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Jill Hoffman

Unionization and Individual Negotiation to Improve Graduate Student Stipends and Benefits

July 31, 2023 by Jill Hoffman Leave a Comment

In this episode, Emily shares first-person stories of graduate students enjoying improved stipends and benefits thanks to prior negotiation. The first half of the episode includes the experiences of four graduate students with their unions or when taking part in unionization movements. The second half of the episode includes four individual negotiation stories from prospective graduate students.

Links mentioned in the Episode

  • Emily’s E-mail Address
  • PF for PhDs S12E7: This Grad Student Advocates for Higher Stipends Using Cost of Living Data (Money Story with Alex Parry)
  • PF for PhDs S5E9: Insights from the Bargaining Table with a Graduate Student Union Leader (Money Story with Mary Bugbee)
  • PF for PhDs S4E14: This PhD Compares Her Experiences at a Unionized University and a Non-Unionized University (Money Story with Dr. Carly Overfelt)
  • Dr. Katy Peplin, Thrive PhD
  • Host a PF for PhDs Seminar at Your Institution
  • PF for PhDs S8E7: Negotiating Your Grad School Stipend and Benefits: Five Success Stories (Money Stories with Various Guests)
  • PF for PhDs Subscribe to Mailing List
  • PF for PhDs Podcast Hub
Unionization and Negotiation in Grad School

Teaser

00:00 Katy P: But having a union means that there’s a level of protection between a department or sometimes even an individual and a graduate student. And that level of protection is the thing that in my opinion, only becomes possible under collective action, collective organizing. So I know that if I had not had a union, I wouldn’t have had anywhere to go to say like, Hey, this doesn’t seem fair, this doesn’t seem right. And because of a union, I had a system, I had clear instructions of how to do it. I had designated people to talk to. I had resources. I had people in the administration to talk to. I wasn’t alone negotiating a disagreement one on one.

Introduction

00:44 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.

01:12 Emily: This is Season 15, Episode 4, and today I’m sharing first-person stories of graduate students enjoying improved stipends and benefits thanks to prior negotiation. The first half of the episode includes the experiences of four graduate students with their unions or when taking part in unionization movements. The second half of the episode includes four individual negotiation stories from prospective graduate students.

01:39 Emily: I’m beyond excited to announce that I’m offering a brand-new live one-hour seminar titled “How to Not Hate Your Fellowship During Tax Season.” It’s all about how to understand and properly handle your fellowship stipend that will not be reported on a Form W-2, which is what I call awarded income. Awarded income typically doesn’t have income tax withheld from it, which can become an unwelcome surprise and even financial hardship if the recipient is not taught what to do starting with their first paycheck of this type. In addition to teaching about estimated tax and self-withholding, I give pointers for preparing for and navigating tax season with awarded income. This seminar is intended to be taken during orientation or shortly after by people who are switching onto awarded income for the first time, so it will be exclusively available between August and October of this year. If you are starting on awarded income in the fall and your university doesn’t withhold income tax—or you’ve dealt with that scenario in the past—would you please recommend this seminar to your fellowship coordinator, program head, or graduate school? Please cc me [email protected] so I can pick up the conversation. My goal is for every grad student receiving awarded income to be forewarned about this issue before it rears its ugly head during tax season!

03:06 Emily: You can find the show notes for this episode at PFforPhDs.com/s15e4/. Without further ado, here’s our compilation episode on unions and individual negotiation.

What is Your Union or Unionization Movement Story?

03:25 Emily: This portion of the episode includes four responses to my open-ended prompt of “What is your union or unionization movement story?” If you would like to hear other episodes on unions, look up Season 12 Episode 7, Season 5 Episode 9, and Season 4 Episode 14.

Courtney’s Union Story, Oregon State University

03:49 Courtney: Hello, my name is Courtney and I am a third year Ph.D. student at Oregon State University in Corvallis, Oregon, in civil engineering. The Coalition for Graduate Employees at Oregon State was established in 1999 with the first bargaining contract in 2001 and since then, the union has successfully bargained for amazing health insurance, including dental and vision, and they have continuously raised wages and reduced student fees and provide a no strings attached hardship fund for graduate students. I directly benefit from this union by fully utilizing my health insurance. My deductible is only $100 and my co-pays are very minimal. I can go to the dentist every four months too. And my funding source is currently an external fellowship, so I’m not a full member, but I pay $10 per month to be an associate member as I still benefit from this work and I want to support them. Full membership is 2% of pretax monthly salary and is optional for grad students and assistantships and grad research assistants. The union also often has socials and provides many resources to support graduate students and assist with grievances. Full members also get discounts and deals at local establishments in Corvallis, which is pretty cool. And there are many hardworking members in this union who I am very appreciative of and make my graduate experience much more enjoyable.

Michele’s Union Story, Michigan State University

05:25 Michele: My name is Michele and I’m a Ph.D. student at Michigan State University. When I first saw MSU, I didn’t know very much about unions because of the pandemic. My department had lower participation in their graduate student organization or GSO, so there was no one to discuss unions at the orientation. However, the president of our GSO encouraged me to be our steward or graduate employees union. After I discovered that I was interested in learning more. So I’ve been representing my department for the last year and then continuing that role in the upcoming year as well. My funding is actually from fellowships and not from a teaching assistantship or a research assistant position in Michigan. Only teaching assistants are allowed to be covered under the current contract. So our research assistants and fellows are not covered under the current contract. However, the benefits that the teachers went through their contract are typically also given to RAs and fellows. For example, the previous contracts the graduate students bargained for gave to free health insurance, which was also extended to RAs and Fellows also received health insurance coverage. But we have to pay taxes on it as it is dispersed as a fellowship.

06:46 Michele: Even though RAs and fellows cannot be covered under the contract, they can join the union as affiliate members. This may change in the state of Michigan, though, as there was recently some legislation passed in the Senate that would allow us to start bargaining for a contract. I think one of the most important benefits of the union is that unites the grad students together and helps with information sharing. For example, the way fellowships are dispersed, MSU is typically in a lump sum at the beginning of the semester and during this spring semester. This past year, I did not receive my semester payment until about a month after it was stated that I was supposed to receive it on my tax form. But then I was able to contact other members of the union through our Slack channel who had a similar problem in order to resolve this issue as quickly as possible. I have also seen other members of the union get help on a myriad of other topics such as late pay and overwork. One drawback of having a formal union is that dues do need to be paid by members in order to help the union run. And then these dues are used to pay for staff organizers and paying dues to the The American Federation of Teachers and the MSU Union also had two recently increased dues for affiliate members because membership dropped a lot during the pandemic. However, as more people join the union, then the cost of running it can be spread out among more people. In addition, the benefits and pay increases that can be negotiated when the majority of graduate employees are in the union will also offset this cost.

08:31 Michele: It is also more important to make sure that you have an issue that you want to organize around, and the dues can then come later to cover the operating costs of the union once it grows. For those of you who are looking to organize a union at your own university, it will often depend on state legislation. Some states do not classify their graduate students as employees, even if they work as teaching or research assistants. And this means that they are not eligible to unionize. And a good book about learning how to organize is the secrets of a successful organizer.

09:08 Michele: And then from a personal finance point of view, the union has been beneficial to me and to all graduate students. They recently were able to negotiate a 5% raise above the minimum across the board, while bargaining has been on pause. And in addition to the health insurance, there’s also a 50% coverage on dental insurance. Overwork is also written into most union contracts, and enforcing it would also give someone more time to focus on a side hustle if they needed some extra cash. As long as it’s permitted by the university, their program. In addition, enforcing the contractual working hours, could also free up more time to focus on research.

09:54 Michele: Tuition waivers can also be negotiated into the union contract. So for MSU’s current contract, nine credits can be waived in fall and spring and five in the summer. And there’s also medical leave and bereavement leave. And so this year is also a collective bargaining year, and a new contract will be negotiated. So some of the bargaining planks that MSU has been focused on or full dental coverage, a pay increase that tracks inflation and cost of living and interest for late payments.

Katy Peplin’s Union Story, Thrive PhD

10:33 Katy P: Hi, I’m Katy Peplin from Thrive PhD, and I am a proud member of two former unions, both as a graduate student and as a teaching assistant. I was part of the UCLA union when I was there as a master’s student, and then I was part of the Graduate Student Union, GEO, at the University of Michigan my entire tenure there. I wholeheartedly believe in unions for graduate students. I think that one of the things that is most important about them is that they provide collective power in a place where individual concerns can really easily get swept under the rug. For example, when I was in my last year of teaching, I was supposed to be teaching a class which was a 50% workload. But in reality it was two sessions that I had taught for 2 hours of direct teaching, some grading, and then attending the lectures. And that assignment was switched without my knowledge or consent over the winter break into a four direct teaching hours plus screening, plus grading upper level writing class. And I was just informed that it was still going to be a 50% contract and that I would be making the same amount of money. So I immediately went to my rep and was like, Is this legal? And unfortunately it was legal, but I was able, with the help of my union, to negotiate for better terms of my pay. I was able to reduce the writing requirement and therefore the grading requirement of this class. And I knew that I would not have to rely on the word of my department and my advisors.

12:07 Katy P: So now that I work with graduate students all over the world, I think it’s really important to say that most faculty in most universities aren’t out to get graduate students. Universities run on the backs and labor of graduate students in a lot of different ways. But having a union means that there’s a level of protection between a department or sometimes even an individual and a graduate student. And that level of protection is the thing that in my opinion, only becomes possible under collective action, collective organizing. So I know that if I had not had a union, I wouldn’t have had anywhere to go to say like, Hey, this doesn’t seem fair, this doesn’t seem right. And because of a union, I had a system, I had clear instructions of how to do it. I designated people to talk to. I had resources. I had people in the administration to talk to. I wasn’t alone negotiating a disagreement one on one. My unions also made it possible for me to have livable health care, livable stipends, even if they were below the cost of cost of living at the time. And I know that those things were only possible because the group that provided so much labor for the university banded together.

13:19 Katy P: If you are a grad student who is thinking about unionizing, I really encourage you to reach out to other unions. The union that I was represented by as a Ph.D. student was formed in 1974. It’s one of the earliest university unions for teaching assistants. It’s geo at the University of Michigan, and I know that they have consulted with all sorts of burgeoning union movements all around the country. So there’s a lot of people who have walked this path before. GEO has experience dealing with shifting administrations, changing state laws, changing labor laws. They have experience with withheld pay and strike grievances and health care negotiations. And there’s a lot of information that becomes available when you start organizing in union that most graduate students don’t know anything about. Like, I had no idea what a bargaining plank was or how to get into meetings or what a provost was or who the board of Regents were. So being in a union for me was both a way to give back to the thing that was supporting me and giving me so much benefit, but also it was a really great way to learn about how universities work. Obviously, it’s a singular point of view about how a university works, and I’m sure that there are other administrations that might come back and say, You know, this isn’t exactly how it works. But for me on the ground as a union member, I learned so much about how university budgets worked, where my stipend even came from, how my health insurance was negotiated. And those are all really important skills that I’ve needed well, after I’ve left university. So even though I am no longer part of the union and I work for myself, I still use all of my union skills to think about what’s in the best interest, to look at insurance plans, to think about how budgets are made, or if I’m approaching universities to ask for funding.

15:06 Katy P: And it’s certainly something that I work with some clients every day, because the reality is that graduate school takes away from some of your prime earning your prime living years, and it’s for a good cause to create research and add to the knowledge in the world. But also there’s material impacts for taking a big chunk of your twenties or a big chunk of your twenties and thirties. Or to leave a secure job and come back to grad school. There are impacts for taking that time away. And the more that I work with people, the more I really see a distinct difference between campuses that have unions and their graduate students feel like they have some level of security, they have some level of a reliable stipend over the summer or they have some sense that their health insurance will continue from year to year, and students at universities who don’t have it.

15:56 Katy P: Sometimes it can be really easy to reduce unions to like, Oh, they’re the reason I get my good benefits or like, that’s the reason that I get a good stipend as opposed to a very crappy stipend. But I think that the the real benefit outside of those material benefits is just understanding and having some protection for these vulnerable years where you’re really giving a lot of yourself and wanting to have some protection back to them

Anonymous #1’s Unionization Story, A Private Christian university

16:25 Emily/Anonymous #1: This submission is from an anonymous contributor. Quote I’m a Ph.D. candidate and graduate assistant at a private Christian American university. When I started in my program, I was making just over half of what is considered the minimum cost of living in my city. I was not provided health insurance over the summer through my job. Needless to say, it is difficult to make ends meet in these circumstances. Eventually, the graduate assistants at my school put out a letter of demands to the university, insisting that we be fairly compensated and covered for our medical needs. We demonstrated how much money we bring into the university with each class we teach and how dependent the school is on us to teach many required courses for undergraduate students. For example, from what I can calculate when teaching just one class for one semester of 25 students, the school brings in six times more money than I am paid in a whole year. We also appealed to the school’s religious ideologies and ethics and pointed out the hypocrisy of a Christian institution taking advantage of people in this way.

17:28 Emily/Anonymous #1: The school did respond and met some of our demands, but continued to refuse to pay us a living wage. Higher ups at universities want to tell us that because we are also students, that much of our labor is an educational experience for which we should be grateful and not expect compensation. But the truth is that our labor is real work that we have trained hard to be qualified to do, and that the universities could not function without. To get a job as a graduate assistant a person must have a college degree and go through competitive selection processes. Many of us even already have master’s degrees before we start in Ph.D. programs and take these jobs. And it’s not as if we’re asking to be paid as much as professors. We are only asking for the bare minimum of what it takes to live in this particular town. But the university has refused. We realized that we weren’t going to get our basic needs met unless we united and organized. So the union effort began.

18:22 Emily/Anonymous #1: I am keeping my identity and the identity of my school. Anonymous, as we have not yet gone public with our union efforts. But we did want to take this opportunity to get our story out there so that graduate assistants at other universities would know that they aren’t alone in their struggles. Additionally, I want to say that we have been very inspired and invigorated by the efforts and successes of graduate students unionizing at other universities throughout the country. So a big thank you to all who have come before us and for the risks they took. It feels like this is a moment of progress for graduate assistants and we are excited to become a part of that. We gave our university the opportunity to write this wrong without us organizing, but they have refused. So we are going forth with our unionizing efforts. Thank you so much. Personal Finance for PhDs Podcast for having this episode and inviting me to share my story. We have a hard road ahead, but we are ready.

Commercial

19:11 Emily: Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, 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 2023-2024 academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker or facilitator 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 [email protected] 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.

Individual Stipend Negotiation 

20:31 Emily: This portion of the episode includes four responses to my prompts regarding individual stipend negotiation. The prompts were: “What was your original stipend and benefits offer? What was the process of negotiating this offer? What was the outcome of the negotiation?” If you would like to hear another episode like this one, look up Season 8 Episode 7.

Anonymous #2, University of Georgia

20:58 Emily/Anonymous #2: This admission is from an anonymous contributor. Quote, I’m an incoming doctoral student at the university of Georgia, located in Athens, Georgia. I’m in the social sciences. 

What Was Your Original Stipend and Benefits Offer?

21:09 Emily/Anonymous #2: My department gave me an offer of a research assistantship and they nominated me for a university wide fellowship. The RA-ship pays $26,000, and the fellowship is $7,000 per year for four years. In addition, my tuition is waived, and every student in my department gets a $500 conference stipend per semester. All in all, I am receiving funding from two sources, one from my department and one from the university overall.

21:35 Emily/Anonymous #2: I also had a competing offer, which is what allowed me to feel comfortable negotiating with my department. The other offer was about $5,000 more a year at a roughly comparable institution. Both are one SEC schools, although the departments and selves aren’t as comparable. That offer was also comprised an assistantship and fellowship with the extra $5,000 coming from the fellowship.

What Was the Process of Negotiating This Offer?

21:57 Emily/Anonymous #2: At the time I had these offers, I was also in the last year of my master’s program, and I was really well-positioned to negotiate by virtue of my existing professional connections. Members of my faculty knew the faculty at both of the institutions I was looking at, so I asked them if negotiations were the norm in our field or if I would be perceived as out of step. I also think it’s worth asking the newer faculty in your department what they did when entering grad school and during their job search, because the tenured professors haven’t job search in a while, so their norms and experiences might not be as up to date for the actual negotiations.

22:31 Emily/Anonymous #2: I drafted an email that laid out that I had a competing offer and asked if there is anything else I should consider while making a decision. I wasn’t sure what would shake out as a result of me asking, and I was told asking directly for more money wouldn’t be the best way to approach negotiations. So I gave them an opportunity to sell me on the program. I had been corresponding with the program coordinator, so that’s who I sent the email to.

What Was the Outcome of the Negotiation?

22:54 Emily/Anonymous #2: They responded with a very kind email that basically said that they weren’t surprised I had other offers and they offered me a named department award that was specifically for professional development funding for $5,000 over four years.

23:06 Emily/Anonymous #2: I was happy for a few reasons. One, it showed me the department was willing to invest in me. Two, I got the money I asked for, and three, because it was a named award. I can put it on my CV. At that point, I went ahead and immediately accepted the offer and let everyone involved know that it had worked out. Ultimately, I’m glad I negotiated it because I got the funding I requested and because it told me more about the department culture than anything else could have. I also feel really well-positioned to take advantage of conferences and professional opportunities in my field without worrying about how I’ll pay for them. I would recommend negotiating as a graduate student, even if just to see how the department reacts. In most cases, it’s a reasonable request. So if they respond with disapproval, that could be a sign for your future in that department, end quote.

Anonymous #3, a Large Public University in the Midwest

23:58 Anonymous #3: So I just completed the second year of a five year humanities doctoral program at a large public university in the Midwest. My current program was my top choice during the application process, and thanks to guidance from the Personal Finance for PhDs podcast, I was able to use the offer for my second choice program to negotiate and improve the financial package of my top choice program.

What Was Your Original Stipend and Benefits Offer?

24:22 Anonymous #3: Originally, my top choice offered me a five year funding package that included a two year fellowship to be used during a first and last year of my graduate studies. This fellowship relieves me of teaching duties and also offers a higher stipend. The original 12 month stipend was $28,316, but the university increased the stipend right before my first semester to $30,420. So this is the amount I received during my first year when I was on fellowship and I will receive this amount or perhaps even more if the university decides to increase it again for my fifth and final year. My remaining three years of graduate study are funded by a teaching assistantship. So as a GTA, I teach one course per semester. The nine month GTA stipend is $21,280 in my department. There seems to be more and more opportunity to teach a course over the summer, which pays approximately an additional $7,000 on top of that nine months stipend. However, this is not a guarantee and international students have priority over domestic students for these positions, specifically in my department.

25:29 Anonymous #3: My second choice program offered me a 12 month, $24,000 stipend for the five year program, in addition to an extra $5,000 to be used for research over the course of the five years. So in total, the financial package is about $5,000 more than that of my first choice program. But of course, this is not taking into account small differences in fees.

What was the process of negotiating this offer?

25:51 Anonymous #3: Ultimately, I sent a brief direct email to the DGS at my top choice program. I explained that I was deciding between two programs and that the other program of interest, which I named specifically in the email, had offered a more competitive funding package which included guaranteed summer funding. And I outlined all of the details of the funding package in the email to the DGS.

What was the outcome of the negotiation?

26:13 Anonymous #3: My negotiation process was actually quite easy. The DGS responded the next day and offered an additional $6,000, a lump sum that I could use any way I wished. So there was really no back and forth. I sent the email. I asked if there was anything that they could do to increase the financial package, and they responded and said, yes, here’s an additional $6,000.

26:33 Anonymous #3: So this is the financial commitment that I needed to make my final decision. I accepted the offer and I received this cash amount when I arrived on campus. Ultimately, my second choice program has since increased stipends to $30,000 per year. However, my current program has also made changes to funding packages. Summer teaching opportunities have increased in my department specifically for domestic students, and health insurance will soon be covered 100% by the university, so my first two years there was an 85% subsidy. So it seems to me that financial packages can really shift and evolve over the course of one’s program. But I think it’s critical to make sure that you have a guaranteed financial package that is workable for you from the very beginning. For me, as a 31 year old doctoral student who left a career to pursue a PhD in a completely different field, financial security is really important and pursuing programs with strong funding packages in affordable cities and then negotiating with my top choice and continuing to seek out additional grants and awards now that I’m here has been really important for my success in the program and also for my well-being overall.

Anonymous #4

27:47 Emily/Anonymous #4: This next contribution was submitted anonymously. Quote, Hello. Newly minted Ph.D. student here today. I’ll be telling you a bit about my experience of “negotiating” my offer letter for grad school. I say negotiating with air quotes because my experience was not the typical case of using an offer from one school as leverage to improve your offer at another school. But I think my experience can help motivate others to negotiate, which is why I’m happy to share.

28:14 Emily/Anonymous #4: So for a bit of back story, I knew from early on during my undergraduate education that I wanted to go to graduate school. However, the research I was doing as an undergrad wasn’t something I was super passionate about. By my senior year, I found a research area that was more interesting to me, But felt that I wasn’t ready to apply to grad school since I’d be switching fields in order to gain a better understanding of the state of the field and really specify a topic. I could devote six years of my life to. I worked as a lab tech for two years doing research in the field. I thought I wanted to pursue in graduate school and yay, I was correct in my judgment. I found a research topic I really enjoyed. The downside to this perhaps, was that I consequently narrowed my options for grad programs.

28:58 Emily/Anonymous #4: I ended up applying to two programs that are both direct admit, so I knew which lab I’d be joining and have a general idea for a project I’d work on. Following interviews, I realized that one of the labs was not the right fit for me. So by the end of the application cycle, I only had one offer letter. Now, during my interview at this institution, two PI’s, neither of whom were the P.I. I was interviewing for, and one of whom was on the grad committee. Both encouraged me to negotiate my offer. Then, prior to receiving the offer letter my PI emailed me saying we should zoom once I got it so we can go over the details and, quote, discuss anything I’d want to negotiate. So I was confident that negotiation was not taboo for this program and was reassured that my PI would even help me.

What was your original stipend and benefits offer?

29:41 Emily/Anonymous #4: But how exactly do you negotiate without the leverage of another offer? You just ask. My original offer was a 12 month appointment with a stipend of $32,000 for my first two years. Then the departmental rate guaranteed for nine month appointments for three more years, as well as an additional departmental award to be paid over my first three years. Even though I didn’t have another offer, I was still planning to ask for smaller things such as relocation assistance. Then I was awarded the NSF Graduate Research Fellowship. With the Fellowship. I recognized I had a little bit more bargaining power, but at the end of the day, there was only one school I’d be able to take it to. Still, I knew that my PI and department were generally okay with negotiations, so I figured I had nothing to lose if I asked for more.

What was the process of negotiating this offer?

30:26 Emily/Anonymous #4: I first zoomed with my PI, That’s when I asked about relocation assistance. But I followed up on that zoom call with an email basically saying, I’ve heard that other NSF recipients asked for these things. Is any of this even possible? And listed the following agreement to pay the NSF stipend on non-NSF years: partial control of the $12,000 cost of education fund that is part of the fellowship and a sign up bonus.

What was the outcome of the negotiation?

30:52 Emily/Anonymous #4: My plan was to gauge what my PI thought would be reasonable requests, then go forward with only those. But they actually just went ahead and asked about all of them. And two days later I had my answers. First, the school will match the NSF statement. First, the school will match the NSF stipend on non NSF years. Second, I won’t have control over the $12,000 funds. However, the school may top it off with $2,000 that I can use for conferences, workshops, etc. I say may because this component is negotiated separately from the stipend and is still in the works. Third, a sign on bonus is not possible. However, the department award in my original offer letter was reworked into a larger amount that I will receive in my fifth year. So while it’s not technically a sign on bonus, it is an additional lump sum that I’m being guaranteed. And finally, my PI can reimburse up to $600 in relocation costs.

31:48 Emily/Anonymous #4: So overall, my negotiation, which was nothing more than just asking, was largely successful. I do want to note that there are two important factors to consider in my case. One, because this is a direct admit program, my PI was in my corner doing the asking for me. I never did any of the negotiation with the department directly, which may be the case for those entering rotation programs and why asking can be more intimidating for others. Second, my PI has external non-government funding which allows for more flexibility in how it’s spent. I’m almost certain that I would not get the NSF stipend match nor relocation assistance if my PI didn’t have private funding. So it can be useful to know what sources of funding your potential PI has to help you gauge if certain asks are reasonable versus unreasonable. I hope my story will help motivate others to ask for more than what their initial offer consists of. Whether they have offers from five schools or one school. And even if you don’t have an external fellowship like I did at the end of the day, the school offered you a spot. They want you there. I truly believe that making reasonable requests will not hurt you in the eyes of a university that wants you to commit to their program. You’re never going to have an answer unless you ask. End quote.

