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How to Curb Your Impulse to Keep Up with the Joneses

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In this episode, Emily interviews Dr. Joy Lere, a licensed clinical psychologist and behavioral finance consultant on the danger of “keeping up with the Joneses.” Joy explains how emotionally unsatisfying and financially damaging trying to keep up with the Joneses is and that contentment can only come from within yourself. PhDs anticipating future income jumps would do well to put off lifestyle inflation for a least a few years after their salaries increase, which will give them more career and lifestyle choices in the future.

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keep up with the Joneses

Teaser

00:00 Joy: If you can understand that this idea of peer comparison, it is going to be ever-present, and it’s not so much that the environment or the people around you need to change. What needs to flip is the script in your mind, in terms of the mentality you have when looking to the people in your life.

Introduction

00:28 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 seven, episode 12, and today my guest is Dr. Joy Lere, a licensed clinical psychologist and behavioral finance consultant. Our topic is the danger of keeping up with the Joneses. Joy explains how emotionally unsatisfying, and financially damaging, trying to keep up with the Joneses is, and that contentment can only come from within yourself. PhDs anticipating future income jumps would do well to put off lifestyle inflation for at least a few years after their salaries increase, which will give them more career and lifestyle choices in the future. This interview really hit home for me, as I reflected on my post-PhD life and finances and where my family is headed next. As you might have garnered from listening to previous episodes of this podcast, I had a pretty good handle on my finances by the end of grad school.

01:30 Emily: And I was truly satisfied with my lifestyle. I had defeated my Joneses. Or so I thought. Then, my husband and I moved to Seattle. We rented a relatively inexpensive apartment in a wealthy neighborhood. There’s a lot of tech money in Seattle, as I’m sure you know. Suddenly, I wasn’t comparing my lifestyle to that of other graduate students in a medium cost-of-living city, but to other full-fledged adults in a high cost-of-living city. I distinctly remember my first and hardest-hitting Jones moment in Seattle. Shortly after we had our first child, I joined a mother support group in my neighborhood. Our first meeting was in the home of our group leader, and each participant would rotate hosting subsequent meetings. I remember walking into our group leader’s house, which was gigantic, gorgeous, and immaculate. It was somewhat shocking to me. Plus, during the meeting, our group leader casually mentioned she was in the process of custom building another house in our neighborhood to move to the next year.

02:33 Emily: My heart sank, knowing that I would eventually host these mothers and babies in my small, dingy, undecorated apartment. That cheap apartment had been a strategic financial choice upon our move. We were following the advice to live like a grad student so that we could keep our retirement savings rate high while I got my business off the ground and we adjusted to parenthood. Even though we had good reasons for living in that apartment, those reasons paled for me, when I saw where and how my group leader lived. And I started questioning all our choices. That was my first big post-PhD Jones moment. I got past that feeling, kind of, eventually, for that situation, but now my husband and I are in the early stages of searching for our very first home to purchase. And I can sense myself starting to become aware again of the Joneses. Since buying a house in Southern California is such a big, expensive decision, I know I have to be really conscious about those feelings and influences. That’s why the subject of this interview was so timely for me. I hope it will be for you as well. Without further ado, here’s my interview with Dr. Joy Lere.

Will You Please Introduce Yourself Further?

03:50 Emily: I am just delighted to have joining me on the podcast today Dr. Joy Lere. She is a licensed clinical psychologist and behavioral finance consultant, such an interesting combination. So, I’m really happy to have her on the podcast today. We’re actually going to be talking about keeping up with the Joneses. Or rather, how not to keep up with the Joneses. So, Joy, will you please introduce yourself a little bit further?

04:11 Joy: Absolutely. It is a joy and a privilege to be here with you today. My name is Joy Lere. I am a licensed clinical psychologist and behavioral finance consultant. So, essentially I am someone who as a clinician works where Freud meets finance. So, I live and work outside of Napa, California, and I’ve a telemedicine practice where I see patients for psychotherapy. And I also work in specializing in consultation within the finance industry. So within that role, I’m providing support, training, education, coaching, and psychotherapy also to financial planners and financial advisors, because there are a lot of really exciting things happening within the industry where there’s more and more attention being given to the fact that people’s relationship with their money is not just a matter of math or economic theory. Money itself is emotional currency. So, having an understanding of human psychology and how that drives financial decisions is really starting to be integrated more and more into the world of finance.

05:33 Emily: Yes. Thank you so much for that description. Yes, of course, I have observed this trend as well. And I’m really excited to have you on. Actually, I did an interview some time ago with Dr. Daniel Crosby. So, we’ll link that from the show notes as well, since that was on a similar topic.

05:47 Joy: He is a good friend and just, he’s fabulous.

Tell Us a Little More About Your Education

05:52 Emily: Oh yeah, it was a wonderful conversation. Would you also tell us a little bit more about your education, because you’ve spent some time in academia as well?

05:58 Joy: Yes. So, I obtained my master’s degree while living abroad in the UK for a couple of years. And I decided after that experience and after starting my clinical work in England, that I wasn’t quite yet ready to be done with school. So, my husband is in the military. We made our way back across the pond. And then I went to graduate school at George Washington University and obtained my doctorate in clinical psychology while I was there.

Can You Define “Keeping Up with the Joneses”?

06:33 Emily: Yeah. Wonderful. Okay. So, our topic for today, keeping up with the Joneses. Probably a phrase that maybe everyone’s heard in the audience, but can you give a little bit more of a fine point on the definition?

06:45 Joy: Absolutely. So, this is a phrase that’s popularized in society, and it really speaks to the way that people look around their social spheres and circles, and look oftentimes at their peers and kind of benchmark their lives and their decisions to that. So, they are seeing something, often an outside image or kind of a curated facade. I think certainly social media makes this even more complicated for people today. And then they think to themselves, “Well, if they have that or they are making that lifestyle choice, that must mean I can, or I should.” So then, they make decisions based on what they are seeing around them.

Does “Keeping Up” Make Anyone Happier?

07:43 Emily: Does attempting to keep up with Joneses actually make anyone happier? You know, we’ll address the financial component of that in a moment, but does it do anything for us emotionally or socially to try to keep up with the Joneses?

07:58 Joy: I think really, being in the comparison trap just keep someone emotionally stuck. Because what is not happening when you’re telling yourself, “I need to be, I need to be doing that. I need to be getting farther ahead,” is you aren’t focusing and being centered from a place of being grateful for what you have and really having a sense of contentment. And when you think about someone’s financial life, when there’s this constant search and drive and need for more and more and more, that can lead to dangerous, destructive places. Being on a hedonic treadmill like that can be exhausting. And the truth is that when a lot of times people think, “Well, I will eventually catch up,” but oftentimes the goalpost just keeps on moving.

09:01 Emily: I was just going to say that the phrase is keeping up with the Joneses, right? It’s not hanging out with the Joneses and being at the same level as the Joneses. It’s just like it implied in the phrase itself is a continual striving, as you were just saying, which sounds totally exhausting. I really like that you make the point that we can also move these goalposts on ourselves. Like yeah. Maybe you caught up with, you know, Jones number one over here. Well, that just means you’re going to switch your attention to Jones number two and try keeping up in some other area.

09:32 Joy: I tell people, throughout your life, there will always be Joneses there. You went to graduate school with them. You looked around there and you were like, “Well, they’re doing this. That means, naturally, that’s what I should be doing.” They are always going to be in your workplace. They’re going to be on whatever street you live. So, you moved to the bigger house, the newer neighborhood. Well then there’s going to be someone else who ultimately has a little bit more. So, if you can understand that this idea of peer comparison, it is going to be ever-present, and it’s not so much that the environment or the people around you need to change. What needs to flip is the script in your mind, in terms of the mentality you have when looking to the people in your life.

The Hedonic Treadmill

10:29 Emily: Yes, such a wonderful point. You mentioned the term hedonic treadmill a couple of minutes ago, and I’m betting not everyone in my audience knows what that is. So, can you explain that a little bit further?

10:42 Joy: This idea that often times we’re running a race, we’re going after more, something better. There’s a desire for enough. And people think they are moving closer to the mark, but really you are just exhausting yourself on a treadmill, and there’s never a finish line. So, when you are caught in this cycle, you’re just going to keep running. And it ultimately is never enough. I think, I encourage people to reflect on this idea of what is enough. Who decides what it is, how much it is, how do you know you have it? You know, even how someone answers that question is, is enough a number? Is it a sense of security? Does the outside world get to decide what enough is? Or is that something that you determine for yourself? No, this is, this is good. I can stop. I can breathe. And I don’t have to continue to feel the need to be amassing more.

11:55 Emily: Mhm. I’m currently reading the book Your Money or Your Life for the very first time. This is inside the Personal Finance for PhD’s Community. We have a book club, so I’m reading it for the book club.

12:06 Joy: That’s fabulous.

12:06 Emily: Yeah, I’m surprised it took me so long to read actually, because of course it has been out for a couple of decades. But anyway, the concept of enough figures very prominently, the argument that the authors are making in that book about having, as you were just saying, determining for yourself, and it’s really about self-reflection and it’s not at all about looking around you at what anybody else is doing. You know, what it is to be content, be full in a sense, like in terms of thinking about your appetite. You’re full, but you don’t want to stuff yourself. You don’t want to go beyond this, you know, level of fullness or contentness or enoughness because it’s damaging not only to your finances, but also to you as a person to, you know, as you were just saying, continually strive to go and beyond, beyond, beyond. One aspect of the hedonic treadmill idea that I understand at any rate is that, maybe it’s a little bit similar to like addiction or like getting into that, but what you need to feel a pleasure hit from spending becomes higher and higher and higher because you become adapted every new spending level.

13:10 Emily: You know, you get to a new spending level, you’re like, “Well, this is fantastic. I have all these new experiences and stuff. It’s wonderful.” And then suddenly it’s just normal and it’s just you again. It’s just you, yourself. And then you have to go to a higher spending level to get that hit again. And that’s the sort of a mountain climbing, like that’s kind of the treadmill aspect of it, is that correct?

13:28 Joy: Yes. Yes.

Keeping Up with the Joneses Affects Your Finances

13:31 Emily: So, we were just talking about how this is not ever going to be emotionally satisfying. What happens to your finances if you are striving to keep up with the Joneses?

13:40 Joy: I think it, peer comparison when it comes to finances is so complex. And oftentimes it is very problematic because peers give you permission to sometimes spend in ways that you ultimately can’t afford. And sometimes there’s pressure or there’s fear of missing out. Now, when we look at this idea and this concept of keeping up with the Joneses, when we look at the financial state of affairs of the average American family, who is indebted, over-leveraged, all of these things, if you are then trying to keep up with someone who is overextending, you are then overextending yourself even more. So, it just perpetuates this problem indefinitely. My great-grandmother who lived through the depression, had this phrase that I love. And I never met her, but it was something that was instilled in my mom. And it was this: “Just because they have it, does not mean they can afford it.”

Just Because They Have It, Does Not Mean They Can Afford It

14:53 Joy: And that is something that so many people confuse. They look at, “Well, this is the house they’re living in. This is the car they are driving. These are the vacations they are taking. And so that must mean like that’s okay.” What they don’t see is what goes on behind closed doors. They don’t see the physical, the psychological cost of the stress that comes with carrying debt. They don’t see the impact of the work stress of the employment situation that person feels like they are trapped in because of the lifestyle that they are living. A lot of that stuff happens behind closed doors. But I tell people, so part of my job as a therapist is–I love my job–so often, I wake up and I’m like, “I truly believe I have the best job in the world because I get to sit behind closed doors with incredibly bright, driven people who are having conversations they aren’t having with anyone else in their lives.” So, I’ve sat behind closed doors with the Joneses. And let me tell you, their lives are not as rich or pretty or neat as most people think when you just see a public-facing persona.

16:28 Emily: Yes. That’s a wonderful phrase from your great-grandmother. And actually, it reminded me of something that my pastor from my church in North Carolina was preaching a sermon one time and was talking about this concept of keeping up with the Joneses. And I remember him saying, you know, if you’re going to follow sort of the the Christian way of handling money, you know, there’s certain things in the Bible, the layout of how you’re supposed to do this. He says, you’re going to be living multiple steps behind who you perceive to be as your peers. You’re going to be living a step behind because you’re not going to be leveraged with debt, at least outside of your mortgage or whatever. You are going to be living in step behind because you’re going to be giving. You’re going to be living a step behind because you’re going to be saving for your future as well.

You’re Going to Be Living Three Steps Behind

17:12 Emily: So, he was like, “You’re going to be living three steps behind, you know, who you perceive to be your peers in terms of like your career or whatever it is.” And that has really stuck with me too, that like, yes, it just, as you were saying, you don’t know how other people are handling, you know, as an outsider, you don’t know what’s going on inside their homes and how they’re really managing to live the lifestyle that you can perceive. And, you know, you brought up social media earlier. We have so many more, I think, potential Joneses in our life right now, because we have access, in a way limited access, to a lot more people from maybe a lot of our different stages of life and even people you don’t know. So, I’m sure that this just exacerbates this entire problem.

17:50 Joy: Yes. And I love what you brought up. You brought up something so important about lifestyle choices. If you do the things that most people do, you are going to get the things that most people get. You’re going to get average. And right now, financially average in our country is not a pretty picture. So, it really requires people to step back and ask, “Okay, what do I really want? And what do I want long-term?” In order to get ahead, you have, especially early on, our little choices compound over time. So, I will often explain to clients and people, if you can make, and this is especially applicable to, to students, to professionals. A lot of times, if you are entering a kind of employment, or you’re graduating, you’re like, “Okay, I’m going to start living the doctor life.” No, hold on.

18:56 Joy: If you can give it a couple of years of living like you are a broke grad student and what you can do with the savings during that time, when a lot of your peers are starting to make very different choices, what that can lead to for you in the long-term is huge. But that requires being able to say, “No.” It requires being able to tolerate, okay. Maybe you’re going to miss out on some things. But, if you can be willing to do things differently than other people, you give yourself a chance at having something bigger and better that most people will never achieve.

Commercial

19:44 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 which I add to every month. There is also a discussion forum, monthly live calls with me, a book club, and progress journaling for financial goals. 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.

Present Lifestyle Choices Impact Your Future Comfort

20:49 Emily: I’m really glad that you took the conversation in this direction, because it’s exactly where I wanted to go as well. Talking about, you know, when you have these large income jumps, you know, okay for PhDs, you finished graduate school, maybe you’re moving up to a post-doc. Hopefully, a decent jump in income there. Okay, you’re moving out of the postdoc or directly out of the PhD, you’re getting into a proper job. Hopefully, a big jump there. And maybe, you know, throughout your career, potentially there could be other big jumps as you switch, you know, employers or whatnot. So, a lot of my audience is still in graduate school or is still in training. And so, they’re still anticipating and looking forward to those large income jumps in the future. And of course, the advice you just brought up, you know, there’s versions of it. You know, live like a grad student, live like a college student, live like a resident. It’s basically just, keep that lifestyle, or as close to that lifestyle as you can, from your prior earning stage for at least a little while into that next one. And then as you said, you know, this can do fabulous things to your finances. So, can you elaborate on that a little bit more?

21:45 Joy: Absolutely. And I want to explain. I think something that people often don’t fully understand or account for is in school, or maybe early in your career, you have a picture of, “This is what I’m going to want. I’m on this linear trajectory, professionally.” But things change. Life circumstances change. Sometimes your dreams, your desires, opportunities can lead to different places. And, if you have made financial choices so that you have the freedom and flexibility to change your mind, if you want to at a later time, and not be locked in because of the debt you have and the lifestyle that you have settled into, that gives you a ton of freedom. So, I just really emphasize to students that the things you are doing with your money now in these first years of your career are huge. So, if you can just hold on and be a little bit more conservative in some areas, that can have huge implications for your financial life later on.

Saving During Graduate School

23:11 Emily: Yeah. I actually want to give an example from my own life here. It a little feels like I’m tooting my own horn, but I think it does illustrate what you were just talking about. So, when my husband and I were in graduate school, we did our PhDs at the same time. So, we were both on stipends, same time. We saved, you know, I’m into personal finance, right? So like I was figuring this stuff out early. I was figuring out saving, investing and paying off debt and doing all these things. And so I started that during graduate school. Whereas a lot of people, either one have no opportunity to start saving or investing during graduate school, just completely off the table based on either their going into debt for their degrees, or they’re just simply not paid even a living wage. That was not our case.

23:50 Emily: We were very fortunate. So, we were doing that saving. We, one, could, but two, we took the initiative to do it. We were figuring that out at that time. By the time we finished graduate school, we had amassed quite a decent nest egg. And, you know, one, one attitude could have been during that time, “Well, you know, I may as well just spend what I have have, I don’t really need to save right now because I’m going to have this big income jump in the future. And, you know, it’s going to take care of itself at that time. I won’t worry about investing until, you know, later on.” But because we took that other route of starting as early as we could with, you know, saving and investing and so forth, we had a decent nest egg built up by the time we finished graduate school. That enabled one, my husband to take a job at a startup, which he had never anticipated doing and was completely, you know, really nervous about that.

24:30 Emily: We’re sort of conservative with our careers. And so we were like, “Wow, you know, this good job could go at any point.” But it was just such a perfect fit for him. We were like, “How can he pass this up?” You know, we’ll take the risk. We have the nest egg, we can do that. We can take that risk of him taking that kind of job. Secondarily, I was able to start my business, which meant, you know, just completely going off a different track from, you know, the normal job thing, which is a fantastic opportunity and similarly, very good fit for me. So, I feel like our life, you know, career satisfaction levels were much higher than they would have been had we not been in a financial position at that time to be able to make that choice. And the reason we were in that position was because years earlier we had started this process not really knowing that was how it’s going to work out. You know, we didn’t realize, you know, these opportunities came our way and we could take advantage of them because of the preparation we’d done before that point.

25:19 Joy: Absolutely.

How to Cultivate Contentment in the Now

25:21 Emily: So, I’m thinking about a graduate student, probably. Maybe a post-doc, who is currently maybe even practicing not keeping up with the Joneses. Because they probably have a lot of Joneses in their lives that they couldn’t possibly keep up with. Right? Like it’s just not even a feasible thing for them to do right now. So, what would you say to that person about how to still cultivate contentment in their life when they know they can’t even possibly play the game with the Joneses right now, and also how to maintain that once maybe they are able to get in the game once their income is higher?

