Personal Finance for PhDs

Live a financially balanced life - no Real Job required

Emily

Med School Learning Techniques Entrepreneur

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Today’s post is from Alex Chamessian, who leveraged a study system he developed for his own use into online passive income.  Alex has a vital message of both caution and encouragement for anyone pursuing passive income strategies while in grad school.

ChamessianName: Alex Chamessian

Graduate Institution: Duke University

Department/Program: Medical Scientist Training Program (MD-PhD)

1. What is your side income stream?

I sell digital medical spaced repetition flashcards on my personal blog DrWillBe and I just co-authored a book called Learning Medicine: An Evidence-Based Guide with my friend and colleague Dr. Peter Wei.

2. How much do you earn?

I make about $9.40 per sale on the flashcards after PayPal fees are taken out. I also pay taxes on the annual income when I do my federal taxes in April, so that’s a little more subtracted. I’ve been selling the flashcards since April 2013, with very little effort invested in marketing or promotion. Over this time, I’ve made about $5,000, with a slow drip of sales. The book is currently selling for $14.99. It’s early days so no earnings reports just yet…

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3. How did you get started with your side income stream?

As I said, I have a personal blog called DrWillBe, which is where I write about my experiences as a med student. It started out as just a sounding board for me, but over time, I realized that all my posts were about how to study effectively. So that kind of became the theme for that blog.

I wrote a lot about a powerful learning tool called Anki that I used in med school to memorize all the information that got thrown at me. Anki is a smart, digital flashcard program that employs a method called spaced repetition. During my preclinical year of medical school, I made thousands of Anki cards for my personal use. At first, I shared them for free on my blog, which generated a ton of traffic. Once I realized that those cards were bringing value to other people, it occurred to me that I could probably monetize those cards if I put some extra polish on them.

So that’s what I did. I spent some additional time cleaning up my personal cards, checking them for accuracy, and making sure there wasn’t anything copyrighted in them. Then I put them up on my blog and just left them there. I didn’t do any kind of marketing really. I picked a price that I thought was commensurate with the value of my cards ($9.99). I spent hundreds of hours making them, so that seemed like a reasonable price. Over the last two years, I’ve made about ~500 sales of those cards, with very little additional effort. I wanted this to be a passive income stream. I’d already done the heavy lifting in creating the cards. I didn’t want to sell something that needed constant tending from me.

4. How do you balance your side income stream with your graduate work?

Well, for the flashcards, I was killing two birds with one stone. I was making the cards for my own studies in medical school. It was only after I had made them for my own purposes that I decided to sell them to others. This experience highlights a key insight I’ve made about making ‘side hustle’ while in graduate school (and probably the rest of my life), which is the following: aim to take the things you’re already doing anyway and find ways to monetize those things. Usually that means adding a little extra ‘polish’ to make your stuff valuable to other people. There just aren’t enough hours in the day to do something at a high level on top what you already need to do as a grad student. Find ways to repurpose the things you’re already doing in such a way that it brings value to other people. In my case, I knew other people were trying to learn the same medical knowledge that I was, so I put a little extra effort into cleaning up my deck for public consumption, but not much more. In contrast, had I tried to do something completely random and outside my daily sphere of activities to make money, like making crafts on Etsy, I would have failed, since I didn’t have the time or the skill.

A lot of grad students might feel that their daily work is so idiosyncratic that not many people would care about it. That might be true for highly technical work, but I’m pretty sure that most grad students do something or other that there is a market for. Maybe that market isn’t huge, but it’s probably not zero. Wherever there is a pain point, there is an opportunity, because other people are feeling that pain too, most likely. Successful e-learning sites like Udemy demonstrate that people are thirsty for knowledge and are willing to pay for it.

The book was different insofar as it wasn’t directly overlapping with my daily work. This was an add-on in terms of time, but definitely not a tangent. Writing about effective learning methods enhanced all the things I do on a daily basis, like absorbing information from all the scientific articles I need to read. As with the flashcards, I was doing something that I wanted (needed?) to do for myself anyway, but doing it with the purpose of then sharing my efforts with an audience.

Writing a book is definitely hard work. In order to accomplish this, I had to develop new habits. Taking cues from successful writers, I got in the habit of waking up early (~5–6 AM) and doing my writing in the morning consistently, when I’m at my peak energy levels, and before the buzzes and demands of the world can distract me. By putting writing first thing in the day, I made it a priority, ensuring that it actually got done. I think this is key. If you care about something, whether it be a side job or a passion project (or both), you need to prioritize it.