Anonymous #5, Negotiation Advice

33:06 Emily/Anonymous #5: This is from an anonymous contributor. Quote, I will be starting in a PhD program in fall 2023. After some correspondence with the professor in charge, I managed to secure a bit of additional funding. My advice is to think of the process as just asking questions instead of negotiation. Make a convincing case and focus on controllable and movable points.

33:30 Emily/Anonymous #5: One. Thinking of the process as simply a communication exchange helped me in two ways. By removing the pressure of negotiation, it helped me to think clearly about what I need to support myself financially and the pressure points in the initial offer, e.g. rent. And as such it help me to communicate clearly about my financial concerns. Admitted, but not accepted is the time to discuss financial details and faculty fully expect students to ask questions and are prepared to leverage their resources to adjust offers to convince students to join

34:06 Emily/Anonymous #5: Two. Making a convincing case stemmed from thinking concretely about how I would support myself on the initial offer and subsequently asking questions that were detailed and specific. Asking many detailed questions served as evidence of real and reasonable financial and material concerns. I had. Functionally, this worked analogous to asking research questions in the statement of purpose.

34:28 Emily/Anonymous #5: Three. focusing on controllable and movable points made this correspondence actually productive. What are the principal pressure points in my current offer? What tools does the program have at their disposal to improve offers? Often they do not have much wiggle room over a pure stipend amount, but have other programs or fellowships they can leverage. Focusing on effective and real possible offer adjustments helped me to help the professor better understand what they could do to turn an admission offer into an accepted offer. Relatedly, I advise taking advantage of additional funding opportunities, such as filling out optional personal statements, end quote.

Outtro

35:14 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

Behind the Scenes at the Graduate Career Consortium 2023 Annual Meeting

July 17, 2023 by Jill Hoffman Leave a Comment

In this episode, Emily opens up the audio diary she recorded while attending the 2023 annual meeting of the Graduate Career Consortium (GCC) as a sponsor. GCC is attended by university staff members who provide career and professional development services and programming to master’s students, PhD students, and postdocs. Emily shares the insights she gleaned from the keynote and member-generated sessions and the casual conversations around the meal tables and in the hallways. If you’ve ever wondered about the business side of Personal Finance for PhDs, this episode will give you some insight!

Links mentioned in the Episode

  • Graduate Career Consortium
  • PF for PhDs Podcast Volunteer Form
  • Dr. Katy Peplin, Thrive PhD
  • Simone Stolzoff, The Good Enough Job, Reclaiming Life from Work
  • Dr. Sasha Goldman
  • Host a PF for PhDs Seminar at Your Institution
  • Emily’s E-mail Address
  • Dr. Katie Kearns
  • Archer Career
  • PF for PhDs Subscribe to Mailing List
  • PF for PhDs Podcast Hub
Behind the scenes at the Graduate Career Consortium 2023 Annual Meeting

Teaser

00:00 Emily: The basic like, sort of thesis of his book/talk is that white collar workers in America today are attempting to self-actualize through their careers and their jobs. And that’s not good for them personally, and it’s actually also not good for them in terms of their careers. He said a couple of times through the talk that putting all this, uh, pressure and expectation on our jobs is not something that they were designed to bear and they’re not bearing it. I actually found some pretty strong like personal finance themes, uh, peeking into this talk.

Introduction

00:45 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.

01:14 Emily: This is Season 15, Episode 3, and today I’m opening up the audio diary I recorded while attending the 2023 annual meeting of the Graduate Career Consortium as a sponsor. GCC is attended by university staff members who provide career and professional development services and programming to master’s students, PhD students, and postdocs. I share the insights I gleaned from the keynotes and member-generated sessions and the casual conversations around the meal tables and in the hallways. If you’ve ever wondered about the business side of Personal Finance for PhDs, this episode will give you some insight!

01:52 Emily: I’m looking ahead to Season 16 of this podcast, in which we’ll return to our typical long-form interviews. This is your official invitation to please volunteer as a guest for one of the upcoming episodes! Please go to PFforPhDs.com/podcastvolunteer/ and fill out the quick form, and I’ll be in touch over email. I look forward to interviewing you soon! You can find the show notes for this episode at PFforPhDs.com/s15e3/.

02:25 Emily: Without further ado, here’s my audio diary from the 2023 Annual Meeting of the Graduate Career Consortium. I want to give you a tiny bit of background information before jumping into the audio diary. The Graduate Career Consortium is a decades-old volunteer-run organization of about 450 members, and it’s for university staff members who work in career and professional development. It started with a narrow focus on PhD students and postdocs and has more recently opened up to people who serve master’s students as well. 2023 is my third year sponsoring the GCC Annual Meeting but only my second year attending the in-person annual meeting. I planned for about 200 people to be in attendance, but I think the actual numbers were somewhat lower, in part due to flight delays and cancellations in that particular week.

03:19 Emily: In my business, almost all of the revenue comes from my work with universities, and very little comes from the products I sell to individuals. I vastly prefer for graduate students and postdocs to access my content at no cost to them because the university is picking up the bill. Therefore, when you hear me refer to ‘clients’ in this audio diary, I’m referring to the staff members who contract with me to provide financial education programming.

03:44 Emily: One of my objectives in attending this meeting was actually to collect audio for two podcast episodes that I’m planning to publish in August 2023. I wrote two prompts and asked meeting attendees to respond to either or both in a short sound bit, approximately 30 seconds. In the audio diary, I call these microinterviews. Let’s jump in!

Travel Day: Monday, June 26, 2023

04:09 Emily: I am recording this about midday on Tuesday, July 27th, 2023. Yesterday, Monday was my long travel day from San Diego to Indianapolis. I decided to have a more relaxed morning in San Diego, so I booked a noon flight out of there. This is because it’s a Monday, which means that it’s the beginning of the week and my kids were both in summer camps for, uh, the first time this summer. We were on vacation prior to this point, so I wanted to help my husband get them out the door without also trying to get myself out the door simultaneously. So I left my house a little bit after 9:00 AM and got to the airport. In fact, got all the way through security and to my gate by 10:00 AM which was awesome. I set up at one of those little charging workstation kind of areas and I worked on a couple of final things for this conference.

05:03 Emily: Actually, I had one more final flyer that I wanted to print, uh, once I got to Indianapolis. So during that time I kind of tweaked and finished up the design of that flyer, and then I also started getting on the hova app and being active there and messaging people and welcoming people and posting things. I had two flights, one hop from San Diego to Denver, and then from Denver into Indianapolis. Sometimes I really am inspired and love to work on planes. Um, I never pay for wifi, so it’s kind of a good time to process my thoughts without getting distracted by anything on the internet, but Monday was not one of those days. I just took the time to like relax and rest and I did a lot of reading. The book I’m reading right now is Love Lettering by Kate Clayborne was a recommendation. I’m enjoying that.

05:50 Emily: So I basically just took some me time to relax and get my energy ready for the mad dash that is gonna happen, you know, between Tuesday evening and midday on Friday, we landed in Indianapolis at around 9:00 PM and I noticed, you know, in my Uber from the airport to the conference center, even at 9:30 PM in the summer, it is late in Indianapolis because we are in the bleeding edge of eastern time zone. So that was pretty interesting. All the travel on Monday went really smoothly. I got to my hotel around 10 and I tried to drop off the swag I brought with me. I brought pens and a little tiny flyer to go into the swag bags, but, um, the people who were doing that had left for the day. So I just went back to my room, said goodnight to my kids over FaceTime and read more on my book. Went to sleep around midnight with my alarm set for 7:00 AM for Tuesday.

GCC Pre-Conference Day: Tuesday, June 27, 2023

06:50 Emily: Tuesday morning. I woke up before my alarm at about 6:30 AM I guess I’m just so excited to be at GCC. Um, so I didn’t have to rush of a morning, just got ready and then at about 7:45 went off to find, uh, the person that I needed to deliver that swag to, which thankfully I was able to do immediately. They took it off my hands, they got it into the swag bags right away. Even the registration, um, for the early bird attendees was opening at eight. So I’m really grateful that they were able to do that so quickly. I also took that time to get my booth set up, so I brought with me like a brightly colored tablecloth and a table runner and a little sign that goes on my table. And so I set all that stuff up and while I was setting up, two really good things happened. The very first conference attendee that I saw, uh, we both did a, Hey, you look familiar, where have we met before thing? And it turns out we actually worked together, um, a couple of years ago, but it was all virtual. So of course it’s different seeing someone in person. So it was really great to see that person and I am excited to maybe renew my work, um, without office. And the second person I saw was not someone I had met before, but she works for an office that I have worked for virtually in the past. And when she, you know, figured out who I was, she said, we love you . And it was so great to hear that I thanked her so much. She was so sweet. And yeah, I hope to be working with that office in the coming year as well. Now that I know I have a couple different, uh, champions over there.

08:21 Emily: By the time I got my table set up, it was about 8:15 and I went to check in at the registration desk. They didn’t have my name badge ready yet, but the conference organizer just said I should grab some breakfast and go on in and eat, even though technically I wasn’t like registered for that session. This is again, sort of the early bird, um, first day attendees, they were having a breakfast together, but I took advantage. I crashed the breakfast, grabbed a plate of food, sat down at a table, you know, introduced myself all around, met some interesting people. One person was a wealth manager before starting graduate school. You’re gonna hear from that person on the sister podcast. This one that I’m recording as we go through. In fact, I was really regretting not bringing my recorder with me to breakfast. I wasn’t expecting necessarily right away to be interacting with trainees, so I didn’t have it on me, but I was telling people about the micro interviews for the podcast and several people on the table really interested in it.

09:12 Emily: Um, so yeah, met a wealth manager, um, met a couple other people. I had some things in common with, had a really interesting, although brief conversation with someone about postdoctoral training. And of course the differences between being an employee and being not an employee. They’re especially amplified in your postdoc. So I love talking about that kind of stuff here at gcc and I’m hoping for more conversations like that. After I finished up breakfast at about 8 45, I went back to my room and did a couple of errands. So I went and picked up the flyers that I had ordered for printing to have at my table. So walked over to the u p s store to get those. And then I walked in the other direction to go to CVS to get some supplies for my table. So I got a couple of bowls and some candy just to make people, you know, entice them over and make them feel welcome and maybe talk to me or check out my stuff.

10:00 Emily: Um, so I got that all set up. So all in all, I probably walked about a mile and a half and the air quality today is no good. I think there’s like smoke from a fire or something. Um, so the air quality’s pretty rough. I probably should not have been outside for that long, but yeah, needed to do those errands on foot. So I’m glad that was over. By the time I go back to my hotel, I was really like sweaty and feeling kind of grimy, not so great. So I decided it was a good time for a workout today, Tuesday is definitely my day with the most free time. So I knew if I didn’t take advantage of workout today, I was never gonna work out the rest of the time here. So I did a little workout in my hotel room, took a shower, feel really good and refreshed. And that brings you up to the present. I am recording this right before heading out to have lunch with Katy Peplin from Thrive PhD.

10:52 Emily: It’s 1:30 PM on Tuesday. I just got back to my hotel room after a great lunch with Katy Peplin of Thrive PhD. We have known each other for many, many, many years online only, but this is the first time that we’re meeting in person. I consider her sort of my colleague as like a fellow solopreneur who serves graduate students and postdocs, albeit in a very different way and on a very different subject. But anyway, it was great to meet her and catch up with her. And we had some great conversations about kind of the state of graduate education from our perspectives as sort of like, you know, people used to be in it and now we are outside, but we talked to a lot of people inside of it. And by the time you hear this, you either have already heard a couple of contributions Katy made to existing podcast episodes or maybe they’re coming up. But yeah, we did a couple of recordings. She was my first test case in terms of recording a micro interview at this conference. So really glad to have that done with. I am taking a break in my room right now. I’m gonna do a little bit of light emailing and get back to my booth a little later this afternoon.

11:58 Emily: All right, it is now 8:15 PM on Tuesday, and I’m back in my hotel room for the night. Uh, let’s see. So I was down in the kind of main conference area all through the registration period, which is three to 6:00 PM Um, it was a little slow, but there were, you know, a handful of people who stopped by my booth and introduced themselves. And I recorded a couple of micro podcast interviews during that time. So that was all good. And then things really picked up between six and 8:00 PM which was during the reception. And, um, I did a lot of mingling and networking. Basically my, uh, stance when I come to conferences like this, my attitude is that everybody here wants to meet me and I just need to give them the opportunity by walking up and introducing myself. So as a naturally shy person, this is not at all, uh, comfortable for me, but I push myself outta that comfort zone for the sake of my business.

12:59 Emily: And it’s actually, it can be really fun when it works out. So yeah, I met, um, a couple dozen people maybe this evening, you know, caught up with some old clients or maybe, you know, colleagues of people that I’ve worked with in the past. Certainly met a lot of new people, some of whom are interested in working with me, some of whom are not. And yeah, just got to talk about financial stuff with them. Some of them had really good, um, financial insights from their either time in graduate school or, you know, their current life. Some of ’em had questions, some of ’em had ideas about policy changes, which is the subject of one of the micro interviews. So yeah, recorded a bunch more micro interviews at that time. I think I’m up to 13 for the day. Pretty good for the first day. So yeah, today was a lot of unstructured time, but tomorrow we’re really getting into the meat of the conference and I’m looking forward to learning a lot and getting some new insights and sharing them here in this audio diary. I know I need a lot of rest and a good night’s sleep to be on my game for tomorrow. So yeah, I’m gonna stay in the rest of the night, uh, get ready for bed, do some reading, call my family and go to sleep early, I hope.

GCC Conference Day 1: Wednesday, June 28, 2023

14:14 Emily: Okay, wow, here I am on Wednesday evening at almost 9:30 PM and yeah, I recently finished my first long, long day at the conference, so I will try to do a recap for you now. It’s been a really great day. I woke up at six, managed to get in about 20 minutes of yoga before I needed to shower and get ready for the day. And, uh, breakfast opened at seven 30. It was from seven 30 to eight 30. And as a sponsor, my objective is to be at breakfast the whole time and sit at least a couple different tables and just meet and talk with as many people as I can. So I did manage that. Um, was at breakfast for an hour, I believe I sat at two different tables. Um, I made some like pretty decent connections at one of them in particular, some people I’m gonna follow up with.

15:10 Emily: And that was really exciting immediately after breakfast was the welcome to the conference. Um, and also the Wednesday keynote, the keynote speaker was Simone Stolzoff, I hope I’m pronouncing that close to correctly. And he recently published his first book called The Good Enough Job, Reclaiming Life from Work. And that was kind of the subject of his talk. I thought the keynote was really great. It’s always exciting for me to see, uh, other professional speakers engaging in their craft and try to take some, you know, tips away from what they’re doing. And yeah, I thought he had a good, really good mix of, um, speaking about personal stories from his life, drawing in stories from his book, um, relating to the audience, like the specific, um, subject of this conference was definitely tied in with like all of his themes and giving us some exercises and time to talk and reflect with one another.

16:09 Emily: So from what I could understand, the basic like, sort of thesis of his book/talk is that white collar workers in America today are a attempting to self-actualize through their careers and their jobs. And that’s not good for them personally, and it’s actually also not good for them in terms of their careers. He said a couple of times through the talk that putting all this, uh, pressure and expectation on our jobs is not something that they were designed to bear, and they’re not bearing it. I actually found some pretty strong like personal finance themes, uh, peeking into this talk. Probably not that surprising. Apparently the author has an undergraduate degree, dual degrees in economics and poetry, and then he has a graduate degree, I believe in journalism, and he also worked in tech and has lived in San Francisco. So yeah, not that surprised to see that theme coming through, like pretty strongly.

17:12 Emily: But his talk definitely reminded me of the aspect of the fire movement, the financial independence and retire early movement that is, uh, emphasizing that when you want to retire early or retire at all, um, you really have to prepare during your working career and separate your identity as a person from your job, your identity as a worker, um, in preparation for that retirement date. Because if you go into your retirement still with your identity really wrapped up in your career and your job, you’re gonna be very lost and probably very unsatisfied, um, until you can get that sorted out in your retirement. And so it’s much better to do that ahead of time, maybe even find more satisfaction in your job when you’re not putting all that pressure on it, um, before you actually retire early. And then you’re not, they say a lot in the fire community.

18:01 Emily: You’re not supposed to be retiring from something like a job you really hate. You’re supposed to be retiring to something, something you’re really looking forward to doing, uh, once you’re no longer working your job. But what Simone was talking about today was more a a little bit more about people who see their profession as their calling and maybe some people who hate their jobs and wanna get outta that, you know, previously saw their careers, their calling. But yeah, more of the danger of identifying too closely with your career and even potentially being exploited by your, um, employer or by your industry more at large, because you’re in one of those professions where it’s assumed that you’re, you know, getting all this satisfaction out of your work. So of course you don’t have to be paid that well. So nonprofit work education, of course, government work, these kinds of areas.

18:50 Emily: So Simone ended the keynote with like five really good takeaways that are both for, you know, all of us in the audience personally as well as, you know, those vast majority of people in the audience unlike me, who are career advising professionals, you know, to help advise their students in postdocs. And one of them that I really liked was actually the last one, and it was to diversify your identity. So diversify, like add to the number of areas of your life from which you can draw meaning. And I’m definitely going to reflect further on, you know, the messages from this book and this talk and how they apply to me personally as a self-employed person who has, um, you know, chosen my business and chosen my profession. And I definitely feel like it’s a calling and just how all of this, all of these concepts get wrapped up for me and how they’re maybe a little bit different or a little bit similar with me being my own employer.

19:49 Emily: So that’s my homework following this keynote, and it was really enjoyable. And yeah, I’m really glad to have been introduced to this author and, uh, his take on this topic after the keynote and a break in which, you know, I’m, again, always trying to be networking during these free times. Uh, we went into the first two concurrent sessions, so they’re called the member generated sessions. So basically you have a choice among, you know, four or five different, um, sessions that you might attend at a given block of time. So we got two in the morning. So the first session I attended was titled Strengthening Networks and Career Readiness Post Documenting Committees. And the second one was charting Our Path at the Crossroads of Career Readiness Support. And I won’t go into all my takeaways from the sessions that I went to, but in general, the things that I’m listening for during this conference are, you know, to try to gain some insights into the, the format of programming that, you know, they seem to, you know, think is successful in their, um, career services kinds of jobs, because I would like to take those best practices into my business and of course suggest them to my clients. So the three formats for financial education that I’m currently offering my clients are live in person, live remote. Those are both for like seminars and workshops and stuff. And then I also have a variety of workshops that have been pre-recorded, so it’s more of a flipped classroom model. And so I’m trying to glean, uh, what other people are doing, whether are they going back in person, you know, are they seeing engagement? Are people really using pre-recorded resources? And this past year has been a really hard one, it seems for everyone in terms of levels of engagement for, you know, this type of programming and also for my programming. So yeah, we’re all trying to sort through it together, but it seems like the time and everybody is tired and everybody is burned out after the pandemic and everybody’s, you know, sick of whatever. And so, uh, it’s difficult for everyone, certainly.

21:41 Emily: Something I’m also looking for in taking note of are resources that I can use, like I wrote down, uh, like a report from the National Postdoctoral Association that I should read, and one from the National Academies of Science, engineering and Medicine. So resources like that that I can go to utilize on my own afterwards that are gonna give me more insights into the communities that I serve and today’s trends. Next on the schedule was lunch. And it was thankfully a very long lunch period. It was like almost two hours long, so we had box lunches, so I grabbed a box lunch, sat down at a table, uh, they were really heavy into their career conversation, so I did not actually get a word in and a little bit awkward. But yeah, I didn’t contribute to that conversation at all. Just really enjoyed listening to it. And after I was done eating my lunch, I just excused myself and said I had enjoy listening to everyone. And yeah, I was a bit awkward, but I headed back up to my hotel room to charge my devices. And then once they had charged a bit, I took a, you know, a small break, went back down to the lunch area, and then the second table I sat at, I was really able to engage with the couple of people there. In fact, when I sat down, they were talking about home ownership and the rising cost of rent and how the faculty and staff at universities just do not, uh, get how difficult it is living on a grad student or a postdoc type income with these rising cost of living and, you know, housing crisis kinds of costs. And so that was a really interesting conversation to step into. And I ended up talking with both of those people for, um, quite a while about various topics. And I recorded some more micro interviews. So I felt like that was a really nice way to spend the end of my lunch. Oh, and at the end of that lunch, I found out after that whole conversation that one of the people at the table had already knew who I was because she had seen me speak at MSU like 7, 6, 7, something like that years ago, um, when she was a postdoc there.

23:35 Emily: In the third member generated session in the afternoon, I listened to, uh, three Lightning talks, so like three eight minute talks in a row. And the fourth session I attended that afternoon was titled PhD Progression Micro-Credentialing for Navigating the PhD and Beyond. And this was actually presented by Dr. Sasha Goldman from Boston University. And I had the pleasure of working with Sasha a couple of times. Her office hosted webinars with me during the pandemic. And so we had a little bit of a relationship and I was so excited to see what she was presenting that she’s been developing over the past. She and her office had been developing over the past several years, which is this micro-credentialing program. And she really took us behind the scenes and how she made it. And again, this is all in like the career development area. Um, and it just was so inspirational. Well, first of all, it’s very impressive , and if you are a graduate student at bu, I really hope you are gonna take advantage of this because it seems like an amazing resource, um, to yeah, to help you get ready for your future career. And Sasha also said that, you know, this is free and she wants it to be open to lots of other universities. So I don’t know how fast that rollout is going to be, but, uh, if you have the opportunity to take this, um, I’m gonna go ahead and highly recommend it. And actually, Sasha told me later that they have a badge on personal finance inside the program from which they link to some of my like free resources, like podcast episodes and stuff I believe that I’ve produced in the past that was nice and flattering that they had done that. And they also have a badge for financial literacy with like, sort of a, a business twist on that business, financial literacy. So again, if you’re at BU and you’re a grad student or you’re at one of the institutions that this is gonna come to in the near future, wow, I really hope you take advantage of this. And it was really inspiring to me as well, and thinking about, oh, would like a micro-credentialing program potentially be a good fit for me when I’m doing this financial education stuff, um, versus like an online course. And so it really got my brain percolating about like a different way to help people, uh, master, you know, the skills within, within personal finance. So anyway, I was really excited to have attended that session, um, and really proud that my resources, a couple of them are, you know, being included in this awesome, awesome program.

25:55 Emily: One other note about, again, how I approach, uh, networking is like, I’m just always introduce myself to people. Like if we have a minute or two before a session starts, like I’m introducing myself to the person next to me, if I’ve met them before, I’m saying hi to them, um, you know, checking in. Of course, sometimes these things turn into pitches. It’s pretty naturally, um, for, you know, for working with me. And, and sometimes they don’t, and either way is fine. Um, but yeah, I’m just, it’s just such a great place to meet people because just about everybody here is like a past client or a potential client of mine, and I just have such good connections with them.

26:31 Emily: Late in the afternoon about 4:15 PM they went into what they called their regional meetings and gatherings. Now these are for GCC members, and I am not a member , but they’re, they have the country divided into like seven, um, regions. And so I just decided to go into the southwest region, including Southern California, which is where I live, and just, uh, you know, check with the organizer, was it okay if I attended? And they said yes. And it was really just a social hour. And for the Southwest region, um, pretty much most of the time was taken up playing this game. And the game was that, uh, the organizers had come up with some, uh, questions, questions about what is your preference and, you know, is your preference A or B? And we would, um, move to different parts of the room depending on if our preference was A or B. And then, uh, within that group we would decide what was our best argument for A or for B, and then tell that argument to the other group. And nothing got resolved after, it was not like a debate, it was just, uh, here’s our argument, here’s our argument. But it started off pretty light. So the first question was, is your preference to eat ice cream or is your preference to eat cake and moved through some other areas? One really kind of funny one was, would you rather camp in a beautiful location or would you rather stay in a luxury hotel? And the one that got a little contentious was, would you rather drive everywhere or would you rather walk or bike everywhere? And some of these questions were like, the answers were really obvious to me, but there was always a debate around it. And anyway, it was kind of a fun way to, you know, meet and interact with some other people who live, you know, in California and Arizona and, uh, nearby states So that was cool.

