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This Grad Student’s Defensive Financial Planning Paid Off During the Pandemic

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In this episode, Emily interviews Maya Gosztyla, a third-year graduate student in biomedical sciences at the University of California at San Diego. Maya has experienced major financial ups and downs over the three years since her first podcast interview. Her husband was unemployed for over a year between moving with her to San Diego and pandemic hiring freezes. However, she managed to support both of them with her grad student stipend and freelance side income thanks to negotiating for a spot in her university’s subsidized housing program. Now that her husband is employed again, they are aggressively pursuing FIRE through investing and enjoying occasional splurges.

Links Mentioned in the Episode

This Grad Student’s Defensive Financial Planning Paid Off During the Pandemic

Teaser

00:00 Maya: My husband didn’t have a job lined up at that point. We weren’t too worried, because San Diego’s a pretty big biotech hub. And so we were doing pretty well on just my stipend end of 2019. We got to 2020, things changed a bit. And so what we thought was going to be just like maybe like, you know, worst case, a six month-unemployment period, turned out to be like over a year of unemployment for him. So it was at that point that I was really happy that I had made the decision to choose a school that I could pay for on just my stipend. Because if we didn’t do that, we would have had a lot of debt after paying for just us that year.

Introduction

00:34 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 11, Episode 1, and today my guest is Maya Gosztyla, a third-year graduate student in biomedical sciences at the University of California at San Diego. Maya has experienced major financial ups and downs over the three years since her first podcast interview. Her husband was unemployed for over a year between moving with her to San Diego and pandemic hiring freezes. However, she managed to support both of them with her grad student stipend and freelance side income thanks to negotiating for a spot in her university’s subsidized housing program. Now that her husband is employed again, they are aggressively pursuing FIRE through investing and enjoying occasional splurges.

It’s January now and you know what that means: Tax season is upon us! At some point in the next three or so months, you will prepare and submit your 2021 tax return, and I am here to help. I have just released the 2021 version of my annual tax return workshop for graduate students, which is titled How to Complete Your Grad Student Tax Return (and Understand It, Too!). The goal of the workshop is to assist you in calculating and reporting your grad student income and maximizing your higher education tax benefits using your qualified education expenses. It supports your federal tax return preparation process whether you use software, employ a human tax preparer, or fill out the IRS forms directly. The workshop comprises videos and worksheets, plus I will hold live Q&A calls throughout tax season for any follow-up questions you might have.

There is another upcoming deadline that graduate students, postbacs, and postdocs should be aware of. The 2021 quarter 4 estimated tax payment is due on January 18, 2022 unless you plan to file your tax return by the end of January. This payment deadline may apply to you if you were paid by a fellowship or training grant for part or all of 2021 and no income tax was withheld from your paychecks. You can find out if you are required to make this payment by filling out IRS Form 1040-ES. If you need some help with calculating your payment, please join my workshop, Quarterly Estimated Tax for Fellowship Recipients. It shows you how to fill out every line of the form and answers common questions from the PhD population, such as when to make these payments if you switch onto or off of fellowship in the course of the calendar year. The quarter 4 live Q&A call for this workshop is scheduled for January 9, 2022. You can find links to these two workshops plus all of my free tax resources at PFforPhDs.com/tax/. By the way, I license both of the workshops that I just mentioned to university clients at a discounted bulk rate, so it’s well worth asking your graduate school, graduate student association, postdoc office, etc. if they are willing to purchase either or both on behalf of yourself and your peers. I hope you will use my resources to ease much of the stress of tax season. Again, you can find everything linked from PFforPhDs.com/tax/. Without further ado, here’s my interview with Maya Gosztyla.

Will You Please Introduce Yourself Further?

04:12 Emily: I am delighted to have back on the podcast, Maya Gosztyla. She’s actually contributed to the podcast three times before. So back when she was a postbac fellow, we did a full interview and season two, episode four, that was mostly about her side hustle. We’re going to hear an update about that later on today. And then she’s also given us two short updates. So season seven, episode 16, she gave us a quick update on how her finances and life were going. And then in season eight, episode seven, she was one of my anonymous guests on the podcast episode on negotiating your grad student stipend and benefits. So, because, you know, we’ve been kind of loosely in touch over the past couple of years. I know that a lot of interesting things have happened in Maya’s finances since we did our full interview. So I asked her to come back on the podcast to talk about all these various developments. So, Maya it’s really great to have you! Would you please re-introduce yourself to the listeners?

05:01 Maya: Yeah, definitely. I’m excited to be back on here after a couple of years. There are some updates. So yeah, my name’s Maya, I’m currently in my third year of my PhD program at UC San Diego studying biomedical sciences. And before this, I did my undergrad at Ohio State. And then I did a one-year postbac at the NIH.

Freelance Side Hustling

05:20 Emily: Yes. And so, that earlier interview that we did was all about your side hustle. So can you fill us in a couple of details about that side hustle?

05:27 Maya: Sure. So I’ve been doing this since like senior year of undergrad. I do some freelance science writing. And since then, I’ve gotten a little bit into science consulting and some freelance programming as well. So I’ve been doing that for a while, and it’s just kind of a way to both supplement my income and also to get some connections with various industries that I might not have met otherwise through my main research.

05:47 Emily: Yeah. I love that you started this side hustle so well in advance of grad school. So it was kind of already established. It’s really kind of hard to get something off the ground as a grad student, but I love that, you know, you already had it going and just had to maintain it.

How Taxes Played a Role in the Decision to Get Married

06:00 Emily: Okay. So we’re just kind of going to step through the last couple of years, since we published our interview. We conducted the interview in maybe like late 2018, early 2019, you were applying to grad school that year, or in that academic year. So things that have happened since then: one, I know that you got married, and I know that the timing of your marriage was influenced by tax matters. So can you explain how taxes played a role in when you decided to get married?

06:26 Maya: Yeah, definitely. So my husband and I, we actually, for a long time, were just like not planning to get married. We’d been together for close to 10 years at this point, like since high school, but, you know, neither of us is religious. We don’t really have any interest in children. So we just didn’t really see much of a need to do the whole legal marriage thing. But then as I started to research more about the kind of financial benefits of marriage, it started to become a lot more useful for us to get married, basically for like kind of a cynical my point, not very romantic view of marriage. And especially as I was going into grad school, as you mentioned, this was kind of the ideal time for us to get married. Partly because I was asking my husband to like move across the country with me and he didn’t have a job lined up yet.

07:04 Maya: So I thought that was kind of a big financial risk for him. And I wanted him to have a little legal protection, I guess. But as you said, the tax reasons were kind of the main thing. Probably most people know that when you’re married filing jointly, your overall tax rate usually goes down somewhat. That can vary depending on your exact incomes. But for us, the thing that kind of made us get married at that point was because I was still eligible for the kiddie tax from my first year of grad school, which is basically, I think it was established so that it was like people who were rich used to kind of give their adult children some of their stocks and like use that to kind of avoid taxes on their part. And so to avoid that if you’re under age 26 and you have unearned income which includes capital gains, but unfortunately also includes a lot of grad school fellowships and scholarships.

The Kiddie Tax

07:50 Maya: Your taxes are like really high on that. Like, I don’t know the exact number, but it was like 20% or something ridiculous like that. So for that first year of grad school, I was only 25. So, I think I was actually 24 going in. So like, I didn’t want to have to pay that crazy tax rate. And if you’re married, you don’t have to pay the kiddie tax. So that right there probably saved us a few thousand dollars. And it also ended up saving us more money that year because we qualified for the retirement savers’ credit which normally, you know, if it was just me, my income would have been a little bit above the limit to get like the maximum benefit. But because we were both below the limit, because my husband didn’t have a job during that first year, which we’ll get into later. Our combined income was low enough that we basically each got a thousand dollars back for that tax credit. So $2,000 plus the kiddie tax savings just for getting married that year.

08:37 Emily: Yeah. I’m sure it’s something that most people don’t think about, especially at the age that you were, you know, 23, 24, that kind of age. So yeah, people want to learn more about the kiddie tax like issue, I have an article on my website it’s linked from PFforPhDs.com/tax. You can find it linked from there. But basically, it’s pretty little known, but as you said, it’s meant to tax unearned income, but unfortunately fellowship income is defined in the same way. It’s defined as unearned income. And so yeah, grad students and postbacs like you were, can get into this strange, like potentially higher tax situation. Now around the time that you were like getting married, making these decisions, the kiddie tax was going through a little bit of a shift. So I think maybe in the year that you got married, it was the worst that it ever got because it was yeah, like the Tax Cuts and Jobs Act, which was passed, I guess at the end of 2017, so effective in 2018, it increased the kiddie tax rates up to the like trust rates.

09:38 Emily: But then after a year or two, they realized what a problem that was, especially for low-income college students. And so they brought it back down to like your parents’ tax rate, which is what it was before. Which is great if your parents are low income and that’s the reason you’re receiving grants and stuff. But like for a lot of graduate students, we received this kind of aid for merit reasons, and not necessarily because your parents have this or that kind of income. And so it can hit students and postbacs and stuff who are not dependents of their parents. So not necessarily even receiving support from their parents, but their parents’ tax rate is considered in their tax rates. So it’s really messed up. But as you said, marriage gets you out of this. It’s like the get out of jail free card for the kiddie tax, and for some other matters like this. So yeah, as you said, not very romantic, but a very practical reason. If you’re already set on being together long-term to have the legal protections, as you said, of marriage in place, and having these kind of extra weird tax benefits, like you mentioned the retirement saver’s credit as well for your husband, presumably.

10:35 Maya: Yeah, it ended up being really important, especially during my husband’s unemployment period, because one of the things that came with marriage was that he can be on my health insurance. And when he aged out of his parents’ health insurance, we would have had to pay much higher rates if we were not married. So it was a benefit that I wasn’t like even thinking about going in, but things like health insurance, also the ability to like open an IRA and contribute for each other. Like since I don’t have any earned income during grad school, I normally wouldn’t be able to use an IRA, but being married lets us do that. And there’s probably even other financial benefits I haven’t figured out yet. So I think it’s a good thing to be aware of that even if you don’t really have like romantic or religious reasons to get married, it’s sometimes still useful just for the financial reasons.

Marriage Penalty or Benefit

11:12 Emily: Yeah. I want to say actually a small correction because it was the case that you couldn’t contribute to an IRA, but that law has changed as of 2020. So even with fellowship income. But for your husband, now, if your husband, as we’ll get into, he went through a period of unemployment. As a spouse, he can still contribute to an IRA based on your earned income. So it’s like anyway, double benefit there. But yeah, it’s really interesting. I’ll try to link it from the show notes. There’s like a graphic, it’s probably from the New York Times or something, where it shows you where there’s a marriage benefit and where there’s a marriage penalty in terms of does having, you know, this income range mean lower tax rates or higher tax rates if you’re married.

11:49 Emily: And depending on where you are, it can either have no effect, there can be a benefit, here can be a penalty, I think down where I’m assuming your tax rates are, it’s neutral, there’s no benefit or penalty. But as you get into like higher incomes and more disparate income, sometimes those things can come into effect. Super interesting. So thank you for telling us about the kiddie tax. Ah, good to be reminded, especially in tax season. Okay. So that affected the timing, the fact that you got married, the timing of it and so forth, and then okay.

Role of Finances in Grad School Selection

12:15 Emily: Going into like application season, admission season, this is kind of just after we did our interview. Did finances come into play for you in considering your various offers or your selection of where to attend graduate school?

12:27 Maya: Yeah. Finances are definitely like probably in my top five or maybe even three criteria for choosing a grad program. I think everyone knows you’re not going to be like living large on a grad stipend, but I at least wanted to not have to have finances be like something else I’d have to worry about on top of my research. And I think some people, especially if you’re going into grad school in a long-term relationship, or if you’re married, you might think that maybe it doesn’t matter quite so much, because you could rely on your spouse’s income. But especially if your spouse works in a field where jobs aren’t always long-term, it’s common for people to like get laid off quickly or switch around jobs. I think it’s really important to be able to support not just yourself, but also both of you for at least a short period of time on just your grad stipend, and not think like, “Oh, I have a spouse, so therefore I don’t have to worry about it too much.”

13:12 Maya: So like for example, in our case, I really wanted somewhere where maybe we won’t be living like with anything extra really, but at least we can survive and like pay the rent and buy food on just my income. Which is like just barely the case where I am at UC San Diego. That’s kind of like right on the border of like slowly losing money over time. But there were definitely some other schools like I’ll mention like the Bay Area, several schools in that area where their stipends are a little higher than here in San Diego, but definitely not enough to cover like the difference in cost of living. And that made me really hesitant to choose any of those schools.

Subsidized Housing

13:43 Emily: Yeah. I really appreciate your mindset going into this. “Okay. I want to be able to support two adults, if necessary, for a short period of time.” And I know this is a situation that often comes up for international students who are bringing spouses along with them who don’t have, you know, the clearance to work in the U.S. And so that’s a major, major consideration for them. I’m really glad you brought that up. And I’m glad that you mentioned like other schools, California, different areas. Now some schools, like ones in the Bay Area maybe, and I know at UCSD, offer subsidized housing. So how did that come into play with your decision-making?

14:16 Maya: Yeah, housing is like, I think for most people, their biggest expense. So any way I could bring down my housing costs was a big plus for me. One of the schools I interviewed at was UCSF and they do have subsidized housing. But it’s not guaranteed, like you’re not guaranteed a slot in grad housing. And in general you only get to stay there like one year, sometimes two. So that was kind of like, made me a little nervous that I might have to pay full Bay Area rent for most, if not all, of my grad school. Here in San Diego, we also have subsidized grad housing. For us it’s a two-year limit. But I was able to, as I talked about in that negotiation video, I was able to negotiate into this program at UCSD, which is designed to recruit grad students to school, where they basically guarantee you a spot in grad housing as soon as you get there, and you get to stay until you graduate. So you don’t have to move out after two years. So basically once I got into that program, that kind of like sealed the deal for UC San Diego for me. It just made it like, like much more comfortably affordable and it just like gave me a lot of peace of mind to not have to worry about rent increases as much.

15:14 Emily: Yeah. That is incredible. Okay. So did you know about that program? Or was it something that you kind of inquired about housing, and then they told you about it? Like how did the conversation go?

15:26 Maya: Yeah, it was kind of actually something that my student host who was the one like driving me around to interviews told me about, because she was also in that program. It’s kind of a weird word of mouth thing. Like the university doesn’t really advertise it, but it’s also the kind of thing where like, if you bring it up, you’re much more likely to get it. So it can be helpful if you interview at a school, you know, even if no, one’s like really mentioned any subsidized housing, maybe some don’t even know about it because they’re not in like the subsidized housing, you know, special program, just like ask around. Because sometimes just knowing about it can really help your odds of finding something like that.

Negotiation Often Starts with a Simple Question

15:55 Emily: That’s incredible. And I think that negotiation often starts that way just like by inquiring sort of innocently like, “Oh, are there any like benefits I should know about? Any special programs I should apply for?” And how did you end up actually getting it? Like, was there an application process? Or how did you know that you secured the spot?