5. Does your side income stream complement your graduate work or advance your career?

Yes. Absolutely. As I said above, the things I make my side job either flow directly from the activities of my career, or they are things that are closely related and will enhance what I do in my career.

6. Is there anything else you would like to share about your experience?

Don’t do a side job primarily for the money. Sure, more dollars in your pocket are a good thing. But your efforts might not always bring you a profit, especially if you do something risky. If you only do something for money, when and if you don’t make any, you will view your time as wasted. It’s a win-lose game. On the other hand, if you do things that you enjoy and that you would have done anyway, even if nobody ever paid you a cent, then there can’t be a bad outcome. It’s a win no matter what. If you have no customers, oh well, at least you learned or grew in some way. If you do succeed in selling your product or service to someone, great, you made some cash, but the main pay off is the learning and personal development you achieved, and the profit is a byproduct.

Connect with Alex Online

Twitter: @achamess
Personal Website: www.alexchamessian.com
Blogs: www.drwillbe.blogspot.com (medical), www.acuriousmix.com (everything else)
Book Website: www.learningmedicinebook.com

Jazz Singer

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Today’s post is by Meggan Farish on performing jazz in a local band, which is an enjoyable hobby for her as well as an income stream. She has great advice about keeping organized with your side job and how to get started as a local musician.

Meggan performing
Meggan performing

Name: Meggan Farish

Institution: Duke University

Department: History

As a graduate student, I supplement my income by performing with jazz bands. I started in 2010, while living in Columbia, SC. Columbia has a thriving jazz scene, and I began “sitting in” with various musicians. In time, I built a following and put together my own band. When I moved to Durham for graduate school, I met a saxophonist in need of a lead singer and began performing with his quintet.

I have been playing with the same musicians for years, and since our repertoire has not changed drastically and we do not spend a great deal of time rehearsing, playing music takes up very little of my life (maybe two Fridays per month). The gigs in SC are generally more time consuming since I have to travel, but I would likely visit home that often regardless and am at a place in my graduate career where I can work from just about anywhere.

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My advice to anyone thinking of making music a side job is to be prepared for the vicissitudes of performing in a local band. Promotional shows do not always pay, and regular gigs can get nixed with little to no warning. I recently lost a gig I had for several years because the restaurant needed to make cutbacks. It is a nice way to supplement my income, but I do not rely on it to pay my bills. Networking, having good YouTube videos (preferably at least one polished studio recording), and maintaining a presence in social media to promote your skills are all key to being a successful local artist. Additionally, it is critical to keep track of scheduled performances and to show up prepared and on time. Forgetting a gig or being late will quickly kill a career in music. Also, keep accurate records of your income and set aside a percentage to cover your state and federal income taxes. Typically, you will receive a 1099 at year-end from the establishments where you or your band perform.

While it is doubtful that music will advance my career as a historian, I believe it has made my years of rigorous graduate study far more enjoyable. If anything, it has allowed me a much-needed break from my studies and provided an avenue to meet new people.

University Fitness Instructor

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Today’s post is from an anonymous contributor. Her side job was very convenient for her based on its location and nature!

source
source

1.     What was your side or temporary job?

Fitness instructor at my university

2.     How much did you earn?

~$16/hr

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3.     How did you balance your job with your graduate work?

I work out anyway, so this was just like getting paid for something that I would do anyway!

4.     Did your job complement your graduate work or advance your career?

It did not complement my graduate work, but it helped me keep my sanity!  Exercise is a huge stress reliever for me and I got to meet some really amazing people who frequented my class, so I made new friends, too.

5.     How did you get started with your job?

One of my friends in the same graduate program started being a fitness instructor before me and I would attend her classes.  She mentioned that I would probably enjoy teaching as well, so I talked to the coordinator at the university gym.  She had a few teaching time slots that weren’t filled, so she asked me if I wanted to teach those slots.  I got certified through online training and started teaching the following semester.

Zoo Consultant, Online Professor, and Piano Teacher

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The grad student featured in today’s side job series is a true hustler! Kathayoon balanced her graduate work with THREE side jobs that furthered her career, lined her pockets, and gave her a much-needed break. She even used her consulting network to get her first post-PhD job. It’s truly amazing how much she was able to do in addition to her PhD.