28:20 Emily: Next we had a block of free time. I used it for more networking, again, some more recording of micro interviews. And then I took like a five minute break in my hotel room to change out of my dress shoes into sneakers, um, to go to the evening reception, which started at 6:00 PM And the evening reception, which included dinner and drinks, was in this place called the Punchbowl, which was really fun, I guess was kind of like a bar atmosphere, but there were all kinds of games there. There was a bowling alley as well as a karaoke room, ping pong tables, and a bunch of smaller games as well. And they put out a lovely dinner for us. It was, um, like, make your own tacos. So I mostly just got food and sat and ate and, you know, talked with people. Um, and I talked with a few different groups over the course of my time there. Met some really, uh, interesting people, had some good conversations, recorded a couple more micro interviews, uh, made some good connections. People I’m gonna follow up with, not just about like work, but about like future collaborations. And I met another person who has recently gone full-time into self-employment like I am, uh, but you know, was a, a longtime member of GCC and it was really exciting to meet her. Oh, and I met a legend in the field who I’d never met or spoken with before and who is retiring. So I guess this was my last opportunity. So that was really cool. Oh, and I was also really surprised and flattered. Um, one of the people I met at the Punchbowl, um, I’ve only maybe exchanged an email or or two with her, but she is very aware of my work apparently, and, um, congratulated me on the success I’ve had with my business in, you know, the last few years and asked how it was going and everything. And even said that she points people to my website as an example of, um, you know, a self-employed person’s website, which, ugh, I’m so like, kind of embarrassed by my website. Sorry, y’all. Uh, I was considering a revamp of the website for this summer, but I kind of decided in the late spring that I had spent enough money already this year on professional development and didn’t really want to make an additional financial investment, at least not yet. So anyway, uh, kind of embarrassed by that, but also just really pleased again, and, and flattered that, um, you know, she has been following what I’ve been doing and, and, and thinks highly of it. So yeah, that was really great to hear. Um, stayed there for about two hours and then walked back to the hotel with a group, um, around 8:00 PM back in my room, like eight 15. And my evening since then has been a little more yoga, uh, downloading these micro interviews to my computer so I can save them recording this audio diary. And pretty soon I’m gonna be saying goodnight to my kids and reading and turning in because I have another early day tomorrow.

Commercial

31:14 Emily: Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, 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 2023-2024 academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker or facilitator 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 [email protected] 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.

GCC Conference Day 2: Thursday, June 29, 2023

32:32 Emily: All right, it is about 6:20 PM on Thursday. I’m back in my hotel room for a break after a pretty long day, but there’s still more day left as iI’ll tell you about in a few minutes. Today was another really successful day, and I’m so glad I decided to sponsor this conference again. So my alarm went off at 5 45 today, which is like no mean feat for someone who normally lives on Pacific time. Uh, and I actually went to the hotel gym for about a half an hour workout, saw some other people from the conference there and back to my room, got ready. And of course, like I told you yesterday, I was at breakfast by seven 30 when it opened and just, you know, talked to the people for the next hour. I sat at two different tables at breakfast today, and one of the tables in particular, we had such a great conversation. One person at the table asked me my origin story for how, you know, I I got into this area and started this business and everything, which I’m always happy to share. So then the conversation led into, well, what is the, you know, biggest issue or obstacle that graduate students have with their finances? And of course, I said, and other people around the table said, well, they’re just not paid enough. I mean, that’s the first thing, uh, which yes, agree. And, but then actually someone else brought up something that I very often talk about in my seminars for prospective graduate students, and she said this was her personal experience as an entering graduate student. Just the idea of being paid to get a PhD is so flattering that you don’t really consider to carefully whether it’s a living wage or enough money to be comfortable. Um, and this person’s PhD is in the humanities. And so, you know, we talked about that idea for a while as well, and that led into, you know, negotiating and advocating for your worth and all that good stuff.

34:40 Emily: After another, welcome to the conference. We had our Thursday morning keynote, which is by Dr. Katie Kearns, titled Not just Career Crossroads Social and Emotional Aspects of Grad and Postdoc Development. And Dr. Kearns was speaking from her, um, experiences more in like the teaching and learning area. I didn’t connect with this keynote as much to be honest, but she said one thing that kind of stuck with me, which she was saying this in relationship to, um, her experience teaching. It sounded like first year undergraduate students, uh, year after year after year. And, uh, having the experience of, you know, answering the same, uh, types of questions and, and having to do the same kinds of trainings over and over again. And, and personally having the realization that, oh, right, like, I’m getting older every year, but they’re always 18 years old. Uh, but anyway, what she said about that was maybe, you know, the, the problems that they’re having and the training that they need that they’re experiencing at that time in their lives, maybe that is developmentally appropriate. And so I, I’m gonna chew over that a little bit, like how I can apply that to like the financial realm and, um, not that I really like get frustrated or anything with like, repeat questions, but like, I want to think about what is developmentally appropriate for a graduate student to go through, especially one who’s entering right out of college and what kinds of, um, what kinds of skills they perhaps already have by then, and which of the skills that they should be working on.

35:56 Emily: After another slight break, we got into the next member generated session and the one I attended was called Pathways and Crossroads at the intersection of events, equity and engagement. And this group of presenters was out of Harvard Medical School, and they’re actually more former clients of mine, hopefully future clients as well. And they described, I might not be using the right words for this, but the way that they organize and advertise their programming and they put on a lot of events. Um, so the way they organize their events and also their resources so that it’s easily accessible by the people that they serve in the medical school. And it was really quite impressive to me to hear about the development of like the web-based tool that they’re using so that people can again, find these resources and events and then also how diligent they are in collecting evaluations and standardizing those across all the programs. Cuz that’s something I’m really thinking about right now is how do I, um, improve what I offer and understand whether people are getting out of it, what I hope that they’re getting out of it, um, and how I can kind of do better in that evaluation realm. And again, like I said yesterday, I’m listening for do people have best practices around attendance and engagement, um, in terms of the events that they’re putting on. And a again, still hearing, nobody has a magic formula to, um, get through to students and postdocs right now. And it’s difficult kind of, uh, across the board.

37:24 Emily: The next session I attended was, uh, revolutionizing career services in the digital age, engaging students for 21st century success, more on the same theme. And this, um, session was actually done by Archer Career, which is one of the other sponsors of this event. And, um, specifically their co-founder and CEO Pam Schilling was the one doing most of the presenting. And it was a nice session because it was a balance of, you know, hearing from Pam about her insights, especially in the ed tech space, and also doing some exercises, uh, personally and then also with, you know, my, my neighbor who I, I got to know through the exercises, which was really nice. Um, and so it, it allowed me to do some reflection even though I’m a little bit, you know, to the side of, of Pam’s intended audience. It allowed me to do some reflection on the formats that I’m offering. And I really meeting the needs of, um, you know, the people I’m working with and what, what could I do? This is called ideation. Like what could I do if there were no constraints? Like budget was no constraint, time cons was no constraint. Uh, what would I do? So I was specifically thinking about my, uh, tax education work when I was going through these exercises, and it’s definitely given me some food for thought that I’m going to continue to think about over the course of the next few months because I’m already reevaluating, uh, these programs actually. So really good timing for this session for me.

38:40 Emily: After that, we had a lovely buffet lunch, um, actually a very long lunch, and I took advantage of this because while people were waiting, um, in line to get their food at the buffet, I kind of went down the line and asked a few different people if they would go ahead and record their micro interview with me right then, which a few people took me up on and I had some good conversations. So that was actually a good strategy, although of course I ended up at the end of line and got my food last. But it was really delicious. And again, a long lunch. We had some time for conversation around the table, and then they did a recognition, um, session. So recognizing all the members of the graduate career consortium who have served in the past year, especially those who are, um, coming off of leadership roles and sometimes going on to other leadership roles, and also honoring two people who have contributed a lot to GCC over sounded like about the past 15 years. As a non-member of this organization, it was great for me to get some more insight into what exactly all is going on here. Like, what are all the things that GCC does because I’m not, uh, you know, I, I see a very narrow slice of it. So this was a really good time for me to just learn more about the organization.

39:47 Emily: And after lunch, I had a very lovely conversation with, um, someone about postdoc benefits and the lack thereof and how postdocs should be considered employees. This is a theme. Many people talk to me about this over the course of this conference. The last member generated session that I attended in the early afternoon was a really special one because it’s actually the one that I as a sponsor got to introduce. So the session was titled at the crossroads of parallel planning, integrating fellowship applications into graduate and postdoc career advising. And when I, as a sponsor, I was given a list of, uh, sessions that I could sponsor in advance, and this was my number one choice, and I’m so glad I got it because to me, the the connection is, is very clear. So what I basically said at the beginning of the session was, you know, we’re gonna learn, hopefully some best practices throughout the course of this session on how, um, you could help your graduate students and postdocs apply for fellowship funding. And hopefully as a result of you implementing this at your campuses, there will be much more fellowship money flowing to your institution, and specifically a lot more people being funded on fellowships for the first time. And, uh, when that happens, there are tax implications. And so then I got to kind of pitch my tax education stuff. I have a new seminar that I’ve developed and I also have, um, my ongoing, um, deep dive workshops that are in the flip classroom model. So I gotta say a little bit about that and then introduce the speakers. And the session was incredible. It was wonderful to learn what they’re doing over at Vanderbilt, um, to help, uh, prepare people for, for example, I think they’re doing, they’re doing a lot more than this, but for just one example, help prepare, uh, graduate students to apply for the NSF G R F P. And so they are doing boot camps and the whole process starts in like the May before, um, the application is due, you know, the following October-ish. And it’s a very long cycle of working with the applicants and also working with their letter writers, and they, they, they’re doing what they call bootcamps over the summer. So it’s like cohort groups where you have that like accountability, um, and peer mentoring and also expert mentoring to, uh, yeah, get these applications into tip chop shape. And, and based on the data they showed, these bootcamps seem to be very effective in getting the applications, you know, up higher percentage of them towards the funded stage. But another thing they emphasized, which I really liked was how really applying for fellowships is a professional development exercise. It’s not merely about winning the fellowship or not winning, winning the fellowship. It’s a huge accomplishment just to apply. Um, and you learn so much and it’s so applicable, transferable skills, et cetera. Um, just from doing the application process alone, and especially an intensive one, like the one that they’re describing and that they actually celebrate at an event at the end of the year, everybody who applied for fellowships, um, and they don’t frame it in terms of, you know, you got it, you didn’t, it’s just everybody who applied, you know, accomplished this amazing thing. And I, I actually participated in a little bit something like this when I first applied for the NSF G F P back when I was at the NIH for my Postback irta. Um, but I definitely did not utilize this kind of resource when I was a first year graduate student. And I certainly wish that I had, I don’t know if it was available to me, um, if it was, I, I didn’t access it, but it seems like an awesome idea that, uh, many universities should be following suit. I’m really glad that they presented this, um, information in the session and that I got to sponsor it.

43:17 Emily: The last event of the afternoon today was what they called a showcase session. So it was, um, posters from various people and also, um, posters from each GCC committee to show what they’ve been doing over the course of the year. And I basically use this as another kind of networking opportunity and also opportunity to record my micro interviews, kind of doing both. So it was really, um, it was a really good time for me and I got to talk with a lot more people during that period. And yeah, that was great. I even hung around for quite a while after that session, kind of officially ended to talk to the last like few stragglers and again, get a couple more interviews. I did have someone have a, not totally unexpected, but fairly strong and interesting, uh, reaction to one of my prompts. Um, it’s the one talking about what policy would you change? And so this person, and very kindly by the way that this person was warning, um, her colleague maybe don’t answer that question, like, go for the other prompts, like, maybe don’t answer this prompt because, you know, if anything is construed as like criticizing this colleague’s, uh, current employer, um, you know, that could be bad. She could ha face repercussions or even lose her job. I don’t know if that, that might be a little, little bit extreme. But, um, basically just, you know, you’re saying who you are and who you work for maybe don’t be critical of the university that you work for in terms of their policies. So they had a little kind of debate about that. Ultimately, the person, um, did not contribute to that particular question. Um, I definitely think it’s a legitimate concern, but it was just a little, you know, a little disappointing to me that people don’t think they can speak freely to criticize even legitimately, even, even gently, even nicely, um, criticize a policy of their employer, not even like a person, but a policy. And by the way, that the policy this person was, um, going to put on record but didn’t, was like very reasonable. totally, totally reasonable change that I’ve said this one many times myself. Of course, I’m my own employer and I’m not gonna fire myself for saying that sort of thing. But anyway, that was a pretty, um, interesting reaction and I certainly hope that no one participating in that episode gets any blow back. I don’t think they will. But anyway, I, I really hope it doesn’t happen and I’m really grateful to people who were willing to answer that question and kind of stand, uh, behind their opinion. Um, I’m glad that they either think their employer is reasonable or they, um, at least think their position is strong enough that they wouldn’t be kind of threatened by that. So that was an interesting interaction regarding these micro interviews. Okay, I’m gonna wrap up because I am heading out to dinner in a few minutes. I’m going to NADA here in Indianapolis, which was highly recommended. So I’m going with, um, nine other people from the conference and yeah, hope to do more of the same, of talking with people and maybe getting more of micro interviews and we’ll see just doing more of the same through this conference, which has been again, so, so enjoyable.

46:19 Emily: Oh man, it’s now 10:40 PM , uh, let’s see. I went out to dinner with a group of people from the conference. There were nine of us in total. I left at about 5 45, got back well to the hotel, maybe nine 15 or so. Stayed around chatting for a few minutes. Uh, probably got back to my hotel room about an hour ago. Uh, dinner was really, really lovely. Um, you know, talked with people walking over to the restaurant and walking back, uh, more networking and so forth. But, uh, we were at the restaurant for about two hours, so we really had a nice long dinner and I got to talk quite a bit with all the people, um, sitting around me. We talked about it, it was a little bit more, uh, relaxed and less sort of professionally oriented than the rest of the conference. So we definitely talked about some personal stuff like, uh, the vacations were going on this year and, uh, uh, parenting. And I talked with this one person about this, um, science fantasy trilogy I read recently by NK Jemison. Turns out he’s really into, uh, that other, and we chatted about it quite a bit and it was, that was pretty fun. And uh, I made him promise to bring his, uh, tabletop role playing game based on, uh, this certain trilogy series, which that’s, I asked him to bring it to GCC next year. Maybe we’ll play, it’s not my kind of game, but I’m willing to give it a shot cause I really did like this trilogy. Um, anyway, and, uh, some people sitting around me also definitely asked me about work and, and also just more about like my business, you know, not just what I could do sort of in partnership with them, but how I do what I do. And, um, yeah, that was really nice to have those kinds of conversations as well. Um, yeah, this is definitely a nice relaxed, um, atmosphere and element of, uh, this conference. And of course I recorded a few more, more micro interviews for my collection and, uh, yeah, it was a really, really good, although long and it’s certainly late now, good long, um, nice evening out and I’ve already said goodnight to my kids. So I am just going to read a bit, uh, actually finished Love Letters yesterday and today I’m starting the Southern Book Club Guide to Slaying Vampires by Grady Hendrix. Kind of another random recommendation I found online somewhere, but, uh, we’ll see how it goes. I’m definitely into the, uh, lighter reads at the moment after reading that NK Jemison Trilogy. Um, yeah, so I’m gonna just read a tiny bit and go to sleep cuz I have to be up relatively early again tomorrow morning to pack and check out before the final half day of the conference.

GCC Conference Day 3/Travel Day: Friday June 30, 2023

49:09 Emily: Okay, , this is my final, um, live entry of the audio diary of my conference. It is about 11:00 PM Pacific on Friday, June 30th. So this was the last day of the conference and I was surprised that it has ended up being the longest day, I think. Um, so I’ll go through it pretty briefly cuz I’m awfully tired at this point. Uh, my day started at 7:00 AM Eastern and I let myself not work out and sleep in a little bit this last morning because I knew it was a travel day. And so got up at seven, got ready and got down to breakfast at eight. And similar to other days between eight and nine, it was basically a networking breakfast. I believe I only sat at one table this time. Um, but I had some really nice conversations with the people there, some people who I hadn’t yet met at the conference, which is great. I was of course trying to meet everyone, but, um, didn’t quite get there, but I certainly got to, I would say at least over 50% if not 75% of the people. Um, yeah, so I got some final conversations in over breakfast and then there was between nine and about 1130. Um, a few different activities went on, but I would say the one that was of most note, um, was the panel on. Um, I don’t have the title in front of me, but it was basically a keynote panel, uh, with four panelists on how to, uh, better support the international graduate students and postdocs, um, you know, in this career services area that the conference was themed around. Um, and so of course I didn’t get, you know, the, the some of the specifics and technicalities that were discussed and that are not totally relevant to what I do, but certainly it was a great reminder to me on the importance of inclusion of those international graduate students and postdocs and the importance of, um, calling out, um, specifically when there’s content that’s, um, just for them that’s been placed in there that is specific to their experience. So I thought of a few examples with my content, um, of when I talk about, um, how international students with postdocs can get started with investing, um, while they’re living in the US of course, regarding my tax programming, um, what is specific to non-residents is solely for non-residents. But I’m sure if I thought about a bit more, I could come up with a few other examples and I wanna incorporate those into my, um, into my talks to just make sure that international students and postdocs know that they are yeah, being taken into consideration that I am, uh, speaking to them as best as I can. So that to me was like the biggest kind of takeaway of the morning. Oh, and by the way, not just for international students and postdocs, but all kinds of different, um, you know, let’s say underrepresented groups or first generation, um, grad students and so forth.

52:00 Emily: Um, okay. And then the other kind of fun announcement from this last little segment of the conference was that next year’s conference is going to take place in Philadelphia. So you can’t probably hear it in my voice right now cause I’m awfully tired, but I’m very excited about going, uh, back again and sponsoring again next year in 2024. Okay, so the conference kind of officially wrapped up, um, around 1130 and between about 11:30 AM and 1:00 PM I was, um, just sort of having my last like, conversations with people. There were a few people who I wanted to catch, um, before we all went our separate raise. Some people that I’ve known from previous work and some, um, who I just met this time around. So, for instance, I had an old mentor at Duke, I wanted to say hi to, um, it turned, I, I learned during that, um, international student postdoc panel that one person at the conference was on the board of the National Postdoctoral Association. So I grabbed him and wanted to talk with him about some maybe ways that I could work with the npa, which had been brought up to me by multiple times throughout the conference by other people of that possibility. Um, and of course I wanted to thank Annie Maxfield once again for kind of orchestrating the sponsorship, uh, my sponsorship of this conference and telling her that once again, just like last year I was so happy with how things went and that I definitely wanna sponsor again next year. So, you know, keep me on list, keep me informed, um, and all of that.

53:23 Emily: And then between about one and 3:00 PM I got really lucky. I thought I was gonna be spending that time pretty much on my own, just, you know, packing up my booth and going to the airport and I did pack up my booth, but I went and sat down with someone who I saw sitting on her own, um, who I hadn’t met yet. And it turned out that she was another sponsor of the conference. Um, and that we had some things in common. So we were just having lovely time chatting and getting to show one another. She’s also a solopreneur like I am, although she’s been in business a lot longer than I have been. Um, and in a different area. Um, and then, uh, we were also joined by Katy Peplin Thrive PhD. So my conference kind of book ended by, uh, spending time with Katy, both at the beginning and the end. So it was lovely. We spent a couple hours together. We had lunch, we chatted about business. And yeah, that was a really, really nice, um, session as well. And it turns out that, um, myself and this one other person who I’d recently met, we were on the same flight from Indianapolis to Las Vegas. So we actually headed to the airport together, got to continue talking. That was all lovely, um, and just spent time together and actually ended up sitting next to each other, uh, on the flight. And so we had a wonderful conversation, but during the flight I was telling her that I was quite tired already and needed a rest, but I couldn’t quite fall asleep on the plane. So I ended up reading, um, the book that I picked up. Uh, I think I have the title to write the Southern Book Club’s Guide to Vampire Slang. Um, so I was really into that book, so I wanted to continue reading it, um, while on the plane. And then when we got off the plane in Las Vegas, it turns out that my next flight from Vegas to San Diego also had two other people from the conference on it. Um, both of whom were from U C S D. And so we, and our flight was delayed also, uh, by about an hour and a half or two hours. And so we had dinner together, got to talk so much, um, about what they do and what I do and just getting to know each other and continue that conversation at the gate. And again, lovely, lovely time and really nice to decompress in a more like social and informal way at the end of the conference. Um, and then during my last little hop from Vegas to San Diego, I continue to read my book. I think I’m like 75% of the way through it, and it’s only been two days. This is a very fast read, um, very enjoyable and uh, that brings me just about up to now. So yeah, except for that slight delay in my second flight, um, the travel has been pretty smooth, although again, it has been a long day. And this is definitely a note to myself. Um, I do often try to justify based on flight times, um, staying after conferences and events like these until the next day. Like, I don’t like to have my travel day be the same as the last day of the conference because I like to take time to decompress and rest and maybe even get started on the massive to-do list I have, uh, based on the events of the conference. But I just couldn’t justify it to myself for this particular one, given that it ended by noon on a Friday and it was on Eastern time and I was going back to Pacific, blah, blah, blah. So I decided to travel home this day, but really, really note to myself. Give myself that extra time, uh, just spend the extra money and stay the extra night in the hotel and, um, really be able to come back like kind of better rested and stronger, um, from the conference in this date I’m in currently. So thank you all for listening to this audio diary. I hope it gave you some insight into this really special time in my life and my business, which is when I get to attend these conferences. And, um, yeah, my experiences as a sponsor and what I learned and what I’m taking away from the conference and uh, yeah. Yeah. Thanks for listen. Bye.

Outtro

57:01 Emily: That is the end of my conference audio diary. I would say this conference was very successful for me. In the end, I noted about three dozen potential clients to follow up with. I recorded 54 microinterviews, well exceeding my goal of 40, and invited one person on the podcast for a full interview. I also gleaned many ideas for organizations to partner with, resources to access, and formats for my financial education. And I had a great time! So I will definitely be back again as a sponsor next year in Philadelphia. On the date that this podcast episode will publish, I’ll actually be at another conference as a sponsor, the Higher Education Financial Wellness Summit. That conference is more about my own professional development and keeping up with my field and less about networking in comparison with the GCC Annual Meeting, though I’m still planning to record microinterviews and follow up with potential clients. If you are interested in hearing more about what I learn from the conferences I attend, please let me know! I may share in a future podcast episode or email if it’s of interest.

58:13 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

Why and How These Grad Students Purchased Homes

July 3, 2023 by Jill Hoffman

In this episode, Emily presents first-person stories from grad students who bought homes during grad school. The volunteers were simply asked to share their stories of home ownership, whatever they may be. You’ll hear from three volunteers throughout this episode, both on how they purchased their homes but also what’s happened since then, the benefits and the challenges. Perhaps you’ll be inspired to pursue home ownership yourself sooner rather than later. The final person included in this episode is a mortgage originator specializing in early-career PhDs, who summarizes why graduate students and anyone paid by fellowship have a difficult time securing a mortgage and his system for framing them as qualified borrowers.

Links mentioned in the Episode

  • Emily’s E-mail Address
  • Don’t Accept Admission to a PhD Program without a Sufficient Stipend (Free Webinar on Friday, July 14, 2023 at 10:00 AM PT)
  • PF for PhDs S10E18: This Grad Student Purchased a House with a Friend
  • Host a PF for PhDs Seminar at Your Institution
  • AMA on the PhD Home-Buying Process (Free Live Q&A)
    • Sam Hogan, Mortgage Originator/Emily’s Brother
      • Sam Hogan’s Cell #: (540) 478-5803
  • PF for PhDs Subscribe to Mailing List
  • Podcast Show Notes Page
grad student home ownership

Teaser

00:00 Courtney B: Owning a house is all about the long game. We hope to see large returns on the remodeling and roofing work once we sell, but for now we have to be willing to put a decent amount of cash down for deductibles, emergencies and our new monthly loan payment.

Introduction

00:18 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.

00:47 Emily: This is Season 15, Episode 2, and today we’re featuring first-person stories from grad students who bought homes during grad school. I simply asked the volunteers to share their stories of home ownership, whatever they may be. You’ll hear from three volunteers throughout this episode, both on how they purchased their homes but also what’s happened since then, the benefits and the challenges. Perhaps you’ll be inspired to pursue home ownership yourself sooner rather than later. The final person included in this episode is a mortgage originator specializing in early-career PhDs, who summarizes why graduate students and anyone paid by fellowship often have a difficult time securing a mortgage and his system for framing them as qualified borrowers.

01:32 Emily: By the way, there is still time to volunteer for one of the compilation episodes coming up later in the summer, specifically the episode on unions and unionization movements. If you have a story to share on that topic from the last few years, please email me at [email protected].

