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This First-Year PhD Student Prioritizes Investing While on Fellowship

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In this episode, Emily interviews Michele Remer, a first-year PhD student at Michigan State University, about her financial goals for graduate school. Michelle graduated in spring 2020 and worked a few different jobs during the pandemic, so she was able to generate some savings and open a Roth IRA prior to starting grad school. Thanks to a summer 2022 internship and one-time bonus on top of her ongoing fellowship, Michele is in a strong financial position at the start of graduate school. Michele shares her investing goals and values and why she’s considering buying a house hack in the spring. She also breaks down her budget and shows how she’s keeping her large, necessary expenses under about 40% of her gross income.

Links Mentioned in the Episode

S13E8 Image: This First-Year PhD Student Prioritizes Investing While on Fellowship

Teaser

00:00 Michele: And then I also was able to start my program during the summer and I did an internship in D.C. which, technically, I wouldn’t be allowed to do because you are only supposed to, you can’t work more than 10 hours a week with your fellowship at Michigan State. But because it was part of a class, I was able to overcome that requirement. So, I had money from my internship to like live on in D.C. and then I also had that like fellowship money that I could use for like saving and investing.

Introduction

00:38 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. This is Season 13, Episode 8, and today my guest is Michele Remer, a first-year PhD student at Michigan State University. Michelle graduated in spring 2020 and worked a few different jobs during the pandemic, so she was able to generate some savings and open a Roth IRA prior to starting grad school. Thanks to a summer 2022 internship and one-time bonus on top of her ongoing fellowship, Michele is in a strong financial position at the start of graduate school. Michele shares her investing goals and values and why she’s considering buying a house hack in the spring. She also breaks down her budget and shows how she’s keeping her large, necessary expenses under about 40% of her gross income. By the way, we recorded this interview in late October 2022, and since its recording, there has been a lot of student loans news. As of November 27, 2022, the day I’m recording this, the $10k or $20k degree of cancellation that Michele and I discuss has been blocked by court challenges, which are likely to be resolved in the Supreme Court. Additionally, the administrative forbearance has been extended into summer 2023.

02:26 Emily: Speaking of the possibility of home ownership in 2023, Sam Hogan is now offering lunch-and-learn seminars on how graduate students and postdocs can purchase homes. Sam is a mortgage originator specializing in graduate students and PhDs, an advertiser with Personal Finance for PhDs, and my brother. He’s been a guest on this podcast numerous times, most recently Season 13 Episode 1. If you live in a city where graduate students and postdocs sometimes buy homes, please consider arranging for Sam to come to your campus for a lunch and learn on mortgages and the home-buying process. He’s put these on for a couple of groups this fall and has more booked the spring. He gives a short presentation and then answers questions about individual borrowing scenarios. Sam has done a ton to help grad students and postdocs with usual academic incomes like fellowships and summer pay gain access to mortgages so they can realize their dreams of home ownership. You can reach Sam about the possibility of coming to your campus—or with your own mortgage question—at sam.hogan@movement.com or 540-478-5803. You can find the show notes for this episode at PFforPhDs.com/s13e8/. Without further ado, here’s my interview with Michele Remer.

Will You Please Introduce Yourself Further?

04:03 Emily: I’m delighted to have joining me on the podcast today Michele Remer. She is a first-year graduate student at Michigan State University, and we are going to be talking today about kind of what her finances look like as a first-year graduate student and what her plans are for the future. So, Michele, it’s a delight to have you on. Will you please introduce yourself a little bit further for the listeners?

04:24 Michele: Of course. Thank you for having me by the way. So, as you said, I’m a first-year PhD student. I’m in the Fisheries and Wildlife Department at Michigan State. And I got my undergraduate degree from a small liberal arts college in Minnesota back in 2020. So, I’m a pandemic graduate. And then I was supposed to go into the Peace Corps but it ended up not working out due to the pandemic once again. So instead, I did some other seasonal jobs, which included AmeriCorps. I also want to preface this by saying that I have had some assistance from my parents for expenses in college and post-graduation as well.

05:03 Emily: Yeah, let’s talk about that more. So, it sounds like you had about two years between your graduation college and when you started graduate school. I’d love to learn more about those jobs that you did during that time and kind of what your finances looked like through that period.

05:17 Michele: Yeah, so my first, well I graduated 2020 and I still had my job through my university. It was a GIS job so I was able to do it remotely during the pandemic. So, I was just living at home with my parents and didn’t have any big expenses there, which was really nice. And then I got a job with AmeriCorps in a Conservation Corps out in western Utah. So, that’s where I went next. And that one was <laugh>. I was basically just breaking even for that job because it was volunteer and it was also a pretty low like stipend that we received. But I was able to get free housing, and they gave us like a free tent. I just had to provide the gear and a plane ticket. So, I think it worked out pretty well for me, especially because with the pandemic I was getting stir crazy in my house so I welcomed the opportunity to go somewhere new during that. When everyone else was kind of stuck inside. I was able to be out in the woods and <laugh> doing conservation projects.

06:26 Emily: And was it like a full year? Was it a full year that you were with AmeriCorps?

06:30 Michele: So, this was about seven months was my term. And then also for AmeriCorps, you get, they call it education award. That’s what it’s called. So, I got about $3,000 for my education that I was able to put towards my student loans.

06:47 Emily: Oh nice. That’s a good flexible usage.

Money Mindset Coming Into Grad School

06:52 Emily: Okay, so we’ve had I think one previous guest who was in AmeriCorps, if we can find the episode, it’ll be in the show notes. But I’m very interested in like your mindset I guess going into graduate school, having just had that AmeriCorps experience. Because I know that, I mean as much as graduate student stipends need to be higher, AmeriCorps is like whoa, you are really, as you said, it’s kind of a volunteer position that they basically just kind of give you housing and food money, right? So, can you talk about yeah, your mindset coming into graduate school, having had that experience with respect to your finances?

07:25 Michele: Yeah, I think it was actually really helpful for me personally because, so my undergrad, it was a residential school so like all of my food and stuff was like at a cafeteria and everything and included. And with this job, I like had to like cook dinner and everything. And so, that really taught me how to like meal prep and just like living on such a low wage, I was able to be really smart about like how I was handling my groceries and everything. And then like while we were on project, like, so we would work eight days and then we would get six days off. So for those eight days they provided all the food. So basically you were just like, didn’t have any expenses for eight days of the week and then, or eight days at a time and then six days you would have expenses, but we were able to like also have leftover food from that. So, it was this kind of like, and I also don’t really buy a lot of other things. Like I still to this day I basically just buy food and that’s my only other expense besides like housing with like occasional other like luxuries now that I have some more money. But yeah, so I think it was a challenge but it actually kind of set me up well for grad school.

Stipend at Michigan State

08:42 Emily: Yeah, very interesting. So, give us a picture of your finances when you started at Michigan State. So like, you know, did you have any assets? Did you, you already mentioned student loans, maybe you had other liabilities as well. And also what is your stipend at Michigan State?

08:57 Michele: Yeah, so my stipend first of all is $30,000. And I also got pretty lucky too because I got a $5,000 fellowship for getting accepted into the environmental science and policy program here. So, I can kind of lump that on top. And then I also was able to start my program during the summer and I did an internship in D.C. which, technically, I wouldn’t be allowed to do because you are only supposed to, you can’t work more than 10 hours a week with your fellowship at Michigan State. But because it was part of a class, I was able to overcome that requirement. So, I had money from my internship to like live on in D.C. and then I also had that like fellowship money that I could use for like saving and investing.

09:51 Emily: So, am I understanding that you were being double-paid during that time? You were receiving your fellowship and your internship pay?

09:58 Michele: Yeah, I was. The reason why like we decided to do the fellowship. Like I was talking to the administrators about this and everything and the class, because technically, the internship was part of a course. And so there was like a $2,600 tuition fee that I would’ve had to pay if I was just doing the internship. So this way the fellowship, because the fellowship also covers my tuition. So, in this way it covered my tuition and then I also was able to receive the money, the stipend money with that.

10:29 Emily: Nice. It sounds amazing. And that $5,000 that you mentioned, so your sort of baseline, standard stipend on the fellowship is $30,000 per year. Did you get that $5,000 as like a lump, it’s kind of like a bonus, like a lump sum at the start, is that right?

10:42 Michele: Yeah, it’s supposed to be a lump sum. I actually haven’t received it yet, but yeah, I think that’s just going to be like a lump sum to my account once they process it.

Finances: Assets and Liabilities

10:52 Emily: Okay. This is great. I so wish that more or all graduate students could get started with like, hey here’s some money just like for you to have for savings because you’re probably going to need this down the line. Because the stipend is really not, you know, necessarily enough to generate a decent savings rate, although, you know, we’ll get to yours and what your plans are with that. So let’s, if you don’t mind, could we share some numbers, like what assets did you have at the start of graduate school? What liabilities did you have?

11:16 Michele: Yeah, so I think I came in, so the AmeriCorps job that I had, I finished that. I did that right after college. So, I took another seasonal job where I was able to minimize my expenses a lot more and then I had another part-time job before starting. And I think the best thing that allowed me to build up savings was that I like basically reduced my housing expense. Like every time I got a new job it was either like free or it was like max $300 a month. So, I was doing really well in that area. So then I was able to, I had about $6,000 in my Roth coming in to grad school. And then I also have, let’s see, I guess for my other assets I just have like, oh I also just put in $2,000 into I-bonds too for my student loans after I graduate.

12:11 Michele: And then I also have some other savings just from, because I was saving up more money to pay off my loans as well. But now with the pandemic or the student loan forgiveness, I should be sitting in a much better place because after my education award using that and then the 10 grand that I’ll get from student loan forgiveness, I’ll be in a really good spot. And so, now that’s freed up a lot more money that I was going to put towards my loans because I’m super debt-averse, so I had saved up all this money to pay off my debt right away.

12:45 Emily: I see. I want to talk more about the student loans in just a second, but you don’t have any other debt, I would take it then, aside from the student loans?

12:52 Michele: No, no. Like I have a car, but it’s paid off. And yeah that was my only other sort of I guess liability since I don’t have a home or anything.

13:05 Emily: Yeah. Okay. So I want to point out for the listeners that we were recording this in October, 2022. So by the time this comes out, I’m hoping that people will have received the cancellation but as of the time that we’re talking, I don’t think anyone has started to receive it yet, although the application is open. So yeah, hopefully in the coming months. Did you already apply Michele?

13:24 Michele: Yeah, I did. I signed up for the email alerts. I was one of the first people, I think.

13:28 Emily: Okay, perfect. So, your cancellation amount hopefully will come through before the end of 2022 is the idea I think. Yeah. And so, and the rest of your student loans, the ones that weren’t being taken care of by these other sources, are they just going to be in deferment during graduate school? Or are you going to work on paying it down?

13:43 Michele: Yeah, I only took out subsidized loans, so they’ll be in deferment.

13:48 Emily: Okay, perfect. Yeah, for anyone listening, subsidized loans, well, if they’re in deferment you’re not going to make payments, and then if they’re subsidized the government pays the interest on your behalf so they won’t start accruing interest until when you come out of deferment, presumably after you graduate. And it’ll be pretty easy to hopefully take care of them at that point. So, that sounds awesome.

Making Investing a Priority

14:04 Emily: Okay, so you have some savings, you have started your Roth IRA, you bought some I-bonds, that’s great. So, let’s talk more about this investing situation. I understand you want to continue investing during graduate school. Why are you making that a priority?

14:18 Michele: Yeah, I think it’s a priority for me because I want to have the flexibility to take whatever jobs I want. And so, like with the AmeriCorps thing, I was able to take that job because, well for one, the student loan payments were on pause and it was kind of just like a good opportunity for that point in my life. But I also want to be able to take other opportunities that may not pay me as much because I’m really passionate about doing like environmental jobs that sometimes you don’t really get that high of a salary for. And so, I just want to make sure that I’m in a good financial spot in order to take those positions that I want.

14:58 Emily: So, is the idea that you’re going to start saving and investing for retirement now because perhaps at some later points in your life your salary won’t be really necessarily much higher than it is now? Or is it to be building up assets so that later you don’t have the pressure as much of having to save, you know, so much for retirement later on? It could be both, but I’m curious about your decision-making here.

15:21 Michele: I would say it’s both. I think, too, just everything I’ve read about personal finances, it’s time in the market over timing the market, and so I wanted to start as soon as possible so that I don’t have to worry about like starting after grad school. And like maybe if I don’t get a very high-paying job and I still like can’t contribute as much as I want to, this starting early allows me to have much more time to like accrue interest and just a bigger retirement savings account and that also would let me be more flexible in case I need to take like a career break of some kind or anything like that.

16:04 Emily: Yeah, I have to say, like so I’m 37 now, I’ve been out of graduate school for eight years about, and this is really like I can already see this playing out in my own life because I did start saving into a Roth IRA or investing when I was like 22, right out of college. And it’s really like because of some other stuff going on in like my and my husband’s financial life, like we, you know, saved diligently during graduate school. It was never, I’d never even maxed out my IRA so it wasn’t even like a large dollar amount, but for a graduate student it was a lot. And that portion of our portfolio in the time since then, like it’s a really big portion of our portfolio even though we have started since buying our house like last year we’ve really ramped up our retirement contributions because we no longer had like the down payment savings to be considering. But it’s like still amazing how much of our portfolio has just been those long time ago contributions that have had plenty of time to compound. And even though we’re saving a lot right now, and in the decades to come, like it’s still going to be a huge part of our portfolio despite being you know, dollar amount-wise not that much in contribution. So, I really commend you for getting started with this early. Is it your goal to max out every year? Like what number have you put around how much you’re going to contribute?

17:19 Michele: Yeah, I’m already maxing out every year so I put in $500 a month automatically so that I don’t have to like worry about forgetting doing it. And then I also am planning on increasing next year since they just announced that it’s going to be $6,500 instead of $6,000.

Getting Started with Investing

17:39 Emily: And many of the listeners who are, you know, considering getting started with investing or trying to get started now might be curious like how did you exactly get started? Like where did you choose to house your money and you know, what do you invest in? Obviously you’re not giving anyone advice but just like the path that you took.

17:54 Michele: Yeah, so for me I really wanted to make sure that I was going to be investing in funds that I believed in, like ethical investing for me. So, to do that I chose Fidelity as my I guess like taxable or tax advantaged account that I wanted to use. I’ve since learned that Vanguard has lower cost like target date funds if you’re interested in those. But I think Fidelity is a good one for graduate students because they have more fractional investing so you can invest with as little as like $10 a month, but for Vanguard you need to have I think a minimum of a thousand. So that’s why I chose Fidelity. And then as for the funds, I just chose ones that were offered by Fidelity because that those have lower expense ratios. And then also I chose environmental funds so there’s like, they have a US Sustainability Index Fund, International Sustainability Fund and then an Alternative Energy Fund. Plus some other ones. I got a little trigger happy when I was first starting out but yeah.

19:06 Emily: Okay. It sounds like though, are you like a hundred percent in equities with this with your IRA investments?

19:13 Michele: Yeah, so I have mostly stock funds right now since I’m still pretty young and I can afford to be more aggressive. I do have one bond fund which I’ve learned as I’ve been researching more that you want to have more bond funds in your Roth IRA cause it’s a tax managed account and so if I start a taxable brokerage account then I’ll switch to more stocks in that one.

19:38 Emily: Yes, this is asset location optimization, this is a really advanced strategy. But just in case anyone, any listener doesn’t want to put as much thought <laugh> as Michele has into this process, I mean it’s great to put thought into it but if you just want to get started and don’t have the time right now, whatever you choose, as long as it’s like broadly pretty appropriate, like you were just saying. Largely stocks, you know because you’re just starting out and you have a long timeline to retirement. What’s most important at this point is just to get started. And your exact asset allocation and everything, you can figure that out down the line. Because right now, the way that your portfolio is growing is mostly by your contributions <laugh> later on, you know, a couple decades from now, it’s mostly going to be growing because of the compounding interest. But for now, it’s really your contribution. So even if you’re not like a hundred percent the most optimized in what you’ve chosen, it’s okay. It’s really the thing is just to get started and to get that nice savings rate going like Michele has with her, you know, $500 per month current target. So, that sounds awesome. And are you also doing any other kinds of investing outside of your Roth IRA?

Investing Outside of Roth IRA

20:46 Michele: Yeah, so right now, like I said before, I have the I-bonds. So, my goal is to have about I think maybe like $4,000 in I-bonds so that hopefully the interest will accrue enough that when I graduate I can take those out and pay for the rest of my student loans. And then I’m also looking into doing a taxable brokerage account but I’m still exploring that because I’m still figuring out how the taxes would work on that.

21:17 Emily: Sure. Would that also be for long-term investing like for retirement? Or would it be maybe for like a shorter-term goal? Nearer-term goal?

21:24 Michele: I think that would be a longer-term goal just because I don’t want to have to worry about like taking it out and losing money because I didn’t like pick the right investment. So, I would rather leave it in there for retirement.

21:39 Emily: You’re actually taking a fairly similar approach to what my husband and I did when we started graduate school. We, as I said, we had our Roth IRA investments going at a certain rate. And then we also, I had student loans as well that were subsidized during graduate school. And so, initially I was just like, okay, forget about those. Like I don’t even need to think about those. Not like you’re doing, you’re planning from the beginning but at some point along the way in graduate school I realized, oh it would be nice to have money set aside to pay this off once they come out of deferment. And so, that became a goal as well for us. And then we also opened a taxable brokerage account. So, lots of different kind of layers to this.

Union Efforts to Obtain 403(b)

22:13 Emily: Okay. Is there anything else you want to share about your investments?

22:17 Michele: I guess I also want to, I’m part of the union here on campus now. I’m like our department representative, and one thing that I want to work with them on is getting a 403(b) account for grad students at Michigan State. Because I know that there are some other schools, a lot of schools don’t have them for grad students, but there are schools that do and I think that that would be something that would be really beneficial, not only for the grad students but also for the university to attract more people to come there. So, I think that that’s something that we could work on together to hopefully achieve <laugh>.

22:56 Emily: Yeah, that would be really exciting. I definitely want to hear an update from you about that. I mean I hope you’re successful certainly, but even if you’re not, I would love to know why like what their reasons are for, you know, not including graduate students. Because as you said, in very few places graduate students are included, and I don’t really know why they would bother like excluding them really.

23:16 Michele: Yeah, I could see maybe like, I know that the ones I’ve been looking at, they don’t provide a match. But I think they already have like a 403(b) set up for like employees. So, I think just like allowing grad students to open an account even if you don’t do a match, I think it would still, I think that would be pretty easy to do, but I don’t know. I haven’t looked into it super far yet.

23:38 Emily: A match would be, I would be shocked if I ever <laugh> Yeah. If I ever saw a match for a graduate student. Even postdocs oftentimes don’t get matches. Some of them do, especially if they’re like state employees. But yeah just the first step of like, because when I read these like plans and so forth, because I often do this with schools that I give seminars at. I’ll go into and just do a little check and see if students might have the opportunity to contribute to a 403(b). And most of them say explicitly students cannot contribute or you have to have at least a 50% appointment and they, you know, put all the students at 0.49% appointments. They have these kinds of like workarounds to specifically exclude graduate students. But why? I don’t know, is it just an administrative burden for them? I really don’t know why because I’m sure there wouldn’t be that many graduate students who would, you know, elect to use it even if they had the option. Although even just, I mean psychologically, just knowing that you had the option would actually help, I think. Students start thinking about, oh is retirement something I should be preparing for in this stage of my life? So, I love this idea, and I really want to hear an update about it.

24:41 Michele: Yeah, I think that would also maybe help like with negotiations for like increasing stipends as well.

24:50 Emily: Alright. Okay, great. To be followed up on.

Commercial

24:55 Emily: Emily here for a brief interlude! I’m hard at work behind the scenes updating my suite of tax return preparation workshops for tax year 2022. These pre-recorded educational workshops explain how to identify, calculate, and report your higher education-related income and expenses on your federal tax return. For the 2022 tax season starting in January 2023, I’m offering three versions of this workshop, one each for U.S. citizen/resident graduate students, U.S. citizen/resident postdocs, and non-resident graduate students and postdocs. That third workshop is brand-new this year, and I’m very excited about it. While I do sell these workshops to individuals, I prefer to license them to universities so that the end users, graduate students and postdocs, can access them for free. Please reach out to your graduate school, graduate student government, postdoc office, international house, etc. to request that they sponsor one of my tax preparation workshops for you and your peers. I’d love to receive a warm introduction to a potential sponsor this month so we can hit the ground running in January serving those early bird filers. You can find more information about licensing these workshops at P F f o r P h D s dot com slash tax dash workshops. Now back to our interview.

Budget Breakdown

26:36 Emily: Okay, so we’ve talked about your investing goals. How are you formulating your budget to support those goals and to support all the other things you want to be doing in your life right now?

