Personal Finance for PhDs

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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.

This PhD Solopreneur Started His Business During Grad School

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In this episode, Emily interviews Dr. Lubos Brieda, a PhD in aerospace engineering who is now a full-time consultant in the aerospace industry. Lubos’s solopreneur journey during grad school started with blogging about scientific computing  and a part-time job at NASA on top of his assistantship. Lubos gives great advice on how to start consulting as a graduate student and how to transition it into your full-time job after your PhD, emphasizing making connections and choosing the right structure for your business. This episode is perfect for any graduate student or PhD who is interested in being their own boss and providing services within their area of expertise for multiple clients instead of pursuing the traditional employee route.

Links Mentioned in this Episode

This PhD Solopreneur Started His Business During Grad School

Teaser

00:00 Lubos: Whatever niche topic you might be into, and you might think like, oh, nobody else cares about this. You will find the audience for this. Just by simply the mathematics of how many people are in the world, you’ll find somebody interested in this audience. And so, you know, for all the kind of PhD students these days, you know, whatever interests you, do not hesitate to kind of put it out into the world. I mean like, there will be somebody interested in what you’re doing.

Introduction

00:28 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 10, Episode 15, and today my guest is Dr. Lubos Brieda, a PhD in aerospace engineering who is now a full-time consultant in the aerospace industry. Lubos’s solopreneur journey during grad school started with blogging about scientific computing and a part-time job at NASA on top of his assistantship. Lubos gives great advice on how to start consulting as a graduate student and how to transition it into your full-time job after your PhD, emphasizing making connections and choosing the right structure for your business. This episode is perfect for any graduate student or PhD who is interested in becoming their own boss and providing services within their area of expertise for multiple clients instead of pursuing the traditional employee route. Without further ado, here’s my interview with Dr. Lubos Brieda.

Will You Please Introduce Yourself Further?

01:32 Emily: I am delighted to have joining me on the podcast today, Dr. Lubos Brieda. He has a PhD in aerospace engineering from George Washington, and he is now self-employed analyzing spacecraft plasma, propulsion, and contamination controls. He’s going to tell us a lot more about that. That is the subject of our interview today, how Lubos became self-employed during graduate school, and how that became his full-time thing after graduate school. So those of you who have aspirations to become your own boss or become entrepreneurs, this will be a really interesting conversation for you. So Lubos, will you please introduce yourself to the audience a little bit further?

02:07 Lubos: Well, thank you, Emily. Thank you for having me. So again, my name is Lubos Brieda, and I have a bachelor’s from Virginia Tech and also a master’s from Virginia Tech in aerospace engineering. And after I finished my grad school, my master’s, I worked for three years at the Air Force Research Lab at Edwards, California. And then after working there for some years, I basically realized that I would like to go back to school and do something more, you know, have the opportunity to actually be my own researcher, and my own investigator. And this is something that a PhD would kind of allow me to have this role. And an opportunity came up to go back to the east coast into Washington DC. And I joined a program at the George Washington University. And during that time, I basically started doing a little bit of a consulting on the side. And after I graduated, this actually morphed into my full-time job. And so, essentially, I’ve never had a real job besides except for the three years stint between my master’s and my PhD. Because from the time I graduated with my PhD, I was essentially working for myself as my own boss with its own, you know, pros and cons.

Blogging in Grad School

03:17 Emily: Yeah. It sounds like a smooth transition. We’ll find out more about that right now. So I understand that this whole self-employment thing started with blogging. So can you tell us more about like, why you started blogging during graduate school?

03:30 Lubos: Yeah. So, actually what happened was, the reason I ended up working at AFRL is because the Air Force Research Lab was funding my graduate work at Virginia Tech. And so when I came in, I essentially developed some code and some simulation programs for the Air Force. And so when I moved over to AFRL, I, you know, worked on the code a little bit more and helped develop additional features. And so when I left for a PhD, there was still a need for me to essentially kind of provide like, you know, consulting services to AFRL because I was the primary author. So when some questions came up, I would help out with that. So, really my first experience with consulting was actually doing the sort of hourly work for AFRL.

04:16 Lubos: But at the same time, I also kind of realized that, you know, there’s this huge gap in the scientific computing field between what’s really available in, let’s say textbooks, that will introduce only like the basic equations for like, you know, how some solder should be written. And then in the journal papers, they only discuss kind of the outcome of it. Like, you know, basically saying like we used this technique and we got these nice graphs, but there was really this missing gap in the middle that actually shows you how to go from the equation to the results, how to actually physically implement it on a computer. And so I started kind of working on this, you know, related to my own field of plasma propulsion. I started writing these in a blog article that actually tried to illustrate how you would actually implement these solders.

05:02 Lubos: And this blog actually became quite popular. And you know, it led actually to quite a lot of additional business opportunities. I started teaching online classes, I got a book published. I’m just going to do a promo. So basically this book is a summary of the course of that came out of my blog. And it’s just been a really good opportunity to actually kind of how, by having a website, I was able to attract this audience because there was this big need for this kind of a niche topic. And people just found it and just, you know, started reaching out to me.

05:34 Emily: Is it fair to say that what you were blogging about was what you were learning in graduate school, or maybe what other graduate students were learning, like to take what you were saying earlier? Like what you read in a textbook, maybe that’s at the undergraduate level versus what you see published in a journal that’s quite advanced and to bridge those two, is that fair?

05:54 Lubos: That’s absolutely correct. That’s right.

You Will Find an Audience

05:56 Emily: Yeah. And so, I’m just trying to think about how we can, you know, how the listener can think about, be inspired by your story. And like, I do think that blogging or practicing some kind of communication around what you’re learning in graduate school, like a learn with me kind of model, can be really powerful, especially as you discovered, you know, no one was yet doing that in your niche, and you were able to step in and do that. So like wow. What a good technique, like, that’s a great idea.

06:22 Lubos: You know, I think that people need to realize that, you know, the internet or the world is huge. So I think really what the internet allows us to do is that whatever niche topic you might be into, and you might think like, oh, nobody else cares about this. You will find the audience for this. By simply the mathematics of how many people are in the world, you will find somebody interested in this audience. And so, you know, for all the kind of PhD students these days, you know, whatever interests you like do not hesitate to kind of put it out into the world. I mean, like there’ll be somebody interested in what you think.

Primary Income Source: Government Contracts

06:53 Emily: You just told us a few different ways that you ultimately monetized this, you know, the subject that you’re blogging about and so forth. I was just wondering which of those you actually did during graduate school? The teaching or the courses or the whatever, you know, what you just listed.

07:07 Lubos: Right. So there was actually another kind of side of it. So, I mean, I do blogging, but really the blogging is really more, just a way to actually get real customers. So my real income is not from blogging. It’s not from courses. I mean, I’ve made, you know, like up to now I’ve probably generated something like $80,000 from the courses alone, but that’s, you know, over like, you know, many years. But my main income is actually from government contracts. I’m actually doing like real analysis for customers. And what really the blog allows me to do is that, you know, people find me and people say, Hey, this person has a set of skills that I might be interested in. Let me hire this person to do some contract work. So, I mean, that really is my primary source of income, even up to this day. I support quite a large number of clients. You know, I have clients from NASA, Air Force, all the primary aerospace companies. And, you know, they come to me and, you know, we get some little contract, you know, some statement of work written down, and then I do some analysis for them as needed.

08:03 Emily: I think that’s really, really good information for the listener, especially like, I don’t know. I think I became maybe a little bit too enamored with like the online entrepreneur space where people are all about like selling courses and selling eBooks and selling these like passive products. But really, the fastest way to get a business off the ground is selling services. And you’ve done both of this, but you’re being transparent now that yeah, the bulk of your income comes from the services side rather than the passive income side of things, which I think is very, totally typical. So how is it that you like got this? Well, I mean, it sounds like you had a consulting client from, you know, your employer prior to starting your PhD. How did you land your first consulting client aside from that company?

Landing Consulting Clients

08:45 Lubos: Yeah, so there’ve been actually a few, but really the main contract, so also when I was working, when I was doing my PhD, I took a side job and I started working at NASA Goddard in Maryland. And I was working there as a part-time employee, you know, kind of was still in school. And while I was at NASA, I managed to get quite, you know, I made a lot of connections, you know, with a lot of people. So basically the reason I was brought in is because a friend of mine that actually used to work at AFRL with me, he got a job at NASA and he identified a sort of need for a certain skill set, something that I was really good at. So it was something that, you know, he really didn’t have the time to work on.

09:29 Lubos: And so he identified me as somebody who would come in and actually help NASA Goddard, you know, with this particular need that was there. And so I came in and I, you know, worked on this project. And doing this kind of led to meeting a lot of people at NASA. And so, at this time I was working as a government contractor through one of the contracting firms. So maybe your listeners, maybe in the aerospace field, are more familiar with this, but a lot of work in, you know, centers like NASA with so many of these research labs is actually done by contractors. So there’s only a small subset of government civilians who are essentially kind of the top-level people controlling the purse, the budget, but most of the technical work is actually done by contractors.

10:11 Lubos: And so, I came as a contractor with the understanding that when I graduate, my salary will essentially increase to a more competitive range, because I came in just kind of like a, you know, better than McDonald’s money, but I was really not making like what you would expect to make as a PhD engineer. Which is fine when I was in school, it was just a little bit of extra spending money for me. But unfortunately when I graduated, I went to my contracting company boss and said, “Hey, I graduated now. So can we renegotiate my salary?” And basically they said, “Oh, we give you like a 2% raise.” And I was like, this is not going to fly.

10:48 Lubos: And so, in the meantime, since I made all these connections and already had my business, you know, kind of set up because of these other works, I already had like a legal entity. I was actually able to roll over all my contracts at NASA to my own firm. So that instead of paying, you know, some middleman to essentially hand me a paycheck, I just, you know, became my own middleman essentially. So I was able to actually also give a much better value to the government because my overhead was a lot less than what the other company before was paying. And so that kind of led to that. So one of my, really, I think my kind of big intro into this was that I you know, started actually supporting work at NASA Goddard kind of more not full-time, but close to full time. And also at the same time, my advisor and I, we wrote a grant that was based on my dissertation work. So then I’m getting funded. There’s this program called SBIR, Small Business Innovative Research, that a lot of these government agencies essentially fund. And so we were able to get SBIR funding to do some additional follow-on work on my PhD. So that was kind of another, like a big contract that also kind of materialized around the same time.

