side hustle

This Grad Student’s Side Business Pays Twice What Her Assistantship Does

June 6, 2022 by Meryem Ok Leave a Comment

In this episode, Emily interviews Natilie Williams, a PhD candidate in communication at the University of Missouri, keynote speaker, and author. Natilie established her business prior to starting her PhD and was up front about it with the director of graduate studies from the beginning, which has been to her benefit. At times, her business has brought in double or more what her assistantship pays, which has been vital for her financial health and security during graduate school. Natilie manages her time and schedule fastidiously using a planner to excel in her graduate program and business.

S12E2 image for This Grad Student's Side Business Pays Twice What Her Assistantship Does

Teaser

00:00 Natilie: I was able to, once you added in book sales, you added in speaking, yeah, I was able, at some point, I made maybe like two and a half times my assistantship, almost three, by being able to do these things and elevate my speaking career. Expand it, so not just speaking, but then also a book.

Introduction

00:25 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. This is Season 12, Episode 2, and today my guest is Natilie Williams, a PhD candidate in communication at the University of Missouri, keynote speaker, and author. Natilie established her business prior to starting her PhD and was upfront about it with the director of graduate studies from the beginning, which has benefitted her. At times, her business has brought in double or more what her assistantship pays, which has been vital for her financial health and security during graduate school. Don’t miss Natilie’s description of how she manages her time and schedule to excel in her graduate program and business.

01:35 Emily: I have a gift for you if you’re not yet subscribed to the Personal Finance for PhDs mailing list. At the end of every interview, I ask my guest to give their best financial advice for another early-career PhD. My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. The document is even organized by topic so you can easily see which type of advice is most popular. I invite you to join the mailing list to receive access to this document through PFforPhDs.com/advice/. I hope this quick, powerful resource will help you up-level your finances this summer! You can find the show notes for this episode at PFforPhDs.com/s12e2/. Without further ado, here’s my interview with Natilie Williams.

Will You Please Introduce Yourself Further?

02:38 Emily: I am delighted to have joining me on the podcast today, Natilie Williams. She is both a PhD student and a professional public speaker and author. And so I’m really excited to learn how she’s managing her business as well as her career as a graduate student. So Natilie, welcome to the podcast. Thank you so much for volunteering! And would you please tell the listeners a little bit more about yourself?

02:58 Natilie: Absolutely. Thank you so much for having me. I’m super excited. I am a fourth-year doctoral candidate. I’ll actually graduate in just two months, so I’m very excited about that. So, I’ll graduate in two months. I am at the University of Missouri in Columbia, where I am finishing up my PhD in Communication with a focus in Identity and Diversity, and also maintain an assistantship there. I actually recently accepted a professor position in the Midwest. And so I’m really excited about that. And I also have the privilege and the honor to serve as a keynote speaker across the country on student leadership, collegiate success, and academic and professional development. And then that wasn’t enough for me. I also wrote and published a book called Innerview (I N N ER): Lessons in Leadership. And so, really excited about the book. And so, it looks at how we can use moments of reflection in order to enhance ourselves as leaders.

04:00 Emily: Wow. I can already tell, I wish we had another interview to do all these other topics on like, and actually hear from you and your, you know, the main topics that you speak about because that sounds absolutely fascinating. We’re going to keep it more focused on like you as a graduate student and having this business and how you’re doing both of those things at the same time. Hopefully get some good gold nuggets for the listeners who also have businesses that they want to run as well as being graduate students or PhDs. But congratulations on your faculty position! That’s really, really exciting. And yeah.

04:29 Natilie: Thank you.

Getting Into Public Speaking

04:29 Emily: So, that’s awesome. Let’s kind of back up a little bit. And how did you start speaking professionally? Did this come like before graduate school or since you started graduate school? How did you come to that?

04:40 Natilie: Absolutely. So I started speaking professionally about three months after I received my master’s degree. So I had a really mind-blowing experience. I did my master’s thesis on a TV show called A Different World, which was a spinoff of The Cosby show. And it was a very much so like a staple in like the Black community. Like that show ended May of 1993 and it is still talked about now. People still dress up as the characters for Halloween. And so I did my thesis on that show, and I got surprised by The Steve Harvey show with actually meeting the cast because they did a reunion. I talked about my thesis and it was just like this big national, even international thing.

05:20 Natilie: And so where I went for undergrad, Central Michigan University was like, “Hey, we have this freshman orientation leadership program and we want you to come and serve as a keynote speaker. And we want you to talk about your old leadership experience you had on campus as an undergrad. And we know that you just had that really cool experience with A Different World. Do you think you could tie that in as well?” And so, I did it. I keynoted in front of about 300 plus people. And at the end of that keynote, I had lines and lines and lines of students waiting to talk to me afterwards. And that was the moment where I realized it was more than just me being good at speaking, but it was truly a part of my purpose. And then I eventually learned, maybe months after that, the business side of speaking and was able to start it as a business and turn it into a very much so awesome, successful career path.

06:13 Emily: And so, I understand from our prior conversation that you had some years in the workforce between when you finished your master’s and when you started your PhD. So that’s kind of when you were learning, as you said, the business of speaking and growing that part of it. Is that right?

06:27 Natilie: Absolutely. So with the master’s, I was working for a corporate organization part-time and then once I graduated, they actually hired me on full-time. And when they hired me on full-time, I worked there for about two and a half years. So during the time where I started my speaking career, I was working in corporate and I was actually teaching as an adjunct at night because I was still living in the same town where I got my master’s degree from where I also had had an assistantship that paid for my master’s degree. And they were like, Hey, we know you’re still here in town. You did really good work when you were teaching for us. You want to come do it at night? And so I was really able to use my corporate job to fund my speaking career to start funding the business, right? The website, the photoshoot, different things of that nature. And I had my adjunct position as well as some extra savings. And it got to a point where I was working corporate where I was like, I don’t want to do this anymore. I’m not a fan of this position. And I actually realized that I’m a geek. I love to read and write. I want to go back to school and get a PhD and still maintain and enhance my speaking career.

Speaking in the Collegiate Circuit

07:34 Emily: That’s a great thing actually about sort of side hustling or having your own business generally. It can be on the side of different full-time things. You can have transitions in your career and take your business with you as you go through this transition. So that is awesome. And so, your niche about speaking, you said you’re on the collegiate circuit. So do you speak mostly to college students? And you mentioned leadership earlier, like what are kind of the general topics that you speak about? And did it come from that initial engagement or how have you, you know, expanded since then?

08:04 Natilie: So yeah, it’s come from the initial engagement. It’s also come from my own collegiate experience that has really propelled me as a leader and have taken advantage of opportunities and so, and networking. So like mentorship, relationship building, leadership despite trauma, Greek leadership, Black and multicultural Greek leadership, first-year experience. So how do you even plan out your college career? Whereas you can take over the campus, what are some resources and opportunities that you should take advantage of as a college student? So studying abroad, pre-professional programs, networking with professors, and things of that sort. So those include some of the speaking topics, professional development, preparing yourself for your career path. What can you do in college to prepare you for post-graduation? So those are some of the speaking topics. And it’s on the collegiate circuit as well, but I also am starting to do more stuff with high schools and middle schools as well, including like that social and emotional learning component to leadership. So, it’s starting to expand greatly.

Time Management as a Grad Student and Business Owner

09:12 Emily: That’s awesome! Now I want to hear about you as a graduate student, and also as a business owner. And since you started the business back when you had a full-time job and another part-time job, you probably took some lessons from that in terms of time management and so forth. But I’d love to hear about how you’re applying them now as a graduate student. Like, how are you managing your time and your energy to make sure that you’re doing both these things well?

09:35 Natilie: Absolutely. So I believe it’s time management and also time prioritization and time stewardship. And so figuring out what’s important right now and how much time do I need to allocate to it. But for me, coming in as a graduate student, working on a PhD was really new to me because I had never done that before of course. And so my first thing was, I need to understand what’s the lay of the land. How much time do I need to dedicate to this because it was in-person and it was full-time? And so for me, I really had to figure out what I didn’t know. And I looked to upperclassmen to see how much time are you all spending on readings and coursework? What’s the writing load like? And so I actually sort of, kind of, when I first started the doctoral program, I took very few speaking engagements that first semester, because I was like, I need to focus on this program.

10:31 Natilie: And once I learned that I could balance my coursework and my speaking career, it was all she wrote after that. So it would get to a point where I knew my schedule perfectly. I knew when I had to teach. I knew when I didn’t have to teach. I knew how long it would take me to get to the nearest airport. So I was about two hours from the nearest airport and it would be sometimes I would literally get done with class as a doctoral student. I would have my suitcase packed in my car. I would drive two hours to the airport. I would fly out to go speak. That same day, when I got done off the stage speaking, I would fly right back, finish work as a doctoral student, maybe teach that morning as my assistantship, and I would do it all over again. So I really learned my schedule perfectly. And I would do my papers sometimes on the airplane, do my class readings in the back of the Uber as I was going to my hotel to speak. I would sometimes get to my hotel the night before, so I could do my coursework. And so I really got the timing down perfectly, and I always keep a planner with me. So I knew due dates for assignments as an instructor, and due dates for assignments as a graduate student as well.

Schedule Flexibility

11:47 Emily: I’m not that familiar with like your field. So like, what is the nature of the research that you’re doing? Like is a lot of thinking and writing and reading? Or do you have to like, be certain places aside from like the teaching component? Like, do you have to be certain places at certain times? Like how flexible is your schedule, I guess?

12:02 Natilie: Very flexible schedule. So, as a doctoral student, I study communication. Specifically, I’m more of an interpersonal and family communication scholar. Specifically, I look at what’s called voluntary care relationships. And so those are relationships that have no biological tie, but because we say they’re family, they’re family. So your best friend that you consider your sister friend or your childhood nextdoor neighbor that you may have considered your cousin growing up because you all have known each other for the past 20 years. Godparents and things like that. And so I look at that, but specifically within the context of Black families and Black people and the validation process of those relationships, the impact of them, and the benefits. And so, I’m also a qualitative scholar. So I spend the time interviewing people and things of that sort. So that’s my research interest. And when you’re doing the interviews, you can, you know, do them over the phone and things like that. So, I had a lot of flexibility except for the fact that my coursework was in person. So I just, I knew how much time I had to drive to the airport right after class. I knew how much time I had to board the airplane. So I really just really got it down to a science.

13:16 Emily: That’s amazing. I don’t <laugh>, I don’t think I’ve ever gotten near that degree of specificity with like my time blocking practice. But it’s because I have much fewer, I think, constraints on my life, especially prior to becoming like a parent. Like once you have like that the parenthood stuff going on, I know it’s like a thing that’s said like, you know, mothers become like the most efficient workers you’ve ever seen because they have like, so limited time to like, do their work and then they have to do these other things. So like, but even that, like, I’m not to the degree that you just described, like time blocking. So I really like admire that. It sounds like an amazing skill to have.

Speaking Engagements During COVID

13:53 Emily: And how, like, during this time that you’ve been a PhD student, you know, you mentioned that you took very few speaking engagements at first when you were kind of getting the lay of the land. But then how has your business grown over the past few years? And I’m especially wondering how things have changed with COVID, because you just mentioned you were doing in person speaking. I assume that at least changed for some amount of time for a while. So how have things been going, you know, since starting your PhD?

14:15 Natilie: So as soon as I got the understanding of my schedule and the timing, I hopped right back on that road and it, I just, I knew if I had class, if I didn’t have to teach or my own classes on a Thursday or a Friday, I knew Wednesday night I could go fly out and come right back. And so I started to just be intentional about the different conferences I would present at, in front of students. But then also too, with the decision-makers present, understanding how many decision-makers will be present during that networking piece. And that networking piece, allowing decision-makers to meet me, sit in on my sessions, get to learn more about the learning objectives with my presentations, whether it was a workshop or a keynote, that really allowed me the opportunity to continuously to grow on the speaking circuit.

15:02 Natilie: And with the topics that I speak about, leadership and student leadership on the collegiate market, it’s not as many young black women doing what I’m doing. And so, I’m standing out, right? And I’m doing very well with speaking as far as the mechanics of it. And I was able to and still am able to get my name out there. And so that allowed me to grow my speaking engagements. And you also mentioned about COVID. Well, when COVID hit, I was in my mind, I first thought that this was literally the end of my speaking career. And I said, well, you know what? I had a great run. I did a great job. If that’s it, I went out with a bang. And I actually saw my business boom, shortly after. Like months after. And my mind was blown. I’m like, wait a minute. But I realized that these schools were like, we still need people to encourage our students.

15:53 Natilie: We still need people to give our students the how to. It’s now a virtual space. And so I was able to sometimes do two engagements in one day I could do one in California, one in Florida virtually and not have to leave and not have to also invest in travel expenses. And so, 2021 was probably one of my most profitable speaking years yet. And I think this year is probably on top to beat that. It’s definitely on top to beat that. And so, yeah, I was completely blown away by it, completely blown away. And once I finished coursework for my PhD, it was <laugh>, it was all she wrote. I was able to do a lot more. So I didn’t have to be in the classroom as a student. I just had to teach. And so I was able to have even more free time to get out there and to maximize my opportunities to get in front of my target audience.

16:47 Emily: Yeah. I’m so glad that your business has grown through COVID as well. I’ve observed the same thing. My client base has expanded. It’s so much easier to set up speaking engagements without having to do all the logistics of the travel. And you know, my schedule’s a lot more open, as you were saying, because the travel’s not there. So I’m free to accept engagements that are closer in time together than they used to be. And it’s been strange because I had the same reaction like, oh I can’t travel anymore. I’ve got to pivot. <Laugh> like, what else can I do in this business aside from speaking, because I’m clearly not going to make money from speaking anymore. No, that was not at all the case. Once people kind of got their bearings, the bookings started coming in again. So it’s really been like amazing and I’m so grateful, and grateful that it’s happened the same way for you.

17:27 Natilie: Thank you!

Commercial

17:30 Emily: Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as goal-setting, investing, frugality, increasing income, or student loans, each tailored specifically for graduate students and postdocs? I offer seminars and workshops on these topics and more in a variety of formats, and I’m now booking for the 2022-2023 academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker to your university, graduate school, graduate student association, or postdoc office? My seminars are usually slated as professional development or personal wellness. Ask the potential host to go to PFforPhDs.com/speaking/ or simply email me at emily@PFforPhDs.com to start the process. I really appreciate these recommendations, which are the best way for me to start a conversation with a potential host. The paid work I do with universities and institutions enables me to keep producing this podcast and all my other free resources. Thank you in advance if you decide to issue a recommendation! Now back to our interview.

Business Income vs. Stipend

18:52 Emily: Let’s talk about money. So, you have an assistantship. I don’t know if you want to share how much you make through that. Feel free if you’re comfortable. But how does your, like the money that comes in through your business compare with like your stipend?

19:05 Natilie: Yeah, so with an assistantship so Hey, when I left corporate, I left corporate, I quit the job. I had saved up $15,000 over the timeframe that I had worked there. Especially when I knew I wanted to leave. I was like, well, I’m no fool. I need to, you know, I need to be able to live. And so I saved up $15,000 and then I got this assistantship. And this assistantship was paying me literally a third, one-third of what I made in corporate. And for me I’m like, I will figure it out. Like that’s one promise I’ve made to myself is that I will always be okay financially. Legally, financially, correct? And so yeah, so with the assistantship I was making like a third of what I made in corporate.

19:50 Natilie: And with speaking, I was able to, there were some times where I was literally making whatever my assistantship was, I could make double that with speaking. So I was literally making double my assistantship with speaking and still had my assistantship. And so for me that allowed me to realize like, okay, I can do both of these things well, and I’ve always been a saver and I knew that I would need, you know, I would need to live after I graduated. So I was able to prepare for life post-Graduation. And then also writing a book while I was in the doctoral program and releasing the book and also having book sales come in. So, I was able to, once you added in book sales, you added in speaking, yeah, I was able, at some point I made maybe like two and a half times my citizenship, almost three, by being able to do these things and elevate my speaking career. Expand it, so not just speaking, but then also a book. And so, yeah.

20:54 Emily: It sounds to me like, you know, going into your PhD program, it was never like a question that you would give up the speaking. Like, it’s part of your career now. But I’m just wondering like, had you come into graduate school and not had a side business, is your stipend even enough to live on? Like, are your peers living on it? Or do they all have like side stuff going on or taking out student loans or depending on family members? Or like what’s going on financially in your program, I guess?

Transparency with the Department

21:19 Natilie: Yeah. Most of them, they definitely, they hustle. When I say hustle, I don’t mean it in a bad way. But they’ll take another job. They’ll teach somewhere else. They will, some of them have maybe like a significant other, so they’re able like to split costs. But for the most part, we definitely, as part of our program, we look for other ways to bring in that additional income. And so for me, I came in as a speaker and I made sure that that was something I promised myself that I would not give up, but I wasn’t sure how the department was going to react or respond to it. Because I never wanted them to think that like I was not focused on the program. And I listened to one of your previous episodes where you were talking about that, where it’s frowned upon sometimes.

22:07 Natilie: And so, I came into the department and told the Director of Grad Studies for the department, like, Hey, I do speaking. And so there would be some Fridays where they would have, what’s called colloquium where like, it’s like a big research conversation. And I’m like, yo, I’ve got to go Denver to speak. I can’t make it to colloquium. And luckily the Director of Grad Studies was like, you know, I’m going to count you speaking as professional development since you already have your hand in your career. We’re not going to count it against you, that you aren’t at colloquium, right? Like you already have your hand in your career. We’re going to support that. And I was so happy that she was so generous because she could have been like, no, you need to be here. I can say for like some of the rest of the department more so like peers, I didn’t really let them know too much.

22:56 Natilie: I would just say like, oh, I have a leadership conference to go to. I didn’t mention to my peers that I was the keynote for the leadership conference. But once I saw that it was a comfortable space, I was able to let them know. And then once they saw that like I wrote a book and so they were like, oh, wait a minute, you really do this. Like you wrote a book like you are on a book tour, wait a minute. Like, you know, so once I felt comfortable, I didn’t mind sharing. But I had to be sure that it was a safe space because I was not going to allow anybody to sabotage this career that I had worked so hard for.

23:28 Emily: Yeah. I think this makes a ton of sense because when you have a business, a side business or whatever you might call it, that’s so like out there and public-facing, and especially it’s in higher ed <laugh> as well. Like, it’s something that’s probably impossible to conceal. Like sometimes with my podcast guests, they don’t want to let people know about it, and they can not let people know about it. They can do their side hustle on the weekends, in the evenings. It can be just a private thing. But I think it was really smart of you since you were already doing it when you came into graduate school just to be completely upfront and say, this is what’s happening. And I’m really glad too, that, you know, they worked with you on that. It also makes sense to me that what you’re doing is professional development enhancing your career. So, I’m really glad they gave you that, you know, a little bit of leeway on the attendance.

24:11 Natilie: It was difficult. Because it got to the point where like, I was so protective of my speaking career. Like I was not accepting my colleagues on social media because I didn’t want them to see that, like, you know, I’m speaking. Or if after class, as a student, I go hop on a flight to the airport and I post on social media that I’m on a flight and they’re like, oh, well, what is she doing there? Is she going to make it back in time to teach? And I would, but I never wanted people to question. I never wanted people even to have the opportunity to try and, you know, speak against or speak negatively or try to talk about what they didn’t have clarity on, you know, so. But now it’s all good.

Advice for Working on a Business in Grad School

24:47 Emily: Yeah. You proved yourself in your program and it came out that you were doing all of that with the business on the side, and being successful in both. So yeah, I’m really glad that you had that positive reaction. Is there anything else that you want to share with us about your business or your role as a graduate student before we wrap up?

25:03 Natilie: Absolutely. As a graduate student, if you come in with a business, you don’t necessarily have to lay it down by the wayside in order to focus on your doctoral studies. You can do both and you can do both well. I think it’s about coming into a department and figuring out how does this operate? And then also allowing yourself to have as much time as possible to work on your business and still be a person because doctoral programs are hard for no reason. But it’s possible to maintain both of those things. And if you are like, well, I’m a doctoral student and I want to start a business but I don’t know. Try and think about what skillset do you have that you can actually monetize, and that you can do it in a way in which you’ll have time to dedicate to it. Because you don’t want to start a business and you can’t serve your customers well. So I could not show up to my speaking engagements half-tired because I had a paper due last night that was 15, 20 pages, you know? So being able to still serve your customers in whatever capacity that you serve and try and figure out how you can monetize your skillset and do a ton of research, right? If you are interested in speaking, you can look up other speakers that may be doctoral students and figure out how did they do it. So, you never have to recreate the wheel.