16:13 Maya: Yeah, so basically right after I got my official acceptance to the program and they wanted to know like, was there anything else that could answer my questions or things to basically convince me to join? And at that point, I basically sent them an email saying, “I’m really interested in the program. I also got accepted to this other school, which has a similar stipend, but is in a much lower cost of living city. If there was anything that UC to do to lower my housing costs, such as this subsidized housing program, I would basically commit to UCSD right now,” is what I told them. And then I just sent that email to the grad program. They went back for like a week or two to, I don’t know, discuss something. And then they just emailed me back and said, you have a slot in the program. There was no formal application or anything like that. So it was a very informal thing. I think other people who don’t ask about the program, just get that in their initial offer letter. Like if they’re just a really competitive candidate, they might get that off the bat. So I think it varies between people, but that was how it was for me. It was a pretty informal process.

17:06 Emily: It’s amazing, I won’t say everywhere, but at some kinds of programs, what recruitment strings administrators have to pull on that you would not know about if you weren’t really just like, kind of openly communicating with them. And I think it’s really smart to just say like, “Hey, like I have financial concerns right now. I’m looking at other offers, and what can we do here to like sweeten the pot?” Because as you said, you know, you’re obviously interested in the program, you know, passionate about the program and wanted to go, but like, there’s just this one thing holding you back. And that’s honesty, but it’s also a negotiation tactic. So I’m really, really happy to like hear that story again. Were there any other ways you wanted to mention that finances played a role in your decision of where to go to grad school?

[Addendum: After the conclusion of the interview, Maya shared that UCSD is increasing the rent for on-campus housing for new tenants. Maya’s apartment would rent to a new tenant for over double the price she currently pays. Therefore, subsidized housing at UCSD for grad students matriculating in 2022 may not be a deal compared with unaffiliated housing. More info here.]

Stipend and TA Requirement

17:50 Maya: The stipend was definitely the biggest thing. The other thing to look at, I think, was whether you have to TA to get that stipend. There are some programs, especially with things that are more like a biology program, as opposed to like a biomedical program, where you sometimes have to TA multiple quarters to basically get that stipend, which can really extend your time to graduation. So even if you’re making the same amount, like if you have to be an extra year in grad school, that could cost you like a year of entry-level industry salary, that could be a six-figure difference. So having a program where you may have to TA like one quarter, or like maybe not at all, can make a really big difference to not have to like extend your graduation time, which my program, we only have to TA one quarter. So as soon as that’s done, you can just focus on research. So that’s a big help as well.

18:31 Emily: Yeah. Super, super good point. And I cover this in my course inside the Personal Finance for PhDs Community called like Decipher Your Grad Student Offer Letters or something like that. And that’s one of the points that I go into is like, what is the reason that you are receiving this stipend? What do you have to do to receive it? And if you’re receiving a stipend because you’re TAing, then that is a time commitment. It’s at a part-time employment time commitment of you that doesn’t necessarily exist at all if you’re on fellowship or if you have a research assistantship where, you know, you’re working towards your dissertation the whole time. So really, really important point for any prospective graduate students to consider. So thank you for that.

Commercial

19:09 Emily: Emily here for a brief interlude! Taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2021 tax return, which are available at PFforPhDs.com/tax/. I hope you will check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which are linked from PFforPhDs.com/tax/. I offer one workshop on preparing your annual tax return for graduate students and one workshop on calculating your quarterly estimated tax for fellowship and training grant recipients. The 2021 quarter 4 live Q&A call for the quarterly estimated tax workshop is this coming Sunday, January 9th. Please be aware that the deadline to make your quarter 4 payment, if applicable, is January 18th if you are not planning to file your tax return by the end of January. It would be my pleasure to help you save you time and potentially money this tax season, so don’t hesitate to reach out. Now back to our interview.

Financial Transition at the Start of Grad School

20:45 Emily: Okay. So let’s kind of fast forward. You’ve chosen UCSD, you’ve gotten married, you’re starting the school year. Tell me about the move, the transition to graduate school, especially financially.

20:56 Maya: Yeah, so we moved, I think basically the day after my fellowship at the NIH ended. We just like moved right to San Diego and started getting moved in. My husband didn’t have a job lined up at that point. He has a bioengineering just bachelor’s degree. We weren’t too worried at that point because San Diego is a pretty big like biotech hub, and he was already like getting some interviews after we moved there. And so we were doing pretty well on just my stipend end of 2019. Obviously, we got to 2020 things changed a bit. He’d been getting a lot of interviews and actually already had an offer in hand. But as soon as the pandemic hit, that offer got rescinded. Companies started going remote only and didn’t really want to train any new kind of biology, tech positions like that. And so what we thought was going to be just like, maybe like you know, worst case, six-month unemployment period turned out to be like over a year of unemployment for him. So it was at that point that I was really happy that I had made the decision to choose a school that I could pay for on just my stipend. Because if we didn’t do that, we would have had a lot of debt after paying for just us that year.

21:52 Emily: Yeah. That’s I mean, you couldn’t have seen what was coming, but like your just general emergency worst case scenario like planning really kicked in there. So that’s great. I can’t imagine it was very pleasant. Do you want to share anything about how, I mean, I guess everyone was kind of not really doing anything for most of 2020, like how did it go for you in terms of like actually living on that one stipend?

Managing Living on One Stipend

22:17 Maya: Yeah. I mean, one thing that definitely helped a lot with, I think I mentioned in my original interview that I had been saving really aggressively during my postbac to get kind of an emergency fund built up. And I still had that during grad school and that was super helpful. We ended up not really needing to touch that. We didn’t have any major emergencies, but just knowing that, if something came up, like, especially, you know, what if one of us had to go to the hospital or something, we would have that cushion was really helpful. But on the other hand, with like zero cashflow every month, like I was just really hesitant to spend at all beyond my stipend. Like, you know, if we had to use some of that emergency fund, we’d have no way to replenish it at all. So we had to be kind of like kind of hermits for the whole year.

22:54 Maya: Having subsidized housing definitely helps. One of the things that helped were, like, for example, we share a really old used car that we bought in cash before we moved here. It was very cheap. And I actually don’t even use that car. I bike to lab every day. So there’s basically no like gas maintenance costs at all. We just have that for like buying groceries once a week. So that definitely lowered the cost a lot. Parking is also really expensive in San Diego, so that saved us I’m sure several hundred a month easily. And also things that weren’t really within our control, like for example, loan forbearance, like, you didn’t have to make any loan payments. If we had to make those payments, we probably would have been like bleeding money a little bit during that year, for sure.

23:30 Maya: And then also my side hustle, which we mentioned, I kind of like cranked that up a little bit during that year for obvious reasons, and my husband did some of that too, while he was applying for jobs which, you know, it doesn’t bring in that much money. You only have so much time as a full time grad student to side hustle. But having that extra couple of hundred a month was like really helpful, allowed us to kind of like, maybe once a month we’d like get some takeout and like that money would come from my side hustle. So just like those, you know, occasional things where we’re just really tired and just want some cheap Chinese food or something. Like we could actually do that without having to be super anxious about just like taking from our emergency fund for that kind of thing.

Dual-Income Household

24:02 Emily: Yeah. Thank you so much for sharing that. It sounds like a difficult time, like not really having any outlets, like sort of literally, and also financially. But, eventually the corner turned and he did get a position. And when did he get his full-time job?

24:19 Maya: He first started at the beginning of this year, so just like January 2021, making very little money, like basically the same as my stipend, which is like pretty low. But then like a month or two after that, he got a new job at a different company paying quite a bit more. So we actually have some like positive cashflow, which is like a very welcome change after more than a year of having very little money.

24:39 Emily: Yeah. That’s awesome to hear. And I guess there’s been sort of a sea change with employment generally in that time. And so he probably has a lot, I don’t know, it’s actually a good time to be getting jobs like now, or, you know, earlier this year. That sounds really good.

24:52 Emily: So finally, you had a dual income household. Did you make any changes to your finances? Aside from maybe having a little bit of, you know, loosening up on the purse strings a bit. Did you have any like financial goals that you were working towards, or anything like that?

Financial Goals with Dual Income

25:05 Maya: Yeah, definitely. It was definitely like a pretty slow process. Like I think probably for the first six months of this year, we kind of still lived like hermits, because we just didn’t know like, you know, what if he loses this job again? Like what if like there’s another resurgence in the pandemic and things close down? Like we just didn’t know what’s going to happen. But I just started getting into summer and like things were kind of semi getting back to normal, we did a couple of things to kind of like actually start not just like saving money but investing it. So we’re both really interested in like FIRE, like financial independence retire early. And we had basically had been making zero progress on that, because obviously we just didn’t have any money to invest. But now we actually are able to do things like take some of our savings and put that into our IRAs.

25:40 Maya: And we’re able to max those out this year for the first time. We also had some just for our actual emergency savings, we converted some of that into I bonds, which pay a little bit more interest, like something, I think they’re like five or 6% right now just to keep up with inflation which we couldn’t do before, because you can’t touch them for a year after you put them in I bonds. But now that we have like a bit more of a buffer, we felt comfortable doing that. So we get a little more interest there. And the other thing was that I still do my side hustle, but I’m much more selective now. I’m not just like working crazy hours all weekend. And I’m able to basically just take the jobs that like pay really well per hour and are also interesting to me. And now that money, instead of being like spent every month, I just put it all into a solo 401(k). So that’s all just kind of extra money that our budget never sees. It just goes right into our investments.

Side Hustle Balancing Act

26:27 Emily: Yeah, I want to follow up on that a little bit. So that’s cool that you’ve been able to make these extra moves in your finances, like especially doing the IRAs in 2021. That’s awesome to hear that. Yeah. Talk to me a little bit more about the side hustle. So now that you, you know, feel like you don’t to have the money coming in because you’re depending on it, you said you’re more selective. Does that mean that you’ve increased your pay rate either what you’re asking for, or just you only select jobs that pay more?

26:53 Maya: Yeah, so basically, there’s kind of a balancing act, right? So if you increase your pay, you get fewer customers, but you also like maybe you don’t need as many because you’re making more. So during the pandemic, I kind of had a certain balance where like I wanted to just like maximize money per month, regardless of like hours. But now that I’m limiting myself to closer to like five hours max per week, oftentimes less, I’m definitely cranking up the pay. Like these days, since I have a good bit of experience, I charge a hundred dollars an hour or more sometimes to offer these clients. And they’re all things that I like personally enjoy. They’re not just like boring articles that I’m slugging through. So that’s been helpful, both to just like keep me motivated, like I think I would’ve started to hate it if I had to keep doing it for just any job that would come in. Now it’s more of just like a hobby that I happen to get paid for.

27:35 Emily: Okay. Hold up. So you just said that you work about five hours a week and are looking at a hundred plus dollars per hour. So that’s 2000 a month, if you work consistently. Now that’s rivaling your stipend. I mean, I’m sure your stipend’s a little bit higher, but we’re in the same, like ballpark now. That’s incredible. And so you are, as I understand, you’re not incorporating any of that income into your budget, it’s just going straight into your individual or solo 401(k), right?

28:01 Maya: Yeah, definitely. I mean, I don’t always do five hours a week. It’s kind of the upper limit, but yeah, it’s kind of tough. Sometimes I’m even tempted. I’m like, why am I working extra hours in my lab when I could be making like 10 times this hourly rate on my side hustle? So yeah, it’s like very tempting to work more at it. Honestly, I’ve had to kind of like restrain myself.

Networking via Science Writing

28:17 Emily: That’s something that’s really, really good to be thoughtful about. Because like, so for you, does this freelance writing play into your ultimate career goals? Or is this just something you do for the time being?

28:28 Maya: It’s something I’m just trying to keep open as a door. I don’t think I’d want to be like a full-time science writer, but it’s more just like I’m meeting a lot of people at companies. Like I’m more interested in like a research biotech type position. But a lot of the jobs I do, even though they’re writing, are for like biotech and pharma companies. I’ve even had people like offer me like jobs as like maybe like if you drop out of grad school, we’ll give you this job. And I’m obviously not going to do that, but be great to follow up within a few years and be like, “Hey, I actually graduated. Can I get a job there now?” So it’s more just like those connections that I think are really valuable rather than the actual, like specific writing experience that I’m doing.

29:00 Emily: That is amazing that it can serve as a networking tool as well for your future position. But yeah, I do think it’s smart to limit the number of hours you spend on this because obviously the graduate degree and how well you do with that and how much you publish, whatever, it’s still going to matter for getting your next position. So yeah, don’t leave grad school to do your side hustle full-time. But yeah, that’s an amazing rate. I’m so, I mean, like you said, you’ve been doing it for several years, it’s been what, like four years now or something? So like you’ve built up the skills and the networks and so forth. But like, that’s awesome. So that’s rivaling your stipend, but it’s all going into investments. You’re pursuing FIRE. I do want to mention, I have, again a course inside the Personal Finance for PhDs Community called, the title is like Best Financial Practices for Your Self-Employment Side Hustle.

29:45 Emily: And it goes into the choice of what retirement account to use. If you have, it’s like basically for exactly your situation: you’re in grad school or a postdoc or whatever. You have a side income, you’re self-employed, you’re already maxing out your IRA. What do you do next? And you know, not being offered a 403(b) or whatever through your primary position. Well, because you’re, self-employed, you have the opportunity to open up a self-employment retirement account. You chose the solo 401(k). I did the same thing for my business, so I know what an incredible tool it is. But that is like, if your goal is FIRE, that is really supercharging your progress compared to what you would be doing, you know, just as a grad student who’s not side hustling, so wow.

Being Selective with Clients

30:23 Emily: How are you, I don’t know, like, it seems like there are so many benefits doing it. Like you said, the money you needed it. Now it’s more of an elective thing. And the networking. How do you stay motivated to do that work?

30:36 Maya: Yeah, I think it helps that I’m just very selective in clients. And like, for example, even if the work is interesting, if the client is even kind of like slightly annoying, like if they don’t respond quickly or they like ask for a bunch of edits and don’t want to pay you extra for it, I just like don’t have a reason to take them. So I think it helps to kind of value yourself and to charge what you’re actually valued. And I would encourage people, even if they, like, I started out like, I think like 10 or $20 an hour when I first started. But every single time I got a new client, I would ratchet up that rate just a little bit. And I was expecting like, there to be kind of a cliff when no one would hire me anymore. But like, people kept hiring me.

31:09 Maya: I think some companies like, you know, even if they’re paying me a hundred dollars an hour, if I’m only doing like one or two hours of work for them, like that’s like nothing to their company budget. So even if it feels like a really high rate to you and it makes a big difference in your budget, oftentimes companies will just like take your high rate as a sign like that you must be good at what you do, and they’re willing to pay it. So I would encourage people if you’re doing any kind of side hustle to like slowly increase it until you start to like lose clients and then you can kind of back off.

Advice for Starting Freelancing

31:35 Emily: That’s really, really good advice. And do you have any advice for someone who wants to get started with this line of work? Thinking back to when you were doing it in college, like how did you get your first few clients?