26:47 Michele: Yeah, so actually, the reason why I want to do a budget breakdown is because I’m really bad at actually doing a budget, so this helped me to track my spending. So, right now, I guess like my fixed costs, so my rent, I’m living with two roommates. So I have, my portion of the rent is $375 a month. And then with like utilities they’re kind of high here so I’d say that brings me to like between like $450 to $500 for my portion total, sorry, when I add rent and utilities <laugh>.

27:27 Emily: Just to interrupt, because that is such a low amount of rent, I have not heard a rent amount that low in a long time. Do you have your own bedroom or are you sharing a bedroom?

27:35 Michele: No, I have my own room and then it’s actually like a really nice setup because it’s a house, and so we still have like our laundry and like a dishwasher and like a yard. So yeah, when I found this place I was like, this is great. <Laugh>.

27:50 Emily: Is that through a private landlord?

27:52 Michele: Yeah.

27:53 Emily: Okay. Yeah, I’m always curious in different cities about like, where can you get the best deal? Is it going to be a corporate place, is it going to be, you know, a mom-and-pop landlord? So yeah, that’s great. Did you find this house? Or did these roommates exist and you found the room?

28:06 Michele: So, my roommates are both also in, not my department but a similar department to me. So, they had sent out like an e-mail on the listserv, and so I reached out to them through that.

Food and Furniture

 28:18 Emily: Amazing. Love it. Okay. What’s your next expense?

28:22 Michele: Yeah, so I guess my next biggest expense would be my food which I kind of just lumped together, like going out to eat and groceries. So, I guess my first month it was $450 and then my second month was $385, so I guess roughly $410 right now. And then also with my moving, I didn’t bring any furniture with me so I actually got pretty good deals on all of them. So my total for that was $170.

29:01 Emily: You spent $170 in total on furniture? Was it just like a mattress or like what?

29:07 Michele: No, I got like someone was selling their bed at a rummage sale, so I got that pretty cheap. And then I got a desk, a chair, and two dressers. Yeah, Facebook Marketplace.

Transportation

29:21 Emily: I’m just delighted by this great job. <Laugh> Yeah, Facebook Marketplace. Okay, great. Yeah, have you incurred any other expenses? I think you said earlier you basically only buy like housing and food, so what else is on your list?

29:35 Michele: <Laugh> and then I guess like transportation. So, my gas money and then I’m flying home for the holidays and I’m also going to be taking the train home so I have to like buy those tickets. So, for this month it was like $282 and then last month it was like $110 for gas. And then I guess too, one other thing I should mention is I like bike to the university so that I don’t have to buy the parking pass and I can just park for free at my house when I go to the store and all that stuff, so.

30:19 Emily: So, I think we’ve covered the big three, right? Housing, food and transportation. You mentioned that you own your car outright, so you know, you’ll pay insurance on that but not a whole lot in terms of fixed costs. But even just with those three, I think you’re still under a thousand dollars a month probably. Which is quite reasonable given your gross salary, let’s just say it’s $30,000 per year. $2,500 per month. So, keeping your like larger necessary expenses under 40% of that is great. You’re doing very well. What are you doing with the rest of it? Like are you choosing to spend discretion early? Or is this just going to go into investments and savings?

Discretionary Funds

31:00 Michele: I’m still trying to figure that out. I guess I also have had like different like fees come up just from like, so I’m trying to figure how to incorporate that into my budget from like the TSO and different organizations on campus. And then I’ve just like since moving, I’ve been like finding little things that I like want to get. Like I just got some new headphones and needed to replace like my watch band and everything. So, I still don’t know how to budget the rest of my money just because I don’t like have a good grasp on it yet, but I’m hoping that I could spend like $200 a month, like discretionary and then just like either invest or save the rest of it.

31:51 Emily: Yeah. Given how low you’re keeping your fixed expenses, especially your housing and this like very decent fellowship, yeah it seems like you have a lot of choice over what you can do with that excess cash flow, so that’s great. I don’t, you know, many graduate students are not in such a fortunate position. That sounds awesome. Does this fellowship last the entire time you’re in graduate school? Or is your stipend expected to like drop at some point?

32:14 Michele: So, for this fellowship, it covers the first and the fifth year. But then like you’re supposed to work with your department to find funding for the middle three years. So, I’m supposed to always have like, at least in my offer letter it said I’m always supposed to have like the base rate somehow.

32:31 Emily: Which is 30,000 per year.

32:33 Michele: Yeah.

Best Financial Advice for Another Early-Career PhD

38:34 Emily: Okay, so let’s finish up, Michele, with the question that I ask all of my guests, which is, what is your best financial advice for another early-career PhD? And that could be something that we have touched on already in the episode or could be something completely new.

38:49 Michele: Yeah, I think my best financial advice would be to automate everything as much as possible so that you don’t miss payments or if you are investing you don’t miss your investment goals. I know most credit cards you can set up an automatic payment so that you don’t miss that at all and then you can also link your accounts together so that you can like send money from your checking account to your savings account automatically so that you don’t miss anything or spend the money that you wanted to save. And I think this also can help with fixing like if you have any problems with like overspending or just like if you get super busy in your PhD like you probably are, then you don’t have to worry about like saving your money.

39:34 Emily: I love that advice. I totally concur. It took me some time, I think, to trust myself with automation, but I’m really glad that I got there. Was there anything that you wanted to add about your bank that you wanted to say?

39:47 Michele: Yeah, I did. So, I highly recommend reading I Will Teach You to Be Rich by Ramit Sethi. I think that’s how you say his last name. Because he gives a lot of recommendations for personal finance in general but for banking. So, like I just opened up the checking account that he recommended, which is called the I think it’s the Schwab High Yield Checking account and you get a brokerage account with that, but you don’t have to invest in it if you don’t have the money or if you don’t want to invest with them. But that checking account gives you 0.4% interest, which is like awesome. And then you also get ATM reimbursement everywhere and you also, I don’t think there’s like overdraft fees. So yeah, it’s just a great account. And then also for savings accounts, he recommends like I open a Capital One 360, and there’s also like an Ally Bank account that you can get like over 2% interest right now. Yeah, because I was looking into the Aspiration account because of their, they don’t lend to fossil fuel companies, but the downside of that is I heard a lot of people talking about how they like couldn’t get their money out and so that kind of scared me a little bit, but I might look into them again once they’re more established because they’re a pretty new bank.

41:06 Emily: Yeah. That’s good to hear. And thank you so much for the recommendation of the book, I Will Teach You to Be Rich. There’s actually a 10th anniversary edition that came out, I want to say within the last year or two. So, recommendations like banks, like I’m sure those have all been updated in the new edition, so if you’re looking for that kind of recommendation, you should definitely get the new edition and not the original edition from like 10 plus years ago. Or I would imagine you can just go to his website, which is probably, I Will Teach You to Be Rich or Ramit Sethi or something like that. And he’ll have those kinds of recommendations, but that’s awesome. And yeah, I think, I read that book again recently after the new edition came out and it’s great. It’s very, very direct and actionable and he’s so confident in what he tries to teach you. So like, it’s really compelling, it’s a compelling book. And a previous podcast guest mentioned that reading that book was like her sort of catalyst for like starting to get her personal finances under control. We’ll link that episode as well in the show notes. But I think it had to do with banking. I think the first thing she did was change her bank and felt really like great about that decision and like just sort of snowballed that energy like going forward. So, that’s awesome. Thanks for the recommendation.

42:10 Michele: Yeah, no problem. Yeah, the banking was really helpful, too. Just using like an online bank that doesn’t have as many like brick and mortar locations, they save a lot of money and give it back to you. So, that was a really helpful tip from him.

42:21 Emily: Totally. I started using an online or an internet-only bank I think about a year after I graduated from college when I knew like I’m going to move for grad school and then I’m probably going to move again. And then maybe, you know, I just saw a lot of moves like in my future and didn’t want to be sort of tethered to like regional, you know, availability of brick and mortar banks. So, all great suggestions. Michele, it’s been such a pleasure to talk with you. Thank you so much for volunteering to be on the podcast!

42:45 Michele: Of course. Thank you for having me!

Outtro

42:51 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

How to Pursue FIRE in Graduate School

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In this episode, Emily shares the first section of a written guide she recently added to the Personal Finance for PhDs Community, titled How to Pursue FIRE in Graduate School. FIRE stands for Financial Independence / Retire Early, and it’s a big movement among personal finance enthusiasts right now. At first, Emily didn’t believe graduate school and the pursuit of FIRE were compatible, but the many interviewees she’s had on the podcast who are pursuing a PhD and FIRE simultaneously changed her mind. In the introduction, Emily introduces FIRE and the general ways people pursue it and lists the four biggest levers a graduate student could pull to pursue FIRE right away.

Links Mentioned in the Episode

Introduction

Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts.

This is Season 10, Episode 19, and today I’m going to read to you the introduction to a written guide that I recently added to the Personal Finance for PhDs Community, titled How to Pursue FIRE in Graduate School. FIRE stands for Financial Independence / Retire Early, and it’s a big movement among personal finance enthusiasts right now. I have to admit that at first I didn’t think graduate school and the pursuit of FIRE were compatible, but the many interviewees I’ve had on the podcast who are pursuing a PhD and FIRE simultaneously changed my mind. In the introduction, which I’ll read to you momentarily, I introduce FIRE and the general ways people pursue it and list what I think are the four biggest levers a graduate student could pull to pursue FIRE right away.

If you are pursuing FIRE or are interested in it, I’d love to hear from you. Please join the Personal Finance for PhDs Community at PFforPhDs.community right now, today. Once you’re a member, you can do two things:

  1. Read the rest of the guide, which goes into detail about all the financial opportunities graduate students have to pursue FIRE, from increasing their incomes to building assets to mindset work.
  2. Join me and other Community members for a special live discussion and Q&A call on Wednesday, December 15, 2021 at 5:30 PM Pacific Time. We have live calls like this once per month, and this month’s is dedicated to the topic of FIRE. I really want to hear from you. I’m going to continue to expand and edit the guide based on the ideas and experiences of Community members and future podcast interviewees.

In case you’re listening to this after December 2021, no worries. You can still join the Community to read the current incarnation of the guide and chat with us about FIRE in the Forum or the next upcoming monthly call. Again, go to PFforPhDs.community to sign up!

One last note. I reference a bunch of previous podcast episodes in the introduction. All these episodes are linked in the show notes, which you can find linked from PFforPhDs.com/podcast/.
Without further ado, here’s the introduction to How to Pursue FIRE in Graduate School.

How to Pursue FIRE in Graduate School: Introduction

I was in graduate school when the current incarnation of the FIRE movement started picking up steam. At that time, the acronym FIRE (financial independence / retire early) was not yet in use, and people focused mostly on the “retire early” goal—not retiring at 55 like some Boomers had, but retiring by 30 or 40. Pete Adeney of Mr. Money Mustache was one of the leading voices, having achieved early retirement at age 30 by combining a well-paid engineering career with rigorous frugality.

At first, I found the idea of early retirement to be largely unappealing. The chief reason was that graduate school was supposed to be the foundation for a long, meaningful, fulfilling career… Why would I plan to retire early from that already? Why would any PhD (a group I was growing more interested in creating content for)? I couldn’t get behind that idea.

Thankfully, my disinterest in FIRE in my mid-20s didn’t diminish my passion for personal finance writ large, and I still invested, practiced frugality, and attempted to increase my income to the best of my ability and knowledge at that time.

My view is different now, a decade later. While I still don’t consider myself part of the FIRE movement, I do see its appeal, even for PhDs.

1) I’ve changed: I’m ten years older. I have children now. I’ve switched careers, and I’m a business owner. I earn and spend much more money than I did during graduate school. My and my husband’s parents have retired (at a traditional age). I better understand why having the financial ability to downshift, change, or stop active work before age 70 is attractive.

2) The FIRE movement has changed: There’s a greater emphasis on financial independence rather than early retirement. The featured voices are more diverse. There are numerous well-documented paths to achieve FIRE, not just the earn-a-lot/spend-very-little model from Mr. Money Mustache.

3) Most importantly, I’ve met numerous graduate students and PhDs who do identify as part of the FIRE movement. They don’t see a contradiction between pursuing a PhD-type career and financial independence simultaneously. I’ve learned from their philosophies and methods. The Personal Finance for PhDs Podcast interviews I’ve published that touch on FIRE have been with:

In this guide, I won’t attempt to convince you to pursue FIRE—because I haven’t fully convinced myself. I will show you how you can pursue FIRE as a funded PhD student. We will explore multiple potential strategies, and I am confident that you will be able to adopt at least one of them.

How you pursue FIRE during graduate school will look different than how you pursue it when you have a post-PhD “Real Job,” but you can get started right here, right now.

What is FIRE?

FIRE stands for Financial Independence / Retire Early. FIRE is a movement within the broader personal finance community that has gained popularity in the last decade, roughly coinciding with the long bull stock market post-Great Recession.

Being financially independent (FI) means that you no longer need to work for an income to maintain your lifestyle and that you expect to maintain this status until your death. Once you cease working to generate an income, you have retired. The early part of the name refers to achieving financial independence earlier than the typical retirement age of 70-ish. Some superstars in this movement reach FI by age 30, while others set their sights on age 40 or 50.

Broadly speaking, there are three common ways to achieve FIRE, and some people use a combination:

  1. Purchase a portfolio of paper assets (e.g., stocks and bonds) from which you can draw an income
  2. Buy or build an asset or set of assets that generate income, such as a business or real estate portfolio
  3. Qualify for a pension, e.g., after 20 years of military service

I’m going to omit the option of a pension from the remainder of my discussion because 1) it’s not common for people in my audience to qualify for one, 2) within the FIRE movement it’s typically combined with another strategy as well, and 3) there are other good resources on pensions specifically.

How you determine that you have achieved FI is beyond the scope of this guide. Our focus is on the start of the journey, the pursuit of FI, and how to do it during graduate school.

However, to give you a rough idea, to know that you are FI you must have a good grasp on how much money it takes to sustain your lifestyle, i.e., how much you spend yearly. For example, FatFIRE is considered a yearly spend of $100,000 or more, while LeanFIRE is considered a yearly spend of $40,000 or less.

If you have a pension or own a business or real estate portfolio, the amount of income it generates should be more than the amount of money you spend for you to be considered FI. With respect to paper assets, a popular rule of thumb based on the Trinity Study is to have a portfolio of twenty-five times your yearly spend. For example, if you want to live on $40,000 per year indefinitely, adjusted for inflation, your portfolio should be valued at $1,000,000 or more.

How do you pursue FIRE?

How exactly you will pursue FIRE depends a great deal on your personality, career goals, and lifestyle desires.

At some point, you must create or purchase assets of the type I listed above. While you can start on that during grad school, creating or purchasing assets does not have to be the first step on your journey to FIRE, depending on the rest of your financial picture. If you are in debt, your first step may be to repay debt. If you have no savings or little savings, your first step might be to save up cash. If your income is low or unreliable, your first step might be to increase your income so that you don’t rack up any debt.

I recommend following the eight-step Financial Framework that I developed for use by graduate students and early-career PhDs. It will help you decide which financial goal is best to pursue at any given stage in your financial journey. You can find this Framework detailed in several resources inside the Personal Finance for PhDs Community, including the ebook The Wealthy PhD and the recorded workshop Optimized Financial Goal-Setting for Early-Career PhDs.

In brief, the Framework Steps are to:

  1. Save a starter emergency fund
  2. Pay off all high-priority debt
  3. Prepare for irregular expenses
  4. Invest a minimum percent of your income for retirement
  5. Pay off all medium-priority debt
  6. Save a full emergency fund
  7. Invest more for retirement and/or other goals
  8. Pay off all low-priority debt

The Framework is fully compatible with the pursuit of FIRE, though a FIRE adherent will likely move through the Framework steps faster than the average and may pursue additional financial goals such as purchasing real estate.

There are two less tangible but no less important ways that I recommend that you pursue FIRE starting in graduate school, both of which involve your own development.

1) Your career. I am confident that one of the major reasons you entered graduate school was for career development. Using your time in graduate school to set yourself up for a fulfilling and well-paying career is vital. Do not lose sight of this goal in your pursuit of FIRE. Your future, higher income is going to play a major role in how fast you will achieve FIRE. On the flip side, if a PhD no longer figures into your vision for your future, do not stay in graduate school; jump ship for a higher-paying job.

2) Your mindset and systems. To achieve FIRE, you must have a certain kind of money mindset and well-established systems and habits. You will continually develop these in your pursuit of FIRE. Even if you are unable to increase your net worth much during graduate school, pursuing your career and mindset development now is worthwhile to pay major dividends later.

What makes grad school different?

Your pursuit of FIRE during grad school is likely to look quite different from how you would pursue it if you were not in grad school or how you will pursue it post-PhD.

Generally speaking, PhD students accept a low stipend in exchange for training that—we hope—will qualify them for more lucrative jobs later on. They could be making more money right now in another job, but graduate school is a long-term career investment. Blanket personal finance advice to switch jobs or negotiate to increase your income does not apply well for graduate students (although there are many ways to increase your income, which I cover later in this guide).

In non-pandemic times, most graduate students are required to live in close proximity to the university they attend, although some may be permitted to finish their degrees remotely. For the former group, geographic arbitrage is not available. Geographic arbitrage, a common FIRE strategy, is when you choose to live in a low cost-of-living area while maintaining an income more suited for a high cost-of-living area so that you can boost your savings rate.

Finally, graduate school is a major time commitment. Few PhD students consistently cap their work weeks at 40 hours. You may have less time for outside income-increasing or asset-creating pursuits during grad school in comparison with other times of life.

My Personal Favorite Steps

In the second half of this guide, I will explore numerous possible strategies to further your FIRE journey during grad school. Some of them are what I call “big levers,” which are strategies that are virtually guaranteed to greatly increase your available cash flow and are possibly unusual choices for a graduate student. This increased cash flow can then be saved, invested, or used to repay debt. In your pursuit of FIRE during grad school, I think it will be very helpful for your psychology to pull one of these big levers if you’re able to. It will be clear to you that you are serious about your commitment to FIRE, which will help keep you on the path.

I want to give you a quick preview here as to what I believe these big levers are before we go through all the strategies in much more detail.

Big lever #1 is to choose a graduate program that provides a 12-month stipend that is well above the local living wage. If you’re a prospective graduate student, simply don’t consider any offers that fail to meet that bar, even if they are good fit for you otherwise.

Big lever #2 is to commit to applying for awards like it’s your part-time job—everything from multi-year, full-stipend fellowships to small poster competitions.

Big lever #3 is to radically reduce or eliminate your housing expense. Two potential ways you can achieve that are to house hack or serve as a resident advisor.

Big lever #4 is to start a side business with the potential, at least, to pay you a high hourly rate. You’re most likely to generate a high pay rate by employing the skills and knowledge you’ve developed during your graduate program.

If you can’t pull one of these big levers in your remaining time in graduate school, that’s fine. Put in place one of the smaller strategies from this guide, and if possible keep stacking those up throughout your time in graduate school.

Personally, even though I hadn’t committed to FIRE when I was a graduate student, I was putting a lot of effort into my personal finances. I didn’t know about these big levers or most of the other strategies I’ll discuss in the second half of the guide. I pulled just one big lever by accident, which was to attend Duke for my PhD in biomedical engineering. I wasn’t at all considering the stipend when I made that decision, but I realized later what a boon it was. My stipend was approximately 30% higher than the local living wage, which meant that with careful budgeting I could sustain a decent savings rate.

Over our seven years of PhD training, my husband and I increased our combined net worth by over $100,000. You can hear all about how we did that in Season 1 Episode 1 of the Personal Finance for PhDs Podcast. Now, seven years removed from when we defended, I can clearly see that the time value of money continues to honor those early efforts, even though we earn and save much more post-PhD. That money forms the bedrock of our current financial security.

By applying just one of the big levers or a few of the smaller strategies in this guide, I firmly believe that you also will accelerate your progress toward FIRE, even as a graduate student. Many of the people I’ve interviewed on the Personal Finance for PhDs Podcast have far exceeded my own degree of financial success using the strategies I’ll share with you next.

Conclusion

It’s Emily again! That is the end of the introduction to How to Pursue FIRE in Graduate School. If you liked what you heard and want to read about all the strategies and join the live call on Wednesday, December 15, 2021, please join the Personal Finance for PhDs Community at PFforPhDs.community. I look forward to hearing your thoughts!

Outro

Listeners, thank you for joining me for this episode!

pfforphds.com/podcast/ is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes’ show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast. I’d love for you to check it out and get more involved!

If you’ve been enjoying the podcast, here are 4 ways you can help it grow:

  1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use.
  2. Share an episode you found particularly valuable on social media, with a email list-serv, or as a link from your website.
  3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and effective budgeting. I also license pre-recorded workshops on taxes.
  4. Subscribe to my mailing list at PFforPhDs.com/subscribe/. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs.

See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps!

The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC.

Podcast editing and show notes creation by me, Emily Roberts.

How This PhD Invests According to Her Personality

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In this episode, Emily interviews Dr. Natalia Bielczyk, a PhD-turned-solopreneur who helps researchers step into fulfilling careers outside of academia. Natalia started investing in a variety of sectors during her PhD training, finding success in some areas and disaster in others. She shares her hard-won lessons into how to invest according to your individual personality and not be influenced by marketers and trends. Natalia emphasizes the importance of building financial stability prior to starting to apply for jobs and presents a unique framework for choosing among post-PhD career and financial priorities.