Name: Kathayoon Khalil

Graduate Institution: Stanford University

Department/Program: Graduate School of Education

Kathayoon while consulting at the San Diego Zoo.
Kathayoon while consulting at the San Diego Zoo.

1.     What was your side or temporary job?

I taught classes for the Miami University of Ohio’s online program Project Dragonfly, taught piano lessons to local kids, and did evaluation consulting for zoos and aquariums.

2.     How much did you earn?

Miami offers a stipend of $750 per class, so I would do two classes per term. I charged $30/hour for piano lessons and $70/hr for consulting.

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3.     How did you balance your job with your graduate work?

I tried to keep a strict 8-5:30 schedule in grad school so I would stay efficient – plus I don’t work well at night. The course instructing and consulting was in the same line of work (zoo and aquarium education) as my graduate work, and I love hanging out with kids and playing music so teaching piano lessons was like a breath of fresh air for an hour every day!

4.     Does/did your job complement your graduate work or advance your career?

I got to build a lot of important skills by consulting, and teaching online courses allowed me to travel and both allowed me to make connections to people in my field who acted as study subjects for my dissertation, and eventually helped me get a job after graduation.

5.     How did you get started with your job?

With Miami, I had a friend at the Cincinnati Zoo (where the program is based) who introduced me to the staff.

With consulting, a mentor of mine connected me with a colleague in the Bay Area who needed help evaluating an exhibit. Once it got out that I was providing that service, several other people in our field – both in California and elsewhere in the country – offered me projects at their institutions.

With piano lessons, I signed up on care.com to be a babysitter and at my first interview, I mentioned being a pianist and the parents asked me to teach their children. Friends of the family heard that I taught lessons, and asked me to take on their children as students.

6.     Is there anything else you would like to share about your experience?

Honestly, it kept me sane to have other things going on, even though sometimes I was so busy I had no time to eat until dinner. But I wouldn’t do anything differently! I needed the money, but I also needed the distraction to some extent. Having these other things going on helped me to finish my dissertation more quickly because I was more focused on the time I had, instead of having lots of unstructured time to work.

Research Analyst for an Investor Relations Firm

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research analyst at investor relations firmToday’s post is by Adam Evertts on the part-time job he took in his last year of grad school that positioned him for his transition into the work force. He also includes a great reminder about the proper place of of side jobs in graduate school.

Name: Adam Evertts

Institution: Princeton University

Department: Molecular Biology

1. What was your side or temporary job?

In my final year I started working hourly at a NYC-based investor relations firm as a research analyst. It was a way for the company to test me out, and for me to test out of the company prior to them offering me a full-time position. For my role I would either write initiation reports or update notes. The initiations are anywhere from 20-50 pages and describe everything a potential investor may want to know about the company. The update notes are smaller documents, 2-6 pages in length that provide short updates on a company’s progress. I would spend a lot of time reading primary literature, company reports, and other materials.

2. How much did you earn?

I earned $25/hour. Not a huge amount of money, but more than I was making as a graduate student. I didn’t work part-time for the financial rewards, but I can say that it was very helpful in the end. Having a few hundred extra dollars around each week allowed me to take a vacation in San Diego after graduation and then immediately move to NYC. It also made me realize how underpaid I was as a grad student.

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3. How did you balance your job with your graduate work?

It was a tough balance for me. I don’t think I could have pulled it off earlier in my grad career. I still had a lot of obligations as a student and was working 10-12 hours/day during the work week plus 4+ hours on Saturday. They were intense hours too, no more 2 hour lunch breaks like I did as a 3rd year. The key is that I continued to satisfy my obligations in the lab and graduated on time.

4. Did your job complement your graduate work or advance your career?

This experience was critical for my transition out of graduate school. I ended up getting a full-time offer at the same company after maybe 2 months of hourly work and have been there for almost 2 years now. The best part was that I had an opportunity to try out my job before starting full-time. How else do you know if you want to launch a career in a certain field? I actually thought of my part-time work as a right instead of a privilege. Just my opinion. I don’t think the NIH spends money to educate PhDs without any interest in their future. I may not be doing primary research now, but I still play a role in advancing human health for the country.