How to Reach Natilie

26:22 Emily: How can the listeners find you if they want to learn more about your career or anything else?

26:27 Natilie: Absolutely. I would love for your listeners to follow me on social media and let me know that they found me from the podcast. And so, I can be found on Instagram @NatWillSpeak N A T W I L L S P E A K. And so that is @NatWillSpeak on Instagram, on Twitter, on Facebook. My website, www.natwillspeak.com. And I’m available if you know, they ever want just drop in and say, hi. And my book Innerview, I N N ER, Lessons in Leadership is available on my website, NatWillSpeak.com, and it’s also available on Amazon. And I really kind of lay out even more in the book of how I was able to start the speaking career and elevate it.

27:13 Emily: Yeah. Fascinating. I love that URL slash handle. Your name lent itself so well, that’s amazing.

27:18 Natilie: Thank you. <Laugh>.

Best Financial Advice for Another Early-Career PhD

27:20 Emily: So, the question that I ask all of my interviewees before we wrap up is what is your best financial advice for another early-career PhD? And it could be something that we’ve already touched on in the interview, or it could be something completely new.

27:33 Natilie: Know what you have coming in financially, know what you have going out paying bills. And you can do that for as in a budget. Budget, your money, so, you know, again, what you have due every month, what you have coming in, and that will really allow you to take more ownership of your finances to say, Hey, I realized that I have $800 leftover every month. I’m doing pretty good. I can start saving or investing. Or it may make you realize I need $800 more a month. I don’t have enough. Do I need to pick up another position? Do I need to try and apply for a fellowship or a scholarship or outside grants or things of that nature? So, I think that me budgeting, learning to budget my money, I budget down to the dollar. Not to the cents, but to the dollar, and me doing that, I was able to take ownership of my finances and know at all times where I stood. And checking bank accounts daily, making sure that, you know, what’s what, did this bill get taken out? So just knowing where I always stood financially gave me the knowledge to make the best-informed decisions financially as a doctoral student.

28:38 Emily: Well, Natilie, it’s been such a pleasure to meet you and thank you so much for sharing your experience and everything with the listeners! Thanks for coming on!

28:45 Natilie: Thank you so much! Thank you!

Outtro

28:52 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? I have collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

Semester-Proof Your Academic Side Business with Digital Products

April 11, 2022 by Meryem Ok Leave a Comment

In this episode, Emily interviews Dr. Toyin Alli, a lecturer at the University of Georgia and founder of The Academic Society. Through the Academic Society, Toyin teaches graduate students about productivity and time management. After experimenting with many different offerings, both Toyin and Emily have added digital products to their businesses to generate passive, scalable income. Toyin explains what a digital product is and how it can help a graduate student or academic “semester-proof” their business so that income flows in no matter how busy you are with other things. She also shares how to find your “zone of alignment” within your business, which might or might not relate to your academic work.

Links Mentioned in this Episode

PF for PhDs S3E12: This PhD Lecturer Found Her Perfect Side Hustle and Teaches Others to Do the Same (Expert Interview with Dr. Toyin Alli)
Plan Your Semester-Proof Business in a Weekend (Free!)
PF for PhDs Annual Tax Return Workshop
PF for PhDs Estimated Tax Workshop
Toyin’s Website
Toyin’s YouTube channel
Toyin’s Twitter (@drtoyinalli)
Toyin’s Instagram (@drtoyinalli)
PF for PhDs Tax Resources
The Academic Society Resources
#GRADBOSS: A Grad School Survival Guide (Book by Dr. Toyin Alli)
McNair Scholars Program
PF for PhDs S10E15: This PhD Solopreneur Started His Business During Grad School (Money Story with Dr. Lubos Brieda)
PF for PhDs S10E16: This Graduate Student Launched a Passion Business Based on His Research (Money Story with Dr. Nelson Zounlome)
PF for PhDs Subscribe to Mailing List (Access to Advice Document)
PF for PhDs Podcast Hub (Show Notes and Transcripts)

S11E8 Semester-Proof Your Academic Side Business with Digital Products

Teaser

00:00 Toyin: And so, for me, one way that I feel fulfilled in my life and I found purpose is through my business. And so it doesn’t have to be through your business, but I do encourage everyone to think about like, what’s something outside of academia that brings me joy and brings me fulfillment?

Introduction

00:19 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 11, Episode 8, and today my guest is Dr. Toyin Alli, a lecturer at the University of Georgia and founder of The Academic Society. Through The Academic Society, Toyin teaches graduate students about productivity and time management. After experimenting with many different offerings, both Toyin and I have added digital products to our businesses to generate passive, scalable income. Toyin explains what a digital product is and how it can help a graduate student or academic “semester-proof” their business so that income flows in no matter how busy you are with other things. She also shares how to find your “zone of alignment” within your business, which might or might not relate to your academic work. I warn you that Toyin and I jump right into biz-talk at the start of this interview, so it might be helpful to go back and listen to her earlier interview, which was Season 3 Episode 12.

01:28 Emily: I need to warm you up a little bit right now for this conversation. Ask yourself: Do you want to make money on the side of your current position? Are you limited in how much time you can spend on your side hustle and does it have to be flexible? Are you subject to a draconian no-side-jobs clause in your contract? Toyin and I discuss in detail one particular type of business that could be a great fit for a graduate student or PhD: A digital products business. We discuss the pros in-depth and also some of the cons, plus how you can get started even if right now you don’t know what you want to offer or to whom. Don’t be put off by our use of the term business, either. You have a business even if it’s just you and one product or one service. Toyin has an excellent short, free video course on digital product businesses for academics, which you can join at theacademicsociety.com/weekend. I took this course prior to our interview and highly recommend it if you’re interested in this type of business.

02:32 Emily: I would be remiss if I didn’t tell you where you can find my main digital products, which I mention a few times in the interview. You can find my annual tax return workshop, How to Complete Your Grad Student Tax Return (and Understand It, Too!), at PFforPhDs.com/taxworkshop/. You can find my estimated tax workshop, Quarterly Estimated Tax for Fellowship Recipients, at PFforPhDs.com/QETax/. I also share why I’ve transitioned all my tax education work from live speaking engagements to these workshops, which comprise pre-recorded videos, worksheets, and live Q&A calls. Without further ado, here’s my interview with Dr. Toyin Alli.

Will You Please Introduce Yourself Further?

03:21 Emily: I am overjoyed to have back on the podcast today Dr. Toyin Alli. She was first on the podcast in season three, episode 12, where we talked about side hustling and finding a good side hustle fit while you’re a graduate student. And today, several years later, we’re having an evolution of that conversation. So, Toyin is, as she was before, a lecturer, she has a PhD, and she’s a business owner. And her business has, you know, moved on in the past three years and she’s learned a ton and she’s going to share a lot of what she’s learned today with us. And I’m so excited about that. So Toyin, thank you so much for coming back on the podcast. And will you please introduce yourself further for the listener?

03:59 Toyin: Yes. Thank you so much, Emily. I’m excited to be back to share with your listeners. Especially, it’ll be interesting to hear the previous episode and think about like the evolution that has occurred. But yes, I’m Dr. Toyin Alli. I got my PhD in math from the University of Alabama back in 2016. And immediately after getting my PhD, I landed, which is basically my dream job, as a lecturer at the University of Georgia. And I’ve been there for almost six years now. And last year I was actually promoted to senior lecturer. So that is very exciting. And I won a teaching award, which is amazing. I actually won two teaching awards. And I also run The Academic Society, which is my business where I help academics and grad students with time management and productivity.

04:52 Emily: Yeah. And Toyin and I have actually collaborated in the past because she’s incorporated some of my financial teaching into her programs through The Academic Society, which we’re going to learn a lot more about in a few minutes. But Toyin, like right up front, why don’t you say if people want to learn more about the subject that we’re talking about today, which is digital products and a semester-proof business, where can they go to find out more from you?

05:14 Toyin: Yes. So I’ve been talking a lot more about business on my personal Instagram account, which is @drtoyinalli, but you can also check out some videos on my YouTube channel called The Academic Society with Toyin Alli. I have a special playlist called Academic Dream Life where I talk about my life and business.

What is a Digital Product?

05:34 Emily: Oh, wow. That’s so inspirational! I need to check that out. Okay. So, I just mentioned the term digital product. This may be unfamiliar to people, although probably they’ve used a digital product, but they may not know that’s what it’s called. So what is a digital product?

05:48 Toyin: I love digital products. So a digital product is something that you can sell online without having to be involved in really any steps of the process. The whole like transaction happens with systems online. And so it’s how people do passive income online. It’s how people say they made money while they slept. And that actually happened to me. But a digital product can be, I like to classify it into three categories. You can think of it as like an ebook or any type of PDF that someone can download, a digital course where you’re teaching something and people can get access to that, or a template where people can get a link to a template that you’ve created and fill it out for themselves. So this is something that someone can go to your website, sign up for it, purchase it, and consume it without you having any interaction with them.

06:43 Emily: So, the analogy is, okay, let’s say some things that contrast to this. So a digital product contrasted to a physical product: there’s some manufacturing process there. There’s some delivery process there. In addition to, of course, the design and the creation, which you would do for a digital product as well as for a physical product. And then there’s also services. So, you can sell a service, which is sort of selling your time or your expertise, your talent for money. And that’s a great way to have a side hustle, but it’s very different from having a digital product. Like you just said, the delivery, once you’ve made the thing, the delivery is completely hands off. And so, digital products are a way that you can scale your income much beyond what you probably would be able to do with something like a service-based business. And so why do you think that digital products, that kind of business, is a good fit for an academic?

Digital Products and Academics

07:34 Toyin: Yes. So I believe that digital products are perfect for academics, which let’s back up and say, I have a business consultancy. So if you’re a consultant, a coach, or you do speaking, I think those are great side hustles. However, when the semester starts to get hectic and really busy, it can be really hard to deliver or have time to do those types of services. And so, a digital product is really nice because you can have a digital product and have your business be running during the busiest and most draining times in your semester. So for example, all of 2021 was very difficult for me. I just felt very drained from teaching my classes, and I wasn’t able to work in my business as much as I usually did. I wasn’t able to create as much content. I wasn’t able to do like the selling that I normally would. However, I actually made more in my business than I ever had before, because I had digital products. And so people were purchasing my products without me having to do any additional work than I had already done. So, that was really nice. So, I think it’s perfect for academics, for academics who have a business already, but they kind of fall off on working in their business during the semester when it gets really busy.

08:53 Emily: Yeah. So this makes a lot of sense to me if your, I guess, various roles in whatever you are as an academic, whether it’s a grad student, postdoc, faculty member, lecturer like you are, if they sort of ebb and flow with the semester, which so many people’s do with their teaching schedule, you know, summer could look quite different from during the academic year. Even breaks, like your winter break could be, I don’t know, three weeks or a month-long. And you know, maybe you have some grading to do, but then your schedule’s very different than what it is at other times. And so, yeah, I love the idea of being able to sort of consistently deliver the product and make the sales no matter how crazy your life is or is not at that time.

09:29 Emily: And I also really want to add, like, not only is this kind of business I think a good fit for an academic, but I’ll speak, I’m not an academic anymore, but I am a parent. And so listeners, this is actually the third time that Toyin and I have tried to record this interview. And the first two times I had to cancel because of complicated stuff going on with my children. For example, my child’s preschool closed during the Omicron wave. So, things like that can come up for lots of people, not just academics, like parents and so forth. And so having a business like mine is to some extent now that can deliver these products without you having to be on a call or in a room is very, very helpful when your life goes a little bit off the rails.

10:11 Toyin: Exactly. And that’s exactly what happened to me last year in 2021. Probably fall of 2021 was probably the worst semester I’ve ever had. And it was just so draining. And I had all of these intentions on like going live, creating videos, working on my business. And I just wasn’t up to it.

A Semester-Proof Business

10:32 Emily: So Toyin, when we were discussing this episode, you had this term that you used that I love so much that reflects what you were just talking about. Can you share what that is?

10:40 Toyin: Yeah. So I call it a semester-proof business, which means no matter how busy your semester gets, your business is semester-proof. Therefore, you can still make sales. Your business can still run without you working on it every single day. And I think the key to having a semester-proof business is to have digital products as part of your business strategy.

11:05 Emily: You know, this has really been kind of where my business has gone over the, I’ve been doing this for like seven years now. And when I first started the business, I really envisioned myself as a public speaker. That was like the thing that I did. And that was because I loved doing it. I loved speaking publicly, I loved being able to interact with people and like that format, answer questions. That’s awesome. But, I realized over the years that like, it wasn’t scalable in the way that I needed it to be. And you were just mentioning how hard fall 2021 was for you. For me, spring 2021 was also hard, but in a different way, which is that I was really, really busy. I was delivering a lot of webinars. This was during tax season, lots and lots of tax webinars for lots of different universities.

11:49 Emily: And it wasn’t like I was doing that every hour of the day, but it took a lot of energy, and I was really feeling like, kind of getting a bit like burned out on that situation. And so, what I decided to do was transition my tax material, in particular, from doing live speaking engagements for universities to offering a digital product to them, which I had already been offering to individuals, but I just decided to sell it to universities as well. And it’s been going fantastic. We’re in tax season for tax year 2021 now. And I love this delivery model. It’s so much easier on me. And, here’s the other thing. I think it’s higher quality for the recipient too. Like in comparison with the live stuff that I was doing otherwise, in a live speaking engagement, I’m not going to say things perfectly. I might flub up something versus my digital product is a hundred percent scripted. I’ve checked it over multiple times. I know it’s correct. I can expand in all the right places. So I think it’s a better product overall. This is for my business, right? That comparison. But just to illustrate to the listener, like how beneficial it can be. Maybe if you have different, you know, suites of different things that you offer, to have this as one of the things that you do that can help you scale and deliver what you want to teach or what you want to share.

12:57 Toyin: I think this is a great point, because I was talking about how beneficial a digital product could be for the academic, the business owner. But it’s also more accessible to the consumer. The consumer can consume whenever they want, they can consume it as many times as they want, and it just fits into their schedule. They can take the time to digest the material. They can repeat the material. And I think it’s just a great experience. So, it’s nice to have other offers that may be live or in-person, but to have digital products for your audience as well can only help them.

Evolution of The Academic Society

13:34 Emily: So, you and I have both experimented a lot. We’ve been doing business stuff in this space for academics for several years, we’ve tried out different things, we’ve evolved what we offer. How would you describe what you offer? Like, has something clicked for you along the way about what you should be offering, who you should be serving? How did you get to that point, and what was like, not quite there yet? Like what was not quite clicking yet?

14:00 Toyin: Yeah. So in my business, The Academic Society, I help grad students mainly with time management and productivity. And it took me a while to get to like the core digital products that I sell in that business. It took me a while to figure out what actually sell. So there was a lot of trial and error. So, the very first digital product I created was called The Grad School Toolkit. And this was, I would categorize it as a template where I made a Trello template to help graduate students organize their lives, keep track of like their degree, all of the things. And I was like, oh my goodness, I wish I had this when I was in grad school. So I made it for grad students. And I tried to sell it and it just would not sell, but I realized I didn’t really have the tools.

14:49 Toyin: I didn’t really know how to sell. This is the first thing I ever created. And so I kind of chickened out, which I wish I didn’t, but I chickened out and I decided to give it away for free. And what happened, no one even downloaded it, even though it was free. I had to learn how to talk about what I was offering. And in order to talk about what I was offering in a way that people would actually want it and purchase it, I had to get to know my audience even more. So, something that was really helpful for me was my YouTube channel and always asking people to share in the comments and ask their questions in the comments. And so, based on the comments of my YouTube channel and the posts in my Facebook group, I was able to learn more and more about what grad students really needed and what they actually wanted.

15:38 Toyin: And that led me to my two main offers. So, there was a collection of students who were excited about starting grad school and they didn’t know what to expect. So, I created a program just for them called Grad School Prep, which is for incoming graduate students. And then I also had this group of grad students who were like struggling to get their work done and struggling with time management. And they just did not know how to motivate themselves to get their work done. So, I created a program called Focus for them. And so those are my two main products. And I would say it took me about two to three years to actually like get those, like actually in the format that they are in today. So it takes a while it takes a bit of improvement, but I think the best advice I can give is just start, put something out there, see how it’s received, and then go from there.

Commercial

16:32 Emily: Emily here for a brief interlude! Taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2021 tax return, which are available at PFforPhDs.com/tax/. I hope you will check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which are linked from PFforPhDs.com/tax/. I offer one workshop on preparing your annual tax return for graduate students and one workshop on calculating your quarterly estimated tax for fellowship and training grant recipients. I’m sure I don’t have to remind you that tax day is fast approaching on April 18th, 2022. That’s the deadline by which you must file your annual tax return and also make your quarter one estimated tax payment, if applicable. The 2022 quarter one live Q&A call for my workshop, Quarterly Estimated Tax for Fellowship Recipients, is today, Monday, April 11th in the evening. It would be my pleasure to help you save time and potentially money this tax season. So, don’t hesitate to reach out. Now back to our interview.

Knowing Your Audience

18:18 Emily: For someone just starting out thinking, I would love to have a side income, even though I’m an academic and I have a busy semester, and I think this digital product thing could work really well for me. You’ve mentioned a couple times like getting to know your audience and discovering what they really want and need. And I’ve done this too, but how does someone who has no audience figure out how they can serve other people and make money doing it?

18:45 Toyin: Yes. So even if you don’t have an audience of like people to buy from you, you know, people, your friends, your family. And so when I was starting, I like made a little list of things like what do people come and ask me about? Like, what do people get advice from me about? What do I feel like I do better than others? What comes easy for me? And that was a way to get started. A way to figure out how I could help someone else. And then once I figured out who I wanted to help, I actually started asking people who fits this description? What are your questions about this topic? And so I started creating content about the topic. So for me, it was grad students with time management. I started creating content and that started to build my audience. And so, that gave me more people to ask marketing questions too.

19:37 Emily: I think this aspect of the audience is a really important element of selling digital products. And it’s something that, so I said earlier, like you could also sell services. Selling services is a really fast way to make money. Selling a digital product is maybe more scalable, but it’s more of a long-term play because you have to find the audience, you have to figure out what they want. You have to develop the product, you have to tinker around with different things like we’ve been talking about. And so I know like something that you do now is that you create content regularly for your YouTube channel, probably other places as well. And that, you know, brings people into your orbit, they’re interested in what you’re saying, and ultimately, maybe they decide they want to buy this digital product from you because they know it’s going to help them even further than what you’ve been doing for free. Is that the general model that this should follow? I guess someone could get really lucky and put something out there and suddenly people find it and love it, but that’s not typically how things go, right?

20:29 Toyin: Yes. I’m so glad you mentioned that. I would say that having a digital products business and making your business semester-proof, it’s a slow burn. It’s kind of like a snowball that kind of just like builds and builds, but it takes a while. I also agree that having a service like a consultancy or coaching or speaking, that is a much quicker way to make money, but the nice thing about a digital products business is, once you set it up, it’s good to go. So would you rather wait until you have a huge audience for people to buy to set it up, or would you rather set it up now and just start attracting people little by little? And the more you talk about what you do, the more people will learn about it, and that’s, what’s going to build that snowball effect.

Sales on Autopilot

21:16 Toyin: And there are of course things you can do to like kickstart your digital product. So, it doesn’t have to be completely passive at the very beginning. So for example, I created a workshop recently called Sales on Autopilot to help other academics. And I could have just launched it as a digital product that people could watch on their own, but I knew it was new. And so, I needed to build a little bit of hype around it. So I decided to offer it live for the first round, and that is a way to get people excited. And so if you are unsure or if you do want to have a digital product and you don’t really want to wait around to see if it catches on, try to do some type of live event around it and it can get people excited about it.