Links Mentioned in the Episode

How This PhD Invests According to Her Personality

Teaser

00:00 Natalia: As long as I was on the safe side and I was investing in real estate and the stock exchange, so more traditional markets, I was doing very well and I was always beating the market. But once I went to these speculative markets like crypto, like I kind of fell into this trap where, you know, your lizard brain takes over and then your intelligence and your like knowledge about people in the world doesn’t matter anymore. Because you go with your greed and fear and this kind of takes over you. And you start making really stupid decisions.

Introduction

00:39 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 10, Episode 11, and today my guest is Dr. Natalia Bielczyk, a PhD-turned-solopreneur who helps researchers step into fulfilling careers outside of academia. Natalia started investing in a variety of sectors during her PhD training, finding success in some areas and disaster in others. She shares her hard-won lessons into how to invest according to your individual personality and not be influenced by marketers and trends. Natalia emphasizes the importance of building financial stability prior to starting to apply for jobs and presents a unique framework for choosing among post-PhD career and financial priorities. Earlier, on the day I’m recording this, I was interviewed for the Vitamin PhD podcast. That interview will be published in January 2022, approximately. It reminded me how much I love working with other podcasters and creating this kind of content not just on my own feed. I would love to connect with other podcasters in the academic space, particularly ones with U.S. audiences. You most likely listen to such podcasts. Can you recommend any podcasts to me or even introduce me to another host as a potential guest? Please hit me up over email at emily@PFforPhDs.com or on Twitter @PFforPhDs. By the way, no need to connect me with Dear Grad Student as we already have an interview swap in the works! But any other recommendations would be excellent. Thank you so much!

Will You Please Introduce Yourself Further?

02:23 Emily: I’m so excited to share with you today an interview with Dr. Natalia Bielczyk. She is a PhD-turned-solopreneur who helps other PhDs and researchers transition into careers that are a great fit for them. And she has had a lot of really interesting sort of financial experiences, especially regarding mindset, both when she was in academia and now as an entrepreneur. And we’re just going to get a lot out of this conversation today. So I’m really excited to introduce Natalia. Will you please tell the audience a little bit more about yourself?

02:53 Natalia: Thank you so much, Emily, for your kind invitation and for the great introduction. Thank you so much. And what can I say? Indeed, I finished a PhD in computational neuroscience, and since a few years I’m helping indeed researchers in finding a new way in their lives and it’s a very exciting career path, I have to say, and very rewarding as well. In the meantime, I wrote a book entitled, “What is out there for me? The landscape of post-PhD career tracks”. I think the title is self-explanatory. And I also recently created an aptitude test called the Odyssey test, or the Ontology of ValueTM, and it’s meant to help professionals, PhDs, but not only, in finding the right working environment for them, for themselves, and also the right role to play, given their personality, values, and natural working style.

03:47 Natalia: And I’m very bullish on this test because it’s working really well. And it’s a result of two two full years of work. And I’m very excited for this premiere that actually happened like a few weeks ago. And other than that, I indeed have a lot of interest in personal finances and I find it a very important aspect. You cannot really tell these areas of life apart. Like when you talk about career, it’s hard not to talk about finances because it conditions your decisions. And that’s also what I would like to talk about today a little bit, because it’s hard to also give good career advice to someone who is desperate to get a job because they have an empty account. And I always talk about it in the courses and also in the talks I’m doing for PhDs, because this is a very important aspect of career building. So I’m very excited that I can be here today and talk a little bit about that.

Financial Experiences Overview

04:43 Emily: Yes, we’re so excited to dive more into that. Before we get into these more sort of specific thoughts that you wanted to share, can you give us a bit of a background or an overview of what your financial experiences have been, both while you were pursuing the PhD and since, so that we know some topical areas that will come up later on?

05:01 Natalia: Yes, actually indeed I come from a family where finances were not topics that were often discussed. I think both my parents are more idealistic and they believe in creating value by virtue of like using your own hands and actually working hard rather than saving and investing money which is a pity, I think. But indeed when I came to the university as an undergrad, I fully focused on my studies initially. And then, only then, in my mid-twenties, I realized that, you know, it’s better like in the long run to think about your savings and to invest them. And I actually have to say that I had some beginner’s luck because when I first got to investing in the stock exchange, I think I made a few really good bets.

05:57 Natalia: And my strategy initially was to look into, by the way, I’m not a financial advisor, just a little disclaimer. So my initial bet was just looking into companies that have good value that have like rather luxurious products. And I personally believe that these products are good. I use them, myself. Like good clothing brands, and video games. Everything that I could trust myself as a client. And I had quite good shots there. And then, so I initially thought, well, I have to be good at this because every single time I’m out beating the market. So for a few years in a row, like I was making 60, 80, a hundred percent per year. And I was like, oh, I’m a genius, apparently. But then, you know, I also realized that, really, it’s not that I am overly like a talented investor.

Real Estate Investment

06:53 Natalia: It’s more that I kind of personally fit that type of investment. I found these few companies that I was absolutely sure about at the right moment. And I had a little bit of luck. And in fact in the long run, investing is so much more than that. But in my grad school, I also have to say that I was one of the few people in my environment that spotted the opportunity when the housing market was recovering in 2014, 2015. And back then, it was still not very popular, especially among PhD students, to buy their own properties. But I have to say that I was one of the first who must have noticed the opportunity, because the mortgage capability was going up, the interest rates were going down at this point. So I saw the window of opportunity to get my own property when I was still a second-year PhD student.

07:45 Natalia: So that was a great opportunity. And back then, I was thinking of myself as a future professor in neuroscience, and I wanted to live here next to the university. So I had a very clear picture of where I want to live and where I want to buy property. And I have to say that I hacked the system because this area was not the cheapest, but I figured out how to avoid bidding against other other candidates for houses. So I basically determined where I want to buy property, and then I distributed leaflets with information that I am this nice person who studies neuroscience and I want to do great research in this house and I really need some calm place to live where I can do my awesome research on human brain. And I have to say that I spent a month distributing these leaflets in mailboxes around the quarter, and about 10 people contacted me and they were willing to sell me the house, like, you know like by a handshake.

08:48 Natalia: So without bidding, without competition, I could buy quite a few good houses this way. So I was also the only person who kind of figured out that it’s possible this way, and that allowed me to buy a house way below the market value and avoid the bidding, avoid the competition. And that was also, yeah, I’m still proud of it because yeah, at that time, I could not afford to do it in like a usual way by competing with other bidders. So this was my only chance and it worked and I have this house until this day, it’s great. And I also have some passive income from it. I have some rental room. So that also helped me, like in more difficult times after my contract expired, it was a source of passive income.

The Dangers of Speculative Markets

09:37 Natalia: So I have to say that this was one of the best decisions I ever made. And then after my contract expired, I also had some bad decisions because I went into much more speculative markets. So as long as I was on the safe side and I was investing in real estate and the stock exchange, so more traditional markets, I was doing very well, and I was always beating the market. But once I went to these speculative markets like crypto, like I kind of fell into this trap where, you know, your lizard brain takes over. And then your intelligence and your like knowledge about people in the world doesn’t matter anymore because you kind of go with your greed and fear. And this kind of takes over you, and you start making really stupid decisions.

10:29 Natalia: And also, I have to say that I was quite naive after my PhD, because I was not used to the environment where people can tell you, like they have vile intentions. Like they will tell you things that they never intend to do, because honestly, researchers, you know, some of them might have difficult personalities, but at the end of the day, they have good intentions. And I was always surrounded by honest people who have pure intentions. And if they commit to something, they will do it. And when I found myself in speculative markets, I lost all my money also because I was trusting the wrong people. I was just very naive. So, it was a really painful lesson for me.

11:15 Natalia: And I have to say that now I know that there is no such thing as a good investor or bad investor. There are so many different ways of investing and you have to figure out who you are, what your strengths are and what types of investments will work best for you. And now when I invest again, I always look into value. And I think in the future I will become more of a value investor. So, it’s definitely, I’m not into trading. I’m very bad at this. I’m too impulsive. And now I know what my weaknesses are. And in the long run, I’ll just orient myself towards the markets and opportunities where I know that I have some grasp on what’s actually going on. So like, I had a lot of painful lessons to take. But also, one thing I learned is that indeed there is no winning strategy. There is no algorithm. Because at the end of the day, everyone’s different. And what works for me might not work for you. So it’s like you have to learn through trial and error, what type of strategy works best for you.

It’s Okay to Make Mistakes

12:23 Emily: So what I took from that story, which was fascinating, is that you were operating in these early years very much off of intuition. And it worked well for you in some areas, and it didn’t work as well for you in other areas. And now that you’ve learned that about yourself, you are sort of shoring yourself up with more research and like systems to make sure that your weaknesses are not going to come through in your investment strategy, the way that it did before. And I think this is really interesting because I actually talk with a lot of people in my audience, and I’m not saying that’s the majority, but people who choose to speak with me, sort of have the opposite. Like they’re so cautious and they don’t want to take any steps because they don’t want to make any mistakes.

13:06 Emily: And so what I love about that overview that you just gave us, and we’ll go a little bit more into the subject shortly is like, it’s okay to make a mistake. Yes, it’s painful. Of course, it’s painful to make a mistake. Of course, you should try to avoid it. But the downside of making a mistake is not so huge that you should miss out on the upside of actually pursuing your investments or pursuing these strategies. So, yeah, we’re going to talk more about that in a moment. I’m so excited about that.

13:29 Natalia: Well, I think at the end of the day, you most regret things you didn’t do, rather than the things that you did.

Negative Views of Money

13:36 Emily: Yeah. I agree. So when we prepared for this conversation, we talked a little bit about how money is viewed in academia, specifically not favorably. And so I wanted to know based on sort of your observations, your personal experience, and I can share mine as well, how that voice in academia saying that, you know, money’s bad, don’t pursue money, blah, blah, blah, how that actually materially affects the personal finances of people who survive academia.

14:07 Natalia: A very good question. I think it’s not only a disease of academia, but of the whole public sector, I believe. And yes, that’s actually another painful observation I had to make in grad school because I was one of the few like misfits who were interested in the economy and personal investments, while most of my friends from grad school were spending evenings on just having, you know, beers like downtown. And they didn’t really understand my interest in reading about the economy and the financial markets. So, yeah, I heard about myself that I was greedy, that I was so materialistic, that I was an aggressive capitalist. Like I heard those things, but I also know what my aims are in the long run and I just didn’t, I’m happy now that I chose to develop myself in this direction. And I would definitely recommend it to anyone, regardless of what you do.

15:09 Natalia: Like money is not a bad thing. Money is a good thing. It gives you opportunities. And indeed the picture of money in academia is quite negative. And I feel this is what they also do to program you to be poor, you know? And when you like read like popular press and go online, like what they always sell you is these negative pictures of successful people and like big entrepreneurs. And it’s like, there is a lot of bad press around success on financial markets, and don’t buy into it. Because at the end of the day, like money will not change you as a person. It will just give you more chances to do what you would do otherwise. So, I’m always trying to fight with this black picture of money in academia. And when I do courses with PhD graduates who are now looking for careers, I always underscore how important it is to have a financial cushion and to take care of your finances, and that it’s actually a good thing. You’re only going to have more chances to do good if you have your finances sorted out.

Negative Impact of Separating Finances from Career

16:18 Emily: Okay. So let’s continue on from this thought about, okay, academia has this low view of money. Let’s say that does impact most people’s finances negatively while they’re in academia. They’re not earning very much. Maybe they’re not, you know, enticed to invest as you were and so forth. How does that then translate into the career space? How does that affect their career search and their job selection, and so forth?

16:39 Natalia: Yes, obviously it does affect your job search because as mentioned before, the separation doesn’t really serve you well. And you don’t have a clear view of the opportunities, once you have this bias that you actually have to find something and you have just less freedom to choose and to wait for the right opportunity. So definitely it does affect, like the lack of money does affect your career in a negative way, of course. So indeed, there’s a correlation there, or even causation between a lack of funds and some problems with developing careers. So at the end of the day, you know, I always tell it to the course participants, you know, you have to, at least manage your expenditures and control them and just control your finances.

17:35 Natalia: Even if you don’t feel like you’re the best investor, at least you can watch your expenditures and make sure that you pay yourself first. That’s at the very minimum. It’s good to put aside like 10% of your income. And don’t tell me that you can do it, because everyone who, at least here in the Netherlands, everyone with a postdoc contract is able to do it. I mean, if someone says, they’re not, they’re not saying the truth to themselves, because there is such a disproportion in salaries between PhD students and postdocs that if you spent everything as a postdoc, that means you inflated your lifestyle way too much. So that means you should take a look at your expenditures. So, if you do it right, then you should always be able to pay yourself and set aside some amount. So you don’t have to be a genius. You don’t have to be another Warren Buffet to be financially safe. You just have to be reasonable with your finances.

Commercial

18:33 Emily: Emily here for a brief interlude. If you are a fan of this podcast, I invite you to check out the Personal Finance for PhDs Community at PFforPhDs.community. The community is for PhDs and people pursuing PhDs who want to take charge of their personal finances by opening and funding an IRA, starting to budget, aggressively paying off debt, financially navigating a life or career transition, maximizing the income from a side hustle, preparing an accurate tax return, and much more. Inside the community, you’ll have access to a library of financial education products, including my recent set of Wealthy PhD Workshops. There is also a discussion forum, monthly live calls with me, and progress journaling for financial goals. Our next live discussion and Q&A call is on Wednesday, October 20th, 2021. Basically, the community exists to help you reach your financial goals, whatever they are. Go to pfforphds.community to find out more. I can’t wait to help propel you to financial success! Now back to the interview.

Make Your Own Decisions

19:41 Emily: So you mentioned earlier a few, you know, negative experiences you’ve had in this investing sphere and about having your crypto stolen and meeting up with bad actors and so forth. Are there any kind of like takeaway messages maybe that you have for the listener, like about how to not fall into these situations that you have?

20:04 Natalia: Right. Well, first of all, you have to make your own decisions. First of all, get informed about possibilities, and try not to follow the crowd. Because at the end of the day, once something’s already, like there is a hype on the media, usually it’s too late already. So usually it’s already a bubble. And if you join at that point, it’s better to just like try to figure out early that something is promising. Some project is promising and it’s just about to take off, and observe closely to see if that crowd sentiment will follow and just jump in just before the crowd, not when it’s already making headlines, because that’s already, usually, too late. And also don’t follow the advice too much. I would say like my best decisions were always my own independent decisions, and all these companies that I found in the stock exchange, like nobody told me to buy into those companies.

21:02 Natalia: I just made my own decisions. I came to my own conclusions, and, they turned out to be good decisions. And so, at the end of the day, it’s all about your knowledge and your gut. And now I can see that, especially since the Corona crisis started, there are so many of these false like financial advisors on YouTube. And they became really popular and they started all these systems to become rich quick, or they legitimately actually became rich because they have some successful company, but then they will tell you, you know, this is how I did it. This is what you should be doing to, you know, to follow my success and become successful. But you have to craft your own way that fits you best, and there is no algorithm.

Assume That Your Mission Matters

21:55 Natalia: So if it works for them, it doesn’t mean it will work for you. And I have to say my own way to get like closer to wealth is very different from any of what these financial advisors are telling you. So like none of the rules that, you know, I tried many pieces of advice that they suggest and the sales techniques, et cetera. And none of them really worked. Like for me, for instance, what worked best was just assuming that like that your mission matters. And when I was buying a house, basically I was just telling people openly what I’m going to do in this house and how I’m going to take care of it. And in the end, I got a very good deal because someone liked my purpose and me as a person.

22:43 Natalia: And this is something that no one will tell you in this, you know, in the space of financial advisory. And now I’m kind of doing the same. So I also work on my personal mission. I have a vision of, if my company becomes really successful, what I want to do with with the money I earn, I would like to build the most beautiful house of all time, somewhere in the woods and host startups and people who want to build their careers there, and have a place where we can find value and develop value in people and projects. And the more I talk about this, the more I also sell my products, because people like the mission. So, and this is something no one will tell you on the internet, you know, that they will tell you, well, you should build a CRM model and you have this like bulletproof system to acquire clients. Nobody will tell you that you actually have to have meaningful purpose, right? So every single time, like, just think for yourself, like, what do you really want? What’re you good at? And also, start with why, right? Why are you doing this for? Like, why do you want to get wealthy? And just have a good purpose. I think that really helps.

23:57 Emily: So much that I wanted to emphasize in what you just said. To play off the last point, I’ve also found in growing my business, I haven’t taken like the mission driven approach that you have, but what I found has been most valuable for me is relationships. Like literally just developing relationships with other human beings. And the podcast is one way that I do that. And that’s been the biggest driver of revenue for me, for sure. And like, again, that’s not something some internet marketer is going to tell you, because it’s an investment, it’s time consuming to develop relationships. But in any case, for my business model, which is not the same as anybody else’s, it pays off, right? So O just want to emphasize, yeah, like you don’t have to follow all the techniques that everybody is trying to teach you in your own finances, in your business, whatever it is that you’re doing.

Understand How They Make Money

24:42 Emily: The other thing that I wanted to add about like how to sort of avoid making mistakes, and like you were saying, like, sort of forging your own path. Once the media is, you know, proclaiming something, it’s already over, the trend’s done. You have to get in early if you’re going to get in, kind of at all. Just to emphasize in there, it’s really important when you’re listening to people, from anywhere, to understand how they make money. Whether it’s directly selling you a product and they’re getting commission off that, that’s at least straightforward. That’s easy to understand their motivation for, you know, pitching you the product. It’s maybe a little bit harder when people are driven by, you know, advertising revenue perhaps, like on YouTube or something. Or it’s also hard if they’re just, they’re not directly making money, but you going into the thing that they’re hyping feeds the bubble and allows their investments to grow.

25:29 Emily: Just ask yourself that question, like, how is this person making money, and does that influence, it doesn’t necessarily, does it influence the message that they have for me? I welcome all of my listeners to ask that about me and about my business and, you know, listening to this podcast. How is it that I make money? And should you be listening to me? And so forth. And I think that my business would stand up to that scrutiny, but it’s up to the individual to do that everywhere that they listen to money, advice, or business advice, or what have you.

25:56 Natalia: Yeah, totally. I absolutely agree. And I can also say that I get entertained by some of these financial channels as well. And, I mean, I would rather choose this over some entertainment shows. And so when I have free time, I would rather listen to good financial advice, but I always choose people who don’t sell you anything, at least, you know, they just say what they know. And yes, they get some revenue from the sense that YouTube pays them. But at least they are not selling you any system. So at least to some extent they are objective. But I agree with you, you always have to look at their business model. And that will tell you a lot about how credible they are.

Time Management in Managing Finances

26:44 Emily: So you mentioned earlier that when you were in graduate school, your friends might be out at the bar having a drink together, and you were at home, you know, learning about more about your investments or something. What have you learned about appropriate time management when it comes to your finances? Have you swung too far to one side of the spectrum or the other? What do you think is like the happy medium in terms of how much attention and time to pay to your finances?

27:07 Natalia: Very good question. I think that also very much depends on the type of investments you do. But I think also, there were periods of time when I was spending way too much time, especially after my PhD contract expired. And I had all the time in the world to do the projects I liked. And at some point I went down the rabbit hole, and for a few months, I was spending time mostly on reading about these speculative markets. And I felt that, the more time I was spending on that, the more I was losing the overall picture. And now I don’t spend as much time. I attend some online groups to discuss the progress in the field, and I try to be there every week, and I read once in a while. But I’m trying to keep this time limited, and I can feel that I’m much better at spotting the valuable projects and valuable concepts that have a future if I look more from the distance.

28:04 Natalia: Because like the closer you get, the more, you know, you’re also influenced by people you’re talking to. For instance, like everyone who is developing a new product, they do it for a reason. That’s why they do it, because they believe that none of the mainstream projects are the future. So like when you talk to them, they will obviously criticize the like mainstream projects, just because otherwise they wouldn’t be doing what they’re doing. So, they are kind of biased, even if they have the best intentions. Then you have to take into account, the more you interact with people in the space, the more biased you get.

Be Like Master Yoda: Everywhere

28:42 Natalia: So now I really am trying to keep a healthy distance, and I’m trying to be like this like Master Yoda that talks to everybody and has some wisdom, has some knowledge, is everywhere, you know–talks to employers, talks to recruiters, talks to professionals who are looking for careers, talks to business developers who are building their own businesses, talks to people who are in financial markets. But I don’t get, like, I always keep some level of distance to everything. And I try to keep my emotions low, be objective, look from perspective, and I’m doing much, much better this way. So I would say like too much time can work against you, as well. At least that’s my experience.