31:44 Maya: Yeah, that’s definitely the hardest part is getting your foot in the door. It helps to use Upwork and those kinds of freelancing websites. Just because if you don’t have any way to like find clients, it’s pretty hard to like get them to hire you. Thos sites, you take a pretty big kind of your pay. It’s something like 20% usually, which can feel kind of painful, especially when you have to pay like 30% ish self-employment tax on top of that. But it helps to start out there. And then sometimes if you have a long-term client, you could go just like bill them directly after you’ve established yourself on there. So using those sites is helpful. And also just kind of networking. If you know like anybody in your lab or anybody else who has some experience in the area that you’re trying to get into, they’re almost always willing to help you find the job. Like I’ve given other people who I’m friends with science writing jobs. Like sometimes if I don’t have time for a client, I’ll like send them to one of my friends who wants to get started and like, they don’t have any experience yet, but because I recommended them and they trust my opinion, they’ll get that job. So those two things together, like being on the website and getting help from other people who are in that network are really helpful.

32:45 Emily: Amazing, amazing advice. And I do want to add, we did a podcast interview with Courtney Danyel in season six, episode 17. Courtney has a business called Endless Freelance Income. So she’s a freelancer herself, plus she teaches other people how to do this. So that’s a great interview also, if you want to get started with not just freelance writing, but like a variety of sort of services that you could do on a freelancing basis. So that’s incredible.

Breaking Away from the Poverty Mindset

33:07 Emily: Maya, it’s been so wonderful to catch up with you! Is there anything else that you want to add about what’s been going on with you financially over the last couple of years?

33:14 Maya: Yeah, I think it’s just definitely been a big time of transition. We’ve gone from just like being pretty much broke, like not really broke because we had an emergency fund, but feeling very broke to actually having like more than double the income we had last year. So yeah, it’s been really nice to be able to not only work toward our investment goals, but actually be able to like, as you said, buy some things that actually improve our life a little bit. Like even just small things we never would have bought last year. Like for example, we have to carry out groceries like about quarter mile from our car to our house. And so we finally bought like a wagon, like it was like a hundred dollars to buy this wagon and like, it is the best purchase we made.

33:46 Maya: Like we never would have bought that last year, but just that’s like now it seems like a small expense. It’s like, well worth it. Like recognizing those things that like, okay, now you can actually afford these things like greatly improve your life and like probably our health so that we’re not like breaking our backs with like tons of groceries. Like that’s really nice to have. So I think it’s good to recognize, like, even while you’re pursuing your investment goals, like still save a little bit to like, not be like having that poverty mindset and trying to actually improve your life a little bit too.

Financial Independence, Early Retirement (FIRE)

34:12 Emily: Totally, totally agree. And I’ll just add another question in here. Your motivation for pursuing FIRE, financial independence and early retirement. You’re in grad school, it seems like you’re planning for a long and wonderful career. How does FIRE play or not play with your career goals?

34:30 Maya: Yeah, it’s kind of a weird thing for people to say in grad school. I think sometimes it’s like, why would you go to school for this long if you don’t want to like work your career for much longer after that? I personally don’t think I would necessarily want to fully retire once I hit that number. Partly for me, it’s just a security thing. Like, you know, if I’m in a job I don’t like, and I want to maybe take a year off and go on sabbatical and then come back and maybe it’ll take me a while to find a new job. I want to be able to do that. And even if I think for now that I really love doing what I do, maybe when I’m 45, I won’t like it anymore. Maybe I’ll never want to look at a pipette ever again, who knows.

35:01 Maya: And also just the freedom for like, for example I’m really interested in the idea of working less than 40 hours a week someday. Maybe even as a freelance basis, like not necessarily in writing but maybe as a consultant or something like that, like maybe just a freelance bioinformatician. I don’t know having the freedom to do that as well is nice. So I don’t necessarily plan to do the traditional, like I hit 45 and I have X dollars, so I’m just going to retire. I have like a lot of options available to me now.

Best Financial Advice for Another Early-Career PhD

35:26 Emily: That’s great to hear. I’m actually, well, by the time this is out, by the time we publish this, this will be out again inside the Personal Finance for PhDs Community. I’m currently working on writing an e-book. It’s going to be titled something like How to Pursue FIRE in Grad School. And so I just love it when I get to meet someone who is doing that and get their like reasoning behind it and how they’re doing it. And the strategies that you’re using are now going to be kind of featured in that e-book. So that’s awesome. If the listener is interested, you can check it out, PFforPhDs.Community. Maya, again, it’s been so wonderful to talk with you. Would you please answer, I don’t think you got to answer this the last time we talked, share with the listener your best financial advice for another early-career PhD?

36:04 Maya: Yeah. So I’d say kind of like a three-pronged approach with it. I think, I don’t remember who, some professor told me this like a long time ago, which was like invest aggressively in your future, and then invest aggressively in your current self. And then everything that isn’t those two things, like cut out pretty ruthlessly. So I think what he meant by that was basically, you know, even if you can only invest $50 a month in your IRA, like do that and commit to it. Also invest in your current self, like, you know, these are my twenties, like I’m not going to be 25 again. So like if someone’s like going whale watching this weekend and it’s a hundred dollars, like if I can make that work, I’m going to do it. I’m not going to be like, “Oh, that could have been going into my retirement.”

36:39 Maya: So it kind of balance those things and be pretty aggressive about doing the things that are really important for your current self and your development as a human. But everything that isn’t those things, like just cut out. Like, you know, I could buy a car, it would make my life mildly more convenient to not have to bike every day. But that’s not something that I feel like really enriches me as a person, or it makes me that much happier. So I don’t do that. So I think that’d be my advice is to figure out like, what is really important to you now and in the future. And don’t feel any hesitation about having to cut out things that aren’t in those two categories.

37:08 Emily: I have never heard it put that way before, but that really resonates with me in my like current mindset towards money. So I’m really glad that you shared that with us. Maya, thank you again for joining us! It’s been wonderful to catch up with you!

37:20 Maya: It’s good to talk to you! It’s been a good three years overall, despite the rocky start.

Outtro

37:29 Emily: Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? I have collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. If you’ve been enjoying the podcast, here are 3 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with a email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and increasing cash flow. I also license pre-recorded workshops on taxes. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

Catching Up with Prior Guests: 2021 Edition

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Emily published the first episode of this podcast in July 2018. This is the one hundred and fiftieth episode, and over the last three and a half years, the podcast has featured 134 unique voices in addition to Emily’s. The last episode in 2021 catches up with the guests from Seasons 4 through 6. The guests were invited to submit short audio updates on how their lives and careers have evolved since the time of their interview. They also included their best financial advice for an early-career PhD if their answer has changed since the initial interview.

Link Mentioned in this Episode

Episode image of Dr. Emily Roberts with the title "Catching Up with Prior Guests: 2021 Edition" and the subtitle "Money Stories with Various Contributors"

Teaser

00:00 John: You know, life doesn’t wait and you can still be financially sound while in graduate school.

Introduction

00:10 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts.

00:19 Emily: This is Season 10, Episode 20, and today I am featuring many guest voices! I published the first episode of this podcast in July 2018. This is the one hundred and fiftieth episode, and over the last three and a half years, the podcast has featured 134 unique voices in addition to my own.

00:41 Emily: For our last episode in 2021, I thought it would be fun to catch up with the guests from Seasons 4 through 6, and a couple from earlier seasons as well. I invited them to submit short audio clips to update us on how their lives and careers have evolved since the time of our interview, as well as to provide their best financial advice if that has changed since our initial interview.

01:03 Emily: The audio clips in this episode are ordered by when the original episode was published. If you’d like to circle back and listen to any of the previous interviews, you can do so in your podcatcher app or at my website, PFforPhDs.com/podcast. To keep up with future episodes, please hit subscribe on that podcatcher and/or join my mailing list at PFforPhDs.com/subscribe.

01:28 Emily: You’ll hear an update from me first, followed by the rest of the guests. Happy listening, and I am wishing all good things for you in 2022!

Dr. Emily Roberts

01:43 Emily: Hi! This is Emily Roberts from Personal Finance for PhDs. I am of course the host of this podcast and you hear from me every week!

01:52 Emily: It seems strange to say, but 2021 was a banner year for me and my family.

01:59 Emily: On the personal side, my husband and I bought our first home, which I discussed in great detail in Season 8 Episode 18. We now live in the San Diego area, which has been our dream for over a decade. Our children are in kindergarten and preschool, and after being out of school for over a year due to the pandemic, it’s really wonderful for our family to be in a routine and for them to be around their peers. We are loving playing tourist in San Diego and enjoying the incredible weather and wealth of outdoor activities.

02:32 Emily: As for my business, Personal Finance for PhDs, I am so grateful that it has grown quite a lot in the last year. I’ve simplified my paid offerings so that I can focus on what seems to be in highest demand: 1) my personal finance seminars, both live and pre-recorded, which are hosted by universities; 2) my tax workshops, which can be purchased by individuals or in bulk by universities; and 3) the Personal Finance for PhDs Community, which individuals can join. To each of you who have joined the Community or one of my workshops in 2021 or recommended me within your university, you have my sincere thanks. The reason I can continue to create this podcast and all of my free resources is the revenue that I generate in these other areas.

03:20 Emily: I’m really looking forward to starting 2022 off strong with tax season and admissions season. If you know any PhDs-to-be who need help in either of those areas, please send them my way!

03:32 Emily: Thanks for listening to my update! If you want to get in touch, you can visit my website at PFforPhDs.com or find me on Twitter @PFforPhDs.

John Vsetecka

03:49 John: Hi everyone. It’s John Vsetecka from Season 2, Episode 2 on the personal finance for PhDs podcast. Several years ago, I got to talk with Dr. Emily Roberts about negotiating PhD offers and I wanted to just offer a quick update on how I think that has benefited me up until this day. So since that time, many things have happened. I got married during this time. I’ve moved and now I’m actually living outside of the US. I am currently in Kiev, Ukraine working on the last stages of my research for my dissertation, so I am now at the tail end of my graduate career.

04:29 John: When I last spoke to Dr. Roberts, we discussed how to go about negotiating PhD offers and I want to offer an update now about why I still think you should this. When I was applying to programs prior to 2017, I was able to successfully negotiate offers at several universities. This has really, I think benefited me to this day because I was able to choose the school, not only with a great funding package, but also great benefits that I’ll talk about in just to second. I know things have changed since the pandemic and many programs last year halted admissions, and this has made many programs and departments more competitive, and so you might be a little hesitant to negotiate an offer if you receive one, but I still think you should. If you receive a funded offer and you should absolutely make sure that any offer you receive is funded, this is really important, I think you should still ask if there’s anything else that that department or program can do for you.

05:29 John: Now, this can mean more money. This can mean insurance benefits. This can mean grant money, travel money, or any other resources that they have. See if there’s anything else that they can tack onto your package to help you be more successful in your program. And if you’re fortunate enough to have multiple offers, you should still negotiate these and see which one is the best one for you. And this might not be the one with the most money, but I think the ones that tend to offer the most money and the most incentives tend to be the best bet for your graduate career because life doesn’t wait and you can still be financially sound while in graduate school, if you can start by looking at what your department can offer you so you can plan ahead and make the best of your earning while you’re in graduate school.

06:18 John: So my advice remains the same. Again, if you receive multiple offers, don’t be afraid to ask. In some ways this is just like a job offer. It’s okay to negotiate. It’s okay to ask what else they can do for you. You’re going to do a lot for them. Don’t be afraid to reach out to the director of graduate studies or whoever’s in charge in your department and see what else they can do for you, if your package sort of insinuates that maybe there’s more that is available. I’ll leave you with that and of course, if you have any other questions about graduate school or negotiating offers, you can always get in touch with me on Twitter. My handle is @JohnVsetecka, or you can feel free to email me, it’s [email protected]. Best of luck to those of you who are applying and I hope you have successful negotiations.

Dr. Lourdes Bobbio Smith

07:22 Lourdes: Hi listeners. My name is Dr. Lourdes Bobbio Smith and I’ve been on a few episodes of the podcast. I was first on Season 3, Episode 11, where I gave a budget breakdown as an NDSEG fellowship recipient at Penn State University. I was also on Season 5, Bonus Episode 1, where I discussed my life as we entered social distancing in early 2020, and on Season 6, Episode 18, where I discussed some best practices as a side-hustling graduate school. Since those episodes, I have defended my PhD, started a business and gotten married.

07:55 Lourdes: In my first episode I spoke about how I use targeted savings accounts to save for various mid- and long-term financial savings goals, which hasn’t changed. My husband and I were able to fund our wedding with a combination of the wedding targeted savings fund I discussed in the episode, as well as savings my now husband had, and some generous gifts from our parents.

08:15 Lourdes: Since getting married and joining finances with my husband, we still use the target savings accounts, but we’ve modified what those different savings buckets are. Buying a house, which was previously a long term goal, has now become a more short to mid-term goal as we are looking to settle down in a house of our own. We also recently adopted a cat and my husband’s car is on the older side, so we are making sure to keep a pet fund and a car fund well funded as part of our monthly targeted savings. Investing is also a big priority in our household, and we’ve been able to max out our Roth IRA for 2021 and invest outside of the Roth in taxable brokerage accounts.

08:52 Lourdes: Post-PhD I’m working on a few different things. I have a job as a research associate at Penn State, I continue to work with Emily on this podcast, and I’ve also started a wedding stationery business this year. It’s been a fun adventure to learn both the management and financial sides of owning a business. I initially invested some of my own money, but it’s been self-sustaining for the last few months and I will even be turning a profit in my first year in business. 

09:17 Lourdes: I was asked to give my best financial advice for early-career PhDs and I would say, invest as early as you can, even if it doesn’t seem like you can contribute a lot. When I was first on the podcast, I was early in my own investing journey, only able to contribute a little each month, and it seemed like the progress was slow growing. But even in the two years since then, I’ve been able to see how powerful compound interest can be when it comes to growing your money.

09:44 Lourdes: If you’d like to connect online, you can find me on Twitter @lourdesb1012, that’s l o u r d e s b 1 0 1 2. You can also find my business on Instagram @cardsmithdesignstudio. Thanks for listening and have a good new year!

Jane CoomberSewell

10:08 Jane: Hi Emily! It’s Jane CoomberSewell of CoomberSewell Enterprises here, and we last chatted back in Season 2 (editors note: this should be Season 4), Episode 8, and we talked a lot about working on a budget, and self-sufficiency when you have a family and you’re doing a PhD and you’re also running a business. We talked a lot about menus, budgeting, gardening, both for practical reasons and for your mental health. And in terms of early career financial advice, none of that’s really changed except remember to have some fun. So occasionally after you’ve obviously dealt with all the bills, go and have a drink with friends, or have a meal out, or go and do what we did at the weekend, which was go and have a game of bowling, but only with adults, no children in tow. It was lovely.