22:05 Emily: I am literally right now experimenting with this in my business because I’m super interested in reaching out more and more to prospective graduate students. Like you said, that you had a cohort of people who are like preparing for graduate school and trying to figure out all the stuff about how they’re going to succeed in graduate school. I have that same group that I’m interested in from their financial perspective. And so there are different ways that I’ve been doing this over the years, but right now I’m experimenting with delivering some content live for the first time that will ultimately be refined and live as an evergreen digital product. So like, this is something that for some aspect of your business, you may be able to do it once and then, you know, set it on autopilot. But every time you sort of have a new idea, you have to go through the same sort of iterative process on this. So, that’s really, really exciting.

22:51 Toyin: It’s also really fun to do like a live event because when you do something live, you get to hear people’s feedback real-time. And it can tell you how you may want to tweak what you’re offering, or maybe how to reposition it in a way that’s more exciting for your prospective client or customer.

23:10 Emily: I just wanted to share another aspect of my journey on this point that you were just making of, you know, make the product and also grow your audience. And it’s there for them whenever they want it. And as your audience grows more and more, hopefully more people will be finding it and buying it and so forth for me. Like I started teaching the tax material that I do in my business way back from the beginning, because it was one of those multiple personal finance subjects that people really needed to know about. So it had sort of, it was on the level of the other things. And then a while after that I created the digital product version, like my prerecorded tax workshop, but I was only selling it to individuals and I wasn’t selling it to universities yet. I was doing the live stuff for universities. And then like I was saying earlier, when I got so busy that I couldn’t really support the live aspect of it anymore, that product was there. And I could already tell my university clients I’ve been selling this for three years to individuals. It gets great reviews. People love it. And that was a great selling point for me. So like, my audience grew and shifted and so forth, but I was really glad that I had started experimenting with that product like years and years earlier.

24:11 Toyin: Yes. I love that. And I love like how you could scale that one offer. You’re talking about the same thing, but you’re offering it in different ways and in different capacities. That’s actually how I came up with my Grad School Prep course. I wrote a book called #GRADBOSS: A Grad School Survival Guide. And I wanted to expand on that book and go a little deeper. So, that book is available as a digital product or you can buy the physical copy, but if you want something more in-depth, something more interactive, there’s my course. I turned it into a bigger, better thing into a course. And then as you mentioned, we collaborated, and I invited Emily in on my course to help the students in there with the finance. And then that same topic, I actually scaled it up even more. I have a program for if anyone’s heard of the McNair Scholars Program, it’s for first-generation underrepresented undergraduate students. I was actually a McNair scholar, and the goal is to teach them about grad school and have them earn a terminal degree. And I was like, wow, my Grad School Prep stuff would actually be really helpful for McNair scholars. And so I scaled that product again, but tweaked it so that it was personalized for McNair scholars. So, I just feel like there are endless possibilities with digital products.

Find Your Zone of Alignment

25:33 Emily: I’m so glad you brought up the example of working with the McNair programs, which you and I are now doing, and it’s fantastic and it’s so much fun and I feel like we’re making a huge impact and it’s amazing. I think that you now call that your like zone of alignment, right? That you have the material that you’re teaching, you have the audience that you’re teaching it to. Can you expand on what that means?

25:51 Toyin: Yes. I finally discovered my zone of alignment, which is where I can position myself where I can just be myself and just really succeed. So, a lot of people talk about their zone of excellence, which is just things that you’re really, really good at. And then there’s your zone of genius where it’s like, not just the things that you’re good at that may be like draining on you, but the things that you’re good at that feels good to you. But if you take it one step further and add in your background and who you are, you can achieve your zone of alignment. So for me, I am really good at time management, and I am really good at helping graduate students with time management and productivity. That’s what I’ve built my business on. But my McNair program, it is so special to me because I was a McNair scholar.

26:44 Toyin: I achieved the goal of the McNair program of getting my PhD, and I help other graduate students. And now I’m able to help other McNair students actually achieve their goal. And so when I talk to McNair directors about my program, it’s like a no-brainer for them like, oh yeah, we teach our students about grad school. But also, they’re going to be able to learn from someone who was in the exact position as they were. And I just feel like all of the stars aligned when I created that program, and it just brings me so much joy and I feel that I’m working out of my zone of alignment. And I believe everyone has a zone of alignment. So like, if you think back to where you came from and what you’re good at, is there a way that you could help people who were just like you? And if you can find a way to do that, it tends to become almost effortless.

27:38 Emily: I can think of actually a couple recent podcast interviews that I’ve published. One with Dr. Lubos Brieda, and one with Dr. Nelson Zounlome, who were both graduate students who, I think, you know, according to your framework, like discovered their zone of alignment while in graduate school, and then launched businesses out of that zone of alignment. In Lubos’ case, he has a consulting company now. And in Nelson’s case, he’s still in academia like you are, but he has this side business that relates to his research and also his passion. And it just, it all just like feeds into one another in this like beautiful way. And I think that’s like something that our academic audience, you know, your zone of alignment might be something related to the subject matter that you’re studying in graduate school or that you did study during your PhD. You and I took kind of a step side to that of just like, how do you succeed as like a graduate student or PhD in these different areas, but it could literally be related to your research or the population that you are interested in or something like that. Like, there’s probably something about your experience as a graduate student or PhD that will help you figure out your zone of alignment

28:46 Toyin: One hundred percent, one hundred percent. And this is something I actually work on with my clients. So, I have a business consultancy where I help academic entrepreneurs figure out like how do they manage both being an academic and an entrepreneur. And academic work can be pretty draining. And so, you don’t want your business to also be draining if you already have a job that’s draining. So it’s really important to build a business, you know, from your zone of genius, but also really find that alignment so that everything just like falls into place and it becomes way more easy and more joyful and more fulfilling to work in your business when you’re working out of alignment or in alignment, rather.

Seeking Joy and Fulfillment

29:31 Emily: Toyin, I’ve just loved this conversation. Is there anything else that you want to share with us regarding digital products businesses, or zones of alignment, or anything else that we’ve touched on?

29:42 Toyin: As academics, we spend a lot of time becoming who we are and like building to our career. It takes a lot of work, and when we actually finish and make it through the program, we should feel good about that. And we should start to enjoy our lives. And so something that I really hate seeing is an academic who’s gone through the whole process of getting their degree and they get stuck in that grind of academia and their life just becomes academics, and they don’t really find a fulfilling purpose. And so for me, one way that I feel fulfilled in my life and I found purpose is through my business. And so, it doesn’t have to be through your business, but I do encourage everyone to think about like what’s something outside of academia that brings me joy and brings me fulfillment? And so, yeah, that’s just what I wanted to mention.

30:36 Emily: That’s beautiful. Toyin, where can people learn more about this subject of digital products and so forth?

30:44 Toyin: Yes. So I’ve created a free video series, which is a digital product, but it’s called Plan Your Semester-Proof Business in a Weekend. And so, it’s a multi-part video series where I walk you through the process of creating your own semester-proof business, as well as share my complete business journeys, failures, and successes. And so if you’re interested in that, you can check it out at theacademicsociety.com/weekend.

31:14 Emily: And I went through this digital product a couple of weeks ago, and I found it really, really illuminating. Even though I’ve already been in this space for like several years, I still learned several things from this series. Something I really, really liked was that you go through, as you briefly mentioned earlier, just a bunch of different examples of different digital products, but in a little bit more detail in these videos, and it can really spark ideas and just show people also like a digital product doesn’t have to be some like massive thing. Like my tax workshop, for example, which has taken years to create and hours and hours and blah, blah, blah. It does not have to be that big, it can be a small thing. That’s okay. Start somewhere and get your sort of systems up and running. I love the systems focus that you have in that series, because this is a weak part of my business. So that’s where I learned something. So anyway, it’s a free course, y’all. If anybody’s interested in creating digital products, just go and take it. It’s going to be great.

Best Financial Advice for Another Early-Career PhD

32:02 Emily: Okay. So Toyin, last question that I ask of all my interviewees is what is your best financial advice for another early-career PhD? And it can be something that we have talked about already in the interview, or it can be something completely new.

32:16 Toyin: Yes. So my best piece of advice would probably be to not underestimate the power of having savings. I am someone who always struggled with having savings. I think just since graduate school when I was applying for jobs or going to conferences, just the way that things are set up, it’s like you pay your own money and then you have to be reimbursed. And so I was often like using a credit card and then being reimbursed, but also have to use the money for other things. And so I got into a pretty deep debt. And so I was never able to build my savings. But thank goodness I have my business and I was able to get out of debt using earnings from my business. But I am really focused now on building a savings account. I think that’s really important. Like this past summer, my air conditioner broke, so I had to buy a new air conditioner. Luckily, I actually had savings this time, and I was able to do that. But yeah, I think that was something I underestimated before, but I never will again.

33:19 Emily: That’s great. That’s great. I think when you’re in a cycle of like living to paycheck to paycheck or like depending on credit cards, it’s kind of about like getting by, and you think you are. You’re doing okay, using the tools available to you. Yes, that’s true. But once you are not in that position anymore and you have the savings, like you did not even know the peace of mind that was available to you by that savings existing until you got to that point. So, definitely cosign as best you can, as soon as you can get some savings in place. And the thing that’s great, we didn’t even talk about this before, about a digital product business is that it’s so low overhead. So, you can start one without sinking a bunch of money into whatever systems and inventory and blah, blah, blah, blah. You can do it very easily. It’s going to cost you your time, but probably not much more than that. And yeah, so you can make money without having a whole lot on the expense side.

34:12 Toyin: Yes. I love that you said this. So I do this workshop called Sales on Autopilot, and you can literally set up a digital products business for $9 a month. That is it. Like it is probably the cheapest business that you could ever create.

34:29 Emily: Yeah, no kidding. Well Toyin, we’ve gotten so many insights from this interview. Thank you so much for coming on the podcast again, it’s been wonderful to talk with you!

34:37 Toyin: Thank you so much for having me, this was great!

Outtro

34:45 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? I have collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. If you’ve been enjoying the podcast, here are 3 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and increasing cash flow. I also license pre-recorded workshops on taxes. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

This Grad Student’s Side Hustle Is Trading Options

February 14, 2022 by Meryem Ok Leave a Comment

In this episode, Emily interviews Min Sub Lee, a 4th year PhD candidate in Molecular and Medical Pharmacology at UCLA. Over the past year, Min Sub has developed a side hustle in options trading, which is selling or buying the option or right to sell or buy stock. Min Sub teaches us what covered calls, put options, and put-credit spread options are. He shares how he learned this technique and why he thinks it’s a good fit for a graduate student’s budget and schedule. Min Sub keeps this strategy low-risk by limiting it to only a small fraction of his investment portfolio and making small, consistent bets. This content is not advice for financial, legal, or tax purposes, and if you are interested in options trading, please do extensive research before you begin!

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Teaser

00:00 Min Sub: You know, as long as you’re consistent, as long as you are committed to your goals, I really think that in the long picture, right, the money will compound on its own. And you know, I am a very strong believer that anyone can, you know, achieve great wealth, no matter what kind of income you’re making. I personally think that as long as you have the right mindset, as long as you have the right strategy for it, then anyone can do this. That includes grad students.

Introduction

00:31 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 11, Episode 4, and today my guest is Min Sub Lee, a 4th year PhD candidate in Molecular and Medical Pharmacology at UCLA. Over the past year, Min Sub has developed a side hustle in options trading, which is selling or buying the option or right to sell or buy stock. Min Sub teaches us what covered calls, put options, and put-credit spread options are. He shares how he learned this technique and why he thinks it’s a good fit for a graduate student’s budget and schedule. Min Sub keeps this strategy low-risk by limiting it to only a small fraction of his investment portfolio and making small, consistent bets. This content is not advice for financial, legal, or tax purposes, and if you are interested in options trading, please do extensive research before you begin! I have a new little project that I’d love for you to participate in! I’m crowdsourcing information on what tax forms are being issued for various fellowship and training grant funding sources. I’ve published an article with the data I’ve collected so far at PFforPhDs.com/taxform/. So if your stipend or salary was from a fellowship or training grant issued from the NIH, NSF, Ford Foundation, DoD, DoE, Hertz Foundation, Paul and Daisy Soros Fellowship Program, Life Sciences Research Foundation, American Association of University Women, etc., or an internal fellowship source, please fill out the survey linked from PFforPhDs.com/taxform/ to help out other people with the same type of funding who are confused about the tax form they received or lack of tax form. Thank you! Without further ado, here’s my interview with Min Sub Lee.

Will You Please Introduce Yourself Further?

02:32 Emily: I am delighted to have joining me on the podcast today Min Sub Lee. He is a current graduate student at UCLA, and we are going to discuss options trading, which is a form of investing that I know nothing about. So it’s very exciting for me to get to learn alongside probably many of you listeners. So Min Sub, would you please introduce yourself a little bit further for the listeners?

02:51 Min Sub: Yeah. Hi, Emily. Very nice to meet you. It’s very good to be here. My name is Min Sub. I’m currently a fourth year PhD candidate. I’m currently studying molecular and medical pharmacology at the University of California, Los Angeles. And I am very passionate about financial education, financial literacy, and hopefully I can provide some good value to my audience who may not be familiar with how options work and you know, all that good stuff.

What are Trading Options?

03:17 Emily: Yeah, sounds great. I am definitely in that audience. So, as longtime listeners know, I am a dyed in the wool passive investor. I set up my investments a decade ago and have not touched them since, because I’m very happy with how things are going. So, actively investing is not something that I do and it’s not something that I teach, but of course I want to learn about it, and I’m happy to share the information with the listeners as well. So, Min Sub, let’s start with what are options, and how does this differ from what we might otherwise think of as like stock trading?

03:50 Min Sub: Yeah, absolutely. So basically most of us are probably familiar with the concept of buying shares of a company. So essentially when we purchase, let’s say 100 shares of, you know, your favorite company, you know, let’s say McDonald’s or something, or, you know, Walmart or Target. Well, that basically means that you are essentially part owner of a company’s equity. Now, options are something that I honestly never considered doing until this year. Because you know, you might hear in the media saying that, well, you know, people have like based lots of their money on options, right? People basically, you know, put their entire life savings into options. They basically lost it all. So options really have a very negative sort of like vibe on overall market trading. But I actually wanted to, you know, change that sort of like sentiment today because options training can actually be very profitable and very, very safe if you do it correctly.

04:46 Min Sub: Right. So, essentially what options are is that options are basically a right or some kind of a contract to buy or sell typically 100 shares of a company. So here’s an example that I usually tell my friends whenever they ask me, you know, about options. So, let’s say that you are a home buyer, and I am a home seller, right? So, I currently own a house that is currently selling for about $500,000 right now. And you are interested in buying my house. However, you currently do not have the full $500,000 in cash, but you are willing to essentially have the right to buy my house. So, let’s say that you pay me $100,000 of quote unquote premium, and what the premium states is that you basically ask me if you can buy a $500,000 house for $200,000 with a $100,000 premium.

05:49 Min Sub: And essentially how that works is, you know, typically when we have those contracts, we set some kind of a contract date and some kind of a strike price. So essentially let’s say in three years, even if my house let’s say appreciates to 1 million dollars, because you have a contract with me stating that you have the right to buy my house for $200,000, essentially you could buy my house at a total of $300,000 if you add up your initial premium plus the amount that you want to pay for. So that is, in a nutshell, how options work. And, you know, obviously things can go wrong both ways because you know, my house can easily collapse to, you know, $0, right? So in that case, you know, then your premium might be deemed worthless. But at the same time, you know, like if my house appreciates to, you know, 10 million, right, then you can technically, you know, buy my house for the premium price that we’ve sort of contracted for.

06:44 Min Sub: Now, the truth is, for the most part, people who buy these call option contracts, many of these premiums expire worthless. And what that means is, typically what happens is, you know, like either the price did not appreciate in value as they wanted, so basically their contracts become worthless, right? Or, you know, the other concept is that sometimes over time there’s a concept called data decay, which means even if you hold an options contract for, let’s say three years, if you do not exercise that contract for some time, the data decay essentially can actually wear off part of your option contract on a daily basis. So, essentially people’s contract just becomes worthless, one because the actual security price doesn’t appreciate, or because of the fact that data decay has essentially just devalued the entire contract on its own, and your premium is just deemed worthless at that point. So, there are different ways how people can exercise options. But typically, you know, I say about 90% of the time, you know, people who own call options typically are on a losing streak, but you know, in the end they’re not losing a lot of money because they’re only paying a small premium to essentially have the contract, if that makes sense.

07:55 Emily: I see. Yeah. So, it does actually, and I’m not sure how familiar the listeners are with this, but I don’t know the stats on this exactly, but it turns out that like over the many, many decades, you know, 90 plus percent of the value that’s been created in the U.S. economy is coming from like the tail end of stocks that have done like incredibly well. Whereas the vast majority of companies either like break even, or lose money like over the long-term. And so it sounds similar to that. So like a lot of the bets that you’re going to make if you enter into this are going to not turn out in your favor, but because you’re making small bets, you only have to win big a certain percentage of the time to overall come out ahead.

08:35 Min Sub: Exactly. Yes. Which is why, you know, when people typically buy options, they only, you know, play with a very small percentage of their portfolio because it is money that people can live without,k right? But, you know, if the country goes well, then people can make lots of money in that sense. Right.

Safer Ways to Approach Options Trading

08:50 Emily: Okay. So I think we have the basic idea of what options are. So then how do you approach options trading in such a way that you think you’re going to come out ahead mostly?

09:03 Min Sub: Right. So, I mean, there are different ways to win in options trading. So how about this, let me start with actually some of the safer ways to start options? Because I think, you know, most people still think of options as a fundamentally evil thing, and they just sort of, you know, fear losing a lot of money. And that is, you know, not wrong. You know, if you play options really incorrectly, if you really think that you could sort of win big with options, right? You’re not thinking in the right mindset, right? Because in the end, options should be only about 20% max of your total portfolio. For me, you know, I only play with maybe 10% of my total you know, security asset portfolio, mainly because I know that if I lose that 10%, you know, I’m not going to lose my sleep on that, right?

09:46 Emily: If I heard you correctly, what you’re saying is that about 90% of all the money you have available to be invested is not invested under this strategy. You’re doing maybe a long-term diversified index situation, probably?

10:00 Min Sub: Correct.

10:01 Emily: Okay. Good to know. Okay. So we’re talking about this fraction of your portfolio, and the strategy that you’re using in that. Please continue.

Strategy #1: Covered Call Option

10:07 Min Sub: Correct. Yes. Yeah. So there are actually three sort of strategies that I adopted on options. And I really think that these strategies are very, very useful for anyone to get started. Mainly because, first of all, they’re risk-free, right? Technically, there are still some risks to options. So, I mean, don’t think that this is actually something that’s guaranteed to make money, because if you do it incorrectly, you will lose part of something. So, the first strategy I’m going to talk about is actually a strategy called a covered call option. So, how this works is, the one requirement that you have to have for this strategy is that you must own 100 shares of some security, some stock class. And basically, here is what’s happening. So let’s say that you have these 100 shares of a company or of some stock, and this stock has not been moving for the past year, or this stock basically has been trending sideways.

11:02 Min Sub: You know, maybe it’s been swinging up and down, but maybe like plus or minus two to 5%, you know, on a flat basis, right? And you know, like you’re looking at your other, you know, stocks like Tesla, you know, and like other big stocks and, you know, you’re jealous because you kind of want to, you know, like start liquidating some of this and start to, you know, maybe consider putting your money into asset classes that actually do appreciate more value. So instead of doing that, right, which I don’t recommend, you should never just jump and just liquidate your cash just to jump on a hot stock just because it’s moving up like 20%, you know, on a weekly basis. But essentially how cover calls work is you can basically kind of say that I think that the current stock that I’m owning is not going to go above 10% of value in the next certain time. Right?

11:55 Min Sub: So let’s say that, you know, by next month, by December 3rd or something, right? You know, my hundred shares, I do not expect these shares to go above a certain price. So what we can do is we can actually sell a covered call and receive a premium. So, basically I am kind of betting that because I sort of know on a high trends basis that I don’t think that these shares will go above a certain strike price, I am willing to sell a covered call option on my current shares. And with that, you can actually earn roughly between about two to 3% of your current assets. So let’s say that you own about 100 shares worth of, you know, your favorite stock. Pinterest, let’s say, right? And, you know, you currently have about, let’s say $5,000 worth of Pinterest.