29:25 Emily: Yeah. And I would say to drill that point down even further on like specifically financial management, I would say like, so when I was in graduate school, it’s fair to say I was pretty obsessed with my finances. But not in a way that was super helpful and actually improving like my net worth in a big way. So like, for example, I did not get into entrepreneurship when I was in graduate school. That was after I finished graduate school. And actually earning more money at that time when I was earning very little for a graduate student stipend would have been a bigger ROI than just focusing on frugality, which is a lot of what I thought about. Now, I did good things like, you know, my frugality fueled investments. So that was good and that did increase my net worth. But now that I’m an entrepreneur and maybe you’ve had a similar sort of transition, I think a lot more about how to earn more money, and that’s worth more to my bottom line than spending a lot of time being really frugal.

Do You Have to Go Through a Proving Period?

30:19 Emily: But you know what, I think there’s also some value in, and maybe you agree or not, going through a period of being a little bit obsessed and really learning a lot, learning a lot about yourself, in whatever space you’re in. And then after that point, when you’ve invested a lot of time, you can pull back, like you were just saying and see the bigger picture, like more easily. What do you think about that? Do you have to go through like a proving period of, you know, really, really diving into a subject?

30:44 Natalia: That’s a very good question. I don’t have one clear answer to that. I think again, like just that careers cannot be like treated separately from finances. I think that your finances cannot be treated separately from your personality and who you are. So you have to learn it somehow, like what fits you best. And indeed, you need some knowledge to make educated choices and allocate your assets, which are your future, basically in the right, like baskets. There is some effort, like there is no freelance, so indeed perhaps, yeah, spending time on it and effort is of course necessary. I’m not sure if this is absolutely necessary to spend a period of your life on it, like full-time or maybe it’s sufficient to, let’s say, allocate one evening per week and do it systematically. Maybe that’s healthier. So I don’t have a clear answer to that, but for sure, this is like a compound interest. Like you have to have some space in your life for this, and it’s lik compound interest. If you allocate time for it on a regular basis, you will become a pro in a period of time. So for sure.

How to Contact Natalia

32:01 Emily: Love that answer. Okay. So we’re going to get to your best financial advice in just a moment. But before we do that, I just want you to remind the listener where they can find you, where they can find all the stuff that you’re doing in the career space.

32:12 Natalia: Right. So yes, I think the best way to contact me at the moment is my LinkedIn profile. So you can find me on LinkedIn, I’m open to new contacts. So please contact me and let’s talk. And you can also find me on Twitter. And of course I can recommend my book that also contains one chapter about finances. So I hope you can find some link to the book somewhere here as well. And yeah, I think this is at the moment, the best way to find me. And there is also a YouTube channel. There is my company website with everything I think will be linked below. So, please find me. I’m always, I’m not a financial advisor, but I like talking finances. I think it’s an important area of life. So I’m always happy to talk.

Best Financial Advice for Another Early-Career PhD

33:01 Emily: Yes. We can find all those links in the show notes for the show or in my mailing list, email, which you should get the day this is released, if you’re on my mailing list. Okay. So last question, Natalia, what is your best financial advice for another early-career PhD?

33:17 Natalia: Well, so I would say two pieces of advice. I couldn’t choose, so I will just list two. So first of all, what is also related to the topic of my book. In my book, I talk a lot about like a very important choice you have to make once you get from academia out to the big world. And this is a choice between safety and freedom. So, if you go to public institutions or large corporations, you have to compromise a lot on your freedom. You will have to follow the procedures, follow the local rules, follow your boss, follow expectations. But you will gain a lot of stability. You will get good working benefits and an opportunity to stay for a long time in one place. So, you’ll sleep well at night, but you will have some limited freedom. Versus if you go the opposite way and you start your own business, or you continue in academia, or you go like work in a startup in some speculative markets, then you will experience much more stress because your future will be much more uncertain.

34:25 Natalia: But you will also gain a lot of freedom. So it’s always a compromise. You either go for one or the other. The only exception, the only group of people who can afford to be free and to be safe at the same time are those who are wealthy. So money is a measure of safety, and it’s a measure of freedom. And this is your only chance. So in fact, most people who get wealthy, they don’t do it because they want to have a lambourghini in their garage. They just want to be free, and they want to be safe. And that’s how you should treat it. And if you treat the money like this, I think it’s a really good mindset to start with.

35:06 Emily: I just, I hope you don’t mind. I want to add onto that point because I love the way you articulated that. It’s not something I’ve thought about before. So I’m so glad that you brought that up. For my own life, personally, obviously I’m an entrepreneur. Longtime listeners may know that my husband, who’s also a PhD, works at a startup. And so we both, pretty much immediately after we finished our PhDs, went down this freedom, less safety route, although certainly his is more safe than mine because he has an actual job. So we went down this like freedom over safety route that you were just articulating. However, we radically reduced risk of undertaking those job choices because of the financial wherewithal that we had built up during graduate school, because we had savings, because we had investments, because we paid off almost all of our debt. That risk was much, much less to us, as you were just saying. So we were able to shift that, you know, get more freedom, feel like we were providing our own safety, even in these like unsafe careers, basically. So love the way you articulated that. So brilliant. Thank you. What was your next piece of advice?

Think About Your Mission

36:05 Natalia: My last piece of advice would be referring to what I said before. Think about your mission. And this is like, again a bit counter-intuitive, but there are at least two good reasons to think about your mission. First of all, if you have a goal that you can think of every time you negotiate, you become a better negotiator, because you see a purpose. You see like a big picture of why you want to negotiate a better salary, better honorarium for your work. That also helped me because that was initially my problem as an entrepreneur, that I couldn’t really value my work properly. And I was doing a lot of work for free. And I was just afraid to ask for money for my career services at first. And I was always feeling guilty.

36:49 Natalia: But once I started thinking, okay, this is my big picture. This is what I want to get. I need to start valuing my work, because otherwise I’ll never get there. So, that helped me. That gave me courage. And now I’m standing my ground much better when it comes to negotiation. So that helped a lot. And the second reason is because people will make it easier for you. People like helping individuals who have vision. And people are good. If they see that you have a good purpose, they will make it easy for you. You can even get donations. You should have big dreams, and should articulate them. Because most people, they keep their dreams to themselves. They believe that nobody cares or that, you know, people will only make it harder for you. They will either laugh, or they will put locks on your feet. But it’s not true. It’s the opposite. If you have a good cause, just articulate it. Say it loud, and you will see that wealth will come to you much faster.

37:55 Emily: I love that. I need to take that one to heart. Natalia, this was a wonderful interview. Thank you so much for giving it. I hope that the interested listeners will reach out and connect with you. And just thank you so much again.

38:05 Natalia: Thank you! Thank you so much for your invitation. It was great.

Postscript

38:09 Emily: Emily here, with a quick postscript. When we conducted our interview, Natalia was in the middle of a rebranding. Her business is now officially named the Ontology of Value and can be found at ontologyofvalue.com. In the interview, Natalia described the Odyssey test, or the Ontology of ValueTM test. If you would like to take this test to learn how you most naturally create value in the world, and which professional and employment sectors fit your value proposition, please register through my affiliate link, PFforPhDs.com/ontology. That’s P F F O R P H D S.com/O N T O L O G Y.

Outtro

38:56 Emily: Listeners, thank you for joining me for this episode! pfforphds.com/podcast/ is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes’ show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast. I’d love for you to check it out and get more involved! If you’ve been enjoying the podcast, here are 4 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and effective budgeting. I also license pre-recorded workshops on taxes. 4. Subscribe to my mailing list at PFforPhDs.com/subscribe/. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

This Grad Student Is Riding the Meme Stocks and Crypto Roller Coasters

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In this episode, Emily interviews Cara Davidson, a graduate student at Western University. Cara has a “tumultuous” income from assistantships, scholarships, and freelance writing, and she built up a considerable nest egg thanks to diligently tracking her spending. She started investing in January 2021 in mutual funds and also meme stocks and crypto. Cara details her investing motivation, philosophy, and sources, shares how much mental bandwidth she devotes to her positions, and gives great advice for anyone already invested in or considering investing in meme stocks and crypto.

Links Mentioned in this Episode

grad student meme stocks and crypto

Teaser

00:00 Cara: Do your research. Just because it’s a meme stock, that doesn’t mean that there shouldn’t be some kind of data behind it. Don’t just do it because the internet says to do it.

Introduction

00:15 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 10, Episode 9, and today my guest is Cara Davidson, a graduate student at Western University. Cara has a “tumultuous” income from assistantships, scholarships, and freelance writing, and she built up a considerable nest egg thanks to diligently tracking her spending. She started investing in January 2021 in mutual funds and also meme stocks and crypto. Cara details her investing motivation, philosophy, and sources, shares how much mental bandwidth she devotes to her positions, and gives great advice for anyone already invested in or considering investing in meme stocks and crypto.

01:06 Emily: I’d like to share with you a personal update now. As I discussed in Season 8 Episode 18, my husband and I purchased our very first home last spring in north San Diego County. It was an area we’d never lived in or near before but we are location independent with respect to work and just got a really good feeling from the city. We’ve been living in our house for about five months now and are settled into a pretty pleasant routine. Our older daughter started kindergarten in August, and our younger daughter is in preschool. After a year and a half of either no childcare or grandparent childcare, it’s amazing to have our children back in a school setting. It’s great for them to be among peers, and it’s great for us to have quiet, uninterrupted work time. We also enrolled the kids in introductory sports classes, which is quite hilarious to watch.

01:58 Emily: We’ve made friends with a few of our neighbors, and I’ve organized a once-per-month social gathering in our neighborhood park. We have a goal to explore one new-to-us point of interest each weekend, so we’ve been to numerous beaches, parks, tourist attractions, etc. It definitely isn’t considered hip, but my husband and I both really wanted this quiet, suburban, family-oriented lifestyle, and I think we’ve made a good start at cultivating it after so many years of putting down only shallow roots. COVID has of course made its mark on this process and has dampened the in-personal socializing that I would otherwise have hoped for. I am really thankful to live in an area where it’s pleasant to be outdoors year-round. That was one of the main reasons we moved away from Seattle in summer 2020. We are here for the long-term, though, so I hope with time and vaccine availability for the younger children, we will eventually develop a robust network of local friends. So I just wanted to let you all know that things are going well following our move, and even though buying a house in a place we’ve never lived before was an odd thing to do, it seems to be working out. Without further ado, here’s my interview with Cara Davidson.

Will You Please Introduce Yourself Further?

03:12 Emily: I’m really excited to have joining me on the podcast today, Cara Davidson. She is just finishing up her master’s now, starting a PhD program in the fall. We are recording this by the way in June, 2021. Cara has been on an investing journey, specifically regarding meme stocks and crypto and other kinds of investing. And I’m so excited to have her because I haven’t had a conversation about this yet. Obviously it’s been in the news and on a lot of people’s minds, and I know there are so many people in my audience who are interested in this kind of investing because it’s garnered so much attention and it’s so exciting. And I’ve been getting questions in my seminars actually about how do I pay capital gains tax on this money that I made from, you know, this kind of investing? So super excited to have Cara on. Cara, would you please tell the audience a little bit more about yourself?

03:58 Cara: Yeah, absolutely. So, as you mentioned, I’m finishing up my master’s and then launching my PhD in the fall. I’m specializing in mixed methods research involving intimate partner violence and looking at how that can affect breast cancer. So I’m really excited for that, but I’ve yet to defend. So that’s kind of the bane of my existence right now. And yeah, in terms of investing, I got into that in January. It’s brand new to me still, I guess that was like the height of the meme stocks. And I got in just in time and I’ve been riding the wave ever since. It’s been a lot of fun for me. And then I’ve also been dabbling in cryptos, which I also find really interesting, especially just because of the volatility of the market, which I know is a huge disincentive for many people. But for me, it’s a lot of fun because you can make a lot of money really quick, but I guess you can also lose it all pretty fast too. So I’m looking forward to discussing all of that.

04:55 Emily: Yeah. We’ll get into that in a moment. And can you tell us what university you attend?

05:01 Cara: Yes. So I attend Western University in London, Ontario but I’m doing so remotely right now. So I’m at home in Ottawa at the moment.

Balance Sheet: Cashflow and Side Hustle Income

05:08 Emily: Okay, great. So first question is, let us know what your balance sheet looks like right now. And actually it’d be helpful to talk about cashflow too. Like what’s your stipend? What basically are, you know, you spending on living expenses, and how much are you able to save, and how much have you accumulated in what?

05:25 Cara: So, I’m a freelance writer, so I’m going to say that first because when I was doing my research on my own finances for this interview, I was a bit surprised at how much it really does fluctuate. So like I’ve made as little as $1,700 in a month and I’ve made as much as over $8,000 in a month. So, I really like month-to-month don’t know what’s going to come my way. It can be really lucrative and it can be tight. And in a year also, like, I wouldn’t say I even have an annual salary because I’m so dependent on grad funding, like scholarships that I’m applying to, GRA positions if I’m fortunate enough to get one, teaching assistantships. So even putting like a dollar amount on my annual income is difficult just because like, I really don’t know what I’m going to earn until it happens.

06:18 Emily: Okay. So you have the freelance writing side hustle, but I assume it brings in more than your main hustle, right? Being a graduate student, but it sounds like even that aspect of it is not, it’s not fixed or steady, right? Your income as a graduate student is fluctuating.

06:33 Cara: No, not at all. So like, as I mentioned before, like that about like one and a half to $8,000 range, that can come in freelance, I’ve made like 200 bucks in a month and I’ve also made $3,000 in a month and that’s just doing it like part-time, as I can, as a grad student. I was fortunate enough to get the Ontario Graduate Scholarship for last year, or I guess technically this year, which was $15,000. And then the Canada Graduate Scholarship for next year which is 17 and a half thousand dollars. But those kind of aren’t ideal because they go to tuition first. So like, you’re like, yay, $15K. And then immediately like $8,000 gets taken from you. So that’s not ideal. And then depending on whether or not I get the research assistantships and I get the TA ships, I’m making, the research assistantship’s like one to $2,000 a month. And then the teaching assistantship is about $5,000 a month, but I mean, it’s so variable. And then I got another scholarship for $1500. I don’t know if that’s coming again in the PhD, like they don’t tell you until it happens. And then one other source of income that I’ve recently gotten into is flipping things on Kijiji. So like buying like old wood furniture and sprucing it up. I really enjoy that. But then again, like that’s $0 some months and like $500 next, so.

07:53 Emily: Wow.

07:54 Cara: My finances are tumultuous, to say the least.

07:58 Emily: Yeah. That’s definitely, that’s a great word to describe it. Is at least the freelance writing, like anti-correlated with your graduate student income? Like, are you able to, if you know, you have slow months coming up for like scholarship-wise you can ramp it up, or is it also just not really under your control? Just like whatever work comes your way.

08:17 Cara: So right now I’m fortunate that I have clients that just show up in my inbox and they’re like, “Hey, I need something from you.” Just because I’ve been working with them for a long time. So that part, I don’t have much control over, but if I do have a slow month, I can go to my platforms and like apply to things and likely get jobs. So I have a lot of peace of mind from that, that like, no matter what happens, like let’s say I don’t get a scholarship next year or whatnot. Like I can still rely on that and I will be able to support myself.

Balance Sheet: Savings and Investments

08:48 Emily: Yeah. I feel like this could be a whole podcast interview in itself just on the freelance writing, which is really exciting. But also on dealing with the irregular income aspect of it. However, this is not the subject that we propose to talk about today. So I am curious though, I asked about your balance sheet. So like are you in debt for example, or how much of your assets are devoted to maybe cash savings to help you buffer these irregular months? And how much do you actually have working for you in terms of investments?

09:17 Cara: Yeah, so right now in my bank I have about $7,000 and I like to keep it normally around like three to 4,000. So I’m looking for something to do with that extra cash, just because I had a busy freelance month. In terms of debt, I am very lucky that I don’t have any. So in my undergrad, I was so lucky that my parents would pay my rent and all I had to do is worry about like tuition, books, and food. So that kept me out of debt for sure. And now getting the scholarships, like I’m able to pay off the tuition right away, because that would be my biggest expense. So, and then my partner and I just paid off his car that I now use. So I helped with like the remaining payments. That’s gone.

09:58 Cara: So I really don’t have any debt. In terms of credit cards, like I use one as a debit card. I heard that’s good for your credit score. So I do that. But I pay that off like every two weeks so that I don’t really consider that a debt. And then in terms of investments, I’m pretty busy in that front. So I have a TFSA that I’m able to use. I forget their official title, they’re a professional investment manager. And I maxed out my TFSA, which was good, which is about, I gave them like $34,000 at the beginning of the year and now it’s become $36,000. So that was exciting for me, that was like my first foray into investing and it worked out. But that’s a long-term hold. Like I’m not going to touch that money like in my mind ever. It’s just going to be there forever until I really need it.

10:46 Cara: I opened an RRSP which was fun. I’m doing that through Wealthsimple. That’s where I do my like traditional investing. And I’ve managed to make a couple hundred dollars on that as well. It’s sitting at about like $5,000, I think. And then I also have a personal account. So before I opened the RRSP, I was dabbling in Wealthsimple. And that’s just like, like I will get taxed on it, which is the sad part for me, but that’s okay. And that’s where I’m holding my meme stocks, which was not smart on my part. So like, let’s say those do really take off, then I’ll be paying the price for that, but that’s okay. I believe in taxes. It’s fine. And then I have a couple of different crypto wallets where I hold things.

11:31 Cara: So I’ve got like $4,000 in cryptos, I’d say. And so I really liked Celsius. So Celsius is a wallet where you can hold your cryptos, but you also earn interest on those cryptos. So like I’m buying tokens that I would hold anyways, but I’m earning like up to 14% interest on those year over year. So that’s been fun for me as well. And then just holding in various wallets, like my long-term things that like, I’m hoping in five years we’ll be up enough that I can cash out and make a profit.

12:02 Emily: Yeah. So, it definitely sounds like you’re not all in on any one thing, right? You have a variety of different strategies and places going on for our American listeners. I think the RRSP and TFSA equivalents would be like our IRAs or other tax-advantaged types of, you know, supposed to be for retirement type accounts. Versus just holding things in like a taxable brokerage account, which you also have. Yes. Wonderful. So yeah, you, you only started in January, but it sounds like you had a fast start because you had savings to devote to it already, right?

12:34 Cara: Yes. Absolutely. So like I worked through high school and I didn’t spend a dime and that’s why I was able to have that cushion. And it was just sitting in my cash account and I kept thinking like, I should do something, even if it’s only 5% interest like that matters for inflation and whatnot. So I was able to have a nice little nest egg to devote.

Strategies and Mindset for Building Savings

12:51 Emily: Yeah. So let’s talk for a moment. Were there any other strategies that you use to build up the savings that you were then able to invest and also your current level of savings? So you’ve already mentioned the freelance writing career, of course, finding funding as a graduate student. Anything else that you practice or related to your mindset that helped you build up the savings?

13:09 Cara: Absolutely. I track everything. I’ve been tracking everything since I was in high school. I have like my own Excel sheet where I put in all of my expenses every month. Like absolutely everything. And that’s helped keep me accountable a lot. So like I was exploring those food kits that will get delivered to your door, but they end up being so expensive. So I was looking at my grocery bill, and as soon as it hit over like $300 a month, I was like, nah, I can’t do that. Like I’d much rather put the money towards something else. So I’ve definitely dialed back on that. But if I wasn’t tracking like that, I wouldn’t see these things that crop up. And like, I find you forget in a month what you’ve actually spent things on. So like, I have a puppy and I would love to spend all my money on her. And like, I’ve noticed that, okay, you’ve already spent this much on her. Like maybe you can pass on that special thing for her this month and then get it the next month just to keep a more consistent level of expenses. So I’d say that’s been the biggest thing for me was keeping myself very much accountable in terms of what I am spending and relative to the income coming in that month.

14:18 Emily: Yeah. It sounds like, I mean, that tracking is not at all passive for you. You’re really looking at the data and then making different decisions based on what you’re seeing. So I absolutely love to hear that.

Progression to Crypto/Meme Stocks

14:29 Emily: Okay. So I think you mentioned earlier that you just started with investing in this past January, so like five months ago. And you started with a bang because you had the cash savings to put towards some different things. Of the different investments that you mentioned, was the more like classic type of investing the first thing that you did, or did you start out on these like crypto/meme stocks more? How did that progress?

14:54 Cara: So I started for sure with the TFSA. I had already put a little bit of money in there, like maybe under $10K, but I didn’t really know how to use it. That’s not very clear. So I wanted to max it out. I may as well while I can. And so that’s when I connected with the investment advisor and they were able to actually invest in different stock portfolios for me. And then I was just watching the number for like a few months and I was like, “Meh, like this isn’t doing what I would like. Like I’m young, I can take on some risks.” And I feel really comfortable with the amount that I have in that right now. So why not? Let’s do something more fun in the future and where there’s more risk, but the reward is higher and I can be more engaged with it. Because with the TFSA like, you don’t really touch it unless you need to move around your portfolio, which my advisor would do, and I wouldn’t. So I wanted something more hands-on because I do find it fun. So that’s where I got into the meme stocks and the cryptos

Getting into Meme Stocks

15:56 Emily: Let’s start with meme stocks because that’s been like the newer story. Crypto has been an exciting ride for a number of years now. So with meme stocks, you said you started in January. And when you volunteered to be on the podcast, that was in March, we’re now getting around to actually recording this interview in June. So I know there’s been some developments over that time as well. So, yeah, just tell me like what your experience was through those through these last few months.