11:56 Emily: So, it sounds to me like you weren’t necessarily like a traditional PhD student in the sense that you only worked for your advisor doing your research and you were paid like an assistantship salary. It sounded like you had sort of a foot in the real working world, although part-time, and a foot while you’re finishing your PhD. And it was sort of a more gradual shift over to, okay, well now I’m done with the PhD and now I’m fully working for myself. And I love the idea of cutting out the middle person and, you know, you’re going to be a contractor anyway. So just work for yourself instead of for a third party. That makes a lot of sense.

Navigating PhD Research and Outside Work

12:26 Emily: So, given that you had this, what might sound a little bit unusual to some of my listeners different like approach to working, like how did you sort of manage finishing your PhD and having a great relationship with your advisor with doing this outside work, whether it was for, you know, as an official contractor for NASA Goddard or your own side stuff?

12:46 Lubos: Yeah. So I was working about 20 hours a week at NASA. It was, you know, a part-time job. But yeah, I mean, it definitely involved a lot of late nights, which I think a lot of PhDs are kind of familiar with anyway. But you know, I think the bottom line is we need to make money. You know, and I lived in DC. DC is expensive. And, you know, I was lucky to also have a stipend. I was receiving a stipend, but, you know, George Washington paid, you know, fairly good money. But still, you know, just going off my memory, it’s probably maybe around $2000 a month or whatnot. And just the rent, you know, can eat up like, you know, a huge chunk of that. So it’s really difficult to survive just on the stipend alone.

13:23 Lubos: So, you know, part of the reason I took these opportunities was to make more income, but also it actually ended up being a very symbiotic relationship too, because, you know, the work that I was working on at NASA is very related to what my advisor was researching, what basically I was researching for my own PhD. And so they were actually able to generate connections that would then actually help my own advisor actually get his own foot in the door at NASA and get additional, you know, contracts for him. So I think it actually worked out really well.

13:52 Emily: Yeah, I’m really impressed with this journey. And I’m also kind of, I’m a little bit surprised, honestly, that, I don’t know if it was your advisor or department and whoever, allowed this working relationship. Allowed a 20 hour per week outside position while you were still, you know, receiving a stipend, but was that just on the basis that yeah, you’re putting in the hours, like that 20 hour a week position did not affect your, you know, main progress on your dissertation.

14:15 Lubos: That’s right. And I’m also, you know, I’m a believer of you know, it’s better to ask for forgiveness later, than ask for permission first. So I mean, you know I was essentially paid for, you know, doing my 20 or whatever 40 hours a week of, you know, doing like RA work. And I was putting that in. So anything beyond that, you know, like as long as the advisor doesn’t have a concern with it, I mean, the department after all is really there just to essentially funnel the money, right? And make sure that everybody is getting paid, and the PI is getting the funding from external sources. But in the end, as long as my advisor, you know the PI who actually has the funding is, you know, happy with your output, then it just worked out really well.

14:55 Emily: Yeah. I mean, it sounds like, I don’t know if this was the initial pitch to your advisor, but this ended up helping your advisor as well, your outside working relationships. So it was a whole like symbiotic thing, like all around, which is really great to hear.

Outside Income as a Cushion Against Additional Grad School Debt

15:06 Emily: So you said that one of your main motivations for taking this job at NASA and then also doing the side hustling was to earn more money because, yeah, DC’s an inexpensive place to live. What did having these other, you know, outside sources of income do for your finances in graduate school?

15:22 Lubos: Well, I mean, it definitely helped. I think I was a little bit privileged in the sense that I, you know, when I finished all my schooling, I really didn’t have a lot of student loans. Essentially, most of my loans were actually stemming from my undergrad, really from my freshman and sophomore year. But still, I was kind of glad that I was able to, with the extra income, I was able to keep making payments if needed or at least maybe save some money, and not have to essentially tap into more debt. So I was able to go do my PhD without actually taking on any additional debt on top of what I had.

15:52 Emily: Yeah. That makes a ton of sense.

Commercial

15:56 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, November 17th, 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.

Advice for Starting Your Own Self-Employment Journey

17:09 Emily: Did you have any advice for other current graduate students about balancing some side work or starting even your own self-employment venture during graduate school?

17:19 Lubos: Sure. Yeah. So I think it’s really important for everybody, and maybe this is actually more for like some of the undergrads, to really make connections with the faculty. Because, you know, the professors are always looking for more help with whatever project they’re working on. And often they might get some funding coming in, and they just simply do not have anybody available to do the funding. So if you already have a working relationship with a professor, they might say, Hey, you know, you, whatever, come work for me. I got this new grant coming in. I can fund your master’s work, maybe your PhD work. And it just really helps to actually have those connections existing there.

17:58 Emily: And it sounds like, you know, networking, in a sense, or the connections also are what got you some of these other jobs and contracts and so forth. I think you referenced earlier, “Oh, I had a friend who was working there and he knew that I was the expert in such and such.” And so having those connections obviously is amazing for getting these bits of work. Anything else? You know, you’ve mentioned a couple of times about like the official like business structure, like what kind of structure did you have during graduate school? Do you think it was a good fit at that time?

Forming a Company

18:23 Lubos: Yeah. So this actually is really, I would say maybe the most, it’s not really complicated, but if anybody wants to do kind of a consulting route, I mean, there are a lot of steps that need to be done, some technicalities. And so in order to actually be a business, there are kind of like two main routes you can choose. One is that you really just are sort of like a self-employed person, you actually do not have any kind of a business entity at all. So just really do the work as yourself. And there are some challenges with doing this because you’re kind of exposing maybe more of your own personal finances to any liability. So it’s always good to form a company, and it’s actually not difficult. It’s just some paperwork needs to be filled out.

19:02 Lubos: So I went down the LLC route. LLC is a Limited Liability Company. Another option is a S corporation LLCs are simpler to sell than S-corps. And every state has a different way of doing this. So this is kind of where things become a little bit challenging. Depending on what state you’re located in, you have to kind of research your own, you know, I guess the corporation board, I guess something along those lines. But essentially, you need to register with your own state. You also need to register with the federal government. So you need to get an employer identification number. So it’s kind of like a social security, but for a business. You also need to open a bank account. S, you know, it depends, you know, where you go, each bank will have different regulations. I bank with a credit union. So they actually made it kind of easier, I think, to open it.

Opening a Retirement Account

19:49 Lubos: And finally, then when it comes to the finances, you need to also open a retirement account. So, you know, I think some of your listeners might be familiar with a 401(k) or Roth IRA. The issue with a Roth IRA is there’s a ceiling to how much income you can make, you know, and then it basically cuts off. So you cannot put any more money into the Roth, like once you exceed a certain amount of annual income, you simply cannot put money into Roth IRAs. And with a regular IRA, you’re limited to only like $6,000 a year. So if you actually want to be saving, you know, more substantially for retirement, it’s better to have some other ways to save more. And the easiest way to do this is open a SEP IRA. So SEP is I guess self-employed or something on those lines.

20:35 Emily: Self-Employed Pension, I think.

20:37 Lubos: Yeah, Self-Employed Pension [Simplified Employee Pension] plan. And so with a SEP, you can contribute something like up to like maybe 20% of your income. I think you probably know the right numbers, but it becomes something comparable to 401(k). And the benefit is there is no expense, because the 401(k) plan has like an annual fee. So 401(k) is really the only viable route if you have a lot of employees, but if you’re kind of like an individual person, then a SEP is the way to go. And with a SEP, you just the money in, and it’s just like a regular IRA, you know, you get the deduction. And then, you know, so you can get it rolled right off on your taxes when you do your income. Also in the website, it’s also a very important thing to have some kind of website for people can find you. And besides, I mean, that’s essentially, I mean, things become more complicated once you start hiring employees, but as long as you’re just working for yourself, then it’s actually quite trivial. Like it’s not too many more steps besides what I just mentioned right now.

21:29 Emily: Yeah. You put that so well. I want anyone who’s interested in going out on their own, hanging their own shingle, like to go back and listen to what you said, because you covered everything important. You said it very succinctly and very, very clearly. And I totally agree with everything you said there, and it’s the journey that I’ve taken with my own business as well. I’m going to link in the show notes, I actually have a course available inside the personal finance for PhDs community called Best Financial Practices for Your Self-Employment Side Hustle, which goes into some of the elements that you just talked about, like setting up a separate bank account, like retirement plan options. So I actually don’t have a SEP IRA, but I have a solo 401(k), which I decided was the better fit for me. Which actually, because I set it up at the same place, Vanguard, where I have my IRA, it actually didn’t have any additional fees, which was cool.

22:19 Lubos: I also bank with Vanguard. So I didn’t actually realize Vanguard has options.

22:21 Emily: Yeah. Look into it. Because I liked with the solo 401(k), especially when I was making like less money, you can contribute up to that $19.5K cap, like a hundred percent of what you make basically, and not be limited to that 20% limit that the SEP IRA has. So anyway depending on your level of income, one or the other could make more sense. For me earlier on, definitely the solo 401(k) made more sense, so I liked using that at first. For me also, like I’m actually right now going through the process of registering my LLC in California, because I moved to California recently. And California wants their hands in everything you do if you live there. So I’m registering my LLC in California now. It used to be in Washington. And actually I’m doing an S election this year with my financial advisor. So she’s helping me with that. But yeah, it’s the same, I totally agree when you’re starting out, like do the LLC, it’s not really a big deal, set up the bank accounts. All of what you just said is perfect.

From Side Hustle to Full-Time Self-Employment

23:16 Emily: Let’s talk more about your transition. Like you mentioned, you know, coming out of grad school, maybe you expected to keep working for that contracting company, but then they weren’t going to raise your pay. So, no. Like how did you expand to like, make this be a full-time thing instead of just a side thing as it was during grad school?

23:34 Lubos: I don’t know. I guess maybe I was kind of maybe lucky. I kind of stumbled into this field that apparently there was a huge need for people to do analysis. And there really aren’t many who have the set of skills that I have. So it kind of almost got to a point of where, like, I almost have more work than I can handle, which on one hand is a good thing, but it also can be, you know, you need to be really careful with like, how are you balancing, you know, your life and your work commitments.