11:03 Jane: Thanks so much for the timing of this as well. I finally got to my graduation yesterday. Within the business, Joyce, my other half has very much rebranded herself as an autism advocate and that’s going really well. And for me, I’m concentrating on research, but not in the academic sense. So at the moment I have two family biographies that I’m writing that people are paying me, have commissioned me to write, as well as attempting to turn my thesis into something slightly less theoretical for the commercial market. That’s my update. Everybody take good care and if you want to get in touch, it’s [email protected].

Abigail Dove

11:53 Abigail: My name Is Abigail Dove, and I was on Season 4, Episode 9, where Emily and I discussed the graduate Student Savings Act of 2019. I spearheaded the endorsement of this bill by the Federation of American Societies for the Advancement of Science, also known as FASAS, as part of a science policy fellowship. The graduate student savings act is a bi-partisan bill that allows graduate students and postdocs to be able to contribute income from a fellowship stipend to an individual retirement account or IRA. Previous IRS wording prevented contributions from fellowships as they were considered unearned income.

12:27 Abigail: Since we recorded that episode, I have a few big updates on the personal side. I have a daughter who is 18 months old, and I will be defending my PhD in a couple weeks and looking forward to the post-graduate student life.

12:40 Abigail: The big update in relation to the episode where I appeared on is that trainees can now contribute to IRAs while receiving fellowship stipends. The language from the Graduate Student Savings Act was added to an omnibus spending bill HR 1865, and was passed into law at the end of 2019. Emily did touch on this update after our interview to share the good news with everyone in a bonus episode in season four, for more information, be sure to check out that episode. But this is really fantastic news for anyone on fellowship stipends and wants a say for retirement.

13:11 Abigail: My updated financial advice has thus changed a result of the new laws. Since everyone is now allowed to contribute to an IRA, I highly recommend that if you have the financial ability to do so, do it. There’s a maximum contribution cap for IRA accounts and right now that cap is set at $6,000 for anyone under the age of 50. Additionally, there are income caps, but graduate student stipends are unfortunately well below those income caps so not something that we often have to worry about. That $6,000 cap may sound intimidating, so contribute what you can or put aside a fraction of your paycheck towards an IRA contribution. It’s never too early to start contributing to a retirement account, and it’s a good spending habit to start. And no amount is too little.

Commercial

13:57 Emily: Emily here for a brief interlude! Are you a graduate student, postdoc, or early-career PhD considering buying your first home in the foreseeable future? If so, I invite you to join the Personal Finance for PhDs Community for a Book Club discussion of First-Time Home Buyer: The Complete Playbook to Avoiding Rookie Mistakes by Scott Trench and Mindy Jensen of BiggerPockets. I and all the Book Club participants will read the book and come together for a one-time live discussion in January 2022. This is perfect timing for anyone with an eye on the spring or summer 2022 peak buying season. Since it might be hard to find this book in a public library, I will give you a copy of the book after you join the Community. If you want to join the Book Club for First-Time Home Buyer, please fill out the survey, including your availability for the discussion, at PFforPhDs.com/BookClub/. That’s P F f o r P h D s dot com slash B o o k C l u b. Now back to our interview.

Patrice French

15:03 Patrice: Hi my name is Patrice French, I was interviewed on Personal Finance for PhDs on November 25th, 2019 Season 4, Episode 15. I am still a full-time employee and am near the end of my doctoral program. I will defend and graduate in spring 2022. Since then I have made some major financial changes. I’ve sold my house, given the strong seller’s market. I have paid off all of my debt except for my student loans and will be eligible for a student loan forgiveness in March of 2022. I plan to transition to a career outside of higher education, in industry, and will likely relocate. As far as the best financial advice I can give for early career PhD is really create some clear goals in mind and create a plan from which to meet those goals. But don’t put a lot of pressure on yourself if things come up. Save, save, save! I have multiple savings accounts for things so that it doesn’t really dip into my income. So if I have car repairs, I have a car repair savings account and things of that nature. And definitely don’t pay for an educational program if you don’t have to. I can be reach on Twitter at @FrenchieMSW. And that’s it.

Dr. Zach Taylor

16:44 Zach: Hey everyone. This is Zach Taylor. I was on Season 5, Episodes 10 and 11. I’d like to give a little bit of an update. I’ve taken a new position. I’m now the assistant director of admissions for communication at Texas State University. It’s the first institutional position that I’ve had after having my PhD because I graduated into the pandemic and that was a very tough job field. But I wanted to give a few updates about how I think a little bit of my advice has changed since COVID 19 has happened and has really changed the landscape, especially of graduate education in the social sciences.

17:27 Zach: I know a lot of the harder sciences like your chemistry or engineering requires graduate students to be in a lab, working with physical materials, but a lot of social sciences PhDs, things like higher education where I came from, sociology, psychology at times, does not require you to be physically in a classroom. And I think people aspiring to earn a PhD, people in graduate school right now need to think how important is the on campus, in the classroom environment? How important is that physicality? And can you save money by taking online classes or taking hybrid classes. Think to yourselves about how much time and money is spent on commuting, especially in urban areas, coming from an Austin perspective. If I was still going to school living where I live now, I would have at least an hour long commute, including a car ride, a bus ride, and a walk. And that hour could be used to make money, could be used to do academic work.

18:29 Zach: So I think that might really change my perspective on the advice that I would give for an early career PhD is really considering online options, in addition to everything else I spoke about — the cost of living in your area, what you’re willing to go without and how you can side hustle to make a little bit extra cash. If anyone has anything that they want to reach out to me, please do so. My email is [email protected], just my initial ZT at U Texas dot edu. Thanks everyone.

Dr. Rachel Blackburn

19:08 Rachel: Hi, this is Rachel Blackburn and here is my update. So since I last recorded the episode of personal finance for PhDs (Season 5, Episode 12), I actually got thinking about finance quite a bit. I was in a tenure track position, teaching as a professor, but I decided that the thought of not getting tenure, and that forthcoming potential instability was a little bit much for me. And I also considered what if I do get tenure and then I’m committing to this place for the long term and is that what I really want? And the thought hit me, when’s the last time I got to choose where I lived? I also took a look at the finances because I was teaching at a public university, I was able to take a look at salaries and I could see that even by the time I might get full professor, if that was what was in the cards for me, that my salary would not go up by a whole lot. It occurred to me that I really wouldn’t reach my financial goals. So I decided to leave academia.

20:18 Rachel: I’m still researching and publishing and writing, but I have left teaching and I’m now a learning consultant for a public company. In leaving my position as a professor and moving on to this company, I gave myself a 70% raise. I’m now making more than I would be if I were a full professor at my previous university. Now I’m learning all kinds of things about employee stock purchase plans and things like that. So that’s actually where I’m at now. I’m saving more money than I ever thought I would. And I feel like I’m meeting my goals a lot faster, so it’s great. And I’m still teaching, I just do it now on behalf of developing training material for a company. That’s where I’m at and thank you again. Good luck everyone! Bye!

Courtney Danyel

21:19 Courtney: Hi! This is Courtney Danyel. I was on (Season 6) Episode 17 of Personal Finance for PhDs, and my topic was how freelancing can take your career from academia to affluence. And that’s my brand AcademiaToAffluence.com, where I teach other people with an academic background how they can learn to freelance and grow their online income like I did. We talked about how I actually only work maybe 15 or 20 hours a week, but I earn full-time income as a freelance writer. And the reason I’m able to do that is because I find writing gigs that are highly specialized in my niche and so I’m able to earn higher income for work that takes me less time to do.

22:04 Courtney: We also talked about how freelancing gave me the freedom to travel around the world and live wherever I want and so I’ve been spending the past seven years actually living in Africa, in Ethiopia. Since that episode, which was back in August, 2020, I’ve actually immigrated back to the United States, where I continue to freelance and I continue to work maybe 15 or 20 hours a week on that, but now actually have another part-time job here in the United States also. Another great thing about freelancing is that it gives you the flexibility if you wanna have multiple careers you can have them, and you can earn full-time wage as a part-time influencer and pursue a career in academia or elsewhere, which is really nice. That’s something that’s changed in life since I was first on the podcast.

22:53 Courtney: My best financial advice for any early career PhD is to diversify your income. Give yourself options. Be a freelancer, be an academic, have your own business, do something on the side, but never put all your eggs in one basket and always have options for yourself so that when life changes or you want to make a change, like I have recently, you can do that. If anyone has questions about applying your skills from academia to a freelance career like I have done, please do shoot me an email. You can contact me at [email protected]. Thank you!

Meryem Ok

23:36 Meryem: Hi everyone, this is Meryem Ok recording on Friday, November 26, 2021. While I typically work behind the scenes as an editor for the podcast, I was featured in Season 6, Episode 18, along with fellow Virtual Assistant Lourdes Bobbio, for an episode about Best Practices in Side Hustling During Graduate School. As I mentioned in that episode, one of the reasons that I’m grateful for my side hustle is that the extra income provides me with a cushion for those occasional purchases that might happen outside of my usual spending habits. This really comes in handy especially around this time of year when there are a lot of birthdays in my family, in addition to the holiday season, so my spending on gifts and eating out tends to spike up a bit.

24:24 Meryem: This past semester, one of the financial adjustments that I made was when my university moved from paying fellowship recipients on a monthly basis to a once-per-term model. At first, I was pretty uneasy about the change, but after talking to Emily and sitting in on some town halls, I felt more prepared and ready to strategize. When that first lump sum arrived in August, I immediately contributed part of it to my Roth IRA and moved most of the remainder into a high-yield savings account. If you want to learn more strategies, check out Emily’s blog post, “How to Financially Manage a Once-Per-Term Fellowship Paycheck.”

25:06 Meryem: As a personal and professional update, I recently changed my Twitter username, so it’s now @Meryem_T_Ok, if anyone is curious to learn more about my MD-PhD journey and intestinal stem cell research. Shoutout to all my fellow grad students on the research grind – I’m rooting for you and hope you have some time to recharge in the coming weeks. 

Outtro

25:37 Emily: Listeners, thank you for joining me for this episode! pfforphds.com/podcast/ is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes’ show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast. I’d love for you to check it out and get more involved!

Emily: If you’ve been enjoying the podcast, here are 4 ways you can help it grow: (1) Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. (2) Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. (3) Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and effective budgeting. I also license pre-recorded workshops on taxes. (4) Subscribe to my mailing list at PFforPhDs.com/subscribe/. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps!

Emily: The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

How to Pursue FIRE in Graduate School

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

Links Mentioned in the Episode

Introduction

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

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

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

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

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

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

How to Pursue FIRE in Graduate School: Introduction

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

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

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

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

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

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

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

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

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

What is FIRE?

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

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

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

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

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

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

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

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

How do you pursue FIRE?

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

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

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

In brief, the Framework Steps are to:

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

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

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

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

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

What makes grad school different?

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

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

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

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

My Personal Favorite Steps

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

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

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

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

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

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

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

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

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

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

Conclusion

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

Outro

Listeners, thank you for joining me for this episode!

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

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

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

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

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

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

This Grad Student Purchased a House with a Friend

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In this episode, Emily interviews Courtney Beringer, a second-year PhD student in civil engineering at Oregon State. Courtney joined the Personal Finance for PhDs Community near the start of grad school; the Community taught and encouraged her to create an emergency fund, open and fund a Roth IRA, file an accurate tax return, and calculate and pay her quarterly estimated tax on her NSF GRFP income. When Courtney started grad school, she was curious about the possibility of buying a home, and over time decided to purchase a house with a fellow grad student. By renting out two of the bedrooms in their house, Courtney and her friend have nearly completely eliminated their housing expense, even in a market where it wasn’t possible to buy on a single grad student income. Listen through the end of the episode for short bonus interview with Sam Hogan, a mortgage originator specializing in graduate students and PhDs, for his take on Courtney’s co-borrowing strategy.

Links Mentioned in the Episode

This Grad Student Purchased a House with a Friend

Teaser

00:00 Courtney: I know some people might be wondering, like, why would I buy a house in somewhere where I’m only going to live for four or five years? But like, I’m not paying rent or a mortgage right now. And I also get to hopefully sell my house in three to four or five years and make money off of its appreciation. And maybe I don’t sell in four to five years and I could actually move away and I can hire a management company to manage tenants. So there are possibilities beyond just the time where you’re physically in that city to use your house hack.

Introduction

00:40 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 10, Episode 18, and today my guest is Courtney Beringer, a second-year PhD student in civil engineering at Oregon State. Courtney joined the Personal Finance for PhDs Community near the start of grad school; the Community taught and encouraged her to create an emergency fund, open and fund a Roth IRA, file an accurate tax return, and calculate and pay her quarterly estimated tax on her NSF GRFP income. When Courtney started grad school, she was curious about the possibility of buying a home, and over time decided to purchase a house with a fellow grad student. By renting out two of the bedrooms in their house, Courtney and her friend have nearly completely eliminated their housing expense, even in a market where it wasn’t possible to buy on a single grad student income. Listen through the end of the episode for a short bonus interview with Sam Hogan, a mortgage originator specializing in graduate students and PhDs, for his take on Courtney’s co-borrowing strategy. You’ll be able to hear in the course of this interview just how excited I am to bring Courtney’s story to you. I am quite bullish on house hacking for graduate students, and I believe Courtney’s strategy can make it accessible to far more graduate students.

02:01 Emily: If you get excited about home ownership during this episode, whether as part of a house hack or not, I have two special upcoming events to invite you to. First, on December 16, 2021, Sam Hogan and I will hold a free live Q&A call where we answer any and all questions pertaining to becoming a first-time homebuyer. This is a perfect event to attend if you’re getting your finances prepared to purchase a home next spring or summer. Go to PFforPhDs.com/mortgage/ to sign up for the call. Second, I am hosting a live Book Club conversation in January 2022 on First-Time Home Buyer: The Complete Playbook to Avoiding Rookie Mistakes by Scott Trench and Mindy Jensen inside the Personal Finance for PhDs Community. I’ll even buy you a copy of the book after you join the Community. Fill out the short form at PFforPhDs.com/bookclub/ to indicate your interest in the conversation and I’ll be in touch about scheduling! Without further ado, here’s my interview with Courtney Beringer.

Will You Please Introduce Yourself Further?

03:13 Emily: I am very pleased to have joining me on the podcast today, Courtney Beringer. She is a second-year graduate student at Oregon State in civil engineering, and she is a founding member of the Personal Finance for PhDs Community, which you can find at pfforphds.community. So, what we’re going to discuss in today’s episode is how the Community has helped helped advanced, help shape Courtney’s finances in this first year of graduate school. And in particular, we’re going to focus a lot on Courtney’s house hack, which I’m really, really excited to learn more about and tell you more about. So, Courtney, thank you so much for joining me on the podcast. And will you please tell the audience a little bit more about yourself?

03:53 Courtney: Yeah, thanks for having me, Emily. I’m happy to be here. Yeah. As she said, my name is Courtney. I’m from Iowa, but moved to Oregon for grad school. I have an undergraduate degree in mechanical engineering and I’m here for civil engineering. And yeah, in my second year of my PhD, I have a few more left, looking to do a postdoc after that and become a faculty member.

Finances Before Grad School

04:16 Emily: Awesome. Well, take us back to like when you were not yet enrolled in graduate school, but thinking about graduate school. What were your finances like at that time? And also what was your outlook about finances in graduate school?