16:19 Cara: It has been a wild ride. So I started in January. I got in on the floor of GME at like 40 bucks based on something I read on Reddit. I’ve been a part of that community ever since, but moving around there were problems in the WallStreetBets community, which I guess that happens when there’s money involved. So I’m in another one that’s like a little more secure and they call them like shills. So less people trying to sway your opinion and more of like, here’s the data look at the data, which is fun.

16:52 Emily: Is that also on Reddit?

16:53 Cara: Yeah. So a lot of how I’m involved in the meme stocks. So, I’m in on GME and AMC. Since January I’ve been holding, like they went like way up. I don’t know if you heard around like it was around my birthday and like the end of January, they just went way up and then Robinhood blocked buying. And that was like a massive thing. I was so upset because that just basically like, like cut off the feet of the short squeeze, and I’ve been holding ever since because I’m like, just because they turned off buying doesn’t mean that the short interest is any less. That doesn’t mean that they don’t have to cover. So I’ve been holding since, and then actually this week there has been like crazy developments once again. So AMC really shot up yesterday, like 99%.

17:40 Cara: They’re struggling today, but I have confidence. There’s big meetings coming up. But that actually reminds me, so like we call them meme stocks, and that’s what everybody knows them as, but AMC and GME, the reason why they’re actually successful is because there’s a lot of data behind what we’re doing. And I probably shouldn’t say we, because that sounds like a lawsuit waiting to happen, but based on the data that’s available in the short interest in knowing that anyone who shorted the stock does need to cover, but if we’re all buying and holding these stocks and so many people, so many retail investors do, there’s nothing to buy up. And so when you have that much demand and that little availability that creates a short squeeze and then boom, off we go to the moon. And then I cash out. But I’ve been waiting five, six months for that and it looks like it’s on the horizon again. So we’ll see. We’ll see, stay tuned.

18:35 Emily: Yeah. Well, I would like to hear about the future. So like for you personally, do you have a plan for when you’re going to exit this position or partially exit it?

18:44 Cara: Certainly. I don’t have a dollar amount, but I do want to see indicators. Like yes, we are indeed in the short squeeze. Like, a short squeeze does not happen in a day, and it doesn’t shoot up a stock by a hundred percent. Like, it’s pretty exponential in terms of how that works. In considering who’s involved in shorting the stock, and like basically when you short a stock, like you’re betting that the company is going to go under, go bankrupt, et cetera. I’m not a huge fan of Wall Street and how they’re playing this. Like, there are a lot of shady things going on. So like, even if it goes to like a thousand dollars a share, I’m not selling. Like that’s not worth it for me. I would really like to stick it to the people who are manipulating the economy and running these like innocent businesses under. So in that regard, I need to see that the short squeeze is happening. I need to see that Wall Street is scrambling to cover everything. And then I’ll probably hold on a little longer and then sell on the way down. Because I don’t want to miss the peak.

Commercial

19:52 Emily: Emily here for a brief interlude. If you are a fan of this podcast, I invite you to check out the Personal Finance for PhDs Community at PFforPhDs.community. The community is for PhDs and people pursuing PhDs who want to take charge of their personal finances by opening and funding an IRA, starting to budget, aggressively paying off debt, financially navigating a life or career transition, maximizing the income from a side hustle, preparing an accurate tax return, and much more. Inside the community, you’ll have access to a library of financial education products, including my recent set of Wealthy PhD Workshops. There is also a discussion forum, monthly live calls with me, and progress journaling for financial goals. Our next live discussion and Q&A call is on Wednesday, October 20th, 2021. Basically, the community exists to help you reach your financial goals, whatever they are. Go to pfforphds.community to find out more. I can’t wait to help propel you to financial success! Now back to the interview.

Initial Amount of Money Invested in Meme Stocks

21:04 Emily: So when we started talking about your portfolio overall, you mentioned, you know, certain dollar amounts, 30 some thousand that you put towards this and that or the other. You can share whatever you want of this, but I’m wondering how much money you initially invested in these two stocks? Because I want to get an idea of like how big this was. It’s probably big in your world now, but how big was it at the beginning?

21:28 Cara: I’ve been like gung-ho since the beginning, but I also did not trust like the information I was getting totally. Because like I found this on Reddit. Like let’s not go too far here. So let’s see. I think I wrote down what I put in. Did I, did I not? Okay. I think I put $750 in AMC and I’ve got like a $2,500 return now. It’s still not worth it for me. The squeeze hasn’t happened. And then I think GME, I did maybe about 1400, $1,500. So, like that is a lot of money, but for me, like relative to like the TFSA I have to fall back on, like it’s not a big deal for me. If I lose that, I can recoup it based on my freelance. And like the risk for me isn’t, I don’t find it that high. I do believe that like these companies will go up, so I’m not worried about that. And I got in while the floor was still low. Like if you’re buying in now and it’s like 250 bucks and you want to buy a lot of shares, it’s going to be a lot more money for you. So I would hesitate then, maybe. But yeah, I’d certainly put about like 2,500 in total, under $3,000. And just to see like where it took me.

22:46 Emily: I feel like that amount of money is a lot of money, like in a grad student world. We’re talking about, you know, one month stipend, maybe a little bit more, a bit less. That’s a lot of money. But for you, because you had these other sources of income, you had, you know, the good savings going on. As part of your overall portfolio, it wasn’t a big percentage. And that’s something that I, so I’m kind of a dyed in the wool, like passive investor. And so, the advice that I hear from other people who promote passive investing is like, okay, sure. Like if you want to, you know, get into these like exciting trends and be part of it. And like you were saying, maybe you want to make a statement with your money about the policies of Wall Street and so forth, do it, but do it with an amount of money that you can afford to lose that’s not going to hurt you, right? It’s not going to make you lose sleep at night or anything like that. So it sounds like that’s actually what you did. And so it’s been an exciting part of your portfolio, but it’s not anywhere near the majority of your portfolio.

23:43 Cara: No, no. And that would give me stress. To lose it all would hurt my pride and that’s fine, but like, I wouldn’t be putting myself in any danger whatsoever. Like I would be perfectly able to like continue living my life and to recoup that. And like, I would never bet my life savings. I know some people do. It’s all or nothing, but I’m too risk adverse for that. Like, I do have a tolerance, so yeah. I wouldn’t recommend that. This has worked out for me just fine so far. And I’m very comfortable with what I’ve invested and where I’m at.

Time and Energy Spent on Meme Stocks

24:19 Emily: So I think what you said was that you took this initial position in January, and you’ve been holding it since then. So I am wondering about the amount of like attention you’re giving to this, given that you haven’t actually changed anything about your position. At some point you will sell, we think but yeah, like how big is this in terms of your time and your energy?

24:41 Cara: I absolutely adore it. Like I’m checking on it every day. I will take a break if it’s like been a slow week or whatever. I’m like, man nothing’s changed. But like this past week now that things have been going up again and looking promising, like there’s a big shareholders meeting coming up, we’re going to hear Q1 earnings, all of that stuff. I’m like, oh, okay. Let me just keep up with this again. So I will say that I do spend a lot of time. I like reading the DD, the due diligence, on all the forums and just keeping up with what everyone else is talking about. And I’m not sure that I would be devoting the same attention or would be this invested if we weren’t in a pandemic where this is like one of my only hobbies that I can still access. So it’s been nice to belong to a community virtually and you kind of explore this together. So I would say I do devote a good chunk of time to it, but like I see it as just like a fun hobby that I’m doing. I don’t see it as an obligation because, “Oh my God, I’m a shareholder now. And I’m worried about my portfolio,” and all that. That’s not the case.

25:50 Emily: Yeah. It sounds like you’re going about this in a really healthy manner. So I’m really happy to hear that. Anything else you want to add about meme stocks before we talk about crypto?

26:02 Cara: I will say if you’re thinking about going into meme stocks, just be careful now on the forums. Now that we’ve had our moment of glory, there’s a lot of people out there with I would say like nefarious intentions. Like as soon as we had that day where GME hit $450 at the end of January, all of a sudden all of the ads, all of the new accounts that were made and they were all shilling silver, and everyone’s like, who’s investing in silver? Like there’s no, no one’s shorting silver. What’s going on? And a lot of people lost a lot of money on that because it was basically a pump and dump to distract attention from what was happening with GME. And that’s still happening now, especially right now as we’re chatting because we’ve had such a wild week. So do your research. Just because it’s a meme stock, that doesn’t mean that there shouldn’t be some kind of data behind it. Like for example, AMC and GME are based on potential for short squeeze and that’s a proven concept. It happened with Volkswagen way back. So still do your research. Don’t just do it because the internet says to do it.

27:10 Emily: Yeah, that’s great. Well, I think you’re speaking to a receptive audience in that respect of PhDs and PhDs to be.

Experience with Cryptos

27:16 Emily: Okay. Let’s turn the attention to crypto, then. You also started investing at that time. Tell us about your position and what your experience has been.

27:23 Cara: Yeah. So in cryptos, it’s also kind of like the meme stocks where I’m not putting a ton of money in it. I’ve got maybe like $4,000 in there. And I like to just like keep sifting through things and changing out my positions and whatnot. My long-term holds are Nano and anything that I have in Celsius, so that would be MATIC, Ripple, and the Celsius token. And that’s just because I believe that they will continue to go up over time. And I don’t feel the need to like work around the increases and decreases that happen and the fluctuations on like a daily, weekly basis. I’m not in Bitcoin or Ethereum. I’m not a fan of the gas fees. I think that’s ridiculous. That’s why I’m such a big fan of Nano because it’s instant, it’s feeless, it’s green. And so that’s why I think like that will certainly be a strong contender in the future of crypto.

28:19 Cara: I am invested into, I guess, meme cryptos. When I heard that Elon Musk was going on SNL, I got into Dogecoin because I’m like, definitely the exposure is going to drive it up. So I got in like maybe 27 cents or something, and I got to exit about 50 or 60 cents. So that was like a tidy little return and I cleansed my hands and that was good. And then I bought in again, actually once it went back down after just because I don’t know what’s going on with Elon Musk, but like he loves it and he won’t stop talking about it and he wants to integrate it into everything. So I’m like, okay, if you’re going to have anyone behind a crypto that’s going to be actually used daily and whatnot and at least grow as an investment, then I might as well just hold like a couple hundred Dogecoin and see what happens.

29:13 Cara: And then I also invested in, I guess, a Dogecoin copy cat called Shiba Inu. It’s like, you know, like the sheep dog meme. Yeah. So it’s that. Definitely my most irresponsible investment, but it’s like fractions and fractions and fractions of a cent. So I’m like, I just put like a hundred dollars and this thing goes to 1 cent. Like that’s a good return. And I’m happy to just, like, I would spend a hundred dollars on like, I don’t know, maybe like a nice weekend with friends doing something. So I’m like, I might as well just tuck that away. I have nothing else to do right now. We’re locked down. And let’s just check on it in like 10 years and let’s see what happens. I’m happy to wait. So that’s where I’m at.

29:56 Emily: I really like to hear these distinctions that you’re making between what you’re holding long-term, what you are buying because of instincts about where a particular different coin is heading, and then also that last point that you just made about, you’re really explicitly calling that entertainment at that point. Like I could spend 100 dollars on going out. Well, okay. That’s not available to me right now. Okay. A hundred dollars in this position. We’ll just like, it’s money spent. It’s gone. It’s not even like, you’re barely even thinking about it as an investment anymore at that point. Just like you sunk some money to something you’re having a good experience with it. And it doesn’t really matter what the outcome is, right? So I like to hear those distinctions. How are you, like, what are your sources when you’re doing research on these different cryptos?

30:43 Cara: I just think about what I would like as a consumer and someone who would like to use crypto in the future just to make transactions and make everything easier. So that’s, again, why Nano appealed to me. I wanted something that’s instant, like waiting 30 minutes for Bitcoin is ridiculous. And to think that you can pay like really ridiculous amounts of fees as well. Like sometimes I buy things on Binance, like coins and then I go to transfer them out to hold them in a secure wallet and it’s like paying 40 to $80 in fees. And I just don’t think that’s right. I don’t think that makes any sense at all. And then also seeing photos of these massive mining rigs that they have all over the world that are just chugging away, killing the planet. I’m like, as a currency of the future, that doesn’t make sense either. So I do believe the ones that have the most potential for adoption are ones that are green, that are as fast as a normal transaction, and that don’t carry those massive fees. Like nobody wants to pay more money just to use money. That doesn’t make any sense to me. So my long-term holds are ones that support that for the most part.

Resources to Learn About Cryptos

31:55 Emily: Yeah. I understand. I like your thought process on that. I’m actually wondering more, like, how do you find out about Nano, for example, like how did you think about yourself as a consumer and then match that with, oh, this point reflects what I would like?

32:09 Cara: Great. Like a couple of my friends are into it, so sometimes they’ll introduce coins to me and I’ll chat about that with them. I’m involved in a lot of crypto Reddit forums where I read up on new stuff coming out or updates and whatnot. I also, I just go on CoinMarketCap and I see like, who are the gainers? Who are the losers? Why’s that happening? Because they have like a really handy, like, you’ll see like the price action and all that. But if you scroll down, they’ll give you like a two-paragraph succinct explanation of what this coin is and what it’s hoping to achieve. And then normally like there’s blog posts about that coin that I’ll look at if I’m interested that list the pros and cons. And as soon as I see something like gas fees, I’m like, Hmm, Nope. Or long transaction times. Nope. I’m out. So that’s how I would say I find my responsible investments. My irresponsible investments are things that you hear other people talking about, like Dogecoin, where it’s just like a public movement where everyone’s like Dogecoin. That’s so funny. Let me buy some and then you go up and then you can sell. So I would hear about those ones from other people in like online, I guess, conversations. So it depends, I would say.

How Much Attention Are You Giving to Your Cryptos?

33:24 Emily: Yeah. So a similar question to when we were talking about the meme stocks, but like, how much attention are you giving to your crypto positions?

33:32 Cara: I check on Nano every day, because that’s my baby and I love Nano. So I will check on that constantly. I get really excited when there is price action and I obviously have the opposite reaction when it goes down. So I check on Nano every day. As for my other ones, like, I’ll take a look at them. I just like take a gander, like my Celsius wallet I’ll check on to make sure that I got my weekly interest as promised. And then I leave that alone. In terms of Dogecoin and Shiba. Like, I don’t want to hear about those for 10 years and then I will cash out. So, I would say really Nano is the only one that like I’m investing considerable time in. Like I’m in all the forums. I’m keeping up. Like we just had a new version update come out. Because there was like a massive spam attack that was clogging up the network. And obviously that needs to be solved to facilitate like massive adoption. So developers were great and they fixed it. And so like, I wanted to know everything that was going on with that, but I do not get that in depth with like any other crypto because I found my one and I’m sticking to it.

34:38 Emily: Okay. Got it. Yeah. We’ve gotten some, you know, great insights and great advice from this conversation so far. Is there anything else that you want to add about what you’ve learned about investing in meme stocks and or crypto? I’d love to especially hear a little bit more about the psychology of it. If you have any advice for someone who’s thinking about getting into this or who’s already in, but is wondering, what do I do now? I’m already in, now what?

To Do Cryptos, Or Not To Do Cryptos

35:01 Cara: If you’re a really impulsive person, I don’t think that you should do cryptos because you can go to bed at night and you’ll be up like 20% that day. And you’ll wake up in the morning and you’re down 25%. And there’s usually no clear reason as to why that happened. So if you’re the kind of person who’s going to panic and say, oh my God, I just lost a quarter of my investment. My life is over blah, blah, blah. Don’t do it to yourself. Like you will be so stressed. But if you’re a person who is more like me and like you’re happy to buy something and then leave it alone, like indefinitely until you want to use that money or just to see where you’re at out of interest, not out of like obligation and stress, then absolutely go for it.

35:42 Cara: That sounds fine for you. But I would worry if you’re an impulsive person that you’re going to buy high and sell low just constantly and just absolutely wreck your finances. And cause yourself a lot of stress that you don’t need. Like this is supposed to be fun. People aren’t taking most cryptos very seriously. You get kind of a mix with meme stocks, but even still, like I bought in at GME at $40, I held up to $450, and we went all the way back down to like 50, 60 bucks. And it’s been five months where I’ve been sitting here checking it every day to be like, what’s going on? What’s causing this price action? And if that doesn’t sound like fun to you, and I know it doesn’t to some people, just don’t do it. Like you don’t have to do it just because everyone else is, it doesn’t make any sense for you and you won’t enjoy it. And that’s the whole point I would say.

Best Financial Advice for Another Early-Career PhD

36:33 Emily: Great advice. Thank you. And I think I would add onto that, the reason YOU can have that attitude about this is because it’s not a significant part of your portfolio. You’re not drawing any income from this. You have other sources of income that are coming in. Your whole life is not riding on, you know, the performance of these particular investments, right? You have this in balance with a lot of other things. So like, you CAN sleep well at night because you’re not depending on this. So a very, very important point to add on there. Well Cara, thank you so much for this interview. I really enjoyed speaking with you and learning about your experience with meme stocks and crypto. As we sign off, I just want to ask you the same question I ask of all my guests, which is what is your best financial advice for another early-career PhD?

37:15 Cara: Advice in terms of meme stocks and crypto?

37:18 Emily: It could be related to that, or it could be completely something else.

37:22 Cara: I would say, just buy pretty much anything and just hold it. Just hold it and like, forget the password and have a reminder on your phone in five years with that password. Like do not touch your investments unless you know how to day trade. And I don’t think anyone really knows how to day trade consistently. Like it’s very, very hard to achieve. And it’s more dependent on the market than you and most times. So if you buy and you hold, you will be okay. But obviously to do that, make sure that you’re putting in money that you don’t need for five years and you won’t feel tempted to touch it all. So whether that’s like 20 bucks or a couple thousand, whatever that means for you do it and just forget about it. And then it’ll be there and ready for you hopefully in several multiples for you in a few years.

38:11 Emily: Sounds wonderful. Thank you so much, Cara. This was a great conversation. Thank you so much for volunteering.

38:16 Cara: No, thanks for having me. I had a lot of fun. It’s nice to discuss these things outside of my Reddit communities. I really appreciate it.

Outtro

38:30 Emily: Listeners, thank you for joining me for this episode! PFforPhDs.com/podcast/ is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes’ show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast. I’d love for you to check it out and get more involved! If you’ve been enjoying the podcast, here are 4 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with a email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and effective budgeting. I also license pre-recorded workshops on taxes. 4. Subscribe to my mailing list at PFforPhDs.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

Insights from a Financial Planner Who Works with Academics

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In this episode, Emily interviews Andy Baxley, a Certified Financial Planner who specializes in working with academics and PhDs. Andy pursued graduate school in psychology immediately after undergrad, but quickly realized the career path wasn’t right for him and the financial pressures were too great. He eventually started practicing financial planning, realizing that it is psychology ‘out in the wild’, and decided to serve the academic community he so closely identified with. Andy shares his insights from working with PhD clients nearing retirement about what they are glad they did when they were younger and what they wish they did. At the end of the interview, Andy explains how his career plans have brought him back to graduate school again. Andy brings deep insights to the interview from his years of study and practice in this space—ones you won’t want to miss!

Links Mentioned in this Episode

Teaser

00:00 Andy: It was sort of that long-term existential financial dread mixed in with just the day to day, “I don’t have enough money for anything.” I was living in a big, fairly expensive city and just was very, very much living like the proverbial graduate student. I didn’t mind that, but it was that in tandem with feeling like everyone else was just taking like leaps and bounds beyond where I was in their financial journeys, that confluence of things added a lot of anxiety.

Introduction

00:34 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season eight, episode 17 and today my guest is Andy Baxley, a certified financial planner who specializes in working with academics and PhDs. Andy pursued graduate school in psychology immediately after undergrad, but quickly realized the career path wasn’t right for him, and the financial pressures were too great. He eventually started practicing financial planning, realizing that it is psychology out in the wild and decided to serve the academic community he so closely identified with. Andy shares his insights from working with PhD clients nearing retirement, about what they are glad they did when they were young and what they wish they had done. At the end of the interview and explains how his career plans have brought him back to graduate school. Again, don’t miss Andy’s deep insights from his years of study and practice in this space.

01:36 Emily: I have my own insights that I will provide to you next week, specifically regarding the home buying process. My husband and I closed on our very first home a week ago. My podcast episode next week is going to be all about our journey to home-ownership. Like many other PhDs and millennials generally, we put off buying our first home for quite a while. I’ve been open on the podcast about my regret that we did not buy our first home back when we were in grad school and I’m pretty bullish on grad students and PhDs buying homes if it’s financially feasible.