24:02 Emily: Yeah, I mean, that is really fortunate that the demand was there and you were stepping in like at the right time to provide these services. It definitely seems to me from the way you’re speaking about this that you could have a full-time job. You could have an employer if you wanted to, but you are, you know, committing to this contractor lifestyle. Why is that? Why do you prefer this?

Flexible Contractor Lifestyle

24:21 Lubos: I think I really enjoy the flexibility of it. You know, so I’ve been actually working from home like long before COVID came. And I do enjoy that I to work with many different customers. So I kind of get like an insight into what’s happening and, you know, I kind of get to see like, you know, I get to work on many different missions. As opposed to, let’s say I work at NASA Goddard, or another NASA center. I might be working only on one mission. So you get to see the one mission from build to launch, which is great, but sometimes it’s good to actually, you know, learn more about more things happening. So it just kind of gives you more insight into the world. But there is one big downside and that is that you know, working from home, like by yourself, you kind of start missing a little bit of that kind of face-to-face interaction.

25:09 Lubos: And so I actually took a job you know, a year and a half ago at the university. So I also teach at a university and I basically do the job so I could get a chance to interact with students and actually kind of try to teach them some of the stuff that I learned myself. And just kind of have more like the kind of face-to-face interactions with other faculty and you know, more people in academia. So I think it’s important that even if you do work kind of for yourself is, you know, try to find a balance a little bit and actually try to like interface with other colleagues kind of in your same field, just so you can have the kind of back and forth a little bit of discussion.

The PhD Opens Doors

25:45 Emily: Yeah. I’ve found the same thing, and thankfully I’ve made some good, like kind of online contacts through my business, who I can have, they’re not literally my colleagues, but kind of have a collegial relationship with them, which is really, really lovely. And definitely yeah, it’s a needed outlet when you’re self-employed. Is there any other advice that you want to add about you know, being full-time self-employed?

26:11 Lubos: I would basically, I guess say like, you know, do not hesitate to try this out. And also, like, I think that people should realize that, you know, a PhD is really just a way to open a set of doors that maybe wouldn’t be there before, and it may not be for everybody. Maybe not everybody wants to open the door, but having a PhD really gives you the credibility to kind of be your own independent researcher. So, you know, I’ve met a lot of people, brilliant people who only have a bachelor’s. So, in no way am I knocking down any other, you know, any other degrees. Just because someone has a PhD doesn’t mean they’re necessarily going to be, you know, smarter than somebody who doesn’t. But at the same time, by having that, you know, a PhD after your title, it kind of makes people kind of trust you a bit more, so maybe like a new person or you want to kind of get into consulting.

26:58 Lubos: Just the fact you have the PhD will give a little bit more credibility. And so if there’s anything you’re interested in, you know, do not hesitate. And I feel like now, especially with the internet, you know, there’s really no need to have this survey standard career path. You know, you go for a PhD and then you do a post-doc, go to faculty. I mean, there are many, many opportunities to be an independent researcher. And a lot of, you know, now there’s a lot of private funding coming out. Let’s say my field in the space environment, the space industry, maybe, you know, five years ago, all the money was coming just from the government entities, you know, from NASA, maybe from the DOD. Now there’s a lot of private venture capital coming in. So there are all these companies being formed all over the place and everybody needs some kind of analysis to be done. And so if you have a set of skills, you know, don’t box yourself into this whole, like, you know, post-doc faculty route, because there are many, many other opportunities available.

27:52 Emily: I love that advice. That’s perfect. A perfect way to end this interview aside from our standard last question. And I loved hearing sort of the arc of your story here from you know, just starting a blog about something that interested you and what you were learning in graduate school and it blossomed into this whole like full career, which is amazing. And I’m so glad to hear that you, you know, you’re so gratified in that.

Best Financial Advice for Another Early-Career PhD

28:13 Emily: So the question that I ask all my guests at the end of our interviews is what is your best financial advice for another early-career PhD? Would you please share that with us? It can be something that we have touched on already in the interview, or it could be something completely different.

28:26 Lubos: Yeah. So, you know, obviously while doing a PhD, you know, your funds may be kind of limited. But you know, once you do get a job, or once you have a more steady income, you know, try to save money for retirement. Because it is not the percentage you’ll make, it’s a time that’s going to save you. I mean, it’s just the, you know, once you have the money there for a couple of years, just the compound interest, it just starts, you know, accumulating, accumulating, accumulating. So the earlier you can start with saving for retirement, the better. And, you know, for other people it’s like, oh, I’m going to put it off. I need to buy a car. I need to buy other things. But you know, please do that as quickly as you can. And the second one is, I was just listening to your you know, recent podcast with I guess Alexandra about, you know, purchasing a house.

29:09 Lubos: And so again, you know, buying a house these days is quite challenging as well because it’s a lot of money. But at the same time, you know, my wife and I, we bought a house, a townhouse maybe three years ago. And I was very, very hesitant to buy any property for like many, many years, because it’s just such a huge, huge expense. But it was a really great decision because what I kind of didn’t really realize before is that mortgage is really a forced saving, especially now with interest rates being so low. And we actually were able to get into a 15-year loan. My monthly non-principal payment is about $800. So even though my mortgage is about $3,500 I pay every month, out of that only $800 goes to the bank. The other one is the left hand pays the right hand. So I’m essentially just paying myself, you know. So it’s like the remaining $2,700 or whatever it is really just me taking money and just putting them into the equity of the house. And so it’s really a wonderful way to accumulate a lot of net worth you know, pretty fast.

30:12 Emily: Yeah, I totally agree. That was wonderful advice. Lubos, thank you so much for joining me for this podcast today. I had a fantastic time with this interview, and I hope it’s going to really help out some grad students who aspire to a career similar to yours.

30:25 Lubos: Thank you very much, and good luck to everybody!

Outtro

30:32 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.

How This PhD Conducted a Job Search and Evaluated Multiple Offers in the Private Sector

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In this episode, Emily interviews Dr. Sean Bittner, a newly minted PhD in biomedical engineering, on how Sean navigated finding and landing his first post-PhD job in medtech innovation. Sean timed his start date for immediately after his grad student position finished so as to not miss any paychecks, and they discuss how early Sean started networking and applying for positions to enable that smooth transition. They also talk through the strategies and tools that were most helpful to Sean in the job search process. Finally, Sean lists the elements of a job offer and what questions you need to ask to fully understand the salary and benefits. This conversation will benefit current graduate students and PhDs who are planning to pursue private sector jobs in the near or far future. You won’t want to miss Sean’s powerful concluding advice!

Links Mentioned in the Episode

How This PhD Conducted a Job Search and Evaluated Multiple Offers in the Private Sector

Teaser

00:00 Sean: Graduate school doesn’t always, I think, do a great job of reminding students of their worth. Of not just financial worth, but also their work worth and just like worth as an individual. But that was huge in my job search, was understanding like, no, no, I deserve to be here. You know, I deserve to be having conversations with working professionals that I admire that I think are, you know, extremely brilliant and hardworking. Like, I deserve to be here because I’m those things too. I did a PhD. I did these other things that qualify me to be here. This is myspace and I get to take it.

Introduction

00:42 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 14, and today my guest is Dr. Sean Bittner, a newly-minted PhD in biomedical engineering, on how Sean navigated finding and landing his first post-PhD job in medtech innovation. Sean timed his start date for immediately after his grad student position finished so as to not miss any paychecks, and we discuss how early Sean started networking and applying for positions to enable that smooth transition. We also talk through the strategies and tools that were most helpful to Sean in the job search process. Finally, Sean lists the elements of a job offer and what questions you need to ask to fully understand the salary and benefits. Don’t miss Sean’s powerful concluding advice! Without further ado, here’s my interview with Dr. Sean Bittner.

Will You Please Introduce Yourself Further?

01:48 Emily: I am delighted to have Dr. Sean Bittner back on the podcast. He was actually a guest on season six, episode 12. This was while he was in graduate school. We talked a lot about budgeting, how he and his wife were budgeting accrding to their values. Fascinating episode, recommend listening to it. But Sean is back because he very recently finished his PhD. We’re recording this in mid-September. He finished last month, and also started his post-PhD job last month. And so we’re going to be talking about that process of like, how do you do the job search, like while you’re finishing up your PhD? And how do you evaluate job offers? So really excited to talk to you, Sean. Will you please introduce yourself further for the audience?

02:26 Sean: Sure. Yeah. Thanks again, Emily. My name is Sean Bittner. I’m a recent PhD grad in bioengineering from Rice University. Recent as in four weeks ago. So very exciting, still kind of in the thrill of being done. And then, yeah, I also started my post-PhD job the day after, and I’m excited to just chat about the job search, and all the things to think about.

Timing Between Finishing PhD and Starting New Job

02:53 Emily: I know, because this is something that I’m sure is on the minds of many, many graduate students. Definitely in like the year when they’re finishing up, but maybe even the multiple years before then. This can be a great conversation for postdocs as well. Even people who have already navigated one job search might, you know, pick up some tips or at least some different perspective on how you did things. Of course, this always ends up being very individual, but so happy to hear your story. So the first thing I want to ask about is timing, because you just mentioned that you didn’t miss a paycheck between finishing up with your however you were being paid, assistantship or fellowship or whatever, and going into your job. So like, wow. Like if that was your goal, how did you manage to work out the timing that way?

03:32 Sean: Yeah, yeah, so this is a good thought. I would say it was a long time planning. There are a couple of elements there. One is scheduling the thesis defense, I think is always a little bit hairy just based on having to get four or five, six people in the same room at the same time. It’s hard. But I actually defended my thesis two months ago, so it was July 13th and had about a month’s worth of just wrap up and carry over after that. But I also had two weeks of vacation to use still. So right after defending, my wife and I took a much=needed, I think well-deserved vacation. And I came back, I had two weeks of work left, and then I was trying to set it up so that, okay, I’m done.

04:12 Sean: I already took my vacation. So I don’t need to take a bunch of time off between grad school and work and trying to get a start at my new job. Some of the companies that I was looking at were starting immediately, or starting a week later. But it wasn’t, you know, start in two or three months. I think I tried to make sure that it was just a consistent transition. I also wouldn’t necessarily know what to do with myself for three or four weeks off. I just, I like, I don’t know, having a purpose and going and doing some cool stuff.