04:31 Courtney: Yeah. Overall, I felt comfortable in my finances. I’d worked a lot of jobs in undergrad, and I actually took a year and a half break between undergrad and grad school and worked a full-time engineering job, which paid pretty well. I already had a really decent savings and I had mutual funds, but I basically knew nothing about retirement or buying a house or perhaps how I knew I was going to go to a lower income going to graduate stipend and how that might affect my change in lifestyle as well.

Finding and Joining the PF for PhDs Community

05:07 Emily: And so tell us about how you, I guess, came to find me and Personal Finance for PhDs and why you joined the community.

05:15 Courtney: Yeah, so about two years ago now, I applied for grad school and started getting offer letters coming in and wanting to understand how to compare them. And I was applying for a lot of different fellowships and wondering how that could be leveraged in my offer letters. And then I found Personal Finance for PhDs, I believe on just by Google searching and finding the website and then finding Emily’s resources and reaching out for that like 15-minute call. And feeling like this Community, it was really somewhere where I needed to be in order to grow and understand my finances as a PhD student.

05:57 Emily: Yeah. So it sounds like you had some solid basis in terms of like a little bit of savings in place and so forth, but really needed more like of that grad school-specific, what is going on with fellowships what’s going on in academia, like kinds of questions, which is exactly what I try to offer. Okay. So we have a picture of, of where you are financially when you started graduate school, what was one of the first like actions that you took within your finances having joined the Community?

Open a High-Yield Savings Account

06:24 Courtney: Yeah. So going through your like step-by-step framework, I had savings, but I didn’t necessarily have a specific amount set aside that I should have in savings, or I hadn’t thought about it in a more critical way. So the first thing I did was look at putting a chunk of money that supports me over X amount of months in a high-yield savings account, because the one that I had always used was not that high. So I went through the videos, I chose my savings account, and based on the Community, I was able to keep myself accountable and was able to put in, like I chose the savings account and I just transferred my money in, and here’s an accountability step where I can tell other people that I did that. And yeah, now I get to check my savings out and see it grow more than it was before.

07:20 Emily: Awesome. I’m so glad to hear that. So, the framework that you mentioned is this eight-step financial framework that I teach in a few different places around the Community. I have kind of a series called The Wealthy PhD, which is both an e-book and now a video series, although that didn’t exist when you first joined. So I’m curious, is your emergency fund, that sounds like a step six emergency fund, is that right?

07:43 Courtney: Yes. Yes.

07:47 Emily: And so, did you also work through the steps prior to that point? Or was it just like, I have some cash, so I need to define this as emergency savings and put it in a more optimal place as you did? Like, did you go through all the other steps as well?

07:59 Courtney: I think, based on where I was at in my finances, a lot of the other steps had been covered, so I’d already paid off all my school debt, I didn’t have any credit card debt. I worked through a lot of that. So that was really like the next step that I had not tried to do yet, or even thought about.

Invest in an IRA

08:20 Emily: So step four in the framework is starting to invest. And you mentioned earlier, you didn’t really know anything about retirement accounts. So, did you also start investing, or have you been focusing on other financial goals?

08:30 Courtney: Yeah, kind of around the same time as making that emergency savings, I also looked into the IRA investing and watched those videos. And then in a similar manner, was held accountable by the Community and started my IRA, which I contributed fully to in 2021 and then already contributing to as well again. So yeah, that was around the same time where I was like, I have a decent savings, and I need to be doing something with it.

09:03 Emily: It sounds fantastic. Obviously you are an exemplary member of the Community in terms of like actually following through on the stuff that you learn inside there. We’ve run this a couple of times in the Community, maybe we’ll run it again soon, this challenge that I call like open your first IRA which people can learn more about that at pfforphds.com/openIRA. But basically- I just lay out like the seven step process for, okay, these are decisions you have to make, you know, to get from where you are to having your IRA open and funded. These decisions, these are the steps you have to follow through on. And I believe you went through that challenge. Is that right?

09:38 Courtney: Yeah, I did. Honestly those videos are so helpful. It helps you understand the verbiage and all the language that goes along with it. And I felt like I was making my own decision, but it was a very informed decision on it.

09:52 Emily: I’m glad it reached that tone with you because that’s exactly how I want it to be. It’s like, you know, I can’t tell people what to do. Like legally, I’m not like licensed to tell you what to do with your investments. But I can kind of give you the lay of the land, and then within that you figure out like what’s best for you. So I’m really glad it struck you that way.

Evolution of Courtney’s House Hacking Strategy

10:09 Emily: Well, I’m excited to talk about your house hack. So when did buying a house and even the potential of house hacking kind of come onto your radar?

10:19 Courtney: I feel like there were some conversations in the Community, actually, before I moved to grad school, I feel like maybe there were conversations in the Community, or I was talking to people outside of this Community as well about home-buying. And I was really excited to buy a home in Oregon before I moved here, but that was very hard to do during the pandemic and virtually and not knowing the area. So, I ended up moving here and renting for the first year. But then yeah, with the help of the Community amd reading through our book club, I felt like I started to learn a lot more about the house-hacking strategy and wanting to pursue that.

11:05 Emily: Yeah. So when you first thought about buying a house, were you thinking of it as you would live by yourself? Or were you thinking that you would be renting to roommates? Which I haven’t defined it yet, that’s what house hacking is, owning a house and renting at least one room out to somebody else.

11:18 Courtney: Yeah, actually at first I was like, oh, I’m in grad school. I want to live alone. I’m like becoming more of an adult. But then when I looked more at just the cost of living in this area, it was not as feasible as I thought it might be. And my first year living with roommates went really well. And I was like, I think this could continue. And I’m okay with roommates in grad school. So, then my mindset transitioned to more of the house hacking rather than living alone.

The House Hacking Strategy

11:53 Emily: And so, I did time our reading in our book club of The House Hacking Strategy for when people would be thinking about, you know, there’s a seasonality to buying a home. So we were reading that in like maybe Februaryish, 2021. So anyway, the book is The House Hacking Strategy by Craig Curelop. I learned a lot from reading that book. Apparently, you did as well. How did that book influence the decisions that you made after that point?

12:20 Courtney: It lays out a lot of different house hacking strategies based on your level of comfort. And so I found the one that I was looking for, which was, you know, I buy a house and I rent out maybe one, two, or three of the rooms, and I have my own room, and my tenants could maybe be my friends or maybe not. And that was my level of comfort. It also influenced me to talk to my other good friend in grad school about buying a house, and we were both looking at buying separately. But then we compared our finances and realized that we actually wanted to buy a house together.

13:02 Emily: Yeah, this was, I mean, to be frank, I was a little concerned when you first brought this up inside the Community, like can this be done in a safe and responsible manner that is buying a house with someone else who frankly, you know, you’re not legally married to, which is the kind of easiest scenario under which to buy a house. Of course, many people do this with a romantic partner without being married, but then you’re taking that a step further and buying it with a friend. And so it’s very unusual, and you have to be careful about it. So I really want to understand better about how you did that. But like, I mean, you’ll explain it to us, but if other people are thinking that this might be, you know, feasible for them to buy with a friend and still be able to house hack and rent out additional rooms so it’s still a source of income for you. Like, I mean, that is a complete game changer in being able to buy in many, many more housing markets than a single graduate student stipend would support, you know, right now. So tell us more about that, like partnership that you formed.

14:00 Courtney: Yeah. So there was another first-year grad student in my program and we became friends pretty quickly. And then when we started talking about buying a house, I was basically able to convince her that it’s a pretty good idea to buy a house. And then looking at the market in Oregon, it’s just, especially if we wanted to be even within a half an hour drive of our university, it was not doable with the down-payment and with just our overall debt-to-income ratio alone. And so then, one day a realtor mentioned like, “Oh yeah, I actually just showed a house to like someone your age. And there were these two women that were looking to buy it together.” And I was like, “Dang, okay. I cannot afford really anything here by myself. But I can perhaps talk to my friend about this.” And so we had a lot of long conversations about our finances and getting to know each other and really putting it all out on the table. We made a lot of documents together, a lot of like signed contracts between ourselves because we wanted that in writing.

Co-Owning a 4-Bedroom

15:17 Emily: So this is amazing that this idea came from your realtor and, you know, you had a person kind of in mind as a candidate, and then you’re able to work out all the things you need to work out. It’s actually not that unusual in the real estate investing space to have a partner. But like you have done with the person that you bought with, like, you guys have to have some legal kind of protections and some things planned out and worked out in advance to make this work. But that’s amazing. So, would you feel comfortable telling us about the house that you bought? Like some of the numbers around it?

15:51 Courtney: Yeah. So we were actually looking at three-bedroom houses, but ended up with a nice four-bedroom that is only like a five-minute drive from the university. We, I think, got a pretty good deal on it. These sellers wanted to move out really quickly. And the house I think was asking for like 250,000, but we offered nearly 270,000 because that’s where the market was at now. And then additionally, we offered more percent down, and that’s what finally sealed the deal for us to get our offer accepted. Yeah. So now we are able to rent out two of our rooms. So of course, if you did this alone, you’d be able to rent out more rooms rather than having a co-owner, but it actually works out really nicely to have a co-owner for a lot of reasons.

16:50 Courtney: We were able to split the down payment, which was very nice. Our two renters actually pay our mortgage basically fully. So we don’t pay any portion of the mortgage. We really only pay a fourth of the utilities for our home. And then we are able to put more money towards improvement of the home and sweat equity and yeah, it’s worked out really well. Another reason that having a co-owner has been awesome is that if one of us leaves, one of us is still there to manage everything. And we actually split a lot of tasks. And there are so many tasks to do as a homeowner, right? And having someone to split them with is really nice.

17:32 Emily: Yeah. I think that there is a degree of work involved with being a landlord. And I think especially as like a first-time landlord, having a partner there with you to help you like figure out like, what’s the right course of action? Like, how should we be screening tenants? Like, what kinds of house rules should we set up? Especially for you, like your case, living in the same living space with your tenants, there’s much more kind of like roommate interpersonal stuff going on as well as the layer of like the legal stuff. So I think that’d be actually really helpful to have someone going through that journey alongside you.

Setting Up a Joint Bank Account

18:04 Emily: So those numbers sound amazing that the mortgage is pretty much paid by those the rental income. Of course you still have some additional costs, like you had just mentioned home improvements, and so forth. Do you have any like structure in terms of like each of you like maybe saves a certain amount of money or contributes to a common fund that you’re buying from? Or are you kind of like winging it as you go forward?

18:25 Courtney: Yeah, we actually set up a joint bank account, which is like yeah, a whole other thing to do with a friend, but it was super easy. We have both of our names on our home insurance. And out of our joint bank account is basically where we process all of our rental income and where we process all of our home purchases. Because one thing we haven’t done yet is talk to a tax consultant about what home expenses could mean for tax write-offs. And so we want to have that all in one place. And then we actually both contribute to our joint account every month, a few hundred dollars to basically invest our home, to put towards emergency home repairs, and just make up the differences of utilities and such like that.

19:19 Emily: Yeah. Thanks for clarifying that. If anybody is interested in hearing other grad students and PhDs talk about this like house hacking strategy, I’ve actually done two previous sort of in-depth interviews on house hacking. One with Dr. Matt Hotze, and one with Jonathan Sun. Well, the one with Jonathan Sun is actually more about getting a mortgage when you have fellowship income, which is another wrinkle in that whole thing. But we’ll link those two episodes in the show notes. And another episode that may be of interest to the listeners is that I purchased my first home around the same time you did this past spring in 2021. And so I tell the story of how we made that happen. And a lot of the sort of technical things that go into this, like the down payment and like the interest rate on your loan and verifying your income and all these kinds of things. So we’ll link that from the show notes as well.

Navigating a Home Loan with Grad Student Stipends

20:06 Emily: Did you run into any like hiccups with getting the loan or getting to closing like that were related to either, you know, the partnership aspect of this or the fact that you are graduate students?

20:20 Courtney: Yes. There are a lot of confusing things with income, and know that the title company is going to be kind of confused by grad student income. And like our loan officer, like she helped us a lot, but there still was confusion about like, how are you funded this summer versus the fall? Why is it changing? Like submit all the documentation for, you know, both types of income that are coming in. And then there’s just, you know, a whole other person that has to submit all their bank information and all their financial information. So that just means like more room for, you know, missing a document here, there things being delayed. It wasn’t a huge deal, it’s just more paperwork and more people to coordinate.

21:12 Emily: Yeah. I noticed with my own journey to homeownership that like, there’s so much attention paid to the, getting to an accepted offer part of the process. And it’s very dramatic and all of that, especially this past spring, it was yeah, a very dramatic time to be buying a home. But then all the stuff that happens after, you know, you go under contract. All that paperwork, all those details, it’s not sexy at all, but there’s a lot of work that happens in that period of time. A lot of work by your real estate agent, a lot of work by you and all the other professionals involved in this process. So I was kind of impressed in a new way with the whole industry and how it works and just, yeah, how much work there is that goes into that stage.

Sam Hogan, Mortgage Originator

21:50 Emily: I will say for anyone listening, you did not use my brother, Sam Hogan as your loan originator. But other people may be interested and we will link all the episodes that Sam has been on the podcast in the show notes as well. But basically, through our relationship, like I’ve been referring business to my brother Sam Hogan, because he is now very, very intimately familiar with all the weird kinds of income that graduate students and postdocs may have, and how to present a case to the underwriters that work with his company, that you are a great person to lend to. I mean, he’s not a miracle worker. So in some cases, funding is structured in such a way that it’s not going to go forward, but basically he knows like how far he can like push it to get things accepted that may be not familiar, not accepted by other mortgage originators. So I’m glad yours went through, okay. But if anybody’s having trouble or just wants to have a smooth like process from the beginning, please contact Sam. You can find his contact information in the show notes for this episode.

22:50 Courtney: I think, another thing I’ll add is that a lot of times when people buy houses together, they’re perhaps married or have a different end goal for the house. So, there were a lot of assumptions in just documentation, like by the title company and in our loan that, you know, if one of me and my friend, if one of us were to die, like what happens to the house? And a lot of that assumes that it will just totally go to the other person, or there are a few different ways that you can co-borrow alone. And those are things that you definitely need to talk through. We actually ended up buying like a $15 legal help guide basically for co-borrowers of houses. And that was so helpful and helped us make our contracts with each other.

23:39 Emily: Yeah. That’s awesome. What kind of loan did you get by the way? Was it conventional or a different type?

23:45 Courtney: We did end up doing conventional, yeah.

23:46 Emily: Okay. And do you each have a 50% stake in this, or is there some kind of other equity arrangement?

23:52 Courtney: We both have 50%.

23:55 Emily: Amazing. Anything else you want to say about how this is working out now that you’ve been in the house for a few months, and you’ve had your tenants for a few months?

24:03 Courtney: We’ve been in it for three months. We started with two tenants who are friends who only needed a month somewhere to live, which was really great to practice with people who are a little bit lenient and understand your situation. And now we have our two tenants that are going to be in here for a year, and it’s going really well. And we’re already making updates and improvements on the house. Yeah, overall, it’s working out really nicely.