01:52 Emily: This next announcement is specifically for those of you who are applying to PhD programs in the US in the upcoming academic year. If you’re not in that group, please share this information with someone who is! On Friday, July 14, 2023 at 10:00 AM Pacific Time, I’m delivering a free webinar titled “Don’t Accept Admission to a PhD Program without a Sufficient Stipend.” Yes, this is something you need to understand and commit to even before you start applying to PhD programs! The three phases of this webinar are to go over why you need to be sufficiently financially supported in your PhD program and what that means to you; how you can ensure that you will be; and what actions you need to take in the fall during application season, in the spring during admissions season, and in the summer before you matriculate to make this come about. This webinar includes what I wish I had known as a prospective graduate student and the hidden financial curriculum of academia that it’s taken me over a decade to uncover. It’s so vitally important for prospective graduate students to have this information early, which is why I’m giving it away for free! Please help me spread the word! Anyone interested can register for the webinar at PFforPhDs.com/sufficientstipend/.

03:20 Emily: You can find the show notes for this episode at PFforPhDs.com/s15e2/. Without further ado, here’s our compilation episode on home ownership.

Hannah Stroud, PhD Student: College Station, TX

03:37 Hannah S: Hi, my name is Hannah Stroud. I am a final year PhD student at Texas a and m University, uh, which is located in College Station, Texas. College Station, Texas is a city with a extremely low cost of living compared to other areas of this country, uh, which is pretty much the only reason that I am here sharing my home ownership story with you today. , I guess I started my PhD in 2020 and purchased my house in March of 2021, and I had been a grad student before that and had been living in college station since 2014, so I’ve been here a while. Uh, and the low cost of living in this area in general allowed me to save a pretty substantial amount of my stipend just comparatively. So in my master’s, I think I was paying like six 50 in rent, uh, per month, uh, which meant that a decent portion of my stipend could go to fun activities or savings in general.

04:37 Hannah S: Um, how I grew my savings was through a robo-advisor managed, uh, money market account and also ETF investments. Um, and that was really helpful in kind of just turning what I had saved into enough to be able to afford a down payment. Uh, and so when I started the kind of mortgage lending process, um, in the first month of my PhD, so I am a fellowship student, which means my income is not w2 and I’m a NSF GFP fellow, which means that my intimate income is guaranteed for three years. So when I started my mortgage process, uh, that was important to my lender. What I didn’t realize is that when my mortgage rates were locked in, uh, they wanted my three years of employment to be verified from the time of closing. So when I closed six months later, I actually ran into some issues, uh, where my lender wanted some way to guarantee that I would be employed at the same salary that I’m currently making, uh, for three full years, not the two and a half that I could promise based on the time that had elapsed.

05: 43 Hannah S: Um, so I ended up needing to increase my down payment to the full 20% so that I didn’t have to qualify for private mortgage insurance anymore. But ultimately, the main aspect of my home ownership story is truly luck. Uh, I’m very fortunate to live in a very low cost of living city, and the timing of the pandemic honestly played a lot into the house prices being very low and mortgage rates being what they were. So given the current environment, I don’t know that a lot of this advice is incredibly applicable, uh, but advice that does stay the same is the, if you have non W2 income, it is important to learn from your desired lender. What aspects of your income are important to them, and if three years of proof of income will be required from the time of closing, it’s been a fun experience overall.

06:41 Hannah S: Ultimately, owning is significantly more expensive than renting because when things break, I am my own landlord and I get to fix them, and sometimes those expenses are more significant than I would like them to be. Uh, within the first kind of few months of owning my home, uh, both the washer and dryer that came out, the house broke, and so I needed to replace those. Um, and I found out that my non-mobile house had a mobile home shower installed in it, and all the plastic parts were degrading, so I needed to, uh, replace all that with copper piping and plumbers are expensive, and then any electrical issues become your problem, AC issues become your problem. So definitely get the home warranty. Uh, if you can include that in the conditions of closing and ha have it be something that the seller pays for, I would recommend that highly. And then I renewed it for a second year as well, cuz my air conditioning unit was pretty old. Um, and that ended up being the right choice for me just because the, the amount of maintenance that I required on, on that particular utility was, was significant in the second year as well. So yeah, hopefully you have as good of luck on your journey as I’ve had online and yeah, good luck going forward.

H, PhD Student: East Coast

08:00 Emily: This submission is from “H”, a PhD student who lives on the East Coast. Quote. I had a vague plan to buy my place in my second or third year of my program, but it ended up happening in a surprising and rushed way when a house came up right in my neighborhood, I had something like a month to close, which I did in August, 2020 at the beginning of the second year of my program. My income has increased since I got the house, so the monthly payment, including mortgage insurance and property tax, is now a little less than a third of my post-tax income. Initially it was closer to 40%. Having roommates in various configurations has offset between 25% and 65% of my payment at any one time. But there have also been months between roommates where I’ve been covering the whole amount. I’ve had kind of a revolving door of housemates, which has been a lovely part of having my house.

08:49 Emily: So far it’s been friends or friends of friends, almost all grad students because my roommates and I, I have so far always been gone for the summer, I rented out for more like 85% of the mortgage to people doing summer internships. Here it offsets the fact that my July and August stipend payment is lower than my 10 month academic year stipend payment. I charge less than market rent because I’m not a professional landlord and I don’t have a property manager. The house is old and not in perfect shape. When I’ve had water in the basement, a broken water heater or a broken window, people have been understanding and patience since I’m not charging a lot, I’m also able to undercharge because I have a financial safety net. My parents lent me almost all of the deposit and I won’t start paying them back until I finished my program.

09:33 Emily: Their justification was that they had paid the same amount for my siblings law school. We’ll pay them back interest free. I would’ve been able to get a place on my own, but it would’ve been smaller and I would’ve bought later. The fact that I have a financial safety net has made being a homeowner less stressful. I haven’t had to ask my parents for money for repairs so far, but I can sleep at night knowing I’d be able to borrow money from them if I urgently needed a new roof or something. I love having an old house, but because of the upkeep, I think it would be too stressful to own one without that kind of cushion. It was very much a pandemic home purchase. I remember reading all these articles in 2020 and 2021 about people who are desperate for more space when working from home and how they had overpaid for falling apart houses.

10:17 Emily: I was like, oh my God, is that me? Now with the interest rates up, the news is all about people who lucked out with 2% interest rates like me, and now their incentive is just to never sell. Sometimes I think about how my mortgage on the house is twice what I was paying for a one bedroom apartment and how I spent money on repairs and my bills are much higher than in the apartment. And I wonder what would’ve happened if I had plugged the difference into an index fund instead. But if the house has increased in value, as much as Zillow says the house wins out as an investment, obviously you have to take Zillow with a grain of salt. I think only time will tell whether this was a good financial decision or not, regardless of whether it turns out to have been a good investment.

10:55 Emily: I have so many great memories of this house. I love having space to host and being able to provide a gathering place, especially in the pandemic. When I hosted people from out of town who needed a break from being isolated alone in their apartments. I’ve loved becoming closer to my housemates. I’ve had friends stay in the house when their family were visiting from abroad and needed a place to stay. I feel happy that the house has helped people out with somewhere to stay when other solutions were expensive and logistically difficult. I’ve loved being able to host my family, especially at the holidays. A lot of this would just not be possible if I were renting. I know that buying a house is normally seen as tying you down, but for me, I think it’s given me the freedom to be mobile. Having the house has allowed me to be pretty flexible during the latter part of my program, which requires research abroad.

11:40 Emily: I offset the monthly payment by renting it out so I don’t feel like I’m obligated to stay there just because I’m paying for it. When I’ve worked abroad on a job that included housing or got grants that covered my housing while researching, I’ve been able to save a good amount of money, money by reducing my housing expenses, but I also didn’t need to formally move out and I know I can come back whenever because there’s still a spare room compared to having to deal with paying for storage and finding a place during awkward lease gaps. I’m able to be much more of a free agent than other people I know Doing dissertation research abroad, it’s just one of the many ways that being financially secure makes the experience of being a grad student dramatically less stressful. I think it’s important to recognize that my financial privilege and home ownership, along with my citizenship, have given me greater research capacities. I’m not sure what I’ll end up doing with a house after I leave the program. I might rent it out on a more formal basis or if I decide to buy elsewhere, I might sell. End quote.

Courtney Beringer, PhD Student: Corvallis, OR

12:37 Emily: This next submission is from Courtney Beringer, who was previously interviewed on this podcast in season 10, episode 18.

12:45 Courtney B: My name is Courtney and I’m a third year PhD student in civil engineering at Oregon State University in Corvallis, Oregon. Uh, I recorded a podcast with Emily shortly after I bought a house in 21, so I’ll briefly talk about that and dive into what has happened since then. I bought a house with my friend in July, 2021 in Corvallis, Oregon for about $250,000. It’s a three bedroom, two bath with an additional room that we converted into a bedroom. My co borrower and I live in the house along with our two tenants. Our mortgage is about $1,500 a month, and our rental income is, uh, $1,300 a month. Um, we were patient and took months to find a house that met our needs of being within about five miles of campus. Um, had rooms we could rent out and was under our budget of about $320,000. Our loan process was made, uh, a little complicated by having co borrowers who were not related or married.

13:50 Courtney B: And because we were both grad students with changing sources of income throughout the year, we worked with our loan officer through these hurdles and everything actually turned out great. It has now been two years as homeowners and with tenants. Uh, it has been great to have a passive side income through renters. We have enjoyed the freedom that home ownership has provided, uh, but home ownership is always unpredictable. We had a water heater leak in January this year, which caused my co-owner one of our tenants and I to live in a hotel for two months while demo and construction occurred in my room and our shared bathroom insurance covered so much. But this took a lot of time out of our studies and lives to move, make remodeling decisions and coordinate with contractors, and we just got a roof place, which added a $13,000 loan to our joint finances. Owning a house is all about the long game. We hope to see large returns on the remodeling and roofing work once we sell, but for now, we have to be willing to put a decent amount of cash down for deductibles, emergencies, and our new monthly loan payment. Uh, I hope my story gives you a sense of the joys and realities of being a homeowner.

Commercial

15:07 Emily: Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, 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 2023-2024 academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker or facilitator 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 [email protected] 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.

Anonymous, PhD Student: Atlanta, GA

16:26 Emily: This submission is from an anonymous contributor. When they mentioned Sam in the course of this contribution, they’re referring to Sam Hogan, a mortgage originator specializing in early career PhDs. And we’re actually gonna hear from Sam next

16:39 Emily: Quote. I purchased a home during the spring semester of my first year as a PhD in Atlanta, Georgia. I closed in April, 2023. I have been debating home ownership since 2020. I would be entering graduate school in my early thirties, so I wanted to try and build wealth so that I wouldn’t be too far behind in retirement savings or net worth. When I finished in my late thirties, my parents were not convinced that buying was the right move. So when I moved back home to Atlanta to start school, I ended up renting a beautiful old studio. But in January of spring semester, when I was informed that rent would be going up $200, I realized that I was ready to buy and that I needed it to happen fast.

17:18 Emily: I tried several different mortgage lenders, but most were rather confused by the stipend structure. I would get pre-approved based upon my credit score and lack of debt, but then would always receive several follow-up emails asking for documents from my university, asking for verification and explanations. I turned to Sam fairly early on, just asked him questions and then ended up going back to work with him after the other lenders didn’t work out. I received my pre-approval from Movement Mortgage with no follow-up questions and began house hunting. In late January, maybe eight or nine bids later, I finally landed on a home, not a condo, which had been my original call, but HOAs kept blowing my budget in late March with a closed date in early April. For a moment, there was a bout of panic because the house has an unfinished primary suite and we, Sam, my realtor and myself, didn’t know if it would pass appraisal the suite, huge bedroom, bathroom closet was essentially a bonus room or a garage.

18:11 Emily: The outside structure was finished, but there was nothing else. No drywall, no electric, nothing. Ultimately, the house passed appraisal, the seller contributed to closing and Sam even managed to get me a few hundred dollars back at closing. Looking back, this story sounds really straightforward, but it was super stressful. I also switched realtors during this process and I wish that I had done so earlier. I was also saving between $800 and a thousand dollars a month between January and April to make the down payment, and also ended up basically emptying my investment account and my Roth ira, both of which had less than $2,000 in them. I put 3% down on a home that was less than $200,000 a total steal in Atlanta. All in all, I’m glad that none of the other bids worked out. This home is spacious, has a lovely yard, is in a great location, and the unfinished primary suite will multiply the value of the home.

19:01 Emily: Of course, the house will need a lot of work, but I have a roommate and we’re both excited to get our hands dirty. My biggest piece of advice is to remember that the people who help you purchase your home need to advocate for you. Sam is a phenomenal advocate and helped me get into my first home and stopped at nothing to make the sale work. The realtor who I ended up working with was also an amazing communicator, and I wish that I had been working with him the entire time. Of course, save money and do your research, but remember that the people on your team matter. End quote.

Sam Hogan, Mortgage Originator

19:36 Sam H: Greetings. This is Sam Hogan. I help graduate students, postdocs and PhDs achieve home ownership in all 50 states. We’ve closed hundreds of loans for PhD students and postdocs. They have a unique, uh, income set and require unique mortgage approval process. Um, having done this for over four years now, we are the nation’s only lender that focuses on your success while you’re getting your degrees in higher education. My team is a longstanding advertiser and sponsor of PF for PhDs, and I am delighted to also be Emily’s little brother. So Emily reached out to me in, um, spring 2019, um, having seen a pattern of difficulties for PhD students, um, closing on home loans.

20:29 Sam H: The issue with PhD income is that the loan officer in the pre-approval stage will either pre-approve them and not do enough work themselves or deny them out the gate. Now, when an underwriter sees the PhD income after loan offer, pre, pre-approved them, them, it might not have enough information about the stability and continuance in history, and you also can be issued a denial because the underwriter doesn’t have to give you a final approval based on those offer letters. Um, after some a few months of investigating, we developed a system to properly document the income, the continuance, and the stability. Um, regardless of how soon or how late you are in your PhD stipend continuance, where I come in is demonstrating that the borrower who’s a PhD student has always been a full-time student, has always maintained a good gpa, has a track record of staying in the same field of science or research.

21:34 Sam H: We do have to over document a file sometimes to demonstrate continuance, but even if we have less than three years, we are able to help the underwriters understand the quality of individual behind this stipend income, which has helped us become successful in closing loans in this space. I will rescue PhD deals every single month. This happens often with, uh, new construction builders and their lender is completely unfamiliar. Or some other companies like, um, loan Depot for example, will just outright never accept stipend income. So those clients will read my reviews or, uh, find Emily’s blog where we give a little bit more of in depth information on how it works. Um, I’ll connect with them and they will become homeowners and protect their deposit, have a more stress-free approval working with us versus a lender. Loan officers. Not, not familiar. When we originally started helping PhD students and post-docs become homeowner, homeowners, we were more comfortable with having three years of continuance.

22:42 Sam H: So at the early years or maybe before your first semester of becoming a PhD student, that was our, um, bread and butter easy approvals with confirming that income. As we’ve done more PhDs and expanding to more states, we’ve actually seen some success helping PhDs who are in their later stipend years, years four, five, sometimes six. Um, so really we just need to make sure that we can show history and continuance. Even if you’re stipend might be ending in a few months, we can still help you. We just like to show the career field that you’re going into and some other details about your career path and your future successes. A lot of home buyers in this market are not excited about taking higher than a 5% rate, and I wanted to just encourage people that it is much more difficult to find the home than to get a mortgage on it. So we say in our industry, marry the house date the rate. Once you’ve found your home and rates improve, you’ll be able to refinance and lower your payments and lower your total interest paid. What you don’t want to do is wait for rates to get a little bit lower and then the market is flooded with buyers and you have more competition searching for that same home.

24:03 Sam H: Having to read originated loans for seven years working with the PhD community just makes my life such a breeze. Everyone is very responsive, calm, cool, and collective. They understand what I’m talking about and they’re willing to listen to me explain a little bit extra about the home buy-in process so they can have a better understanding of it. Unfortunately, there’s not a lot of standard education on how to buy a home or how to get a mortgage, but that’s okay because you have people like myself who are willing to take the time to help you understand and find success in this space. But working with the PhD community has been, um, so wonderful over the last four years. I I wouldn’t trade it for anything. Having to having clients who, um, are attentive to your requests. I, I will say well qualified, a good, good credit scores and goal oriented. If you’re committing, uh, five or six years to a new area and you don’t wanna waste five or six years worth of rent, you know, please reach out to myself. The best number to reach me is 540-478-5803. Um, and I’m looking forward to hearing from you. Happy hunting.

25:14 Emily: I host monthly. Ask me anything with Sam. So if you’d like to meet him and ask a question about mortgages or the home buying process, please register for our next one pfforphds.com/mortgage.

Outtro

25:32 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

Why and How These Graduate Students Side Hustle

June 19, 2023 by Jill Hoffman 3 Comments

In this episode, Emily presents first-person stories from grad students who side hustle. The volunteers were asked this set of questions: What is your motivation for having a side hustle? What is your side hustle? What are its benefits and detriments? How much do you earn through your side hustle? If someone listening wants to pursue this side hustle, how would you recommend they get started? You’ll hear from eight volunteers in total throughout this episode, and perhaps be inspired to start or expand your own side hustle.

Links mentioned in the Episode

  • Emily’s E-mail Address
  • Host a PF for PhDs Seminar at Your Institution
  • PF for PhDs S10E18: This Grad Student Purchased a House with a Friend
  • PF for PhDs Subscribe to Mailing List
Grad student side hustles

Teaser

00:00 Anonymous #1: Some places might give you entirely free housing. Some places might be like mine where you get like a 50% off for your housing rate. I find it to be beneficial because that’s money that I get to keep for myself that I can invest in my Roth IRA that can be used for my own spending, that can use for a traveling for leisure, because we know we get started as graduate students. So it’s really important that I take breaks and have that extra money so that I can invest for my future and take those much needed breaks

Introduction

00:33 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 15, Episode 1, and today we’re featuring first-person stories from grad students who side hustle. The volunteers were asked this set of questions: What is your motivation for having a side hustle? What is your side hustle? What are its benefits and detriments? How much do you earn through your side hustle? If someone listening wants to pursue this side hustle, how would you recommend they get started? You’ll hear from eight volunteers in total throughout this episode, and perhaps be inspired to start or expand your own side hustle.

01:34 Emily: By the way, there is still time to volunteer for one of the compilation episodes coming up later in the summer, specifically the episode on negotiating your individual grad student stipend and the episode on unions and unionization movements. If you have a story to share on either of those topics from the last few years, please email me at [email protected].

01:59 Emily: I’m beyond excited to announce that I’m offering a brand-new live one-hour seminar titled “How to Not Hate Your Fellowship During Tax Season.” It’s all about how to understand and properly handle your fellowship stipend that will not be reported on a Form W-2, which is what I call awarded income. Awarded income typically doesn’t have income tax withheld from it, which can become an unwelcome surprise and even financial hardship if the recipient is not taught what to do starting with their first paycheck of this type. In addition to teaching about estimated tax and self-withholding, I give pointers for preparing for and navigating tax season with awarded income. This seminar is intended to be taken during orientation or shortly after by people who are switching onto awarded income for the first time, so it will be exclusively available between August and October of this year. If you are starting on awarded income in the fall and your university doesn’t withhold income tax—or you’ve dealt with that scenario in the past—would you please recommend this seminar to your fellowship coordinator, program head, or graduate school? Please cc me [email protected] so I can pick up the conversation. My goal is for every grad student receiving awarded income to be forewarned about this issue before it rears its ugly head during tax season!

03:29 Emily: You can find the show notes for this episode at PFforPhDs.com/s15e1/. Without further ado, here’s our compilation episode on side hustling.

Shan Kutagulla: Technology Incubator

03:46 Shan K: My name is Shan Kutagulla at the University of Texas at Austin. I’m getting my doctorate here. I have a masters and did my bachelor’s at USC in Southern California. I do materials research for semiconductor and energy. Energy topics.

What is your motivation for having a side hustle?

04:08 Shan K: Yeah, my motivation for side hustling, I think like everyone else is to make a little extra cash. But in addition to that, it’s trying to get some skills that I wouldn’t necessarily get in the lab. I think for me as an engineer, I think soft skills are always going to be one of those things that engineers tend to either stereotypically or realistically lack.

What is your side hustle?

04:29 Shan K: So I work for my campus’s technology incubator, so that involves a lot of interviewing people, talking to founders of companies. So that really helps develop a lot of soft skills and then also gives me exposure to the business side of things. So it’s a little kind of rounding out the skill set in addition to making making some cash, which is always, always needed in grad school.

04:54 Shan K: So it’s through the school UT is I think one of a couple of universities has like technology incubator associated with it. So if any, any graduate student or any or founder really has a good idea that they kind of want to commercialize those, take research and spin it out into into the real world. So that the issue with that is a lot of people start applying to those positions or applying to the incubator to have their company incubated and they need someone to kind of bridge that gap between the technical side of things, which is just is this technology legitimate versus the business side of things, which is will this technology survived the competitive landscape.

05:35 Shan K: So this is something through UT that I applied for because I have an interest in going into like technical due diligence in the venture capital industry upon graduation. So it kind of helped you build that skill set. But I got this through just a relentlessly applying. I actually got rejected four times in a row and I got it on my fifth try.

05:53 Shan K: So it’s just an exercise in persistence or knowing someone I don’t really know, but I but either way, it worked out and it’s a really fulfilling position, I would say. And it’s just like a one of a couple of things that I do on the side to get some extra cash.

What are its benefits and detriments?

06:11 Shan K: Yeah, I mean, drawbacks are always going to be like the time, right? Any time, especially in grad school, any time you do a side hustle, it’s time taken away from research, especially if you ask some professors, thankfully not mine.

06:23 Shan K: And then, I mean, benefits always just be like the people you meet. Networking is a huge part of grad school, I would say opens a lot of doors as I would definitely say one of the things people warned me about grad school is that it closes a lot of doors and they can’t do anything else. I don’t necessarily think that’s true. It’s open a lot more doors and I had before and it’s a lot of people I just would not have met without applying to these these side hustle positions like I get to talk to The leader, the technical director of the incubator directly on a weekly basis. I talked to the president at university every now and then a lot of people in industry, academia, I get to help define mission roadmaps. I was invited to do an article on semi analysis. None of that would have been possible without without a side hustle. And so it’s been very, very fulfilling.

07:14 Shan K: But yeah, the cons would just be the time commitment really. So if you can make your own schedule with a side hustle, that’s probably a huge benefit that I didn’t necessarily have. But those are the pros cons that that you’ve got to weigh. So maybe that’s that’s some other advice that I have. Just do something that you really enjoy. Don’t don’t take positions that would just be incredibly bored in. And don’t find any fulfillment in.

How much do you earn through your side hustle?

07:39 Shan: This one actually only pays 15 an hour. I work for a startup too, one of the start-ups that we have right now on pay is much better. It’s like 40 an hour. So yeah, but again, one of those doors that’s open that allowed me to go work at a startup, right.

If someone listening wants to pursue this side hustle, how would you recommend they get started?

07:54 Shan K: Every major city has a technology incubator Los Angeles where where I went to undergrad has Los Angeles and Los Angeles Clean Tech incubator, Austin Technology Incubator in Austin Obviously Boston has a bunch. So like if you’re in one of these major cities where they exist, just go Google who the director is of your respective verticals if you’re interested in energy, semiconductor, whatever. Google them, find their email surprisingly easy to stalk online.

08:24 Shan K: Just email them and be like, Hey, I’m a grad student, especially if you’re trying to do technical due diligence, email them and be like, Hey, I’m a grad student. This university interested in technical due diligence because a lot of times those incubators are staffed with like business people who have a lot of business experience, but they don’t really necessarily do technical due diligence, which is a very specific role that only PhDs can really fill. And then that’s why you see it a lot of like hard tech investing firms like Kleiner Perkins, it’s always staffed by PhDs on due diligence. It’s just to avoid if they’re in a situation and there’s there’s not that many people who can do that. So they’d probably be very willing to take your help and don’t be afraid to work for free for like a couple of months, but then you can kind of push on them.

Anonymous #1: Graduate Housing Community Assistant

What is your motivation for having a side hustle?

09:10 Anonymous #1: So I am a pre doctoral student at University of Rochester. I’m a second year and my motivation is really based on seeing how much my parents were able to save or their parents are immigrants. And so I’ve seen them working very hard on my life and not getting the most pay. But I also want to make sure that I’m setting myself up for financial freedom in the future so that I can, you know, as lofty as it is nowadays on a home one day as well as save my retirement. And so those are my biggest goals. I want to set myself up for a positive future financially.

What is your side hustle?

10:17 Anonymous #1: So my side hustle is working with my university’s graduate housing department. Through them, I work as community assistant, so I get to not only socialize with people that are also going to my graduate school, but I also get a very good deal on my rent. I get about half off for my rent and it really does help considering how much rent has skyrocketed in the past couple of years.