25:57 Joy: I think, you know, this idea of game and even if we bring it back to the race. if you can understand everyone is playing a different game, and if you can focus on running your own race and just stay in your lane, that is going to set you up for success. Now, I don’t think that if you are not trying to keep up and you’re making a concerted effort around that, that doesn’t mean your life needs to be devoid of fun and human connection. I think, I encourage people to be creative. You can be the one driving the conversation, making suggestions. And the truth is, sometimes if you are maybe doing things or suggesting things to your social circle that are not going to be exorbitantly costly, there are probably going to be some people who are really relieved. Because here’s the thing. Everyone’s running this race.

27:04 Joy: And some people are more aware of it than others. Some people, based on their upbringing and what they bring to the table in terms of their own money scripts, and what gets activated for them around money, they may have different thoughts and feelings about it. But that’s one way to think about it. And you know, this transition when you do have more income, I think it’s important that it doesn’t become, you know, if you think about someone who’s been on a diet and then it’s like, everything is suddenly available, I’m just going to binge. If you can keep a mentality of moderation, that is going to serve you going forward.

Take Ownership of Social Spending

27:50 Emily: I love those two suggestions. And especially the first one around like, it’s sort of like, money decisions, let’s say about social spending with your peer group. They don’t have to happen to you, right? Like you can actually sort of take the wheel and say, at least some of the time, I’m going to be suggesting things to do that are within my budget. Like you said, probably some other people will be relieved. And so, you know, you can do a combination of planning things and maybe saying yes or no here or there to things that other people suggest. So that you’re not, you know, always, always saying no to everything, but yeah, you can keep it more within your range and steer things. I know, certainly for me in graduate school I found a group of friends that I was comfortable socializing with and we all sort of had the same manner of socializing that we enjoyed, and it was very inexpensive. And it was really good for all of us in that sense.

28:40 Emily: And so, you sort of find your people, is maybe one way. So like, there aren’t so many Joneses, so close to you in your life. I had a couple other ideas about how to like combat this, you know, impulse to keep up with the Joneses. One was to redefine what you’re jonesing for. So like instead of jonesing for the consumption aspects of using your money, Jones for like, “I’m going to max out that 401k,” like “I’m going to, you know, be striving”–if you want to strive for something–be striving for something that’s ultimately going to benefit your finances instead of, you know, working in the opposite direction for you.

29:17 Joy: Change your status symbols.

Happiness is Not Contingent on What You Are Chasing

29:20 Emily: Yes. Oh, that’s a great way of putting it. I love that. It’s very, you know, it’s millionaire next door. Right. So, try to be like that person. Are there any other like sort of behavioral finance tips that you would suggest for, you know, helping people achieve their financial goals without letting these Jones impulses kind of get in their way?

29:40 Joy: Well, I think just really paying attention to what you are benchmarking to, this idea of this is the baseline. I think that’s really important. As you think about and reflect on, I think developing financial self-awareness and doing some reflection and understanding about what gets activated for you with your money, and really starting to dig into some of the more core beliefs you carry about money and how that drives what you do with it. I think those are really important foundational places for people to start.

30:26 Emily: Yeah, I think going along with those exercises as well, and you just mentioned this, is sort of remembering where you’ve come from. Like remembering the influences, of course, that your parents have, and then maybe your peers, you know, through different stages of your life. And remembering like, especially once you’ve passed, like the graduate school stage, like, “Okay, back then I did live on this amount of money. I did have this size of home. I did do these things. Was I happy then? Was I content then? Why are things different now? Could they be more similar to how things were in the past?” I’m asking myself some of these questions now that I’m, you know, a few years out of graduate school.

31:02 Joy: If you are telling yourself, “I will be happy when,” and you are then looking to something in the future, I would really encourage you to go back into your history and think about this idea of happy. What is some other evidence you have that there have been other times when you’ve had that feeling that experience that you haven’t had that thing? So, happiness is not contingent on that which you are chasing.

The Power of “No”

31:34 Emily: Yeah. That’s such a, I think foundational point about happiness, that I’m only just sort of starting to learn myself now in my thirties. And I wish I had known it because I am the type of person who kind of always has goals and is always striving for something. And my husband definitely kind of complains and kind of ribs me for like always wanting the next thing. And why can’t you be satisfied now? And, I am starting to realize like that. Whoo. That’s just how I am. I need to really like, look at that because I’m never going to get there. Right? If that’s what I’m basing that on. Is there anything else you wanted to add, Joy, before we wrap up the interview here?

32:09 Joy: I think this idea of there’s a lot of power in saying no and having financial boundaries, that’s something I do a lot of talking with people about. I think a lot of things get in the way of people saying, “No.” There’s a fear of missing out. There’s a discomfort with what you are anticipating someone else’s reaction is going to be. And the truth is, I believe people would be healthier, wealthier, and less exhausted overall if they built that muscle of saying “No” more often. And again, that’s not saying no to everything. But if you are finding yourself in a situation in your gut where you’re like, “I’m going to say yes, but I really don’t want to do this.” Ask yourself why. And then what is getting in the way of your taking care of yourself? If it’s your energy, if it’s your finances, and what would need to happen in order for you to have the courage to say, “No?” And what is the cost to your yes? Be that financial, physical, psychological.

How To Connect with Joy Lere

33:27 Emily: Yeah. Thank you so much. How can people find out more about the work that you do? Or I don’t know, if they want to be a client of yours. Like how do people connect with you?

33:37 Joy: My website is my name. J O Y L E R E. Joylere.com. I am active on LinkedIn, Joy Lere Psyd, and also spin my creative wheels on Instagram a little bit, @ joylerepsyd, and also love to hang out on Twitter and connect with people there. Also, my handle is joylerepsyd.

Best Advice for an Early-Career PhD

34:02 Emily: Yeah. Thank you so much. That’s where we connected as well. So, final question here, Joy. What is your best financial advice for an early-career PhD? It could be something we’ve touched on in this interview, or it could be something else entirely.

34:14 Joy: My best advice is to do things different than most people around you. If you do that now, you will have things that no one else later on in their career will likely be able to accomplish and achieve.

34:36 Emily: Yeah. Thank you so much for that. Thank you so much for this interview and for joining me today.

34:39 Joy: Absolutely. It was a pleasure. Thanks for sharing your platform with me.

Outtro

34:44 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind-the-scenes commentary about each episode. Register at pfforphds.com/subscribe. 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.

How to Identify and Change the Money Mindset You Developed in Academia

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In this episode, Emily interviews Dr. Chris Cornthwaite of Roostervane. Chris and Emily share the money mindsets that they have observed among PhDs and academics, including believing money and wealth to be evil, scarcity, relating time to income, and anchoring. They discuss how to identify and change your own money mindset. Chris shares how his money mindset has evolved from his youth idolizing poverty through his underpaid grad student years and now into his employment and entrepreneurial journey.

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Link Mentioned in this Episode

PhD money mindset

Teaser

00:00 Chris: It’s one thing to start when you’re, when you’re 20 or 25, and have the value of compound interest over time and save that $40 a month or whatever it was. But it’s actually quite a different thing to start when you’re 35 with student loans that need to be paid off and try to create a sizeable chunk of wealth.

Introduction

00:23 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 seven, episode 11, and today my guest is Dr. Chris Cornthwaite of Roostervane. Chris and I list the money mindsets that we have observed among PhDs and academics, including believing money and wealth to be evil, scarcity, relating time to income, and anchoring. We discuss how to identify and change your own money mindset. Chris shares how his money mindset has evolved from his youth idolizing poverty, through his underpaid grad student years, and now into his employment and entrepreneurial journey. As you’ll hear during this episode, one of the best ways you can change your money mindset is by intentionally seeking out and learning from people who have the money mindset you want to move toward, whether that is through books, other media or new acquaintances.

01:22 Emily: If this episode convinces you that you should work on your own money mindset, I invite you to join the Personal Finance for PhDs community at pfforphds.community. Inside the community, you can communicate with me and other like-minded PhDs through our forum and monthly live calls. The community has a monthly book club and group financial challenges as well. In November, 2020, we’re reading Get Money by Kristin Wong and in December, it we’ll read The Millionaire Next Door by Thomas Stanley and William Danko. Our challenges for November and December are to create a frugal stack and set up a system of targeted savings accounts. One of the eBooks included in the community, The Wealthy PhD, also has a chapter on what money mindset is, why it’s important, and how to shift it. While I didn’t understand it at the time being part of the personal finance blogosphere while I was in grad school was absolutely vital to the level of financial success I had then and now, and was directly my inspiration for starting my business. With the Personal Finance for PhD’s community, I’ve attempted to replicate many of the positive elements of that experience while making the whole process more time efficient and accessible for you. If you’re interested in learning more about and joining the community, you can do so at pfforphds.community. Without further ado, here’s my interview with Dr. Chris Cornthwaite from Roostervane.

Will You Please Introduce Yourself Further?

02:49 Emily: I’m so delighted to have joining me on the podcast today, Dr. Chris Cornthwaite of Roostervane. He writes a lot about PhDs and career transitions and career over there, but he also has a lot of material about money, wealth, money, mindset, and so forth. And that’s why I invited him on the podcast today to tell us more about money mindset. So, Chris, will you please just introduce yourself a little bit further to the audience?

03:14 Chris: Yeah, for sure. So in terms of my academic background, I have a PhD in religious studies from the University of Toronto and after I finished my PhD, I was kind of lost and didn’t know what to do for work. Kind of was the impetus for starting Roostervane, eventually. But I went and I worked for a think tank. So I ran projects for Canadian think tank. Kind of a lot of different projects, but some that kind of related to money that are still interesting to me is things like economic development and prosperity and things like that. And then I went and worked for the federal government for a little while, the Canadian federal government. I worked on a project that helps other countries launch refugee programs. Basically it’s a lot of like international diplomacy kind of stuff and that was really neat. And I still do some consulting in that world, in the refugee program world, but I also run Roostervane. I started a blog, initially it was kind of chronicling my own journey out of academia, but it’s just evolved to things that I like to write about. It’s become everything from a little bit on personal finance, as you say to careers, LinkedIn, ideas about purpose, which has really been an interesting question for me. That’s become about, I would say it’s maybe like 80% of the work I do, but it’s not my full-time income yet. It’s growing, but as you know, it takes time, so I’m working on that too. That’s me.

4:40 Emily: So interesting. Thank you so much. So money mindset is our topic for today.

What Are the Common Money Mindsets of PhDs and Academics?

And I wanted to start off by asking you what are the common money mindsets that you have observed in PhDs or academics?

4:53 Chris: This is such a fun conversation. I’m really glad to have it. I think the thing that I see a lot of, I mean, we could talk about scarcity mindset and that sort of thing, and that’s certainly common. I think the thing that I deal with the most, especially as people are like leaving academia and it’s not just about money, but it’s about careers in general, but there’s a lot of constructs within academia, like ideological constructs that money is bad, money is evil. The pursuit of money is something that, especially for those pursuing life in academia, a lot of people kind of buy the idea that this is a noble cause and worth doing for nothing basically. I think that a lot of PhDs have the idea that they shouldn’t think about money or that they’re bad for thinking about it or that they’re not serious academics if they want to think about it.

5:46 Chris: The irony is that, I remember having one exchange with a student in particular and he was kind of saying some of these things to me and he was quoting his professor. And some of the things his professor had said about how this is not about money. And I said, “is that your professor who makes $170,000 a year?” There’s a huge discrepancy, I think, between the idealism of PhDs and the reality of both the Academy and just “real world”. I think that’s the biggest holdup I see in terms of money mindset is that people have this idea that poverty is noble or that earning money is bad. Investing is capitalism, capitalism’s bad. I think those become really big holdups and I think can actually seriously hinder people from first of all, making good decisions about their career, but also from actually acquiring wealth and getting comfortable, much less wealthy.

6:38 Emily: So I think here, your discipline might be showing because like in contrast, so I’ve heard the same things, but it was not until I started speaking with PhDs more widely across a lot of disciplines that I encountered that mindset. Because for me as an engineering PhD and in the STEM fields, yes, scarcity mindset was there. Yes, undervaluing yourself was there, but not the money is evil aspect of things because I think we were all expecting like, okay, yeah, this is a low-income period of life, but this is not characterized my life overall. Like overall I’m going to be a highly employable, decent to good earner as an engineering PhD or STEM PhD. And honestly, even in my let’s say path through academia in terms of the professors that I interacted with, because I was in science fields and engineering fields, I didn’t have any professors say to me, capitalism is evil or anything like that. So it’s not an idea that I found until I started interacting with humanities PhDs that I even encountered that. I think this is really feel dependent.

7:48 Chris: A hundred percent, I agree. And it’s interesting for careers too. I’m always kind of realizing where these field differences are and it’s hard because I write for PhDs, like it’s one audience, and in some cases I think there are a lot of things that are kind of universal, but you’re a hundred percent right. And I think a lot of the kinds of ideologies around money that I was exposed to, and I mean, I still see them a lot, but you’re you’re right, they’re definitely much more predominant in humanities, social science fields for sure.

8:13 Emily: Yeah, but I’m so glad you brought that one up because I think that one is maybe the most insidious, like the hardest to reverse, which of course we’ll get to in a moment, but that was a great first observation to bring up. Do you have any other ones? You mentioned scarcity mindset earlier, but didn’t actually define it. Do you want to talk a little bit more about what scarcity mindset is?

8:31 Chris: Gosh, yeah. I think scarcity mindset for me, the way I understand it is just the idea that like there’s never enough money and it’s always, I’m just going to be poor and I’m always going to be poor. I mean, I don’t know, we’ve never had the conversation about the philosophies of money behind it, but a lot of the people that I read see this as manifesting into your life, that you adopt this type of scarcity and it becomes true for you. There’s a whole different conversation we could have, but I think at least anecdotally that’s been true in my life too, that when I kind of live this kind of scarcity — there’s never enough money, I have to keep it all tight, and pinch every penny and be just really, really controlling about, about my money. I think that’s what I see and I saw a lot of that in academia and I think, I mean, a lot of people are poor. I actually did all right, because I won the right fellowships. I mean, it’s just luck of the draw. There’s not really any reason why one PhD makes $15,000, another one makes $50,000. But all that to say that I saw a lot of that scarcity mindset. But the other thing that I think one of the things that I really observed academia taught me was this idea of linking your time to money. I didn’t get paid by the hour other than when I did TA or RA work, so I think one of the really valuable lessons I learned in academia and it’s a mindset that academics have if you kind of dig for it is this idea that you can actually work on a grant application for five or six hours and it might bring you a hundred thousand dollars. I think there are also some positive money mindsets from academia too, if you want to dig for them, but it’s just hard to kind of hard to get at them sometimes.

10:16 Emily: Yeah. I think that’s a really interesting point to bring up. Actually, I wanted to go back to the scarcity mindset for a second because there’s actual scarcity in your life and there’s the scarcity mindset and those things can come together or they can be separate from each other. You can have one or the other, you can have both, you can have neither. There is actual scarcity, especially at the graduate student level in terms of how much money you’re making. Now, does that apply to everybody? No, because of course there’s fellowships you can win, you can have side hustles, but there is scarcity in a sense. But whether it limits your mindset or not doesn’t necessarily come along with that scarcity. And the other thing is the academic job market, like there is literal a lot of scarcity in the academic job market. And I think that PhD’s observing that market, even if they choose not to pursue it or don’t end up in academia long-term, they still take that observation with them onto their other career paths and imagine the kind of scarcity and other places that they have rightly observed within academia.

11:15 Chris: Yeah. That’s really interesting. One thing I’m thinking of as you say that some of my professor friends who sat on on grant committees, especially for university-level scholarships and realize how many scholarships actually didn’t get any applications. So it also kind of does make me think that like there is of course literal scarcity, but I think one of the ways for example, that that can play out is that instead of me saying as a student, how can I go make more money or how can I increase my, my income? What scholarships can I apply for in this case because there was a lot of years that they didn’t give out a lot of the scholarships. It’s easier just to say, well, I’m just poor and this is my lot in life and woe is me kind of thing. So I hear what you’re saying. I do. I totally agree with you. And I think there’s a balance there for me between the actual scarcity and the mindset that says, how can I make the most of this? There’s obviously going to be some kind of a limit, but how can I expand what I do have access to?

12:11 Emily: Yeah, exactly. I think it’s really depressing for graduate students to think about their hourly wage, because they imagine, especially because they work so many hours, usually beyond 40 and yet they’re only being paid ostensibly — you mentioned RA or TA work earlier, that’s typically limited to like 20 hours a week, at least in the US — so they’re calculating this off of like 40 plus hours per week when actually they’re only being paid for 20 and technically they’re doing their dissertation for free and a lot of people don’t understand that. So it is depressing, they calculate their hourly wage, but like you said, that’s not actually literally what they’re being paid for. And sometimes you can, as you said, win an award for just a handful of hours of extra work on top of the work that you are already doing. So I do like the idea of divorcing the hourly wage thing, but it’s disheartening to think about in the first place.

13:05 Chris: I’m trying to look on the bright side. There’s a lot to be sad about, about the financial state of academia. So overall I’m not saying it’s like, great, but there are things that I’ve realized — I know we’re going to talk about it later — but as I’ve moved into my life, there are things that academia trained me for that I’m actually like, Oh, that’s actually not a bad thing.

13:22 Emily: Yeah. So let’s finish up talking about the mindsets that you see. Are there any ones that you’ve have any other ones that you’ve observed either positive or negative, helpful or unhelpful?

13:32 Chris: Let me think. Well, I guess so, so I think the thing that initiated this conversation was you had mentioned a post that I wrote where I had identified a lot of different things that I had learned. I’m trying to think about how much they relate to mindset, but I think there are principles, some of which do relate to mindset, about money that students kind of carry forward. So we already talked about the hourly wage, but I was thinking about in terms of scale, like when you think of I don’t know, a journal publication, like creating one thing that can influence multiple people. That’s not so much a mindset though. I guess I think the answer is no, I don’t really have any other mindsets offhand that I talk about.

14:13 Emily: I think the only other one that I’ll bring up is anchoring. So when you’re in graduate school and you’re making this tiny hourly wage or maybe you think about your yearly salary also tiny, because you’re anchored there, because that’s the first, early on salary that you’ve experienced in your life, you may not really understand your value in the marketplace once you go forward from that position, whether it’s in academia or outside of academia. And so your anchored to this, as you mentioned, 15 or 30 or whatever it is, thousand dollars per year, you’re making as a graduate student and you think, “Oh, wow, could I make double that?” And that’s like amazing to you. Instead of thinking, I want to three X, four X, five X, 10 X what I was making in graduate school, or more. I think that’s another really insidious one is, is the ultimate under valuing that you do later on.