04:41 Emily: Another thing you mentioned in there is that you defended two months ago, and then you had this bit of extra time, which I think is really good idea. You’re going to have to do edits on your thesis. Maybe you’re trying to get a last paper, you know, submitted or there’s always kind of wrapping up stuff. So I definitely think it’s good to time that defense a little bit before your pay would end.

04:59 Sean: Right.

04:59 Emily: It sounds like you, like were you paid through the end of a normal like semester term, like the summer term, or was your end date like somehow, otherwise negotiated?

05:08 Sean: Yeah. So, this is another good question. It depends on the department, the advisor, the school. The academic year is also your pay year at Rice, for grad students. And that ended on August 15th. After you defend your thesis, you can have a conversation with your department and with your advisor about, okay, how long do you actually need to finish everything up? And the discussion that we had was, I’m going to take two weeks vacation. I haven’t taken that yet. When I get back, I have about two weeks worth of work left to wrap everything up, finish any final changes and edits to my thesis. I didn’t have the last paper to try to complete on the tail end. So I didn’t have that time crunch. But then also there are students still working in the lab. So, you know, making sure that they kind of have a good turnover plan, I don’t want to just leave them high and dry and say like, oh, bye I’m out. You know, I wanted to make sure that everybody that I could assist in bringing up to speed, I did that before I left.

Transparency About Job Start Date Flexibility

06:08 Emily: Yeah, that makes sense. Yeah. Okay. So it sounds like you sort of knew that this date, this, you know, academic year turnover was a reasonable date. And so did you time your job search process then around knowing that was the ideal date to start, like mid-August?

06:22 Sean: Yeah. I had more of a guesstimate than a true date. Like, I didn’t know for sure, “Oh, it’s definitely August 16th.” Right? But I had an inkling of when my thesis defense would be, I knew it would be late summer, ended up being the middle of July. And when I was job searching, I was very transparent about that. Some people were looking for, “Oh, we need you to start on Monday.” Obviously that didn’t work out. And then some people that I was talking to later, I was open from the beginning. I’m interested in this opportunity, but it’s going to be sometime in August. And all of those companies had hired PhD students before. So they’re familiar with the idea that I don’t necessarily know the exact day I can start. But I got out of the way pretty quickly any really serious mismatch, like as I said before, I was talking to somebody briefly and they were like, yeah, we are excited about you, but we don’t have a job open until January. And I said, Hmm, I don’t think I can wait that long. And I’m glad that I didn’t because, you know, we’ll talk about this later, but I love the job that I’m in. So, I wouldn’t have wanted to wait for a maybe of a job that might open. But I think I was as clear as I could have been, I guess that’s the way to put it.

07:35 Emily: And let’s talk, I’m going into so much detail about these timing questions, because for me it was a source of stress and I think it’s a source of stress for other people as well. So for the types of jobs that you were looking for, it sounded like the company’s timelines were quite wide-ranging from, I want you to start next Monday, you know, if they were to hire you to, we have many, many months lead time on this. And it’s a little bit different from the academic search process, which is a little bit more well-known. It’s, you know, these fixed portions of the year that are dedicated, determined from parts of the process. So how did you like figure out what these timelines were and then therefore be able to backtrack and know how early you needed to start these conversations and start applying?

08:16 Sean: Yeah, I would say it was unique to every company, honestly. Similar to how you mentioned with the academic traditional academic pipeline, there are fixed dates in a normal schedule. And even with coming from undergrad, thinking about getting a job straight out of undergrad, there’s kind of a fixed schedule. You apply in the fall. You might hear something December, January. They expect you to start in May. Like that’s a standard thing. And so when I was looking at this in February and March of this year, I was kind of thinking the same thing, like, okay, I’m going to start talking to people. But I’ve learned, I work in the med tech space now, and I learned that it’s really dependent on what each company’s needs are at that time. Some companies I talked to, they had to fill somebody that day, like they needed somebody immediately.

09:00 Sean: And some of them, it was, you know, our fiscal year doesn’t roll over until August and we can’t add a new position until then, right? So I knew it was going to be, like I said, I knew it was going be sometime over the summer. And so I was trying to narrow down to some people. And again, just trying to get them to work with me a little bit flexibility-wise on, I won’t be available until August, but on the other hand, I will be available in August, right? And so like, how can we work this out?

Starting the Job Search

09:30 Emily: And so, maybe you said this and I missed it. So how early did you start your job search?

09:37 Sean: It’s a little hard to narrow it down just because like I would say, you know, I was talking to people for quite a while. I would say I was talking loosely to people as early as the fall, maybe winter of 2020. And then I started to have more serious conversations about job stuff in maybe March of this year.

09:58 Emily: So it went maybe more from like networking, feeling each other out to like, okay, we’re going to like put pen to paper and like get your name in front of somebody.

10:06 Sean: Exactly. Yeah, exactly. And, I can’t remember the exact date, but the call that ultimately got me in front of the people to get me in front of to get the job that I have now I think was in June, maybe. So a relatively quick turnaround in terms of, or compared to what I was expecting. You know, I was thinking like, okay, I’m gonna apply in March and they’re going to have me start five months later. And it was pretty quick.

10:34 Emily: Yeah. I guess I’ll chime in a little bit more on this timing. And of course I have not had a “job” job post-PhD, but my husband has. He has also a PhD, and so he works for a startup and it was quite small at the time he was hired. I think he was maybe employee number 12 or something like that. And they hired him and another one of his colleagues right around the same time. And for him, it was a very quick interview process because he was already in a postdoc that was very casual. It could end at any time. And so he was like, yeah, like we want to get started in a month or two or whatever. Like totally we can do that. That’s how quickly he was hired. His colleague who was hired at the same time, had a start date of about six months later.

11:12 Emily: So that same company was very flexible with these two different candidates. And probably that’s because they’re a startup that they could be that flexible. But I just thought it was interesting that like both of them were like, you know, coming out of PhD, coming out of postdoc and had different timing needs and the company was able to accommodate both of them.

Network or Nothing

11:29 Emily: So when you embarked on the networking that ultimately led to applying, what, you know, had you picked up in terms of strategies, maybe from your professional development during graduate school, maybe from outside sources, that were really useful to you during that period?

11:44 Sean: Yeah. So I think I’ll start with the easiest one. Everybody says it, it’s almost a cliché, but it’s really true. It’s network or nothing for the most part. It’s you got to know somebody. And I don’t mean like, oh, your, your dad’s on the board or like you have a family friend. But all of the jobs that I applied for, I knew someone that put me in front of someone else that put me in front of somebody else. Zero of them were I had the most compelling application on LinkedIn. And I think, like I can’t understate that enough, I guess. Like LinkedIn is super useful for finding information, getting connected to people, learning about the different types of jobs that are available. But ultimately, it’s a stack of resumes in terms of applying. And in fact, I didn’t actually formally apply, in the traditional sense, until well after I had had an inkling that the company was interested in me. And that’s true for all of the companies I applied with. So I think the number one is work on your network, reach out to people, just try to get in front of, you know, get some face time, and tell people who you are and why you’re excited about them.

12:52 Emily: You’re right. Everybody says networking and it’s really intimidating for a lot of people to hear. So please, can you be more specific about like, who was in your network? Like who were those first, the first layer of people that you like reached out to, and then maybe there was another layer, but who was that initial network?

Network Composition

13:09 Sean: Sure. So, of the opportunities that I was considering at the time, each of the companies I got connected to by one person, or in one case, two people. One of them was a former manager of mine. They had moved on but was connected to one of the companies, introduced me. The second one was another student in one of the master’s programs at Rice, went and took a job at this company. And I kind of knew them and I was familiar with the company. And I just said, “Hey, I’m interested in your job. Can you tell me about it? Not that I want to take your job, but I’d like to maybe work for your company.” And that’s actually the job that I ended up taking, is they ultimately connected me with their boss, and that person’s boss is the CEO. And we sat down and had a chat.

13:57 Sean: And they just said, “Yeah, we’re looking for somebody. You seem like you fit the bill. Let’s let’s talk.” The other one was somebody I had worked with in the past. I had done a little bit of, of just like, I guess, diligence work is the best way to describe it. But I had done some work for them in the past when they were at a different company. And then when they moved, they said, “Hey, I have a job open. Do you want to talk about it?” And I said, “Sure. You know, I’d love to chat.” So all of the people that I networked with, it wasn’t just, again, I reached out to them once on LinkedIn. It was people that I’ve worked with explicitly in the past that can speak of my skills, that can speak of, ideally, my personality. People that knew me more than just a face that’s that’s on LinkedIn.

14:44 Emily: Absolutely. I totally agree, that first layer does not have to be like reaching out to strangers. Like no, it should be people who, as you said, have some personal connection with you, hopefully through work, but not necessarily, who can then, you know, forward your name onto the other right people. And I think that, you know, current graduate students like need to know that their peers around them, and potentially their advisors and other professors around them as well, can very well serve as that first layer. So I know one of my, like sort of regrets in graduate school, was not being better connected with the other people in my program, especially the people ahead of me. Let us just say, leaving Duke before me, whether that was PhDs graduating before me, whether that was masters students or undergrads coming in after me, make those connections, too. Because they all are going to be out there potentially, you know, in a place that you’d be interested in working. So those connections are so, so important. And that networking, the “networking” quote unquote, is just your normal connections with other people who you work with and are around during your graduate degree. It’s much more casual at the beginning, but you have those loose connections and then you can pull on them later as you did. And just let them know, I’m looking for work. I’m going to be graduating at approximately X date. Your company sounds cool. Can we talk about that more?

15:59 Sean: Yeah, I think I had, I don’t want to say an easier time, but I have a fairly gregarious personality. It maybe becomes a little bit more natural to me to just kind of get out and talk to people. But it’s really true that, maybe not the reason I got my job, but like the connection that got me the job that I have is a masters student that I knew left Rice before I left Rice, was working at the company for a few years and I said, ‘Hey, can we talk?” Done. And that was it.