10:44 Anonymous #1: Like all across the country, especially in New York State, it’s just gone up. It used to be that you could get a studio for under 800 across the board in this area and now that is no longer the norm. You have to be outside of the city. And because I want to live as close campus as possible, I decided to go for this position with graduate housing because I knew for me and my schedule didn’t make my commute easy as possible was in my best interest.

11:17 Anonymous #1: Coming from a major city, I knew commute can be 45 minutes plus on public transit. I was not willing to do that for my Ph.D. because I need to focus on my studies. So what if I to do this? It’s and it’s very relatively easy. I’m doing an A one event per month and a meeting here and there, introducing people to the right to resources that the university has. So for the money I’m getting off of my rent, it is it’s a very sweet gig.

What are its benefits and detriments?

11:43 Anonymous #1: So the main benefit is the financial discount that I get on a rent, I get half off for my rent charges. So that’s the biggest benefit. I also get to socialize more and meet other people in my community. Moving to a new city. I did not know anyone here, so I was able to use this as a way to socialize with other people at my graduate school. I would say that if you do have the opportunity to be a graduate housing assistant, I would highly recommend it. If you’re someone that likes planning events then and interact with people, I’d highly recommend it. It’s not something that I that I find to be very tedious.

12:21 Anonymous #1: Some places might give you entirely free housing. Some places might be like mine where you get like a 50% off for your housing rate. I find to be beneficial because that’s money that I get to keep for myself that I can invest in my Roth IRA that can be used for my own spending, that can use for a traveling for leisure, because we know we get started as graduate students. So it’s really important that I take breaks and have that extra money so that I can invest for my future and take those much needed breaks. Because I’m on a training grant so I can’t like have a job or an hourly wage. So this is like, ah, this is my way of going around that. So I have to abide by the PhD rules, but also I need to live my life.

13:06 Anonymous #1: Some of the drawbacks are just the logistics of hosting an event, having people turn out thinking and brainstorming new ideas that are both interesting to busy PGD and master’s students, but also attainable for me as a as another busy Ph.D. student to test, to schedule and plan for. So those are like the biggest cons that I could think of.

13:35 Anonymous #1: I really do enjoy like event planning, and if I wasn’t interested in STEM, I might have gone down this route because making sure that I check off all my boxes and doing things in a very organized manner is something I really enjoy doing. And yeah, those are the only those are the only drawbacks. I really enjoy this position and it’s not very difficult for me. I am a social person, so meeting people, introducing them to the to the grad housing area is not something I think of as a hardship.

How much do you earn through your side hustle?

14:04 Anonymous #1: For this year, for 2022, 23, I’m getting a rent reduction of $555 every month. I have a one bedroom apartment and the rent reduction is a flat rate for all graduate housing assistance. And so I think they calculated based off of a to a two bedroom apartment. But I have a one bedroom and I get charged $944. So I’m paying less than $400 for my rent every month, which without roommates, no one that I know has that that charge at all. And I only work about 10 hours per month in total, I’d say in terms of planning, brainstorming and hosting events, the events only last 1 to 2 hours, depending on how many people are there. And so I guess the hourly rate that I calculated based off of that is $55 per hour.

If someone listening wants to pursue this side hustle, how would you recommend they get started?

15:00 Anonymous #1: So the first thing I would look into is if your university does offer graduate housing, not every university does offer on campus graduate housing. So looking into that first and then once you do find out that your university does offer it next thing I would do is look to see if they have any job openings. Usually those job openings will be posted sometimes throughout the semester, but primarily during the move in and move out periods around the summer and winter time, depending on how university work. If you’re on the quarter system or on like a semester system that could also be dependent on when they post those job openings. But because grad students will graduate in December is often going to be opportunities for people to get these positions. And then once you do find out when they tend to post positions, email the contact person so that one they know you’re aware and two that you’re actually very interested in the position and gives a bit more of a of a of an idea. I think when they’re looking at your application, they’ll recognize that, oh, this person emailed me several, several weeks ago saying that they were interested and they scheduled an informational interview with me to go over the, the requirement for the position that’ll sort of put you in their mind, which is something that I did to me to sort of better ensure that I got the position because I very much wanted it.

16:20 Anonymous #1: And then going through the regular interview process. And if you do have any skills in terms of event planning or a previous housing related occupation or internship or or what have you. That will also better you for being chosen for the position.

Ariana: Pet Sitting

16:20 Ariana: My name is Ariana. I’m a fifth year Ph.D. candidate, the University of Virginia, and I live in Charlottesville, Virginia.

What is your motivation for having a side hustle?

16:58 Ariana: So my motivation for side hustling is the obvious one. Money. I’m I was really in need of some supplemental income especially as I my program fifth year the time a lot of applications of preparing for a big move coming up so it was that and also trying to think about what I could be doing as a side hustle for the longer term.

What is your side hustle?

17:21 Ariana: My side hustle is pet sitting. Primarily dogs and cats, but I am open to a range of other animals.

What are its benefits and detriments?

17:28 Ariana: So there are so many benefits, but also some considerations of pet sitting. First is that I love animals and as a person who has a cat not a dog, it’s nice to be around dog energy and just get to meet very sweet animals around my community and honestly see places I haven’t seen before. So I’m walking them around and all that. It’s also a pretty flexible gig. I mean, usually things settle around weekends and on breaks, but as a graduate student, especially in my later years, it’s been nice to be like, okay, I’ll go do a midday walk or something like that. It’s also a job that again, it’s flexible in the nature that if I don’t want to do it for a month, I could not do it and that would be okay. I’m my own boss in that sense, and there are apps that help you to find people and vet them and give you all the support you need.

18:20 Ariana: Drawbacks are definitely that like I’ve been dissertating and even with the flexibility of like it’s been hard sometimes and it can definitely become an unintentional or intentional avoidance strategy to be with pets. It’s also time away from my apartment, my home so a lot of the chores and things that need to get done often have to be delayed because I’m spending weekends with other people’s pets and I kind of like that too. So those are some of the consider.

How much do you earn through your side hustle?

18:54 Ariana: My earnings can really range depending on how committed I am to getting things done. I think it would be possible to get about 25, like if I would just walk, for example, 25 to $50 weekly, it’s only really do 200 a month, but house sitting or pet sitting where I’m staying with them, that can look more like 500 or so dollars a month if I’m doing every single weekend. And that’s another consideration. It’s not the most I’m not flowing in money rather like it is a lot of time. But those like additional benefits, getting to walk outside, having to play with the pets kind of adds to the compensation for me.

If someone listening wants to pursue this side hustle, how would you recommend they get started?

19:41 Ariana: If you want to be a pet sitter, it’s actually easier than I knew. So I was recommended by my cousin who is a lab technician. But there are apps like Wag and Rover which have a really streamlined system for getting you involved. I mean, I’d recommend, of course, having some comfort with pets, but you can get reviews or sort of testimonials from family members and friends and other folks who you may be pet for on the regular. I would say that’s where I started. I was doing more just ad hoc pet sitting for other grad school friends and then really expanded into this, I would say to just be thoughtful about what you’re comfortable with. You don’t have to sit at people’s houses, but I feel pretty comfortable doing that because of all these safety measures are in place and people are really folks who want someone to care for their dog, kind of wants you to feel comfortable as well. So I would say those are the quickest ways. So I’m sure they’re, you know, you can advertise your services on a neighborhood group or something like that and get some direct referrals.

20:48 Ariana: I was going to say that’s another drawback of the piece. So doing the apps I would say is a great starting step because you get screened, you build up your reputation, but they can take about, you know, if I charge $17 for a walk, I’ll probably get 13 of those dollars. So I can’t do the percentages really quickly. I’m not a math PhD, but it’s notable. And so when you do that over time, something like that and it’s not nothing. So but what I found, which I appreciated is after like one successful stay, a lot of folks are okay with going off the app, and just paying me directly. And likewise, like I trust them and I’m comfortable just reaching out. I have all the information that I need. So while I think it’s an upfront cost, it doesn’t have to be a continuous cost. Just you’re trying to get a lot of clients.

21:43 Ariana: I wish I’d started earlier, with the side hustle, I mean, it’s really hard when your schedule’s more packed with things, but I think it’s the type of side hustle that is really relationship and community based and can be a good way to get integrated into a place that as a grad student I know I was like in my room or studying in the building. So that was really nice. And I would say that it’s not it’s actually kind of a nice little mini retreat, You know, I can be in someone else’s home or space with WiFi working on things, and that’s been kind of nice too.

H: College Consulting

22:29 Emily: This submission is from H a fifth year humanities PhD candidate on the east coast whose stipend is $40,000 per year.

What is your motivation for having a side hustle?

22:37 Emily: Quote, my motivation for side hustling is two-pronged. Part of it is to have the extra income. This allows me to save more. I’ve maxed out my Roth IRA every year since I got the job and I get a 7% match into a 401k with a 3% safe harbor. So I effectively save 17% of my pre-tax side hustle income. This is great because my stipend income isn’t eligible for a 401k and wasn’t eligible for Roth IRA contributions for the first couple of years of my degree before they changed the rules to make stipend income eligible. The savings are reassuring for me because I hate the idea of graduating from my program in my early thirties. Seriously behind on retirement savings, especially as job prospects for humanities, PhDs are pretty precarious and usually poorly paid.

23:23 Emily: I find it psychologically reassuring to have savings for when I finish my program, but it’s not just the savings. The extra income also allows me to have a nicer lifestyle than I would if I were living entirely off of the stipend. I don’t feel like I’m missing out because of my income. I’m admittedly a person who likes certain luxuries, like getting my nails done or having a wine subscription or going on vacation a few times a year that are out of step with a typical PhD lifestyle and need some more cash to fund. I like that I don’t have to bow out to plans with my friends who have higher paid jobs just because I’m in grad school, I can go on trips, go to weddings, go to a nice dinner, et cetera. I know plenty of grad students who enjoy living simply and don’t want missing out on those things, but they’re important to me.

24:08 Emily: The second reason is job security. I’m very conscious of how few decent academic jobs are out there. I have witnessed very talented scholars totally flounder on the job market and then panic when they have to rapidly pivot into a new plan with little or no work experience and a lack of obviously marketable skills. Understandably, this leads to a lot of anxiety and depression. I find it petrifying. I don’t want to be in that situation. I hang onto my job so that if I finish my PhD without anything else lined up, at least I have this. I like the job and would be fine to keep doing it while I figured out some other move post-degree. I think having the jobs gives me some security, both materially and existentially along with my main side job. I also have done other fixed term gigs to develop a more diverse skillset.

24:57 Emily: My goal is to make sure that I have recent work experience on my CV after I graduate and talking points for informational interviews. Besides just my research, I don’t wanna be in the position. I see many people in where it’s like they are graduating off a cliff and they have no idea what comes next or how to prepare.

What is your side hustle?

25:15 Emily: For my main side hustle I work in private college consulting. My company provides advice to students applying to university programs, working with clients around the world with a special focus on US colleges. My role involves mentoring students in their final year of high school as they work on their college essays. It’s almost all remote though. We do team retreats once or twice a year.

What are its benefits and detriments?

25:36 Emily: There are a lot of benefits. It involves two of the main areas. I enjoy working in education and writing. I love the colleagues I work with and I love almost all of my students. It’s a pleasure to get to know them and I learn new things about the world from them. I feel like they grow as people throughout the process of us working together, even when they don’t end up at their dream school. That makes it rewarding to me. It’s a great counterpoint to my independent research work because it’s people focused and the impact feels immediate. Unlike an abstract and long-term dissertation project, when I’m deep down a research rabbit hole on my own in the library, getting on a zoom to talk to a colleague or student is a breath of fresh air. Sometimes I feel that having a second job makes grad students more efficient. Anecdotally, I find that up to a point, the ones who have less time seem to manage it better. The drawback is that it’s highly seasonal work and I’m often having to be on email for several hours a day September through December.

26:34 Emily: It’s tough when it overlaps with the holidays and the fall semester crunch time. This was especially true in my second and third years when I was grading finals and writing my own papers and attending conferences simultaneously alongside my job. The nature of the work means that I just have to respond if students are down to the wire on their deadlines and my academic work has suffered in those moments, but not badly enough that my advisors said anything. I’m still on track to complete the degree in time and have been successful in my program. It’s a bit easier now that I’m ABD and more in charge of my own schedule. I have the freedom to organize my time around the busy season. The benefits to me are money and setting myself up for future careers Outside academia, the drawback is the stress and risk of burnout that can come with being over committed and the risk that spreading yourself too thin means not doing as good a job as you could have on your main gig. Personally, I’m okay with that. My approach works for me and my priorities, but plenty of grad students I know would hate it.

How much do you earn through your side hustle?

27:34 Emily: I earn $45,000 annually on salary for the college consultant gig for which I am technically part-time. This is after several raise negotiations. I’ve been at the company six years now and started on 30 k. I get a Christmas bonus of $1,000, also paid for my laptop in the busiest season. September to December. I work 20 hours a week, and in low season it can be four to 10 hours a week to get started in college consulting.

If someone listening wants to pursue this side hustle, how would you recommend they get started?

28:00 Emily: To get started in college consulting I cold emailed a bunch of companies and ended up going with this one, but had offers from others. I’ve heard of someone getting into the same type of role after being reached out to on LinkedIn. My university list serves, sometimes sends out listings for similar roles. I would recommend trying to connect personally with people rather than applying into a black hole, but then applying to a few places. I imagine that experience working with students as a TA or in a writing center would be really helpful, but if you have no relevant experience, try doing it on a volunteer basis first. I know if people getting these jobs after doing pro bono work, finally, it’s a fundamentally credentialist industry. So if you have a degree or two or three from a very competitive school, that will help, end quote

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28:44 Emily: Emily here for a brief interlude. Would you like to learn directly from me on a personal finance topic, such as taxes, 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 2023-2024 academic year. If you would like to bring my content to your institution, would you please recommend me as a speaker or facilitator 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 [email protected] 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.

Courtney: Landlord

30:04 Courtney: My name is Courtney and I am a third year Ph.D. student in civil engineering at Oregon State University in Corvallis, Oregon.

What is your side hustle?

30:12 Courtney: My side hustle is renting out rooms in my house.

What is your motivation for having a side hustle?

30:16 Courtney: I do this to supplement my research assistant income and pay my mortgage.

What are its benefits and detriments?

03:21 Courtney: It’s a study dependable form of income and helps reducing my house, my housing costs dramatically. Besides occasional banking and paper work is a very passive source of income taking care of a house. It’s hard work, but when you have tenants, things have to be done in a timely and high quality manner with their living conditions in mind. For example, we recently replaced the roof and had to include them in the discussions of what the condition of the house would be during the construction.

How much do you earn through your side hustle?

30:52 Courtney: Since I co-own the house, I also split the rental income. So I make $650 a month and I already pay quarterly estimated taxes for my fellowship anyway, so I calculate this income into that as well. But I also use tax deductions for housing costs by following form 1040 schedule E, which actually lays it out really nicely.

If someone listening wants to pursue this side hustle, how would you recommend they get started?

31:17 Courtney: This side hustle requires the purchase of a property which is quite an undertaking. It requires some dedication to understanding rental laws in your state and city. But after that initial setup, having yearly tenants who stick around makes the side hustle low energy input for high rewards. I started this two years ago and I plan to continue the side hustle until I graduate in a few years. At this point I probably spend about 3 hours a month on managing tenants and their needs.

31:48 Courtney: If it feels impossible to buy a house look into co-borrowing or a first time homebuyer financial help in your state or county, and check out Emily’s other podcast on grad students buying houses.

Anonymous #2: Research Assistant

32:07 Emily: This next submission is from an anonymous grad student who is about to start intern year and lives in Texas.

What is your motivation for having a side hustle?

32:14 Anonymous #2: What is my motivation? Having a side hustle. I would say as a graduate student, I just needed money. And while I was grateful for the system that I received from grad school, it just wasn’t enough to be able to travel, to visit family, just to have a little extra cushion. And then now that I’m moving out of state for internship without my side hustle, I would not have been able to afford it at all.

What is your side hustle?

32:40 Anonymous #2: I am a research assistant at a hospital.

What are its benefits and detriments?

32:43 Anonymous #2: Some of the drawbacks of position, I would say, is for the spring semester balancing my schedule. There was a lot to do when it came to doing my internship interviews, wrapping up my final semester, in the state that I live in and just trying to balance my schedule, I would say is one of the drawbacks. Benefits of that are just having money, having a cushion. As I mentioned before, I am moving. I’m single. I’m moving from the states I live in to another state and I feel very fortunate that I’m not worried about affording my move. I am not worried about like the cost of a U-Haul or having to borrow money from relatives or like take out a personal loan. I am solely financing my move from the income I receive from my side job.

33:38 Anonymous #2: I would say in terms of how this will like this position will impact or like play a role in my future career. I’m the type of hospital that I work at is type of setting I would like to work in in the future and this population as well. Also, I can probably request letters of recommendation and from my bosses, and I think it gives me a lot of insight into the type of field that I’ll be working in the near term care.

How much do you earn through your side hustle?

34:12 Anonymous #2: So I’ve been at this job since, I guess like orientation was in December and I make about 25. I make $25.83 an hour and 20 hours a week. And so I would say after tax, before taxes, I take home about 2000 a month.

If someone listening wants to pursue this side hustle, how would you recommend they get started?

34:34 Anonymous #2: If someone’s looking to pursue this type of position or just a side hustle, indeed this a great source when it comes to looking for research assistant jobs that are flexible that are part time. I also recommend especially if you’re interested in research or just want to get some clinical, reaching out to PIs at different hospitals that might. They don’t always broadcast like that they’re hiring. And so reaching out to them and inquire like, Hey, you know, I’m so-and-so, I’m looking for a job, or I’m interested in any position you might have available. And that’s even better. That’s kind of how it worked out for me, where someone put an email out there for, like you said, Assistant Do you know of anyone? I responded back and I know me and I’m looking for a job.

35:28 Anonymous #2: I would say finding that balance in your schedule is really important. I and also having some flexibility. So during the semester I was working like in the middle of the week and now the semester has ended I requested a shift in the schedule so I could work the first Monday through Wednesday, which is helpful for me so that I can get other things done before the end of the week. But also I think just there was some delay. I work for the government and so there’s some delay when it came to my application process and not on my end, but just governments and and I, I very much communicated with my prospective supervisor and let them know like, hey, I filled all the paperwork. I’m just waiting to hear back. It took six months to actually get hired to start the orientation, to start the onboarding process, even though I was hired back in the summer of 2022. But I think for me, patience was a virtue and really just showing up and being present at work. And I’m confident that in the near future when I’m applying for postdoc positions, if I request a letter of recommendation from any of my supervisors here, they will happily write it.

36:43 Anonymous #2: Now that I am no longer contracted at my university as a grad student. The month of June is my last month. I’ll be working here. I’m just working here and I am so fortunate. Like I know I’m not like another. You know, I have peers that are either married or they’re receiving like, Oh, they have a partner or they’re receiving support from their family and like, I don’t know. So financially like, I take care of myself. So and I know for a fact that I would not be able to move 1500 miles from where I am now. Had it not been for this job, because the money I received, the the grad student through my stipend was great. It covered all of my bills and like maybe an extra $100 or two. But over the course of six months it would not have been enough to pay for UHaul to pay for moving boxes and also to and in my case, you know, oftentimes we apply for housing. They want someone who on paper earns three times the rent. And so if I did not have this job, I would have likely had to reach out to a relative to cosign my lease, which is fine. But, you know, it’s a hassle having to ask someone to do that again and again, especially if they’ve been like, So supposedly they’ve done it. You know, for me throughout grad school, it’s nice to kind of feel a little more independent.

DreVon Dobson: Professional Musician

38:08 Emily: This submission is from DreVon Dobson. Quote. I’ve recently graduated with a PhD in pathology from UNC Chapel Hill, studying the genetic regulation of blood coagulation factors. I’m about to start a postdoc position soon in environmental toxicology, studying the effects of ozone exposure on health and disease outcomes.

What is your motivation for having a side hustle?

38:29 Emily: Having a side hustle has been a great way to give my mind a break from my lab work, as well as supplement my income as a graduate student, which was livable but not great.

What is your side hustle?

38:39 Emily: My side hustle is performing as a professional musician. I minored in jazz studies on the saxophone and undergrad and I’ve kept my passion for music alive as a side hustle. I play at churches, country clubs, weddings, et cetera, with a few different bands usually on the weekends.

What are its benefits and detriments?

38:56 Emily: The benefits of this are that it provides a constructive and profitable outlet for my passion and it’s fun. The detriments are that there’s a considerable amount of preparation involved in order to play the gigs well, practicing learning, music, purchasing and maintaining equipment, et cetera. Also, the gigs can consume a good amount of my weekend depending on how far and how long they are detracting from my ability to rest for the upcoming work week. But you can also say yes or no to opportunities to fill your needs and schedule.

How much do you earn through your side hustle?

39:26 Emily: I have worked my way up to earning about $20,000 a year from my side hustle. This is definitely on the higher end for a part-time musician and I had to work my way up to that over the years. This is generated by about two to three gigs a weekend averaging out at around $200 a gig.

If someone listening wants to pursue this side hustle, how would you recommend they get started?

39:46 Emily: Pursuing this side hustle is totally obtainable. If you are musically inclined, you can start by visiting local jam sessions in your area to figure out who might be in need of your musical talents. There are also online avenues to pursue in local Facebook groups and ads and websites like Reverb Nation Beyond Music. If you have a passion for the arts, there’s most likely a way to monetize it. You can sell art, join a dance troop, audition for a theater production, et cetera. I have found artistic passions and scientific studies to be a great combination of financial gain and life balance. I would encourage anyone who is interested to give it a shot. You never know.

Dan Gorman: Chaperone, Podcast Recording, Writing Lesson Plans

40:31 Dan G: My name is Dan Gorman. I am finishing my PhD in US History this summer at the University of Rochester, and I also live in Rochester, New York.

What is your motivation for having a side hustle?

40:41 Dan G: My motivation for side hustling is solvency. Uh, while we had pretty good PhD stipends at my university, it’s still, you’re living in sort of comfortable poverty as a PhD student, I find, and for some people it’s less comfortable. I stay comfortable in my case because I don’t have any dependents. Um, it’s just me in my household, but there’s always wanting to have more than just a little bit of extra money in the bank account, wanting to have something of a cushion. Um, especially as we got towards covid, I was glad to, I had done some side hustling and saved up some extra money. Sometimes the, when I say solvency, I mean, yes, paying the bills also, it’s good once in a while to actually do something fun with your assets, but also I, I think mainly my main reason for wanting to save up money was in case of an emergency. You know, if somebody got sick and I needed to go visit them or, um, you know, during covid when we just didn’t know what else was gonna happen next.

What is your side hustle? How much do you earn through your side hustle?

41:33 Dan G: My side hustle isn’t really one thing. What I recommend to other people is sign up for as many internal newsletters at your university as possible and re and actually read them. Um, I found a number of paying side opportunities within the university just by being on the newsletter feeds for different offices. Um, for example, okay, so the Office of Undergraduate Research a couple years ago they were sending a delegation of students to the National Conference on undergraduate research. And an opportunity came up that they would wanna send a couple staff or grad students as chaperones. Um, it was a pretty easy job. I had to go to Oklahoma City for four days, but they covered all my expenses and there was a small honorarium. It wasn’t a ton of extra money, but it was there and it was an experience that I could say, Hey, this counts as teaching and advising and mentorship.

42:22 Dan G: Another example is that I had joined a professional group for graduate students through our music conservatory, but they’d opened it up to graduate students in other divisions. It was called working PhDs. So they were doing professional readings and interviewing people about how they transitioned into alternative academic jobs. And as part of that, they launched a podcast called Working PhDs. And so by recording interviews for that, I was paid I think $75 per episode and I did three episodes. So then that was, it was over $200 extra. Um, so we’re, I’m not talking about huge amounts of money here, but finding bite-sized projects like these internally, um, if you do enough of them, they do start to add up to some extra cash.

43:04 Dan G: And again, $200 may not sound like a lot, but that could cover, you know, depending where you live, that could be internet, your insurance bill and something else for the month. So it’s not, it’s not nothing. Um, looking beyond the university, I think sometimes it comes down to professional networks and signing up. So again, it’s, I don’t have a very original method, but it’s signing up for the listservs for your professional organizations. Um, an opportunity came up a couple of years ago actually during the pandemic that, during that first pandemic year where some friends of mine were working on a digital library project, um, at Northern Illinois University, which is, you know, 800 miles away from me. But they said there they needed people to write sort of lesson plans for their, for their website. It was pairing archival old books that were scanned with how you could teach it in the classroom. And then you, we would present it digitally and that came with a $600 honorarium.