15:04 Chris: Yeah, that’s a great point.

How Do You Identify Your Money Mindset?

15:06 Emily: So we talked about the money mindsets that are common among PhDs. These are not universal. So how does an individual determine what are the money mindsets that I currently have? And this is such a tough question because money mindsets are so closely held you don’t even recognize them as such. It’s just how the world works according to you. So how do you identify your own, your own money mindset?

15:28 Chris: I think the thing that helped me most was reading. I would say the first book I read on money was The Undercover Economist. And I read that, I mean, that must be 10 years ago now. I read it somewhere in my graduate journey, I think pretty early on and it rocked my world and I started reading every single personal finance or money book I could get my hands on after that. So I’ve read a lot of them. And I think a lot of what I saw through reading kind of reflected back to me in my own life.

16:01 Chris: For example, I started to, I can’t even pinpoint like where I got it from, but I started to see like things that I was raised with. I was raised in quite a poor family. My dad worked as a maintenance man in hospital, my mom stayed home with five kids, and a lot of my money mindset came from there. There was never enough money, money doesn’t grow on trees, money is for other people, and then we were also religious, so it was also spiritualized. I don’t know if I ever heard that money is evil, but I definitely heard that poverty was kind of noble, poverty was spiritual. I think the more I started to read and just hear people name similar things to what I had felt and seeing other people who grew up in similar places, I started to unpack a lot of those. There’s one podcast I really liked, it’s called Profit Boss, and she really did a fantastic job. Is it Hillary Hendershot? Do you know that one? I haven’t listened to it about five years.

17:00 Emily: I don’t think I know that one.

17:00 Chris: She had done an episode on money mindset, and it was really good and really opened up to me a lot of my own limitations and that really helped a lot. I think just hearing people name their money mindset and seeing it in myself.

17:17 Emily: So I totally agree with you that you have to start encountering other minds to recognize your own mindsets and whether that’s through reading as you were doing. I also early on in my life journey was reading the personal finance blogosphere quite a lot. So hearing from other personal stories of people who are talking explicitly about money. That’s the thing is you have to actually kind of get towards money or money related topics when you know, exchange these other minds. So it’s a little bit easier to do in an impersonal format, like reading or listening to podcasts or watching videos or whatever. But I’ll add into that talking with other graduate students, maybe like we mentioned earlier, outside your own discipline and outside your own worldview. Or not even other graduate students, but just like your peers, maybe peers who have real jobs, that can help you open up. If you’re actually, again, touching on these money or money related topics can help you recognize what’s a mindset in you and what’s like actual observable truth about the world versus just your perception of it. Encountering other people I think is crucial to identifying your own money mindset.

18:24 Chris: The kind of thing that that makes me think of is this idea of even talking about money. And I know that’s another money mindset I had is like, we don’t talk about money. We don’t talk about it with anybody. Money, politics, and I guess religion were the three things you’re not supposed to talk about. Right. And that’s definitely something that I’ve experienced. It’s funny, even with Roostervane. For example, I wrote a post a while back and it was just for fun about how PhDs can be worth a $100K or something, and it was one of the most read posts that I’ve ever done, but it’s actually one of the least shared. People were happy to kind of read about it, but didn’t really want to talk about it. I think there’s a lot of shame in talking about money and expressing an interest in money, and even an interest in having money or growing wealth. That’s another mindset that had held me back in the past. And I think it’s still pretty prevalent.

Commercial

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, which I add to every month. There is also a discussion forum, monthly live calls with me, book club and progress journaling for financial goals. 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.

How Do You Change Your Money Mindset?

20:27 Emily: Okay, so an individual has started to identify their own money mindset by listening to this podcast or reading your articles or reading other materials. How do you think they should actually go about changing a money mindset that they’ve identified as unhelpful that they have?

20:44 Chris: I’ve given a lot of thought this. It’s an interesting question, because I think what I realized is it doesn’t change overnight and I will find myself even years later, like something identified years ago and all of a sudden I kind of will stop myself when I’m doing something and say like, Oh, that’s my X mindset that has kind of played in, but it’s kind of sneaking back in. It’s really, really hard to change the way that you are kind of hardwired to think about money. It takes a lot of time. I mean, I’ve done things like I do journaling and I will sort of journal about it. I just watch and read a lot of stuff. I think really immersing yourself in things that kind of present a different view from what you’re used to, I think that kind of immersion has really helped me a lot. I’m trying to think what else. Those would be the two main ones, just kind of exposing yourself to different ideas and kind of recognize that you’re on a journey to change your money mindset. It will definitely take time. It’s not going to happen overnight. Start taking kind of the little incremental steps to grow it. And I think also education, I would say, is a big part of that. The more you learn about money, the more you learn about growing wealth, the less scary it get. It can get confusing because there’s a lot of contradictory information, but it’s at least less scary. So ideally you’re going to, you’re going to be a little more competent and therefore comfortable with actually thinking about and dealing with your money.

22:07 Emily: I totally agree with you that I think the first stop is sort of the extension of the identification. It’s continuing to encounter other ideas about money and maybe now you can kind of selectively go towards, “okay, well, this is a money mindset that I would like to cultivate, or this is the money mindset I want to get away from, so I’m going to specifically listen to source X or source Y, which is going to help me move again slowly over time towards that more helpful money mindset.” So yeah, I totally agree. Like for instance, listen to this podcast. Maybe this is giving you a different perspective on money than you had before. Or continue to read other sources. I know I, as I mentioned earlier, totally immersed myself in like the personal finance blogosphere. That was really helpful in changing some of my money mindsets, especially around like earning more because definitely as a graduate student, I had those limiting beliefs about like, I can’t have a side hustle and like, I can never increase my stipend, but that turned out to not be true after working on it for years and years I finally figured that out. So definitely getting around other people. I don’t remember the exact phrase, but there’s that thing where like, you’re the average of the five people you spend the most time with. And so with respect to your money mindset, if you’ve had parent one, parent two, professor one in that circle before, you can maybe, at least with respect to this subject, edge those people out in favor of people who, have the mindset that you want to adopt.

23:28 Chris: Exactly. Yeah, I totally agree.

23:30 Emily: And I’ll add in, you mentioned a little bit earlier, abundance mindset and thinking and so forth. And I’ve also read a little bit about that in the entrepreneurial space. That’s how I actually first sort of encountered the topic of mindset was through the entrepreneurial stuff. One of the things that is talked about a lot in that space, which I think might be helpful, is actually writing and saying affirmations. And you mentioned, it’s a little bit related to journaling. Basically what we’re talking about is self-talk. You’ve been telling yourself money is the root of all evil and capitalism needs to die and I will never have money and all those things. You’ve been telling yourself those things for years. And so now you need to start telling yourself other things. It might be helpful to actually write down an affirmation, something that you know maybe intellectually to be true, but you don’t really feel it. You haven’t really internalized it yet and start reciting those to yourself. Maybe it’s once a day or a few times a day, to kind of get that self-talk like grooved in. And so eventually you’ll go to it more naturally. This is something I recommend to people who I work with on money mindset. It’s not something I practice all the time, but I do it from time to time when I feel like I need a little boost or a refresher with my mindset. Have you ever done the affirmation thing?

24:46 Chris: I do actually. I think I just, wasn’t clear in defining how I think of journaling because I do journaling, but within my journaling, I do affirmations as well. I have every day and there’s one in particular, there’s one that I’ll share just because it’s been a recent realization for me. I’m not particularly religious anymore, but coming from this idea of my youth that having money is evil somehow or whatever, I’ve really been thinking through like trying to get myself to adopt the idea lately that money is almost spiritual. That having money and creating wealth, especially as an entrepreneur, is actually an indication of the value that I bring to somebody else’s life. Rather than our ideas about entrepreneurship growing up is like, well, business people trick people into giving them money or whatever. In fact it’s quite the opposite. My wealth, the amount that I get paid is reflective of the value that I bring to people’s lives, and that’s really a beautiful thing. I think that’s one thing, just for example, that I’ve been kind of writing down variations of that for quite a long time now, trying to really worm it into my head because I really do believe it’s true, actually.

25:54 Emily: Yeah. I’m working on a similar one for me and my business as well. The amount of money you’re bringing in reflects the value that you bring to the world. That’s true, if you have a job too, but it’s sort of brutally true when you’re an entrepreneur, like you’re feeling that like all the time, there’s no comfort of the salary.

Chris’s Own Money Mindset Journey

26:13 Emily: Okay, so we’ve talked through what kind of mindsets you might have if you’re in academia, how do identify them, how to change them or start to change them, because you said, it’s going to be a process. You’ve talked about your own personal story here and there throughout this. Is there anything that you want to add more so about your career or your financial journey, especially as it relates to your money mindset?

26:35 Chris: Yeah, I think it’s interesting. I’ve had a constant evolution of my money mindset and it started back when I started reading personal finance books, at the beginning and each personal finance books was like a revelation. Like the first one, I remember reading a book called The Millionaire Teacher. I don’t know if you know that one. And it was like, okay, it’s low cost index funds, that’s how I’m going to build wealth. Low-cost index funds, low MER, ETFs — that’s the answer. And then I read the next one and it was like, actually people with managed portfolios do better over time and like, okay, who do I believe?

27:11 Chris: I think one of the most interesting things about my money journey has been, first of all, just digesting the huge amount of contradictory information out there. And there is a lot of it. For example, I remember reading Dave Ramsey and David Bach around the same time, and Dave Ramsey is like, pay down debt, don’t buy a house until you’re out of debt and David Bach was like buy a house tomorrow because nobody’s going to let you leverage that amount of money anywhere else. So it’s funny, I think like looking back now, I was forming my own views around money, even though there are little nuances in how they actually play out. I remember reading one book in particular and it was after I had read all these different people and the book was, I’m almost ashamed to say it. There are two money books I’m really ashamed to say that I like. I wonder if you could guess them, the first is Robert Kiyosaki’s Rich Dad, Poor Dad.

28:05 Emily: Yeah I was going to say Rich Dad, Poor Dad.

28:08 Chris: I’m so embarrassed to say that I liked that one. First of all, because if you Google Robert Kiyosaki, as an individual, I’m not endorsing Robert Kiyosaki. He’s had some interesting business practices and definitely has some interesting beliefs today. But the book was revolutionary for me. It really changed the way that I thought about business and wealth and just my own upbringing. The second one, this one it’s called The Millionaire Fastlane: Crack the Code to Wealth and Live Rich for a Lifetime! It’s by a guy named MJ DeMarco. I would almost recommend it, but I’m hesitant because it’s like a bro book. He’s just one of those…he was an internet millionaire and it’s really, especially when you read it there are just some things that like don’t sit right. But the one thing that I will say that hit me about that book is he said actually when you look at all these personal finance gurus, none of them got rich off of following their own advice. Dave Ramsey and Susie Orman, these people didn’t get rich from saving 15% of their paycheck. They got rich by creating something that had massive value, massive scale, and creating huge personal brands and putting it out there in the world.

29:16 Chris: And I think that was really like something clicked. I had been working for the government too and realizing that even though I was making quite good money compared to what I was making in my PhD and I was interviewing for jobs that would make even more, I was giving away a third of it in taxes. I was struggling. Even our family, we thought we were going to be wealthy now that we have a paycheck and have a good job and I have a pension. And I mean, the opposite was true. Trying to scrape together that 15% to save every month or whatever it was going to be, it felt almost impossible, just because of the realities of our cost of living and raising kids and unexpected expenses. And I remember kind of thinking this through and saying, okay, it’s one thing to start when you’re 20 or 25, and have the value of compound interest over time and save that $40 a month or whatever it was. But it’s actually quite a different thing to start when you’re 35 with student loans that need to be paid off and try to create a sizable chunk of wealth. It’s possible. It’s definitely possible.

30:23 Chris: At the time I was the only one working my spouse Carolyn was home with our kids and she is a graphic designer, so she does some freelance work, but she wasn’t making a full-time income. So I think I just kind of came to the reality and it was about the time I read this, that it kind of shook me. And I said like, actually the way that I’m thinking about wealth is right for a lot of people, but it might not be right for me. For your listeners, there’s probably a variety of people. If you’re a two income family earning $180,000 a year, it might be pretty easy to catch up and squirrel away 30% a month instead of 15% a month and catch up to where you would have been. But for my own reality, I fell in love with the idea of business and the idea that in my case, especially with an internet business that I could start with almost like nothing. I could start with $3 a month and create a business that’s worth a lot of money. I didn’t know where else you could leverage that. Like you have that kind of leverage or create that kind of scale from starting with like paying Bluehost $3 a month and putting my ideas online to creating something. And I don’t know exactly, like I’m not great at evaluating blogs, but I think even today, Roostervane, from what I understand would be worth like between $30 and $60,000, which is not a huge amount of money, but I started it last year.

31:39 Chris: As a business person, it’s just thinking through business has changed everything about how I see money and I’m no longer one of those people trying to squirrel away part of my paycheck. And those are totally fine if that’s the position somebody is in and that’s kind of their money worldview, that’s totally great. But for me personally, I just got a lot more interested in creating an asset. Creating this asset that’s called a business and it changes everything. I don’t really care how much I take out of the business. I don’t care how much my paycheck is because I actually love having money in the business to reinvest back into it. It’s just little things like that, that as an entrepreneur radically reorients your relationship to money and it really changes the way you view everything. It’s been a long journey and I think I’ve talked a lot about it, but it’s been really interesting, and I still have so much to learn, but it’s just that constant growth and realization, coming to the idea that there are some principles that I’ve come believe about money, about things like scale and impacting people and creating value. And that’s some of the things that I’ve put on the blog, which I haven’t really blogged about why you should invest in low cost index funds. I’ve just blogged about here are some of the kind of generic things that I believe about building wealth.

32:54 Emily: Yeah, I’m so glad to hear that narrative and I see a lot of my own story reflected in that as well. Of course, I’ve also come to entrepreneurship.

Chris’s Business

33:01 Emily: So if people want to read more stuff from you, tell us where they can, they can find you.

33:08 Chris: Yeah, Roostervane.com. It’s kind of like a weather vane, but there’s a rooster on top — Roostervane. And that’s where I blog about…my main thing is careers with purpose. It’s just thinking through like how we actually get jobs and careers, but also how we make meaning from them. That’s the kind of humanities thing that I bring to it is how we think about meaning. So Roostervane.com. You can find me on Twitter, @cjcornthwaite is my handle. You can just search my name, Chris Cornthwaite. Twitter, LinkedIn, wherever I’m always happy to chat.

33:40 Emily: Wonderful. And last question for the interview, Chris, what is your best financial advice for another early career PhD? And it could be related to something we’ve already discussed in this interview, or it could be something completely else.

33:52 Chris: Educate. Education, learn. It’s amazing how many people can spend five or ten years learning about the nuances of a field, but don’t actually want to take any time to learn about the basics of personal finance. I would say read as much as you can, listen to a podcast like this one, and just educate yourself and you’ll be empowered to actually create wealth and to get over some of those mindsets we’ve talked about.

34:18 Emily: Wonderful advice. Thank you so much for joining me for this interview, Chris.

34:22 Chris: Thank you, Emily. My pleasure.

Outtro

34:24 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. 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 Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

The Financial Hurdles of Moving to the US as a Postdoc

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In this episode, Emily interviews Dr. Louise Lassalle, a postdoc at the Lawrence Livermore National Lab in Berkeley, CA. Louise recounts the hurdles in the process of her move from France to the US for her postdoc. We discuss short-term hurdles; e.g., being approved for a rental, establishing credit, and the cost of moving; medium-term hurdles; e.g., choosing a health insurance plan, adjusting to the cost of living, and paying tax; and long-term hurdles, e.g., the cost of applying for a green card. This episode will give international graduate students and postdocs preparing for a move to the US a preview of what is to come and what pitfalls to watch out for.

Links Mentioned

international postdoc US

Teaser

00:00 Louise: Don’t just accept a job offer because you love the science. We are all passionate about it, we just want to do science. But where you live is also important, and if you have to worry too much about the financial then you won’t have as much time to do actual science.

Introduction

00:24 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 six, episode three and today my guest is Dr. Louise Lassalle, a postdoc at the Lawrence Livermore National Lab in Berkeley, California. Louise recounts the hurdles in the process of her move from France to the U S for her post-doc. We discuss short-term hurdles like being approved for a rental, establishing credit, and the cost of moving; medium term hurdles like choosing a health insurance plan, adjusting to the cost of living and paying tax; and long-term hurdles like the cost of applying for a green card. This episode will give international graduate students, postdocs and workers preparing for a move to the US a preview of what is to come and what pitfalls to watch out for. Without further ado, here’s my interview with Dr. Louise Lassalle.

Will You Please Introduce Yourself Further?

01:21 Emily: I am delighted how joining me today on the podcast, Dr. Louise Lassalle, and we are going to be discussing the particular financial challenges that come with coming to the US for part of your training. So, Louise, thank you so much for joining me and will you please tell me and the audience a little bit more about yourself?

01:40 Louise: Sure. Thank you for having me. I got my PhD in France, in Grenoble and after that I was looking for postdoc and I think I was looking in all Europe and also in the US and I got a postdoc in San Francisco in Berkeley, more precisely. When I came for my post-doc was my first time in the US. I went to the US neither for vacation or for conferences and I’ve been there for three years now and I’m still the same job, so I’m still on my post-doc.

Initial Financial Challenges with an International Move

02:23 Emily: All right. Yeah. Great to hear. So let’s start back when you first arrived, maybe even before you arrived in the US but when you were applying for your job, getting your job offer — were there any challenges associated with being an international post-doc associated with that stage of things?

Before the Move

02:41 Louise: I think the first thing is even before you come, you already start with a visa application. You already start with paperwork and try to understand what’s going on. I think that’s the visa application was the main thing to understand, make sure you do everything right and I think that’s the main thing.

03:06 Emily: One question to that is that — the visa application, is that something that you’re able to do totally on your own or do you need to consult with a lawyer or something?