12:46 Min Sub: And, you know, you can sell a covered call option and receive about, you know, two to 3% of your current holdings. And if your bet is correct, right? If you’re correct in a sense that Pinterest did not go above 10% in value, then you’re basically going to keep that premium, right? You’re basically going to keep your current shares, and you’re also going to keep the premium, and we can actually do this on a weekly basis because we can actually sell a weekly cover call options on your securities. So essentially, you know, for stocks that you believe that you don’t really expect them to move on a really volatile basis, then this is a very good strategy to actually sort of earn passive income. It’s kind of like earning dividends, you know, on your stocks, right? To an extent. Now, the downside, you know, of course, is Pinterest might all of a sudden skyrocket, right?

13:38 Min Sub: You know, there might be really good news, you know, something, let’s say there’s an acquisition purpose. And, you know, like Pinterest might literally go up 30%. Well, in that case, you’re kind of screwed because you promised to sell 100 shares of your security at a specific strike price. And if the price of Pinterest has gone up way over your strike price, then there’s a high likely chance that you’ll be called out, which means, you know, you will still get your premium, but you’re forced to sell your 100 shares of a company at a target price. So typically selling a cover call is a very good viable option for stocks that typically don’t move too much. You know, stocks like Apple, like Microsoft, you know, these stocks that tend to have a very low volatility and, you know, stocks that typically have very low, you know, like ups and downs are very good ways to actually utilize cover call options as a strategy. I’ve been using this option for quite a while, and I’ve made pretty decent income. And so far, I have never got called out yet. So hopefully I can, you know, stay that way for next, you know, whatever years I continue to do options.

14:50 Emily: With that example, is the price that you agree to sell that stock for what you’re calling the strike price? So like, in your example, it was that like 10% above wherever the price was when you made this bet?

15:02 Min Sub: Correct.

15:02 Emily: So I guess what I’m thinking is, for you as the person who is, you know, currently owning these hundred shares, basically you get money if your stock doesn’t move that much, or if it goes up quite a lot, you still get more than you had in the first place, because you’re selling at that slightly higher price. It’s just not as high as it could have gone had you never put that, you said it’s a covered call, right?

15:26 Min Sub: Exactly. Perfect. Exactly.

15:28 Emily: Yeah, so I see the attraction here.

15:31 Min Sub: Yeah. So like I said, right, it’s very good for stocks that don’t really have a high volatility because you know, if your stock goes, let’s say down, right? That, you know, it still sucks because your stock went down, right? But you’re not going to be called out. But you know, if your stock let’s say suddenly goes up to like 20%, then you know, it’s an opportunity cost that you sort of gave up because of a premium in that sense. So that is one down side, but overall, like, you know, if you feel like there is a security that you just want to hold for a long time, but want a little bit more passive income, then this is one really good strategy to do so.

Feasibility for Grad Students

16:04 Emily: I guess a further follow up question about this, this a little bit relates to like, how feasible is it for a graduate student to do this. To own a hundred shares of a stock, the stock has to be fairly low in price, right? For that to be manageable for a grad student kind of income. So like for instance, when you have done this strategy, what is the stock price or some examples of stock prices that you’ve done this for?

16:26 Min Sub: Yeah. So, you know, I mean, I’ve been trading for some time, about two and a half years now. And honestly, like when I first started this strategy, I didn’t start with covered call options. I actually started with another option trading that I slowly, you know, started to accumulate a little bit of cash on the side. And I’ll actually get to that strategy, which is actually much more feasible and practical for grad students. But right now I currently only, if I were to be transparent with my portfolio, I currently own 100 shares of Lemonade right now. So, Lemonade is actually an insurance company that I really believe that there’s a good future growth to this, but Lemonade also has been trending sideways for a long time. Right now, Lemonade is trending for about $62 if I’m looking at it correctly, and it’s been like this for about the past three months. So, like I simply just used the strategy to, you know, essentially like gain a little bit of passive income on a weekly basis to at least, you know, get something out of it.

17:23 Emily: Hmm. Okay. So the way that you’re using this strategy is you have what you want to be a long-term holding, but you don’t expect it to take off anytime soon or do much movements anytime soon. So you’re making, as you said, some income from it in the meantime.

17:38 Min Sub: Right. Right. Exactly.

Strategy #2: Selling a Cash Secured Put Option

17:39 Emily: Very interesting. Okay. Well, I think you said there were three sort of approaches that you wanted to cover for options trading. So what’s the second one.

17:45 Min Sub: Yeah. So the second one is actually a little bit similar to the covered call option. So the second one is called selling a cash secured put option. So how this works is basically you are obligated to, this time instead of sell, you’re obligated to actually buy one hundred shares of a company that you like. Okay. So, I currently do not have many sold puts going on right now. But let’s say that you have a company, okay? I don’t know, let’s say that you really want to buy Costco or something, right? But you know, you currently don’t like the price right now because Costco is trending for about, you know, $350. I don’t know, I haven’t checked, but let’s say it is. But you know, you really want to own Costco at a lower price. So what you could do is you could actually sell a put option.

18:42 Min Sub: And how that works is for a put option, you actually need a collateral this time. So in the case of a cover call, your collateral was your 100 shares of a security, but for a put option, your collateral is actually cash. That’s why it’s actually called a cash secured put option. And because an option contract typically, you know, moves 100 shares at a time, you know, and maybe Costco is not a good example in this case, but basically we need to have, you know, so if you’re willing to buy Costco at $320, then you need to have a cash security collateral of about $32,000 in your account, which might seem impractical for grad students. But that’s kind of like how put options work. And basically what happens is you also get a premium on that. So you can basically put your collateral up, and then you also receive a premium based on that collateral.

19:34 Min Sub: So if Costco let’s say never goes down to $320, let’s say, right? Let’s say Costco just moons and let’s say it just stays at $350. Well, then the good news is that your premium is still yours. You get to keep that premium, and you actually get to keep your collateral, right? Because you know, basically in a put option, you’re obligated to buy the shares. But if your strike price has not reached below your expectation, then you know, after a week, right? Essentially your put options will expire worthless and you get to keep your money and you get to keep your premium, potentially. Now, I really like puts because here’s, and, you know, put options, I think is really never a losing strategy. Let’s say that Costco actually does go down to $320. Let’s say. Well, remember the reason why you’ve done it in the first place is because you are actually willing to pay that much money for Costco, right?

20:28 Min Sub: So, in a sense, it’s not a losing game because that was your original bet, right? You have an entry strategy and you wanted to basically buy a hundred shares. So even if Costco, you know, falls after earnings or something, you know, let’s say it falls down to $319. Well then yeah, you’ll be called out, right? You will lose your collateral. And actually you’re forced to basically buy 100 shares. But the good thing about that is, let’s say that, you know, you just don’t like Costco anymore all of a sudden. You can always, you know, sell those hundred shares back in the market, right? And essentially, you know, if that happens, then technically you get your collateral back, and you also get to keep the premium that you originally settled for. So I really think that put options is a very attractive strategy.

Risks of Selling Puts

21:10 Min Sub: The only downside course is that, you know, you need to have a lot of collateral depending on what kind of security you’re trying to buy. But other than that, I really think that selling puts is very lucrative. Especially if you have some cash that you really have no idea how to spend it, but you know, you’re going to at least keep your cash as collateral, then you can sort of receive some passive income premiums, in that sense. I sold puts quite often, you know, during this spring, when the market was very red and you know, I made pretty good income from that. So I’m very happy about that choice. Right now the market is doing really well. So put options are not very attractive right now, but you know, the next time we enter a barren market, I’m hoping to, you know, like consider selling more puts, if I have some more cash on the sideline.

21:54 Emily: So one follow-up question, again, I’ll use your example, and thank you for giving one. So in your example, you agree to buy Costco at $320, but you mentioned, let’s say it fell to $319. What if it falls to $200? So are you still agreeing to buy at $320?

22:10 Min Sub: Exactly. Yes. So that is a risk of selling puts, right? So essentially you know, again, which is why you should not do a put option contract on stock with a very high volatility. You know, Costco has a fairly low volatility. It’s deemed a very safe stock. You know, its P multiple is very low. So, you know, I personally don’t think that Costco will drop that much money unless there is some kind of a really bad earnings report, a really bad guidance or something. But, you know, usually with either your cover calls or selling puts, you should not do these strategies on really volatile stocks because, like I said, we know for fact that if it goes in both ways, we are kind of screwed. So that’s a very good follow up point. And thank you for mentioning that.

22:57 Emily: Okay, thank you.

Commercial

23:00 Emily: Emily here for a brief interlude! Taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2021 tax return, which are available at PFforPhDs.com/tax/. I hope you will check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which are linked from PFforPhDs.com/tax/. I offer one workshop on preparing your annual tax return for graduate students and one workshop on calculating your quarterly estimated tax for fellowship and training grant recipients. It would be my pleasure to help you save you time and potentially money this tax season, so don’t hesitate to reach out. Now back to our interview.

Strategy #3: Put Credit Spread Option

24:15 Emily: And what’s a third strategy?

24:18 Min Sub: Great. Yes. So this is a strategy that I really, really like, because I think this is a great strategy for all grad because, unlike covered calls or, you know, cash secured puts, you don’t actually need a whole lot of security or, you know, a whole lot of, you know, collateral. Basically this is called a put credit spread option strategy, and how this works is essentially, you have a put option that is going both ways at the same time. So essentially, you are selling a put, but you’re also simultaneously buying a put at the same time, right? So here’s an example that I thought of yesterday, right? So, let’s say that you are selling a put option for Apple, right? So Apple is, you know, let’s say trending around $147 as of now. And remember what that means is if you’re only selling a cash secured put, you are basically putting $14,700 as a collateral because you’re willing to buy apple at that strike price, right?

25:23 Min Sub: But what if you don’t have that much money? What if you actually don’t have that cash? Well, then you could actually, you know, take that advantage and actually do the opposite. You could actually buy a put option for the same company, but at a lower strike price. So essentially let’s say you sold a put for $147, but you’re actually now going to buy a put option for the same security, but at a lower price, let’s say $146, right? And then remember, when you’re selling a put, you are receiving a premium, and when you’re buying a put, you’re actually paying a premium for that security. So essentially you’re actually receiving the difference on the premium between your sold put and your bought put. So if your sold put was, let’s say $37 of credit, but your bought put is $23 in credit.

26:14 Min Sub: That means your net credit on this put credit spread strategy would be $14, right? Because you’re basically receiving a difference between your sold put and your bought put, right? And you know, of course, you still need to have some collateral, and how the collateral works is basically, it’s the difference between your strike price of your sold put and the strike price of your bought put. So if you sold your put for $147 and you bought your put for $146, the difference is $1, right? But remember, because options operate for 100 shares, your total collateral that you’ll be paying for is $100, right? But you’re actually receiving a premium of $14. So if you put it that way, so if your collateral was $100 and your net premium was $14, that’s about a 14% profit from your collateral.

27:12 Min Sub: And, you know, if you’re correct that Apple basically did not go below your put price, then you know, you can actually keep your premium and your collateral. And the beautiful thing about this put spread strategy is that, unlike the cover puts, unlike the cover calls, you don’t need to have 100 shares, you don’t need to have, you know, basically a lot of cash as a collateral. So I really think this is a really good strategy, and I’ve actually been doing this for quite a while sometime in January of this year. And you know, I’ve been doing this on a weekly basis. And also the one good thing about this strategy is that there are actually ETFs that you could do this. So ETFs, like SPY and QQQ, those two are the two, you know great ETFs for this strategy.

28:00 Min Sub: Mainly because these ETFs actually have three different strike dates per week, right? So basically Monday, Wednesday, and Friday, they have a different strike expiration date. So essentially if you do this correctly, you can actually do this three times a week. And if you, you know, let’s say you sold about, you know, three contracts per, you know, like every two days. And if you make about, let’s say to be conservative, let’s say about $8 per contract. Well, that’s still about $24, you know, on that expiration date. But if you multiply that by three days, that’s still about, you know, $74 of just profit that you’re making from just the strategy. And, you know, like, I think I kind of can figure out your next question. Is this actually a very, you know, like good time commitment for grad students? Because, you know, it might sound like this is very long, very time lucrative and, you know, very, very time sensitive.

28:58 Min Sub: And the truth is, when you first learn how to do this, it does require a little bit of, you know, time to sort of like learn this. But honestly, like once you get more comfortable with these strategies, all you really have to do is simply just wake up in the morning and then, you know, just open your brokerage account, and like on your phone, or it could be on your computer, and just trade these options for, you know, maybe like the first, like 15 minutes of the market open. And that’s it. As long as your security is sold, then you can just, you know, put down your computer, go on a hike, you know, get your breakfast, go to lab. And, you know, like not worry about it until the next expiration date, which is, you know, typically in two days. So I really think that this is a very good tangible strategy that anyone can actually utilize, whether it’s grad students or whether you’re just trying to get started with options.

Recommended Resources for Executing Options Trades

29:47 Emily: If someone is listening and is really interested in pursuing this strategy, but they have no idea where to start, where would you recommend they go to learn more about how to execute these options trades, but also, you know, the research into like, you know, which particular stocks should you be doing which particular, you know, option trade for? So like, what are some really great sources that you’ve learned from in the past few months and years?

30:09 Min Sub: Right. So here’s the thing. So when I first learned about stocks in general or options in general, I actually started with paper money. Because I personally don’t like losing money, and you know, like learning something new like this, even if it’s like a hundred bucks, I mean, even if, you know, that might be a small percent of my portfolio, I don’t like losing money. I mean, so like I would rather be somewhat of an intermediate expert on this field before I actually use real currency. So, you know, there are actually, you know, like online, you know, sources, you know that you could use. I think that the one that I used was actually called the Stockwatch, I think, but basically there are a lot of paper trading platforms where you can sort of like play with fake money and see if this strategy works for you.

30:56 Min Sub: And once you are comfortable with trading fake money, and once you have profited, maybe even become a millionaire with the paper money, I think by then, you know, maybe to me, you know, it took about maybe a good three weeks to be more comfortable with this. So it was a very good learning period for me. And, you know, I’m very glad that I took that time to actually learn about this because now, you know, again, like I said, the time investment, you know, initially might be a little painful, it’s just sort of a big climb, but once you are comfortable with the level of, you know, risk-free training, then honestly this becomes a very routine task for me. So, I started using, you know, a paper training currency, but, you know, there are a lot of YouTube videos out there nowadays, right?

31:43 Min Sub: If you just, you know, look up, you know, how to sell covered call options, how to sell put options, right? How to do a put credit spread. There are many, many sources that people actually use. And there are actually, you know, plenty of day traders online who actually record their, you know, online, you know, videos on live. And they actually show how to execute different trades and they actually do tutorials of this. So there are actually endless amounts of resources that anyone can get started with this strategy. So if anyone is really interested in actually starting, you know, to learn a little bit about options, you know, how to actually trade options in a risk-free way, then I really think that those two ways are a very good start. And you really must make sure that you have enough collateral cash that, again, you are comfortable losing potentially. Because, you know, like I said, I’m only doing this for about 15% of my portfolio, right? Because you know, like I will not lose my sleep if, I mean, it would still stuck, but I will not lose my sleep, you know, if I potentially, you know, lose everything the next day.

Fairly Low Time Commitment

32:46 Emily: Yeah. So I want you to make some comments now about how compatible you think this strategy is with like a grad student lifestyle. And we’re talking both income, like available money to be invested, and of course, again, we’re only talking about a percentage of that total portfolio. And also the time. So like you mentioned earlier, I think there was a little bit of time invested to learn the strategy and you were, you know, playing around with a simulation. And then you actually start doing it. But once you are familiar and comfortable, it sounds like it’s a fairly low time commitment on like the daily or weekly basis, right? To actually execute the trades.

33:25 Min Sub: Yeah. It really is. I mean, you know, honestly, like the actual, like trading itself takes, you know, maybe less than three seconds. You know, like as long as you set your own strike price that you’re comfortable with, and as long as you are, you know, like consistent with what you want to sell it for or buy it for, then it really just, you know, like usually, you know, like I do multiple options on Monday because, you know, technically Monday is when the new market opens, unless it’s a holiday, and then the option contracts expire usually on Fridays. So usually selling a weekly put or cover call on the same week, I think is a very good, consistent income. Now sometimes, you know, like I do a little bit of longer calls. I make longer contracts if I feel like, you know, I can get more premium because you know, the longer your contracts are, the more premium you will get.

34:13 Min Sub: So sometimes if I feel like a stock, you know, might not potentially move for maybe another like two weeks or so, right? Then, you know, I could consider doing that for a longer time, which means the next week I’ll just take a week off or something because I don’t actually have to worry about you know, like losing maybe a premium in that sense. Yeah. So like, honestly, like once you sort of reach that phase of, you know, I learned how to do options, I kind of know what I’m doing, right? Once you sort of like, I think pass that barrier, I think from there, it becomes a very, very passive thing. And that’s the reason why I chose to participate in this podcast because, you know, when we talk about, you know, like passive income, you know, and side hustles. Most side hustles that we are familiar with, you know, usually requires some kind of a time commitment.

35:01 Min Sub: You know, we spend about, you know, an hour or two tutoring, we spend an hour or two, you know, maybe, being a tour guide or something. Or, you know, like you could be some kind of a, you know, participant in some, you know, case study, right? But I think with options, you know, it’s very great because it doesn’t require you to actually exchange your active time for money. Because once you sort of like, you know, have a system, right? It’s kind of like, you know, you are generating your own, you know, machine that gives you your own passive income. Now, you know, don’t get me wrong. Like, again, there are risks to options trading. So, you know, don’t think that everyone’s an expert, because I definitely lost some money during this. You know, but for me, like, you know, because I was very consistent over time and I was very keen to what I believe, and I was very committed to my purchases and other stuff. I was able to make a slowly but substantial income that I still have today. And I’m still looking forward to, you know, keep on doing this, you know, hopefully until I graduate. And by then, who knows what’s going to happen.

Choosing the “Right” Stocks

36:00 Emily: So kind of one more follow-up question on that. Like, I understand that, you kind of said once you set up this like system or like machine, you know, consistently. Yes, there are risks, but you have generated a fairly consistent passive income from this. But I guess I’m more wondering about how you’re figuring out, like you’ve mentioned several individual stocks as examples so far in our conversation, like there’s whatever thousands of stocks to choose from. Like how do you actually figure out which ones you’re going to be making these bets on? Like what resources do you use?

36:30 Min Sub: Yeah, that’s a very good question. So when you talk about like stocks that are deemed considered safe, so there are actually many measurements you can actually learn about this. So, basically when I first got really into investing, I actually read the book called The Intelligent Investor. I actually have it here. Let me pull it out right now. So it’s called The Intelligent Investor by Benjamin Graham. If you see this right here. And basically this is a really good book because it actually really shows you a lot about how to, you know, pick the stocks that are right for you. Essentially, you know, there are two like great measurements of a stock that you consider, right? Because remember, when we do a covered call, you want to choose a stock that has a fairly low volatility that does not tend to move up and down in price too much, right?

37:15 Min Sub: So, you know, a good example would be Google, right? Google or Apple, right? Those two, you know, are very big, you know, big blue chip stocks that have already performed very, very well. Right? So, these are called, you know, large market cap stocks because these companies have already grown, and you know, the amount of growth that they are projecting forward is a lot less compared to, let’s say new SPE companies that have just, you know, IPO’d and you know, these companies have a lot more, you know, potential to grow, right? So I mean, you know, if you’re looking for, let’s say this growth stock investing, then you should not do options on them, personally, because you know, these, like I said, these growth stocks can either go both ways and, you know, because of the high volatility. You might receive more premium, but you have a much higher risk of losing all your money.

37:59 Min Sub: So I would personally stay away from any of those companies that have a very small market cap, right. And, you know, market cap simply means it’s the total asset of a company. So you can basically multiply the share price times the number of shares, that’s how you get market cap. The other measurement is actually a measurement called beta. So I don’t know if you’re familiar with beta, but beta is basically a comparison to the S&P 500 index. And for those who are not familiar with the S&P 500, the S&P 500 basically is a way to think about the U.S. economy as a whole, right? So if your S&P 500 sort of grows on this path, then we can kind of expect that the U.S. economy also follows that trajectory, essentially. So if your beta for a stock is one, that means that stock essentially aligns parallel to the S&P 500.