02:10 Emily: To that end, I’m publishing the episode next week on our personal home-ownership journey, which I hope you’ll listen to. I’ve also scheduled a special event with my brother, Sam Hogan, who is a mortgage originator specializing in grad students and PhDs. You’ve heard Sam on the podcast previously in season eight, episode four; season five, episode 17; and season two, episode five. We are going to do an AMA style live call over zoom on Thursday, May 6th, 2021 at 5:00 PM PDT 8:00 PM EDT. We will do our best to answer any question you have about buying a home, especially as a grad student or PhD. You can register for the event and my mailing list at pfforphds.com/mortgage. I hope you will join us.

Book Giveaway

02:56 Emily: Now it’s time for the book giveaway contest. In April, 2021, I’m giving away one copy of Walden on Wheels by Ken Ilgunas, which is the Personal Finance for PhDs Community book club selection for June, 2021. Everyone who enters the contest during April will have a chance to win a copy of this book. Walden on Wheels made a splash when it was published, because the author wrote about how while he was a graduate student at Duke, he lived in a van on campus instead of renting a home so that he could avoid taking out student loans. This was an even more counter-cultural move than it appears to be now because it was before the rise of hashtag van life. I’m looking forward to learning more about the author’s motivation to make such an extreme choice and discussing it with the members of the Personal Finance for PhDs community. If you would like to enter the giveaway contest, please rate and review this podcast on Apple podcasts, take a screenshot of your review and email it to me@emilyatpfforphds.com. I’ll choose a winner at the end of April from all the entries. You can find full instructions at pfforphds.com/podcast. Without further ado, here’s my interview with Andy Baxley.

First Go at Grad School

05:12 Emily: Yeah. And we’re going to get ton of that insight later on. I’m so excited for it. But first we want to go back in your own history back to when you were pursuing your own PhD the first time, so could you please tell us about the graduate program that you entered and what you were studying?

05:30 Andy: Yeah, absolutely. It’s funny, when I look back on my own personal history, I would have been really surprised 10 years ago, if I could have gotten in a time machine and seen where I am today, I don’t think I ever would have guessed that I ended up exactly where I am, but I also wouldn’t have guessed that I’d be as professionally fulfilled as I am either. It turned out well, but definitely a number of unexpected turns along the way. To go way back, I think the best place to start this story is probably in high school. I was a really sort of uninspired student in high schoo,l to say the least, and my parents always said, you have to get a 3.0 at minimum, so I always got like exactly a 3.0, I just didn’t really have much direction or passion.

06:15 Andy: All that kind of changed when I got about halfway through college and I just got very inspired by a couple of professors and started doing research assistantships and teaching assistantships in my undergraduate work and ultimately decided to pursue becoming a professor myself in psychology. The second half of my academic career, I think I was an excellent student and that was the first time I’d ever been excellent at anything. I really was just very excited to be good at something. I started thinking about life after undergraduate work and ultimately went to a master’s program, that was well-known for being a feeder into really good PhD programs, and so I thought that was the path. It didn’t end up working out that way, and I can tell you more about that story certainly.

What Drove the Decision to Leave Grad School

07:07 Emily: Yes, please do. I mean, I think we all know the beginning of this path, but where your story gets interesting is when you start to deviate from it. So why did you end up leaving that master’s program?

07:17 Andy: It was a mix of things, it was definitely a confluence of things. First and foremost, I think I got there and I realized that while I was fully funded in the program and I had a stipend, I sort of looked around and I realized that I didn’t have the same sense of purpose or direction that a lot of the other students in the program did. At first it didn’t seem like that big of a deal, but the more I thought about it, the more I realized that the further on I got in that journey, the competition was only going to get fiercer and fiercer. I sort of had this mindset that as long as I can do the next thing, that’s where I’ll find happiness. If I can just get into this master’s program, then my path is paved and I’ll find happiness and all will be well.

08:05 Andy: Then I was like, well, that’s obviously not true and I was thinking, okay, well maybe if I get into a great PhD program, once I do that, all will be well and my life will be pretty much set at that point. And I kept talking to people who were either one step or two steps or three steps along in the journey and realizing that some of them are happy, but a lot of them were under a tremendous amount of pressure financially. They just had a lot of stress in their lives that I wouldn’t have expected, and that wasn’t just true. One or two steps beyond. The more people I talked to, I realized that even all the way up to tenured faculty, those folks were under a lot of pressure as well. Some folks were extremely happy with their lives, but not all of them were and I just realized that I wasn’t on a path to sure happiness or professional fulfillment.

08:52 Andy: Also, I was going up against people who were really super passionate about the research topics that they were focused on and I just didn’t have that. All I had was that I was really excited to be good at something and excited to be a good student, but I just didn’t have that passion and didn’t have that drive. Those were sort of the personal reasons. And then there were certain financial ones as well, which I’m certainly happy to go into.

09:15 Emily: Let’s do that in a moment. I am really impressed with you as a, whatever you were 22, 23 year old person, really being able to kind of take a step back from the day-to-day rush and rigor of the program and evaluate “is this really where I want to go” and to do that, looking ahead to your older people ahead of you in the program and older mentors and so forth and asking yourself if you really want that out of your life. And to do that so early on, right within the first, it sounds like about a year of that program doing that evaluation. I really encourage the listeners to periodically step back and reevaluate and see if the path that you’re on is really the one you went to beyond because bailing out like you did earlier is much, much less sunk cost, than getting to the end of the PhD and realizing that you don’t want the career that’s on the other side of that PhD, the one that you thought you wanted. I really commend you for that. Can you talk a little bit more please about the financial pressures that you were experiencing and observing?

10:13 Andy: Absolutely. And one thing I’ll add to what you just said as well, is that that was the hardest decision I’ve ever made to leave that program. It felt like it felt like my world was crumbling down. So much of my identity was wrapped up in that path that I had chosen for myself. At the time it was truly like crushing at a personal level to make that decision, but looking back, it truly is the best decision that I’ve ever made. That’s not to say of course, that everyone should leave their PhD programs or that everyone should leave graduate school, but it is to say that if you have that hunch, that maybe that’s something worth considering. It may feel like the end of the world in that moment, but it will get better later on as you find your path, it just doesn’t seem like it in the moment.

10:57 Andy: To circle back around to the financial side of things, I think I had this experience that a lot of folks probably do, which is that I was seeing a lot of my peers from college who hadn’t chosen the same path, start to experience some degree of financial success. I always had assumed like, “Oh, financial success isn’t for me like that that’s for other people, that’s, that’s not really a thing for me”. But then I had this weird experience where I started to see other people get jobs and decently paying jobs and I felt a little bit of jealousy there. Also I just felt, my stipend was generous, but it wasn’t quite enough to live on, so I was accumulating more student loan debt on top of what I already had for my undergraduate work.

11:42 Andy: I was by no means into personal finance yet at that point, but I was just doing some very simple math and thinking about when am I actually going to make enough money to start to dig out of this hole? I started playing around with compound interest calculators and realizing how delayed I was going to be, not only in paying off my debt, but also in starting to accumulate assets long-term. It was that long-term existential financial dread mixed in with just the day-to-day “I don’t have enough money for anything”. I was living in a big, fairly expensive city and just was very much living like the proverbial graduate student. I didn’t mind that, but it was that in tandem with feeling like everyone else was just taking like leaps and bounds beyond where I was in their financial journeys, that confluence of things added a lot of anxiety, I think.

12:32 Emily: Yeah. I think what you’re expressing is, again, common enough if people take the moment to think about it. And certainly when you’re actively taking out student loan debt it’s really in your face that this it’s not a long-term sustainable thing to be doing. I think it’s a little harder when you have the stipend and it’s enough to live on, but you don’t quite realize, like when you were playing around the compound interest calculators, you don’t quite realize the long-term effects of not being able to save, not being able to invest, so you can make it day to day, but it’s easier to not think about the long-term. You had the pressure of both the day-to-day and the long-term bearing down on you. I really appreciate those observations.

Life after Leaving Grad School

13:12 Emily: Can you tell us what you did next — after you left your program, after you world crumbled around you? And on that path, how you fell in love with personal finance?

13:22 Andy: Yeah, absolutely. After the program, I spent a couple of months just sort of wallowing in uncertainty and not knowing what I would do. Ultimately what I landed on — I love to travel, so I moved to South Korea and taught English as a second language. I intended to do that for one year, just to sort of get my financial house in order and also have a really neat, unique experience. I actually ended up staying for four just because I really loved it. And I knew that I didn’t want to be — I was teaching anywhere from kindergarten to middle school, depending on which year I was there. I knew I didn’t want to do that forever and I also knew I didn’t want to be a teacher forever necessarily, but I just found the experience kept getting more and more interesting and so it kept me there longer than I thought.

14:07 Andy: Somewhere about halfway through that journey, I picked up a book called Millionaire Teacher by a guy named Andrew Hallam. And first of all, the term “millionaire teacher” seemed like an oxymoron to me, which I think is kind of the point of the title. And again, like I said earlier, building wealth, and certainly becoming a millionaire, never felt like something that was for me. It just always felt like that’s that’s for rich people and I just don’t know anything about that. I sort of always buried my head in the sand and was never a great saver, never even thought about investing. I don’t remember why exactly I read this book, but I started to read this book and realized that actually, if you start early enough and you save even just a bit, and as your earnings increase, if you can save a bit more, there’s a pretty clear path to wealth for a lot of folks. I don’t want to make it seem like it’s, it’s available to everyone because I think we have systemic structural issues that do make it really hard to build wealth. But I think it’s, it’s available to a lot more people than most people think. If you can be prudent, especially in your younger years, that there is a path to wealth and, and that wealth isn’t, we can talk more about this certainly, but wealth isn’t just about, how big your accounts are getting, but it’s also about what does that allow you to do. What sorts of freedom does that allow you to pursue? Once I realized number one, that wealth isn’t just for rich people, you know, building wealth isn’t just for people with trust funds, I think I just started reading every book I could possibly find on personal finance and just became sort of obsessed. So that’s how the interest was born in personal finance and then the career part came later.

15:41 Emily: That’s a fantastic entry point into the subject matter. Finding that perfect book that you could see yourself in — The Millionaire Teacher. And I love that you said it’s a provocative title, it’s an oxymoron. I also have a program called the Wealthy PhD, which is similarly designed to be provocative and “What a PhD can be wealthy? How could that possibly be?” Of course, we’ll talk about that in a moment.

Transitioning into a Career as a Financial Planner

16:05 Emily: You’re falling love the subject of personal finance. How did you make it into your career?

16:10 Andy: The first part was the realization that building wealth isn’t just for rich people, but the most important thing was the second realization, which was that personal finances is not just about finance. It’s not just about the numbers. There’s kind of a corny saying that I’ve heard, but I actually like. It’s that personal finance is more personal than it is finance. I started to make this connection. I was also really deeply immersed in the positive psychology movement at that time. I was reading a lot of work by Marty Seligman and other folks who were really just making the statement that it’s not just about fixing our deficiencies, it’s about how do we get from our baseline and transcend beyond that and live a life that is maybe even better than we ever could have expected.

Andy: I started to make this connection that like, “Oh my God, if building wealth is available to everyone, maybe that can also be a tool for helping people, to use another cliche, live their best life.” How can wealth become a tool to live in accordance with our values and live a life filled with joy and fulfillment? And once I made that connection, that personal finance is the best applied psychology there is, it just clicked for me. I was like, Oh my God, I can do this thing professionally that I’ve become really interested in and sort of honor my love of psychology and that original career trajectory I had set for myself. It was like psychology out in the wild. And that was really exciting for me. I didn’t have to just become, I shouldn’t say just, I didn’t have to become a professor. There were other ways to do that. That was really exciting for me. I was hooked at that point and I haven’t really looked back even a single day since then.

17:49 Emily: That’s such a beautiful expression. I’m completely on board with you, but I hope the audience is hearing this as well, the insights that you just gave, because I think it can maybe explain a lot to them about why they haven’t been successful with personal finance in the past. Even if they’re obviously super smart if they’re PhDs or whatever. But like you said, it’s psychology. It’s personal.

Insights into Personal Finance for PhDs

18:09 Emily: So, you get into this as your career, and I know you’ve had a couple of jobs, but what I want to focus on now is what you have learned from and observed in the academic clients you’ve been working with since you did switch to having a focus on that population in your practice. What does the future look like for someone who is maybe currently in graduate school or otherwise early on in their PhD career? What happens a few decades from now, if they are intentional now with their money?

18:40 Andy: Yeah. That’s such a good question because the answers are very different about when you think about the person who’s intentional versus the person who isn’t. To talk about the people who are intentional, there’s this quote I really love by a guy named Morgan Housel, he just came out with a book called the psychology of money and he says “the ability to do what you want when you want with who you want for as long as you want is priceless. It’s the highest dividend money pays.” And so what comes later down the road for folks who are really intentional and diligent about their personal finances early on is freedom. I guess that’s just the best way to put it. And that can be intellectual freedom, it can be creative freedom, it can be — the one thing I would add to Morgan’s quote is the ability to be wherever you want to.

19:25 Andy: I think when people are investing and saving, it can feel abstract, but the way I think about it is they’re just saving little units of freedom and flexibility and how they end up using those units of freedom and flexibility later on, we don’t necessarily know that on the front end, but when they get there, they’re so happy to have them. I’ve had clients who spend half of the year abroad in South America. I’ve had clients who retired and started a little boutique motel. I’ve had clients who were able to afford to do sort of part-time work very early on, like in their fifties and do a half retirement, half working thing for a period of time. So truly the limits are non-existent. The possibilities are as big as your creativity. What comes later on, I can’t say specifically what comes for each individual person without knowing them, but I can say that everyone I’ve ever talked to who did a good job saving early on was really glad they did. I’ve never once heard somebody say that they regret it.

20:24 Emily: I really love the way you phrased that of, saving up units of freedom and flexibility for the future. I’ve expressed that before as money gives you options. Whatever you want to do, having money is going to make it easier to accomplish that. But I really like the way you phrase it, because I know that for me earlier on when I was in graduate school and so forth, and I still don’t to a degree, didn’t have a clear picture of what my retirement or my long-term future would really look like. I wasn’t really sure what kind of career I would have. I wasn’t really sure where I’d want to live or. I have children now, but when I didn’t, I didn’t know how big my family would be. There was a lot of uncertainty and I think that’s really common for PhDs because if you stay on that track, like you may end up moving many times, it’s very difficult to tell what your life is going to look like many decades from now. That can make it a little more difficult to save for and get motivated about because if you think about the vision board technique, for example, you are supposed to have like a really crystal clear vision of like what you’re going for. When you’re facing reality about what your career might look like as a PhD, it might be difficult to have that clear vision, but I love the way you phrase that of just whatever it ends up looking like, saving up for your freedom and flexibility now we’ll give you your options later on for living wherever, doing whatever with whoever, everything you just listed from Morgan Housel. I really love the way you phrased that.

Commercial

21:51 Emily: Emily here for a brief interlude. Taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold your income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2020 tax return, which are available pfforphds.com/tax. I hope you’ll check them out to ease much of the stress of tax season. If you want to go deeper with the, or have a question for me. Please join one of my tax workshops, which you can find links to from pfforphds.com/tax. It would be my pleasure to help you save time and potentially money this tax season. So don’t hesitate to reach out. Now back to our interview.

Pitfalls to Avoid as an Early-Career PhD, According to a Financial Planner

22:57 Emily: Do you want to talk about the converse side about mistakes that you’ve seen your clients make or pitfalls that younger people earlier on in their career should avoid?

23:08 Andy: Yeah, absolutely. The number one mistake is a pretty obvious one and it’s just not saving. It doesn’t have to be, Oh, I didn’t have a super high savings rate, it’s people who just decided, I’m going to wait until much later to start saving. And the thing about investing and saving is that time is your best friend. A lot of people think Warren Buffet’s secret is that he’s this fantastic investor, but the truth is Warren Buffet’s secret is that he’s a fantastic investor and he’s been investing now for like 80 years or something like that, so he’s had that time for, for compound interest to take effect. I think starting really late is one thing that a lot of folks end up regretting. When I meet clients who are 60 and maybe they didn’t start saving until they were 45 seriously and they’re a bit behind or a lot behind, I think what really rings true for me is that it makes it very clear in meeting with these folks is that money doesn’t buy happiness, certainly, but it does pave the way for you to build happiness and joy and fulfillment over the time.

24:13 Andy: Conversely, a lack of money can make it really hard to achieve those things. When you’re 60 starting to think about retirement, but knowing you don’t have enough money to fund a decent lifestyle in retirement that you can enjoy, that’s a really tough place to be. And that stress really weighs on people, in my experience. I think a piece of advice I would give to younger people sort of like cautionary advice is just we’ve all probably experienced some version of resource scarcity at some point in our life, especially folks who’ve gone through graduate programs where you just feel like it’s really hard to make ends meet. And we know how stressful that is. I guess the pieces of advice I would give to a lot of folks is that that stress is amplified by 50 to a hundred times, if you’re at the end of your career, because you no longer have three or four decades of earning potential in front of you. It can be really scary for folks. That’s one of the things I’m most passionate about when I work with younger clients is these small changes we can make on the front end, end up making these tremendous differences on the back-end.

25:15 Emily: Compound interest truly amplifies your actions from early on, given that timeline that you were talking about. I’m thinking about someone in the audience who — you mentioned earlier, systemic barriers to building wealth that many people experience. Of course, we have a student loan crisis now that did not exist for the people who you’re working with who are nearing their retirement years. I’m thinking about someone in the audience who is really struggling, or maybe they were really struggling until recently and only in their thirties or forties, they’ve finally gotten to a point where they feel like they have a career and they have the paycheck and they can start saving. What can someone who is struggling or has been struggling do to — I know that time is your best friend, but like what can we do to make up if the time has already passed?

26:04 Andy: What I often tell clients who come to me with that question, because I do get clients who are like, honestly, it’s too late for me. What I tell them is certainly the best time to start building wealth is the first paycheck you get. That’s the best time to start doing it. Knowing that the vast majority of people don’t start then, the second best time is just today. Just start today, wherever you are, whether you’re 30, 35, 45, 55. And I think the best advice I can give people is just start really small. If you don’t have a lot to save, if you don’t have huge amounts that you can put towards paying off your debt, start very small and build up from there. Even if say you’re almost done paying your student loans off and you’re starting to think about saving for retirement, even if you can start saving 1% of your pay and then commit to moving it up by a percentage point, say every three or four months, programs like that eventually will get you on track.

26:58 Andy: And I think taking those baby steps is important because the idea of saving for retirement, it’s one of the biggest financial burdens we’ll ever have to face and it can be really overwhelming. I think for a lot of people, when they hear numbers like, Oh, you need to save 15 or 20% of your income, they think of it in this very binary way. They’re like, well, can’t do that, so I guess I just won’t do it at all. I think what I would really emphasize is just start small and just build up incrementally and you will get there and no matter how much you’re ultimately able to save, you’ll be really glad you did it.

27:32 Emily: Yeah, I completely agree, especially about people being turned off by the big numbers of savings percentages. I remember when I was in graduate school and reading the advice of like have a three to six month emergency fund, I was just like, no way, there’s no way I can save up whatever that would have been at the time, $6,000 or something like that. I saw that as totally out of reach and so I really just didn’t even try. I fell prey to the same kind of psychology that you just said there. But like you said, just saving as much as you can or putting as much as you can towards debt — could be $5, could be $10 — I think one of the most transformational things about that is not necessarily the amount of money that you’re putting towards savings, but just the fact that you have changed your identity to “I am a saver, I am repaying my debt and I am a person who invests” and that alone can be super powerful and is a great building block on this path towards wealth, even if the numbers are not that big yet.

28:31 Andy: Absolutely. I couldn’t agree more. I think that identity piece is as important or more important than those initial dollars that you’re able to save. I hope people take heart and realize that when you’re just starting on the journey, it’s a little bit like when you watch a rocket ship take off, like watching a space X launch or something. It starts super slow at first. It’s really hard. There’s a gravitational pull that you have to get past, but the momentum builds over time. And once you start to build that momentum, it gets easier and easier. The hardest dollar to save is that very first dollar and every dollar will just get a little easier beyond that. Then eventually once you’ve started to invest as well when you’re at that stage, those dollars will be making more dollars for you while you sleep. That’s the idea of compound interest. Just know that it will never be harder than it is right now and that it does get easier progressively over time.

29:26 Emily: Yeah. Thank you so much for adding that insight. I totally agree. You hear it in the personal finance community: the first hundred thousand is the hardest to get to in terms of your investments and then getting to the $200,000, $300,000 is so much easier, it takes so much less time. But if we’re talking to grad students, let’s lower that scale — the first $10,000, the first $1,000, the first $100 — every order of magnitude that you go down, it is the hardest at that stage. Once you get that compound interest working in your favor, it happens while you sleep, as you said. I know I’ve experienced this in my own life from grad student years, scrimping to save even $5 more per month was like a big accomplishment and now things look very different 10, 15 years later, in terms of the compound interests working in my favor. I can kind of personally attest that yeah, that first hundred thousand, which I’ve well-documented in the first podcast episode that I published actually, was definitely the hardest. It’s been a lot easier since then.