03:15 Louise: In the US, most of the post-docs will be on G-1 because it’s the easiest way to get a post-doc. A G-1 is supposed to be for a change and visitor, but university use it for that proposal too. So basically you employer will provide you with a form for DS-2019, and the process is quite easy on G-1s. Now that I know other processes, I realized that G-1 wasn’t that difficult, but as a first timer you don’t know. So you don’t need a lawyer. It’s quite a straightforward.

03:54 Emily: Okay. Yeah. Great. And I think you mentioned to me earlier that one of your difficulties at that stage of things was understanding the salary offer that you received and putting it in context, having never lived in Berkeley before.

04:11 Louise: Yeah. So first I was very excited to get a post-doc in Berkeley and the topic was super interesting for me, so I was already in the mood that I will accept whatsoever. And also the salary was basically twice what I was doing before, but of course it doesn’t work this way because the rent is not the same as it was. The rent would be like three times and all the costs of living are different. So that is my first advice is make sure you know what the cost of living is before. I’m not sure would have been able to negotiate my salary whatsoever. It’s very hard when I just have like a Skype interview with my PI at this point. But perhaps negotiate your starting time, if the flight is too expensive, then say, “okay, can I start like one month later?”, or something like that.

05:12 Emily: Yeah. Actually, so a year or so I launched this project, PostDocSalaries.com and that’s a database of self reported salary and benefit information. And one of the questions I included in that survey is did you negotiate something about your package or not? And I was surprised actually that about, if I remember correctly, it was about a quarter or a third of the people who responded said, yes, they did negotiate, successfully that is. I thought that was actually pretty high. So it’s definitely something that people don’t necessarily know to do, but it’s sort of one of those, well you may as well try, like you might not be successful, but why not try. But I would be interested in knowing if international postdocs have less leverage maybe than domestic ones in going into that negotiation process. I’m not sure.

06:01 Emily: So you decided you were going to accept whatever offer came your way because you’re excited about the topic and so forth. And so did you try before you actually moved to figure out what the cost of living was going to be or were you just kind of like, “Okay, it is what it is, I’m going.”

06:15 Louise: It was a little of both. I think I still started to check on Craigslist to see the rent, but I was still very optimistic about that and I can go little more on how to get to housing after that. So no, I didn’t really look at it more carefully and it was more like, “Let’s go, let’s do it.”

06:42 Emily: Okay. And so did you arrange for housing before you moved or upon your move?

06:47 Louise: So in this also, I was a little too optimistic. I did a book an Airbnb for one week before and it wasn’t enough at all. I should have booked it, I will advise at least two weeks or even one month. Also because, at least for me, where I live is kind of important. You want to make sure you’re making a great choice and I won’t advise anyone to rent something, apart from Airbnb, from outside. You need to see before you sign anything or you send money. I would really advise to go to an Airbnb, even if you spend a little more money at the beginning, and then find something that really fits your needs. And also you don’t know your neighbors, you don’t know the public transport, or if you want to get a car, if you can do it.

07:40 Emily: Yeah, there is a lot. I mean I agree with you. It’s very difficult to rent something sight unseen. You’re taking a big risk there. And so it’s kind of cool actually that there has been this rise in short term rental options so that you can do something for a couple of weeks or a month without having to sign a lease, but just going into a short term rental situation so that you can do all that research on the ground. It sounded like you needed a little bit more time than what you gave yourself. Did you end up extending that Airbnb or moving to a different one or how did you work that out?

08:09 Louise: I moved to another one but I got a very cheap one and it wasn’t great. And then I rushed to rent an apartment and it wasn’t a good one, because what you see in Airbnb is not what you will get. I can expand more on that later on, but you are not actually competing at exactly the same levels as other people, so in general you go to the more expensive or the apartment that kind of no one wants.

Financial To-Do List When You Land

08:37 Emily: Yeah. So what’s the next thing that you would like to address? When you have your flight coming into San Francisco or wherever you flew into, what were the financial challenges that you were facing right away?

08:50 Louise: I think this is for everyone moving somewhere else, you need quite a lot of money to just first book your flight. Since you need your visa and you don’t know when your visa will come up, then you book your flight like two weeks in advance. And for example, I booked my flight and I arrived mid July. It was a more expensive flight I ever booked, and this, I think I could have perhaps negotiated more, or ask for an increase in my relocation fee because of that.

09:28 Louise: To rent, all of this, I think opening a bank account was actually one of the easiest things I’ve ever done. It Is very, very easy, and what helps a lot is to have the letter of employment with you, and that helps also for the renting part. In general, when you go to the city, everyone knows the big universities that are close by and they like to rent, especially if you’re not the students, you are post-doc, because they know that an employee will pay their rent on time and is not going anywhere. This kind of helps as kind of a reference.

10:06 Emily: I actually am curious about how you paid for things like until you had that bank account opened. Did you have a credit card from your home that worked here or how did that work?

10:17 Louise: Yeah, so you can pay with your credit card. Actually in France we don’t have credit cards and our card is both debit and credit. But the equity we can get on it is generally smaller. But you can pay outside. I think we use, I think the cheapest way is to use wise transfer, but this also takes a few days, so sometimes it’s a little harder. I have to say think that with a credit card I was good because after one week I sent some money over and it was okay.

10:55 Emily: Yeah. It sounds like opening a bank account was probably one of the very first things you did right? Like day two or something.

11:02 Louise: And as I say, it was super easy. Some people say that they ask for, for example, security numbers. They don’t or at least the one I went to it was okay.

11:15 Emily: Gotcha. And what about getting like ID here? Is that another thing you did right away?

11:21 Louise: So right away what you need to do is get your social security number, for sure. This was also another paperwork, but I think it was — generally the university will provide you with some guidance on that. Then what you can do, I mean, the only ID you can get here is a driver license, and I got mine actually a few months after I got here because I didn’t need a car. It was more so I didn’t have to bring my passport everywhere. I think a drivers license is great because it’s kind of an ID and, and then you can keep your passport safe.

11:58 Emily: Gotcha. Yeah. Was there anything else that you discovered in those first few weeks here, especially as you’re arranging for housing? Anything that you wish you had known maybe before you moved or that would have made things easier?

12:14 Louise: So I didn’t expect it will be so hard to get an apartment. First, a lot of people ask for reference and they ask for credit score, and if you’ve never lived in the US you don’t have a credit score. And you have your letter of employment, but technically you didn’t start it yet, so you don’t have that previous salary and sometime also when, if you move up as a couple, you just have one salary. So in general, when they do the list and it’s hard to get at the top of the list, because there’s always someone that’s making more than you, or has better credentials.

13:00 Emily: I would imagine just the housing market also in the Bay Area, broadly, is a very difficult place. Lots of competition. So you may have had among the hardest times that you might have in any city around the US. So how did that end up working out?

13:18 Louise: So I rented something very fast and it wasn’t the best apartment ever, and I moved out this apartment after six months. Also, for example, the rental lease, the rule around that is very different from France and it’s much, much harder on the people that are actually renting the apartment than on the owner, and for me was a surprise to sign a lease. I say that I will have to stay there, whatever happened, even if I get a new job for one year, or I will have to elect to pay for it.

13:55 Emily: So the terms were a little bit unfamiliar to you, in terms of it was much more favorable to the owner, the landlord than it was to the tenant. Is that what you’re saying?

14:05 Louise: Yeah.

14:05 Emily: So what would be more typical in France?

14:08 Louise: So in France, in general, the lease is to protect the renter and also owner. So the lease will be a [inaudible] lease. That means that the owner cannot push you away or they need a big reason for doing that, but you can leave. You have to let your landlord know three months in advance and you can go down to one month if it’s a very hot market or if you get a new job or you move for professional reasons. So I think it’s much more close to what the reality here is, that sometimes you just need to move because you get a new job.

14:46 Emily: Yeah, I know the lease that I signed for my current apartment in Seattle, the terms to break the lease were much more stringent, much higher costs than I had signed in the past. So this is definitely one of those local things, right? It can vary from place to place and obviously individual owner or leasing company, like that. But yeah, I think maybe in higher cost of living cities, the owners have a little bit more power and anyway, the terms can be quite high for breaking a lease early.

15:15 Emily: Anything else regarding some of those first financial challenges that you encountered right away when you arrived here?

15:24 Louise: One thing, it is not directly financial, but you have one month, at least in my lab, you have one month to sign up for your healthcare insurance. The postdocs here have great healthcare insurance also because we have a union, so it was negotiated. We pay very low. You still have two ways, like HMO, PPO is covered differently. And so I think it’s not specific to internationals, because what I understand is even for an American it is a complete mess and so I don’t think it’s very specific, but perhaps for international, it had another layer of things you have to take care of and can be very stressful. And I will say especially for people with family, to understand that with kids that you go much more often to the doctor to understand how it works.

16:19 Emily: Yeah, I can imagine that can be a huge challenge because the US healthcare system is really, really challenging for everyone, and especially if you’re coming from somewhere that makes it a lot easier and you’re not familiar with all the weird stuff that happens here, I can see how that could be super challenging. Was your HR department helpful for you in making that kind of decision about which kind of healthcare plan to take? Did they guide you in any way?

16:42 Louise: Yeah, we had some presentation. The problem here is that I think I remember not getting anything. I think I got how it works perhaps one year after, when I was actually explaining to other people and I asked them to sit down and I think it’s just very confusing. Even me when I tried to explain it again to new postdoc, I also get confused at some point., but they try to help you out.

17:10 Emily: Okay.

Commercial

17:13 Emily: Emily here for a brief interlude. I bet you and your peers are hungry for financial information right now, especially if it’s tailored for your unique PhD experience. I offer seminars, webinars, and workshops on personal finance for early career PhDs that can be billed as professional development or personal wellness programming. My events cover a wide range of personal finance topics, or take a deep dive into the financial topics that matter most to PhDs, like taxes, investing, career transitions, and frugality. If you’re interested in having me speak to your group, or recommending me to a potential host, you can find more information and ways to contact me at PFforPhDs.com/speaking. We can absolutely find a way to get this great content to you and your peers even while social distancing. Now back to our interview.

Mid-Term Financial Challenges of an International Move

18:13 Emily: So let’s move to sort of more midterm challenges. You’ve been here for a few months, what were the next sort of set of financial challenges or questions that you had?

18:25 Louise: I think you feel like you are getting a bunch of money, but of course, when you remove the rent and then half is gone, and as the cost of living tends to be also a little higher, so I think you also need to adapt to that and adapt your way of living. Also what you will do in your country that will cost you nothing that here is expensive. For example, the food. You have to rethink and you have to come up with new things because there’s no way I can eat the same way I eat in France, it is way too expensive. I mean this is a small adjustments, but it is and adjustment. For me, and this is personal, but I have a hard time to understand the credit card system. And it scared me at first, that they say, yeah, you have $1,000 and you can spend it. I’m like, but I don’t have it really. I mean, yes, you have it, but not really. Andwhen I should do my reimbursement and how I should reimburse so my credit score actually goes higher. This also was a little confusing for me.

19:38 Emily: I do not think you’re at all alone about that, because even for people who grow up here, if you’ve never been explicitly sat down and taught how a credit score works or read about it for yourself, there’s a lot of misconceptions floating around about it. Like, for instance, some people believe that if you carry a balance on a credit card, it improves your credit score. In fact, the opposite is true. It’ll probably dinging you in some ways. So yeah, understanding that system can be really difficult. Did you start off with a secured credit card? Was that the first kind you got or were you able to qualify for like a normal credit card?

20:14 Louise: I think a normal. So what I heard from some friends is sometimes the bank actually asks them to put a deposit and they get from this deposit and I don’t know why my bank just give me one and they didn’t ask for anything. And even my husband that was, so we were teo on my salary, and my husband got a credit card like this. So yeah, no we didn’t. I think we get the normal one right away.

20:42 Emily: Yeah. I don’t know why that would be either. The path that I also know is the same thing. Secured card. You put down a deposit, then that’s the amount of money you have available to you. So it’s kind of the same as a debit card, but it helps you build credit. It’s something that mostly people only have to use for a few months, maybe six months or something, before they can then move on to the regular credit system. I don’t know why you would be able to jump right into that one either, but glad you didn’t have to take that first step. And how do you feel about credit now? Now that you’re three years in, are you more comfortable with that? Do you use it at all?

21:13 Louise: Oh yeah. I noticed some people have different credit cards and all from a specific supermarket or brand or whatever. And I just, I didn’t go into it. I feel more safe to just have one. And even this, I use it carefully. But yeah. This is this more personal but once you get it, it’s okay.

21:44 Emily: It sounded like you moved in July, three years ago. How about when it came to tax time that following year? How did you work through that?

21:58 Louise: Okay, so first I’m a post-doc employee, so I have a W-2 form, so it’s quite easy. It’s much, much easier than people on fellowship. So you just have to do it once. And I find actually the first year, it’s not so confusing. We had a presentation here to the lab from the tax people, they help us go through and we can send her an email with our specifics, because since also I wasn’t in the US before, so I was no resident for everything, and it was kind of okay. I think the second year I became a resident for California, but not resident for federal, and it makes it a little more difficult. And this year actually my husband got paid, but as self-employed and that for this one was very difficult to figure out how to declare that. The taxes are hard, but it’s also once a year and everyone has to go through it. We invite people to try to find people from the same country because you can have some country has this treaty that you’re exempt from federal taxes, and some country you still need to pay your taxes back then. Some you don’t. This was quite, it was a boost of my salary and helped a lot in the beginning. That’s a big one for federal taxes.

23:34 Emily: And so is that what the tax treaty with France says? Is that what applied to you, that in the first year you moved here you didn’t have to pay federal tax, but starting in the second year you did, is that right?

23:44 Louise: It’s two years.

23:44 Emily: Oh two years.

23:44 Louise: Yeah, it’s two years day to date. And then the fact that I didn’t have to pay in France is because French tax says that you just pay what you earn in France. It is not related to your citizenship like in a US or in Germany.

24:02 Emily: Gotcha. Yeah, I think the US is very unusual. There’s only a couple of countries that tax their citizens no matter where they live, but yeah, US does that, warning.

Additional Advice for PhDs Planning an International Move

24:13 Emily: Anything else? Any other financial challenges you came upon or things that you want to pass on to other people, bits of knowledge, as you were getting acclimated to the US.

24:22 Louise: Yeah, I just think getting used to that you will spend much more cash and you have to be careful with that. Also, you get a little excited. You want to travel, you want to visit, and it can get a little too much. Every time you go on conference you will spend at least $1000 to $2000 and in general you will get reimbursed but after that, so even with credit card and all of this, get prepared for that too and kind of put it on your budget. If you know you will go to a conference, you should have at least $2000 to make sure you cover the cost. This is for everyone, but that’s true that for an international sometimes you already spent so much on getting there and then you need to rebuild your funds.

25:13 Emily: Yeah, I totally agree. You were just mentioning traveling and I guess something that we think about here is that, you know, in France, our perception is that you guys get a lot of vacation time and we get very little vacation time in comparison. How has that been for you?

25:28 Louise: First that’s true. But as I mentioned before, we have a union, we negotiate five weeks vacation. So it’s actually quite good. And we have also some sick leave that we can take from here to here. Five days is the minimum you will get in France, for example. Generally when you work for a university in France, you get more like 10 or 12, weeks per year. So it’s not that far away and I think it’s helped a lot also. Also if we talk about vacation, this is also a burden on the international. It’s like every time you need to renew your visa, you don’t know how long it will take. So in general, in most countries in Europe are okay, but you never know because they can go on back processes and then you don’t know. But people from India or China, it could take like one month, one month and a half, and then you just use all your vacation for that or you just don’t come back.

26:37 Emily: Yeah, that’s really, really challenging. Just the uncertainty around that, I agree.

Long-Term Planning for Permanent Residency

26:42 Emily: So I understand that you are applying for permanent residency, or are looking into it. What’s that process been like?

26:49 Louise: Okay. Actually I got it.

26:52 Emily: Oh yeah. Great. Congratulations!

26:54 Louise: I got it a few weeks ago. The process for the green card — you will need to pay basically two entities. You will need to pay the US government, and it will be I think $2000 to $3000, also depending if you apply as a couple or not. The big thing, the big part of it is to pay a lawyer, and I won’t to go into details, but you may need lawyers. A lot of people go with lawyers because if you need to make your case, even if you get a green card because you are a scientist, there is a lot of legal stuff going into it, and it’s not a straight out science, like you would write a paper. You can get become eligible by just getting married with an American. Your employer can also ask for a green card for you, and you can petition. That’s what I did. And as a scientist you can kind of easily make your case and you can go for one of the easiest ones, national interest. So that’s like US economy needs you, basically. Then there’s the whole process to get people to refer you. Technically, your lawyer will write a reference letter that you will send to them and they will sign it. And then it’s a lot of bunch of paperwork, that you need to put and translate stuff. In general, preparing all of this will take between three to six months, I would say. And then generally this is used both for eligibility and to adjust your status. Eligibility, you will know around six months. Adjustment of status, it depends a lot on where you come from. It can be from one year to 10 or more.

28:40 Emily: Wow. Yeah, that sounds quite the ordeal. And do you mind sharing, how much did you ultimately spend on the lawyer part of it?

28:48 Louise: For the lawyer, I paid for the eligibility part and I paid $5,000 and I think that is roughly what you will pay. There are cheaper ones, but…I did much more math for this one, I wanted to be more prepared. If you look at the postdoc salary, anything else you can get, in general, is much highe,, and that’s th problem. With my G-1 I cannot get a job in industry or nonprofit or anywhere else. And also I cannot have a side job. I just can work for my employer at my university. This, or me, was also why I wanted ,a green card so I can start and perhaps have a side business, if I wanted to.

29:39 Emily: And why did you decide to go that route instead of maybe finding a next employer and going to the H1B route?

29:49 Louise: Because I wanted to do a career move. I wanted to go out of science and go more applied initiative positions in university or nonprofits. To still work with scientists, but more on the kind of development on the science communication part. And for this one, then my skill as a scientist, I will use part of them, but not the specific one, not the technical one. My employer won’t be able to say, because that’s what they do when they ask for your H1B for you, they basically say no American can do it. I was applying for jobs that they can’t say that, so that’s why. And I think even if you can get a n H1B, the H1B for industry, you can just apply once a year and it is a lottery, so even your employer doesn’t know if you will get it. Then I think you have the O-1 that you can apply to, but it is also, I think, depending on the employer, so you do get less freedom on your part. Actually a lot of people that want to stay here a little longer, if they can, the go for a green card because that’s what gives you the most freedom and also peace of mind. Because now if I lose my job now I need to leave the country within a month. So I think a green card also gives you some freedom around this.

