Want to Make $100,000 a Year? Become a Portfolio Manager
Times change pretty quickly. Back when we first published this story ten years ago, the average portfolio manager was paid about $450,000 a year. These days, post financial crash, average portfolio manager salaries are lower. But they’re still not chump change.
PayScale says that portfolio managers make between $49,000 and $172,000 per year, with the average hovering around $83,000. Glassdoor puts the national average a bit higher, at $101,630 per year. Plus, most portfolio manager jobs allow for cash bonuses based on your performance and the overall performance of your company.
This is nowhere near the nearly half-million dollar salary from a few years ago. But it’s still a great, steady income option for those who enjoy crunching numbers, managing risk, and working with clients.
A full-time portfolio manager working for a large bank will need a bachelor’s degree, possibly in a math-related field. But it looks from current job listings (as of June 2018) that experience is the more important factor.
How to Become a Portfolio Manager
So how do you step into this field and become a portfolio manager? You can step into this career field even with an unrelated degree. But the easiest path is probably to begin as an undergraduate.
If you think you’d enjoy this field of work, start out with an undergraduate degree in something related to business, economics, or finance. You’ll have lots of math-related and accounting classes, of course. And you’ll likely need to go on to get a Master’s in Business Administration focused on finance or accounting, as well.
What if you’re already working in a different field but are interested in switching to this one? In this case, consider just going back to school to get your MBA in a finance or accounting related field. Be sure that you study risk management, or look for a degree program that includes courses specifically related to the stock market.
Once you get those degrees, you’ll likely find work starting out as a research analyst. These jobs pay less–about $60,000 per year according to PayScale. In this type of position, you’d be doing market research for a portfolio manager. It’s a good way to see how the field works and to start practicing making decisions without being responsible for all of the outcomes.
You can also practice in the meantime with a portfolio simulator. These can let you “invest” fake money in the market, seeing what kinds of outcomes your decisions would lead to.
As you’re working in this field, you’ll want to look into the licensing required to become a full-time portfolio manager. After all, when you’re making decisions with other people’s money, it’s essential that you prove you know what you’re doing. FINRA (Financial Industry Regulatory Authority) offers a variety of professional licenses and certificates.
You can start with the Certified Portfolio Specialist (CPS) certification, which requires either a related bachelor’s degree or three years of experience in the financial services industry in general. From there, you can move on to the higher-level Chartered Portfolio Manager (CPM) certification. This requires actual experience in managing portfolios, so it’s something you can get as you work your way up the career ladder.
These certifications require classes taken through FINRA, an exam, and 15 hours of continuing education each year.
Other than this, becoming a highly-paid portfolio manager is all about making solid decisions that do well for your clients. Continue doing this for a few years, and you’ll find that you can work your way up the ladder to a $100K+ job within a few years.
If you enjoy working with numbers and understanding the ins and outs of the stock market, this could be the high-paid, fast-paced career you’re looking for!
Hello I am 28 year old mal, working as F&I manager, at a luxury automotive dealership. I like what I make but I am not happy with the hours and I was always interested in the world of Finance. Is there opportunity for me to change my industry from Automotive to Finance ?. I’m ok going to school for 3 or 4 years, if I will make $150k after that. Please let me know.
Pointless article since no date exists. The numbers could be from 2007 which leads to inflated figures
The date is right at the bottom of the article.
Is this a hard field for a woman to get into?
no..its not hard..infact there are many women who are cfa charterholders
Since large portion depends on performance, in today’s bearish market, these numbers should be much lower, isn’t that so?
No date on article leaves readers wondering how relevant this is to today’s economy. A date on something, if not the article, the comments, would be nice!
@Jennifer
“Many programs in undergraduate physics require less advanced mathematics that programs in computer science.”
This is just plain wrong. I have 2 Bachelor’s from a top 5 university. One is in Physics and the other is in CS. Not in any way is the mathematical rigour of CS even touching that of Phyics. Some of the senior-level courses in statistical mechanics and quantum had math that PhD students in mathematics don’t see until their 2nd semesters.
Uhhh..the sample posting said “Sr. Fixed Income Quantitative Analyst”, which is different from a Portfolio Manager.
For ex., here are the Portfolio Analysts for Invesco Trimark, most of them do not have PhDs in math or physics:
http://www.invescotrimark.com/publicPortal/portal/retail.portal?_nfpb=true&_nfxr=false&_pageLabel=invExpertise_portfolioManagers_landing_page_label
lmao. The photographer for this company must be either terrible or have a sense of humor. I couldn’t even get through the whole page without falling on the floor. Great post bro.