Going Back to Grad School After a Career Shift

30:25 Emily: Andy, I want to get back to your own story because that’s taken another twist. You’re a CFP, you’re working with clients, but you’ve also recently decided to go back to graduate school. Tell us about that decision

30:40 Andy: There’s still that part of me that identifies as a great student and a person who loves school and I’m actually really grateful to have held onto that identity and so a couple of years ago, I started thinking about going back to school and I ended up signing on for the Masters in Financial Planning Program at Kansas State. I did a dual concentration. Half of the degree was really focused on advanced financial planning, so kind of the numbers side of things — taxes, estate planning, that kind of stuff. The other half was focused on financial therapy, so really taking a very deep dive into the psychology of money.

31:18 Andy: I’m finishing that degree actually in March, so I’ll be done in March and my next juncture is to decide if I want to do the PhD, which it’s so funny to me to think that I might yet again, be considering a PhD, but I think I’m doing so with a different head on my shoulders than before. If I decide to do the PhD program, which I think I will at this point, it’ll really be to further what’s been done with regards to academic research around the field of financial planning because not a ton has been done. It’s a very under-researched field.

31:52 Andy: I wouldn’t want to stop being a financial planner. The way a lot of folks do it in the industry is they get the PhD and then they sort of spend 70% of their time in practice and then the other 30% of their time doing research and publishing and doing some teaching. That for me seems like a pretty good balance, kind of having my foot in one door and the other as well, right now. We’ll see! Hopefully we can check in again in a couple of years and I’ll tell you what I decided.

32:17 Emily: Yeah, that would be excellent!

Best Advice for an Early Career PhD

32:18 Emily: Andy, I wrap up all my interviews by asking my guest, what is your best financial advice for an early career PhD? We’ve obviously already said a lot of advice throughout the course of the interview, but did you have something that you wanted to underline for us or maybe something new that you wanted to throw in?

32:34 Andy: Absolutely. I don’t know if it’s new, but I would definitely say that if it isn’t new deserves to be reemphasized and that is to me, the best investment you can make at any age, if you haven’t already made the investment is in your own financial education. Before you even start thinking about index funds and long-term savings and 401ks and things like that, just investing in your own knowledge and establishing a baseline understanding of personal finance, I think is the best possible thing anyone can do.

33:05 Andy: One critique I have the financial services industry is that I think a lot of the messaging has been set up to tell people this is too complicated or too time consuming or whatever “too this” or “too that”. It’s not for you to do, it’s for you to hire us to do. I think in some cases that’s true. When things do get complicated, it is really helpful to have a professional. I believe that obviously as a financial planner. But the basics are not complicated. It’s not to say it’s easy to master them because you know, saving money is never easy, but the principles are not complicated. I always just recommend folks, if you can take 10 or 12 hours, you will basically have mastered the fundamentals of personal finance.

33:49 Andy: A couple of books that I always recommend to people — one is The Index Card by Helaine Olen and Harold Pollack, which is rooted in this idea that basically everything you need to know about personal finance can fit on one five by seven index card. I love that idea and I tend to agree. A second one I’ve already mentioned is The Psychology of Money by Morgan Housel. If The Index Card tells you how to do it, The Psychology of Money is like a user’s guide to your money brain, which is a pretty interesting part of your brain as it turns out. And then the third is The Millionaire Next Door by Thomas Stanley. That’s probably my all time favorite because it really shows that the type of people who become millionaires actually aren’t the ones who you would think become millionaires. It’s not the people driving Mercedes and BMWs and living in fancy neighborhoods. It’s the people who have high savings rates. You don’t see their wealth because it’s all stowed away in investment accounts. I find that book just to be very empowering. Invest in your education, that would be my advice.

34:51 Emily: Yeah. I completely, completely agree. And also starting with books, I really love that idea. It’s kind of old school, but it’s how I started my journey into personal finance as well was reading some well curated material. Actually since you mentioned books, inside the Personal Finance Community, we are currently as of December, 2020 reading The Millionaire Next Door in our book club. Morgan Housel’s book is on the slate for January, 2021. And then The Index Card is one I have not read before, but it’s actually been on my list as another book to consider for that. I’m not sure when this will be published, but when it is, if you’re interested in reading these kinds of books along with some of your other peers, check out the Personal Finance for PhDs community, pfforphds.community, you can see what the current book is we’re reading, the next one on page. If that’s your thing, please come and join us and have some discussions around these books because I love taking these sort of general personal finance texts and bringing it into, okay, well, how does this apply to graduate students and post-docs and early career PhDs? What is this really saying to our population with our particular psychology and career path and so forth. I totally agree with your advice about investing in your education. That’s one way people can do it if they want to do it with me and with others in our community.

36:03 Emily: Andy, last, last question here is where can people find you if they have really connected with you during this interview? Or maybe they want to recommend you to someone in their life?

36:13 Andy: Yeah, absolutely. ThePlanningCenter.com, you can find me there. You can find my email there as well, which is andy@theplanningcenter.com. I’m on LinkedIn, very active on LinkedIn for a time. Tried to get active on Twitter so you can find me on Twitter, but I will say I’ve neglected my Twitter page and find the whole thing to be a bit overwhelming. So probably email or website or LinkedIn would be the best.

36:36 Emily: Thank you so much for joining me today and for giving us your insight

Listener Q&A: Are Fellowships Taxable

Question

36:47 Emily: Now on to listener question and answer segment. Today’s question was asked in advance of one of the live Q and A calls I host as part of my workshop, “How to complete your grad student tax return and understand it too.” Here is the question. “Is the NSF GRFP fellowship taxable? It’s not listed on the 1098-T form. I have no tax documents relating to it.”

Answer

37:12 Emily: Yes, the NSF GRFP is, generally speaking, taxable income, even if it’s not reported on any tax forms, I’ll quote from publication 970, page five: “A fellowship grant is generally an amount paid for the benefit of an individual to aid in the pursuit of study or research.” Fellowships can be tax-free under certain conditions, which implies that they are not tax-free if they don’t meet those conditions. Publication 970 page five further states: “A scholarship or fellowship grant is tax-free only to the extent it doesn’t exceed your qualified education expenses.”

37:52 Emily: There are two additional points that further limit the conditions under which fellowships are tax-free but just going off of that first one, if your fellowship exceed your qualified education expenses, it is not tax-free. The NSF GRFP is composed of two parts, a $34,000 stipend and $12,000 for a cost of education allowance. If the $12,000 to the institution goes entirely to qualified education expenses, for example, tuition and required fees, that portion would be tax-free. To whatever extent the $34,000 stipend goes toward qualified education expenses, it would also be tax-free, but I suspect that little to none of it does, perhaps just some required course related expenses at most. You probably use the stipend for your personal living expenses and savings and that means that it’s not tax-free. Strangely enough, the IRS does not require universities and funding agencies to report fellowship income in any way. Some universities do report the NSF GRFP award on the form 1098-T, but others do not. It’s completely up to their discretion.

39:03 Emily: If you would like to learn more about the taxability of fellowships, please listen to season two, bonus episode one. To go even deeper into how to calculate your taxable income and higher education tax benefits as a grad student, whether you have a fellowship or not, please join “How to complete your grad student tax return and understand it too” at pfforphds.com/taxworkshop. If you’d like to submit a question to be answered in a future episode, please go to pfforphds.com/podcast and follow the instructions you find there. I love answering questions, so please submit yours.

Outtro

39:41 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest, and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email list serve, or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt, repayment and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe through that list. You’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. Music is Stages of Awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC podcast, editing and show notes creation by Lourdes Bobbio.

This Grad Student and Her Family Lived on Her Stipend While Banking Her Spouse’s

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In this episode, Emily interviews Dr. Jacqueline Kory-Westlund, who recently completed her PhD in the MIT Media Lab. During their five years in Boston, Jackie and her husband lived on her grad student stipend and saved and invested all of his income. Jackie and Emily discuss the frugal tactics Jackie and her husband used to keep their expenses low, even after having their first child. Saving and investing Jackie’s husband’s income gave them a sizable nest egg by the end of grad school, which they used to purchase a home in cash in a low cost of living area of the country. Jackie and her husband have designed their lifestyle around location-independent work so they can live where they want to while they expand their family, which is now an option for more workers made remote during the pandemic.

Links Mentioned in This Episode 

Teaser

00:00 Jackie: We started out with a generic retirement fund, and then at some point later that year realized we could probably get better returns if we were more selective about what funds we invested in. So then we switched to some market index mutual funds and over the course of the next three years made almost $40K.

Introduction

00:26 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is season eight, episode eight, and today my guest is Dr. Jacqueline Kory-Westlund, who recently completed her PhD in the MIT Media Lab. During their five years in Boston, Jackie and her husband lived on her grad student stipend and saved and invested all of his income. We discussed the frugal tactics Jackie and her husband used to keep their expenses low, even after having their first child. Saving and investing Jackie’s husband’s income gave them a sizeable nest egg by the end of grad school, which they used to purchase a home in cash in a low cost-of-living area of the country. Jackie and her husband have designed their lifestyle around location-independent work, so they can live where they want to while they expand their family.

01:18 Emily: It’s a model that is now an option for many more people whose positions went remote during the pandemic. This interview is a wonderful example of how an early, intense focus on a lofty financial goal can often result in financial freedom within a short time. Financial freedom means something different to everyone, but it could include leaving, or not taking in the first place, jobs that are unsuitable to you, location independence, working part-time, starting a business, staying home with a child, full-time travel, or just living your best life. Even if it is a bit unconventional. Financial freedom means choices. And this freedom can arrive quite a bit earlier than full financial independence, which is when you never have to earn an income again. We’ve had many stories on the podcast of guests working on or accomplishing a financial goal that seems outlandish for their career stage.

02:10 Emily: Some examples, which are linked from the show notes include Dr. Jenni Rinker paying off over $60,000 of student loan debt during grad school, Beth Moser clawing her way out of financial ruin during the great recession, Jonathan Sun and Dr. Matt Hotze house hacking during grad school, Courtney Danyel growing her freelancing writing business to over $100,000 per year, and Dr. Rachel Blackburn investing for retirement, despite her $1,000 per month grad student stipend. There are even more examples than that in the archives. Even my and my husband’s own story of increasing our net worth by over $100,000 during grad school qualifies. I can tell you that I appreciate my past self for being aggressive about frugality and retirement contributions more with every year that goes by. I don’t this to wag my finger at anyone who has not been working on a lofty financial goal. Personal finance is personal, and we all have different things we value. I just say it because I had no idea when I was in grad school and racking my brain for ways to increase our savings rate by another half a percent, how sweet financial freedom would taste just a few years later. If you’re looking for motivation to push yourself with your own finances, dream about what your best unconventional like might look like.

Book Giveaway Contest

03:28 Emily: Now, it’s time for the book giveaway contest. In February, 2021, I’m giving away one copy of The Simple Path to Wealth by JL Collins, which is the Personal Finance for PhDs Community book club selection for April, 2021. Everyone who enters the contest during February will have a chance to win a copy of this book. The Simple Path to Wealth has quickly become the go-to text in the financial independence community to explain passive investing, which is the style of investing that I practice and teach. It sometimes comes as a surprise that the most effective form of investing is both low cost and low maintenance. If you’ve been sitting on the investing sidelines, this book will almost certainly motivate you to get started by showing you how simple successful investing really is. If you would like to enter the giveaway contest, please rate and review this podcast on Apple Podcasts, take a screenshot of your review, and email it to me at emily@pfforphds.com. I’ll choose a winner at the end of February from all the entries. You can find full instructions at pfforphds.com/podcast. Without further ado, here’s my interview with Dr. Jacqueline Kory-Westlund.

Will You Please Introduce Yourself Further?

04:55 Emily: I am welcoming to the podcast Dr. Jackie Kory-Westlund, and she’s a recent graduate of her PhD program. And we are going to discuss her finances during her PhD and how she accomplished a massive financial goal, right upon completing her PhD, which was purchasing a home in cash. When Jackie emailed me about this prompt, I literally misread it because I could not believe that anybody would possibly do that. So this is going to be really exciting to figure out. But Jackie, why don’t you tell the audience a little bit about yourself first?

05:28 Jackie: Hi. Yeah. I did my PhD at MIT in the MIT Media Lab with Dr. Cynthia Breazeal. So I worked on small, cute fluffy robots that helped kids learn stuff. And I, let’s see, I finished in 2019, so I’m currently an independent scholar, writer, artist. I do not have a full-time job because I’m staying home for the most part, hanging out with my kids. My husband is a software guy so he works from home, has his own startups and all of that going on. And we had our first kid during the PhD. So that’s relevant to our finances and our financial goals.

Jackie and her Husband’s Finances at the Start of PhD

06:08 Emily: All right, let’s dive into it. This is such an exciting story. Okay. So please give me a snapshot of your finances when you started the PhD. If your husband was in the picture at the time, include him, too.

06:20 Jackie: Right. So when I started the PhD, this was back in 2012. I was one year out of undergrad. So I’d spent one year kind of doing a research internship thing. So I hadn’t made a lot of money at that point. My husband and I, we were not married yet at the time, but we both moved to Boston for MIT at the same time. I had a used car that was probably worth $2,000. We had a couple thousand in our bank accounts that we used for our first month of rent in the rental deposit and the realtor fee and a couple of thousand in student loans. And that’s about it.

06:56 Emily: Alright. Yeah. Almost zero, close to zero. It sounds like. And then what was your stipend?

07:04 Jackie: My stipend was about $30K a year. And MIT paid for healthcare for me, not for my husband. We had to add him to the plan later, once he couldn’t be on his parents’ plan anymore, you know, hitting 25 years old there. And that stipend increased slightly year to year because MIT made cost of living adjustments. And it also went up slightly when I switched from the master’s program to the PhD program, but it was never more than like 32K or so.

07:33 Emily: Okay. So from 30K, in 2012, when you started to about 32K, when you finished, you said 2019, right?

07:39 Jackie: Yeah. Though, actually for the PhD. So we actually moved and got the house the year before I finished. I finished up the last bit remotely.

07:49 Emily: Okay. Okay.

07:51 Jackie: Because I was just writing at that point, so we actually moved in the middle of 2018.

07:55 Emily: Okay, great.

07:56 Jackie: And at that point I stopped getting the stipend because I wasn’t on campus.

08:01 Emily: Oh. So you, you left the stipend behind in 2018 and finished self-funded after the last month or up to a year. And how about your husband’s income during that period?

08:11 Jackie: So initially, for the first couple of years in 2012 through about 2015 or so, he was working on a couple of startups and as a contractor, primarily working on his self-funded software startup. So was not making a huge salary, probably around $50K a year in the last couple of years. And throughout the entire time I was in grad school, our combined income never went over about $80K on our tax returns.

Strategies to Decrease Expenses During PhD

08:39 Emily: Okay. So that gives us a range to think about over that period. So pretty low at the start a little bit better by the end, but again, we’re talking about Boston, so yeah, pretty high cost of living area. So $30K is a pretty decent grad student stipend, but in a high cost of living area, it’s still really challenging. Okay. So that’s your finances when you started the PhD. So as you’re going through the PhD, I’d love to talk about, you know, both sort of frugality, like how do you keep a lid on your expenses? And also did you increase your income in any way? You just told us what the total was, but were there any, you know, methods that you used to increase it? So let’s start on the decreasing expenses side. What, you know, what were your strategies? What were the things that worked out best for you in terms of controlling those expenses?

09:21 Jackie: The biggest thing is we both just kind of by default are fairly frugal people. Neither of us like tend to eat out much. You know, we don’t usually buy that much stuff. We ate a lot of rice and beans. Probably were in the range of only about $250 a month on food. Probably the entire time we were there. I’m the one who started the trend in my lab of people packing their own lunches to bring to the lab.

09:46 Emily: Great influence.

09:49 Jackie: So we primarily lived on my stipend of about a $30K a year. And two thirds of that was rent. And our vehicle expenses tended to be pretty low because like we did have the car, but we didn’t use it that much. I took public transit and walked to MIT and that was half subsidized by MIT. And the other big thing was we had an awesome landlady who did not increase our rent.

Housing and Rent

10:13 Emily: Wow. Okay. Well, you just hit kind of the big three expenses right there. You hit housing, which at $20,000 per year is yeah. It’s a bit expensive on that grad student stipend. Really admirable, by the way of structuring your budget so that you would live just off the one income and save, presumably, the higher income. That’s really, really impressive. So you hit housing. Now was it luck that you found someone who was not going to increase rent, or was there any strategy involved in finding that place?

10:42 Jackie: That was entirely luck. When we were moving up to Boston, we spent about a week there prior to moving looking at places. And we talked to a realtor who was like, Hey, I’ve got this landlady who just needs someone. We just got lucky that she just had this policy on her own where she just didn’t like increasing rent too much. And she’s a nice old lady, lives downstairs, you know?

11:04 Emily: Yeah. I mean, actually that’s, you know, it could be luck for you, but it might be strategy for someone else. I wonder if there is something there around being neighbors with your landlord and like cultivating a positive relationship, because I think it’s definitely harder to raise rent on someone whose face you see like multiple times per week, rather than some, you know, unknown number or whatever in some system. So, yeah. So it sounds like you were living in a duplex kind of situation?

11:28 Jackie: Yeah. It was one of those three-story, three-family homes.

11:32 Emily: Triplex.

11:32 Jackie: Yeah. Triplex, that’s the word I’m looking for. Yeah. And my husband and our landlady, they both went to the same church, so that maybe was a relevant factor there, you know.

11:43 Emily: Yeah, any kind of connection you can make.

11:45 Jackie: Yeah. Yeah.

11:46 Emily: That’s awesome. Okay. So, you know, housing expense is clearly number one, but managing to get a place, you know, by luck probably that didn’t increase the rent is an incredible advantage because that, you know, the rate that rent often rises at is higher than, you know, what you’re getting in your salary increases for cost of living. So you hit housing, number one. You also mentioned transportation. You know, it’s a city life kind of thing. Like you don’t have as much need for like the car usage. And did you have one car or two?

 Sharing a Car, Reducing Food Costs

12:14 Jackie: Just the one.

12:15 Emily: Just one. Okay. So sharing a car as well, another great strategy. And you mentioned, you know, the food expenses. So not eating out very often and also, I mean, $250 per month in food is like really keeping a lid on things. You mentioned rice and beans. Presumably you’re cooking a lot. Do you have any other like, tips in that area around like managing the grocery? Both the budget and like the time that goes into cooking and meal prep?

12:40 Jackie: Well, I kind of have a hobby of cooking, so we did a lot of the crock pot full of a big dinner on Sunday, and then eat leftovers all week to reduce time cooking. Buying things in bulk, instead of popping out to the store every couple of days. We tended to go for beans over meat, which decreases expenses. You look for what’s on sale, you know. That kind of stuff.

13:05 Emily: Yeah. Do you have any like Boston specific tips, like a grocer that you really liked for good deals or something?

Roberto’s Produce (in Boston)

13:11 Jackie: Ooh, let’s see. Actually, we lived about half a mile from a produce store that had way cheaper produce prices than the main grocery store that we drove to.

13:22 Emily: And what was the name of it?

13:23 Jackie: That was, let’s see, what was it called? It was Roberto’s. Roberto’s produce. Cute little place. Just, just produce.

Financial Goals with Savings

13:30 Emily: Yeah. We actually frequented a little shop like that in Seattle as well and had great prices. You mentioned earlier that you actually bought your home prior to finishing your graduate program and that you had been, I think, saving your husband’s salary during that whole period. What were your financial goals during that time, aside from you said, living on just your income, what were you doing with your husband’s salary?

13:56 Jackie: So, in about, I think 2015 was when we realized that we had some money in the bank, we should probably do something with it, which was about my third year of grad school, I think. So we took all of our extra money and put it, invested it primarily in the stock market using Vanguard. We started out with a generic retirement fund, and then at some point later that year realized we could probably get better returns if we were more selective about what funds we invested in. So then we switched to some market index mutual funds, and over the course of the next three years made almost $40K just from having money invested, which is like free money! It’s just so cool. It was like, when we first started doing that, we were like, wait, we just get money from having our money sitting here? Like it’s pretty cool when you figure out how that works.

14:49 Emily: It doesn’t always work out like that over the short-term.

14:53 Jackie: It’s true, we got lucky with which, which years we were investing there.

14:57 Emily: Yeah. I felt that way too. I started investing basically in 2009, like at the nadir of the market and just the last decade has been incredible with, you know, a few hiccups along the way, but overall, obviously really, really strong. And was that in like retirement type accounts or was it more just taxable accounts that are accessible to you?

15:17 Jackie: We had a little bit in some IRAs and the rest of it was just like a generic account that we could move money around whenever we wanted.

Having a Child Motivated the Goal of Home Ownership

15:27 Emily: Okay. So you’re basically living on your stipend, investing your husband’s salary or whatever income he has during that period. At what point did the goal of home ownership materialize?