What are its benefits and detriments? If someone listening wants to pursue this side hustle, how would you recommend they get started?

44:01 Dan G: Um, and again, I don’t have a magic method for finding more of these except, you know, in my case, in my field, in the humanities, get on h net, humanities net, um, sign up for the main feeds which post every day, 10 to 20 calls for papers, podcasters. Sometimes you’ll see independent editing projects and, you know, it can be a little tedious cuz then, you know, you’re, you’re deliberately spamming your inbox both from internal sources and then from external professional organizations. But there are opportunities out there. It’s not a lot of money. Again, these are small, usually project based. The $600 for the, uh, the lesson plan was that’s at the high end of what I’ve gotten, but smaller bite-sized projects that you can fit in without massively impeding your own studies. Or if you have a more prominent work study job that you know you’re doing 10 to 20 hours a week. Um, I think writing that lesson plan and presenting it, I think it took maybe six hours total over the course of a couple weeks. Um, because the book was a dime novel. It was quite thin. Um, so your mileage may vary.

45:07 Dan G: Other challenges, I think also, again, that oftentimes these bite-sized academic projects, whether they’re at your school or somewhere else, they tend not to pay a lot. Um, you know, we’re talking one to $200 US users really. But the flip side is that if it’s a bite-sized project like that, you can do it quickly and it doesn’t really impede on your main work responsibilities at your university. And that was, that was the big thing for me. So wanting to find ways I could use my skillset, um, make some extra money, but also where it wouldn’t become such a massive time sink that people at the university, my supervisors would be saying, Hey, you’re not focused on your main work. Ultimately, I would say that the kinds of projects I’ve described are not ways to make a lot of money, although there are exceptions. Like if you become a writing tutor, you will make a good hourly rate doing that. However, they can give you unique experiences and give you some more in business parlance transferable skills and deliverable outcomes that you can say you have produced when you’re going on the job market.

Outtro

46:14 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

PhD Home Buying Updates for 2022

August 29, 2022 by Jill Hoffman

In this episode, Emily interviews Sam Hogan, a mortgage loan officer with Movement Mortgage who specializes in graduate students and PhDs. Sam lists numerous housing markets where graduate students and postdocs are able to buy a home on a single income or two incomes and explains why the rising mortgage interest rates should not be a deterrent to buying. Sam also illustrates why qualifying for a mortgage with fellowship income has historically been difficult for graduate students and postdocs, but how he and his team have found a way to reliably get them approved. They wrap up the interview with explaining how Sam’s recent shift to working for Movement Mortgage is going to smooth the path to approval even further.

Links Mentioned in this Episode

  • Past PF for PhDs Interviews with Sam Hogan
    • S2E5: Purchasing a Home as a Graduate Student with Fellowship Income (Money Story with Jonathan Sun)
    • S5E17: How to Qualify for a Mortgage as a Graduate Student or PhD, Even with Non-W-2 Fellowship Income (Expert Interview with Sam Hogan)
    • S8E4: Turn Your Largest Liability into Your Largest Asset with House Hacking (Expert Interview with Sam Hogan)
  • PF for PhDs YouTube Channel
  • PF for PhDs: Subscribe to Mailing List
  • PF for PhDs S13E1 Show Notes
  • Sam Hogan’s Nationwide Multistate Licensing System (NMLS) number: 1491786
  • Sam Hogan’s Phone Number: (540) 478-5803
  • Sam Hogan’s E-mail Address: [email protected]
  • PF for PhDs S8E18: How Two PhDs Bought Their First Home in a HCOL Area in 2021 (Money Story with Dr. Emily Roberts)
  • Estimated Tax Form 1040-ES
  • PF for PhDs Quarterly Estimated Tax Workshop (Individual link)
  • Annualcreditreport.com
  • PF for PhDs Podcast Show Notes
S13E1 Image for PhD Home Buying Updates for 2022

Teaser

00:00 Sam: This is advantageous to the PhD community because there are other things that are so stressful about the home purchase. You know, putting a $20,000 deposit down can add a little, you know, you might lose half an hour of sleep every night. I don’t want anybody losing sleep because they’re well qualified over income like letters. It’s totally ridiculous.

Introduction

00:28 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others. This is Season 13, Episode 1, and today my guest is Sam Hogan, a mortgage loan officer with Movement Mortgage who specializes in graduate students and PhDs. Sam lists numerous housing markets where graduate students and postdocs are able to buy a home on a single income or two incomes and explains why the rising mortgage interest rates should not be a deterrent to buying. Sam also illustrates why qualifying for a mortgage with fellowship income has historically been difficult for graduate students and postdocs, but how he and his team have found a way to reliably get them approved. We wrap up the interview with explaining how Sam’s recent shift to working for Movement Mortgage is going to smooth the path to approval even further.

01:46 Emily: Since we jump right into the discussion of mortgages in the interview, I want to take a moment here to prepare you for what’s to come! Sam has been on the podcast several times before if you’d like to catch up on our previous conversations. If you plan to listen to them all, please do so from oldest to newest. You can hear him on Season 2 Episode 5, Season 5 Episode 17, and Season 8 Episode 4. We have also held several live Q&A calls in the past in which Sam takes questions from grad student and PhD first-time homebuyers, and I’ve published a few clips from those calls on the Personal Finance for PhDs YouTube channel. We don’t have our next live Q&A scheduled yet, so if you’d like to be kept in the loop on that, please join my mailing list through PFforPhDs.com/subscribe/. Links to everything I just mentioned will be in the show notes. You’re going to hear me being pretty pro-homebuying during this interview because I get so enthused about it when I talk with Sam and reflect on my own rental and home ownership history. But I want to acknowledge up front that of course homebuying is not financially feasible for most graduate students and even if feasible is not necessarily the best financial or lifestyle decision. In my book, renting is a perfectly valid choice. Don’t feel pressured to buy by this interview. It’s more about encouraging graduate students and PhDs who are interested in buying that it may very well be possible for them and showing them how to do it. You can find the show notes for this episode at PFforPhDs.com/s13e1/. Without further ado, here’s my interview with Sam Hogan.

Will You Please Introduce Yourself Further?

03:35 Emily: We have an extra special episode of the Personal Finance for PhDs Podcast today because my guest is my brother, Sam Hogan, who is a mortgage loan officer with Movement Mortgage. And for the past several years, he has been specializing in writing mortgages for graduate students and postdocs and PhDs. And I’m just so delighted to have Sam on! By the way, he is an advertiser with Personal Finance for PhDs, and he’s going to give us some updates on what’s going on in 2022 and recent developments in the mortgage industry that’s relevant for our audience. So, Sam, thank you so much for joining me! And will you please introduce yourself a little further?

04:12 Sam: Thank you for having me. It’s Sam Hogan, I’m newly with an old employer, Movement Mortgage. And my NMLS number is 1 4 9 1 7 8 6.

04:23 Emily: And let’s get your contact information upfront in case anyone knows already that they want to get a quote from you.

04:29 Sam: Yes. So, my best phone number is (540) 478-5803. And the new email address for me is Sam dot Hogan at movement.com.

Homebuying Markets for Grad Students

04:41 Emily: As probably everyone listening knows, in 2022 we’ve seen a lot of rate hikes from the fed, which has trickled down into the mortgage industry. And so, I know that graduate students and PhDs are really concerned right now about still being able to afford to buy with these recent rate increases. So, can you tell us some examples of places or markets where you’re still seeing PhDs and graduate students able to purchase homes?

05:07 Sam: Yeah, absolutely. Some of our steady markets, I would say nationwide, are just pockets of the country where you can still find single-family homes or townhomes under $400,000. Whether it’s a PhD or postdoc buying on their own or with a partner. We see a lot of activity in North Carolina, and that’s within the Research Triangle and also outside of that area. I’ve had a couple of deals done in Winston-Salem for Wake Forest students. But outside of Chicago, Northwestern, those areas are good as well, including, you know, Philly, Providence, Rhode Island, for people who are going to school just across the bridge at Harvard or MIT. And also Austin, Texas, and outside of those city limits has been steady, no matter what the rate is. And I say that because with these lower-priced homes that are a little more affordable for PhDs, the interest rate, even when it goes up, it doesn’t make a huge, huge difference in your monthly payment.

06:14 Sam: Now, if someone was getting a high balance loan at seven, $800,000, when the rate goes up just a little bit, it makes over a hundred dollars difference monthly. Our first barrier and hurdle with the PhDs is, and will always be the monthly income. <Laugh> Not just including it, but finding a property that fits within that budget. You know, people who are debt-free and have a little bit of money to put down, still, it’s the monthly income that we say, Hey, 10% down is going to have to get the job done because the income is very tight.

06:49 Emily: Yes. Can you give us some examples there? Because I mean, you just threw out $400,000, which like is sort of breathtaking for me. And I assume that’s with two incomes, maybe people could afford that. Let’s talk about one income. Let’s talk about a PhD stipend. Maybe it’s $30,000 per year or something similar to that. If you had a person, a single person buying on their own with that kind of income of good credit score, no outstanding debt, I mean, we’re talking ideal candidate here. How much would they be able to qualify for with current interest rates? We’re recording this in August, 2022.

07:27 Sam: Most recent live data is a loan closing tomorrow and she purchased at $185,000 outside of Chicago with 10% down.

07:39 Emily: And what was her income?

07:42 Sam: She was a second-year student, I believe it was around $34,000 a year.

Keep an Open Mind to Possibilities

07:48 Emily: Okay. Okay. So, ballpark numbers. That’s great to hear. Obviously, like you said earlier, it’s going to be a stretch for a graduate student, especially a single one as I was just mentioning, to buy a home on a stipend. But there are some markets around the U.S. where this is still possible, and even more so if you do have a partner to buy with, or if your income is, you know, better than the average graduate student stipend. Basically, my message always when I bring you on is like, audience members do not completely dismiss out of hand the possibility of you owning a home during graduate school or your postdoc. At least look into it a little bit. Yeah. There are a lot of places where it’s not going to be possible, but you may be surprised that it is possible in some places.

08:27 Sam: Yeah. I mean, I have a client who is buying in LA right now, which people would immediately write off as way too expensive. She does have a second job that she has history of working. So, she’s able to afford a little bit more than just her stipend. I believe she’s going to UCLA right now. So, she’s still buying in the upper threes. You know, she does have 20% down, right? Which helps bring down that loan amount, but I’m only qualifying her off of the stipend and a small seasonal job. So, yes, she is looking at a studio with one bathroom, but that is what she knows she’s going to be comfortable with monthly. And I think just the biggest thing about owning in grad school is completely flipping your net worth, right? You could have a hundred thousand dollars of student loans going into grad school, but turn that into $200,000 net worth and then also rental property when you move out of the area.

09:31 Sam: So, even if it’s a studio, it’s still a wonderful stepping stone. You know, you get that first purchase out of the way and you realize, okay, you know, closing costs are basically the only thing I spent my money on that doesn’t go into equity on my home, right? And you know, learning these small steps of home ownership, like filing an insurance claim if you have to, or like, why do I have plumbing issues every month, right? Whatever, maybe my washer broke, what do washing machines cost, right? All these things are just, you’re going to learn them eventually, and the benefits of a five or six-year plan of you owning while, you know, progressing yourself personally is just unmatched, I would say.

House Hacking

10:16 Emily: Sam, you put that so eloquently, and long-time listeners are going to know I’ve said many times that one of my big financial regrets from graduate school when I went to Duke in the Triangle was not buying my first home when I had the financial means to, because I had a lot of limiting beliefs going on at that time about what home ownership was for graduate students. So, I won’t belabor that point right now, but if you want to go back and listen to some previous episodes we’ve had on home ownership, you can check out season eight, episode 18, where I talk a lot about my own limiting beliefs around home ownership during graduate school. And we’ve done multiple episodes with Sam as a guest in the past, but I would especially point you to season eight, episode four, which is when we talked about, the title episode is Turn Your Largest Liability into Your Largest Asset with House Hacking.

11:03 Emily: So, we talk a lot about what house hacking is, which is basically just when you buy a home that’s larger than what you need and you rent out one or more of the bedrooms to tenants slash roommates. And it can be a really powerful strategy for graduate students who are able to pull it off. So, especially go listen to that one because we, again, talk about all these like options for exiting a home ownership situation, if you are leaving the city, when you finish your graduate program or when you finish your postdoc. You could sell, but if it’s not the right time to sell, you could hold onto it, and it could become a rental, like Sam was just saying. Or there are other options as well. So, anyway, great episodes to listen to. Sam, is there anything that you want to add about like where graduate students in PhDs are buying and able to buy right now?

11:42 Sam: I can say reflecting on my last year’s worth of production, there were 17 states which I originated for PhDs last year, or I guess in a calendar year. I definitely see a lot of business in the Northeast. So, people who are going to any New Jersey, Massachusetts, Rhode Island, Connecticut area type of university. I actually had a very successful purchase for a student who goes to Yukon. His name was Joshua DuPont, and he implemented a wonderful house hacking purchase. Couple quick data points on it. He purchased at about $130,000. It was a two-unit, separate levels. The rental comp on the second unit was about $800 a month, which exceeded his mortgage by about 50 bucks. So, he was covering his entire mortgage by having that rental unit above his. I’m not sure which one he lived in, but it was a perfect example of someone who was making the commitment for five years, and then, I mean, his opportunity now financially is completely different than it would be if he was the person renting that unit from someone else, right?

13:05 Emily: I love to hear that. I’m so happy for him!

13:07 Sam: Yeah. And that’s actually the third PhD that bought a multi-unit.

Rates are a Moving Target

13:11 Emily: Wow! That’s so exciting! Okay. So far what we’ve heard is don’t discount home ownership. It’s possible in a lot of different markets. Secondly, rates are going up, but it won’t affect these on the lower end of home prices purchases as much as it will affect larger-scale home prices. So, still go ahead, get a quote from Sam, get a quote from somebody else, see what you can qualify for just based on your income.

13:38 Sam: I wanted to touch on rates one more time. You don’t want to be 100% focused on what rate you’re receiving. Because everyone at that time of the year is going to be in a similar boat as you. Rates have gone up, people will qualify for less at a higher rate, right? But the main goal is to find the right house within your budget. So, whether that is off of a 5% rate or a 6% rate, it still has to be a comfortable payment for you. Okay. So, while you’re looking for your home, rate is basically a moving target, right? What a lot of lenders implement is a float-down policy. So, my client in Chicago that’s closing tomorrow, when I locked her rate, she was up at 5.625. You know, condos have a little bit higher rates than single-family homes, but we’re able to lock at day one when we decided it’s a good time to lock.

14:41 Sam: And then also look at a second day in the future that’s before closing to see if the rate is better that day. In her scenario, the rates had improved for a few weeks. And so, we ended up floating down her 5.625 down to 5.1 at no cost to her. So really, when you’re locking your rate in, you’re just preventing the rate from getting worse, right? You’re locking in it at, let’s just say 5%, for example. Your rate’s never going to be over 5%. Should the market improve significantly before you close, ask your lender about a float-down option. They usually have one. I would say if they’re a competitive lender that does a lot of business, they have a float down policy. Okay. So, mainly, the point I’m trying to get across is, no matter what the rate is, even if it’s at 10%, don’t be discouraged from buying, because you still have the equity you’re going to gain in the home, the amount you’re going to pay your loan down, your tax write-offs, and the ability to either keep or rent out that home after you don’t want to live there anymore. So, all these things, compared to paying rent, rent is a hundred percent interest. The only good thing about paying rent is you get to call your landlord and say, Hey, I have a problem. Instead of dealing it with yourself.

15:55 Emily: That is a good benefit of renting, and one that I miss.

15:57 Sam: It’s the best benefit. Yeah.

15:59 Emily: I appreciate your points about still buying even at higher interest rates, if you qualify, right? The question is, if graduate students were at that tippy top max of their budgets anyway, and increasing rates have caused their monthly payment to go up to such a point where they could no longer even afford a house anywhere in that market, if they were on the bubble like that, then it’s an issue. But if you could still qualify at the higher rates, like you said, I still think it’s a reasonable idea to go forward with buying. Especially because, you know, let’s say next year or the year after that rates are lower, again, that person can refinance. As we saw so many people do with low rates over the past 10 years. And so, it’s not necessarily that that rate is going to be your rate forever. As long as you can still get into the property. So anyway, it’s worth investigating.

Buying Down Your Rate

16:44 Sam: Okay. So, I’ll add these details from what I experienced originating at higher rates right now. Like you just said a moment ago, you’re already on a tight budget. That’s not changing. And rates going up, you’re going to qualify for a little bit less. It’s not going to take you out of the market because now the rates have gone up, and home prices are actually starting to come down in some areas, right? You’re not going to go, you know, over contract price plus 10 grand to get into the home. Okay. So prices will adjust for a smaller buy approval that doesn’t qualify for certain amounts, right? And then secondly, usually PhDs are putting down savings or they’re receiving a gift from a family member or a friend. Some even are selling a previous home and buying another one, right? So, the $5,000 you needed from a family member to close, you know, planned on, might be $10,000 now.

17:44 Sam: You might just have to put a little more down to qualify for that house you want, right? Then again, I still have people buying single-family homes in North Carolina for under $150K. So, if you don’t need more than three bedrooms, you’re going to be able to find something. And then the last thing I wanted to point out is the realtor that you decide to work with is important because they’re going to work hard to find something that fits your budget. What we know already to start is that it’s going to be a tight budget monthly. So, I want to get my eyes on every property that you’re going to put an offer in to make sure it fits for your scenario. So, the room for error is very small here.

18:29 Sam: What’s very unlikely is that you’re looking for a home and I’ve preapproved you at five and a half percent. And during that period, rates go up to six and a half, and now you don’t qualify. That won’t happen. Because the cost to buy down the rate, if it were to go up, would be minimal. So, the rate that you don’t pay for has gone up, but if you are willing to put 1% or even 2% of your loan amount to buy down your rate, we can do that. Sometimes it’s cheaper to buy down for a lower rate versus getting another five or $10,000 to put down towards your loan. So even with the tight income monthly for one, you know, grad student on a stipend, it’s still achievable.

19:21 Emily: That’s really good to hear.

Commercial

19:25 Emily: Emily here for a brief interlude! These action items are for you if you recently switched or will soon switch onto non-W-2 fellowship income as a grad student, postdoc, or postbac and are not having income tax withheld from your stipend or salary. Action item #1: Fill out the Estimated Tax Worksheet on page 8 of IRS Form 1040-ES. This worksheet will estimate how much income tax you will owe in 2022 and tell you whether you are required to make manual tax payments on a quarterly basis. The next quarterly estimated tax due date is September 15, 2022.

20:07 Emily: Action item #2: Whether you are required to make estimated tax payments or pay a lump sum at tax time, open a separate, named savings account for your future tax payments. Calculate the fraction of each paycheck that will ultimately go toward tax and set up an automated recurring transfer from your checking account to your tax savings account to prepare for that bill. This is what I call a system of self-withholding, and I suggest putting it in place starting with your very first fellowship paycheck so that you don’t get into a financial bind when the payment deadline arrives. If you need some help with the Estimated Tax Worksheet or want to ask me a question, please consider joining my workshop, Quarterly Estimated Tax for Fellowship Recipients. It explains every line of the worksheet and answers the common questions that PhD trainees have about estimated tax. The workshop includes 1.75 hours of video content, a spreadsheet, and invitations to at least one live Q&A call each quarter this tax year. If you want to purchase this workshop as an individual, go to PF for PhDs dot com slash Q E tax. Now back to our interview.

Getting Ready to Purchase

21:29 Emily: Both of us have mentioned a couple times so far, like, okay, you know, ideal buyer candidate, like zero debt, and like, okay, how much money do you have to put down? Is it 5K? 10K? More? Let’s lay out for the listers right now, let’s say for someone who is really thinking they’re going to buy, maybe it’s within the next few months or next year, what can that person do within their finances and their life overall kind of to get ready to be in a good position to make that purchase a little ways down the line?

21:58 Sam: Well, you want to have a full understanding of where you stand credit-wise. [Annualcreditreport.com], we’ll have to check that for the show notes, but once a year, every consumer can get a copy of their credit report.

22:19 Emily: I just looked it up. It is annualcreditreport.com.

22:22 Sam: You really want to make sure that you have some money saved, you’re at a good credit standing, and you’re, I guess, mentally prepared to lose out on a couple deals before you find the right house. <Laugh> I would also say, if you do believe you’re going to be receiving a gift, to have that conversation a little earlier on in the process. We really don’t like to transfer money until we know things are done deal, but you know, prepping a family member or a spouse like, Hey, are we prepared to move around 10 or $20,000 to get this deal done, right? And then aside from credit and assets, your other main player is your income. We talk a lot about stipend income. I might know it better than some universities, but be aware of if your funding is changing. Usually, we have these annual increases.

23:25 Sam: But when that goes into effect, sometimes I receive funding letters that haven’t been officially signed. I’m like, we need to make sure you have a signed funding letter. And we do want to see some continuance, but we are not like every lender. We can still approve income even on a short-term contract. We look at the full picture, and Movement Mortgage uses common sense underwriting. So, if I can just show that you’ve always been in good standing as a student, and now you’re transitioning to this PhD in, you know, X science field or arts and sciences that we support you. We understand you’re a good borrower. We just, you know, there are obviously no guarantees because we want to make sure people fall into the right credit buckets, have the right assets, and the trio of how you qualify someone, right?

Advocacy for Grad Students with < 3 Years Continuance

24:24 Emily: Let’s talk a little bit more about that, because in one of our earlier episodes, it was quite a while ago now, season five, episode 17, we talked about this term continuance that you just mentioned. And at the time, again, it was a few years ago, the way things were understood regarding fellowship income–by fellowship, I mean, non-employee income, non W-2 income, awarded income is what I call it for my tax purposes. What we understood at that time was that fellowship income was sort of viewed differently than employee income, W-2 income, with respect to qualifying for a mortgage. And I was getting a lot of messages from graduate students and postdocs who were saying, oh my gosh, I was denied. I couldn’t get a mortgage. I couldn’t buy the home that I expected to because of the type of income I have. Not the amount of income, but the type of income.

25:13 Emily: And so, you looked into this, this is sort of how, you know, we started kind of collaborating together several years ago, you looked into this and one of the first things you found was, oh, well, if you have three years of continuance stated explicitly in your offer letter, which means this funding is guaranteed for three years, think like National Science Foundation Graduate Research Fellowship Program, it’s going to continue for three years. If that’s in the offer letter, oh, no problem. You’re golden. We’re going to be able to write that mortgage easily. Now that’s what we said in that earlier episode, but there has been some development since then, as you’ve been working more and more in this industry, you’ve actually gotten a lot of other types of people on fellowship approved. So, can you tell us more about the updates on that and the success stories that you have that don’t involve W-2 income and don’t involve three years of continuance?

25:54 Sam: Yes. So I have to kind of break this down into layers. So, what all lenders–that’s banks, mortgage companies, anybody who’s given a mortgage out for, I’ll say conventional loan–they have to go by the oversight committee, right? Fannie Mae, Freddie Mac, right? Fannie Mae and Freddie Mac have guidelines. And they are just mortgage laws everybody has to work with. Now, as you get down to the company that you’re working with, that company will also have a set of mortgage laws that are on top of what Fannie and Freddie consider, what they will ensure and take, right? Now, under that layer is your underwriters. The underwriter is similar to a loan officer. They’re a licensed employee of the company, and their license number is attached to every single loan that’s approved and closed. Okay. The underwriter basically can go either way with the income, right?

26:56 Sam: And a lot of times, a couple years ago, for me, I would always have to escalate my underwriter’s decision to their manager. Because the way the guidelines are written, they can be interpreted different ways, right? So let’s say this, actually, this is a real scenario that I got three weeks ago. Her name was Jane. She was buying in New York and she has exactly three years of continuance. Now the lender denied her because one month after the close date is when your mortgage starts and you paid in arrears. So you basically skip a month after closing. Well, when the payments start, she was under her three years continuance. So they said, I’m sorry, you don’t have enough time in your contract, right? So she got denied, found us online. I got her back on track. Her income’s been approved with Movement Mortgage, and she’s going to close on time without issue up in New York. As you get down to these layers, if you’re not working with the right people, you’re running into more and more issues. So what I’ve been able to develop is a way to present PhD income to an underwriter demonstrating historically where this student’s been, and where they’re gonna be going in the future. Technically speaking, the guidelines say the income must be likely to continue for three years. Okay? Now, if the underwriter can see that it’s not going for three years, they can say, I’m not budging. I can’t use this income. My license is attached to this. No. Right? Go get a co-borrower.