31:12 Emily: Yeah. Well, I’m glad that you have completed that process, so you have that peace of mind now. That’s great to hear. Is there anything else that we haven’t covered yet? Some piece of advice you’d want to give to another international student or postdoc moving to the US for the first time?

Final Words of Advice

31:26 Louise: Yeah, so for sure I will say, do your homework, as good as you did when you choose your position, or you look for a job. When you look for a job, you will perhaps do informal interviews, you will do networking, and try to know what is the job about and do you want to go this way? And I think it’s great to do exactly the same when you move to another country, or another city. Do informal interviews. Be aware, because, so I did one, but someone who lived here I think five years ago and so the renting market just completely changed. The rent doubled. So of course what he was saying, he wasn’t what was happening right now. Do some informal interview, too. See if the environment fits you and fits your needs, because this can also be one point. And do the math, too. And be aware that getting an apartment for the first time will be much harder than you think you will be, so take your time for that.

32:34 Emily: Yeah, I agree. And actually I have a resource. I made a webinar and template spreadsheet earlier this summer, so I’ll link that from the show notes that are all about how to budget at a distance. So how to figure out what is that cost of living where you’re moving to. This could be within the US, if you’re coming from another US city, or coming from outside the country, it’s going to work either way. So what are some like resources you can look to, to figure out what does that cost of living going to be, especially the housing, because that’s the really big rock in the middle of your expenses is figuring that out. And so that’ll really help you kind of know, how is that salary offer? Is it going to be sufficient? And certainly for graduate students it is a question mark, whether or not it’s going to be enough to live on, depending on the city and depending on the program. If that sounds good to you, please go check out that resource in the show notes.

33:19 Emily: So Louise, last question before we wrap up. What is your best financial advice for another postdoc or another early career PhD?

33:29 Louise: Really look into it. Don’t just accept a job offer because you love the science. We are all passionate about it. We just want to do science, but where you live is also important, and if you have to worry too much about the financial part, then you won’t have as much time to do the actual science. And especially if you move in with a partner or if you are moving with your family, then you have even more. That is my advice.

34:04 Emily: Oh, excellent. I totally co-sign all of that. Great, great advice. And Louise, thank you so much for this interview and for joining me today.

34:10 Louise: Thank you.

Outtro

34:14 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. 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 Poddington Bear from the Free Music Archive and is shared under CC by NC podcast editing and show notes creation by Lourdes Bobbio.

How The Lucrative Artist Identifies and Reverses Negative Money Mindsets with His Clients

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In this episode, Emily interviews Dr. Brian Witkowski, a Doctor of Musical Arts and the founder of The Lucrative Artist. Brian serves as a business and leadership development coach for artists and teachers. Brian often sees money mindsets in his clients that don’t serve them well, and these mindsets are common among PhDs as well. If left unchecked, these mindsets have detrimental effects on our finances. Brian and Emily discuss how to reverse negative money mindsets and how entrepreneurship is often the most lucrative and satisfying career for a PhD with a transformed money mindset.

Links Mentioned in the Episode

toxic money mindset academia

Teaser

00:00 Brian: When you’re starting out just by yourself, you don’t have to do all that. It’s just a matter of figuring out what’s your actual service, and who are the people you’re going to serve, and then what kind of value exchange you’re going to be creating that you can reasonably get paid pretty well for it, from the right people, in the right way.

Intro

00:20 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 five, episode eight and today my guest is Dr. Brian Witkowski, a doctor of musical arts and the founder of The Lucrative Artist. PhDs, like many artists, tend to have certain money mindsets that do not serve them well, such as a scarcity mindset. Brian and I discuss how negative money mindsets can detrimentally affect our finances and how to reverse them. For many PhDs, and Brian’s clients, the most lucrative and satisfying career path forward might be through entrepreneurship. Without further ado, here’s my interview with Dr. Brian Witkowski.

Will You Please Introduce Yourself Further?

01:06 Emily: I am delighted to have on the podcast today Dr. Brian Witkowski, and we’re going to be talking about mindset work and entrepreneurship and other fascinating topics like that. So, I’m really looking forward to this conversation and learning a lot from Brian. Brian, will you please introduce yourself a little bit further for our audience?

01:23 Brian: Yeah, so I’m originally from Michigan. My grandparents immigrated from Poland. My dad grew up in a very poor area of Detroit and kind of aspired to a much higher middle-class life and worked his way up and eventually became a professor and then raised me to someday want to be a professor, too. Obviously, the world is a lot different today than it was for the generation back then. You know, I’ve had to explore how else, where I can take my teaching and my work and what I really want to do. And so, when that tenure track job, after I finished my doctorate eight years ago, didn’t quite come up, I started exploring other opportunities. I started to really think what else is not being taught that we all could be taught and how can I better serve people. So, I started studying more about business and finance and looking to see where we can help people. Especially as myself, I have a doctor of musical arts degree, and especially in music and the arts, we know nothing about finance or financial literacy.

02:13 Brian: There’s so much to be learned and needs to be learned. So, you not only can just, you know, understand about money and know how to conduct yourself in life. And because we can’t just expect those few jobs we’re trained for, we have to be entrepreneurs, we have to come up with multiple streams of income, and come up with other opportunities and open our minds up to creating new opportunities as opposed to competing for just a few things that less than 1% actually end up having. So, basically, entrepreneurship is kind of the new golden age for higher education in some ways, is what I like to say. Because we can take our expertise and leverage it in new ways and recreate different learning opportunities, not just for the people in the college classes but for the lifelong learners. So, that’s kind of where I’ve taken my teaching nowadays.

Unhealthy Money Mindsets

02:56 Emily: Oh, that’s fantastic. I’m so excited to dive more into all of that, and I’m really excited to have you on as a guest because a lot of my audience, I think, is currently still in PhD training as graduate students or postdocs or maybe closely following that. They may still be competing for that tenure-track job or not sure what they’re going to do if it doesn’t work out. And so I’m really glad to have you on as someone who’s several years further down that line and has a lot more life experience and career experience in that way. One of the things that we said that we would talk about during this interview was money mindset. Because I think the people who you work with through The Lucrative Artist and also the people who I see through Personal Finance for PhDs have some troubling mindsets around money. So, can you talk a little bit more about the mindsets that you see your clients that also maybe overlap with mine? The money mindsets that they have that don’t serve them very well?

03:48 Brian: In some ways, one thing that doesn’t serve a lot of people is just that mentality that we don’t have enough and there’s never enough there. And we always think that it’s a scarcity mindset complex that so many of us have. Even my own father did, even though his adulthood was phenomenally better than his childhood, he was still struggling financially as a professor just putting it all together. There’s a book called Rich Dad, Poor Dad* by Robert Kiyosaki. More or less, he talks about how his poor dad actually worked his way up in higher education and became the administrator in the state of Hawaii, and so forth. Back in the fifties and sixties, when his “poor dad” was his friend’s dad who didn’t have any college training and just focused on acquiring real estate and thinking about owning a business and trying to earn money that way. And so, he more or less points out how we’re not taught about how to actually earn money other than to expect the job. So, part of the mindset is having your mind open to the possibilities of where you can create new income opportunities and new sources of revenue, and so forth, for your personal life using all you have to offer.

[* This is an affiliate link. Thank you for supporting PF for PhDs!]

04:52 Emily: Yeah, I can definitely see how the scarcity mindset–if you’re thinking only that, again, that tenure-track job is the only one for you and the only thing that’s worth doing after after a doctorate–there is scarcity in terms of that actual career path. That’s not imagined. That’s perfectly real. But I guess the mindset that doesn’t serve you is thinking of course that that’s the only or the best option for you following finishing your higher education. So, to think a little bit more broadly about your career track would be, I guess, the way to combat that scarcity mindset. Any other kinds of mindsets that you see in those populations?

Aim High: Raise Your Anchor Point

05:30 Brian: The only thing is, I guess we’ve focused so much like on student loans and the cost of higher education. It’s like we let the four-figure, accruing interest, to get in the way of thinking how we could maybe use that same energy toward, “How can I create maybe six figures of income or more later on?” We don’t open our minds up to the possibility of earning way more than what certain salaries we’re used to or what our parents or colleagues are earning. In a lot of different ways, if we package our expertise and services in the right way, you can find that clientele or that other startup, that kind of business that can easily make you enough money to more than pay off your debt and then some. And sometimes we get so bogged down with getting depressed over having a big student loan sum and we don’t realize that yes, it’s not that great, but it’s better than some other forms of debt that are out there.

06:19 Emily: Yeah. So, I think that’s like having an anchor point, right? So, like you in your mind around the amount of money you can make, you have anchor points, whether it’s what you were earning as a graduate student, if you had a stipend or as a postdoc or what you expect to earn as a faculty member or another kind of professional. Or, like you were just saying, the balance of student loan debt that you have or maybe the living expenses that you have to cover each month. These are anchor points that float around in your mind as, “Okay, I need to make this much money.” But really there’s no limit to that. Like, why are you anchoring yourself there? Go ahead and anchor yourself at 10 times that amount or a hundred times that amount, maybe.

06:55 Brian: Yeah, definitely. And there’s one interesting exercise that I sometimes give the clients to consider. Okay, what are you earning right now? What would you have to become to suddenly earn double that? Like who are some role models out there? Because there’s always going to be somebody out there we can imagine who’s already making more than what you’re making that you could easily–sometimes not even actually do a whole lot more, but just adjust the way you’re presenting yourself and to the right audience, and so forth. And then figure out how we can double that from there. If all else fails, at the end of this exercise, people usually say they’re going to be Oprah or Tony Robbins or something, which is great. You’ve got to not be afraid to think big like that.

07:32 Brian: Too often we think small, we don’t think we can be these celebrities and these great leaders, but anyone can really grow themselves to be more than just what they thought they could. And sometimes we’re not taught enough of that in our school. My father taught leadership courses when he was a professor. So, those are classes where I’ve kind of avoided anything that he taught when I was in school. Hence, I’ve got a doctor of musical arts degree. His degree was in criminal justice. And so, I wanted to make sure I wasn’t just recreating everything I absorbed by osmosis as a child. I guess you could say it was part of my motivation to make sure I picked a very different degree program. But there’s so many of these things that my father taught in his classes that are not taught to people in the arts and so many other fields as far as management skills, how to interact with people, and what kind of personal growth is out there. We’re too conditioned to just do the exact training for the exact skill to get specific sets of jobs and not necessarily create the jobs instead.

Challenges in a Culture of Volunteerism

08:29 Emily: Mmm, yeah. Great point. So, anything else on your observations around detrimental money mindsets and then how they translate to ill effects in our finances?

08:42 Brian: Yeah, I think partly the scarcity mindset that sometimes starts with just the job market and the opportunities for earning money. Another problem is, especially in the arts and education fields, it’s almost like there’s a nonprofit aspect to it or more if you’re working for a religious institution or, in my case as a professional singer, getting paid to sing in churches and so forth. There’s that guilt trip kind of situation where some people who are cutting the checks kind of make you think you shouldn’t be earning as much as what you should be. And there are other situations too where it’s kind of like the negotiation turns into a coerced charitable contribution in some ways, but not in one in which you can actually get a tax deduction for your time in a concrete kind of way. So, it’s another situation we have to deal with, whether we’re in the arts or in education. There’s that mindset, “Wait, I’m not supposed to get paid this much. I’m supposed to do it for the children and do it for God or whoever, whatever the cause is, basically.” So, that kind of keeps people from realizing their potential. And then I try to tell people to be in a position where you can actually tithe or donate that 10% back as we all ideally should later in life.

09:49 Emily: Yeah, I agree to great, great extent. There’s this, I guess I call it kind of a toxic culture of like compulsory volunteerism in academia and in other similar fields. Exactly as you were saying. When the high level institution has some kind of nonprofit-like status that somehow translates to, “We don’t pay people what they’re worth or we don’t pay people to do work for us. We expect a degree of volunteerism.” I encounter this myself sometimes with institutions who want me to work without pay or with much less pay than I’m asking for. They can kind of use that, “Okay, well we’re a nonprofit,” as like an argument, somehow. But it’s just something that it’s hard to combat because as you said, when you’re sort of indoctrinated into that culture, you think, “Yes, well I’m supposed to be giving back. I’m supposed to be doing this for X, Y, Z. What about the people who won’t benefit from receiving my talents if I don’t take this opportunity?” But at the end of the day, you have to feed yourself, right?

Finding Balance in Value Exchange

10:54 Brian: Yeah. And that’s the other thing. I also tell people that, at the very least, it’s a two-way street. How can they serve me in return if there’s an imbalance in the actual value of exchange that’s taking place? At the very least, maybe that institution could give you a referral for another service you’re providing, or they might allow you to advertise something else. Or, like I tell people who are performing artists, maybe they can sell CDs or trade their mailing lists. There are other ways to at least get some kind of fair exchange of value if you open your mind to those things. I try to help people think about those things and make that happen so that at least if they’re not getting necessarily the actual money, maybe they’re getting a leisurely vacation out of it if it’s a traveling musical gig or something like that. They’re getting something that makes it still worth their while to otherwise feel like they’re volunteering their time.

11:41 Emily: Yeah. Something that can be mutually beneficial instead of just beneficial going one direction. Okay. So let’s say, you know, someone in our audience has identified, “Okay, well I do have that scarcity mindset,” or “Yeah, my anchor point is 10 times lower than it should be,” or what have you. Any of these money mindsets we’ve been talking about. How do you actually go about changing a money mindset that doesn’t serve you well once you’ve identified it?

Changing Your Money Mindset: Self-Talk

12:05 Brian: For me and for people who I work with, sometimes I give meditative exercises. You have to think positively. Positive manifestation-type statements, saying to yourself, “Your bank account may be empty,” but rather than say it’s empty, say, “It’s wide open and ready to receive.” It sounds silly, but you have got to think, “Okay, the money is going to come to me eventually.” You can’t think that you’re never going to get it. It’s just a matter of figuring out the right way to find the right people willing to give you that money, basically, for when you willingly deserve it and earn it.

12:37 Emily: So, it’s kind of about self-talk, then, I guess is what you’re saying? Like it’s about, “Okay, I’ve identified my bank account is empty. Oh, it’s always going to stay empty.” That’s the toxic mindset.

12:48 Brian: So, it’s reinforcing that negative stuff. And before you know it, you’re staying on the floor at the bottom and not working your way up. And then another thing is, there’s the song “Love is in the Air,” but also you could say money is in the air, too. The way the global economy works, the way money compounds everywhere, there’s always going to be enough. You know, sometimes we think, “If I take this job then suddenly somebody else is not going to have any money,” and that’s not how the world works, actually. When we keep getting all that we’re supposed to earn, then there’s more to give around and more to grow the pie.

13:22 Emily: Mhm, yeah. So, it’s not like a fixed pool of money, right, that we all are trying to grab a little bit of a piece of,  it’s about growing the entire economy–the entire pie for everyone. Is that what you’re saying?

13:34 Brian: Yeah, exactly.

13:34 Emily: Yeah, so we aren’t thinking, “Me gaining something is someone else losing something.” That’s not how it is.

13:40 Brian: Yup.

13:41 Emily: Yeah, great.

13:42 Brian: It’s how the markets work. If you notice, if you had invested a dollar a hundred years ago, it would probably be who knows how much now. It’s partly a result of that.

13:51 Emily: Mhm. Yeah. Anything else that we can do to change the money mindset aside from turning things in a more positive way and reinforcing that by self-talk?

Open Your Mind to New Revenue Streams

14:02 Brian: The other way probably: be open to thinking of new ways to earn, and be open to new revenue streams. Don’t be afraid to think outside the box as opposed to how you can make a living. Because we all get so caught up trying to apply for the exact same jobs and thinking these are the only ways to earn. There are so many different audiences out there and clientele that we could actually be serving that we don’t even think about. Especially for myself. People, my colleagues mostly, aspire to teach students who are college students and aspiring professional singers. And it’s kind of like we subconsciously only focus on the clientele that is like ourselves. And we don’t realize there’s another whole clientele out there that might be willing to pay way more, or you could actually set up scalable situations where you could easily earn way than you otherwise are used to earning. So, you’ve got to let go of that in one direction and think 360 every way around you, there’s something more you could probably do.

15:00 Emily: Yeah, I think this kind of relates. For people who are still in academia, they might not feel very special because everyone they’re surrounded by also has crazy advanced degrees. Very smart, very talented, very trained in a similar way. But if you can turn and look outside of that immediate environment like you’re talking about, you can see that there are many, many other opportunities to serve different groups of people or to leverage your skills in a different kind of way. And once you do step outside the ivory tower, your skills are going to be regarded in a way that you’re not used to. Right? They’re going to be much more highly looked upon because you are special. There’s only like 2% of the population or less or something that has doctoral level degrees. So, it’s not actually that common if you find the right group to serve. So, this translates really well once you’ve opened your mind to these other types of clients and other types of work that you might be able to do. At that point, why is self-employment more attractive than a job? Or why does self-employment serve you better with a different kind of money mindset than a job would?

You Can Be Self-Employed and Still Have a Job

16:07 Brian: It’s not necessarily mutually exclusive from having a job. And I think sometimes people get caught up thinking they have to quit their job and suddenly be a sole business owner right away. Not necessarily, although sometimes there are situations where you just need to get out of a toxic environment that doesn’t pay you enough. Then you easily find that one client and you can easily–or a few clients–you can suddenly afford to just say farewell to the job that wasn’t really serving you. But I think when you’re stuck in a job, you’re stuck with a cap on your income. Whereas if you start a business, you could think owning your own business, being self-employed, you’re open to more possibilities and there’s no limit necessarily. So, it’s like you’re removing an artificial cap and you’re also giving yourself more freedom once you get it going, you find the right clientele to serve, and so forth.

16:51 Emily: Yeah, I think this goes back exactly to that Rich Dad, Poor Dad book or idea that you were talking about earlier. The poor dad, right, has a job and his income is, as you were just saying, capped and scaled by the employer. It’s sort of out of his hands, right? But the rich dad is an entrepreneur and–well, Robert Kiyosaki’s really into real estate, so lots of different ways to be an entrepreneur–and in that case, the income streams are unlimited. And each income stream itself is unlimited in how much money you can actually bring in. So, there’s a downside to that, but there’s a big, big, big upside too, if you choose to walk away from a job. Which, like you said, it doesn’t have to be all or nothing. So, some people in my audience, again, are still in training. Self-employment is something that they can do on the side while they’re still in graduate school, while they’re still in a postdoc for now, as long as it’s permitted by their visa and their job and everything. But it’s something you can dip your toe into and see how it’s going, and you don’t have to just take the leap, like you said, right away.