Commercial

24:35 Emily: Emily here for a brief interlude! Are you a graduate student, postdoc, or early-career PhD considering buying your first home in the foreseeable future? If so, I invite you to join the Personal Finance for PhDs Community for a Book Club discussion of First-Time Home Buyer: The Complete Playbook to Avoiding Rookie Mistakes by Scott Trench and Mindy Jensen of BiggerPockets. I and all the Book Club participants will read the book and come together for a one-time live discussion in January 2022. This is perfect timing for anyone with an eye on the spring or summer 2022 peak buying season. Since it might be hard to find this book in a public library, I will give you a copy of the book after you join the Community. If you want to join the Book Club for First-Time Home Buyer, please fill out the survey, including your availability for the discussion, at PFforPhDs.com/BookClub/. That’s P F f o r P h D s dot com slash B o o k C l u b. Now back to our interview.

Considering a Second Home for More House Hacking

25:39 Emily: Recently, when we spoke at one of our, by the way, inside the Community, we have monthly live calls where people can just show up and ask questions and talk about whatever people want to talk about with me and whoever else wants to come. You brought up the possibility of buying another home. What are your thoughts around that?

26:00 Courtney: I did yeah, me and my friend had been talking about it because once you do it once, it’s really tempting to house hack again, which is actually what the book recommends. And now that we have this house, I mean, I still need to do a lot of learning in what a home equity line of credit is, and maybe what a second house could mean. But essentially, if we bought a second house, then we could rent out all four bedrooms in our current one, and that would actually cover both mortgages and perhaps even rent out another room in a second house. So as you can see, it could just start stacking up and and improve our financial situation even more.

26:48 Emily: That’s what’s really amazing to me about these like big levers that you can pull in your finances, even as a graduate student. I’m not suggesting that this is possible in every housing market in the U.S. Definitely a graduate student stipend would not even be within striking distance in many areas. But if you happen to find yourself where you happened to choose one of these areas, owning your own place, especially when it’s combined with house hacking is one of these big levers you can pull to massively change your financial situation. And I would say actually that investing is another one. That’s the one that I focused on when I was in graduate school. I wish I knew about house hacking, I wish I had read The House Hacking Strategy if it had been published back at that time, because Durham was another place where that was possible for two graduate student stipends to do that.

27:31 Emily: But instead, I focused more on investing and that’s been a huge lever, not to immediately realize cashflow the way that you can with real estate, but in terms of like growing my net worth over the decade or so since I started graduate school, it’s been incredible. And so, if you can just get like a toehold into real estate or investing, or one of these other levers that we’ve talked about on the podcast, it can really dramatically change your finances over a relatively short period of time. And it’s just amazing. That’s part of the reason why this podcast exists is that I just want people to know the possibilities, even if you don’t want to follow through that’s okay. But just know the possibilities that are out there. Even for someone like a graduate student. So I’m so happy to have you on here because especially this new wrinkle to your story of buying with a partner, instead of on your own or with someone you’re married to or et cetera, of buying with a friend like this is an amazing solution that never would’ve occurred to me. And I’m so glad that, you know, you introduced me to it.

Final Thoughts on Real Estate

28:26 Emily: Is there anything more that you want to say about real estate or the house hack?

28:31 Courtney: Now that I’ve had more conversations about real estate and been listening to more podcasts in general about real estate, I’m realizing how good of an investment it is. And I know some people might be wondering, like why would I buy a house in somewhere where I’m only going to live for four or five years? But like, I’m not paying rent or a mortgage right now. And I also get to hopefully sell my house in three to four or five years and make money off of its appreciation. And maybe I don’t sell in four to five years and I could actually move away and I can hire a management company to manage tenants at this place that I I don’t even live in Oregon maybe anymore. So there’s possibilities beyond just the time where you’re physically in that city to use your house hack.

The Community and Quarterly Estimated Taxes

29:24 Emily: I think that’s an excellent point because that’s definitely something that I got hung up with. I talked about this in my episode on making our first home purchase that I have a bit of like regret that we didn’t buy earlier, because one of the things that was holding me up about it was thinking I’m only planning on being in this city for three, four, five more years. Does it make sense to buy? And that’s a very valid question to be asking, but you have to know again about these other possibilities of one, house hacking, which completely changes the math of, you know, the break even point of renting versus buying. And two, the possibility of holding onto that property longer, if you still think that it’s a good investment at the time that you leave the city. So I’m really glad that you brought those points up. Something else that I know that you’ve used the Community for is your tax return slash your quarterly estimated taxes. So can you just let us know how that resource has helped you?

30:16 Courtney: Yeah. My parents had always sort of handled my taxes and sent it off to some tax person and I was just sending W2s places. And the tax workshop through the Community helped me understand what’s actually going on, what numbers matter, and how I could do them on my own based on getting a graduate assistantship sort of stipend. And now that I have a fellowship that just started one month ago, I’ll be making quarterly estimated taxes on that. And so, additionally, that workshop is so helpful in understanding how to go through that process as well. So I feel way more informed about taxes and how to do them on my own. And I think I ended up filing my taxes for free this past year. So that was really awesome.

Emily’s Tax Workshops

31:08 Emily: That is awesome. Yeah. Specifically, the two workshops you’re referencing are, I have one during tax season for graduate students called How to Complete Your Grad Student Tax Return (and Understand It, Too!). If you’re interested in learning about just that workshop, you can find it at pfforphds.com/taxworkshop. So, that’s during tax season for your annual tax return. And like you said, it explains a lot around like how the types of income that graduate students have, and graduate students tend to have more income types than they think they do, how that all fits in with like the IRS language. And my goal is really to kind of teach you enough so that you can either prepare your taxes on your own, which sounds like probably is what you did, or interface with tax software or a professional tax preparer in such a way that they understand what you’re talking about and your sources of income and expenses and what’s relevant, and what’s not. Yes, you can speak their language. And so you can get an accurate tax return prepared that minimizes, ideally, your tax liability.

32:02 Emily: And then the other one is for fellowship income, and by that, I mean, non-W2 income at the postbac, grad student, or postdoc levels. And that’s at PFforPhds.com/QETax, QE for quarterly estimated. And yeah, all the things that we’ve mentioned so far are available inside the Community PFforPhDs.community for just a monthly subscription fee. That’s actually pretty much equivalent to, if you bought one tax workshop, you may as well be in the Community for a month. If you buy the other one, may as well be in the Community for a month. So that’s kind of how the pricing works. Anything else you’d like to add about the tax journey that you’ve been on? Actually, I’ll add something first, if you don’t mind. I love that you figured out the grad student part of your tax return in 2020, or rather for your 2020 taxes, because now your 2021 is going to be a lot more complicated with the real estate stuff. And so at least at this point, I’m assuming you’ll use a professional tax preparer, but you already have a good understanding of this aspect of your situation. You can rely on that person to do the real estate part, right? And come together and have an accurate tax return together.

33:04 Courtney: Yeah, definitely going to have a different tax situation this year, but certainly go through that quarterly estimated tax workshop. And I feel like I can talk to a tax preparer in a lot more informed ways and say exactly what my situation is and what I need. So that’s been really helpful.

33:22 Emily: Yeah. Any closing comments about being part of the Community or anything else that you’ve gained from it?

33:29 Courtney: I would say the conversations with other PhD students and what they’ve tried and what they liked and what they didn’t, just even talking to people like what tax preparing software did you use? What did you like about it? What didn’t you? You know, like how has preparing your quarterly estimated taxes been? How much time does that take you, or how much time should it even take me? All those sort of questions are really nice to be able to talk to other grad students about, and that’s what I get from being in the Community.

Best Financial Advice for Another Early-Career PhD

33:55 Emily: Yeah. Thank you so much. It’s been absolutely wonderful to have you in the Community. And we’ve really gotten to know each other through these, as I said, monthly live calls, especially. Okay. Last question that I end, all my interviews on is what is your best financial advice for another early-career PhD? It could be something that we’ve touched on in the interview, or it could be something completely new.

34:17 Courtney: I would say, for me at least starting out earlier was, or even pre-PhD, was applying to a lot of fellowships. And if you’re someone who’s applying for their PhD programs, having a fellowship as a leveraging tool is a great way to get into the school you want to get into, work with the professor you want to work with. And also I mean at Oregon State, at least, my graduate research assistantship is a decent amount, but my fellowship definitely is more than that and helps support my personal finances better. I am a recipient of the National Science Foundation Graduate Research Fellowship, and that’s been an awesome tool to get into the places I want to get into and make more money as a grad student.

35:15 Emily: Yeah. So the advice is apply, apply, apply, and apply well. And I would say, you know, that’s awesome advice for people entering graduate school. It’s great advice for people still in graduate school and so forth. There are a lot of fellowships available for first year, second years. Less so a little bit later on, but they’re still there and you can still keep applying. Especially if you already have the feather in your cap of having the NSFGRP, for example, that’s going to go on your CV, it’s going to make it, you know, you’ll be that much more of a standout candidate for whatever awards you apply for after this point. So that’s amazing, Courtney, thank you so much for volunteering to be on this episode. It’s been lovely to have you!

35:51 Courtney: Yeah, thanks, Emily!

Addendum with Sam Hogan

35:59 Emily: Welcome to the addendum to the Courtney Beringer episode. Thanks for sticking around. I have with me Sam Hogan, who is a mortgage originator with Prime Lending (Note: Sam now works at Movement Mortgage). He is an advertiser with Personal Finance for PhDs and my brother. And Sam has been on the podcast multiple times before. The chief episodes to listen to are season eight, episode four, where we discussed house hacking in great detail. So if you like the strategy that Courtney used, check that one out. There’s also season five, episode 17, where we specifically discussed qualifying for a mortgage with fellowship income. Although there have been updates since then. So if you want some updates, I actually have some on my YouTube channel from some previous Q&As that we did with Sam. So Personal Finance for PhDs is the name of my YouTube channel. Anyway, long-winded intro, Sam, please reintroduce yourself to the audience.

36:48 Sam: Thank you for having me Emily. Yes. I’m Sam Hogan and I work with Prime Lending (Note: Sam now works at Movement Mortgage). We’re a national lender. My NMLS ID is 1 4 9 1 7 8 6.

Sam Hogan’s Contact Info

36:59 Emily: How can people get in touch with you if they want to learn more about getting a mortgage for themselves?

37:05 Sam: The best way to reach me is definitely by text. My cell phone is (540) 478-5803. Standard data message rates apply. And if that doesn’t work, my email is [email protected].

37:24 Emily: Perfect. And I should also mention that Sam, because of our sibling relationship, Sam has been actually kind of specializing in graduate students and postdocs and early-career PhDs within the mortgage industry for the past several years. He has lots of experience in this area. So, Sam, you know, I kind of briefed you on what this interview with Courtney was about. And her, to me, very unusual and very interesting strategy of buying a home with a friend. I never talked to anyone who did that before, but it definitely seems to me that if you’re careful about it, this could be a really game-changing strategy for people who could not otherwise, you know, buy a home on their own in their own housing markets. So I wanted to know from you, strictly from a lender’s perspective, now we’re not talking about from a legal perspective about whether this is a good idea or not, but strictly from a lender’s perspective, are there any issues that are posed by putting two, like unmarried or otherwise unrelated, people together on a mortgage?

Lender’s Perspective on (Unrelated) Co-Borrowers

38:19 Sam: There’s not. It’s the same simple steps as having another co-borrower even if you’re related to them. So, normal process, like Courtney touched on, you know, just double the paperwork. And there’s no shame in bringing on a co-borrower even if you’re unrelated or a friend, to jump on a mortgage and then, you know, as long as everyone can stay responsible and consistent, then it’s very little risk.

38:47 Emily: Is it pretty common for there to be co-borrowers on a mortgage? Let’s say, aside from a married couple, is it pretty common to have a parent or another relative or a sibling or a friend or something like that going on?

38:59 Sam: I would say about 50% of the loans we originate have co-borrowers on them.

Exit Strategies for Co-Borrowers

39:07 Emily: Can you just kind of at a high level go over what are the exit strategies? Not for Courtney, specifically, but let’s say we had another person listening who’s like, “Oh wow, my best friend and I would love to buy together, but of course we don’t want to be in a house together indefinitely.” So how, if you enter into this kind of relationship, how can you later on dissolve it?

39:27 Sam: Refinancing off is one. You can obviously sell the property and pay off the mortgage. You could turn the property into a rental. That would allow you to cover the mortgage, maybe some extra income. But that would actually keep both borrowers on the loan. If one borrower wanted to move away, recoup what they’ve gained from home ownership and moved on to their next goal. The borrower that’s still living in the property could take a key lock, a home equity line of credit against the home, which is not refinancing. It’s just basically a line of credit given to you in cash for however much you need. Obviously you’d have to meet the regulations and rules for loan to value, but you can’t take 100% of the value of your home out, for example. But they would take a line of credit.

40:23 Sam: You would be able to pay out your original co-borrower that got you into the loan. Say, “Hey, this is 50% of the equity we’ve gained over the last X amount of years.” And just on top of that money being sent, just have something in writing. I’m not an attorney or anything, but just disclosing that, “Hey, we, we made an agreement. You know, I’m going to have full ownership and take you off the title and have a put claim deed filed. So you’re off the title, then we’re going to pay you some equity from the home.” That would be the easiest way to do it. Yeah. It’s not as complicated as people would think. Like you’re not signing your life away forever. You’re just signing to get into it. And if you want it to, you know, change your living scenario year later, it’s definitely possible.

41:07 Emily: Okay. Yeah. Thank you for that insight. So I just want to say again, the message that I want to get across here from Sam is like that this is not that unusual, not that complicated. You can get out of it in a variety of ways once you want to. But of course, we’re talking with a mortgage originator. We’re not talking with a lawyer. So like there’s other perhaps documents and like official contracts and things that have to be filed that’s sort of beyond the scope of our conversation, but from your perspective, this is not really a big deal from a lending perspective.

41:39 Sam: No, I mean, title companies even have ways to state this that are common, right? That is, two tenants having 50% ownership of this property. So it’s not abnormal. I wish it would become a little bit more mainstream with some of our, you know, younger renters, people who want to be in home ownership but just either don’t know or don’t know how, or are just a little nervous to execute.

Live Q&A with Emily and Sam

42:07 Emily: We have something else exciting to announce, which is that Sam and I are doing another live Q&A call. So we’ve done, we did a couple of these earlier in 2021 during the, you know, peak of the buying season. We’re doing another one on December 16th, 2021 at 5:00 PM Pacific. So basically with this kind of session, you sign up, you can sign up at PFforPhDs.com/mortgage, and just show up with your questions. And Sam, or I might be able to contribute something as well. Mostly Sam, will answer those questions to the best of his ability. And yeah, this is a great way to kind of get prepped. If you are thinking about buying in spring 2022, or maybe shortly after that, this is a great time to be like, sort of getting your ducks in a row and Sam can help you figure out the steps that you need to take to do that. So again, if you want to sign up, PFforPhDs.com/mortgage for the event on December 16th at 5:00 PM. Sam and I will both be in attendance and happy to answer your questions. So thanks so much Sam, for giving this additional insight into Courtney’s fantastic idea.