Interpreting the Word “Likely”

28:39 Emily: Because they’re interpreting the word likely in the way we would say guaranteed. They want to see a guarantee to think that it’s likely. But what you’re saying is, well, no, the word is not guaranteed. The word is likely. So how can we work with that word?

28:53 Sam: Right. I did a lot of due diligence before moving over to my previous employer Movement Mortgage, and I was able to get a guarantee from the whole entire company’s underwriting manager that I can take a PhD or postdoc with less than three years of continuance. Some less than one year. I can take them to a Freddie Mac product or a Fannie Mae product. This is advantageous to the PhD community, because there are other things that are so stressful about the home purchase. You know, putting a $20,000 deposit down can add a little, you might lose a half an hour sleep every night. I don’t want anybody losing sleep because they’re well qualified over income, like letters. It’s totally ridiculous.

29:42 Emily: This goes to that term that you mentioned earlier, common sense underwriting. Because I think the people listening to this podcast can clearly see from their own lived experience that graduate student income, whether it’s employee income or non-employee income, is pretty likely to continue. It’s certainly not more or less likely than some random job you might have, right? So like, we know as a community that this is very similar to another job. In fact, in some cases can even be more secure than a regular job. But the mortgage industry historically has not taken the same view until you, you know, went hard at work on this problem and started understanding the underwriter’s point of view, started understanding how you can present these packages, the language that they use. And like you said, with this most recent move, even prepping the underwriters at the company that you’ve recently moved to, Movement Mortgage, prepping them by saying, this is the type of, you know, letters and income verification that’s going to come your way. I need to know that you’re on board with this interpretation of the word likely and all the other factors that go into it.

30:42 Sam: Yeah. And one other thing about stipend income that was one of the main reasons I switched is universities will either pay their students on a 12-month pay cycle, or they will get paid semesters, right? So, where I was able to include someone’s fall and spring stipend, the summer stipend, because the pay changes, it’s a different pay rate. A previous underwriter at my old company was like, oh, we can’t use that income. It’s future income and it’s not guaranteed. And I debated with them. I said, the letter states that summer employment is often available for PhDs, but it’s not required. Meaning if you want to go to Europe, you’re allowed to go. But if you want to teach, here’s $6,000. That client of mine, he was able to get a co-borrower to solidify the $500 that they didn’t want to include monthly.

31:40 Sam: I took that same scenario and provided it to the underwriters at Movement. And they said, we see that he’s historically worked summers. And we see that he has this option to work as a teacher. And I was conservative. I did not include the higher income that I could have. He made, you know, $30,000 working for a different company the previous summer. I was like, I just went off the $6,000 that was within the letter. I would be able to close that here at Movement without the co-signer. And that just helps me get my PhDs closed with less friction. Because I see it as this is available income for next summer. So you get these layers, like what Fannie and Freddie will require, the lenders are a little more strict, and then the underwriter, you know, they’re on the edge of the fence. It could go one way or another. I couldn’t be happier working with PhDs. They’re responsive, understanding, usually very qualified, and they’re very, there’s no heavy lifting with doing these PhDs anymore. The back end, my team behind me, they’re the best community to work with. And it just doubles down of why they’re great people to approve for mortgages.

Reach Out to Sam at Movement Mortgage

32:54 Emily: Listeners, Sam does not just say these very complimentary things about you on the podcast. He says these things to me regularly about how happy he is to be working with you all. That you are such easy clients to work with, that you’re so responsive, that you’re so ready, that you’re so organized, you’re so responsive to email. Like you’re a great community for him to be working with. He’s really happy about this. Obviously, we have this personal connection that helps start it, but he’s off on his own now. Like he is clearly the industry leader in this area. So anyway, if it hasn’t already been clear through this conversation, Sam is working hard for you. Especially if you’re going to be buying a house in the near future, on your graduate student or postdoc income, his recent move to Movement Mortgage, he obviously did a lot of work on that. Making sure that things like inconsistent income throughout the 12 months will be included in your consideration for a mortgage.

33:44 Emily: So, all that to say, Sam, let’s wrap up here. I, of course, strongly encourage anybody listening or reading this transcript who is considering qualifying for a mortgage in the near future to at least get a quote from you. Doesn’t mean you can’t get quotes from other people, but at least get a quote from Sam. See what he can do for you. And he has probably the most experience working with this particular population of anyone in the U.S. I don’t know. Maybe there’s some random person in one random college town somewhere who also does this, but Sam works nationally. So, please go get a quote from him if this is on your radar at all to see what you could qualify for on your income and with the current interest rate. So, Sam let’s conclude one more time with your contact information.

34:23 Sam: Yes. My cell phone is the best way to reach me. It’s 5 4 0 4 7 8 5 8 0 3. And my new email address is Sam dot Hogan at Movement.com.

34:35 Emily: Well, Sam, it’s been a pleasure to have you back on the podcast. Thank you so much for the work that you do for this community and how much you care for them!

34:42 Sam: Thank you for having me!

Outtro

34:49 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

How Two PhDs Bought Their First Home in a HCOL Area in 2021

May 3, 2021 by Jill Hoffman

In this episode, Emily recounts her and her husband’s home ownership journey, what she’s learned along the way about buying a home, and what she wishes they had done differently. The episode is structured around the necessary elements in your life and finances to qualify for a mortgage and purchase a home: 1) desire to buy a home, 2) income, 3) debt-to-income ratio, 4) credit score, 5) down payment and closing costs, and 6) someone willing to sell you a home. In each section, Emily speaks about the element generally and takes you through their own history to show you how all these elements finally came together in 2021 to enable the purchase of their first home.

This is post contains affiliate links. Thank you for supporting PF for PhDs!

Links Mentioned

  • First-Time Homebuyer Q&A Call
  • This Grad Student Defrayed His Housing Costs By Renting Rooms to His Peers
  • The Psychology of Money by Morgan Housel (affiliate link—thanks for using!)
  • First-Time Home Buyer: The Complete Playbook to Avoiding Rookie Mistakes (affiliate link—thanks for using!)
  • The House Hacking Strategy by Craig Curelop (affiliate link—thanks for using!)
  • Purchasing a Home as a Graduate Student with Fellowship Income
  • This Fulbright Fellow Supplements Her Stipend with Prior Savings
  • Turn Your Largest Liability into Your Largest Asset with House Hacking
  • Purchasing a Home as a Graduate Student with Fellowship Income
  • How to Qualify for a Mortgage as a Graduate Student or PhD, Even with Non-W-2 Fellowship Income
  • How to Solve the Problem of Irregular Expenses
  • Our $100,000+ Net Worth Increase During Graduate School

Introduction

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

This is Season 8, Episode 18, and today I’m going to recount for you my and my husband’s home ownership journey, what I’ve learned along the way about buying a home, and what I wish we had done differently. I have structured this episode around what I understand as the necessary elements in your life and finances to qualify for a mortgage and purchase a home: 1) desire to buy a home, 2) income, 3) debt-to-income ratio, 4) credit score, 5) down payment and closing costs, and 6) someone willing to sell you a home. In each section, I’ll tell you about the element generally and take you through our own history to show you how all these elements finally came together in 2021 to enable the purchase of our first home.

Purchasing a home in the San Diego area has been a decade-plus-long dream for us. My biggest long-term motivator for staying on top of my personal finances was not debt freedom, not financial independence or early retirement, not lifestyle spending, but rather being able to buy a home in southern California and live a financially stable life with children.

Whenever I met people who used to live in San Diego, I asked them why they moved away, and if the answer wasn’t being transferred by the military, it was nearly invariably financial pressures. I knew it would take all of my financial skills just to make it in this high cost of living area, so that’s what I’ve been working toward all these years.

My husband and I closed on our very first home purchase in north San Diego County in April 2021. So not only did we accomplish one of our major life goals, we did it in the strongest nationwide seller’s market in recent memory.

As I tell the story of our journey to home ownership, I’m going to get really personal and transparent, which I don’t often do on this podcast. I am going to give some advice and suggestions as we go through, but please keep in mind that this episode is largely descriptive of our path, not prescriptive for yours. You will see that we’ve had privileges and opportunities that are definitely not available to everyone. COVID-19 in particular greatly influenced the end of this process, which of course we all hope will not be repeated.

I know that my story, especially the end when I start giving you numbers, will feel quite unrelatable to those of you who are still in grad school or who live in low- or medium-cost-of-living areas in the US. They certainly were for me when I was a grad student in Durham. Yet, multiple years out from finishing my PhD, here I am living it. If eventually buying a home in a high cost of living area is something you want, I hope you will find our story inspirational. If your goal is to buy a home soon, I hope you will find it educational.

If this episode raises new questions for you about the home-buying process or you’ve had some kicking around for a while, I invite you to join me and Sam Hogan for a free live Q&A call this coming Thursday, May 6, 2021. Sam is a mortgage originator specializing in graduate students and PhDs, particularly those with fellowship income. He is also an advertiser with Personal Finance for PhDs and my brother. You can register for the call at PFforPhDs.com/mortgage/.

In case you are a new listener, here is some brief biographical info so you can follow along with the episode:

My husband Kyle and I met and started dating at Harvey Mudd College, from which we graduated in 2007 at the age of 21; we both turned 22 in July 2007. Kyle started his PhD in computational biology and bioinformatics at Duke University in fall 2007; I did a postbac fellowship at the NIH for a year before starting my PhD in biomedical engineering at Duke in fall 2008. We got married in summer 2010. We defended our PhDs in summer 2014. Kyle stayed on as a postdoc in his PhD advisor’s lab for another year, while I worked a few part-time / temporary jobs while I launched Personal Finance for PhDs, which has been my main endeavor since. In summer 2015, Kyle got a job at a biotech start-up, and we moved to Seattle. We have two children, born in 2016 and 2018. In summer 2020, Kyle negotiated to work remotely permanently for the start-up, and we moved to southern California, specifically the Los Angeles area. We closed on the purchase of our very first home in North San Diego County in April 2021.

The six necessary elements to buy a home are:

  1. Desire to buy a home
  2. Income
  3. Debt-to-income ratio
  4. Credit score
  5. Down payment and closing costs, and
  6. Someone willing to sell you a home

In the rest of the episode, I’ll tell you how we checked off each of these elements and give you some pointers as well. By the way, this episode is for entertainment purposes only, and nothing in it is advice for legal, tax, or financial purposes for any individual. You are entirely responsible for your own financial decisions.

1. Desire to buy a home

Before even dipping your toe into the home-buying process, you have to actually want to buy a home. It’s not something that you can or should just fall into. And if you don’t want to buy a home, none of the rest of the elements matter.

Kyle and I do not find the idea of home ownership to be particularly attractive. We have been very happy to rent for these last 14 years in the sense that we like that our landlords have had the financial and logistical responsibility to take care of the properties we’ve lived in. We’ve never cared about not being able to customize the space we’ve lived in or anything like that. However, we did idly consider home ownership in some earlier stages of our careers.

Neither of us was in a position to buy a home financially at the start of grad school. We did know some other grad students who owned their homes in Durham, so it was perhaps feasible to buy a small home with a grad student stipend. I actually interviewed Dr. Matt Hotze, a house hacking grad student at Duke, in Season 3 Episode 3. However, anecdotally, all the grad student homeowners we knew personally had purchased their homes before the subprime mortgage crisis, no later than 2007. Lending standards were obviously a lot looser before the crisis than during and after.

The subprime mortgage crisis and the Great Recession had a very big effect on my outlook on home ownership, as I believe they have for many Millennials. The first chapter of The Psychology of Money by Morgan Housel (affiliate link—thanks for using!) discusses why individuals view money so differently from one another. The way he puts it is: “People do some crazy things with money. But no one is crazy… People from different generations, raised by different parents who earned different incomes and held different values, in different parts of the world, born into different economies, experiencing different job markets with different incentives and different degrees of luck, learn very different lessons.” His examples in the chapter of common financial experiences of various American generations include the Great Depression, high inflation in the 1970s, low inflation since the 1990s, the stock market’s high returns over the last 50 years, and the Great Recession.

Housel calls your teens and 20s “your young, impressionable years when you’re developing a base of knowledge about how the economy works.” Well, my early to mid 20s money mindset was scarred, as Housel puts it, by the housing crisis. By the time I reached my mid-20s, the mantras “Your home is not an investment” and “Don’t buy a home that you don’t plan to stay in for at least five years” had settled in deep.

Now, that five-year rule, that’s a tough one for early-career PhDs. Most of us expect to be fairly itinerant—moving cities, states, or countries for grad school, a postdoc, a first Real Job, a second, etc. You have to be really intentional as a PhD to stay in the same city for longer than 5 years, often making some kind of career sacrifice or concession to do so.

This is the dilemma that Kyle and I found ourselves in back in 2010. We had just gotten married and combined households and finances. The housing market was not strong by any means but it seemed that the worst was over. Our two grad student stipends were certainly enough to support a mortgage on a small home in Durham. We had a small amount of savings. Yet, Kyle was three years into his program and I was two years into mine. We thought, surely we will be leaving Durham by 2013, more or less. There wasn’t time, according to the 5-year rule, to have the reasonable expectation that we wouldn’t lose a bunch of money on buying and selling a home. So we didn’t buy. We focused our financial energy on retirement investing instead.

In hindsight, I learned the wrong lesson from the subprime mortgage crisis, or at least I applied a good lesson in the wrong way.

Here are a few things I’ve learned since 2010:

1) Personally, we didn’t actually move away from Durham until 2015. So we would have passed the 5-year rule anyway if we had bought shortly after getting married. The lesson there is: You might stay in your current city longer than you initially expect to. PhDs can take a long time. Keep a realistic timeline in mind in addition to an optimistic one.

2) If you own a home and then move away, you don’t have to sell it if your home hasn’t appreciated enough yet. You can rent it and become a long-distance landlord, likely with the help of a property management company. In 2012, we rented a townhouse from a private landlord through a property management company. The owner had earned her PhD at Duke and subsequently moved to Europe for a postdoc. Matt Hotze also employed this strategy when he moved away from Durham after finishing grad school.

As I record this, Scott Trench and Mindy Jensen of Bigger Pockets recently published a book titled First-Time Home Buyer: The Complete Playbook to Avoiding Rookie Mistakes (affiliate link—thanks for using!). I have not read the book yet, but I have listened to them go on the podcast rounds to promote it, and I’ve learned something just from that. One of the concepts in the book is on exit strategies from real estate purchases, namely: 1) live in it forever, 2) sell it, 3) rent it. When you buy a home, you should have more than one exit strategy that is a viable option for you.

What I want you to take from this point is that your home ownership clock does not need to stop when you move away from your current city. If it does take 5 years for your home’s rise in value to justify the transaction costs of real estate, which are very high, you don’t have to actually live in the home for all 5 years. Therefore, when you buy a home that you don’t plan on living in forever, whether that’s because of an anticipated move or growing your family or anything else, make sure that it makes financial sense as a rental as well as a primary residence.

3) Instead of relying on passive appreciation to increase your home’s value over a timeline like five years so that you can break even vs. renting, you can instead approach your primary residence with a real estate investor frame of mind. I’ve learned of two ways to do so through The House Hacking Strategy by Craig Curelop (affiliate link—thanks for using!), though there may be more.

The first method is forced appreciation, which is when you upgrade your home while you’re living in it through renovations or an addition or something similar. I don’t know how accessible that method would be to the average PhD; it’s not something that I would feel competent or confident to undertake in a cost-effective manner.

The second method is house hacking. I’ve already mentioned that term once in this episode. House hacking is when you buy a home that’s bigger than you need and rent out part of it. This could be a single family home where your tenants are your roommates or a multi-family property where your tenants are your neighbors. Assuming the ability to buy a home in the first place, I think this strategy is quite accessible for especially graduate students, who are accustomed to roommate living. I have had multiple house hacker interviewees on the podcast, including Matt Hotze, Jonathan Sun in Season 2 Episode 5, and Dr. Caitlin Kirby in Season 6 Episode 16. House hacking is an incredibly powerful strategy, which if done right can either reduce your housing expense or even eliminate it entirely and give you an additional stream of income. I discuss this strategy in depth with Sam Hogan in Season 8 Episode 4.

The upshot is that I wish I could go back in time and tell my early grad student self that living in Durham for grad school was a wonderful and rare financial opportunity. I would tell myself that buying a home with an eye toward renting it out, whether through house hacking or long-distance landlording, greatly mitigates the risk of buying in a city you don’t plan to live in forever.

That pretty well summarizes my aversion to home ownership and what I wish I had known about home ownership in my grad school years. Since I am unable to communicate with my past self, I hope you find it valuable.
In 2015, Kyle and I moved from Durham to Seattle, and that was quite a shock to our financial system. Kyle’s income jumped, of course, but suddenly our cash savings seemed pretty paltry compared to our new living expenses. Buying a home was no longer on the table. Instead, we rented a cheap apartment that was walking distance to his new job and focused our energy on growing our careers and our family. I’ll tell you more about how those years went for us financially later on in the episode.

By the time we were ready to reconsider the home ownership question in about 2018, we looked around and saw that Seattle was experiencing double-digit growth in its median home price and had been for several years. We had numerous friends buying or trying to buy in a super competitive market, doing things like waiving inspection contingencies. That didn’t sound appealing. Plus, going back to the previous discussion, we didn’t want to be in Seattle forever. I told Kyle when we moved there that I wanted to move to southern California within two to four years, and it had already been three. Instead, we decided to focus on building up a down payment on a home in California.

That brings us to the present, more or less. Home ownership was not super desirable for us in the past based on our location and mindset, but now it is. We have two big reasons for wanting to be homeowners at this stage in our life: 1) As a financially-minded person, I love the idea of, as Ric Edelmen puts it, carrying a big long mortgage. Doubly so with interest rates being as low as they are. 2) We, ideally, want to provide our children with a geographically stable home throughout their school years, which both of our sets of parents did for us. Our older child is entering kindergarten in fall 2021, so we knew we wanted to buy in 2021 if not sooner.

What I want you to take away from this section regarding whether or not you desire to become a homeowner is that you not should go on your feelings only. Your feelings matter, but purchasing a home or not purchasing a home is a big decision that should be well thought through. What are your motivations for home ownership? What are your exit strategies if you decide to buy? How can you use your home to increase your net worth, aside from passive appreciation? What are your other financial goals, and how do they rank against home ownership?

2. Income

Your income as an individual or household is one of the factors that determines the upper limit of the purchase price of your home. Income is the main sticking point keeping graduate students and postdocs from being able to buy in cities that their age-mates with Real Jobs could buy in, and that is due to the relatively low amount of income and sometimes the type of income.

First, I’ll address the type of income.

Employee or W-2 income is the easiest income type for lenders to understand and process. Basically, if you are an employee, the lender presumes that your job will continue indefinitely and that you will be able to pay your mortgage. You could potentially get a mortgage with just a single pay stub or an offer letter. Once the mortgage is close to being issued, they do check with your employer to verify that you’re not about to be let go or something similar.

Kyle has W-2 income through his job, so we knew that would be an easy sell.

Self-employment income is also common for lenders to work with, but they ask for at least two years of tax returns and profit and loss statements to ascertain whether the income is stable. Also, self-employment income will not qualify you for as large of a mortgage as an equivalent amount of W-2 income would.

I’m self-employed, and I was really concerned about how a lender would view my income. I wanted to wait to apply for a mortgage until after we filed our 2020 tax return because my income was higher in 2020 than 2018 so I thought that would help us qualify for a larger mortgage.

Fellowship income is the last income type that is common for grad students and postdocs. I hear frequently from grad students and postdocs who have been denied mortgages because the lender either doesn’t understand or can’t work with fellowship or training grant income. We’ve discussed qualifying for a mortgage with fellowship income in depth on the podcast in Season 2 Episode 5 and Season 5 Episode 17. Lenders view fellowship income as temporary, not indefinite like employee income, so they are concerned that you won’t be able to pay the mortgage after the fellowship ends. I know this sounds backwards to us because fellowship income is guaranteed over its term as long as you remain in good standing, whereas most employees can be fired at any time. However, it is possible to qualify for a mortgage with fellowship income under certain conditions and if you use a lender who is accustomed to working with it. Anyway, if after listening to the aforementioned episodes you still have some questions about whether you could get a mortgage with your particular funding situation, please come to the Q&A call on May 6th with Sam Hogan, who again is a mortgage originator specializing in fellowship income. You can register for the Q&A call at PFforPhDs.com/mortgage/.

Second, I’ll address the amount of income.

You may have heard a rule of thumb that you shouldn’t buy a home for more than three times your annual income. I learned through my own home-buying process that 3x your income is an outdated rule of thumb. Because interest rates are so low right now, people without other debt might be able to qualify for mortgages around 5x or more of their income.

The real metric that lenders go on is your debt-to-income ratio. There are actually two debt-to-income ratios, the front-end and the back-end. I’m going to address the back end debt-to-income ratio as a separate element.

Your front-end debt-to-income ratio is your total monthly housing expense divided by your gross monthly income. Your monthly housing expense includes the principal and interest payment on your mortgage, property tax, homeowner’s insurance, private mortgage insurance, and/or homeowner’s association dues. Lenders usually want your housing expense to be no more than 28% of your gross income, although depending on your loan type and credit history, some lenders might go above that number  .

Basically, this front-end debt-to-income ratio is a major factor in calculating the maximum mortgage amount you will be extended. However, what I’ve learned through my own home-buying process and my conversations with Sam is that the amount you’ll qualify for is a bit of a black box. If you want a definitive number, you’ll need to work with a mortgage broker or originator on getting pre-qualified or pre-approved.

Regarding our own homebuying journey, obviously real estate in the San Diego area is very expensive. We had to decide how much we were comfortable spending on a mortgage, regardless of the amount we qualified for, and match that up against the prices of single-family homes. There are a lot of cities and areas in San Diego County that we absolutely could not and would not buy in, and even in the remaining areas we were only looking at pretty modest homes.

When we started homing in on our target range of home prices, Kyle’s income was borderline enough to qualify for that range on its own without including mine. We were really, really fortunate when, just after we made our first offer on a house, Kyle received an unexpected and substantial raise. His income with that raise was more than enough to cover our target range. Ultimately, we went forward with his name only on our mortgage since we didn’t need to use my more complicated self-employment income.

3. Debt-to-Income Ratio

In this section, we’ll discuss the back-end debt-to-income ratio, which many people refer to as simply the debt-to-income ratio. Your back-end debt-to-income ratio is your total monthly debt payments and certain other obligations divided by your gross monthly income. The numerator is inclusive of your proposed housing expense that we delineated when discussing the front-end debt-to-income ratio.

Aside from your housing expense, the other debts and obligations included in the back-end debt-to-income ratio are the minimum payments you are required to make on credit cards, car loans, medical debt, personal loans, and child support. If your student loans are in repayment, those minimum payments go into the calculation as well. If your student loans are in deferment, your lender may consider 1% of the outstanding student loan balance as a stand-in for the monthly payment.

The maximum back-end debt-to-income ratio permitted by lenders varies widely from about 36% to sometimes over 50%, depending on the type of mortgage and the rest of your financial profile. Again, it’s a bit of a black box, so if you think your back-end debt-to-income ratio is what will limit your ability to get a mortgage of the size that you want, speak with a mortgage originator like Sam Hogan.

Kyle and I have been essentially debt-free for many years, so in our case the front-end debt-to-income ratio equals the back-end debt-to-income ratio. I bought a car at the start of grad school with a personal bank loan, but I paid that off during grad school and have since sold the car. We own one car currently, and it’s Kyle’s college car. It’s a 2003 Chevy so pretty unglamorous, but that is literally how we roll. I had student loans from undergrad that we paid off a couple of years after we finished grad school. We use credit cards, but we pay them off every month. I think we may have financed a cell phone or two at 0% instead of parting with cash, but we’re done with those payments now as well. Kyle has essentially never been in debt aside from the kind that builds your credit without costing you any money, and I haven’t taken out any new debt since I was 23.

4. Credit score

Your FICO credit score and the three major credit reports it is based on are the major ways that your lender will determine how credit-worthy you are. Basically, your credit reports and score communicate how responsible you have been with debt in the past.

If you’ve never had any kind of debt, you don’t have a credit score, and then lenders, if they even want to work with you, have to do a lot more legwork, or what’s referred to as manual underwriting, to figure out if you’re credit-worthy. That’s pretty ironic because if you’ve never taken out any debt and always paid your bills on time, you’re probably very responsible with money.

On the other hand, if you have lots of outstanding debt, that’s going to hurt your credit score.