17:53 Brian: Yeah, definitely.

Commercial

17:58 Emily: Emily here for a brief interlude. Tax season is upon us, and while no one loves this time of year, it’s particularly difficult for post-bac fellows, funded grad students, and postdoc fellows. Even professional tax preparers are often thrown for a loop by our unique tax situation. And don’t get me started on tax software. I provide tons of support at this time of year for PhD trainees preparing their tax returns, from free articles and videos to paid at-your-own-pace workshops to live seminars and webinars for universities and research institutes. The best place to go to check out all of this material is pfforphds.com/tax. That’s P F F O R P H D S.com/T A X. Don’t struggle through tax season on your own. Visit my website for the exact information you need in the most efficient form available. Now, back to the interview.

Pay Attention to What is Not Being Taught

19:01 Brian: The great thing is, while you’re still in grad school, it’s your perfect opportunity to realize what is everybody doing the same? Where do you feel like you’re literally just in “the Matrix,” and what’s not being done? I stress to people that it’s the perfect time to really observe and reflect and take notes for what’s going on and what’s not being taught that still needs to be taught in real life. Because there’s just so much of that that still needs to be taught. Whether it’s with finances or just personal development or other aspects of just knowing how to live. Too many aspects of our degrees are just kind of geared to train us for specific jobs but not for creating jobs. So, one strategy is to just observe what’s not being taught. And then how could you actually teach that? I like to joke with people who are getting their terminal degrees, their PhDs, that they could actually create something in which those same people who may not hire you for a faculty job might actually hire you to do their professional development. Because you never know. That fresh perspective of being young, just finished your degree, and offering a different viewpoint is something that’s going to be valuable to them.

20:07 Emily: You’re exactly describing my own journey into Personal Finance for PhDs, because what was going on for me in graduate school was, I was learning about personal finance because I had to apply it in my own life, or felt that I had to, right? So, I was learning how to apply it and then over some time sort of looking at the way my university was or was not supporting that growth and that journey. And I should say that Duke, which is where I did my PhD, actually does a great job with personal finance in comparison to many, many other institutions. But even so, I could see that there was more that could be done there. And that’s exactly how I stepped into my business was seeing, “Okay, well no one is teaching personal finance from the perspective of a graduate student or a postdoc or a PhD. They’re teaching personal finance from the perspective of a CPA or a financial advisor who deals with very, very wealthy clients.” And this is just completely foreign to the people that I was coming out of. And so, I decided to turn around, right? And teach the people who are coming up behind me those principles. So, exactly what you described. And as you said, I never applied for jobs, universities, or faculty positions, but I am now hired by plenty of universities to do professional development in this area. So, it’s totally, totally, exactly what you said.

Different Business Models for PhDs

21:22 Emily: So, what are the different business models that you can see with PhDs or other people with doctorates that are successful, that are easy for them to access, given the skills they’ve been learning throughout their higher education?

21:35 Brian: Yeah. One thing is just to simply think, “What kind of professional development services could I offer? Are there businesses, are there organizations or clients where what I have to offer with my knowledge and expertise can be valuable to them?” And sometimes it’s not necessarily just regurgitating the same content, but how can you repackage it in a way that is more meaningful to them. Sometimes, with my work, I stress that you can kind of integrate some personal development, leadership growth, using your content as the vehicle, so that people are thinking not just that they’re learning more about a certain thing about history, but they’re realizing how their own life embodies that same historical thing you’re trying to reinforce. Find something like that.

22:19 Brian: It personalizes it more and really fits the clientele or the audience that you’re serving. So, there’s that. Sometimes you can do something as simple as different kinds of coaching, whether it’s life coaching, business coaching. There are so many forms of coaching out there that still people need to hire people. That’s not enough just to go about life waiting for the job or expecting your business to take off. We always need more people to help us in different ways to give us different perspectives, different viewpoints to push us in different ways. In the arts, even though I have my degrees, I still take voice lessons. My voice is an evolving instrument. I’m always learning how to use it in different ways. And the older I get, the different kind of repertoire I suddenly get to sing. So, it’s a never ending thing. And there are other aspects of life where it’s the same way. So, people with PhDs and other graduate degrees, just that background alone gives credibility with certain types of audience members.

Self-Employed PhD and Beyond the Professoriate

23:11 Emily: Yeah, absolutely. So, I’m part of a community called Self-Employed PhD, which is underneath the Beyond the Professoriate umbrella program. And so, what Jen Polk and Maren Wood do, who run that program, is they are career coaches for PhDs. And there are many other people who have stepped into the same area. Seeing again like we were just talking about that a lot of universities don’t prepare PhDs well for knowing the possibilities for their careers outside of academia or being prepared to actually apply for those jobs or network for those jobs or get those jobs. Many people have decided to become career coaches in this area because there is a lack of support from many universities in that area. So, exactly what you’re just saying. Any other business models that you see as very accessible for this audience?

Think Big, Think Lifelong Learning

23:56 Brian: Sometimes it can just be simply, create your own school. It might even rival your university. Don’t be afraid to think big like that. Or something else to that effect. Some kind of supplementary, after-school program for elementary kids or high school. Really any age group. I read an article that there is going to be an enrollment crash in higher education soon where suddenly, because there’s going to be way more retirees than young people, not as many young people enrolling in college. So, more job cuts and other drama might be around the corner. But at the same time, we have a retirement population that is just growing, and they’re bored. There are ways to serve them. So, rather than think higher education, think lifelong learning or higher learning and other things you can offer that can serve any kind of population.

24:45 Emily: Hmm. Yeah. If what you really wanted to do when you were pursuing that faculty position was teach–I mean there are so many different audiences and different ways that you can do that. Even within the subject matter that you were highly trained in, if you want to stay in that area.

24:59 Brian: If you’re willing to leave the country, there are 7.6 billion people in the world. There’s going to be somebody out there who will pay you to teach them something.

25:06 Emily: Yeah. Or work online, and have access to everybody in the world. Yeah. Any other business models you want to add to that list?

Other Business/Teaching Models

25:14 Brian: Yeah, one-on-one coaching, teaching, offering professional development seminars or other workshops, and so forth, using your expertise. Also, you don’t necessarily have to not teach the same students you’re expected to teach that you went through school. You just need to be offering them something that’s different from what they’re used to. So, that’s why I also, with my own business, I help people specifically in the arts figure out how can I do this likewise? How can I create something different and empower myself to have control over my career and do more of the things I actually authentically want to do? Because one thing, especially in the arts, there’s a lot of interesting toxicity that goes on when it comes to career expectations. Especially with professional singers. We have a lot of people who started their careers in the last century and sometimes they just went about teaching as if that last century way of life was still going about and everybody could easily have the same career they had. Or at least that’s how they’d go about, conduct themselves, and just kind of otherwise disregard your actual career and what you’d be doing.

26:16 Brian: You have to really be more of an entrepreneur nowadays as a performing artist if you’re not going to suddenly get some of those few jobs that are still out there. So, position yourself to help those same people who are in your field, not getting the help they probably should have had.

26:29 Emily: Mhm. Yeah. And you mentioning actually using the specific skill you’re trained in, singing. But I’m thinking about–so I have a colleague named Chris Cloney who has a business doing research. He has an independent research company, specifically translating the research that he did as a PhD student into basically another way of delivering it to the world. So, we’ve talked about teaching and coaching and speaking and so forth, which is what you and I do. But there are other ways to translate even more precisely what you were doing in graduate school into the entrepreneurial sphere instead of just going after a job. So, you brought up what you’re doing through The Lucrative Artist. I would love for you to tell us a little bit more about that. Maybe a couple of minutes on how you came to this point. We’ve already heard some of that journey, and then what you do for clients right now.

Brian’s Work with The Lucrative Artist

27:16 Brian: Yeah. So, what I do is I help clients literally figure it out. Sometimes, the biggest barrier that we need to break through is figure out what else we can do other than those few jobs we were conditioned to expect to get. And so I help people think, “Okay, how can I assess all your skills and your strengths, your weaknesses? What’s something that you can synthesize that can actually become a viable product or service that you could give to other people? And you’re more or less in a position where you’re not having to worry about competing against other people and you’re serving the audience that really wants you to serve them and so forth?” And so helping people really package that together. We do authenticity training where we think, “What is it we really, truly want to do?”

27:57 Brian: Like, “What is your purpose? What really drove you to want to teach? And how can you get more to that?” Like for me, it wasn’t really necessarily about the actual content, but it’s about helping people really actually change their lives. Like I’ve witnessed my father as a child, growing up. He did the same thing with his students, seeing people who were, likewise like him, grew up really poor, had no idea what they’d be doing later in life. Then finally they realized, “Oh, I can learn this. I can do this.” And suddenly they have great jobs or they have their own businesses, they’re making a great living, and so forth. So, helping people realize there is another way out there, and anyone’s capable of doing it. And then basically once people figure out what ideal business would be for them, what kind of service they’d be providing–sometimes there’s not a specific service, it’s like a bunch of different services related to themselves through their art form. So, for people in singing, for example, sometimes it’s teaching lessons, sometimes it’s teaching speaking lessons, presentation lessons, helping people patch together other skills related to their singing. So, they’re not just performing, but they’re also providing expertise and educating the public more about the works to bring awareness and you know, make that same connection between a certain classical work and you know, what its audience is going through right now.

Combat Limiting Beliefs and Imposter Syndrome

29:12 Emily: That sounds like, based on what we were kind of talking about earlier, you help people identify the limiting beliefs they have, the mindsets they have around their career, for example, and then coach them in how to combat that within themselves. I guess I just think about this as related to imposter syndrome, right? There’s nothing that we are trained for to do outside of academia. All we can do is teach. And if we can’t get that job, we’re like worthless, right? That’s a horrible thing to think about yourself. But I think it’s indoctrinated into so many of us who go through academia to have that imposter syndrome that “I’m not worthy of another kind of job. I’m not worthy of being able to start a business. I don’t have translatable skills into these other areas.” And so, once people see, “Okay, well this is what’s holding me back. I’m going to engage Brian,” you help them turn those mindsets around in a very practical way. Because you can say, “No, here is what you need to be telling yourself instead of what you have been thinking.” And then they do the work, right? To actually uproot those mindsets.

30:14 Brian: Yeah. And then once they get through there, once they realize what they want to do, then I coach them through step-by-step, “What can I do to actually make a viable business take off the ground.” And it’s not always necessarily too scary or confusing. Some people, you tell them you’re helping them grow a business, they want to see all these weird numbers and other things. And when you’re starting now just by yourself, you don’t have to do all that. It’s just a matter of figuring out what’s your actual service and who are the people you’re going to serve and then what kind of value exchange you’re going to be creating that you can reasonably get paid pretty well for from the right people in the right way. And it’s a matter of figuring out how you can package that and who you’d be serving.

Growing a Business is a Gradual Process

30:52 Emily: Yeah. I think some people when they hear like starting a business, they think about the startup world and where you have to have a highly refined business plan you’re pitching to investors and so forth. And it is really important to have this high degree of models and understanding of what you’re going to be doing in that world. But just to dip your toe into self-employment is much, much, less than that. You don’t have to do all that. You have to try out some things, see what people aren’t going to pay you for it, see what you like to do. It’s a lot of experimentation at the beginning and it’s not really high stakes.

31:21 Brian: Yeah, exactly. I love helping people, walk them through that and realize, “Oh, I can do this.” And yes, there’s actually a demand. One interesting exercise to really take people through is just called hot or not. What are some ideas that can work, and we talk them out. And then we also might contact some other people and see what they think about that if it’s a totally new thing that they hadn’t heard of before. And just a matter of, you need an opportunity to just test the waters and you openly be in a safe environment where you can express ideas without somebody thinking you’re stupid or whatever. There’s no stupid idea. There’s, you know, millions of ideas everywhere. And it’s a matter of figuring out how to piece together to create something viable as far as the business goes.

Origin of The Lucrative Artist

32:00 Emily: Mhm. Yeah, that gives me a good idea of what your services are. But I wanted to ask you about your name, The Lucrative Artist, which is very provocative. So, can you tell us a little bit how you came to that?

32:09 Brian: It’s fascinating. It’s a provocative word. It’s a word they say all the time on CNBC and all the other finance channel for other businesses. But for some reason we’re conditioned to think we have to starve as artists. And it’s not necessarily the case. So, I try and help people realize, “No, actually if you’re getting paid what you deserve and what you should be, you’re actually in a position to make even higher quality art and you’re serving people even better.” So, it’s actually an empowering mindset that better serves them later on.

32:39 Emily: Yeah, I love that. Oh my gosh. Well, where can people find you?

32:42 Brian: Well, my website, thelucrativeartist.com, the lucrative artist, three words there, .com or there’s facebook.com/thelucrativeartist where I’m active on a Facebook page. I also have a Twitter and an Instagram where I try to be accessible to as many people as possible through all those platforms, wherever the world’s taken me. There’s a Self-Employment in the Arts conference taking place in Chicago in February that I’ll be presenting at. And also some universities here and there. I’ll be doing some presentations and masterclasses and so forth. So, I try to be all-around.

Best Advice for an Early-Career PhD

33:13 Emily: Sounds awesome. So, final question. This is a standard one that I ask all my guests, which is what is your best advice for another early-career PhD or another early-career doctor? And this could be something related to what we’ve talked about today or it could be completely other.

33:30 Brian: Yeah, I think as far as the best advice, always keep a mind open to creating new sources of income and having multiple sources of income coming in. And think of ways you could create some passive income for yourself as well as the active income. And then, when you’re in your PhD, look and see what everybody else is doing and then think, “What is everybody not doing they should be doing?” And realize that might be a gold mine of a business opportunity just waiting to happen. So, just to open your mind up to that possibility and not being afraid to go for it.

34:03 Emily: Thank you so much, Brian. Thank you so much for the interview. I’ve learned a lot. I hope the audience has as well.

34:07 Brian: I really appreciate it.

Outtro

34:07 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. 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 podcast, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media or with your PhD peers. 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 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.

Fellowship Income Is Now Eligible to Be Contributed to an IRA!

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In this episode, Emily explains the new legislation that allows non-W-2 fellowship income to be contributed to an Individual Retirement Arrangement (IRA). Up until 2019, fellowship or training grant income (reported on a Form 1098-T or Form 1099-MISC or not reported at all) was not eligible to be contributed to an IRA. Certain legislation, the Graduate Student Savings Act (GSSA), which fixes this problem, has been proposed a few times since 2016, but never passed. However, at the end of the 2019 Congressional session, the text of the GSSA was passed and signed into law as part of an omnibus spending bill (H.R. 1865). PhD trainees who are newly eligible to contribute to an IRA should consider their overall financial status and goals to determine whether to contribute and in what amount.

Links Mentioned in this Episode

taxable compensation fellowship IRA

Intro

Welcome to the Personal Finance for PhDs podcast: a higher education in personal finance. I’m your host, Dr. Emily Roberts.

This is Season 4 Bonus Episode 1, and in this episode I will update you on recent legislation that has a major positive impact on the PhD trainee population.

Specifically, starting on January 1st, 2020, the definition of “taxable compensation” for the purpose of contributing to an individual retirement arrangement or IRA was  updated to include taxable fellowship income not reported on a W-2.

That’s the takeaway point for those of you already in the know about this issue: Your taxable non-W-2 fellowship income is now eligible to be contributed to an IRA. You can open a Roth or traditional IRA on January 1 or following and put in the $6,000 maximum contribution if you like, assuming your taxable fellowship income is at least $6,000 in 2020. If that’s all you need to know, feel free to stop this episode now, but please share it with your peers as you go.

In the rest of this episode, I will review the prior definition of taxable compensation and how it negatively impacted the PhD trainee community and then explain the recent legislation that changed the definition for 2020 and forward. At the end of the episode, I’ll point you to a few resources to help you in your investing journey.

1 The Prior Definition of Taxable Compensation

The federal government offers a few different tax incentives to encourage individuals to invest for their retirement.

When you invest money inside a tax-advantaged retirement account, you don’t have to pay tax on the growth in your investments as you would for a regular taxable investment account and you also can take a tax break on either the amount of money you contribute to the account or the amount of money you withdraw from the account in your retirement.

Most of the tax incentives are offered through workplace-based retirement accounts, such as a 401(k) in the private sector or a 403(b) in the nonprofit sector. However, there is one type of account that can be opened outside of your workplace, and that is the Individual Retirement Arrangement or IRA.

You as an individual can go to just about any brokerage firm and open an IRA, and it’s not at all connected to where you work. The contribution limit for an IRA is $6,000 per year if you’re under age 50.

The restriction the federal government places on IRAs is that you have to have what’s called “taxable compensation” in a given calendar year to contribute to an IRA. Your overall income also has to fall under certain limits to contribute.

The old definition of taxable compensation was as follows. Think of a two-column list. The left-hand column is types of income that are considered taxable compensation, and the right-hand column is types of income that are not considered taxable compensation. I’m not giving you the exhaustive lists, but just an idea.

In the left-hand list, taxable compensation, you had:

  • W-2 income, such as you would receive from being an employee,
  • Self-employment income,
  • Alimony,
  • Etc.

In the right-hand list, not taxable compensation, you had:

  • Rental income,
  • Interest and dividend income,
  • Pension or annuity income,
  • Taxable scholarship and fellowship income not reported on a W-2,
  • Etc.

This was specified in the tax code. So if your fellowship or training grant income was reported on any kind of tax form other than a W-2, such as a 1098-T or 1099-MISC, or not reported at all, it was not considered taxable compensation for the purposes of contributing to an IRA.

That means that if you went an entire calendar year with only non-W-2 fellowship income, you would not have been able to contribute to an IRA in that calendar year.

This was really tough news for a lot of people in our PhD community. The irony was that students and postdocs who won outside fellowships often received a higher income than their employee peers, so they perhaps had more money available to invest, but they were barred from using an IRA to do so.

Now, there were a couple workarounds. Keep in mind that the contribution limit to an IRA is $6,000 or the amount of your taxable compensation, whichever is lower.