38:48 Min Sub: So an example of a stock that would have beta one is actually Google, right? Basically, if you actually look at the past chart of Google versus the S&P right, we can actually see that they actually largely overlap together. You know, mainly because, you know, those two companies, they sort of flow in the same trajectory, right? So if I were to, you know, recommend a stock to do options on, I would choose a stock with a very low beta, or with a beta that’s as close to one as possible, mainly because we know those stocks are a lot less volatile compared to other stocks, right? You know, please don’t do, you know, options on, you know, like stuff like Tesla right? Because we know Tesla goes like up and down, in like so many ways.

39:30 Min Sub: So, it’s really, really risky to you know, do those kind of options, you know, unless you have a lot of money to lose, right? And the third measurement that I also look at is something called the PE ratio. So that’s called the price to earnings ratio. And typically I mean, some people say that PE ratio is a measurement of companies’, you know, future performances. But usually I like to basically use a metric where the PE ratio for a company typically should be around 20 or lower. And basically with that measurement, that usually means that the company has already grown, you know, has a lot of built-in growth. And there is a lot less growth potential possible in the future. So, it’s kind of like Google.

40:13 Min Sub: So Google also has a fairly low PE ratio because, you know, they also have grown so much these past, you know, couple decades that you know, we don’t expect Google to, you know, become like a master large cap stock in the future. So, you know, like you could actually search up these stocks on Yahoo finance, and actually look at their charts. And, you know, these charts will actually display all the parameters that I talked about. Beta, PE ratio, market cap, all that stuff. And, you know, if you are interested in learning more about this stuff, there are plenty of resources out there online. The one source that I really like is a source called Investopedia, actually. So Investopedia is basically like an encyclopedia with all the investment terms.

40:54 Min Sub: So, you know, like if you want to know more about, you know, what is a large cap company versus a low cap company? What is a PE ratio? What is a beta? You know, what are call options? You know, you will be able to find individual articles on all of these. So, again, it takes a little bit of time and practice to be familiar with these, but I personally think that as long as you are comfortable and as long as you are interested in making money, then I think these are very good strategies that we could potentially incorporate in our daily lifestyle. Especially if you like investing.

Portfolio Growth in 2021

41:26 Emily: Sounds really attractive. So for your personal portfolio, do you mind sharing how long you’ve been doing this for, how much money you’ve made or how much your portfolio’s grown, and how much time you think you’ve put into the research and the execution?

41:44 Min Sub: So this year alone. So if I were to, you know, just add up all of my total put credit spreads that I made from January 2nd to now. I have about $7,322. And that is because I was able to do this on a weekly basis. You know, I was selling SPY put credit spreads on three times a day, and eventually, you know, those money has been accumulating and compounding. And quite frankly, that’s the reason why I was actually able to accumulate a little bit more capital to start, you know, selling puts. Remember to sell put options, we need cash collateral. So because now I had a little bit of cash, now I’m able to, you know, use these put option strategies to actually sell puts on companies that I’m willing to buy. So basically, like, you know, I think you can see what I’m getting at here, you know, as long as you’re consistent, as long as you are committed to your goals, I really think that in the long picture, right, the money will compound on its own. And, you know, I am a very strong believer that anyone can achieve great wealth, no matter what kind of income that you’re making. So, I personally think that as long as you have the right mindset, as long as you have the right strategy for it, then anyone can do this. That includes grad students.

43:01 Emily: I love the way you put that. I don’t have anything to add to that, except to just say that $7,000 in, let’s see we’re in November now. So almost a year of what is essentially like a side hustle. You know, not that active, you’re not spending a lot, a lot of time on it. It’s a very decent rate of return, especially for a graduate student. So yeah, this is very exciting.

Best Financial Advice for Another Early-Career PhD

43:21 Emily: It’s been really a pleasure for me to learn more about this. So thank you so much for volunteering to be on the podcast. I want to conclude with the question that I ask of all my guests, which is what is your best financial advice for another early-career PhD? And it can be something related to what we’ve talked about today or something completely else.

43:40 Min Sub: Yeah. So this is actually not financial advice, but this is actually, I think, a very good personal habit that everybody should employ, and that is to wake up early. So the reason why I started waking up early was actually frankly, because the stock market in California opens at 6:30. And, you know, like, you know, if I’m trying to get the best bet out of this, right? You know, usually I like to do most of my trades in the morning. But honestly, you know, quite frankly, like after I started to have very prosperous morning habits, I realized that I feel like I have a lot more time in my day, right? Because, you know, when we wake up at let’s say 9:00 AM or 10:00 AM, right? You know, like we tend to feel I think more lazy because the sun’s already out and, you know, we already hear people outside. So, I really feel like fostering this kind of like early morning routine is a very good habit, I think for really anyone, right? Because not only do you feel like you have more time, but I think that, you know, in the morning when people are, you know, mostly asleep typically usually like I get less distracted and I tend to get more work done in the morning, personally.

44:50 Emily: I have to say that I concur, and it’s even a surprise to me. Well, it was so good to meet you Min Sub! Thank you so much for coming on and sharing about this topic. New to me, new to probably many of the listeners, but really exciting to learn about. So thank you! It was great to have you on!

45:05 Min Sub: My pleasure! Thank you so much for having me!

Outtro

45:12 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? I have collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. If you’ve been enjoying the podcast, here are 3 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and increasing cash flow. I also license pre-recorded workshops on taxes. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

Is Podcasting a Lucrative Side Hustle? with Elana Gloger of Dear Grad Student

November 29, 2021 by Meryem Ok

In this episode, Emily interviews Elana Gloger, a 5th-year PhD student at the University of Kentucky and the host of the Dear Grad Student podcast. Elana and Emily discuss Elana’s motivation to start Dear Grad Student, how the podcast makes money and how much, and the podcast’s expenses. They both give advice on how to earn money from a podcast for someone just starting out and list examples of other types of side hustles grad students pursue and how generate a high pay rate over a short period of time. At the end, Emily shares a key strategy with Elana for managing her business finances going forward.

Links Mentioned in the Episode

Emily’s E-mail
PF for PhDs Financial Education
PF for PhDs S8E9: Be a Fly on the Wall During a Financial Coaching Session (Money Story with Elana Gloger of Dear Grad Student)
Dear Grad Student Episode 27 (feat. Emily Roberts)
Dear Grad Student Patreon
Better Help Affiliate Link
Magoosh Affiliate Link (GRE Prep)
Otter.ai (Transcript Service)
Dear Grad Student Merch (Redbubble)
Podcorn
PF for PhDs Community
PF for PhDs S10E7: The Financial Upside to Leaving Academia (Expert Interview with Dr. Christopher Caterine)
PF for PhDs: Best Financial Practices for Your Self-Employment Side Hustle
Her First $100K Podcast
Her First $100K Instagram (@herfirst100k)
Dear Grad Student Podcast Website
Dear Grad Student Twitter (@DearGradStudent)
Elana’s Twitter (@Elana_Gloger)
Dear Grad Student Instagram (@DearGradStudentPod)
PF for PhDs Podcast Hub
PF for PhDs Subscribe to Mailing List

Is Podcasting a Lucrative Side Hustle? with Elana Gloger of Dear Grad Student

Teaser

00:00 Elana: If you want to start a podcast, overwhelmingly, my advice is going to be, do it. It is awesome. It is fun. If you want to make money off of a podcast, it’s hard. That’s my biggest piece of advice. If you figure it out, let me know!

Introduction

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 10, Episode 17, and today my guest is Elana Gloger, a 5th-year PhD student at the University of Kentucky and the host of the Dear Grad Student podcast. We discuss Elana’s motivation to start Dear Grad Student, how the podcast makes money and how much, and the podcast’s expenses. We both give advice on how to earn money from a podcast for someone just starting out and list examples of other types of side hustles grad students pursue and how to generate a high pay rate over a short period of time. At the end, I share a key strategy with Elana for managing her business finances going forward. In my business, I’m well into scheduling events for the spring term. If you have a position in a Graduate School or Graduate Student Association or similar—or have the ear of someone who does—please consider bringing my material to the graduate students and postdocs at your university or institute. I offer live and pre-recorded seminars and workshops on a variety of personal finance topics, all tailored for the PhD audience. I’ve noticed that my investing content, whether as a deep-dive workshop or as part of a comprehensive seminar, garners a lot of interest and questions. Most popular of all is my tax workshop for graduate students who are US citizens, permanent residents, and residents for tax purposes, which teaches them how to calculate and report their taxable income and determine which higher education tax benefits to use. If any of that piqued your interest, please start a conversation with me over email, emily@PFforPhDs.com, or visit PFforPhDs.com/financial-education/. Without further ado, here’s my interview with Elana Gloger of Dear Grad Student.

Will You Please Briefly Introduce Yourself?

02:21 Emily: I have a very special episode for you today, Elana Gloger is back with us. You know her as the host of the Dear Grad Student Podcast. She’s also a PhD student at the University of Kentucky, and we are talking today about her podcast, but specifically the financial side of her podcast and how it’s working out as a side hustle. And maybe some ideas about how you can best manage side hustle income or pursue side hustle income as a graduate student or PhD. So very, very exciting. Elana was last on the podcast in season eight, episode nine. So if you want to learn more about her personal finances, not just the podcast side, you can listen to that one, sort of a mini coaching session. But Elana, welcome back to the podcast and for anybody who is not a listener of your podcast, or didn’t hear the last episode, would you please briefly introduce yourself?

03:07 Elana: Absolutely. So, so, so happy to be back! I have recommended this podcast to so many people since I was last on it. But yes, hello. I am Elana. I’m a fifth year PhD student and I study health psychology at the University of Kentucky. I focus on how our immune system interacts with how we manage stress and regulate ourselves and how that determines how well or poorly we age. And I host Dear Grad Student, which is a podcast. And I’ll just give you my slogan, “for all grad students to celebrate, commiserate, and support one another through grad school.” And yeah, I started it in summer 2020, 6 months into COVID, feeling lonely. Wanted to complain with fellow grad students, and I missed doing that in the hallways between classes and I made a virtual space for that to be, you know, more than just Twitter. So yeah, I love to podcast. It’s a great creative outlet. And as we will discuss today, not a great side hustle for cash, but super, super fun.

What Inspired You to Start Dear Grad Student?

04:07 Emily: Yes. I feel the same way about my podcast. What inspired you to start Dear Grad Student, aside from just lonely during the pandemic?

04:14 Elana: Yes. Well, right. So that was sort of the first one, right? I was lonely. I missed complaining. The other thing is that I really needed something creative to occupy my time that I wasn’t just going to drop off. You know, I crocheted for a really long time and I loved that, but it was like, after you make a few blankets, it’s like, you’ve done it. You know? So it was like, what’s going to be the next thing? And what’s something I can do long-term, that’s going to be fun and relevant for me? And then the other thing, I mean, I did want something that was going to be a side hustle. I don’t make a lot of money as a grad student. We talked about this on your episode, we talked about it on the episode you are on for my podcast, it’s episode 27. We don’t make a lot, but I’ve made a little bit of money from the podcast, and it’s sort of incremental. So, maybe one day this will be, you know, a big dent, but mostly it was, I wanted something fun and creative. I wanted to feel fully me in whatever that was. And I wanted to do something that was impactful to other people, which luckily the podcast has been.

Return on Investment (ROI)

05:12 Emily: I think that ordering of your motivation is really crucial. That you wanted to create something that you’re passionate about. And also, if money comes from it, that’s cool. And that would be a nice supplement. Let’s talk more about how that’s actually working out. So I know from our kind of offline conversations, how much of yourself you put into this podcast. So let’s kind of talk about the ROI here. Like what are you putting in and what are you getting out aside from the feeling of creating community and helping people?

05:43 Elana: Yes. I mean, as a hobby, it’s incredibly fulfilling. Like you said, I mean, I could not be happier. I’m probably at one of the happiest points of grad school, not just with my own personal stuff going on, but because of this podcast, so absolutely fantastic and satisfying for that. Regarding time I spend, which is of course what you were alluding to, I’ve done a little bit better this year. I have shortened the length of my episodes. I’ve gotten some folks on my team to help me out. Last year, I was spending a solid 10 to 15 hours a week, basically unpaid, to do the podcast. This year, it’s a little bit closer to six to 10, depending on length of episode, depending on the hype I’m making for each episode, you know, communications and things. And regarding what that looks like financially, I mean, I’ve actually been making profit every month, profit quote unquote, every month since March.

06:34 Elana: So like individual months, I’m in the green, I would say. But over my whole chunk of this experience, I think I still am in debt, like 134, like that’s, my net is negative $134. And that comes from a lot of different things. And I’ve spent, I will say probably the minimal amount of money that I would spend on a podcast of this size. So it’s been a lot of time to be unpaid. I mean, you really have to love something to put this much time in and get no money and be in the negatives despite the popularity of the podcast over the last year.

07:10 Emily: Yeah. You know, I think that information might be surprising to some people who know how well your podcast has taken off and how well it’s doing and the fact that it is monetized. Just to know that, okay, it is great news the last six months or so, like you’ve made more money than has gone out. But one, that doesn’t account for your time spent at all, you’re not paying yourself directly.

07:33 Elana: Literally not at all.

Emily’s Podcast’s Business Role

07:33 Emily: But then two, like it does cost money to get a podcast off the ground. And so those initial expenses, you’re still paying yourself back for those initial expenses that you incurred near the beginning. Podcasting is definitely a labor of love, I would say for the great, great, great, great, great majority of podcasters, but yeah, it might be surprising to know that behind podcasts and behind bloggers and YouTube channels and all these things like, yes, there are ways to make money from this, but the percentage of people, the percentage of creators who are making any kind of substantial money is so, so, so small.

08:05 Emily: Since you’re disclosing, I may as well disclose that for me, the podcast is not a money-making endeavor. It actually costs me a lot of money directly to make the podcast. And secondly, I pay virtual assistants to work on creating the episodes with me. And so each episode probably costs me 150 to $175 in direct costs of paying assistants and other things like hosting and doing transcripts and so forth. And I’ve decided to incur that cost because this does supplement and support the rest of my business. So for me, the podcast is technically content marketing. So it’s me talking about things that are related to my business. Hopefully, you know, people listen to this, they get something out of it. And eventually they get around to somehow sending money my way through the various means that that could happen like speaking engagements. So that’s kind of my business model. The podcast is in itself as isolated, a money loser and a time loser, but it bolsters the rest of my business. I think to me, in a way, that’s worth it. So that’s kind of my perspective on the podcast financials. Is there anything else that you wanted to add about how you’re like managing the finances of the podcast?

Dear Grad Student Main Revenue and Costs

09:17 Elana: Yeah. I mean, I’m happy to be super transparent about like what my main revenue is, the costs that I’m incurring, things like that. So I have it broken down here in front of me and I just think it would be helpful to let people know like, what is the minimal cost as I mentioned? Like, you know, so people know that the podcast has a Patreon group. I currently have 17 active patrons and I allow people to contribute 1, 3, 5, or $10 a month to the podcast. And it’s listed on the Patreon page, all the things that you can do and the reasons that I’m, you know, trying to earn money. So I have 17 patrons that all have those choices. And last month I made $60 after taxes, which maybe sounds like a lot. It’s actually not. And that’s the most I’ve ever made in one month.

10:00 Elana: And I do have other ways of making money. Like I am an affiliate for you and some of your tax workshops, I promote BetterHelp and their therapy services, Magoosh which is a GRE prep service. I’ve worked with Instacart, things like that, but it is really hard to make money with an affiliate link. I think that you and BetterHelp are probably the ones that I make the most money off of. But it’s a lot. Because with, they say that it’s like 1% of the people that click will buy something. So a hundred people click on something, you might get one purchase. My rate is a little bit better than that because I’ve never had a hundred clicks and I’ve sold things, but it’s really hard.

What is an Affiliate?

10:37 Emily: I want to make sure we were clear about this. So like, when you say affiliate, people might not know like what that means. So an affiliate is like, you’ve decided you as the content creator have decided that you’re going to have an advertising relationship with another entity. But you only get paid if someone actually makes a purchase to, you know, BetterHelp or one of my tax workshops or whatever the different partnerships are. And so it’s like, by the way, for the listener, it’s really helpful if you are going to make a purchase anyway, if you actually do it through the link where you heard about it, right? Like give that person the credit, let them get the few, you know, the dollars or whatever it is that they’re going to get from that sale. That’s really, really helpful. So thank you for those of you who are doing that. This is different from maybe like flat rate advertising where like maybe an advertiser would pay you to run a commercial based on your listenership, like based on the exposure they think they’re going to get, but they’re not going to directly track sales. Two different models. But that’s how affiliate marketing works.

11:36 Elana: Yeah. I’m so glad that you explained that. That’s one of those things that like, it’s now normal knowledge for me, but like, this was all new for me a year ago when I was diving into it. It’s usually bigger podcasts or YouTube channels that if they have millions of followers and people just are like, yeah, the exposure is fine. And then whatever. And so those are my main sources of revenue. And like I said, the costs I’ve put in, despite making, you know, 50, $60 a month off Patreon and other things, I still haven’t broken even. So some of the costs that I’m accruing regularly are things like hosting the podcast on Buzzsprout and that’s $18 a month. I do use a social media schedule to make sure that I can have boundaries with the podcast and have things automatically post.

12:16 Elana: And that is, I think about $14 a month. Because I had to up that a little bit. And then there’s the stuff I pay for yearly. And this is where the big chunks come from. Hosting the website on Squarespace: $200 a year. Otter.ai is what I use for transcripts, which is a big must for me, that is $80 a year. And I pay my transcript editors, Kayden Stockwell, and Vishal Thakkar. And you know, there’s also things like patron benefits, which people are starting to sign up for the tiers where there’s a free mug, a free sticker or whatever it is. And that comes out of my pocket because I’m really thankful for anyone who is putting enough money towards the podcast, that it warrants a free item. And then the last way that I get revenue is merch sales. And so I have made probably $25 in profit from Dear Grad Student merch that’s on red bubble.

Redbubble Merchandise

13:10 Elana: The way that red bubble works is you upload artwork and then you can put it on any item. They handle the payment, the shipping, making the product, all of it. But you get a very, very little bit of the actual sale made. So that is a small place that I get some profit, but I don’t make a ton. And the podcast was never meant for that. So that’s okay. And you know, even if I did make more, probably wouldn’t pocket it, it would probably go to growing the podcast more until I was at like a really steady rate. So, it’s a balance and I’m doing the best that I can, but maybe don’t go into podcasting for money unless you already have a big following.

13:47 Emily: If there’s anyone listening who wants to support either one of our podcasts monetarily and wants to know what is the biggest impact action they can take, they are willing to part with some money. What can they do to make sure these podcasts continue? So for you, what’s your answer to that? I’m assuming it’s Patreon, is that right?

Patreon and Networking

14:05 Elana: Is, yeah, Patreon’s the biggest one. I do have a couple of affiliate links that pay me quite a big chunk of money. The most being from BetterHelp, but I’m not going to say like, if you want to support the podcast, I would ask you to please go to therapy. What I would rather is to have a relationship with you, and Patreon really allows for that. So you can contribute, like I said, 1, 3, 5 or $10 a month, which hopefully is in a range grad students or postdocs can afford. And it allows you to have a private message with me on there. There’s benefits like you can ask questions I put in the episode, you can know episode themes early. One of these days, I’m going to have special Patreon-only merch. So you really get some extra fun content. And it means a lot to me. I shout the patrons out every month on the podcast, I take special requests from them. So it’s also a benefit for people who really like the content that they know that I’m making. So Patreon is the biggest, and I think the most fun for me as well. So I really see it to be mutually beneficial.

15:05 Emily: Yeah. I think if someone wanted to send a message to you through their money that says, I support Dear Grad Student, the Patreon is the clearest way to send that message, and possibly the least expensive for the person sending the message. Because as you said, for some of the other things, you only get like a small payout compared to what the customer would be paying via the other entity. Of course, that’s how that works. To answer the question for myself, really monetarily, the best thing that comes out of me for the podcast, similar to what you were just saying, is networking. So it’s getting it’s when listeners refer me well, either when listeners themselves have the power to host me for an event with your university or your grad student group or whatever, or can refer me to someone at their university who can. Like those sort of bigger jobs and bigger payouts literally sustain the business. So that is amazing. And thank you so much for those of you who have made those recommendations.