The middle ground with debt is optimal for cultivating a high credit score, which is taking out small amounts of debt and proving that you can pay it back consistently. As your age of credit grows older, your score improves as well because that track record of on-time, in-full payments gets longer.

Exactly how a FICO credit score is calculated is proprietary, but the broad strokes are that 35% is based on your payment history, 30% is your amounts owed, 15% is the length of your credit history, 10% is your credit mix, and 10% is new credit inquiries.

Lenders use your FICO score and credit reports to determine if they’ll lend to you at all, which type of mortgage to use, and what interest rate to offer you.

If your credit score is 760 or higher, you should qualify for the best interest rates on a mortgage. The minimum credit score to get a mortgage is around 620.

While Kyle and I have never tried to hack our credit scores, you can probably tell from what I told you in the previous section that they are very good by now. I started taking out student loans at age 18 and got my first credit card at 22, so my credit history is quite long in the tooth. Kyle’s parents actually added him to one of their credit cards as an authorized user when he was a teenager, so that gave his credit score a big boost right out of the gate. Of course being debt-free at this stage while still using credit cards raises our scores quite a lot. We also haven’t applied for any new credit cards since the pandemic started, so there were no recent hard pulls on our credit reports when we applied for our mortgage. I don’t actually monitor my credit score, but Kyle keeps tabs on his through Credit Karma, and it’s been consistently over 800 for several years.

5. Down payment and closing costs

Saving up money for a down payment on a house and the closing costs on the purchase was the biggest, longest, and most intentional process we went through in preparing to buy a home. I will tell you all about it in detail after going over what this money is for and how much you should target.

First, the down payment.

The minimum down payment on a home depends on the type of mortgage you’re taking out. A conventional mortgage can require as little as 3% down, though 5% is more common as the minimum. A Federal Housing Administration or FHA loan requires 3.5% down. United States Department of Agriculture or USDA and US Department of Veteran’s Affairs or VA loans don’t have a down payment requirement.

You may be familiar with the recommendation to, if possible, put 20% down on a home. If you put down 20% on a conventional or FHA loan, you’ll avoid paying private mortgage insurance, which is an insurance premium you pay to insure your lender against the possibility of you defaulting on the loan.

The more you put down, of course, the smaller your mortgage will be. A larger down payment amount can also potentially lower the interest rate on your mortgage and make you a more competitive buyer in a seller’s market, as we have in 2021.

Second, the closing costs.

Going into the home-buying process, I had heard that sellers typically pay closing costs, but that’s not a hard-and-fast rule and it’s not all closing costs. While in a typical transaction sellers pay roughly 5 to 8% of the purchase price in closing costs, buyers pay roughly 3 to 5%. So if you were targeting a down payment size of 3 to 5%, you may want to double your savings goal to account for closing costs.

I’ll give you a history of our down payment savings over the years. But first, I want to share a memory that I have from 2012. Kyle and I were at our five-year college reunion and chatting with a friend who lived in southern California. This friend shared that she and her husband wanted to buy a home and that they were working on saving up a $100,000 down payment. A ONE HUNDRED THOUSAND DOLLAR DOWN PAYMENT. That to me was a completely unrelatable goal. She may as well have said a trillion dollars. It was totally unattainable in my world. Now, to be fair, my friend and her husband were both engineer types and I’m sure had very good salaries. And of course real estate is very expensive where they live. One hundred thousand dollars may have been a 20% down payment, or maybe not. But since I was a grad student living in Durham at the time, my mind absolutely boggled at that number.

The irony is that, nine years later, Kyle and I put down well over $100,000 on our house purchase. And I will tell you how we got there. Before I do, please recall from the beginning of the episode that I am acutely aware of the privilege that you will soon see at play in this process and that I am simply telling you what happened for us, not suggesting that you will or could take the same path.

Kyle and I opened a savings account that we nicknamed “House Down Payment” in 2014, the year that we defended. Our main financial priority prior to that point was retirement investing. By the end of grad school, we had eked our retirement savings rate up to about 17% of our gross income. We were also quite focused on budgeting and saving for irregular expenses; I shared our system for managing those in Season 7 Episode 15. Just before Kyle defended, our combined net worth had crossed $100,000, which I talk about in depth in Season 1 Episode 1.

That summer, as a defense gift, one of our sets of parents gave us $14,000. That was an incredible amount of money to us—about a quarter of our yearly household income—and completely unexpected. We decided to sequester it in the aforementioned House Down Payment account so that we wouldn’t be tempted to use it for everyday living expenses. Then, in summer 2015, that same set of parents gave us another $14,000 as a graduation gift. That also went straight into the savings account. So by the time we moved to Seattle, we had quite a nice nest egg earmarked for a future house purchase.

Once Kyle started his job at the Seattle biotech company in 2015, we reevaluated our financial goals. We increased our retirement savings rate to 20% of our gross income and have maintained it there since. The house down payment became our secondary saving goal. We figured we could move it to primary savings goal status when we had a firm timeline on buying by decreasing our retirement savings rate to perhaps 10% for a year or two. I’ll also note that we didn’t have a firm target amount of money for the down payment. We thought it would be good to have at least a 10% down payment, though 20% was likely out of reach, but of course we didn’t know yet how expensive of a house we would purchase.

I’ll give you snapshots of how the balance in that account grew or didn’t grow over the next five years.

In 2015, we consolidated some other savings we had into the account, but didn’t actively work on adding any more money to it. We got pregnant with our first child that fall, so we were instead beefing up our emergency fund and saving cash to supplement our income during Kyle’s parental leave. The balance in the account at the end of 2015 was $29k.

In 2016, after the birth of our first child, we committed to contributing a certain percentage of my irregular at that time income to the account, which amounted to tens of or a couple of hundred dollars per month. The balance in the account at the end of 2016 was $31k.

We continued that savings plan into 2017, and I even started paying myself a regular salary from the business. When we got pregnant with our second child that fall, we switched our savings goal as we did for our first pregnancy and temporarily stopped contributing to the account. The balance in the account at the end of 2017 was $40k.

In 2018, our insurance changed halfway through our second pregnancy. We were responsible for more medical bills associated with the birth of our second child than we had with our first, plus we supplemented our income during Kyle’s parental leave again. We returned to our savings plan after the birth of our second child, but then decided to pull money back out of the account for some of the medical bills and other irregular expenses. The balance in the account at the end of 2018 was $39k.

Through 2019, we continued to save a certain percentage of my income into the account, and we layered in an additional fixed $250 per month. Again, around tax time we contributed to the account a portion of a distribution from my business and our self-tax refund, which amounted to approximately $10,000. (Sidebar: We save a generous amount from each of my paychecks into a separate savings account earmarked for income and self-employment tax. We pay quarterly estimated tax and also more along with our tax return. Our self-tax refund is whatever is left over in our savings account after all the taxes are paid, which we then incorporate into the rest of our finances.) The balance in the account at the end of 2019 was $56k.

2020, as you all know, started out normally. We again were saving a couple of hundred dollars each month, plus a bolus around tax time. Then, the pandemic hit. We stopped paying for childcare, which was certainly a strain on our time and stress levels, but did allow us to increase our monthly savings rate to the down payment fund to $1,500. We also put most of the first stimulus check into the account.

I’m sure everyone has struggled during the pandemic in at least one facet of life. Our primary struggle was as the working parents of very small children. Both of our children’s preschools and our babysitting service closed. We had no nearby family, and all our nearby friends were dealing with their own small children. I’m sure you’ve heard that “it takes a village” to raise children. Well, the village was gone—or only on Zoom, at any rate. We definitely had it easier than many because of the flexibility in my schedule, but that only goes so far.

By the summer, when we acknowledged this was not just a flash in the pan, we realized that nothing was actually keeping us in Seattle. Kyle negotiated for permanent remote work with his employer, and we started preparing to move to southern California. Our Plan A was to rent a single family house in one of the cities in San Diego County that we were considering buying in so that we could get to know the area. As our desired move date grew closer, we were having some difficulty arranging for a rental at a distance, and we decided to exercise Plan B, which was to move in with Kyle’s parents in the Los Angeles area. They had extended us an open-ended invitation to stay with them.

That’s how, in August 2020, we moved back in with our parents, kids in tow. And even though it wasn’t what we thought we wanted, it was exactly what we needed. I’ve been calling these last eight months a time of respite. We were so tired and so stressed. Moving in with Kyle’s parents has benefited us in so many dimensions. They have provided part-time childcare throughout this period, which relieved so much of the time pressure we were experiencing. Kyle and I could leave the house together without the kids, which was incredible, especially once we started house hunting in earnest. Our kids had two more people they got to interact with on a daily basis.

On the financial side, Kyle’s parents refused any payment for living expenses, not rent, not utilities. Our only financial contribution to the household was to take over the majority of the grocery spending. Therefore, starting in September 2020, we increased our monthly savings rate into our down payment savings account to $4-5k. The balance in the account at the end of 2020 was $115k.

That saving rate continued at the start of 2021. We also put the second and third rounds of stimulus that we received into the account. When our respective sets of parents saw that we actually started house hunting, they also gave us a combined total of $86k. That a lot lot lot of money. We were not expecting or counting on those gifts at all. We are obviously really grateful to our parents for passing those on to us. The addition of those gifts put us well over the 20% down payment plus closing costs target, and we even have enough left over to do some needed repairs and upgrades to the property we bought. We’ll get into that momentarily.

Before we move on from this section, I want to point out some advice or observations:

1) I think it was psychologically important to us that we had a named savings account open for our down payment. Having a certain place to house money for any particular goal keeps it front of mind and prevents you from mixing money intended for that goal with your other money.

2) It was a good step to have a set savings rate going into that account on a monthly basis, when we did, and also to know that we would put any financial windfalls, like our self-tax refund, into that account.

3) Living rent-free with family members is an very, powerful financial move if it’s agreeable among all parties. We wouldn’t have done it if not for the pandemic, but I’m really grateful that we had the opportunity.

4) If you suspect your family might be planning to gift you money for your down payment, I suggest trying to find a way to get that conversation started earlier rather than later. You can tell from our tally that over half of our down payment fund was sourced from gifts, most of which we didn’t know about until the eleventh hour. We could have done more optimal financial planning if we had known they were going to arrive. Then again, it does feel good that we had some skin in the game.

5) Speaking of optimal financial planning, I’m not thrilled that we had cash sitting around since 2014 waiting for us to buy a house when in hindsight it could have been invested. Throughout this whole period, we sort of continually thought that buying a home was about two years off. For a two-year time horizon, cash makes the most sense. But that two years was actually up to seven years in our case. I am glad that we maintained our 20% retirement savings rate, because at least that money benefitted from the incredible market returns in recent years.

So my suggestion is to not skimp out on your retirement savings unless you have a really firm timeline on when you’ll buy. You might even invest part of your down payment fund if you are confident that you have time to weather any market downturns. We knew that we would be able to remove our contributions to our Roth IRAs and even some of the earnings if we really wanted to use them for a home purchase, so that helped us feel comfortable with a relatively high retirement savings rate.

You can see why I said at the beginning that this is a descriptive rather than prescriptive tale, right? Generating down payment money by receiving gifts from family, putting away thousands of dollars sent by the federal government for aid, moving in with your parents, and forgoing childcare is not exactly replicable.

6) Someone Willing to Sell You a Home

This last section is the story of how we bought a house in 2021, the strongest nationwide seller’s market in recent memory.

Once we moved to CA in August 2020, we saved a few searches on real estate websites that pull from the Multiple Listings Service and started passively figuring out in what areas of North San Diego County we could buy a single family home in our price range. We narrowed down our search to about 5 cities/areas. We also compiled a short list of must-have and nice-to-have features of our future home and property. That fall, we worked on making sure that the financial items I talked about earlier in the episode were all in order.

I read Home Buying for Dummies that fall to put together a game plan for getting a real estate agent and lender and so forth. Because at that time we thought we might need my income to qualify for a mortgage of the size we wanted, we agreed to file our 2020 tax return ASAP in January 2021 so that we could give that to our lender. In December and January, we also started contacting local real estate agents with the plan to interview several before choosing one.

That plan went completely out the window when we saw a property pop up in our search in mid-January. By that time, we were primarily using Redfin because we liked its search functionality best. So we saw this property come up in our search that met everything on our list and was well below the maximum of our price range. During the pandemic in California, there are no open houses, and you need a real estate agent to book a private appointment to see anything. We didn’t have an agent yet. Redfin, however, anticipates this exact situation, and so has a feature where you can request to see any property and you’ll be assigned a Redfin agent to go with you. So we did that. We also got a quick prequalification letter from the mortgage arm of our bank, Ally, for the amount we would need.

I’ll spare you the blow-by-blow, but we did end up putting in an offer on that house. The home’s list price was $675,000. Our offer was for $726,000. It sold for $746,000.

It’s very, very involved to decide whether you want to buy a particular house and put together an offer, especially a first offer, so we were working closely with the Redfin agent through that process. Ultimately, we decided that we liked working with her and she was doing a good job, and that’s how she became our agent. So that aspect of Redfin’s business model totally worked on us.

I want to take a small sidebar here about Redfin and why we liked working with one of their agents. Since we didn’t work with any agents outside of Redfin, these perks may exist elsewhere, too, so I’m not saying they are exclusive. 1) Redfin’s search engine is really nice to work with, definitely our favorite, and their app is good, too. 2) It’s seamless to view a property on the website or app and communicate with either your co-buyer or your agent. 3) Redfin takes a smaller-than-standard commission on the buy side, and the difference is refunded to the buyer at closing. 4) Our Redfin agent was on salary, so she got paid whether we bought a particular house or not. We didn’t like the commission-based compensation model of traditional real estate agents because it misaligns the incentives of the agent and buyer, so we felt much more comfortable with Redfin’s salary model. 5) If our agent was ever unavailable to tour a home with us, Redfin assigned another agent to sub in. So we never missed out on seeing a home because of our agent’s schedule.

So our first offer wasn’t accepted. But what we learned from that offer is the power of the appraisal contingency waiver in this market.

There are several contingencies in place in a standard home purchase offer that are in effect once the offer has been accepted and the house goes under contract. A contingency is a way for the buyer to back out of the deal if the contingency is not fulfilled. If you’ve talked with people going through the home-buying process before, you’ve probably heard about the inspection contingency. Once you go under contract on a house, there will be an inspection that will probably turn up a bunch of things wrong with the house. This is a chance for renegotiation, such as asking the seller to make certain repairs or give the buyer money at closing to make the repairs. If that negotiation does not go the way the buyer wants it to, the buyer can exercise the inspection contingency and get out of the contract without penalty, or even do so without negotiating. There are numerous contingencies that are standard for a contract, including the inspection, financing, and appraisal.

So that’s how contingencies work once you’re under contract. When you make an offer, in a strong seller’s market it’s common to waive as many of the contingencies as the buyer is able to and comfortable with. In our case, we could not waive the financing contingency because we were using a mortgage to buy the home. We would not waive the inspection contingency, and the market wasn’t quite strong enough to make that a common tactic. One of the reasons we lost out on that first offer was that we did not waive the appraisal contingency, whereas the winning offer did.

So what is the appraisal contingency? The buyer and seller agree on a price for the home, and during the contract period the home is appraised, which means that it is assessed by a professional and assigned a value that it could be sold for. In a not super hot market, this value is typically at or above the agreed-upon sales price, and everyone is happy. In a rapidly rising market, like we’ve seen this year, it’s typical for the agreed-upon sales price to be above the appraisal. That becomes a problem if you’re using financing, because the bank will usually not lend you more than its assigned fraction of the appraisal value.

To use round numbers, let’s say that you go under contract on a home for $220,000. You were planning to put down 20%, which is $44,000. But the appraisal comes back at $200,000. Your lender is going to say, nope, we are going to lend you 80% of $200,000, which is $160,000, not 80% of $220,000. Your choices at that point are to 1) get another appraisal that you hope comes back higher, 2) bring to the table $60,000 in cash to make up for the appraisal shortfall, 3) decide to redistribute your cash to fully cover the appraisal shortfall and instead put down less than 20%, or 4) exercise your appraisal contingency to get out of the contract if the seller doesn’t renegotiate the purchase price.

Now, it is apparently possible in some cases for the lender to give the buyer the go-ahead to waive the appraisal contingency with the agreement that the lender will still put up their agreed-upon percentage of the sale price, no matter how high the price goes. Our lender did not agree to that.

In our experience in the San Diego housing market in 2021, appraisal waivers are commonly used, and when multiple offers are in play, it’s likely that the seller will pick one that has this particular waiver. We didn’t use an appraisal waiver in that first offer, but we did in our second and third offers.

Speaking as a layperson and first-time homebuyer, waiving the appraisal contingency really scared me. Not only am I coming to the table with my 20% down payment plus closing costs, but now I have to potentially bring even more cash to the table just to make the deal go through, and that cash is above and beyond what an unbiased professional thinks the home is worth. And there’s no real upper limit to how much cash you could be asked to bring because you won’t know for sure what the house appraises for until you’re under contract. Suddenly the cash that we had saved and been given that far exceeded our projected 20% down payment seemed like it might not be enough.

Our agent and lender reassured me that even if we waived the appraisal contingency, we could still get out of any contract that we go into on the financing contingency. Apparently they are somewhat redundant. If the appraisal comes in lower than we expected and we didn’t want the house any longer, we could ask our lender to say they won’t lend to us the needed amount and use the financing contingency to cancel the deal. Of course, nobody wants a deal to be canceled in this way, so Kyle and I had to decide for each of our subsequent offers where we used an appraisal contingency waiver how much of an appraisal shortfall we were willing to make up with cash and consequently how low the appraisal would have to come in for us to exercise the financing contingency.

The second house we put in an offer on was listed at $769,000. Our offer, assuming the escalation clause was exercised, was for $860,000. That house received 21 offers, and the seller’s agent counted with 7 of the them, including us. He asked for certain changes to everyone’s contracts and to submit our highest and best offer, no more escalation clauses. We stuck with $860,000. The house sold for $861,000. It turns out that the winning buyer agreed to “beat any other offer,” and retained a tacit escalation clause following the counterofferr. That one was a heartbreaker.

The third house we put in an offer on was listed at $675,000. Our offer was for $746,000 with an escalation clause up to $756,000. The winning offer was all cash for $730,000.

At that point, we were totally emotionally exhausted. We had toured 13 homes and made 3 offers. Each one was completely wrenching for us. Quick decision making is not our strong suit, but it is necessary in a fast-moving market. Typically homes would be listed between Tuesday and Friday. We would tour them on Saturday, usually, and then have to submit an offer by Sunday or Monday. Each tour day involved at least 90 minutes of driving each way between LA and SD plus more driving to each of the homes. Every week and weekend were consumed with this process, and we were getting tired.

Remember that list of must-haves and nice-to-haves from before we started the search process? It had about tripled in length by that point. Touring houses and making decisions about whether or not to make offers really helped us clarify what we were looking for. We were able to become much more specific about our search parameters and could better decide based on a listing whether it was worth it to tour a home. We had also increased the top end of our price range by about $150,000.

On our last weekend of touring, we saw six houses on Saturday! Even though we had gotten a lot more specific about what we wanted, those six all made the cut. We noticed while we were out that there were way fewer buyers around than there had been on other weekends. Usually, we would show up for a 15- or 30-minute appointment and there would be someone finishing up their appointment just as ours was starting or would be waiting for ours to finish, often both. Sometimes, houses would be 100% booked for showings. However, that weekend, we had several appointments where no one was seeing the house immediately before or after us. It was a very noticeable aberration.

That was a very long day and very long weekend. After seeing the six homes, we only immediately ruled out one, so we debated putting in an offer on any of the other five. We slowly whittled down the list until we had just one remaining, but we simply didn’t feel strongly enough about it to put in an offer. We were very disappointed that we weren’t seizing our opportunity to make an offer on the low-volume weekend, but we just couldn’t do it by the end of the day on Sunday.

All day on Monday, we wondered if we had made a mistake by not making an offer on that last-to-be-ruled-out house in particular. On Tuesday, when the houses that went under contract over the weekend change their status to ‘pending,’ we saw that house’s status changed to ‘back on the market.’ We immediately contacted our agent, who told us that she had spoken with the listing agent and that the house had not received any offers. We knew this was our second chance and we moved fast. We put in an offer for below list price that day. We didn’t waive any contingencies because we knew we we weren’t competing with any other buyers. The sellers countered for asking price, and we went under contract for $700,000.

Kyle and I have speculated about why we got this house for asking price, which the house also appraised for, when virtually all the other ones we were interested sold for so far above asking and appraisal. I know we got lucky, but maybe our luck could be strategy for someone else. The following are some pieces of maybe advice for a hot market.

1) We stayed in and kept pounding the pavement. Even though we were tired, we didn’t take a break, we just refined our process.

2) Because we were out there just about every weekend, we recognized that weird low-volume weekend as an outlier and our chance to win a bid with less competition than usual.

3) We overlooked our house’s poor showing. I honestly think the listing agent made a major strategic blunder by listing when she did, which we benefitted from. The house was renter-occupied when it was listed, which meant 1) it was only shown for four hours total that weekend and 2) the house was not empty or staged, but rather cluttered with the renters’ possessions. The garage and living room were all but inaccessible due to the volume of stuff crammed into them. The windows were covered with a thick tinting film, so the house appeared very dark. It had a strong smell from the renters’ cooking. Finally, there was a necessary and obvious repair that had been neglected by the owner. The house apparently did not make a good first impression on the limited number of people who were able to see it that weekend, which resulted in there being no offers until we changed our minds. If the agent had waited to list until the renters had moved out, which they did a couple of weeks later, I think the sellers would have had a completely different result. On our end, none of the items that I just listed were the reasons we initially passed on the house. We really were able to overlook those cosmetic issues and focus on the fundamental attributes of the house.

The next month, between going under contract and closing on the house, is not something I hear people talk about as much as the first stage. It’s not as thrilling as house hunting, but a lot more work get done. I definitely developed a new appreciation for our agent. There is a lot of communication, negotiation, and paperwork, and we were really glad to have a professional guiding the process as well as support from numerous other professionals. On our side, we almost pulled out of the deal like three more times as new information came to light, but we ultimately decided to stick with it, and we now officially own that house.

My advice for you on finding someone willing to sell you a house is:

1) Start early figuring out where you want to live. Research your market thoroughly months or years in advance of when you actually want to start house hunting. You can do this through tracking prices, visiting the various target areas, and talking with people who live there. Ideally, you would actually live there for a while before buying. We wish we had been able to do this.

2) In non-pandemic times, I suggest going to a lot of open houses. I think we would have really benefitted from a period of casually seeing houses in person to expand and refine our list of must-haves and nice-to-haves. For example, a big difference for us between simply visiting someone’s home and evaluating whether or not we wanted to buy it is that in the latter case we brought a range finder to measure distances and calculate square footages. We developed opinions on how large a bedroom or a dining area or a backyard should be for our home that we didn’t have prior to starting house hunting.

3) Interview real estate agents. I am happy with the agent we worked with, but I’m not happy about how we sort of defaulted into working with her. And do consider Redfin. We had a great experience with the company.

4) Shop around for a loan, again well in advance of when you make your first offer. On our agent’s suggestion, we worked with a local mortgage broker, which was a great experience. But we also got our own quotes from several lenders and even one other broker to make sure we were getting the best rate. A piece of advice I got from Sam Hogan was to ask each potential lender for the official loan estimate. Quotes can take on any format, so a potential lender might be able to make theirs look more attractive by omitting or shifting around some of their fees. Loan estimates have a consistent formatting across the industry, so it’s actually possible to compare them directly.

5) Once you’re ready to submit offers, as I said earlier, pound the pavement consistently because you never know when conditions will align for you to get an offer accepted, like in our case.

6) Trust your agent, or rather find an agent that you can trust. Our agent was not super directive in telling us how much we should bid on a particular house, but she did provide us with information and market insights and to help us make the decisions. She helped us respond to shifting market conditions, like starting to use the appraisal contingency waiver.

Conclusion

We’ve come to the end of the episode! I hope this gave you some insight into what it takes to buy a home, particularly in a HCOL area in a strong seller’s market. Please know, however, that it is often possible to buy a home without all of the advantages that we had. Our financial profile is quite strong at this point because of our age, post-PhD incomes, and the gifts we received, but if you don’t have those things going for you, you may still be able to buy a home. Of course, that depends a whole lot on where you’re trying to buy. In fact, buying a home at an early age could put you in an even stronger financial position by your mid-30s than we are in, especially if you house hack or force appreciation in your home.

Best of luck to you in your home-buying journey! Sam Hogan and I will be answering any question you have about being a first-time homebuyer as a grad student or PhD this coming Thursday, May 6, 2021. Register for the call at PFforPhDs.com/mortgage/. Please join us!

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