LinkedIn and Beyond

16:26 Emily: So we mentioned networking, you mentioned LinkedIn. Did LinkedIn come into play, particularly in your search, given that networking in real life was actually what led you to, you know, the right place?

16:40 Sean: Yeah, so again, I think it’s a good informational tool. It certainly came into my search in terms of figuring out what other people in my field were doing. And then also, in a lot of cases, LinkedIn was the first touch point. For example, this masters student that I’ve talked about a couple of times, that was my first message on LinkedIn, was, “Hey, can we, you know, have a phone call and set it up?” Everything after that was phone calls, emails, et cetera. But the first message was LinkedIn. And same thing, you mentioned other students in your department, other students in your program and at the university, some of my other connection points were prior students in my lab that graduated years before me with their PhD. But you kind of have this like familial relationship because you came from the same lab, you know. They want to see other students from that lab succeed. So same thing, you know, either LinkedIn or just having access to their email and just cold emailing and say, “Hey, I’m from so-and-so lab. I’d love to chat about your own experience in job searching. Can we set up a call?” But yeah, LinkedIn is hugely useful. I think it’s just not the beginning and the end, it’s the beginning.

17:51 Emily: Yeah. Any other strategies that you want to share with us that you found useful during this process?

17:54 Sean: I think one thing to keep in mind that we maybe haven’t touched on so far is, the network that you have is bigger than you think it is. And that’s not like a empty hollow way of saying, like, you don’t know who other people know until you ask them. Example: I have a friend of a friend who, when I said, I’m interested in this company that I’m looking at, they said, oh yeah, I know so-and-so manager at that company, let me put in a call. And I didn’t ask for that. You know, I didn’t ask for, can you recommend me? I just, they asked me about how my job search was going, and I was honest about it. And the next day I got an email and said, oh yeah, I heard from your manager, friend. I’d love to chat. Let’s talk about it. So there is the element of like, you have to network, but there’s also asking, just being explicit and asking your friends and your colleagues, like who do you know that might be able to help? Because that’s ultimately what we’re all here to do. I would love if somebody from my lab, my department reaches out to me that knows me and said, “Hey, I’m looking for a job. Can you help me?” Love to, I’d be happy to help if I can.

19:02 Emily: Yeah. I think that’s a really common human thing. Like if we can make someone else’s experience go easier, it’s something that we’ve already done in the past. And you’re also, you know, if you actually get a hire, like you’re also helping your company and so forth. So it’s kind of like a win-win, win-win all the way around for networking.

Commercial

19:20 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, November 17th, 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.

The Anatomy of a Job Offer

20:33 Emily: Okay. So, you’ve networked, you’ve gotten your name in front of the right people, you’ve interviewed, and you’re finally getting, you’ve mentioned a few different job offers. And so what actually did the job offers look like, and what were the components that you were sort of considering?

20:48 Sean: Yeah. Yeah. So, this is, I think the meat of the conversation today. The standard job offer, I feel like, baseline, has two components. You have base salary, and you have ancillary benefits, whether that’s vacation time or sick time, like just time off basically. But, there are other things to consider there. And so, it’s interesting. I kind of had the gambit of a variety of different things that were part of the quote unquote package. Here are some things in no particular order that it could be: straight salary and, you know, vacation or sick time or whatever. One of them might be salary. And if you’re at a startup, it’s salary plus stock in the company, it could be. Some other things that other companies do is you have a salary, but also we have a retirement plan, whether it’s 401(k) or 403(b). You’ve talked about that a couple of times with other students, or I guess other professionals now on the podcast. Those things are things to keep in mind. Whether the company offers health insurance or not is hugely important.

21:54 Sean: But all of these things together are a much larger conversation than just the salary number that you see on maybe your job offer. Something else to keep in mind is you may not see those other things on your offer letter, if that makes sense. So not that they’re, you know, trying to be hidden or anything like that, it just may not be part of the standard form email that you get of like, “Oh, we’d like to offer you this job. Your compensation is this, you have this many weeks off.” I asked I think all of those questions to all of the companies, and they were very forthcoming with the information once I asked. But it wasn’t part of their standard letter. There’s also some differences in time. Sorry, I’m kind of all over the place.

Variable Employee Benefits

22:36 Sean: As an example, the company I work at now, the time off policy is really generous. I think it’s everything, sick vacation, et cetera, is all PTO, or paid time off, but it’s unlimited PTO, right? So, I don’t have this weird situation where like, “Oh, I’m out of sick days, but I’m sick. Or my kid is sick, or I have to take my animal to the vet or something.” And on the other side, like I don’t have to feel like I can’t use any of my vacation days, right? Like there’s a very open policy about that. Some of the other companies, it was very explicit. You have 40 hours or 40 hours of sick leave and, you know, two weeks of vacation or whatever. I would say that’s more of a standard notice. It’s two or three weeks vacation and then a fixed amount of sick time also.

23:23 Sean: On the stock side, I think there’s pros and cons to stocks. I’m not a huge single stock guy, for retirement. So, you know, when I look at single stocks, it’s kind of a gamble. You know, they could be worth a huge amount of money if that company skyrockets. They could also not be worth very much if something happens and, you know, especially in biotech. That comes and goes, right? And so like, you kind of got to weigh, okay, is this a gamble I’m comfortable taking? And then the last piece, I talked about retirement before. One of the companies I was looking at offered a retirement package. It was, I forget if it was a 401(k) for 403(b). But it was required participation up to a certain amount. So, it wasn’t a match, it’s just they set it up so that, you know, X percent of your salary has to go in no matter what. That can be valuable because it prevents you the legwork of having to go set it up yourself.

24:15 Sean: But, as you’ve talked about previously, if you’re interested in having a little bit more control over your own retirement package, you can set up an IRA. You can just set up external mutual funds. If they have a plan at work, they will send you information about the funds that they have available. And you can kind of make a decision on how was the track record for these funds? Can I get, you know, better returns elsewhere, whether it’s an IRA or just a mutual fund in a non-retirement account. I think all of that nuance like doesn’t immediately come to mind when you’re first looking at a job, but it is important. And I also want to just put a small asterisk here. Money is only part of the conversation. Ultimately I took the job that I took because I love the work, and I’m really passionate about the type of work that I’m going to get to do. But it is part of the conversation.

25:08 Emily: Love everything you said, like, exactly right. The salary is going to be upfront. Maybe the time off policy will be upfront. Maybe they’ll mention something about healthcare or retirement or insurance or something, but you’re probably going to have to do another layer of questions and say, “Hey, send me your booklet on your, you know, retirement policy, and I’ll take a look at it.” Or like, let me know, like, you know, I mean, insurance is such a massive, massive issue. Especially, like I’m thinking, you know, I’m married, we have two children, we’re all on my husband’s workplace insurance. So like how much of a premium his employer pays versus how much he pays. The deductibles, all that stuff matters a lot because we have a lot of people riding on that one, you know, policy.

25:49 Emily: And maybe, you know, you have to evaluate how much that matters to you, but if you are supporting a family on one insurance policy, you could be looking at a premium of a thousand dollars a month easily for an employer that doesn’t help out that much, or even more, versus an employer who pays a hundred percent of the premium or 90%. It’s a massive, massive difference. But that’s very individual, you know, you have to really decide what’s more important to you. Is it the vacation policy? Is it the healthcare? Is it that the retirement plan has a match? And that’s super, super good to you or whatever. And maybe that’s why they’re not that upfront with this because like salary matters to everyone, but like maybe there’s different levels of caring about these other elements.

26:26 Sean: Yeah. And it could also be you know, no fault to the company. It may just not be prudent to kind of give all that information out upfront. So for example, some of the companies that I looked at, I knew that there was a retirement plan. Or I knew that there was health insurance provided. But in the case of health insurance, which you just talked about, I didn’t actually know what coverage was available to me until after accepting the job, or in the case of one of the ones I didn’t take, until after I would have accepted the job. So, that’s also a little bit of a gray area where, okay. I know that there is some type of insurance provided, but I wouldn’t get to decide whether, like you said, it would be better for my wife and I to stay on my wife’s insurance versus change over to this new one until actually taking the job.

Comparing Job Offers

27:12 Emily: Exactly. So you were in the fortunate position, the well-timed position of having multiple offers, it sounds like simultaneously, or at least like overlapping or something on the table. Yeah. And so you could actually look and say, not it’s a yes or no on this job, but like, what do I like about this job offer versus this one? And of course the work’s important. You mentioned that the work matters, I would say most. But the salary and so forth benefits are part of that. So how did you do this like comparison? And also, did you do any negotiation knowing that you had, you know, competing offers?

27:43 Sean: Yeah. So this is a good question. I think I did it in tiers. The first tier was, like you talked about just now, the nature of the work. The job that I have now, it wasn’t until realizing that that job was available to me, that I realized how excited I was about that type of work, right. And so, I think there’s something to be said for like, if it’s financially feasible, of course this is a personal finance podcast. If it’s financially feasible, pick the job that you enjoy, because there are going to be some days that you don’t enjoy. And I think those days go down better at a company that you enjoy doing work that you like, as opposed to at a company that you’re not super thrilled about, but you’re getting paid a lot to do it. So that’s, you know, obviously tier one.

28:27 Sean: Tier two, this is a personal finance podcast. I looked at kind of the, just as much as I could, apples to apples of each of them. Again, I talked about, I knew that there were benefits for all of them. I didn’t have insight into the specific coverages and all of that until actually taking the job. So in terms of like evaluating them, I picked the one that was what I consider an optimum. It was the best combination of salary and benefits and I’m passionate about the job. And then in terms of negotiation, I didn’t really negotiate, in part because I knew that the offers that I was getting work were competitive with what I would expect for the types of roles I was getting. So I didn’t ever really push back on, oh, you know, I think I’m worth this much or, you know, this other, I didn’t really do any of that.

The Tactic of Honesty

29:19 Sean: What I did do was be transparent about wanting the job. For example, I did have a favorite and obviously I took that one. But when we were having that conversation, I was transparent with them and I said, this is my top choice. I’d love to do it. Like, how do we make that happen? And it wasn’t until I think like sometimes employee applicants and employers are playing this game of chicken of like, I want to be vulnerable and tell you that I want you, but I don’t want you to say no, right? And so like, there’s this weird tension. And I just, I tried to cut through that and say like, if you guys are not interested in me, cool. You know, like I get that. I’m going to go pursue another opportunity. But if you are, like, I’m really interested in this, let’s make it happen. And I think that ultimately sealed the deal because they also were probably thinking a little bit of like, we like him. We’ve said we like him, but we’re not really sure where he’s going. He said he has a couple of offers. So I know it can be a little nerve-wracking, but like, there’s something to be said for transparency and honesty, if that’s part of the conversation.