First, the calendar year and the academic year do not line up. So if your funding source switched between W-2 and non-W-2 between academic years, you would still have at least a degree of IRA eligibility in that calendar year.

Second, if you were married and your spouse had taxable compensation, you could contribute to a spousal IRA, up to their amount of taxable compensation or the overall $12,000 per year limit for two IRAs, whichever was lower.

Third, if you had a side hustle, that self-employment or W-2 income would give you some eligibility.

As a last resort, if you truly didn’t have access to an IRA in a calendar year, you still had the option to invest for retirement in a regular taxable investment account. If you chose a tax-efficient investing strategy, such as passive index investing, you probably would not have much of an additional tax burden due to the favorable tax rates for long-term capital gains and qualified dividends. However, this tax advantage was not widely recognized.

The effect of this law was that many PhD students and postdocs who had the financial means to invest for retirement were prevented from contributing to IRAs, and they likely didn’t try to invest instead in a taxable account. The law sent the message that PhD trainees were not supposed to be investing for retirement and were not worthy of being extended the same tax break that employees were. This had an overall dampening effect on the financial ambition of PhD trainees, which in my opinion was a very serious problem.

2 The Legislation That Changed the Definition

All that has changed now. In essence, the new legislation moved taxable scholarship and fellowship income not reported on a W-2 from the right-hand column to the left, from being explicitly excluded from the definition of taxable compensation to being explicitly included in the definition for graduate students and postdocs.

The origin of this legislation was the bipartisan Graduate Student Savings Act or GSSA, first introduced in 2016 in the Senate by Senators Elizabeth Warren and Mike Lee and in the House by Congressmen Joe Kennedy and Luke Messer; however, it was not passed at that time. The GSSA was re-introduced in 2017 and 2019 and eventually included in the bipartisan SECURE Act in 2019, none of which passed.

You can learn more about the GSSA in Season 4 Episode 9 of this podcast, in which I interview Abby Dove, a graduate student who as a science policy fellow worked on getting a scientific advocacy group to endorse the GSSA.

Ultimately, in the closing days of the 2019 session, the text of the GSSA was included in an omnibus spending bill along with the rest of the SECURE Act, passed by both chambers of Congress, and signed into law by the president.

I’ll read to you exactly the change that was made in House Resolution 1865, and I’ll link it from the show notes.

“SEC. 106. CERTAIN TAXABLE NON-TUITION FELLOWSHIP AND STIPEND PAYMENTS TREATED AS COMPENSATION FOR IRA PURPOSES.

(a) In General.—Paragraph (1) of section 219(f) of the Internal Revenue Code of 1986 is amended by adding at the end the following: “The term ‘compensation’ shall include any amount which is included in the individual’s gross income and paid to the individual to aid the individual in the pursuit of graduate or postdoctoral study.”

(b) Effective Date.—The amendment made by this section shall apply to taxable years beginning after December 31, 2019.”

There you have it! The definition of “taxable compensation” for the purposes of contributing to an IRA now includes taxable fellowship income for graduate students and postdocs. However, by my reading, it seems that taxable post-baccalaureate fellowships have not been included in the definition.

That language of “aid the individual in the pursuit of graduate or postdoctoral study” reflects the definition of a fellowship from IRS Publication 970, which reads quote “A fellowship grant is generally an amount paid for the benefit of an individual to aid in the pursuit of study or research” end quote.

3 What to Do Now

This change is really good news for the PhD trainee community overall, but it may or may not materially change anything for you. If you now have access to an IRA in 2020 when you otherwise would not have, what should you do? I imagine that PhD trainees fall into one of three groups.

First, some PhD trainees should not be investing for retirement right now, so having access to an IRA doesn’t really matter. This is the case if you don’t have the available cash flow to invest or have other, higher-priority financial goals, such as paying off high-interest debt or saving up cash.

Second, some PhD trainees are ready and able to invest but don’t have pre-existing savings or investments. Maybe they have recently finished paying off certain types of debt or saving up sufficient cash, and they now have cash flow available for investing. This is the group that can open up an IRA and set up a regular savings rate into it; this is called dollar cost averaging. With a $6,000 per year limit, your regular monthly contribution to the IRA can be up to $500, which would be a great savings rate for a graduate student or postdoc.

Third, some PhD trainees have already been saving or investing outside of an IRA and are eager to contribute a lump sum of money to an IRA. You are permitted to contribute the full $6,000 in one go if that’s your preference. Then, throughout the year, you can direct your ongoing savings rate to a taxable investment account or other financial goals.

One question I’ve already received a few times is whether fellowship recipients will be able to contribute to a 2019 IRA. In general, you are allowed to contribute to your prior year’s IRA up until tax day of the subsequent year, and this is a strategy I recommend to anyone who has not yet maxed out their IRA for the prior year. However, since the text of the bill says the change will go into effect after December 31, 2019, my reading is that the old definition of taxable compensation will apply to 2019 IRAs and the new definition will apply to 2020 IRAs.

If you’re not sure what your unique next steps should be or if what I spoke about today even applies to you, I am available to coach you. I can’t recommend specific funds, but we can work together to determine your next financial goal, increase your savings rate, and figure out which high-level investing strategy is most appropriate for you.

You can set up one-on-one coaching with me by going to PFforPhDs.com/coaching. Another excellent option is to participate in my upcoming program, The Wealthy PhD, through which you will receive course content, individual and group coaching, and community with your peers. You can find more information about The Wealthy PhD at PFforPhDs.com/wealthyPhD.

I would be absolutely delighted to shepherd fellowship recipients who have never before invested through the process.

As for additional resources, I have many, many articles on investing on my website, and I have linked several updated ones from the show notes. You can find the show notes for this episode at PFforPhDs.com/s4be1 for season 4, bonus episode 1.

For international students and postdocs, I would also recommend listening to Season 4 Episode 17 of this podcast, which answers the question of whether it is permissible and advisable for international students, postdocs, and workers to invest while living in the US. Keep in mind that I recorded this episode prior to the definition of taxable compensation changing.

Finally, if you need to take a big step back because you were surprised to hear that your fellowship and potentially scholarship income is taxable, I recommend listening to Season 2 Bonus Episode 1 of this podcast, titled Do I Owe Income Tax on My Fellowship?

Thank you for joining me for this special bonus episode. Please spread the good news about IRA eligibility to your peers also receiving fellowship or training grant income by sharing this episode with them!

Outtro

Listeners, thank you for joining me for this episode.

PFforPhDs.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. 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 podcast, Stitcher, or whatever platform you use.

Two, share an episode you found particularly valuable on social media or with your PhD peers.

Three, recommend me as a speaker to your university or association. My seminars covered 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.

Can and Should an International Student, Scholar, or Worker Invest in the US?

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In this episode, Emily interviews Hui-chin Chen, a Certified Financial Planner specializing in advising globally mobile professionals through her business, Pavlov Financial Planning. In the interview, Hui-chin answers the questions: Is it permissible for an international student, postdoc, or worker to invest while in the US, and if permissible, is it advisable? Hui-chin and Emily discuss several factors that could impact the answers to these questions: whether the person desires to stay in the US long-term, the type of visa they are on, what type of income they have (W-2 vs. fellowship/training grant), and whether they have access to a tax-advantaged retirement account, such as a 401(k), 403(b), or IRA. Listeners to this episode should come away with clear next steps to further evaluate whether and where to invest while living in the US.

Links Mentioned in This Episode

international investing in US

Teaser

00:00 Hui-chin: I would actually recommend the default is think about, well, if I had the extra money I can invest for the long term, I don’t really need the money — why not? So there has to be a really good reason why you don’t do it.

Introduction

00:21 Emily: Welcome to the Personal Finance for PhDs Podcast for higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season 4 episode 17 and today my guest is Hui-chin Chen, a certified financial planner specializing in advising globally mobile professionals through her business, Pavlov Financial Planning. In this interview, Hui-chin answers the questions: Is it permissible for an international student, postdoc, or worker to invest while in the US and if permissible, is it advisable? We discussed several factors that could impact the answers to these questions. One, whether the person desires to stay in the US long-term. Two, the type of visa they’re on, F-1, J-1 or H-1B. Three, what type of income they have, that is W2 versus fellowship or training grant. And four, whether they have access to a tax advantage retirement account such as a 403B, 401k, or IRA. I’ve wanted to help the international graduate students in PhDs in my audience think through these questions and scenarios for a long time and I’m so grateful to Hui-chin for giving us her expertise in this area today. Please consider sharing this episode with your friends and peers. Without further ado, here’s my interview with Hui-chin Chen.

Will You Please Introduce Yourself Further?

01:42 Emily: I am so delighted to have joining me on the podcast today Hui-chin Chen. She is a CFP. Her business is Pavlov Financial Planning. She is an expert in this area of international students, postdocs, workers living in the US and what can we do investment wise? I know this is a question of high, high interest in my audience. I get this question every single seminar I deliver at universities. Can I invest in the us? Should I invest in the US. What kinds of accounts can I use? So Hui-chin is here to help us answer these questions as best we can. It’s a very complicated and detailed area, but you know, we’re going to work through it over the next 30 minutes or so. So Hui-chin, thank you so much for, for joining on the podcast and please tell us more about yourself and your business.

02:29 Hui-chin: Well, thank you for having me Emily and I think you covered like all the high levels. Like you said, I’m a CFP, a certified financial planner and I focus my work on clients and international planning needs, whether they’re immigrants to the US, people who are temporarily working in the US that migh leave or US citizens that become expats. So sort of like your listeners who are technically expats from other countries. So I deal with international complexities day in and day out for my clients, so I’m happy to answer any questions you might pose today.

03:05 Emily: Yeah, I mean I have been searching high and low for an expert, just like you. Will you please mention your blog name, your website name.

03:12 Hui-chin: Yes. You can read more about just in general financial planning topics for global and mobile people on moneymattersforglobetrotters.com and if you want to learn more about my business or working with me, it will be on pavlovfp.com.

03:29 Emily: Great. And you have a YouTube channel as well, right? What’s the name of that?

03:32 Hui-chin: Yes. Well there’s no name because I just record more like a series of different topics. The most recent one I recorded, I call it “Welcome to the USA: personal finance edition”. I think some of you might be interested or your spouses who accompan you to the US while you study or work and they may or may not be able to. So it goes through a lot of the different steps of understanding the US system that will be helpful if you eventually do want to stay in the US.

04:04 Emily: Yeah, perfect. Tell me just a little bit more about yourself — when did you arrive in the US, where are you from, why did you come here and those kinds of things.

04:12 Hui-chin: I first arrived full time in the US in 2004 for my graduate degree in public policy and management. I did consider going into a PhD, but I did not eventually and I basically stayed. Since then, I found a job in the US, I continued my work and then I met my husband in grad school, but after working separately for a few years, decided to get married and he got a job posting overseas in different countries. So I also have a very personal interest in working with people from all over the world because, for example, right now, I’m actually not physically in the US, we’re somewhere else. So.

Investing in the US as an International Student

04:58 Emily: Okay. Yeah. Fascinating. Oh my gosh. I really hope people follow up with you about this. So what we decided to do with this interview was to answer two broad questions, which are the ones that hear during seminars. The first is am I allowed to invest in the U S is this permissible? Secondly, is it advisable for me to invest in the U,S while I live here? Now the second question is a lot thornier than the first, I understand, so we’ll kind of go through a few different, aspects of this question that might affect the first question or the second.

Is it permissible? Yes!

05:33 Hui-chin: All right, so you’ll have to prompt me later for all these different questions. I’m going to answer the easiest one which is whether, as an international student who is not a US citizen or a green card holder, can I invest through a US based account? The answer is yes. And the United States is one of the few countries that’s very friendly to foreign investors investing directly in the stock markets and the US also has one of the largest stock markets. A lot of foreign companies come to list in the U S. dot. Markets. So really, even if you were not in the US, even if you were just like live in your home country and you want to open a US brokerage account, you can actually do it.

06:24 Hui-chin: It’s not only permissible, it’s actually a sometimes recommended way to invest, especially if your home country gives you very little access directly to investing equity on your own. A lot of countries don’t even have what we call retail access, like in the US. In a lot of places you have to invest through insurance contracts or very expensive mutual funds. So investing directly as a retail investor, that means that you’re as an individual, not going through an advisor, just like open your own account and start investing, it’s actually a great opportunity to do so. Now you’re in the US, it’s a lot easier. It’s easier for you to find information like that instead of doing it in your home country and tried to find those kinds of information. So that’s the long answer. But the short answer is it’s definitely permissible to do so. Right now you’re in the US and you can invest no matter what kind of income that you have. We’re talking about just a normal broker brokerage account, so it doesn’t give you any tax advantages. It’s just for somebody who wants to buy some ETFs or even just stocks. For example, if you really like Apple, you want to buy Apple stocks, you’re totally permissible to open a brokerage account online and pressures that Apple stocks with whatever money you have, either from your work in the US, from your grants, from your fellowships, or from your wealthy uncle back home who wired you some money. Those are all possible ways to invest.

Opening a Brokerage Account

08:06 Emily: So I think there may be, you can tell me if this is the case, I think there may be a distinction between something being permissible under the law and being, will I actually find a brokerage firm who will work with me? Because what I hear from international students and scholars is, and I never know if this is the rumor mill or if it’s actually their own experience is, “well it’s difficult to find a brokerage firm to approach who will work with me.” Is that the case? Is it, I can walk up to any brokerage firm and you know, as an international student or scholar or worker and open whatever. Or is it like, Oh well some of them might, by policy, be excluding certain types of people from you know, opening accounts.

08:51 Hui-chin: That’s a good question. Sort of at the practically, how does that work? So the first scenario is that if you have, for example, if you actually pay social security, now you have a social security number and you’re technically getting your income and you’re an employee of your university, then, for example, if you go onto Vanguard, that’s all the information they ask for. So at Vanguard, if you provide those two types of information, you will be able to open the account and plus you have a US address because you’re currently living in the US, so you actually do not need to already be a green card holder or something in order to have it processed through it. It doesn’t mean that if you eventually decide to leave the U S and if Vanguard finds out, they will want to close the account. So that’s one scenario.

09:43 Hui-chin: The other scenario is that I know some people because their totalization agreements, they don’t even have a social security number or they choose not to have one in the US and so in that case, even though you’re physically in the US and you have a US address through your apartment or on campus, it’s basically you’re considered a foreign, like how you file taxes as a nonresident alien, you can be a foreigner. So in that case, if you still have pretty close ties with your home country and you do decide to go back, you can actually open an account like your just a person living overseas, but in that case it is pretty much dependent on the brokerage company being willing to work with you because every brokerage company, like Schwab or Fidelity or TD Ameritrade, it’ll have their own internal list of which countries residents they were willing to do business with. So you’re basically declaring to them, I am a resident of some other country, would you would do business with me? And then they may or may not. So that’s another way to go about it.

10:59 Emily: Got it. So, okay, an international student or scholar who does not have an SSN, when they actually try to go and open a taxable brokerage account, what should they say to customer service? I’m a resident of X country, but I’m living in the US currently, will you work with me? Is that the question that they need to pose?

11:22 Hui-chin: Yeah, the question will really be, I’m a resident of another country, because if that’s the case, you’re providing an address of that country. You may be able to provide a us mailing address, but that’s not the address that’s associate with the account. So if they know that you are foreign customer, they will have different tax reporting, different tax withholding. Instead of filling out a W9, you fill out W8-BEN, all the different things, so it’s whether you want to be considered as a foreigner to the US institution or somebody who’s a US resident.

12:01 Emily: Got it. So in the case where someone does have an SSN, probably because they’ve been employed W2 employee for at least part of the time that they’re here, would you say that it’s totally fine to then present yourself as a US person? Even if you’re still technically a non resident alien for tax purposes, even though you have the SSN, but let’s say you’re a nonresident alien for tax purposes, is it okay to go ahead and use that SSN and be like, I’m a US person?

12:26 Hui-chin: Well, that’s the tricky part because you are still for tax purpose, like your dividend capital gains interest will be taxed differently. So you do need to report, you need to write a W8-BEN instead of W9. So I would just give an example on how easy it is to actually open an account. For example, on TD Ameritrade’s website they actually ask what kind of visa you have. So I’m just saying that usually in those kinds of applications, if you have a SSN, you have a US address, you have a US employer, it’s most likely those online retail brokerage account, they will allow you to open the account. But you also need to make sure that they know that for tax purposes you need to fill out a tax form as a non resident alien.

Investing during Short-term vs. Long-term Stays in the US

13:17 Emily: Got it. Okay. I think that’s very clear now. Than you so much for going through that in detail. Okay. So then let’s go back to the scenario of “I plan to stay in the US long term, or hope to, not sure if it’s gonna work out” versus “I don’t plan to stay in the US long term”. We now know what’s permissible, but then what is advisable? Should a person who hopes to stay in the US long-term, has the ability to invest right now — is there any reason for them to shy away from doing that because they’re not sure about the longterm status? Let’s start with that question.

13:50 Hui-chin: So like I mentioned, I guess, eluded to earlier, because the US is such an attractive market, not in terms of return or performance, but in terms of access, you can invest in a broad index in so many different countries, so many different companies with such little cost, and it’s really hard to beat if you tried to do it in some other country. Usually there’s more brokerage fees more commission, there are more hurdles to jump through as an individual investor. So I would actually recommend the default is think about well if I have the extra money I can invest for the long term, I don’t really need the money — why not? So there has to be a really good reason why you don’t do it upon the US perspective.

14:38 Emily: Got it. And so maybe that person in that situation is thinking, “well, is it a good reason that I might eventually leave?” How would the investments that are in the US for the moment, do they to exit the country with that person? If the person ends up leaving, how does that work and how’s that handled?

14:57 Hui-chin: Yeah. So as I mentioned earlier, even for somebody who’s never been to the US, some custodians will be willing to open account for a foreign customer. So if you’re thinking about, “Oh, I’m just leaving after I finished my grad degree in three years,” if the country you’re likely going to is on whatever list that custodian posts, like it’s European EU country or it’s a relatively developed country or it’s a safe country, it’s not like a terrorist country that may be on the treasury list of “do not do business with”, then you’re probably safe to assume that you can continue to hold the account. But of course do your own research on the specific countries. It’s impossible for me to go into every single country.

15:46 Emily: We’ll link to a reference if you can provide a reference of that treasury list. We’ll put that in the show notes and check to see if your country appears on this list, in that case, okay, we need to tread more carefully. But let’s say, okay the country is not on that list, go ahead.