43:10 Sam: Yes. Thank you for having me! And as always, let me know if you have any questions.

Outtro

43:19 Emily: Listeners, thank you for joining me for this episode! pfforphds.com/podcast/ is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes’ show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast. I’d love for you to check it out and get more involved! If you’ve been enjoying the podcast, here are 4 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with an email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and effective budgeting. I also license pre-recorded workshops on taxes. 4. Subscribe to my mailing list at PFforPhDs.com/subscribe/. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.

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

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

Links Mentioned in the Episode

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

Teaser

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

Introduction

00:20 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 10, Episode 17, and today my guest is Elana Gloger, a 5th-year PhD student at the University of Kentucky and the host of the Dear Grad Student podcast. We discuss Elana’s motivation to start Dear Grad Student, how the podcast makes money and how much, and the podcast’s expenses. We both give advice on how to earn money from a podcast for someone just starting out and list examples of other types of side hustles grad students pursue and how to generate a high pay rate over a short period of time. At the end, I share a key strategy with Elana for managing her business finances going forward. In my business, I’m well into scheduling events for the spring term. If you have a position in a Graduate School or Graduate Student Association or similar—or have the ear of someone who does—please consider bringing my material to the graduate students and postdocs at your university or institute. I offer live and pre-recorded seminars and workshops on a variety of personal finance topics, all tailored for the PhD audience. I’ve noticed that my investing content, whether as a deep-dive workshop or as part of a comprehensive seminar, garners a lot of interest and questions. Most popular of all is my tax workshop for graduate students who are US citizens, permanent residents, and residents for tax purposes, which teaches them how to calculate and report their taxable income and determine which higher education tax benefits to use. If any of that piqued your interest, please start a conversation with me over email, [email protected], or visit PFforPhDs.com/financial-education/. Without further ado, here’s my interview with Elana Gloger of Dear Grad Student.

Will You Please Briefly Introduce Yourself?

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

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

What Inspired You to Start Dear Grad Student?

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

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

Return on Investment (ROI)

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

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

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

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

07:33 Elana: Literally not at all.

Emily’s Podcast’s Business Role

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

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

Dear Grad Student Main Revenue and Costs

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

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

What is an Affiliate?

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

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

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

Redbubble Merchandise

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

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

Patreon and Networking

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

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

Starting a Podcast and Knowing Your Audience

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

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

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

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

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

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

Commercial

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

Finding Your Unique Space as a Grad Student

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

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

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

23:32 Elana: Yeah, for sure.

Impact of Podcast on Personal Finances

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

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

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

25:34 Emily: May I make a recommendation?

25:35 Elana: Yes! Help!

Keeping Business and Personal Finances Separate

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

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

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

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

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

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

Facilitating Taxes for Business

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

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

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

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

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

It Takes Time to Build Something

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

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

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

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

Best Financial Advice for Another Early-Career PhD

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

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

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

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

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

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

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

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

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

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

35:18 Elana: Thank you!

Outtro

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

This Graduate Student Launched a Passion Business Based on His Research

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In this episode, Emily interviews Dr. Nelson Zounlome, a recent PhD in counseling psychology from Indiana University and assistant professor at the University of Kentucky. Nelson started graduate school with a negative net worth, but over the six years of his PhD he increased his net worth to nearly six figures, including investments in both a Roth IRA and taxable brokerage account. Nelson practiced intentional frugality, particularly with respect to his large, fixed expenses and high-ticket purchases. However, what really moved the needle in Nelson’s finances was increasing his income, both through winning an external fellowship and starting a business. Nelson and Emily discuss in detail how his business complements his research and became an asset during his recent hiring process.

Links Mentioned in the Episode

This Graduate Student Launched a Passion Business Based on His Research

Teaser

00:00 Nelson: I didn’t have an advisor who was seeing this work as a conflict, right? And instead, actually, seeing it as an asset and a complement to my research in a lot of ways. Because a lot of the work that I do is focused around my research, right? So using my skills and my expertise in a way to give back to communities in a different way, aside from writing articles and getting grants and things like that, which is, you know, often what we focus on in academia.

Introduction

00:32 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 10, Episode 16, and today my guest is Dr. Nelson Zounlome, a recent PhD in counseling psychology from Indiana University and assistant professor at the University of Kentucky. Nelson started graduate school with a negative net worth, but over the six years of his PhD he increased his net worth to nearly six figures, including investments in both a Roth IRA and taxable brokerage account. Nelson practiced intentional frugality, particularly with respect to his large, fixed expenses and high-ticket purchases. However, what really moved the needle in Nelson’s finances was increasing his income, both through winning an external fellowship and starting a business. We discuss in detail how his business complements his research and became an asset during his recent hiring process. Without further ado, here’s my interview with Dr. Nelson Zounlome.

Will You Please Introduce Yourself Further?

01:42 Emily: I’m so excited to have joining me on the podcast today, Dr. Nelson Zounlome. He is a faculty member at the University of Kentucky, but he recently, just a few months ago, finished graduate school at Indiana University. And so we’re mostly going to be talking about his finances during graduate school. By the way, we’re recording this in October, 2021. So Nelson, thank you so much for joining me for the podcast. It’s a pleasure to have you! Will you please introduce yourself to the audience a little bit further?

02:07 Nelson: Yeah. So thank you so much for having me. Excited to be here and just share a little bit about you know, my journey. So I’m Nelson Zounlome, I did my undergrad and doctoral work at Indiana University where I studied, in undergrad, psychology and sociology, and then in graduate school, I studied counseling psychology. So as you mentioned, recently graduated and happy to have a job as an assistant professor.

Balance Sheet Before and After Grad School

02:32 Emily: That’s wonderful. So let’s go back to the beginning of graduate school. Can you give us an overview of your balance sheet at that time? Like what was going on with you financially?

02:41 Nelson: Yeah, so when I first started graduate school, I had a stipend for my fellowship of about, I want to say, maybe $19,000 a year. So in Bloomington, Indiana, thankfully pretty affordable for the most part, so that was able to cover most expenses, but I didn’t have a lot leftover at the end of the month. Also going into graduate school, I did have $7,500 in student loans. And so one of my first priorities was to figure out basically how to get rid of that. And so that’s something that I budgeted for. During that time, I wasn’t doing an assistantship, so just focusing on classes at the time, which was helpful. So that was kind of, you know, what that looked like financially.

Assets at the Start of Grad School

03:27 Emily: So you had $7,500 of student loan debt. You mentioned your stipend, and it sounds like you didn’t have any significant assets. Did you have like a bunch of money and savings or anything like that?

03:37 Nelson: No. Maybe like a thousand or $2,000 in savings. So, you know, not a lot of money at the time, just coming right out of undergraduate. Yeah.

03:46 Emily: Yeah. So negative net worth. But having a thousand or $2,000 in the bank starting graduate school is not bad at all. And then I want to fast forward us to, when you finished graduate school, give us that picture. And then we’ll talk about how you got from A to B.

Assets at the End of Grad School

03:59 Nelson: Yeah. So by the end of graduate school, let’s see, paid off my student loan debt pretty early in my graduate program. So graduated debt-free. At that point in time had a net worth of almost a hundred thousand dollars and had a job. So yeah, that’s about where I stand now.

04:23 Emily: Fantastic. Wow. And how many years was that? How many years were you in graduate school?

04:28 Nelson: I was in graduate school for six years.

Financial Goals and Building Net Worth in Grad School

04:30 Emily: Okay. Wow. What a huge swing. I’m excited to learn more about this. So you mentioned paying off the student loan debt and you mentioned, well, you mentioned that you ended up building up significantly other assets. Did you set any particular financial goals during graduate school? Aside from the student loan debt, which you mentioned, were you intentionally building up these assets on the other side of the balance sheet?

04:52 Nelson: Yeah. So, you know, paying off the debt was my first, right. So that’s something that I budgeted for. Other things were more in line with making sure that I was living within my means, and actually below my means as much as I could and still, you know, have a fulfilling life during graduate school. So things like keeping track of all my expenses throughout graduate school. But also, you know, keeping costs low with things like furniture. So, you know, getting secondhand furniture in graduate school and on college campuses, there are a lot of ways to get free or reduced furniture. I think, you know, a lot of students don’t realize that you know, and that was a huge way. And then also just rent. So something that I was willing to do was actually move regularly to find a better living situation, particularly if that meant a better cost or just, you know, closer to campus. So then the commute time and commute costs were down. So those were the things that I kind of considered. And then thrifting, right? So just, you know, anytime I needed something new, I would check multiple locations for that to make sure that I got a good deal to keep costs low.

05:59 Emily: Yeah, those are some great frugality tactics. I guess what I’m asking is, did you accidentally build up a net worth of a hundred thousand dollars? Or like, were you like no, I’m funding my IRA and like I’m also have these savings goals or like what was going on in your mind with respect to, you know, what were you pursuing and also, why were you pursuing it?

06:18 Nelson: Yeah, yeah, yeah. So it was part accident, and in part planned. So I would say initially, right, the debt was the biggest thing, but once I had that figured out, it was like, okay, I got used to living, you know, with this take-home., right? And so the idea for me was, okay, I should save this money because I’m going to need it for other things. And so that’s initially all it was, was saving. And then it was maybe my third or fourth year, I kind of stumbled upon different podcasts, different books, right? So, you know, Millionaire Next Door, Automatic Millionaire, you know, other kinds of resources like that, that got me more knowledge around Roth and retirement and brokerage accounts and things like that. And so I spent a lot of time over the next couple of years researching that.

07:06 Nelson: You know, listening to your podcast and other things like that to figure out like, oh, there’s much more that I can do with my money beyond just saving it, right? And so the motivation behind you know, a lot of that too, is that I grew up poor, right? So I grew up from in a very low-income, single-parent household. I lived in public housing for most of my life. And so you know, a lot of the messages I received about money were just save, save, save, right? And so it wasn’t until I got to these other resources that I realized that I can invest it, right? I can do other things. And then in addition to that, so that’s kind of the part that I stumbled upon, right? But the more intentionality came with learning, and then another really big strategy that I think is important for graduate students to know is being able to monetize your skills. And so something else that I did was create a business, right? And so I created my business, which is Liberate the Block, which is focused on providing educational and mental health resources for BIPOC students to help them live their lives holistically. And so I was able to create and publish a book. I was able to create an online course specifically for those groups of students, which help also contribute to my net worth and things like that.

Paying Off Student Loan

08:23 Emily: I’m really glad you brought that up. And we’re going to go more into detail about that in a moment, but like doing the quick math for me, I’m thinking $20K stipend times six years, $120,000. How did you get, you know, almost a hundred percent like savings rate on that income that you’re making? But it’s because we went beyond the stipend to make more money. So that’s great. So we’ll talk about that more in a moment. Since it was the student loan debt repayment that kind of kicked off this whole process for you, why did you decide to repay that student loan? Did you have to, or could have been in deferment? What were your decisions around that?

08:59 Nelson: I did not have to, it could have been in deferment, but it was something that it was instilled in me long ago that that debt is just something in my family that we don’t like. And so, you know, even that by comparison to others that I know is a small amount of debt. It’s just something that I didn’t want hanging over me, something I didn’t want to have to deal with later. And so it was just something important for me to feel financially secure and to really start that, getting rid of that debt and then focusing on how I can grow that net worth afterwards.

09:32 Emily: I’m so glad you brought that up because, are you familiar with like the debt snowball and the debt avalanche methods?

09:37 Nelson: I am. Yeah. And it was kind of unintentional that I did that. Yeah.

09:41 Emily: Well, what I like about this is that like, according to the debt avalanche, and also according to what I like typically teach, defer those student loans, pay them off later, especially if they’re subsidized. But what I like about what you said is that it was important to your psychology to get rid of that debt. And that’s much more in the debt like snowball camp of like get rid of these small debts. Like you don’t even want them on your mind. And of course, I mean, $7,500 is a small amount of money, but compared to your stipend, that’s like over a third of your stipend. So in your world, it was not a small amount of money, but anyway, so I’m really glad to know like your reasoning for why you did that. And I totally, if it helps you sleep better at night, like that’s awesome. Go for that.

Increasing Stipend and Income in Grad School

10:20 Emily: So let’s talk more about increasing your income and let’s start, like, in your role as a graduate student, was there anything you did to increase your stipend over the course of graduate school?

10:31 Nelson: Yeah, so something that I did as well was looking for an increase in stipend through a fellowship. So I was able to apply for, and luckily received my second time around, a national fellowship that increased my stipend from the 19 to about $24,000 a year. And so, you know, me being me, I kept my cost of living the same, right? So even though I had a higher stipend, I was being able to use that in the same way for my expenses. So that is also kind of what helped me, you know, start to increase my net worth and then start to use some of that money to invest in a general sense, right? Brokerage account, Roth, and things like that. But then also back into myself through things like my business and other things.

11:20 Emily: Gotcha. And I believe what I heard you say is that you started off graduate school with a fellowship as well, right? Not an assistantship. And then you got this higher fellowship later on.

11:31 Nelson: Correct.

11:31 Emily: So you didn’t have like teaching responsibilities or any research responsibilities that didn’t relate to your dissertation, is that correct?

11:40 Nelson: Well, so my first year, I did not have any of those responsibilities, but then my second and third year I did teach. And then my fourth year on, because I got that additional fellowship, I did not have those responsibilities. But as a counseling psychologist, I was also engaged in clinical work, you know, 10 to 20 hours a week on top of classes and teaching and things like that. So that took up a good amount of my time as well.

Business Helped Increase Net Worth

12:06 Emily: Wow. Okay. Busy schedule, because now we’re about to add the business in here as well. So you mentioned the name of it and a little bit of the mission earlier, but let’s talk more kind of like tactically, like what was bringing in money for you during that period of time?

12:22 Nelson: Yeah. So what was bringing in money were, you know, book sales, right? So, the book that I published which is you know, a book for BIPOC students to help them thrive in undergrad and graduate school. So that was actually the primary way. But then also I started being able to do speaking gigs. I also worked as a consultant, right? So individually with students to help them thrive in graduate school and undergrad, but then also working with, you know, larger school programs that focused on student success or, you know, BIPOC students matriculating into graduate school and things like that. So that’s also, you know, work that I’ve continued to do and to be hired for. And so that’s, you know, definitely increased my net worth in a good amount.

Finding Mentor Support and Being a Mentor

13:09 Emily: I love your story, because it’s been rare to have on the podcast, like a true business owner who started that business during graduate school and made significant income from it. Because this is also bringing up questions for me around like, your advisor must have known about this because you’re being invited to speak places and so forth. Like, and then, so how did you handle those conversations about sort of balancing your world as a graduate student and your role, like launching this business? And then there’s a time management portion of it too. So can you give us a few comments about that?