30:27 Emily: I think that, it sounds like, you know, that conversation was prior to the formal offer being made, right? Like that could have been what tipped you over into getting an offer versus maybe we’ll go with another candidate, you know, that sort of thing. So like, I think at that stage, you use that tactic really well. Honesty, the tactic of honesty.

30:45 Sean: Right. Yeah. And I think, so another, I guess small detail that’s important here is, I knew the terms of what an offer would be for each of the companies before actually receiving the offer. So that’s, I think part of it too, is like the formal paperwork wasn’t filed, but I knew what it would be talking about. There wasn’t a part where I came in and something, you know, surprised me totally out of the blue. I wasn’t expecting that. So that might be part of it too, is I think that there was a little bit less formal, like I’m applying, I wait for my offer letter, I consider the offer letter and more of a fluid, like, I know what we’re talking about. Everybody’s kind of on the same page in terms of information, and now we just need to make some decisions.

Tell Us More About Your Job

31:28 Emily: Yeah. That’s really good insight. I think for anybody who has not had a job in the private sector, and they’re not really sure, especially, let’s say particular to your space, and of course this is going to vary across other companies, but like, it’s good to just hear someone’s experience and how you navigated that. So tell us a little bit more about the job that you actually took. What is the nature of the work that you’re doing?

31:47 Sean: Yeah. So, I’m going to be working in we’ll call it, I guess, med tech innovation or med tech support. So basically what I’ll be doing is helping support startup companies in the medical device space, getting them prepped and moving through the different stages of development, helping, you know, maybe teach them some core concepts about regulatory and clinical trials and all of these things that they have to do to get their product to market. I’m, I think excited about that aspect in particular, you know but now I’ve really fallen in love with this coaching and teaching space over the last couple of years. So like I’m going to get to do that as part of my job, which is super cool. And then I also get to stay in the science realm without actually, you know, holding a pipette myself, which was, I think ultimately my goal coming out. That’s something I didn’t think to talk about earlier, but that was part of, I knew kind of the nature of the work that I would want coming out of grad school, which was, I want to be involved in science, but I don’t necessarily want to do the science myself. I think I see myself more as a coach, a mentor, a supporter of other individual contributors than I see myself as one.

Role of Side Work in Career Path

33:05 Emily: Given the skill set that you’ll now be using that you developed partially through the coaching and teaching side work that you were doing during graduate school. How much of, you know, how important was it that you pursued those side endeavors in ultimately, you know, formulating and landing this particular job and career path?

33:24 Sean: So, I think it’s a good question. I think the answer is a little nuanced. Over the course of my PhD, I did a couple of different things. I did the traditional research route. Of course, that’s what I got my PhD in. I also did some short-term consulting at a nonprofit in town. And then I did, as you said, coaching and training, more leadership and career coaching style. All of those things were relevant in the job search, in getting the job that I ultimately have. In fact, the fact that I have a PhD in bioengineering, I think qualified me to be even at the table having the conversation. But the things that sold me, that you know, put me over the edge were these other ancillary things that I was doing. And going back to the networking piece, an ancillary skill that you have is conversation, right? I work in now, medtech innovation. There’s a lot of handshaking and smiling and waving and chatting and, you know drinks over dinner. Like there’s all of this kind of stuff in this field. And so having gotten experience in learning how to evaluate startup companies, in learning how to decide whether a team or a founder or somebody is coachable, is willing to do the work and learn. Those are things that I didn’t get through five years of bench work, but are incredibly relevant to my job.

It’s Okay to Just Be You

35:00 Emily: I think what I’m taking away from your explanation there is, during graduate school or during these earlier phases of training, you be you. You just do the things that you want to do, learn the things that you want to learn, explore different opportunities, figure out what you like. And it’s okay. In fact, it may be very helpful if some of those things are not strictly grad student role kinds of things, strictly at the bench, strictly just publishing papers and blah, blah, blah, blah, blah. Like, and if you are you during graduate school and you’re pursuing all these other things that you like, it will help you find and craft a job and career that you actually like later on, don’t try to fit yourself into this like I’m just a researcher or I’m just a teacher mold if that’s not you. If it’s you, perfect. Grad school is great for you. If that’s not exactly you, you need to explore these other areas because you don’t want to be stuck into a mold that you don’t fit in for the whole rest of your career.

35:57 Sean: Yeah. I think that’s true. I do want to, you know, obviously present the caveat of like, it’s true, you’re getting a PhD in the stuff that you’re doing at the bench or in the case of, you know, non-wet lab stuff, in the stuff that you’re doing for your degree. So you do have to obviously do that and do it well. I think there’s value in, you know, crafting a really strong body of work. That being said, there are a lot of people that they do their research, and that’s what they do. That I think qualifies you to be at the table to get jobs that people are looking for PhD hires for. And in the case of a more traditional academic route, like kick butt at publications and grant writing, all of that. Hugely important, and those are the things that are relevant to your job.

36:44 Sean: But that’s not necessarily the case for everyone. And in fact, again, personal example, of the offers that I was considering, only one of them was even really closely related at all to the specific work I was doing. So I think I talked about this last time, but, my PhD was in the 3D printing space. I was looking at bone and cartilage printing. That bioengineering experience was more relevant to one offer. For all of the other job opportunities, they were interested in my coaching background. They were interested in my knowledge, not only of science, but of like the startup environment. Those are things that I wouldn’t have learned just in my lab work because the lab work’s not designed for that, right? The lab work is designed for the really detailed, basic science level type work that is used to eventually create some of these opportunities.

Best Advice for Another Early-Career PhD

37:40 Emily: I think that was very, very well put. I ask my guests as you know, a last question, which is what is your best financial advice for another early-career PhD? I think we just got some fantastic advice, but do you have any others? It could be something we’ve touched on already in the interview, or it could be something completely different.

37:57 Sean: Yeah. So, I guess two, because I’m not great at following directions. The same thing that we just talked about, which is, I think there’s real value in pursuing and carving out whatever path makes the most sense for your career, whether that’s a traditional academic route, whether that’s something else. Finding and doing and pursuing opportunities that are relevant to that. I think the other thing is, we’ve talked about this before, and you’ve talked about this with several students on the podcast previously. Graduate school doesn’t always, I think, do a great job of reminding students of their worth, of not just financial worth, but also their work worth and just like worth as an individual. But that was huge in my job search was understanding like, no, no, I deserve to be here. You know, I deserve to be having conversations with working professionals that I admire that I think are, you know, extremely brilliant and hardworking. Like, I deserve to be here because I’m those things too. I did a PhD, now that might be because I’m stubborn, but like I did a PhD. I did these other things that qualify me to be here. And I’m not a poser. I’m not taking somebody else’s place by being here. Like this is my space and I get to take it.

39:16 Emily: Wonderful. I think this interview is going to be so useful to graduate students and postdocs who are, you know, looking forward to this post-PhD career transition, especially into the private sector. So thank you so much, Sean, for joining me on giving this interview.

39:29 Sean: Sure, sure. Thanks for having me again.

Outtro

39:37 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! 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.

An MD/PhD Pays with Time Instead of Money

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In this episode, Emily interviews Emily Przysinda, an MD/PhD student at the University of Rochester who is approximately halfway through her 8-year degree program. As is typical in a Medical Scientist Training Program (MSTP), Emily’s funding package includes tuition and fees and a stipend for the entire program. Emily and Emily discuss the financial side of the MD/PhD and why it shouldn’t be thought of as a free medical degree. Emily shares why she chose an MD/PhD program and what the career options are afterwards. Thanks to the low cost of living in Rochester, Emily has been working on her finances intentionally for the last couple of years and is pursuing several savings and investing goals—but decided against buying a house. This episode is perfect for anyone considering an MD/PhD program or curious about the mindset of someone pursuing an 8-year-long graduate program.

Links Mentioned in the Episode

mdphd pays with time instead of money

Teaser

00:00 Emily P: If you think about what an MD might be making in the four last years of their career, because that would be to assume they might have a more extended career by four years, it’s probably only about maybe a year or two worth of salaries of debt that they take on for this. But essentially I say that I pay in time and not money for my MD degree, just because of the opportunity costs of not having those extra four years of the career.

Introduction

00:37 Emily R: 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 13, and today my guest is Emily Przysinda, an MD/PhD student at the University of Rochester who is approximately halfway through her 8-year degree program. As is typical in a Medical Scientist Training Program, Emily’s funding package includes tuition and fees and a stipend for the entire program. We discuss the financial side of the MD/PhD and why it shouldn’t be thought of as a free medical degree. Emily shares why she chose an MD/PhD program and what the career options are afterwards. Thanks to the low cost of living in Rochester, Emily has been working on her finances intentionally for the last couple of years and is pursuing several savings and investing goals—but decided against buying a house. This episode is perfect for anyone considering an MD/PhD program or curious about the mindset of someone pursuing an 8-year-long graduate program. Without further ado, here’s my interview with Emily Przysinda.

Will You Please Introduce Yourself Further?

01:50 Emily R: I am delighted to have joined me on the podcast today, Emily Przysinda. She is an MD/PhD student at the University of Rochester. And since the very beginning, like episode one of this podcast, I have wanted to interview an MD/PhD or an MD/PhD student. And Emily is the first person who has like, come along, who has volunteered to do that. So I’m really excited about this, and just delighted to have her on. So Emily, will you please introduce yourself to us and yeah, tell us a little bit about yourself?

02:17 Emily P: Hi, I’m delighted to be on the podcast, been listening for about a year now, so I’m really excited to be here. So I’m originally from Livonia, New York, which is south of Rochester. I went to Skidmore college in Saratoga Springs, majored in music and neuroscience, and I was also on the swim team there. After that, I worked in a music cognition lab at Wesleyan University in Middletown, Connecticut, and there I solidified my love for human cognitive neuroscience. And I applied to MD/PhD programs while I was there for two years. And then now I’m in the University of Rochester MD/PhD program, or MSTP, which stands for Medical Scientist Training Program. I’ve completed the first two years of medical school and also the first few years of my neuroscience PhD. And so I’m about halfway through, and my project is looking at social language processing in patients with schizophrenia using neuroimaging methods.