While this article is over 2 years old, I felt compelled to place a rebuttal to correct some of its’ critical inaccuracies.
First off, most computer science schools – particularly the more theoretical ones – are offering programs with a level of rigor equivalent to many programs in mathematics. In fact, many departments in the highest-ranked universities worldwide are departments of “Computer Science and Mathematics”… these are fundamentally entwined elements of quantitative analysis. Therefore, your point is moot. Many programs in undergraduate physics require less advanced mathematics that programs in computer science.
Second of all, while graduate degrees are a benchmark for many portfolio manager positions, the Ph.D is not the-all-and-end-all. In fact, a master’s degree with an additional 3 or 4 years of intensive work experiences is very often more of a competitive advantage than a Ph.D in a moderately related field. We’d rather see your history of Investment Analysis than your Ph.D in Quantum Optics.
Finally, many Portfolio Managers have backgrounds in Engineering, a category under which Computer Science is often considered. Analytical skills are key.
Good work on an informative article about the earning powers of Portfolio Management, however it is my great hope that further research be done into acceptable qualifications when writing an article like this, for it has the potential to misinform a future generation of potentially gifted managers that may not fit your narrow range of descriptives.
Yeah…..over 450K…
After 15 years of working in the domain….
Which degree do i need to become a portfolio manager? i am planning to take a bachelor of commerce as a gold standard in business/accounting.finance world. am i on a right track? currently i am taking some cga courses to begin in accounting and start making at least some money… i think in another year i’ll be able to complete it. it’s a seneca accounting and finance diploma. but then i want to switch into b.comm and go into investment banking with joint cfa and mba from concordia. am i on a right track so far?
Evgen
I am curious to know if the 450,000 was a median or a mean estimate. We all know a couple of portfolio managers can make $15-$20 million in one year, that could inflate that average.
Those numbers are stunning. Generally speaking, I know there’s a small discrepancy between someone with a BA salary and someone with an MA salary, but statistically, I think there’s a much larger one between an MA and a PhD. I guess it holds doubly true for these guys. Crazy.
Also – I love the phrase “math-averse.” It makes me think of A) someone who doesn’t like equations, or B) a universe built entirely of math. Good times.
P.S. Thanks for checking out my blog, Sasha!
The one PhD in Physics who was a coder, skateboarded to work in his Hawaiian shirt. He worked on mathematical modeling software for portfolio managers. He was a fun guy.
As for the money and the math, it goes together. Quant is heavy heavy math and it takes big brains to power the models.
You’re right though, most of the high salaries for PhD’s in math and physics are for folks that ended up coding and founding their own companies. But you can do that without a degree too.
I would have loved to become a portfolio manager and play with other people’s money but I only got a 2:2 in Accounting and Finance.
Now manage my own portfolio and more than match some of these over-paid manager’s underachieving portfolios.
The investment banker salary would be fine with me, especially if I didn’t have to add numbers together or anything.
note that it is total compensation, and a large portion of that is based off of commission.
The money does sounds great. I wish I could work there for one year and live off that salary. I’ll just be content with where I’m at and move up at my pace. Thanks for the article!
If only I’d been more interested in high finance (and decided to do a phd). Ah well, in my next life I might try this.
I am willing to bet that a lot of them are in debt up to their eyeballs – fast cars, big houses.
Perhaps I am just bitter,
The Dividend Guy
Too stressful a job for me. With one year’s worth of that money (let’s assume that’s the takehome) we could pay off all our debt (which is big!) and buy a new house (a smaller one at around $200k) with no mortgage and have more money left over than I earn in a year. Dang. Why does Mr. Micah’s PhD have to be in philosophy?
But it’s really not the life for either of us, so we’ll take the lower pay and the greater happiness. But dang.
Nice article, Sasha. It’s good to hear about this side of personal finance. Personally, I think the amount of money you make is just as important as how much you save. Showing people that it’s possible to make this much money could help them become wealthier, much faster.
This is similar to what I did for a living up until a few months ago. And you’re right: the money is breathtaking. In my experience though, much more than 25% of the compensation was tied to performance. Performance-based bonuses accounted for 80% of mine.
You can also make significantly more than $500,000 per year. I have two friends that start private equity funds, and both of them clear over $1 million per year.