathematical finance is clear: it can be extremely rewarding, but it’s definitely not for everyone. As with any career, you’ll need to balance passion and practicality when deciding if working as a mathematician in finance is right for you.

Think about what your goals are – Do you want to earn money? Contribute to society? Set yourself up for an exciting, fast-paced lifestyle? To learn more about what it’s like working as a mathematician in finance, check out FinancesOnline’s guide.

 In short, working as a mathematician in finance is great if you want to put your math skills to use and get paid to do it.

But while many graduates dream about earning large sums, remember that it’s never too early to start making financial goals and working towards achieving them.

Even if you find that academia isn’t for you, knowing what type of position will be most beneficial for your future will help you make an informed decision about your career path.

After all, there are more than just three main career paths available to math majors – there are countless opportunities available! And now that you’ve read our guide on mathematicians careers after graduation , where do you think your passion will take you?

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