03:25 Emily P: So it’s fairly integrated with clinical and research. And yeah, and then also before I get started, I just want to acknowledge my privileges and express gratitude for just a couple of things. My family kind of had modest means, but I’m very lucky that all my needs were met and most of my wants were fulfilled. I learned how to save for big ticket items at a young age. And my life was very rich with relationships, activities, and experiences, especially in nature. And then for funding my undergraduate degree, I was happy and very grateful to get a good financial aid and merit combined scholarship and have around an average amount of student loan debt. And I’m very grateful for some family support with room and board and transportation costs. And I’ve been financially independent from my parents shortly after graduation. And I’m currently a white female and I’m only financially responsible for myself. So that’s just kind of some things that I’m very grateful for and want to get into before we talked about any breakdown of finances and things like that.

How Do Finances Work for an MD/PhD?

04:40 Emily R: Yeah. Thank you. Thank you so much for that context. So I don’t know that all of my listeners will be very familiar with MD/PhD or MSTP programs. So could you please explain like, just in general, like maybe the timeframe and so forth and and of course what the finances are, because I think we all know the finances about PhD programs. Most of us can make some assumptions about the finances of MD programs, but how does the MD/PhD fit, you know, between those two?

05:06 Emily P: So, yeah, it’s actually kind of similar to the PhD except for it’s longer for most programs. And so I’m in a NIH-funded program, and not all programs have funding from this. So it’s a combination of NIH funding and funding from my institution. And so I get a stipend that’s like essentially like a STEM graduate stipend for the full eight years of the program. And just to give you an estimate about that, it’s around $30K, which I think is standard depending on the city that you’re living in. And the PhD is kind of sandwiched in between two years of med school on each side. So you have two years of med school, which is mostly didactic courses and some patient interactions, and then you have the PhD, which is four years.

06:03 Emily P: And then the last two years of MD, which is mostly clinical. So it’s eight years long, and you really try to only keep the PhD to four years, but some people do have longer. And then, in terms of just like a couple of nuances to the finances, the PI is kind of responsibl for your stipend for after the first 21 months of your PhD. So it kind of gives the PIs an incentive to take on an MD/PhD student. You stress to them that it’s four years, or maybe even a little bit less, so you can make that transition back into med school. And you’re encouraged to apply for an F30, which is like the MD/PhD equivalent of an F31 grant. The program here, at least, covers health insurance and disability insurance. And they take over, once you go back to medical school. We also have about a $2,400 stipend for MD/PhD things during the program. So like conferences, test prep, like lab laptops. And there are some student fees, but they’re generally minimal except for the first year and during some of the medical school years. Yeah. So that’s kind of the overall trajectory in terms of finances in the program.

An MD/PhD is Not Just a Free MD

07:37 Emily R: Yeah. And I think at first blush, this seems like, What? Like you get a free MD and you get paid while you’re there, like during both the med school part and the PhD part? That’s incredible! What a deal. Can you tell us why that might be the first reaction, but it shouldn’t be the only reaction to how this program is funded?

07:59 Emily P: Yeah, so it’s definitely a valid reaction, and I think it can be a very good deal, but really only if you like research a lot. Because it’s a very long program, it’s eight years. So the way that I thought about it even going into it is that I more compare it financially to an MD program where you would be funding the MD out of pocket. And so the MD career trajectory will be essentially four years earlier than an MD/PhD’s. So, if you think about what an MD might be making in the four last years of their career, because that would be to assume they might have a more extended career by four years, it’s probably only about maybe a year or two worth of salaries of debt that they take on for this. And more with interest, because that can be a big thing depending on your specialty. But essentially, I say that I pay in time and not money for my MD degree. Just because of the opportunity costs of not having those extra four years of the career. And for that reason, I definitely wouldn’t suggest doing an MD/PhD just because it seems like an awesome deal. You should really like the research, both the research and the human clinical side, because both of these training programs can be fairly brutal. So, definitely want to consider that.

09:35 Emily R: I really like that you noted in that comparison that what we’re really talking about is, in a sense, a four-year shorter career, possibly. So like it’s those end, you know, the last four years of salary that is the difference rather than, you know, your residency salary or whatever you’d be doing in the, you know, most immediately post-degree. But I wonder, and I don’t know if you’ve ever done this, is like playing around with like the compound interest effect on this because you know, it sort of cuts both ways. Because one, if you did the MD instead of the MD/PhD, you again would be out four years earlier and you can get compound interest working for you earlier from your like big MD salary. And of course you’re paying off your debt as well. Versus during the PhD, maybe you can only invest a little bit, but you do have that stipend coming in.

Think of Yourself as an Adult with a Job, Not as a Student

10:18 Emily R: So some early investment is possible, we know of course the massive time value of money. So I don’t know, it cuts both ways, but I think it’d be really, really interesting if someone, for their own situation, you know, played around with those numbers and saw that. But I really like that you emphasized, you know, we’re going to talk about finances today, but in terms of the motivation to do an MD/PhD program, you really want to get both of these degrees and love what you’re doing the whole time. So, you know, you were just mentioning how of course you have this history that you told us at the beginning with like being into like a music and you mentioned being on the swim team, and of course you really want to have both the neuroscience PhD as well as the MD. So what do you think, like, what is your outlook on maintaining your life outside of just being an MD student or a PhD student? And do you think that’s different at all from maybe another PhD student?

11:13 Emily P: Yeah. So I’d say that I’m not sure if it’s necessarily too different from MD and PhD. However, given the length of the program, I think that it’s very important to kind of think of yourself as being an adult with a regular job and not a student. It would be very difficult to postpone this mentality shift for eight years. And I think that’s something that could be valuable for both MD and PhD, but it’s especially important to take that into consideration. So, I consider my program to be a full-time job with my stipend as my income. And then that just helps you to act both in better financial interests, but also able to continue to live your life and not put it on pause because of this program. And so, since it’s such a long program, I would say that you want to secure your support network as soon as possible when you get to med school and especially because med school ramps up really fast and can be very difficult.

12:28 Emily P: There are a few kind of, I guess, areas of personal capita that I would suggest getting up and running as soon as you get there. Or as soon as you can. Academically, I’d say you want to make friends with MDs and MD/PhDs because it’s good to have a group of people to study with. And you might also want to talk to people who are currently in your graduate program that you’re thinking about joining to make sure that’s the program you want to do. And then also establish relationships with your advisory dean and your MSTP or MD/PhD director. And so those are all things that I guess are related academically, but also can be very helpful in your outside life. Also, you want to do the adult thing of setting up your support network for personal health.

Your Health and Support Network

13:25 Emily P: So the two most important thing would be to establish a relationship with a primary care doctor as soon as possible. Even if you don’t necessarily need them, just like make an appointment to like get your prescriptions transferred. And then also find a therapist in the community. I think that every PhD and MD student, or MD/PhD student, should have a therapist because oftentimes, if you actually need a therapist, it’ll take months to get, so you want to find a therapist, maybe you just meet with them every month. And then if something comes up, you can meet with them more often. And then set up the other auxiliary things, dentist, eye doctor, and things like that. So, you want to make sure you’re doing the regular adult things that you should be doing to make sure you that you get support in the program.

14:16 Emily P: And then moving to some other outside of medicine is that you want to make sure you’re maintaining your relationships with friends and family that you already have. If you’re living near your family, which I am, make sure you have boundaries and they know when you can talk to them and see them. And set up regular phone calls and visits and you know, plan to see friends in other cities if you want a vacation. And then finally, you should maintain and pursue potentially additional hobbies outside your med school, graduate school training. Personally, I joined a masters swim team, which is just adults swimming, and it’s really fun. And I made a lot of friends there. I go to a lot of Rochester Philharmonic Orchestra concerts. There are really great tickets for that. And I also sing karaoke. So those are some of my hobbies that I do. And most people have their own kind of hobbies that they do. Two of my previous housemates, they both had their martial arts, horseback riding, and volunteering through religion. So I think it’s very important to kind of set up that support network and then including your hobbies and relationships.

Time Management Approach

15:36 Emily R: The other thing I wanted to follow up on was that, you know, you described that your attitude towards your graduate program is that it’s a full-time job and you’re being paid this stipend for your full-time job. Does full-time job to you mean 40 hours per week? Because definitely you’ve mentioned a lot of great stuff like that you do outside of work. So yeah. I’m just wondering, like what your sort of overall time management approach is.

16:00 Emily P: Yeah. So I think it honestly depends on what stage you’re at. The MD, the whole thing is probably going to be more than 40 hours a week because you’re studying a lot and that really can kind of cut into the outside time. However, I found that you just have to, as long as it’s not like interfering with like required activities and things, you just have to put that time in your schedule, like try to make it in the evening and carve it out, which is what I typically do for things like swimming. I know that on Tuesday and Thursday evenings, I’m going to be at swimming and I’m not going to be studying. So you kind of have to make time, if makes sense. And same with like going to the Rochester Philharmonic, you have to carve out that time for yourself. In grad school, it’s definitely a bit more flexible. And I’d say like, I probably never work the same amount of hours like in consecutive weeks. It always fluctuates. Sometimes it’s more, sometimes it’s less. It depends on deadlines and when I’m running participants and stuff like that. But it’s a similar thing. Like you have to prioritize your hobbies, your relationships, and put them in the calendar and kind of treat them like you would any other commitment.

17:25 Emily R: Yeah. Not dissimilar from a good strategy for your finances as well. Get the big, important things in there in first and kind of let everything else fall around the margins.