15:38 Jackie: About the same time we had a kid. So it was in my fourth year of the PhD. That’s when I started thinking, Hey, you know, we’ve got a baby now, at some point I’m going to finish this PhD and where are we going to go? What are we going to do? So that’s when we started doing a lot more life planning and getting a house with a yard somewhere for kids to play. And that’s when that started being like really on our radar.

16:01 Emily: Yeah. We glossed over the whole having a kid during grad school thing. How did that work out with like, did insurance cover pretty much everything? Like, how did the finances of the having a child work?

Health Insurance and Parental Leave

16:13 Jackie: MIT’s healthcare program like yeah. Insurance covered pretty much everything. We paid probably $200 total to have a baby.

16:19 Emily: Amazing. And did you get any leave?

16:22 Jackie: Yes. MIT was good about that as well. And the Media Lab gave me an extra month. So MIT had a policy of two months paid leave for any parents. And then the Media Lab gave me an additional month and that was all paid leave.

16:35 Emily: Amazing.

16:35 Jackie: So I had three months off and then last thing on that was my advisor was awesome. And my lab was awesome in that they’re all very supportive of this and I could work remotely a lot more and was at a point in the program where I didn’t have to go into class anymore because I was just able to just research stuff. So a lot of, a lot of things went into that being, not that bad, like being like a reasonably doable thing. I know it’s not for a lot of women. It can be difficult.

Did You Also Pay for Childcare?

17:06 Emily: So I think about three big expenses when it comes to having a child. We just covered two of them, health insurance and the leave. And then the third one is childcare. You just mentioned working from home, but did you also pay for childcare?

17:18 Jackie: We did not, actually. My husband and I split that.

17:21 Emily: So interesting.

17:22 Jackie: And just managed to work that into our work schedules. That was part of why he was doing such flexible work at the time. And then my lab was flexible. So we just squished childcare and somehow, you know, did lots of work when the baby was napping kind of thing.

17:36 Emily: Yes. I remember those days very well. I have two kids as well, and I’ve actually done one other interview on the podcast from season one. So if newer listeners haven’t seen this one yet, but you’re interested in having a child during graduate school, check it out because I interviewed another graduate student mother married to another PhD father who also did the same thing. I think for the first six months after their first child was born, they completely split childcare and I did not pay for any outside services in that regard. And yeah, she talks about how she managed to you know, complete her dissertation and get a TT job and have the baby. And it’s kind of a really crazy year for her. But it’s incredible that, you know, you took that on and then were able to accomplish it. Was that motivated by finances? Was it motivated by, we just wanted to spend time with our child a lot of time or, you know, what was the reasoning behind that?

18:29 Jackie: All of the above. So, childcare in Boston is ridiculously expensive. But also a lot of you want to spend time with this baby. Like, why would you have a kid if you don’t want to spend time with it? And there are some philosophical things around how we wanted to approach raising our kids and actually being around a lot of the time. I was homeschooled actually growing up. So that’s probably very influential in how I’m thinking about how to raise my kids.

18:57 Emily: Yeah, so a familiar model for you.

18:58 Jackie: Yeah.

How Did You Choose Where You Wanted to Live?

19:00 Emily: Gotcha. Okay. So got the baby, but we’re not paying for childcare or the other associated expenses. MIT did a good job providing you with the appropriate benefits. Okay. So then you said that home ownership became a goal. Once you had the child and you were like, we want to get out of the city life, how did you choose where you wanted to live?

19:19 Jackie: So we decided based on kind of two factors. One, we were not tied to any particular location first. So we could kind of pick anywhere because of the kind of flexible job situation that we’re setting up for ourselves. And then we wanted to move nearer to some of our family. We were like, we’re having kids. We’d love to have some grandparents around. We’d love to live near some family finally, because it’s been a long time since we’d done that. It was really nice. So my husband’s family is in North Carolina. Mine, a lot of them were in Idaho, North Idaho. So between the two of those, we were looking at the different areas and ended up picking Idaho for a variety of reasons. I mean, both places had a lower cost of living. It’s hard to get a higher cost of living than Boston, New York, or San Francisco. Lots of nice, pretty lakes and mountains up here.

Commercial

20:15 Emily: Emily here, for a brief interlude. Taxes are weirdly unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold your income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2020 tax return, which are available at pfforphds.com/tax. I hope you’ll check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which you can find links to from P F F O R P H D S.com/T A X. It would be my pleasure to help you save time and potentially money this tax season. So don’t hesitate to reach out. Now, back to our interview.

Location Independence

21:21 Emily: Sounds like you know, you have intentionally chosen a route that not many PhDs do. You know, a lot of PhDs feel that they have to be geographically flexible to have the type of job that they want. And you’ve gone another direction and said, my primary goal here is to be in certain locations in the country and the job is going to be, it sounds like the job is going to be secondary to that in that you want to work in a way that is flexible to live wherever you want. You want to be location-independent. Is that right?

21:52 Jackie: Yep.

21:53 Emily: And that’s what you’ve done and your husband has done.

21:55 Jackie: Yes. Yeah. That’s one of the main reasons he was working on his smaller software startup was so that he would be able to work from anywhere and not be tied to someone else’s you have to work in this location. And I was not looking at the end of grad school to get an academic job, necessarily. I mean, there’s a university here, but I’m not looking for an academic job or a full-time job currently because I wanted to be able to spend time with my kids and also work on some part-time things.

22:25 Emily: Yeah. I see actually, a lot of similarities between your story and mine actually. I mentioned to you when we started the call that my husband and I recently became location-independent. He still has a job job, but it’s just remote now. And I would imagine a lot of people are in that situation and going forward, a lot of people are not going to be going back into offices and labs and all of that. So depending on the nature of the work that you do, a lot, I think more people in my audience are going to have location independence in their future.

22:54 Emily: And it’s really, it’s exciting, I was telling you too, but it’s also a little bit intimidating to figure out where exactly do I want to live.

23:01 Jackie: We made spreadsheets, we made spreadsheets.

23:05 Emily: You went the direction of going to a lower cost of living area, which is known as geographic arbitrage in the financial world. We are actually choosing to live in a very high cost of living area because we love it and want to be there, but have to make the finances, you know, work out to have balance in that area too. So, in different ends of that spectrum. Okay, so you chose based on, you know, more personal factors where you wanted to live and then comes this, you know, huge accomplishment of buying this home in cash. And I think we’ve already heard how you saved up for it, right?

23:39 Jackie: Yeah, pretty much.

How Much Money Did You Have for Home Buying?

23:40 Emily: So do you want to share like the numbers around that? Like how much money you had to work with by the time you did buy?

23:46 Jackie: Yeah. So when we decided to move, we had about $150K from our non-retirement accounts. We also emptied our IRAs for the most part which was about $25K. So we had around $200K to work with when we were buying a house up here. And relevantly because I no longer had the stipend from MIT when we were moving and my husband’s startup had, like no long-term proven history of income, we wouldn’t have been able to get a loan. So that was also relevant in us deciding to get a home in cash. So we had about $200K to work with and the market up here was moving very quickly at that time. So we came out to Idaho for about two weeks that summer with the plan of when we leave, we will have a house.

24:39 Emily: That’s an incredible story. You say, now you couldn’t have gotten a loan or it would have been, Oh my gosh. So, so difficult, so much paperwork or something. Did you know that that would be the case, like looking forward when you started that taxable savings, savings and investment, or was it just more about having flexibility at that point?

24:59 Jackie: Well, when we first started saving money, we had no idea what we were going to do with all of it. And then we were like, Hey, we should buy a house when we move out of here. And then when we started looking into, how do you buy a house? How do you get a loan? How, how much money do you have to put down on a house? How expensive are houses in the different areas that we’re looking at? As I said, we, we did spreadsheets for a lot of things and calculations about how much money might we have and how much money would we need for this kind of house in this area. And having provable income for getting a loan from just about any bank seemed to be pretty relevant. And because my husband’s business was not quite off the ground yet, it kind of got off the ground a lot more in the year right after we moved, there was relatively little income that we could prove at that point in time, which was, you know, fine for how we lived, because we didn’t need much income to live off of.

25:51 Jackie: But for the purposes of buying a house would have made getting a very expensive house difficult or getting one with a smaller down payment more difficult. And maybe, maybe there was a bank that if you talked to the guy and explained all your situation in lots of detail, lots of paperwork, maybe, maybe they could work something out. But the other factor, I guess, that I should probably talk about was our goal of being debt-free when we moved as well, because we only had a couple of thousand in student loans and we paid that off before we went for the house. So as soon as I was done with grad school I was like, all right, pay off student loans, get rid of any other debt that we have.

Challenges of Mortgages for Fellowship Recipients

26:31 Emily: Gotcha. I probably know a little bit more than I should about getting a loan at this point because my husband and I are anticipating buying a house soon. My brother is a mortgage loan officer, so he sells mortgages. So I’ve talked with him quite a lot about this process. And thirdly, he’s actually helped me quite a bit. We’ll link in the show notes to some episodes I’ve done before on how people receiving fellowships during grad school or a post-doc can or cannot ultimately get a mortgage because a lot of times they’ll be just flat, turned down right away. There is sometimes a way to get a mortgage, but it’s really tricky. So we’ve done all that in these other episodes, but to your point, self-employment income is another really kind of dodgy form of income. I know because that’s what I have that is going to be looked at a lot more carefully and you have to prove a lot more than, you know, you would for like a W2 type of situation.

27:24 Emily: So, yeah. It sounds like, you know, you, you started the savings investing for whatever, you know, because you were in a position to be living on just the one salary and saving the other, and it turns out that it helped you accomplish this like major goal. So now, you know, sounds like you have little housing expense, it would just be like insurance taxes, this kind of stuff, very minor relative to what a mortgage would be, correct?

27:51 Jackie: Correct. Yeah.

What Are Your Future Financial Goals?

27:52 Emily: Yeah. And so what are you thinking now about your finances? Like your, you know, your living expenses must be quite, quite low. So what are you working on next?

28:03 Jackie: So for what’s next we like the idea of having a bigger house with acreage around it. Because up here, we have, you know, the small neighborhood house on, you know, maybe a quarter acre, you know, enough space for a garden, a lawn. But we really liked the idea of having some more acreage out here because this is a great area for that. And then be able to keep this house and rent it out as side income. We would like to keep increasing our income enough that we can increase charitable giving, investing in the local economy and community, that kind of thing. Relevantly, we got our house for about $210K and it’s now worth over probably over $300K, just in the last two years because of the increased, this area is growing a lot. So we liked the idea of maybe being able to get something else soon and then maybe get into more real estate in this area. It seems to be growing a lot.

29:01 Emily: So what would be the plan for the next house? Would you try to take out a mortgage given the change in your husband’s income or in whatever you have going on or is it saving up more cash?

29:12 Jackie: That’s still up for debate. Kind of depends on what kind of house we want to have. Yeah we still have been talking. So that’s been actually a fairly recent conversation. We’re like, okay, we’ve been here for a couple of years now. Like jobs are working out better, you know, one is increasing, income’s increasing, like what are we doing next? So that’s something we’ve actually just been talking about a lot recently is like, what kind of house would we want next? And would we want to do that in cash again, or not? Because now we could deal with a mortgage payment, you know, we could do that now, but not sure.

Best Financial Advice for Another Early-Career PhD

29:46 Emily: Yeah. So still under development. Well it sounds, I don’t know, really lovely. It sounds like a real, you know, you’ve really done lifestyle design, I guess is the way that, you know, it’s kind of put in like the entrepreneurship community of figuring out how you want to make money, where you want to make money, where you want to live getting your expenses down very, very low, if you want them to be. And then maybe even turning this house into an income producing asset, ultimately. Wow. Like what a story. As we wrap up this interview, is there, what’s your best financial advice for another early-career PhD?

30:21 Jackie: Probably to actually have long-term financial goals. Because having something you’ve got your sights on helps a lot when you’re coming up with like, if you’re, if you’re trying to stop spending money or trying to budget and keep to a budget or whatever it is, having something in mind that you’re going for helps a lot. Because we got a lot more conscious about what we were doing with money when we were like, Oh, we have a baby and we want to move and we want to get a house. We started paying a lot more attention to what we were doing with our money. As the second thing, don’t actually be afraid of investing money in the stock market or mutual funds because in a good year, that can actually make you quite a lot.

31:01 Emily: Yes. We also made some investments in a taxable account that has grown quite a bit in the last decade, I guess. It’s actually part of our house down payment of money. Now it’s been allocated in that direction. I of course like need to say like past performance is no indication of future return. So like this was a great, you know, three or so year period where you got to do this, it’s been a great time for me investing, but you know, this ride is not going to continue forever. And so I think what you were just saying, like if you have a specific goal for your money, like think about the timing and think about how much risk you want to take with it. And if you’re flexible about it, like the house was not necessarily quite, you know, a goal on your horizon yet, it makes sense that you would, you know, invest at that time. But once you have the goal in mind, like really think about, okay, do I need the money, do I need to take it out of the market now, do I need to, you know, go a little bit more conservative in the investments because you can hit a bumpy period and then not have the time you need to write it out. But if you’re flexible, keep the money invested, then you know, you can go for the higher return over time.

32:03 Jackie: Yeah, we actually lost about $10K right before we bought the house because Trump started a trade war with China. We were like yeah so I guess we should pull this out of the stock market.

32:13 Emily: It’s really, really hard to time the market. Yes. Well, great lessons here and thank you so much for sharing, you know, again, the lifestyle design, the frugal living, the goals. I think it’s, you know, a wonderful story and well illustrated for my audience. So it’s really been a pleasure talking with you Jackie.

32:29 Jackie: Thanks. Thanks for having me on.

Listener Q&A: Tax Claims

32:36 Emily: Now, on to the listener question and answer segment. Today’s question actually comes from a survey I sent out in advance of one of my university webinars this spring. So it is anonymous. Here’s the question. Quote, how do I do my taxes? What can I claim on my taxes? Can I claim a laptop that I needed for school as an expense? End quote. So this is a really big question. Obviously not one I can answer in a few minutes on this podcast. So the best place to go for further resources about your taxes, especially as a funded graduate student, is my website pfforphds.com/tax. That’s my tax center from which I’ve linked all of my relevant podcast episodes and articles and videos and so forth. This answer is even too big for a set of articles. So I have created an entire tax workshop to help answer this question. The workshop comprises 11 videos, two worksheets, and one Q&A call per month throughout tax season. So if you’re interested in getting into the workshop and having a full exploration of this question, please go to pfforphds.com/taxworkshop.

33:55 Emily: Okay. The part of the question I do want to tackle on this episode is the last part. Can I claim a laptop that I needed for school as an expense? There are four higher education tax benefits. However, one of them is virtually always used by funded graduate students. This benefit is called tax-free scholarships and fellowships. I’ll tell you whether or not you can use a laptop or a personal computer as a qualified education expense for the purposes of making scholarship and fellowship income tax-free. I won’t comment during this episode on whether or not you could do it through one of the other three benefits. So how tax-free scholarships and fellowships generally works is that you have some income as a graduate student, for example, the scholarship or waiver that pays your tuition. If me mentioning scholarships as income shocks you, please go check out my further resources.

34:59 Emily: On the other side of the ledger, you also have some higher education expenses such as tuition. Now, tuition is always is considered a qualified education expense for the purposes of making scholarship and fellowship income tax-free as long as you are enrolled in a degree program at an eligible educational institution. So in the case of tuition for a fully-funded graduate student, how this usually works is that the tuition charge and the tuition scholarship or waiver exactly equal one another. And so basically use the qualified education expense to make the scholarship tax-free. So they cancel each other out. The income, the scholarship, has no net effect on your taxable income. You’ve made it tax-free. And furthermore, you can’t use that tuition charge to take any of the other higher education tax benefits because you’ve already used it for this one. Okay. So that’s generally how the benefit works.

36:00 Emily: The question that I’m drilling down to is, is a laptop or a personal computer considered a qualified education expense for the purpose of making scholarship and fellowship income tax-free? Now, please note, to get down to the question of whether your laptop or personal computer is a qualified education expense, you have to have some scholarship and fellowship income to cancel against it. If you’ve already canceled all of your scholarship and fellowship income against other qualified education expenses, like tuition and required fees, then you would not have any additional scholarship and fellowship income to try to cancel against a laptop. So this benefit wouldn’t apply in that situation. However, there are lots and lots of funded graduate students who have scholarship and fellowship income that exceed the tuition and required fees and so forth. So this question would apply to them. So is a laptop or a personal computer, a qualified education expense for the purpose of making scholarship and fellowship income tax-free?

37:04 Emily: I’m pulling up IRS publication 970 because I’m going to read the definition of a qualified education expense. Quote, for the purposes of tax-free scholarships and fellowship grants, these are expenses for tuition fees required to enroll at, or attend an eligible educational institution and course-related expenses, such as fees, books, supplies, and equipment that are required for the courses at the eligible educational institution. These items must be required of all students in your course of instruction. End quote. The definition goes on to specify some types of expenses that are not qualified education expenses, laptops and personal computers were not included in that list. So we go back to the second half of this definition of qualified education expenses regarding supplies and equipment that are required for the courses at the eligible educational institution. They must be required of all students in your course of instruction. So the question is, does a laptop or personal computer fall under that definition? Here’s my opinion on the matter, this is not tax advice, by the way. If you can prove, if you can show in writing that a laptop or personal computer is required of every student in your course of instruction, that could be an individual course that you’re taking.

38:27 Emily: That could be the degree program that you’re enrolled in. That could be everybody in the graduate school. At whatever level, if a laptop or computer is required of all the students, then it can be considered a qualified education expense. I know that we both know that pretty much a laptop or a personal computer is required of every PhD student, especially in the time of COVID. However, you and I knowing that it’s a tacit requirement is not the same as it being an official requirement that the IRS would accept. The theory is that you, as a graduate student can go to the computer labs provided on campus and do all your work there, I guess, which obviously is ridiculous. But in my opinion, for this to work as a qualified education expense, it needs to be down in black and white somewhere that having your own computer was required.

39:29 Emily: Now I went searching to see if I could find some of these in-writing requirements. So I did a few different Google searches. Does X university require students to own their own computers? Obviously, you would do the search for just your own university. I found a really clear example at Iowa State University, page titled Computer Requirement, quote, beginning in fall, 2020, all students at Iowa State University will be required to own or obtain a laptop computer or other device appropriate to their discipline. End quote. The page goes on explaining why this requirement is in place, but having this page, you would be able to show to the IRS, Yes, I am required as a student at Iowa State University to have my own laptop or computer. It is a qualified education expenses for the purpose of making scholarship and fellowship income tax-free. Super clear. However, you will not find this kind of requirement or clear language everywhere.

40:25 Emily: For example, on the computing and information technology page on Brown’s website, it says, quote: Brown does not require students to own a computer. End quote. Of course, there’s more text on that page, but there it is, you’re not required to own a computer as a student at Brown. So unless you can find maybe something more specific to your course or your graduate degree that says something else, this would probably apply. So you would not be able to say that your laptop or personal computer is a qualified education expense. Now, as I said earlier, you know, there could be a university-level requirement. It could be a graduate school level requirement that could be, you know, for your individual department or program, even for an individual course, you know, you might find a requirement, any one of these levels. So please do look at all of those levels to see if you can find in black and white, this kind of requirement.

41:13 Emily: So for example, I searched out Georgia Tech, and I found their page titled, Required Computer Ownership, quote, all undergraduate students, entering Georgia Tech are required to own or lease a computer. End quote. So I could find that requirement for the undergraduates, you would have to search and see if they had a similar requirement for the graduate school or, you know, your degree program. I couldn’t find that. So I think that’s what it comes down to. Can you find in black and white that a laptop or a personal computer is required for you at some level by your university? If you can, it’s a qualified education expense, and you can use it to make some of your scholarship and fellowship income tax-free that was not already made tax-free by other qualified education expenses. This question showcases really well why you can’t rely solely on your 1098T to provide you with information about your qualified education expenses.

42:06 Emily: A laptop that you purchase from a retailer that’s not your university would not be reflected on your 1098T, yet, as we’ve seen under certain circumstances, it can be a qualified education expense for the purposes of making scholarship and fellowship income tax-free. There are other examples like this of qualified education expenses that don’t show up on your 1098T. So you cannot trust your 1098T alone. You have to really think holistically about what your higher education expenses were for the year, and then figure out whether they can be considered qualified education expenses. So I know that was a lot to follow, especially if you’re new to my tax material and you’ve never heard me talk about how your fellowship scholarships are part of your potentially taxable income. Again, if you want more resources, pfforphds.com/tax is the best place to go for articles and podcast episodes and so forth. But you’re going to find the really in-depth information in my tax workshop. Again, pfforphds.com/taxworkshop. I answer questions like this one once per month during our Q&A calls. The next Q&A call is coming up on Sunday, March 14th, 2021. Thank you so much to Anonymous for submitting this question. If you would like to submit a question to be answered in a future episode, please go to pfforphds.com/podcast and follow the instructions you find there. I love answering questions. So please submit yours.

Outtro

43:34 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episode show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast, and instructions for entering the book giveaway contest and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email listserv, or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt, repayment, and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.