Starting a Podcast and Knowing Your Audience

15:58 Emily: Let’s turn the advice to a different segment of the audience. Let’s say that someone else really wants to start a podcast and they want to make money from it. What is your advice for that person?

16:09 Elana: Great question. If you want to start a podcast, overwhelmingly, my advice is going to be, do it. It is awesome. It is fun. If you want to make money off of a podcast, you have to be really, really good at shameless self-promotion. You need to know your audience. So there’s a reason that I have Magoosh and BetterHelp and things like that, that grad students or people applying to grad school would benefit from. It’s a reason why the merch that I sell is on mugs and stickers because grad students have coffee and laptops. So you want to know what your audience would actually buy from you. And then there are websites like Podcorn. That’s P O D C O R N. I know there’s others, but this is the one I’ve used before, where other people that want to advertise on podcasts, even small ones will say, Hey, we have this thing we’re trying to promote.

17:01 Elana: And then us podcasters can submit a proposal to say, Hey, we want to promote it. Would you pay me X amount of dollars to read an ad? I have never gotten one of these, but I know other small podcasters who have, that spend and dedicate more time to it. So there are ways to do it. You can also get on YouTube with your episodes. And then if you have, you know, X amount of followers and you become a YouTube partner, that’s the way to get a little bit. You can have ads on your website, which I do not do, because I don’t know how, but technically that can also happen where Google analytics can track how much money each page makes. But it takes a lot of time to build money from that. So I think the biggest thing, if you want to make money from a podcast, maybe have a big audience first, know your brand, know your audience, and do things that would make sense for them buy. Like I’m not going to try to sell wellness things because grad students don’t have the extra money to try some tea. Like, that’s not going to work. So it’s hard. That’s my biggest piece of advice. If you figure it out, let me know.

18:04 Emily: I think that is great advice.

18:06 Elana: I guess my conclusion there would just be, there are so many other ways to make money as a grad student that aren’t related to this, like tutoring or transcribing things for businesses or podcasts or a research lab. Making things for an Etsy shop where you probably get a similar, you know, the content is something physical that you can send people. So it’s not like making money. Isn’t possible. Like, I don’t want the total takeaway message from this episode to be grad students cannot successfully have a side hustle. Because that’s not it, but we already have a full-time and a half job probably. So the time it takes to get something that is lucrative, we don’t have as much. That’s where it gets tough.

18:47 Emily: Yeah. I agree. Podcasting is an ultimately very indirect way to make money, if that is your goal at all. And until you get very, very big, you’re not really directly making money.

Commercial

19:00 Emily: Emily here for a brief interlude. If you are a fan of this podcast, I invite you to check out the Personal Finance for PhDs Community at PFforPhDs.community. The community is for PhDs and people pursuing PhDs who want to take charge of their personal finances by opening and funding an IRA, starting to budget, aggressively paying off debt, financially navigating a life or career transition, maximizing the income from a side hustle, preparing an accurate tax return, and much more. Inside the community, you’ll have access to a library of financial education products, including my recent set of Wealthy PhD Workshops. There is also a discussion forum, monthly live calls with me, and progress journaling for financial goals. Our next live discussion and Q&A call is on Wednesday, December 15th, 2021. Basically, the community exists to help you reach your financial goals, whatever they are. Go to pfforphds.community to find out more. I can’t wait to help propel you to financial success! Now back to the interview.

Finding Your Unique Space as a Grad Student

20:12 Emily: So you just mentioned a couple of great examples of ways that graduate students can have a lucrative side hustle that is not podcasting. I would say like generally speaking, the fastest way to make money is to sell services. So like you can immediately start making money if you are putting yourself out there for tutoring, like you just said. Or writing or editing services or coaching services, if that’s within your wheelhouse. Selling sort of directly your time or how you apply your time to like a project is the fastest way to make money. It’s not necessarily the most lucrative. Unless I would say as a subset of that, you look at what your really special skills are. Like, what makes you unique in the marketplace? And so for graduate students, like maybe that is some skill you’ve been developing during graduate school, like maybe it’s like super ninja data analysis, something or other, and you can sell that as like a consulting service. So that’s something else to think about. Like, if you want money now, go for a service. If you want a lot of money, what makes you unique? A lot of people can tutor. A lot of people can teach, what is it that you do that’s special?

21:22 Elana: And I would say as well, I mean with how big Academic Twitter is and how much advice there is out there, there are a lot of people doing coaching in that space. So now it’s even not just, you know, what’s unique about you, but what can you provide above and beyond what people are accessing for free? And I think that that would be the really tough thing. It’s why I am not offering that kind of thing because I don’t think anything I have to say is that unique. The podcast just gives me a place to say things that I hope everyone knows accessibly. And so it’s really hard to be unique. I think that that’s really something that people don’t quite understand. I don’t know if it’s that we all just think we’re special or what. But I’m having a very hard time on a regular basis figuring out what is unique for the podcast. And that’s something that I’ve spent a lot of time doing to make the podcast something. But when we think about like you said, services, it is hard to sell yourself. That’s why I’m not doing it. I’m selling, you know, the podcast, I’m selling merch, blah, blah, blah, because that’s something that is so hard. And I don’t know if I have the self-esteem for it. I mean, it’s tough, it’s tough.

22:24 Emily: That’s such a good point. I’ve had like, if this will help people who are feeling that way, I’ve had several episodes on the podcast, and I’ll try to link everything I can think of later in the show notes of people who have done things, like consulting, something very relatively high ticket for a graduate student, finding their unique space. And I think a lot of times that just starts with like, you talking about your work with people who aren’t necessarily your peers. So like pivoting, like out of academia and looking in the wider world where they have more money for higher pay rates and like asking yourself, how can my services help these people in this other area who don’t typically interact with PhDs and academics? And maybe what I do seem special. I don’t think it’s special inside academia, but maybe it is special in this other setting. And how can I connect with those people? And this often results in like amazing like work experience and growth experiences. I have an episode with Dr. Chris Caterine that I published recently, we’ll link in the show notes on yeah. Taking those skills that you developed in academia, outside of academia. And having them be really valued because they’re rare. They’re not rare at university, but they’re rare elsewhere.

23:32 Elana: Yeah, for sure.

Impact of Podcast on Personal Finances

23:33 Emily: You mentioned that in recent months, you’ve made something like $60 a month on average from Dear Grad Student. Is that impacting your personal finances at all at this point? Like, are you actually taking that money home? Are you reinvesting it somehow? What are you doing with it?

23:48 Elana: Yeah, that’s a good question. I mean, I’ll say sort of broadly, you know, I track everything for the podcast on this, like Google spreadsheet, because I don’t have a lot of money going out or coming in. So it’s very easy. There’s, you know, three or four lines filled out every month. It’s not high-tech. And because I’m tracking, oh, you know, what is my net gain or loss of the podcast since I started it in August, 2020, I know that I’m still like in the negative one thirties, like I mentioned. So right now, when I get paid from the podcast, it goes into my checking account and it just becomes part of whatever I’m paying off of my credit card or throwing into savings. I’m just replenishing at this point, even though it’s been long-term, like I bought the podcast website in February of 2021. Technically, you know, the $200 I spent I’ve made back, but in all with everything I’ve spent, I haven’t.

24:33 Elana: So right now, it’s just going into my bank account, like normal income, almost like I’m not even seeing it. When I get to the point of hitting zero, which, you know, cross fingers because we’re coming up on a one year of Otter and one year of the website and I’m going to start all over again. But when I get to $0 and I can start actually making profit and, you know, and getting somewhere, I think that will be a question of how much of this do I want to invest in the podcast for what? Right? What’s going to have the biggest gain and growth for the podcast? Like the website was a big one, huge. Transcripts, huge. So the question really will be what is going to be the thing that makes this income even higher? And from there, I can start thinking about investing or fun things or other things like that. But for right now, just replenishing, just trying to hit zero because, you know, I don’t want to be in debt for this. I don’t want to like regret, and I don’t, but I don’t want to be in debt from it. Even $130, like that’s a lot for a grad student.

25:34 Emily: May I make a recommendation?

25:35 Elana: Yes! Help!

Keeping Business and Personal Finances Separate

25:38 Emily: If listeners, as I was talking about earlier, want to learn more about this recommendation, I’m just about to make, I have a course inside my Personal Finance for PhDs Community called Best Financial Practices for Your Self-Employment Side Hustle. And you can find that course directly at pfforphds.com/S E S H for self-employment side hustle. So go there. But the basic basic basic tip is to have some separation between your business finances, and you do have a business, now, even if your business is in the red, you still have a business, and your personal finances. And so I totally understand what you’ve been doing because you’re still in the red net over time and it makes sense that you’re paying yourself back with whatever, you know, monthly profit you have. But once you get to that zero point, once you get to being in the black overall, my recommendation is to have a separate checking account where you’re running everything for your business through that.

26:28 Emily: So all the expenses are paid from there. All the income goes to there. At first, you may not pay yourself, right? Once you’re back to black, you’re not relying on this income, let it build up a little bit in that account. And then you can make decisions about, do I want to reinvest in something? You know, you can save up for maybe a bigger expenditure using that account. Or maybe the answer is no, I want to pay myself a tiny bit for the massive amount of time that I’m putting into this. I’m going to set a salary for myself. And it almost sounds like silly to say that because you know, when we’re talking like $60 a month level, like maybe you would have the ability in a few months to pay yourself a hundred dollars a month. Maybe you’d have that ability.

27:07 Elana: I mean that’d be incredible, because a hundred dollars goes a long way as a grad student.

27:11 Emily: It does. And especially a hundred dollars you can rely on. So this is not like, oh, maybe I’m going to get 60 or maybe 150, or maybe this other amount. When you have the separation between your business finances and your personal finances, once again, you build up some kind of buffer to, you know, ride out the ups and downs. You can make these regular salary transfers. And then maybe it starts out at a hundred dollars, but then maybe in six months, it’s 200 and then maybe it’s 500 and then maybe $1000.

27:37 Elana: It’s the dream, right? It’s the dream.

27:38 Emily: Exactly. And this is how I’ve handled my business as well. Like my salary, I didn’t pay myself a salary for a while, and for a while was a thousand dollars, and then it was 2000, and then et cetera, et cetera, we’ve gone up from there. But I think it’s so, so helpful just mentally to have that separation. Because you don’t feel like you’re being, like you mentioned earlier about like not wanting to put yourself out there and sell and stuff like that. Like, how well you’re doing with selling doesn’t have to immediately impact her personal finances. You can have this degree of separation. So, that’s the first tip.

Facilitating Taxes for Business

28:11 Elana: Yeah, that’s good for the boundary of it. I mean, I hear that and my first thought is like, Ooh, when do I have to start paying taxes on this kind of thing? But I know that that’s the next step. My mom can help me with that. It’s going to be okay. But I know that that is sort of the next step. And maybe that’s what I should have said. Like, I’ve thought about it. It kind of feels dramatic, but I think that I just need to let go of that mindset. Like it isn’t dramatic. Like you said, this is a business, you know, as much as it’s fun, and it really is a hobby. I mean, this is really a passion project for me. There’s income going in and out, and maybe I should start treating it that way.

28:41 Emily: It’s going to be a lot easier come tax time to have this easy record in this one bank account of all of your expenses. You’re not going to have to go hunting through your personal expenses to find all the charges from XYZ different services that you use. So like, that’s one of the main reasons to do it. One is the personal finance reason of the separation. One is the tax simplicity of like the tracking of it. I am very, like we said, this is September, 2021. I think you’re going to sound like you’re going to be in the black in 2021, right? Like overall?

29:10 Elana: Oh wow, I hope so. From your mouth to God’s ears. I mean, truly let’s hope so.

29:15 Emily: So, 2021, you get to file your schedule C and pay tax on this whatever amount of income it ends up being above your expenses. It’s going to be helpful to have that separate account. But yeah, separate account and eventually a salary that you can build into your budget.

29:32 Elana: I’m excited to tell you when I get there. I’ll definitely let you know, I’ll tweet at you. I’ll say Emily, it’s happened. It’s time. I made it.

It Takes Time to Build Something

29:40 Emily: Anything else we want to talk about in this episode about, you know, starting a side hustle, managing finances from a side hustle? Any other comments you want to make?

29:48 Elana: Yeah, I think my biggest thing is that it takes time. Don’t get discouraged if you are trying to build something. I mean, you know, when I started the podcast, I had 372 followers on my personal Twitter account. I ended up having my tweet go viral, which is really what started and launched the podcast. But it takes time, you know, over a year I’ve had like 26,000 downloads. I have almost 5,000 followers on Twitter, over a thousand on Instagram. But all of that has taken all of those hours I mentioned with basically zero income and being in the negatives. So don’t give up, if you have a passion project and you want to go for it and it might make you money, go for it. But you never know if it will or not. And I think that it has been so satisfying and fulfilling in my personal life that, you know, here we are over a year into me doing it. And I don’t even care that I’m in the negatives, but I’ll be super happy when I’m not anymore. So let the passion fuel it rather than the money. Because I feel like that spark will leave really quick if you become impatient with that part.

30:49 Emily: I totally, totally like could not agree more that when you start this kind of thing, creating content that maybe will eventually result in money, you have to be passionate about it to get it off the ground. You know, you mentioned earlier when you had the idea to start the podcast that you wanted something that you were going to stick with long-term. Frankly, a lot of people don’t stick with podcasting, long-term, right? Like most people produce a few episodes and then it’s a lot of work.

31:11 Elana: Yeah, the average is about seven. I saw that online. It was like a threat. It was like, the average is like, they’ll make seven and they’ll stop forever. And I remember when I published my seventh episode, I was like, yeah, watch me. You know, like it became like a dare to myself, and then when I got the followers, it was like, well, now people are expecting a weekly episode. And of course, if I was like burnt out, people are like, oh my God, like, we don’t care to take a week off. But generally I’m like, I have a schedule. I have a structure. People are expecting an episode and I want this to keep growing. So it fuels me.

Best Financial Advice for Another Early-Career PhD

31:41 Emily: Okay. So final question that I ask all of my guests and I asked this to you last time, maybe you’ll come up with something new.

31:46 Elana: I have something new. I’m ready to go.

31:48 Emily: Okay, good. What is your best financial advice for another early-career PhD? It could be something that we touched on in this episode or it could be something completely different.

31:56 Elana: Yes. So this is going to be sort of a bridge between the last episode and this one. You said that was season eight, episode nine. Okay. Everyone should go listen to it. It was a great conversation. So I think my best financial advice bridging these two together is follow a budget early, and listen to financial tips about how to grow wealth at any income. Ever since I was on this last podcast, I’ve been looking for other places where I can also learn about this. One place that I’ve gone, there’s a podcast and Instagram account called Her First $100K, which is kind of like a feminist approach to women building income, which is like, I’m living for it. Your podcast. I’ve listened to many, many, many additional episodes. Like, before I think I’d listened to like what I thought were quote unquote relevant. And now I’m like, just listen to more because you’re going to find bits and pieces, especially when you have like the Q&A section at the end, which may be, or may not be related.

32:47 Elana: I’m like, that’s where I’ve learned the most. I’ve now invested, I know you told me to stop putting money in my Roth IRA. And I did to keep that in my bank, but, I invested that in a mutual fund and I learned a lot about, you know, what to pick. So I think similar to my last advice, it’s about the little steps, but realizing that even at a small income, you can start making those steps. Even at a small income, you can build things and don’t be afraid to go for something. Don’t be afraid to try to make money on the side. There’s nothing wrong with that. And you know, at the end of the day, we’re all just trying to build the best lives for ourselves.

33:21 Emily: I love that. I love finding some people to follow who are having these conversations that feel relevant to you. So like I’m sitting in this like grad student, PhD, academic like perspective on this, but obviously you can learn a ton. And I learned a ton from people outside of that specific niche. And so finding someone else, I mean, there’s so many in the financial space content creators now, like you’re going to find someone that you can identify with, whether it’s Her First $100K, excellent, excellent brand. Whether it’s, they’re all these, like people, you know, people of color and like first gen, you know, college graduates, you know, if that’s the group you are in, like, you can find someone who’s speaking to that audience and will address your, you know, the particular issues that I might not be talking about. Because I’m focused on people in academia. So like assembling like a team of experts that you’re like listening to.

34:09 Elana: Yes, it’s my like mentorship team and they don’t even know about it.

34:11 Emily: Exactly. Excellent, excellent strategy. Well, Elana, it’s been such a delight to have you on again. I’m so glad we were able to do this. I don’t know when this is going to be released, but I will be on your podcast in tax season. So check Dear Grad Student in tax season for that one. And yeah, it’s just great to have you, and thank you so much for coming.

34:30 Elana: Thank you so much for having me again. I have loved this partnership that you and I have built and the collaborations back and forth. Your episode will be coming out on Dear Grad Student at the end of January. So really like, beginning of tax season for me, but maybe that’s actually middle of tax season for normal people who are on top of their finances. But yes, end of January. And then for anyone listening who has not heard of me or Dear Grad Student before, you can find everything for the podcast at deargradstudent.com, you can find me on Twitter @DearGradStudent or @Elana_Gloger. You can find the podcast on Instagram, @DearGradStudentPod. You can find me on Apple Podcasts or Spotify or anywhere. I’m really easy to Google. So I hope you’ll join me if this was interesting, and definitely listen to Emily’s episode on my podcast we’ve already done. You can find that at deargradstudent.com/episodes/27.

35:17 Emily: Perfect. Thank you so much!

35:18 Elana: Thank you!

Outtro

35:26 Emily: Listeners, thank you for joining me for this episode! pfforphds.com/podcast/ is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes’ show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast. I’d love for you to check it out and get more involved! If you’ve been enjoying the podcast, here are 4 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and effective budgeting. I also license pre-recorded workshops on taxes. 4. Subscribe to my mailing list at PFforPhDs.com/subscribe/. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance…but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

This Start-Up Centers Graduate Students and Pays Them Handsomely

August 23, 2021 by Meryem Ok

In this episode, Emily interviews Jin Chow, a graduate student at Stanford, and Stephen Weber, a graduate student at the University of Georgia. Jin is the co-founder of Polygence, a start-up that facilitates graduate students and PhDs remotely mentoring high school students one-on-one through well-defined research projects. Stephen has mentored five students and speaks to the advantages of Polygence as a flexible and lucrative side hustle. We discuss whether and how to tell your PhD advisor about a side hustle, and who is or is not a good fit for becoming a mentor with Polygence. Jin also briefly shares the story of how she co-founded Polygence as a graduate student on an F-1 visa. If you’re looking for a side hustle that’s convenient to balance with your graduate work, check out Polygence: they are hiring mentors now!

Links Mentioned in the Episode

PF for PhDs: Best Financial Practices for Your Self-Employment Side Hustle
Polygence Mentor Interest Form
PF for PhDs: The Wealthy PhD Debt Repayment Workshop
PF for PhDs: Can I Make Extra Money as a Funded Graduate Student on an F-1 Visa? (Expert Interview with Frank Alvillar & Sheena Connell)
PF for PhDs: Podcast Hub
PF for PhDs: Subscribe to Mailing List

Teaser

00:00 Stephen: You know, it’s kind of funny to say, but I’m getting paid to learn more about things that I would already be interested in learning about.

Introduction

00:12 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 10, Episode 3, and today my guests are Jin Chow, a graduate student at Stanford, and Stephen Weber, a graduate student at the University of Georgia. Jin is the co-founder of Polygence, a start-up that facilitates graduate students and PhDs remotely mentoring high school students one-on-one through well-defined research projects. Stephen has mentored five students and speaks to the advantages of Polygence as a flexible and lucrative side hustle. We discuss whether and how to tell your PhD advisor about a side hustle, and who is or is not a good fit for becoming a mentor for Polygence. Jin also briefly shares the story of how she co-founded Polygence as a graduate student on an F-1 visa. If you’re looking for a side hustle that’s convenient to balance with your graduate work and want to help cultivate the next generation of researchers, check out Polygence: they are hiring mentors now!