13:41 Nelson: Yeah. I mean, luckily my advisor, super great you know, very, very just, just a great mentor, really, not else to say about that, but he was really supportive. And so, you know, when he was found out that I was writing the book and then I published the book, right? He was one of the first people to get it and he was excited about it and encouraged me to do speaking and other things like that. So, you know, I assume that really helped me as well. I didn’t have an advisor who was seeing this work as a conflict, right? And instead, actually seeing it as an asset and a complement to my research in a lot of ways because a lot of the work that I do is focused around my research, right? So using my skills and my expertise in a way to give back to communities in a different way, aside from writing articles and getting grants and things like that, which is, you know, often what we focus on in academia.

14:35 Emily: It actually sounds to me like, I don’t know how this is in your field, but it sounds to me like you were doing as a graduate student, the kinds of things that faculty members do. The kinds of, you know it’s not even really a side hustle, it’s part of their work. It’s just not part of their job, right? As a faculty member, they publish books, they do speak, and they do all these other things, yet seeing that at the graduate student level is uncommon. Can you say, like, how did you like get up the like, audacity, like do this to like launch this huge thing, like as a graduate student? Like, how did you have the idea that this is even going to be possible during this time?

Monetize Your Skills

15:13 Nelson: Yeah. So in those same books you know, that I had mentioned, or just resources that I was consuming at the time around finance and retirement and all those things, something that kept coming up was, if you want to increase your net worth, you know, one of the best ways is to monetize your skills, which is to create a business, right? And so, you know, I was working on a research project that had to do with advice for students of color, which is, you know, what ended up becoming my book. But when I was doing that, I was like, man, this is really great advice that these participants are giving. It would be great to be able to put this in a medium, other than a research article, right? And so that’s where the idea of a book came. And then from there, it was just doing a lot of research around how to start the business, right?

15:58 Nelson: How to start, you know, doing all of these pieces. But because it was, you know, something really similar to the work I was already doing and because I am genuinely passionate about and excited about helping BIPOC communities and students in general, to me, it just seemed like a natural fit and complement to the work I was already doing. And so, you know, the time management piece was difficult, right? You know, staying up late and working hard and doing this and doing that. But, you know, I feel like the reward of just being able to engage with students really just gives me a lot of energy and excitement around that.

16:34 Emily: Wow. I’m so excited about this journey for you. This is amazing. I don’t know if this is like reading too much into the situation, but it sounds like these personal finance and entrepreneurship related books that you were reading maybe opened your mind to that possibility more so than maybe the average graduate student would be. And okay, so I think I also had kind of a similar experience from books and also from other types of personal finance content to like, think about, oh, wow. Like I can invest while I’m a graduate student. I don’t have to be limited to this like student mindset. There’s things I could do in my finances beyond this. For me, it didn’t look like starting a business at that time. But doing other things for my finances that were like pretty ambitious, like for a graduate student. It sounds like you went through a similar journey as well through this reading and exploration.

17:25 Nelson: Yeah. One hundred percent. And something that, you know, I often recommend to students as well is, you know, really take ownership of your education. Yes. But also remember that universities are really big resources, right? And once you leave, you know, academia, we often lose access to those resources. So while you’re there, it’s really, really important to take stock of that. And so something that, you know, I definitely should mention is at my university at IU, we have so many resources like access to lawyers, access to people who will help you with business planning, access to people who will talk to you about finances and other things like that. And so that was part of what I did was just take stock of the resources that already existed at my university and use all of those things to my benefit, to help launch my business. And so that’s something I would 100% encourage students to do is to take a stock at what the resources are at your university. And think about how you might be able to take advantage of some of those in a similar way.

18:28 Emily: Love that message. Wish I had heard that during graduate school!

Commercial

18:33 Emily: Emily here for a brief interlude. If you are a fan of this podcast, I invite you to check out the Personal Finance for PhDs Community at PFforPhDs.community. The Community is for PhDs and people pursuing PhDs who want to take charge of their personal finances by opening and funding an IRA, starting to budget, aggressively paying off debt, financially navigating a life or career transition, maximizing the income from a side hustle, preparing an accurate tax return, and much more. Inside the community, you’ll have access to a library of financial education products, including my recent set of Wealthy PhD Workshops. There is also a discussion forum, monthly live calls with me, and progress journaling for financial goals. Our next live discussion and Q&A call is on Wednesday, December 15th, 2021. Basically, the community exists to help you reach your financial goals, whatever they are. Go to pfforphds.community to find out more. I can’t wait to help propel you to financial success! Now back to the interview.

Liberate the Block is an Asset

19:45 Emily: With respect to your business, how much of a role did that play in your hiring process? Like, was it an asset that you have this business on the side?

19:56 Nelson: It was, and so, you know, as a counseling psychologist, one of our core components is social justice and multiculturalism. And so since my research and my business, you know, that’s basically the heart of those things as well. It was something that actually came up, you know, during my interview process. But it was referred to as an asset like Oh, you know, I was also a published author of a book, right? Not just on articles and you know, those types of things.

20:23 Emily: Fantastic! Is there anything you want to say further about either your business or increasing your income during graduate school?

20:31 Nelson: You know, if anyone wants to find more out just about the business itself, you can go to liberate the block dot com. And again, focusing on just the mental wellness and academic persistence of BIPOC students and professionals. And so book, out there already, and then an online course as well. So check that out if that’s useful.

Limiting Home Expenses

20:53 Emily: Fantastic. Let’s turn our attention to the other half of the cashflow equation, your expenses during graduate school. You mentioned earlier a couple of the strategies that you used to decrease your expenses. For example, I want to hear a little bit more about moving, because I kind of always point to these, like, you know, your big fixed expenses, housing being the top one on that list as targets for, if you’re trying to reduce your expenses, you need to think really critically about that particular line item. So can you tell us a little bit more about why you chose to move and how you made it work?

21:26 Nelson: Yeah, so because I had done my graduate school in the same place that I did my undergrad, or I guess we could flip those. You know, I was pretty familiar with the town already at Bloomington. And so I initially, you know, just wanted to switch the side of town that I lived on. So, I lived on one side of town, and I enjoyed it, but you know, it wasn’t the best, right? And so when I was able to find something that was closer to campus that was actually a bit more affordable, you know even though I hate moving, I was like, okay, this financially makes sense. And so and then also I was at the same apartment complex and I actually ended up moving right just across the street to another apartment for kind of a similar reason in the same complex. And so basically, you know, I was just able and willing to make that transition, you know, in light of my fixed cost of always thinking about, okay, how can I keep costs down?

22:28 Emily: That makes sense. And with a market like Bloomington, I have to ask, you chose to rent. Was buying ever on your mind as a possibility?

22:38 Nelson: It wasn’t until I had been there for quite some time, so maybe, you know, in the same time where I was consuming all of these finance, you know mediums, right? It was like, oh, buying actually maybe would have made a lot of sense. But around that time, you know, I only had about a year left in the program. And so it just didn’t make sense to me because I also had no idea where I was going to be in the next year. And so it was something that I definitely wish I at least would have looked into early in their process. And had I known, I would have continued on into graduate school a little bit earlier in Bloomington, that definitely would have been something that would have made a lot of sense. Because over the course of that time, I was in Bloomington for nine years. My last year, my program was an internship. I actually lived in Baltimore, Maryland. But for nine years I was in Bloomington. So yes, that would have been awesome to have been paying all that money for a house and not just for rent.

23:33 Emily: I do think it probably would have been difficult though, like on your $20K like starting stipend. I don’t know how well, you know, we have to go back in the Wayback machine to figure out housing prices at that time. But it may have been too much of a stretch. But by the time your income increased, like you said, your time is growing short in that particular city, so totally understand why it went that way. Are there any other areas of spending that you want to bring up where you like intentionally tried to sort of keep a lid on expenses?

Keeping a Lid on Expenses

24:02 Nelson: I mean, this kind of goes along with furniture, but just honestly anything that was kind of a high ticket item, right? So even when I got a new monitor for my computer, even when I got a desktop, just so I could work at home with and things like that a bit better. We have a surplus store at IU called the IU surplus store. And, you know, they would have old monitors, old desktops, old furniture, old, you know, whatever there. And so, you know, anything that was high ticket, I would almost always go there first to see if they had it to keep those costs down. You know, something I was also mindful of is, you know, food budget, right? So not eating out very often or limiting myself to about you know, just a couple of times a month. And just being mindful of that. And then just doing my best to, if there were conferences or other things, looking for funding for that. So within my program at the national level for my professional organization, I was constantly applying for these grants, fellowships, travel awards and things like that. So that spending, you know, to conferences and whatnot didn’t have to always come out of my pocket. And so I think I was able to really save a lot of money that way, compared to some of my peers.

25:21 Emily: I think this, it sounds like so strategic now, like you were focusing on building, of course, graduating, also building your business, increasing your income focusing on the big line item of housing, and then just letting you know, it sounds like you’re a naturally like frugal person, but just not being too concerned about the minutia. But just when those, as you said, the higher ticket items came up, made sure that you were being really intentional about your spending in those areas. And so in that way, your energy kind of goes more towards this like increasing income side of the balance sheet. I know for me in graduate school, I probably went more to the frugal, like extreme than was necessary and probably put too much energy over there. I should have been focusing more on like the increasing income or, you know, preparing for the next job, like side of the spectrum, but it’s all in retrospect.

Current Money Mindset

26:06 Emily: Okay. So you talked about how, you know, during this six years in graduate school, your net worth went from slightly negative to almost a hundred thousand dollars. Wow. Amazing. How has that set you up financially for your current like career stage and life at the University of Kentucky?

26:23 Nelson: Yeah. So I would say, you know, for me, I’m really using the same principles, right? So you know, I have a pretty cheap place. You know, two bedroom, but my rent is below a thousand dollars, which is great. But you know just based on the cost of living and everything here, I definitely be paying more to live in a more expensive area, right? Maybe with some more amenities and things like that. But it’s important for me to you know, spend my money on my business and other things that are a bit more important to me like visiting family. So I’m happy that I live pretty close to family, and less around kind of the rent side. And now I’m actually choosing to rent as opposed to buy, because I want to get a sense of the area right now before, you know, buying a house.

27:10 Nelson: And also as I’m sure you’re aware of like this whole past few months for buying was ridiculous. So as a first time home buyer, I was like no, I’m okay. But yeah, so just really keeping the same cost of living, like the same habits, the same cost of living for myself into my profession that I was as a graduate student. So, even though, you know, my salary is much higher than my stipend was, I didn’t then magically start, you know, spending a lot more. I’m keeping the same habits because I was pretty comfortable, right? I spend more money on higher price items that, you know, I think are good investments for long-term and things like that. But, you know, my eating habits haven’t changed much, right? The way that I obtain furniture is actually very similar, right? My budget on that has increased a bit, but you know, I’m on Facebook marketplace, I’m looking around, you know, here, I’m going to Goodwill, I’m going there, you know, just to see what’s around. So, you know, it’s important for me to keep those costs down so I can save more, invest more, and also just have more, yeah.

Investments and Retirement

28:12 Emily: Tell me what you’re doing with your investments now? Are you maxing out? What’s up?

28:18 Nelson: Yeah. So right now I’m maxing out my 403(b), which has an employer match, which is amazing. And then I’m also making the max contribution to my individual Roth. And then I also am able to contribute a little bit right now to an actual, additional Roth that I have through work, which is really cool. And then I also have a brokerage account that I fund pretty regularly, too. And so all of those things are just automatic, right? So, you know, my paycheck comes, and all that money is taken from my paycheck to the different accounts invested automatically. And so I think that’s also just the beautiful part is that I really don’t miss the money because I don’t really ever see the money, right? It’s all in these other accounts. So I don’t even get the chance to spend that extra money. It’s just taken directly. And you know, it’s just invested in growing. And so once retirement hits, you know, at this point, even, I’m not actually that concerned about retirement, right? If, you know, as expected, my career continues and you know, my income hopefully will increase over time.

29:24 Emily: That’s fantastic. And I think that what you’ve done makes so much sense for someone in your situation where you have this like big, big jump in income and you don’t really feel the need to increase your lifestyle that much. Sure, a little bit here and there, on parts that are important to you. But overall not making a huge leap in lifestyle, just funneling all that money away into your investments and watching it grow. And then you’ll have lots of options in the future, right? Whether it’s retiring early or doing something fantastic with the money in another way. That’s awesome.

Best Financial Advice for Another Early-Career PhD

29:54 Emily: So let’s conclude the interview with the question that I ask all of my guests, which is what is your best financial advice for another early-career PhD? And that could be something that we touched on in the interview, or it could be something completely new.

30:08 Nelson: I feel like I have several pieces of advice, but I will keep it short. So I would say, my first thing is, I know from experience how overwhelming and how uncomfortable, and that’s a lot of what you address, you know, in some of your materials Emily, is how uncomfortable that can be at first, especially when you come from a background that money wasn’t something that you really talked about and whatnot. But really, you know, utilize these resources such as this podcast and, you know, other books and materials to just learn. And once you get past that little bit of discomfort, it’s actually, it’s pretty easy, right? So to be able to set up, you know, these accounts into investing, and so really just believe in yourself. Yes, it’s going to be uncomfortable.

30:50 Nelson: Yes, it’s going to be anxiety-provoking, but you know, once you get past that and set yourself up, you’re really mostly set up for the rest of your life, which is great, right? And in a really short period of time, you could set yourself up for financial success, which is amazing. And I really wish I had known that my first year. I’m very happy I stumbled upon this, but I really wish I had, you know, more of a resource like this beginning, so I could have been more intentional. And then the other piece is, you know, what I touched upon before is really take stock of your university resources and see what is there for you, right? And really think about, you know, whether that be through lawyers or, you know, business incubators, or, you know, just pitch competitions, all these things that happen at universities that might be helpful for you, if you’re someone that, you know, making a business or even being a part of a business makes sense.

31:41 Nelson: And related to that is we, as PhD students, have a lot of really marketable skills. And I think, you know for those of us who are in fields that industry isn’t something that’s discussed as much as an option, I would take the time to research careers, right? Because you know, myself as a psychologist, we often think about clinical work or academia, right? But we don’t think about all the plethora of ways in which we can apply our degree, right? And so, you know, think about ways outside of those two mediums that you might be able to contribute while in graduate school or outside that might, you know just help increase your financial wellness.

32:24 Emily: So well-put, I’m so glad we’re ending the interview there. It’s wonderful advice. Thank you so much for volunteering to give this interview, Nelson. I really enjoyed talking with you, and I’m just so glad to see this bright career and financial future ahead of you. It’s wonderful.

32:38 Nelson: Yeah, thank you so much! I appreciate it.

Outtro

32:45 Emily: Listeners, thank you for joining me for this episode! pfforphds.com/podcast/ is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes’ show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast. I’d love for you to check it out and get more involved! If you’ve been enjoying the podcast, here are 4 ways you can help it grow: 1. Subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. 2. Share an episode you found particularly valuable on social media, with a email list-serv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and effective budgeting. I also license pre-recorded workshops on taxes. 4. Subscribe to my mailing list at PFforPhDs.com/subscribe/. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Lourdes Bobbio and show notes creation by Meryem Ok.