5. How did you get started with your job?

I actually found the company using a google search and reached out saying that I wanted some equity research experience and would be happy to work for free. It turned out that someone at the company had just quit and they were short staffed. They also insisted on paying me since it was and still is a profitable business, meaning that they don’t need to exploit free labor. You’d be surprised how many profitable companies love free interns. We also love interns, but we pay them. I tried some other standard paths to getting full-time jobs, but with little success. Applying on websites and through job sites is infinitely less personal and your resume starts to blend in. It can be useful to take a creative path and just reach out to a company and ask for some experience.

6. Is there anything else you would like to share about your experience?

My personal feeling is that you should have a very clear purpose for working part-time during graduate school. It should never get in the way of producing high quality research or extend your graduation time.

My Realistic Career Earnings Expectations Push Me to Save Aggressively

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This post is by Tiffany, a PhD student at Harvard University.

As an undergraduate, my parents pushed for me to become a pharmacist. They had good reason to: I had good grades and loved biology and chemistry. However, after volunteering in a lab, I decided I wanted to become a scientist. My dad was initially against this decision: he made many “personal finance” arguments against it. He warned me about the long hours and comparatively low pay to other advanced degrees, and shared articles about the current “glut of Ph.D.s”. He was worried I wouldn’t be able to find a stable job. He argued that as a pharmacist, I would have a stable, high paying salary (though this is now disputed as well). My undergraduate adviser gave similar advice, “You will not make much money if you go into science: the job market is also tricky depending on what you want. Take your time to decide what you want to do.” I thought about these arguments throughout undergrad and during my two years as a technician. In the end, I decided to go to graduate school anyways.

source
source

Their arguments have given me a strong motivation to save as much as possible for the future. First, it is uncertain what will happen after I graduate. Most biology PhDs continue on to work as postdocs, but the starting salary for a postdoctoral fellow based on the NIH guidelines is only $42,840/year. I could move into other fields outside of academia; however, unlike academia, there is no clear map on how to get training and experience for these “alternative careers” outside your dissertation work. Second, compounding works better if I start saving earlier. Any money I put into investments now will likely do more for me later on in life. Unfortunately, scientists are at a disadvantage since their earning power does not increase substantially until after graduate school and postdoctoral fellowships. By then, a scientist is likely into their 30s. Unfortunately, many major expenses – such as weddings, cars, homes, and kids – rack up during your 20s and 30s.

Below, I’ve tried to illustrate these points using my brother and me as an example.

My brother graduated is an engineer. He currently makes $58,700/year in Alabama. His after tax take-home pay is $3800/month. He manages to put away ~$1500/month into his investment accounts. I started my PhD in 2012 and get $36,800/year for my stipend in Boston, Massachusetts. My after tax take-home pay is $2300/month. I manage to put away ~$600/month into my investment accounts. Assuming that no major life events happen, we can calculate how much our income, savings, and investment accounts will turn out.

In the below chart, I’ve assumed that:

For the engineer:

  • He will consistently get a 10% raise every 4 years.
  • He will consistently save about $1500*12/$58700 ~ 30% of his salary.
  • All of these savings will compound at 7% annually, using the formula FV = P(1 + r)y, where y = # of years it compounds, P = the amount saved that year, and r = rate (7%), and FV = future value at age 65.

For the tenure track scientist:

  • I am using my graduate stipend as the PhD student’s salary.
  • Savings as a graduate student and postdoc will be roughly $600*12/$37,000 ~ 20% of her salary, which is what I try to save now.
  • Once the scientist reaches assistant/associated/tenure professorship, she will save ~30% of her salary.
  • All of these savings will compound at 7% annually.

Please note that these numbers are based off myself and my brother. They also do not take into account major life events or raises or changes in investment portfolio. Please also note that I am NOT a financial adviser and that you should seek a professional for financial advice. This article is based purely on my personal experience and hypothetical projections.

savings_comparison

Looking at the charts above, you can see that the scientist makes about 1 million dollars less in a lifetime, but by saving aggressively, only saves $350,000 less. Still, the largest difference is in the amount compounded by age 65. The $1500/month that the engineer puts away in the first 4 years of his career can potentially become over $1 million by age 65 if the annual rate of return is 7%. Although the engineer consistently saves 30% of income, the amounts saved later in life do not yield as much. In contrast, the scientist cannot put away $1500/month until she is 32, after she has finished her postdoctoral fellowship. Her salary grows much more slowly than the engineer’s: she cannot afford to put more away until later. This results in this difference: although the engineer and the scientist have only a $350,000 in total savings, they have a $2.4 million dollar difference in what is compounded. It’s this point that makes me want to save as much as possible now!