01:19 Emily: If you have a pretty well-established side hustle, whether as a contractor with a company like Polygence or your own sole proprietorship, you may be wondering how best to manage that stream of income. This is especially true if you incur any expenses with respect to your side hustle. I have a course titled Best Financial Practices for Your Self-Employment Side Hustle that speaks to two chief areas of interest for people with this type of side hustle. 1: How to financially manage variable business income and expenses so that your personal finances aren’t negatively affected. This half of the course teaches some basic business and personal finance principles to keep everything orderly. 2: What type of self-employment retirement account option to use. If you are a super-saver who maxes out your IRA yearly and doesn’t have access to a workplace-based retirement account, you can actually use your self-employment income to open and fund an additional tax-advantaged retirement account. My course explains which of the several options is the best fit for a solopreneur side hustler. If you’d like to learn more about and purchase this course, please go to PFforPhDs.com/sesh/. That’s P F f o r P h D s dot com slash s for self e for employment s for side h for hustle. Without further ado, here’s my interview with Jin Chow and Stephen Weber.

Will You Please Introduce Yourselves Further?

02:54 Emily: I have joining me on the podcast today, Jin Chow and Stephen Weber. They are representing Polygence. So I first heard about Polygence a few weeks back when I was at a conference, I had the pleasure of speaking with another employee and learned what they do, which is providing mentorship opportunities to high school students and hooking them up with graduate students and PhDs. And the reason that we’re bringing this episode to you is of course, to tell you a little bit about the company, but also to let you know that this is a potential side hustle opportunity. We’re going to get into more of that momentarily. So Jin and Stephen, will you please take a moment to introduce yourselves a little bit further to the audience?

03:31 Jin: Awesome. Hi everyone. My name is Jin, really grateful to Emily for having us on today. A little background about myself, I’m originally from Hong Kong, came to the U.S. for college, studied Comparative Literature at Princeton for my undergrad, and I’m currently a PhD Candidate at Stanford, also in Comparative Literature. And in terms of research background, I’ve just been working mostly on French and Arabic literature. And then right now I’m putting my PhD on hold to work full-Time on Polygence. I’m one of the founders.

04:00 Emily: Yeah, super interesting. We’ll get back to that at the end of the interview. Stephen, go ahead and introduce yourself.

04:05 Stephen: Well, thanks for having me. My name’s Stephen. I’m actually a third-year PhD student at the University of Georgia. My research is focused on Parkinson’s Disease and the association of the immune system and potentially perpetuating that. And then before that I was actually a research professional at Stanford University. I worked with the stem cell Institute, teaching and training anywhere from undergraduates, to postdocs, to professors on application of a specific methodology. And yeah, that’s a little bit about me.

04:40 Emily: And what’s your role with Polygence now?

04:42 Stephen: Yeah, so now at Polygence I’m a mentor and I have been for about a year and a half and recently have moved into being a mentor affairs coordinator. And that’s where I’m at now.

How to Get Involved with Polygence

04:53 Emily: Yeah. So we’re going to hear more about what is this mentor role. But to back up a little bit, Jin, as founder, co-founder let us know more about Polygence, what it’s about, and how can graduate students and PhDs get involved with the company?

05:08 Jin: Totally. So Emily, I think you gave a really great overview of what it is. So we’re an online project-based learning platform where we connect PhD candidates, masters candidates, postdocs, and also people who already have their advanced degrees with really motivated and intellectually curious high schoolers to work on personalized research projects. And our mission on the mentor side really is to democratize access to the knowledge that’s in so many PhD candidates heads and also to give PhD candidates, graduate students in general, a chance to earn some side money because we know how not well universities pay PhD students and graduate students in general. And so on the mentor side, that really is our mission. And we want to make sure that students high schoolers from all around the world who are passionate about different kinds of academic disciplines can get a chance to connect with experts like yourselves, our listeners today. And to do something beyond the school curriculum and to learn something new, create something fun and cool. And so for, in terms of how mentors can get involved, we have an open rolling application season for any mentor to express interest on our website. We’ll put in the link in the show notes later. And also once you sign up, we have rolling interviews, you’ll meet with one of our team members and then we’ll onboard you.

06:29 Emily: It’s so unusual. I really don’t think I’ve spoken to anyone else who has centered the graduate student experience in the broader mission of a startup or a company. And of course it’s very like laudable that we want to help mentor and educate these up-and-coming researchers who are currently in high school and so forth. That’s all wonderful. But to hear that, okay, this was founded by a graduate student. You can, I guess maybe you want to introduce your co-founder in a moment as well, but founded by a graduate student and really again, centers that graduate student experience and the financial concerns of graduate students. So unusual. And I’m really excited to talk to you about that.

07:06 Jin: Yeah. Maybe I’ll just take three seconds to say a little bit more about my co-founder too. So I think the reason why we’re so centered on the graduate experience is because when we founded it, I was in the middle of it. I was in my second year of the PhD program and my co-founder, Janos, had just finished his PhD in physics. And so we both just knew so well how difficult it is financially as a graduate student. And also we both just love teaching so much, but didn’t get enough of that in our own respective programs. And so those two things coming together just made the graduate experience like front and center for us.

Stephen’s Role as a Mentor

07:36 Emily: Fantastic. Fantastic. So Stephen, not speaking as the founder, but speaking as someone who has been a mentor with Polygence and now has moved into an even bigger role. What has been your experience as a mentor?

07:50 Stephen: Yeah, I mean, I think that that’s one of the biggest questions. So I actually am a part of doing the interviews for potentially onboarding mentors. And so, you know, that’s a question that I get asked a lot is so why are you still here? You know, because I think for a lot of graduate students, their experience is TA ships, right? Wherein they are paid poorly for their time. And they’re expected to do a lot. And they often have that as an interference to their day to day. You know, especially someone who’s coming from the hard sciences where there’s a lot of really long days spent in the lab, for instance, it can be hard to juggle the responsibilities of that plus being a TA. And so despite having a really huge love for teaching, it can be really difficult to make that work.

08:37 Stephen: And it also is not quite as flexible as the schedule at Polygence, right? So at Polygence, you’re committing to hour-long sessions with students, roughly once a week, and you can make those times whenever is good for you. So I think that that’s part of why I’m still with it, obviously, but it also adds value to the fact that I get to still enjoy it each time. You know, it’s not just a, “I have to be here doing this.” This is something that I want to do. I feel like my time is compensated well. And I feel like I get to talk about things that I really want to talk about. Whereas as a graduate student, you’re often TAing for courses that may not be within your wheelhouse or may not be of specific interest. They might just be departmental courses that you’re just kind of asked to TA for. So I think that that’s another huge point of why I’m still here is that I feel like I get to not only talk about what I like, but also get to explore it in ways that are new and novel for incoming students.

Intangible Benefits of Mentorship

09:32 Emily: We’re going to talk more about sort of the financial side of this in just a moment, but I wanted to hear some more about like maybe the intangible benefits, the intangible experience, the warm fuzzies that you get from working with these students. Like you’ve done multiple cycles of this, I understand. So, you know, what is your enjoyment of the process?

09:52 Stephen: Yeah, so I’ve, what is it, five students now at this point and I’ve had three of them publish their work in high school-tier journals. And so, you know, for me, what I think is kind of like a part of it that you can’t really capture with, like the financial element is that you’re getting to be a part of the developmental process for people that have a passion similar to yours. And I mean, maybe I’m like the outlier, but when I was in high school, I can definitely say that I didn’t have this kind of opportunity. And so it was a really novel experience to be a part of the early foundation-laying of students who really want to pursue this. And not only do they get to learn more about a subject, but they also get to learn more about the ins and outs of the career itself.

10:37 Stephen: And I think for me that would have been hugely valuable to know here are skills that I could start working on now in high school to get ready for, you know, a long-term academic career. And I think that those are parts of the intangible that just feel like, you know, it’s paying it forward in a way of like, okay, so I struggled through and learned these things. Let me try to provide some insight for you that you can now take forward and maybe try to share with people around you as you go through the academic process.

Why this Side Hustle is a Great Fit for Grad Students

11:04 Emily: Wonderful. I also am reflecting on kind of my experience in high school. And I was fortunate that I did have research opportunities because I attended a particular school that offered that, but they weren’t like one-on-one, it was group. And I think that given my personality, I think a one-on-one setting would have been fantastic for me at that age. We talked about how the commitment when you’re mentoring a student through Polygence is approximately one hour about once a week, and that it’s flexible to be, you know, conforming to the mentor’s schedule. And I love this because one of the key key elements I think of a successful side hustle in graduate school is being able to schedule something that’s not going to interfere with, as you said, Stephen, your long days in lab. Like that really does need to be your priority. And so being able to do something around that is absolutely perfect. Is there any other reason that you can think of that this particular side hustle is a great fit for graduate students?

11:56 Stephen: There’s a whole host of reasons really, I guess, but you know, there’s some of the core ones are in addition to the flexibility of it all, it’s also an opportunity to maybe explore parts of research that your boss doesn’t really find interesting. You know, because for me, my area of research is very niche. And so as a result, I don’t get to explore some of the outside things. It’s not that I don’t have an interest, but now I’m getting, you know, it’s kind of funny to say, but I’m getting paid to learn more about things that I would already be interested in learning about. And, you know, those were opportunities really because, you know, some of the conversations that I’ve had with my students have actually turned around and been things that I was able to employ in my own research. And so, you know, those are things that just through the conversation, through the ever-evolving amount of information you’re getting from these students. And from that process of learning more about your own subject, I think it kind of pays itself back to you in addition to, you know, being compensated for that time.

12:53 Jin: I’ve heard from some mentors too, that like, especially for those who are thinking about building a career in teaching, whether in high school teaching or later in academia, obviously getting more teaching experience and connecting with young people is something that is really beneficial for their own sort of pedagogical development as a teacher and an educator. And obviously getting paid to get that experience. Our hourly rate is usually around $75 and above. And so that’s usually sort of both the financial and also the paying it forward and as well as the teaching experience piece is what I hear most from mentors.

13:29 Emily: Yeah. I was just thinking that like, you know, one of the things that you’re supposed to be doing in graduate school is being exposed to new ideas by networking and talking with new people and going to conferences and going to seminars and so forth. And this is just another way to have that happen, to have to be exposed to another like creative mind who’s not as encultured maybe yet to the way that we think in academia that can help you spark your own ideas. As you said, Stephen, to go back into your research to feed back into that. And so I just think this is again, another way of doing that kind of networking and exploration, but getting paid for it at the same time which is fantastic.

Financial Benefits of Polygence Side Hustle

14:06 Emily: So Jin, you just mentioned the pay rate, usually $75 per hour and above. Fantastic for a side hustle for a graduate student. Stephen, you said you’ve done five cycles of this mentorship program. And so what have you been doing with this side hustle money? How has this money impacted your financial life?

14:26 Stephen: Yeah, I mean, it, in a sense it provides a certain semblance of security, right? So, you know, as a graduate student, you don’t really make a whole lot, really, especially when you consider taxes and just having to pay student fees and all of this stuff. So basically that money basically affords the ability to have hobbies again, whereas before it could be difficult to do that. So I’ve done martial arts my whole life. So being able to pay for training at gyms, that’s sometimes a sacrifice that has to be made of, you know, if I don’t have any additional income, it may be hard to kind of balance that out. So that’s, you know, one place, it also just adds a little bit of actual savings to your life, which is, you know, an amazing thing to be able to have as graduate student is that you can kind of accrue that semblance of like, oh, I’m not living paycheck-to-paycheck anymore. So I think that those are two key ways that it’s been, you know, a nice opportunity for sure.

15:20 Emily: Yeah. I’m just thinking I’m doing tiny bit of arithmetic here. Okay. So $75 an hour once per week, we’re talking 300 a month if you’re doing this for a whole month. And I know, because this is cyclical, people might not be like continuously involved with mentorship, but let’s say you do it for six months out of the year. That’s $1,800 coming in for the year that you didn’t have before. And that goes a pretty nice far ways to contributing to an IRA, for example, where the max is $6,000 per year. If you wanted to invest it there are plenty of other good things you can do. Like Stephen, you just said improving your physical and mental health and you’re making time for hobbies and so forth. Lots of good things you can do with money, but that’s a pretty nice chunk of change, especially as we mentioned for the hourly commitment.

Commercial

16:06 Emily: Emily here for a brief interlude. We have a special event coming up on Friday, August 27th, 2021. It’s the fourth installment of my Wealthy PhD workshop series. The subject is debt repayment. This workshop is for you if you’re in debt of any kind and want to learn the best strategies for getting out of debt. These strategies are tailored to the PhD experience, particularly that of graduate students. We will cover student loans, of course, which are such a complex topic, as well as mortgages, credit card debt, auto debt, medical debt, et cetera. I’ll give you a spreadsheet that will help you work through in which order to tackle your debts, taking into account the type of debt, the interest rate, and the pay-off balance. We’ll also discuss how to sustain your motivation through a long debt repayment process. This is going to be a value-packed session. So please join us on August 27th. You can register at pfforphds.com slash wphddebt. That’s PFforPhDs.com/W for wealthy P H D D E B T. Now back to our interview.

How to Inform Your Mentor About a Side Hustle

17:22 Emily: So Stephen, we talked earlier about how flexible and low time commitment this is. Did you choose to tell your mentor that you were involved with this? Did you choose to keep it on the down low? Like yeah. How did the sort of time management work with you and your mentor?

17:39 Stephen: Yeah, that’s a great question. You know, I get that question from mentors all the time actually is how do you kind of balance this with other obligations? And I mean, I would 100% advocate for informing your mentor, right? Because I think without doing that, it’s not really going to be something that is going to feel comfortable for you, but this isn’t something that needs to be hidden, right? This is a teaching opportunity that your mentor is probably going to be very enthused about you doing, you know, especially if they’re not in need of you to be on a TAship. This is just further development professionally. It also affords you the opportunity to make a little bit of extra income, which as mentors will often tell you, it’s nice to not have students feeling like they’re starving. You know what I mean? And so I think that those are pieces that are important.

18:21 Stephen: And so I certainly told my mentor, and basically I just laid it out as this is not going to impact any of my day-to-day work. Because as I was saying before, you know, the flexibility of the scheduling affords you to be able to set this up well after anything that would be needed in your day-to-day. It can be done on weekends wherein you may not have as many obligations to your full-time position, whatever that might be. And so I think that that’s really how it should be approached, is that this is just a additional professional development opportunity. And I would wager that most mentors and most programs are going to completely support and advocate for that.

18:58 Emily: Yeah. I think that unless there’s an explicit prohibition on any kind of outside work for money, this is probably one of the first things that’s going to go over pretty well with a mentor because of the time commitment because of flexibility. Jin, have you seen other mentors take the same approach as Stephen or different ones? Do you have anything to add about how to approach your advisor with, “Hey, I’m going to take this opportunity”?

19:24 Jin: Yeah, I think definitely a lot of the other mentors that I’ve talked to have just made it very clear with their PIs, that this is not going to affect, or maybe this will even enhance, their own work. And especially those who are thinking about, again, a career in teaching, this usually just goes over really well with PIs. The only sort of difference is I think there are some mentors, if they have certain funding from certain foundations and sources that explicitly prohibit, let’s say outside work, then there have been some conversations where the mentor realized that they can’t actually get paid for the work. And they’re going to just volunteer and work with some of our scholarship students in the scholarship program. But in general, for most of our mentors, it’s gone over actually really well with their PIs. And most of our mentors will want to tell their PIs just in the name of transparency.

Anyone Who Might Not Be a Good Fit at the Moment?

20:12 Emily: To kind of expand on that question a little bit more, Jin. So you just mentioned, okay, there might be some limited circumstances where, contractually, graduate students are not permitted to be paid for outside work. Are there any other people who might be excited by this episode and thinking that they might want to work with Polygence, but that you know already would not be a good fit at least at the moment?

20:35 Jin: Yeah, so unfortunately we are not able to employ graduate students who are on student visas, just because with payment issues, we need everyone to have U.S. work authorization. So mentors who are on F-1 student visas or I think J-1 student visas as well. Sadly, the only way to get involved is through volunteering, which some of our mentors still do, but obviously we know that the financial reward is something that’s very important. And so that’s one thing that’s unfortunate. But for international mentors who are on OPT, CPT, or H1B visas or obviously on a green card, they are absolutely welcome to the paid side of the program. But again, just because of legal issues, we can’t with international students on student visas. Yeah. And I would also say in general, in terms of like what makes a good mentor, is someone who’s really excited about teaching, someone who likes connecting with young kids, and who has a little bit of extra time and energy to devote to this.

21:38 Emily: Yeah, absolutely. And if any international students or students on F-1 or J-1 visas are listening, I released an episode a few months back on what kind of side work is allowed for students on those visas. And it’s a very illuminating episode. So we’ll link it from the show notes, but yes, very clearly this would be considered self-employment income. And that is not a type of income that F-1 students can pursue except on OPT or CPT. So yeah, just want make that clear, but Jin, you’re kind of speaking from personal experience here. You know, you mentioned that you were an international student, at least when you first came to the States. So can you talk more about your experience founding this startup as an international student and someone pursuing their PhD? That’s a lot of things.

22:18 Jin: Totally. It was, I think emotionally, just so, dealing with American immigration is just, I think emotionally exhausting, and I’m still in the middle of it because now I’m actually in the middle of dealing with the green card process, which is a whole separate headache. But yeah, so I was on F-1 from undergrad until the beginning of my PhD. And then when I first established Polygence with my co-founder, I was still an F-1 and I just wasn’t getting paid. It was just sort of like a unpaid thing for the exact same reasons that we were talking about. And then when I decided I wanted to take time off and be paid by the company and do work on Polygence full-time, I then applied for part-time CPT because I wasn’t ABD yet. Like I wasn’t all but dissertation yet, so I couldn’t exactly just do OPT.

23:06 Jin: And so I was on part-time CPT for the first year of my full-time work with Polygence. And then I got married and then started the green card process after which I got the temporary EAD from work authorization thing. But all that to say, I think, yeah, navigating immigration and having an extra source of income as an international student, like I know full well to all of our listeners who are going through the same thing, like how much of an emotional drain it is. But there are ways to work around it. And sort of going back to our previous topic of how the department or how my own, you know, academic bosses dealt with it. They were actually really, really supportive of me actually taking time off even, partly because the job market is so dismal in the humanities that they’re like, if it’s one PhD candidate to fight for one job in comparative literature on a yearly basis, that’s, you know, a win for us. And so they were actually really supportive of me taking a break and helping me throughout the whole visa debacle.

Jin: What is Your Work-Life Balance and PhD Status?

24:14 Emily: So I definitely understand the pressures and the circumstances that led to you saying, okay, this is a solution. I need to take a pause in my program, do CPT for a bit. Are you back into pursuing the PhD actively now? Like what is your work-life balance going on right now?

24:32 Jin: Yeah, it’s still a little bit complicated right now. I’ve finally gotten to ABD. I was actually working somewhat on my perspectives and on my research during the first year of me being on CPT. But now that I’m all but dissertation, I can just take my time. I’m not being funded by Stanford at all. But I’m still sort of on paper enrolled so that I can still stay in housing and get health insurance, that kind of thing. But I am full-time working on the company.

24:59 Emily: Oh, that’s so interesting. Yeah. I didn’t realize you had that set up right now. So everybody hates this question. How long do you think it will take you to finish the PhD? Like when you have a full-time position and you’re doing this on the side, I know this is something that so many people get into when they are ABD, especially in fields like yours, where you don’t have to be in the lab and you’re not being funded by a grant and blah, blah, blah. So like just let us know a little bit more about how you’re managing both aspects of this work.

25:25 Jin: Yeah. It’s definitely a little hairy and tricky because I actually still have, I think one or two more courses that I’m supposed to teach at Stanford. But other than that I’m essentially just writing. And it depends on how quickly I write and how much time I can spare outside of working on the company. Right now, it’s not a lot of time that I can spare, just because I think the company just takes up all of my bandwidth and mind space. That being said, I definitely do want to finish it, because the research I’ve been doing and the novels that I’m working with are things that I care deeply about and derive a lot of intellectual satisfaction from. But I think it really is still a bit of a black box in terms of when I can devote myself to the extent that I would want to. And to the extent that the work deserves my attention while working on the company. So that is still a little bit unclear. I was thinking that maybe I could slowly chip away at the dissertation while working on the company, but that’s clearly not really happening. So I’m going to have to sort of kick the can a little bit further down the road.