16:04 Hui-chin: Yeah, so basically what will happen is that for example, if you went the first route when we’re talking about opening an account, you open account with the U S address and everything, and let’s say you actually end up staying over five years or you actually got a job at under H-1B then leave, right? So you actually went from nonresident alien for tax purpose to a US person tax role, and then you’re leaving, so you’re going back to a non resident alien textual. So you do need to report to the custodian that you’re leaving this is my W8-BEN, this my new address. So of course you want to make sure the custodian does business with people at that address. And there is some other complexity in terms of what you can invest in. Some people from the EU countries might know there are some new regulations saying that the custodian is not supposed to sell ETFs that’s not registered in the EU to their residents. So that’s one type of complexity that may come up that whatever you invested in, you may or may not be able to add more to it once you leave. But whatever you have already invested in, there shouldn’t be any issue with keeping it there, as long as the custodian is willing to keep you as a customer.

17:30 Emily: Got it. So let’s say then that the custodian is not willing to keep you as a customer, for whatever reason. What happens in that scenario?

17:39 Hui-chin: It does happen. Over the last 5 to 10 years, even some US citizens are experiencing that, living overseas, it used to be okay that custodians know that they live overseas and now they’re not okay and custodians say please close your account. For normal brokerage account, of course the first step was if you want to keep your investment in the US, you can always find a different custodian to move your investment to. You actually do not need to sell those investments. You can do a transfer. It’s just whoever’s holding those stocks will transfer the certificate electronically to another custodian. It’s not like you’re selling and getting the money back. But if because where you’re going next or because of personal reasons, after investing in the US for five years, you’re willing to take the money and leave, you can go ahead and sell your investments, close the account, taking the money and leave. There’s no problem with that. There’s also some tax considerations there. For people who are considered a nonresident alien, getting capital gains while they stay in the US for over 183 days versus they do not. Because if, for example, if there is a tax year when you have a US based account and you have a lot of capital gains on your Apple stock because it increases in value a lot, but if you already finish your study and you’ve moved back to your country for two years you’re just wondering, well, will I be taxed on the capital gains? The question is, you actually do not get taxed on the capital gains, in the US. There could be also tax treaties that differs between the US and your country, but in general, the rule is the US does not tax and your country may or may not tax that. So that’s actually a good–

19:34 Emily: It sounds like in that situation, where you’re planning on moving the money out of the US, it sounds like that’s the time to consult a tax advisor in the country that you’ve moved to, right? How to execute this, when to execute this and the tax implications. Is that right?

19:51 Hui-chin: Yeah. So you’re definitely thinking about tax strategy, because, as opposed to the situation I talked about, if you sell the day you leave the U S for example, like “I’m just closing everything down, I’m moving back home.” And if you sell the stocks as somebody who has lived in US, even though you’re a nonresident alien but you were in the US as a tax home, when you sell the stocks, the capital gain is actually taxed at 30%, unless their treaty dictates differently as well. Like you said. So definitely talk to your tax advisor in your home country, as well to understand how the tax coordination works.

Taxable vs. Tax-Advantaged Accounts

20:33 Emily: Got it. And now, you mentioned earlier that all of that was for a taxable brokerage account. So let’s also throw in the scenario that the person has been using a tax advantaged retirement account — IRA, 401k, 403B — and they’re not going to leave it in the US, they’re are going to be moving the money out, what are the tax implications of making a withdrawal from whichever account type.

20:56 Hui-chin: Yeah, in that scenario, basically first of all, you should know that there is a penalty that applies if you take money out of and IRA, 401K, 403B. You should have known it before you put money in, but that’s the same rule that applies broadly to everyone, whether you’re a US person or not. Right? Because the reason is that the government gave you a tax benefit and it’s the incentive for you to keep the money there for retirement. They don’t want you to take the money out. So, if you need the money obviously and you think closing the account, paying the penalty and income taxes is still better going back home and doing it in a few years because of the different tax situation, of course that’s something you can consider. But knowing, with a penalty if you are not not going to need the money and it is eventually going to pay for retirement, one thing you also can consider is to leave the account open for a very long time and let it grow. Of course, you cannot keep putting money into it, but whatever is in there can continue to grow and you can consider taking the money when your income is lower and take the penalty, so the income and the penalty together is less of a hit, or you can take it out when you are 59 and a half, which is the current law of when you can take it out and then there won’t be a penalty but there is going to be taxes in the US and withholding as well.

22:42 Emily: It sounds to me, and this may be painting with too broad of a brush, but it sounds to me like you know, if you end up having investments in the US, if you’re eligible to keep them in the US, and you do leave, sounds like it’s a good idea to keep the accounts open. You won’t be contributing anymore, at least to the tax advantage ones, but it doesn’t sound like there’s a big reason to be closing accounts and moving the money out, unless it is that you are not permitted to keep the accounts open based on the custodian and the rules of the country that you’re going to, and how they deal with the US, is that right? It sounds to me like that’s the pattern. Like go ahead and keep the money here and then when you’re of retirement age in the country that you’re residing and then you can work on doing the withdrawals and dealing with taxes at that time. Is that kind of broadly what you recommend?

23:32 Hui-chin: I think that’s generally correct. Like I said, the main reason for that is because the US is such a individual investor friendly country to allow you to invest that way, so like I said, I would ask the question of why not. Of course everybody’s situation is different. If there is a legit reason that you think that you shouldn’t be keeping the investment in US, of course, you just need to understand the tax implications. Otherwise, keeping investing long-term in the US, not just — let me clarify this, not investing in US companies only, but using a US based account and custodian, who charges you basically right now no commission to buy and sell anything and with very low mutual fund costs, very low ETF costs, it’s a really good bargain compared to the other alternatives.

24:34 Emily: Yeah. So it sounds like whether an individual in the US, not on a green card yet, not sure if they’re gonna be able to stay long-term or planning to not stay long-term, if they have the ability to invest at the time that they’re living in the US, as you said, why not? Why not go ahead and open the taxable brokerage account or the IRA or the 401k or whatever it is and use it, because it’s sort of, as we know — we don’t have to go into about the power of compound interest — starting to invest earlier is fantastic. So basically don’t a waste or fritter away the time that you may be in the US, it might be longer than you expect. Go ahead and start investing and then deal with either moving the money out or keeping here or whatever later, once you know where exactly are you going to be living. I like that approach of why not. So whether the intention is to stay in the US long-term or to not, go ahead and use the time while you’re here. Use your access. Go ahead and open the accounts, again if you’re able to be able to invest.

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25:37 Emily: Emily here for a brief interlude. As a listener of this podcast, every week you hear strategies that another PhD has used to improve their financial picture. But listening and learning does not automatically translate into action in your own financial life. If you are ready to change how you think about and handle your money, but need some help getting started, I can be of service. There are two main ways you can work with me to create and implement a financial plan tailored for you. First, I offer one-on-one financial coaching, either as a single session or a series, as you make changes over the long term. You can find out more at PFforPhDs.com/coaching. Second, I offer a group program called The Wealthy PhD that is part coaching, part course, and part community. You can find out more and join the wait list for the next time I open the program at PFforPhDs.com/wealthyPhD. I believe it’s possible to succeed with your finances at every stage of PhD training and throughout your career. Let’s figure out together how to make that happen for you. Now, back to the interview.

Investing Under Different Visas

26:52 Emily: Okay. That was the first scenario to talk about. And then the second one was about visa types. So F-1, J-1 and H-1B. You’ve already said broadly it is permissible, but is it advisable? Are there any differences among people holding each one of those different visas that they should be thinking about? Or is it like, “no, the general consensus of it’s permissible, why not?” still applies no matter what visa type?

27:17 Hui-chin: I think that it’s not really only based on visa type, but the idea of combination of visa type, how long are you staying in the US — as, you know, F1 can turn from NRA to US person, J-1 as well, with different time frames. I would think about it as just, it’s very similar to what we were talking about before, like longterm or short term. Eventually, the main difference is tax treatment of if you’re staying, if you’re becoming a us person long-term, or even becoming a US citizen and we’re just going to pay US taxes forever versus at some point, in the future, it’s possible you will sever tax ties with the US, other than whatever investment you kept in the US. So overall investing in both scenarios are great. You just need to know the tax implication and the tax strategies, because if you’re switching from one to the other, there may be some opportunities for you to reduce taxes. And if you don’t think about it clearly or get the correct advice, you might find out, well I could have been taxed zero but now I’m getting taxed 30%.

28:28 Emily: Got it. So it’s not so much about the particular visa type, but rather at what point it flips to you being a resident alien for tax purposes, which is different on the different visa types. Okay, great! Quick one there.

Investing for Different Income Types

28:41 Emily: Third point that I wanted to talk about was the income type. So having W2 type income, or even self-employment type income, if that’s permissible, versus having this weird fellowship, training grant, non W2 type of income. This is very common for graduate students and also for postdocs. And so the general rule that certainly applies for US citizens and residents is if you have the W2 type of income that is taxable compensation for the purposes of contributing to an IRA. So let’s say in the scenario where the person does not have access to a workplace-based retirement account, they’re looking at can I open an IRA or not? Taxable compensation would be the W2 type of income. They can open an IRA and use that income towards it. If you go an entire calendar year and don’t have the W2 type of income, not taxable compensation, it’s all fellowship or training grant, and of course for international students, scholars, they’re not permitted to side hustle, they can’t have the second jobs and so forth, so there would be no possibility of having taxable compensation type of income. I guess the question is, whether they had access to an IRA or not, does it change the, we know it’s permissible, but does it change the advisable recommendation on whether to be investing at this time or not, knowing that in the one case with fellowship and training grant type income they wouldn’t be able to use an IRA but could be using a taxable brokerage account as we discussed earlier.

30:09 Hui-chin: I think that’s actually something we can just combine with the fourth one, so the tax-advantaged one. Like you said, eventually the main question is whether I have taxable compensation or I do not have taxable compensation.

30:23 Emily: Now, I want to jump in just to note that we’re recording this in November 2019 so the SECURE Act has not passed the Senate, yet. I am certainly hopeful that it will because what it does is it changes the definition of taxable compensation to include fellowship and training grant type of income, non-W2 income for graduate students and postdocs. So maybe when you’re listening to this, that law would have changed, and so certainly keep that in mind that we’re discussing this as what is the definition of taxable compensation. Basically, right now it does not include fellowship and training grant and come perhaps in the future it will, but right now it doesn’t. Okay, go ahead.

31:02 Hui-chin: I think at the very beginning you mentioned the whole connection to your personal service, right? So the idea of you can contribute to areas that you need to have taxable compensation and that’s related to the idea of it’s not just that it’s taxable, but it is a compensation for performing a service. If we’re just really thinking about why we’re using IRA, it is for the tax advantages. So even before you think about that, it’s like what would be the tax consequences or how much you save by using that kind of account and is that really helpful in your situation? I know, one question, you posed before is well, everybody wants a Roth IRA because they’re like, well, I’ll never get taxed in the future. I want to be able to contribute to that.” But a Roth IRA and traditional IRA have the same rule: the compensation needs to be taxable. So if it’s already not taxable, the government wouldn’t allow you to put money into something that’s never been taxed before. The Roth IRA is for the government to tax you up front, so it doesn’t tax you it in the future when you take it out.

32:26 Emily: Okay, let me, I just want to clarify this. This is a little bit new information to me. So when we have the two words, taxable and compensation, you have to have taxable compensation to contribute to an IRA. The compensation part of it is this, is it non-W2, fellowship and training grant type income? Okay, that’s not compensation. But now we’re also talking about the “taxable”, the first word there in taxable compensation. Your income has to be taxable in the US in the first place to be eligible to be contributed to an IRA. So maybe under certain tax treaties, your income for a time is not taxable in the US, that income would not be eligible to be contributed to an IRA. Correct?

33:05 Hui-chin: Yes.

33:06 Emily: Okay, great. Go ahead.

33:07 Hui-chin: Yeah, and the second one, we use compensation, but on the US-person side it’s called earned income. So if you look at IRS publications it’s always referred to earned income for US person related publications on contributing to IRA. Those two are equally important. It has to be earned income, so your compensation from service, and it’s taxable. The idea is that you will know whether you have that kind of income or not and if you have that income, meaning you’re getting tax in current year, so you’re thinking about, “Oh, if I contribute to an IRA or 401K, or 403B, I get taxed less. Or you contribute to it and now we get taxed, but in the future it won’t get taxed, which is the Roth side. In the first one, just the pretax contribution, it makes sense if you’re really high income. I think for the students, because if you’re on a 1040-NR, depending on the level of your compensation, because you may not have standard deduction, you may only have itemized deduction, some people can be at the zero percent, some people can be twelve percent or above, so you have to look at your tax situation of which bracket you’re going to be in to give you an idea of, well, maybe I want to do pretax instead. And the second one is, okay, so if I’m at a really low bracket, how about I just do Roths, but then the idea is you want the tax benefit in the future, right? But if you are going to move away from the US, how much more is that tax benefit versus simply using a taxable brokerage account, if you don’t get current year tax benefits. So those are the analysis that you need to go through, in terms of whether or not to use a tax advantage account, if you have the income type to do so.

35:20 Emily: Okay. Yeah. Let me see if I can summarize that. If you don’t have taxable compensation, can’t use a tax advantage account anyway, so go through the brokerage firm and go for the taxable brokerage account, if you’re able to use it, if you can set up that kind of cap. Okay. On the other side, we have eligibility for the 401K, the 403B, the IRA. If you want the tax deduction today for contributing to a traditional version of each of those accounts, great. Go ahead and take it and get a tax deduction today. Awesome. The money grows tax deferred, you’ll deal with the taxes in retirement or whenever you move the money out or whatever. For the Roth option, because of any of those kinds of accounts, because you don’t have the immediate tax advantage today, you really have to be asking yourself, does it make sense to put my money into a Roth IRA, no immediate tax advantage, but it will grow income tax free and then I can withdraw it income tax free in retirement versus can I just use a taxable brokerage firm, which is more flexible. And I think maybe the answer to that question, of course it will depend on the math in any individual’s scenario, but might come down to, again, what we talked about earlier, the expectation of staying in the US long-term or the hope, because really over the long, long term it is very advantageous to be using an IRA of any kind, Roth or traditional. But maybe if the time that you see yourself being in the US is on the shorter side, not to retirement or only five years or the length of your degree, then maybe it’s like, well why bother with the whole Roth IRA scenario? Let’s just go for the taxable brokerage account because if you are expecting to move the money out, for example, it’s kind of more of a pain to do so with a Roth IRA, because while you can withdraw your contributions, whatever gains have been in the account, if you try to withdraw those, then then the penalty comes into play. Is that correct?

37:12 Hui-chin: Yeah. And one big difference for people who eventually just move away from US and no ties in the US, I think I mentioned that before, you could qualify for 0% capital gains tax rate if you sell it, so it’s almost like the same, but the only difference is the dividend. So dividends are taxed at a flat 30% if your a NRA living outside of the US, but over the long term, if you’re investing in, for example tech companies, they don’t pay dividends anyway, and your main goal is for that capital gain growth for the next 30 years, then investing in Roth and investing in a taxable brokerage as an NRA living somewhere else is the same.

37:53 Emily: Gotcha.

37:53 Hui-chin: Why give yourself more ties to a Roth type account you can’t access and there’s more complexity.

38:01 Emily: I see. So really your investing strategy might change based on the tax treatment, if you’re no longer living in the US, of capital gains versus dividends. I actually do want to also add in for people who, I think this is still the case under post-tax custom jobs act, people who are the 12% marginal tax bracket or less, they have 0% federal tax on long-term capital gains and qualified dividends. So if you have a very tax efficient strategy, if you’re buying and holding, generally, as long as you stay in those lower tax brackets, you’re really going to see much or any income tax anyway. So why bother with the IRA, when you could be using a taxable account and not really having that much in the way of actual tax burden. Is that correct?

38:47 Hui-chin: Yeah. And just going back to definitely understand the tax treaty if you already know where you’re going to. Of course, most of the time you might think, well I’m just moving back to my home country, but then you get a job somewhere else and then you know, your life is not really as predictable, but at least understand the tax treaty between us and your home country, if you think it’s very likely you might end up there at retirement age when there would be IRA, 401k distribution consequences and compare that to, if I simply use a taxable brokerage, how does that change my dual country tax liability.

39:31 Emily: Got it. I think what I’m hearing mostly from this interview and the point that you just made about life being sort of unpredictable is, okay, here’s what you know. You know you’re in the U S right now. You have to be in the US for a few years, several years, maybe longer. Deal with what you know about right now, make the best decision you can for right now, and then if the situation changes later, you have to pivot. It’s possible to pivot. You’re not going to be losing your investments just because you’re leaving the country or whatever. It’s something that you can move with you, so you can adapt and change depending on, you know, the next step that you take. And hey, if you end up, if you do end up living in the US long-term, like until retirement age, it will be awesome if you started investing earlier and had started using an IRA or a 403B or a 401K earlier, as soon as you have access. Is that fair?

40:22 Hui-chin: Yeah. And I think those more specific questions and people questioning whether they should have account here. I think in my experience, I really mostly hear it from people from EU countries, Australia, Canada, because they feel like they have the same access when they move back. They don’t want the complexity of dealing with cross border things. And I totally understand that. And if you have good access to invest when you go back home, of course. But I think, what I know is being from a developing country myself is that most of the people who come to US see it as an opportunity and if you can have an investment in the US and don’t have to deal with turmoil that may be happening in your home country, most people jump on the opportunity. I don’t know that many people would say it’s a bad idea to open an account in the US.

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Where to Find More Information

41:26 Emily: Got it. I think we’ll leave it there. This has been fantastic. Thank you so much for joining me. Tell us again where people, can find you — your website, your business name and so forth.

41:35 Hui-chin: Yeah, sure. If you want to read more about what I just talked about, and this also how Emily found me, is on moneymattersforglobetrotters.com. It’s just a blog for reading. And if you’re interested in working with me, you can go directly to pavlovfp.com. That’s Pavlov Financial Planning.

41:54 Emily: Thank you so much for joining me today Hui-chin.

41:57 Hui-chin: You’re welcome.

41:58 Emily: Listeners, thank you for joining me for this episode. PFforPphDs.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. 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 podcast, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media or with your PhD peers. Three, recommend me as a speaker to your university or association. My seminars covered 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 Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.