Next Steps for Getting Involved with Polygence

26:30 Emily: Okay. Well, that was fascinating. Thank you so much for sharing. Let’s circle back to how people can get involved with Polygence if they want to. What is the next step, if they’re like, oh yeah, I’m really, really interested in becoming a mentor. I want to learn more.

26:42 Jin: Yeah. So the next step would to go to the link in the show notes. It’s our short mentor interest form. It takes three seconds to fill out. And once you fill that out, we basically ask you what discipline you’re in, where in your program. Yeah. What stage in your program you are, name, email, whether you have work authorization, very important. And then after that, we will ask you to schedule a 15-minute preliminary call with one of our mentor interviewers. And it’s where you can learn a little more about the program, ask questions about what students are like, what kinds of projects they do. And then after that interview, we will set you up on the platform with your own profile account. And then after that, we will start sending you students once we’ve done a background check on you as well. And then we have a lot of really cool mentor programming and scaffolding to help you get more comfortable with this kind of one-on-one Socratic project-based teaching model, where we offer sort of teaching demo preparation sessions, where we ask you to prepare a mock assignment. And we put you in groups with other new mentors, and maybe Stephen can talk a little more about those because he’s the leading a lot of them.

27:47 Stephen: Yeah. So the teaching demos, they’re the opportunity for incoming mentors who have been matched with a student to be able to kind of review some general tips and tricks essentially of, you know, how to kind of engage with the student initially, because we have a lot of mentors who come in with previous teaching experience, obviously, but with a particular format that we are trying to support. Sometimes it’s a little bit different, right? Because you mentioned earlier, Emily, about how like most of these teaching opportunities are typically in groups, which kind of affords a certain social flexibility. But when it’s, one-on-one, it’s a slightly different architecture, which requires, you know, a little bit more of a, like how do you motivate maybe a shy student or how do you engage with a student who’s very enthusiastic and maybe needs to kind of regain some semblance of focus? You know, those are just little things that can come up, but we, as, you know, mentor support team members, we want to make sure that mentors feel like they have access to the information that they’ll need to be as successful as possible with students, because their success very directly affects the success of the students. Right? So we want to make sure that we’re providing that kind of support.

Best Advice for an Early-Career PhD

28:55 Emily: I’m so glad to hear that you’re not just being thrown into like, as happens so often in academia, you’re just being thrown into a situation and expect that you already know what to do, and there’s no like clear way to go for help. Okay. That’s really good to hear. Awesome. So people know where they can go next and we will just wrap up by, I’ll ask you the same question that I ask of everyone that I interview on the podcast, which is what is your best financial advice for an early-career PhD? And Jin, why don’t you go first?

29:22 Jin: That is a million-dollar question. I would say be on top of your savings and make sure that you are saving at least a little bit every month. I know a lot of people, you know, also have student loans to deal with and other things. But I think what was really helpful for me is like really learning how to budget and make sure that on a weekly basis or even on a daily basis, I know how much is coming in and out of my accounts. And also if you’re able to, you know, have a little bit of fun as well, be kind to yourself because I think being a PhD student or any graduate student is really hard mentally and intellectually. And if you have, you know, a little bit of extra funds, whether it’s through Polygence or some other side hustle, treat yourself to something from time to time and just be kind to yourself because this is a marathon, not a sprint.

30:11 Stephen: Yeah. Well, for me, it works out best to use an Excel sheet honestly, right? For the budgeting. And I think that it’s good to kind of orchestrate what is good for you. For some people, they want to spend more money on food. Some people want to spend more money on free time, hobbies, whatever it might be. But I think kind of looking at what you have available to yourself, setting aside, obviously, a column for savings just for who knows what, but, you know, as Jin was saying, being able to kind of establish something to give yourself a break every once in a while and provide yourself some semblance of excitement, I think is really key. Because once you have that, you won’t feel the need to maybe overspend unnecessarily in certain segments of your life. And so I think that that can really be a great way to get the most out of what you have available as a grad student. For sure.

31:00 Emily: You both articulated that so well. Thank you so much for joining me on this episode and I hope that you have a great season of recruiting mentors. Hopefully, a few from this podcast.

31:10 Jin: Thank you, thanks for having us.

Outtro

31:10 Emily: Listeners, thank you for joining me for this episode. PFforPhds.com/podcast is the hub for the Personal Finance for PhDs Podcast. On that page are links to all the episode show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media, with an email listserv, or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and effective budgeting. I also license prerecorded workshops on taxes. Four, subscribe to my mailing list at PFforPhds.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember you don’t have to have a PhD to succeed with personal finance, but it helps! The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio, and show notes creation by Meryem Ok.

Why and How to Increase Your Retirement Account Contribution Room

November 2, 2020 by Emily

In this episode, Emily presents why and how you should increase your retirement account contribution room. She gives a compelling compound interest example calculation that illustrates why you should start investing early in your career and reviews the types of tax-advantaged retirement accounts you might have access to and why you should use them if you can. If you would like to increase your available contribution room in tax-advantaged retirement accounts and you are self-employed, the last part of the episode is for you. You can open a tax-advantaged retirement account through your business, even if your business is new or tiny or unincorporated. Emily compared the three most popular self-employment retirement accounts and evaluated which is most advantageous for a solopreneur side hustler, as so many PhDs are, in a video training she recently added to the Personal Finance for PhDs Community. In this episode, she tells you about the training, what motivated her to create it, and how to avoid making the same mistakes she did with her self-employment retirement account. You can access the training by joining the Personal Finance for PhDs Community at PFforPhDs.community.

Links Mentioned in This Episode

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

This is Season 7, Episode 9, and today I don’t have a guest but rather am going to tell you why and how to increase your retirement account contribution room.

I’ll give you a compelling compound interest example calculation that illustrates why you should start investing early in your career. I’ll review the types of tax-advantaged retirement accounts you might have access to and why you should use them if you can.

If you would like to increase your available contribution room in tax-advantaged retirement accounts and you are self-employed, the last part of the episode is for you. You may not be aware, but you can actually open a tax-advantaged retirement account through your business, even if your business is new or tiny or unincorporated.

I compared the three most popular self-employment retirement accounts and evaluated which is most advantageous for a solopreneur side hustler, as so many PhDs are, in a video training I recently added to the Personal Finance for PhDs Community.

In this episode, I’ll tell you about the training, what motivated me to create it, and how to avoid making the same mistakes I did with my self-employment retirement account. You can access the training by joining the Personal Finance for PhDs Community at PFforPhDs.community.

I highly recommend going through the training if you are looking for more retirement account contribution room. It might even convince you to start a self-employment side hustle for that express purpose. This episode is specific to the US and is not tax, legal, or financial advice for any individual.

Without further ado, here’s my episode, on why and how to increase your retirement account contribution room.

Why You Should Invest for Retirement Early in Life

To build my case, I need to start by showing you why you should invest for retirement early on in your life.

There is an example I use in my seminars that makes a big impression on at least a few people in the audience.

This is a compound interest calculation, and you can follow along with it and play with some numbers of your own using a compound interest calculator such as the one at Money Chimp, which is linked from the show notes.

Compound interest calculations model the exponential growth of money over time with a given rate of return. It’s a way of modeling the returns you can get in the stock market, for example, though this calculation has a steady rate of return and your rate of return on stock investments would fluctuate quite a lot year to year. It’s a good model if you’re calculating returns over long periods of time.

So here’s the example:

Let’s say you’re able to save and invest $250 per month. That’s 10% of a $30,000 per year stipend or salary. You have no starting balance with your investments, and your money gets an average annual rate of return of 8%. You do this over five years, for example while you’re in grad school or a postdoc.

After five years, you have contributed $15,000 and your money has grown to $18,369. That might not sound too impressive yet but just wait!

Now, let’s take that $18,369 and let it keep growing with an 8% average annual rate of return. You’re not going to add any more money to this particular pot. Let it ride for 50 years this time.

The balance in your investment account has now grown to $990,000. You heard me right! The money you contributed over just five years has, given enough time and a good rate of return, grown to just shy of one million dollars! This is the power of compound interest.

If you’d like to read this example for yourself and dissect it a bit, I’ve linked an article from the show notes about all the assumptions and so forth.

Here’s the takeaway point, though: Don’t discount any amount of money you are able to invest during grad school or your postdoc. Whatever money you manage to invest early in life is going to have an outsized impact on your wealth in your older years. So start early and save at as much as you reasonably can.

Of course, you’re not limited to investing for retirement to an early five-year period of life. I hope that you will continue to invest throughout your career in larger sums than $250 per month. That doesn’t take away from the importance of starting early.

Why You Should Use a Tax-Advantaged Retirement Accounts

That’s the case for investing in general. Now I’m going to tell you why you should use a tax-advantaged retirement account for your very long-term investments.

What do I mean by tax-advantaged retirement account? Basically, the federal government gives a tax break to incentivize people to fund for their own retirements in particular. Money that has been contributed to a tax-advantaged retirement account is shielded from income and capital gains taxes.

These tax-advantaged retirement accounts go by many names, such as Individual Retirement Arrangement or IRA, 401(k), 403(b), 457(b), Thrift Savings Plan or TSP, and there are even more.

If you invested in a regular taxable investment account, you would pay your full income tax on the money you invest, plus every year there might be some small bites taken by income or capital gains tax. How large the tax bites would be depends on what you’re invested in, how long you’ve held the investment, and how high your overall income is.

Instead, with a Roth tax-advantaged retirement account, you pay your full income tax on the money you contribute, and then the money grows tax-free while it’s in the tax-advantaged retirement account and you can withdraw it in retirement without paying any income or capital gains tax.

A traditional tax-advantaged retirement account allows you to deduct your contributions to it from your taxable income in the year you contribute. The money grows tax-free while in the tax-advantaged retirement account, and then you pay ordinary income tax on the withdrawals in retirement.

It is a great strategy to use a tax-advantaged retirement account for money that you’re sure you won’t need access to until your retirement. While in any given year the tax you might pay on investments in a regular account might be fairly small, the cumulative effect on your investment balance over decades of this is a bit like a death by a thousand cuts. Plus, once you are in your peak earning years, it’s quite a valuable tax break to be able to deduct your contributions to a traditional tax-advantaged retirement account.

The tax break on the growth in a tax-advantaged retirement account alone typically amounts to tens or hundreds of thousands of dollars over the course of an investing lifetime. This again demonstrates the power of compound interest, because the biggest part of the difference is not in how much you pay in tax, but in how much that money could compound and grow if you were able to leave it invested instead, which is what a tax-advantaged account does.

Add to your investment balance some hundreds of thousands of dollars more if you are able to use Roth and traditional tax-advantaged retirement accounts to selectively pay ordinary income tax in retirement and/or your lower-earning years instead of in your peak earning years.

What Is Contribution Room?

I hope I have convinced you of the power of investing and specifically inside a tax-advantaged retirement account.

Now, I’ll define a term I’m going to use quite a bit in the remainder of this episode: contribution room.

Contribution room is the maximum amount of money you are permitted to contribute to a tax-advantaged retirement account in a given year.

For example, graduate students and postdocs who are not employees of their universities or institutes are not extended retirement benefits, so their only tax-advantaged retirement account option is an IRA. If you are under age 50, the annual contribution limit to an IRA is $6,000 in 2020.

Graduate students who are employees of their universities or institutes are only very rarely extended retirement benefits; it’s worth checking into but don’t get your hopes up.

If you are an employee in the private sector, it’s typical to have access to a 401(k), perhaps even with a matching program. If you are under age 50, the annual employee contribution limit to a 401(k) is $19,500 in 2020. Your total contribution room between a 401(k) and an IRA is $25,500.

If you are an employee in the non-profit sector, such as at a university, it’s typical to have access to a 403(b), perhaps with a match or a fixed contribution by your employer. If you are under age 50, the annual employee contribution limit to a 403(b) is $19,500 in 2020. You might also have access to a 457(b). If you are under age 50, the annual employee contribution limit to a 457(b) is $19,500 in 2020. Your total contribution room between a 403(b), a 457(b), and an IRA is $45,000.

You can see that the contribution room available to you as a full-time permanent employee is much, much greater than if you are a fellow or graduate student. This is why there is such a focus on contributing to 401(k)s and similar and less so IRAs.

Now we come to the question of how to create more contribution room. Of course, you only need more contribution room if you are currently maxing out the contribution room available to you.

When I was in grad school, I never maxed out my IRA. So if you are maxing out your IRA as a grad student, please hear me: You are a rock star. I am not telling you that you have to contribute more. I’m only going to show you how you can if you already want to.

If you are maxing out a 401(k), etc., you are also a rock star. But if you want to contribute even more to make up for lost time or hasten your retirement date, I can show you how.

Self-Employment Retirement Accounts

The specific strategy I’m teaching you today is about self-employment retirement accounts and how they can supplement your IRA, 403(b), etc.

But to have a self-employment retirement account, you have to own a business. That could sound like a really fancy, complicated thing, but it definitely doesn’t have to be. All I mean is that you file a Schedule C with your tax return, assuming your business is unincorporated. You might describe yourself as a freelancer, an independent contractor, a gig worker, a solopreneur, or self-employed.

You know as well as I do that lots of graduate students and postdocs have side hustles to supplement their pay, and many of those, whether the person thinks about it this way or not, are businesses. Again, if you file a Schedule C with your annual tax return, this information is for you.

If you aren’t a business owner and have no plans to become one but you know a grad student or PhD who might be interested in this strategy, please share this episode with them!

I’ve covered the two main requirements you should check off before pursuing a self-employment retirement account: 1) that you own a business and 2) that you want more contribution room in tax-advantaged retirement accounts.

My Story and My Client’s story

I’ll tell you what motivated me to first investigate self-employment retirement accounts a few years ago.

When my husband and I were in grad school, as I mentioned earlier we never maxed out both of our IRAs. So even though I did have some self-employment income by the end of grad school, we had no need to open a self-employment retirement account.

We defended in 2014, and in the year following, my husband was a postdoc employee and I had self-employment income, so we had our two IRAs plus access to a 403(b), and we didn’t get anywhere close to maxing out that contribution room.

Halfway through 2015, my husband took a job at a start-up that offered a 401(k). That was when our household income really jumped up. We knew we would need more contribution room than just our IRAs to meet our retirement investing goal of 20%.

However, the 401(k) offered by my husband’s job was and is really expensive. It’s offered through Edward Jones and composed of American Funds, both of which are notorious for charging high fees. And the company doesn’t offer a match.

So in 2015, I read up about self-employment retirement accounts and opened one for Personal Finance for PhDs. We had a lot of options in where to open the account and which funds to purchase within it, so we could keep the costs really low. And that’s been our tax-advantaged retirement investing strategy for the past five years. We can meet our retirement investing goal using our IRAs and my self-employment retirement account. If we do ever need more contribution room than those accounts provide, we will use the expensive 401(k), but not until.

Your motivation to use a self-employment retirement account to increase your contribution room might be different from mine. Honestly, I didn’t imagine that any graduate students, for example, would want to contribute more than the $6,000 IRA ceiling.

But I was wrong. One of my recent coaching clients through The Wealthy PhD, a grad student, maxed out her 2020 IRA, but had some additional money that she was interested in getting into a tax-advantaged retirement account. She did freelance work on the side of her role as a graduate student, so I suggested that she look into self-employment retirement accounts.

Self-Employment Retirement Account Options

Our conversations throughout that program on this topic inspired me to create a new training inside the Personal Finance for PhDs Community titled “Self-Employment Retirement Account Options.” You can access the training by joining the Personal Finance for PhDs Community at PFforPhDs.community.

As you can tell, I love to encourage PhDs to invest early on in their careers, even during grad school or a postdoc. I also love teaching about taxes. So this training is a perfect crossover point between my two favorite personal finance subjects, and it stretched me quite a bit as well as I learned lots of new things.

The objective for “Self-Employment Retirement Account Options” is to help you choose which self-employment retirement account type is right for you and your business. I haven’t mentioned it yet, but there are at least half a dozen high-level options and many of those have various permutations.

As I was sifting through these options to decide what to include in the training and in what depth, I kept in mind my coaching client who inspired the training. There is a lot of information out there about self-employment retirement accounts, but it’s largely intended for people who work full-time in their business, like I do, or even for small businesses with employees.

What I decided to do with the training in the Personal Finance for PhDs Community was to create it with a side hustler in mind instead—a solopreneur who has only a few thousand dollars in self-employment income—but who wants to maximize their retirement account contribution room even on that smaller income. When you frame the question that way, I believe the best choice becomes much clearer.

I included in the training detailed information about the three most popular self-employment retirement account types. The less popular account types are not ideal for a side hustler or solopreneur. The types I included are SEP-IRAs, SIMPLE IRAs, and one-participant 401(k)s.

Across these three account types, I compared the type of business they are ideal for; their employer, employee, and overall contribution limits and formulae; whether a Roth version is an option; and their deadlines to set up. For each account type, I also calculated the overall contribution limit for someone whose net business profit is $24,000 per year, an amount that highlights well the differences among the plans.

I also show you how contributions you or your employer make to a retirement account offered through your primary job affect your contribution room within each of the types of self-employment retirement accounts. This information is not the type you uncover by reading quick summaries of various account types, but it is crucial for a side hustler.

Ultimately, I recommended one account type over the others. I present whether that account type can be opened at 13 of the most popular brokerage firms today and a few specifics about the account at each of the firms where it is offered, such as what fees are charged. All of that is to save you a bit of research time when you are actually going to open your account.

I admit I did not do any research on the best place to open my self-employment retirement account. I opened it with Vanguard, which is where I had all my other investments. It was quite surprising to me when I looked around at other brokerage firms to find that Vanguard is not necessarily the best option.

The very last module in the training shows you how to use a certain IRS worksheet to calculate your contribution room, and I show four calculation examples. This module is really in the weeds, but should be super helpful for someone who trying to put as much money as legally allowed into their self-employment retirement account.

I actually didn’t know about this worksheet a couple of years ago when I accidently slightly overcontributed to my self-employment retirement account. Once I realized my mistake, I had to reverse that contribution in a slight panic right before the tax deadline. I don’t want anyone else to go through that process or overcontribute and not catch the mistake, so that’s why I included this module.

Summary

Let’s come back around to the compound interest illustration that I relayed at the beginning of this episode. Given the assumptions in that example, investing $250 per month for five years and then letting the portfolio grow for fifty years resulted in a balance of almost one million dollars.

Whatever your saving rate, increasing it by $250 per month is going to have a very impressive outcome, either in more wealth in retirement or achieving financial independence even earlier.

If your budget has no room for additional investing right now but you have a bit of time on your hands, consider pursuing a self-employment side hustle such as consulting; freelance research, writing, or editing; tutoring; baby or pet sitting; or gig work.

To invest $250 per month in the type of self-employment retirement account that I recommend, you only need to net $269 per month through your business. Let’s round it up to $350 per month to account for income and self-employment tax.

If you earn $15 per hour after expenses, you can earn $350 in 23 hours of work, or less than 6 hours per week.

At $25 per hour, that’s 14 hours of work in a month or between 3 and 4 hours per week.

If you charge $50 per hour, which is quite moderate for some of the types of work I mentioned earlier, you can earn $350 in just seven hours of work per month. Increase it to $100 per hour, and you’re down to less than 1 hour of work per week to meet your goal.

If you think that charging $50 or $100 per hour is outlandish, you’re probably anchoring against what you’ve been paid as an employee and/or for work outside of your unique skill set. Capitalize—literally—on the skills you built or are building during your PhD to command higher pay rates.

Do you think you can find between 1 and 6 hours per week to devote to a side hustle over just five years if it can become an extra million dollars fifty-five years from now?

If you’re already there with your self-employment side hustle or will be soon, please consider joining the Personal Finance for PhDs Community to take the Self-Employment Retirement Account Options training. You will learn which self-employment retirement account is best for you and your business and where to open one to protect your investments from taxes and maximize their growth over the decades. You can access the training by joining the Personal Finance for PhDs Community at PFforPhDs.community.