Commercial

17:36 Emily R: Emily here, for a brief interlude. This announcement is for prospective and first-year graduate students. My colleague, Dr. Toyin Alli of The Academic Society, offers a fantastic course just for you called Grad School Prep. The course teaches you Toyin’s four-step grad boss method, which is to uncover grad school secrets, transform your mindset, up-level your productivity, and master time management. I contributed a very comprehensive webinar to the course titled, “Set Yourself Up for Financial Success in Graduate School.” It explores the financial norms of grad school and the financial secrets of grad school. I also give you a plan for what to focus on in your finances each season of the year that you apply to and into your first year of grad school. If this all sounds great to you, please register at theacademicsociety.com/emily for Toyin’s free masterclass on what to expect in your first semester of grad school and the three big mistakes that keep grad students stuck in a cycle of anxiety, overwhelm, and procrastination. You’ll also learn more about how to join Grad School Prep, if you’d like to go a step further. Again, that’s theacademicsociety.com/E M I L Y for my affiliate link for the course. Now, back to our interview.

Role of Finances in Choosing University of Rochester

19:03 Emily R: Let’s talk a little bit more about the money part of it. What role did finances play in your choice of University of Rochester, in particular over perhaps other programs you were admitted to?

19:13 Emily P: So I would say, I guess aside from like kind of the overall picture of paying in time and not money, I definitely chose MD/PhD, I guess I would consider for the right reasons because I really like clinical and research. And I was a bit anxious about taking out a lot of loans for medical school. So this route definitely helped me. But just to reiterate, that’s not the primary reason. I definitely applied to programs that were more in low- to mid-cost of living. I come from kind of a rural town. So like, I wouldn’t necessarily want to live in a big city anyways. But I definitely was looking at places that were a little more, not necessarily rural, but smaller cities. And I guess I chose Rochester, I’m a bit biased here because most of my family is here. And so I was really excited to go to Rochester because of that. But I also got really lucky that it was in a very like low- to mid-cost of living city in Rochester. Yeah, so that’s kind of why I really wanted to come to Rochester, but I say like, you should definitely talk to people who were looking at a lot of other places because I definitely was biased by the family a fair amount.

20:42 Emily R: Yeah, that’s definitely fair. I think you mentioned earlier, your stipend around $30,000 per year. Do MSTP programs vary a lot like with cost of living, or are they in a pretty tight range?

20:58 Emily P: That’s a good question. I’m not entirely sure. I think when I was looking, most of them were around there, but since I didn’t look at some of the higher cost-of-living cities, I’m not sure that they actually increase it all that much for the higher cities. But I wouldn’t quote me on that because I actually didn’t see them. But I think it also might be standardized if they get NIH funding as well. So usually the websites are pretty open about that. But that’s definitely something I would calculate, the cost of living, if there’s some place you really want to live and make sure it’s high enough for you. There are ways to increase it, like getting an F30 grant. Well, I guess it depends on your school. Usually they’ll bump it up a little bit as kind of a reward for getting the grant, but yeah. It really depends on the program.

Financial Goals Pursued with MD/PhD Stipend

21:55 Emily R: So $30,000 a year is a decent stipend, and I think in Rochester goes fairly okay. So, I know you’ve been sort of intentionally working on your finances for the last couple of years and learning a lot. And so what are the financial goals that you’ve been able to pursue with that stipend?

22:14 Emily P: Yeah, so I feel like I live very comfortably on this stipend. I’ve been a very avid saver most of my life. So a lot of my personal finance work has been on instead of trying to like cut back on expenses, it’s more like how do I allocate extra expenses and also transition my money to be able to spend it towards things that I actually enjoy. And maybe still I go with my natural instinct of saving on things that aren’t as important to me. And, yeah, so I would say that actually initially my goal when I started the program is that I wanted to house hack and buy a house. Because I didn’t know that much about personal finance other than like kind of budget and I was saving a lot. But I wanted to house hack.

23:16 Emily P: But then I kind of got into the first few years of medical school and it was kind of crazy and I realized that being a landlord would kind of be a lot of work. And so I kind of shifted away from that. Especially after living in a house with five people during COVID because we had some partners move in temporarily. I decided that I just wanted to live with my partner and not have housemates. So that’s kind of the icing on the cake in what I decided that I didn’t want to house hack anymore. So I decided that I wanted, since if I was just living with my partner, it would be more of a personal residence. And so many finance books that I read say that your house is not an asset, it’s a liability. So I was like, alright, I think that I want to actually buy assets and make some investment decisions instead since I wasn’t going to be house hacking.

24:24 Emily R: So interesting. I’m really glad you brought up this perspective because I am very enthusiastic about house hacking, but I have never done it and I’ve never been in like the position that I was considering it. And I think I, like you, now that I am at a new homeowner, yeah, there’s a lot of work that just goes into owning a home. Not even adding like the landlord aspect on top of it. So, you really have to be up for that. And it can be worth it. Like, especially if you’re, you know, let’s say in your financial situation, you’re looking at house hacking versus having like a side job. Well, the house hack can be your side job and that can make sense, but you have to have the time to be able to do that stuff. So I think that makes so much sense for you and especially, COVID kind of like changing the equation on this.

25:04 Emily R: Like yeah, how many people do you want to live with? And if it’s only going to be two and yeah, house hacking, like that’s actually one of the reasons why I love talking about house hacking. Because I kind of feel like anybody who’s in the position where they could buy a house in graduate school, house hacking makes it like a slam dunk, good financial decision. Whereas it’s more iffy, you know, if it’s really just your personal residence, as you were just saying, you know, you can get lucky or unlucky with the housing market in that case. I know that’s probably what would have happened for me living in Durham had I not house hacked, which I didn’t end up buying overall. But anyway, I’m just really glad to have your perspective on that. Yeah. Living with six other people during COVID sounds like a lot.

25:44 Emily P: Yeah. And also, just, I guess the opposite perspective is that actually my two housemates that I was living with, they actually went on to buy a house. And one of them is house hacking. So it’s definitely something that MD/PhD students can do. They do house hack a lot. But it was just something that I decided not to, and I’m very happy and we live in an apartment complex and when something breaks, the landlords come right away, or the maintenance people come right away, and I’m very happy with that.

Tracking Cashflow, Investing, and Saving

26:17 Emily R: And so when you mentioned that you’re buying actual assets instead of the combo asset liability, does that mean you’re like investing for retirement or investing in other ways? Like what are you doing?

26:29 Emily P: Yeah, so I have a couple different areas. So I’d say like personal finance and investing has kind of been like a hobby that I was somewhat interested in before COVID, but during COVID it’s actually become a lot bigger and I’ve had a lot of time to do some reading and listening to podcasts and stuff. And so, I mean the first step to all this, I would say, was definitely budgeting or tracking your cashflow if you hate the budget word. And I take a very hands-on approach to this because I think it’s really fun. And I kind of try to make it a game. And so, like knowing your cashflow is the first thing. Otherwise, before I knew exactly what my cashflow, even though I knew where my money was going, I didn’t know how much I had to spend for the future and such.

27:25 Emily P: That’s given me a lot of freedom to put the money towards where I actually wanted to go. And oh, I also started tracking my net worth, which is inspired by your emails. So that’s been fun. So those are like really the basic building blocks before anyone should start investing. So I just want to say that I did those first. So yeah, but in terms of what I’m actually investing in, I do have a Roth IRA, and I love my Roth IRA. And I learned, I think from your blog actually, that I was able to open one, and I was very excited about that. And yeah, it’s been a little bit of a challenge. I kind of try to challenge myself to fund that every year fully. Before this, I did have some cash, because I had a lot saved up for the potential house.

28:20 Emily P: So I put it in a regular brokerage account. Some stocks, mostly ETFs. And so I am in the process of kind of trying to fund the Roth IRA with my money that’s incoming. And then when I can’t make the limit, to supplement it with a brokerage account. And then finally I’m saving for some of my future expenses. Medical school can, some parts of it, can be very expensive, such as standardized tests and residency applications. I was actually told to save like $10,000 for residency application. So, and it might be changed a little bit because it’s potentially virtual, but we don’t know if that’s changing. Saving for a new used car, and for paying off student loans, which I chose to defer until after. And it’s definitely tricky to find the right vessel for this savings goal for like about three to five years out. And I actually did something that was maybe a little bit not in the normal, it’s like a specially designed whole life insurance banking policy. And I won’t go into the details, but it’s definitely something that’s a bit controversial in personal finance, but I researched it heavily and it made sense for me, but I definitely would not recommend unless you like fully research it and alternatives for that. But those are the kind of major places where my cashflow is going, the Roth IRA, and the savings for future expenses.

29:50 Emily R: Yeah. Those sound like incredible goals. And yeah, $6K to a Roth IRA per year, either out of cashflow or out of your existing investments is incredible, setting yourself up. Yeah, I hadn’t heard about, or I hadn’t thought about using a whole life policy for sort of shortish, mediumish term expenses. I assume you’re then going to borrow against the policy to do that. Is that right? Yeah. Yeah. We won’t go into it, but like, as you said, there’s not really a good like solution out there for that kind of timeframe. So it’s not surprising to me that you would like, you know, kind of get creative with that.

Career Paths for MD/PhDs

30:23 Emily R: You know, you just mentioned like doing a residency, and I’m wondering is a residency definitely the next step for all MD/PhDs? And, you know, overall, what is the career path for MD/PhDs in comparison to only MDs or only PhDs?

30:38 Emily P: That’s a great question. In certain situations, like interviews and things like that, it’s definitely the next step. But there are a lot of other options out there. But I mean, generally, you’re going to need a residency if you’re wanting to practice clinically at all. Even if you decide to do a full-time like academic lab, if you want to have any proportion medical, clinical things in your work, you’re going to need to do a residency. And they’re usually four to six years long and they can be pretty intensive depending on the field. Sometimes there are research intensive. So the ideal MD/PhD kind of percentage breakdown, which is somewhat arbitrary, is that you’ll spend 80% running your own lab and 20% in clinical doing clinical work.

31:34 Emily R: And that would be in like an academic or like a hospital setting. Is that right?

31:38 Emily P: Yes. Typically in an academic hospital combined setting. So like a larger institution. I’d say, like that’s not, I mean, I think some people do that. I think it’s a very arbitrary number and it might be very difficult. You might end up working, you know, 150% instead of a hundred percent, which can be difficult, especially if the clinical work can just be like pretty brutal and like kind of time suck your time. So if you do something like that, they say to be very purposeful in like protecting your research time.

The 80/20 Myth

32:20 Emily R: So is that like, so when you’re talking about, okay, so the ideal outcome career for an MD/PhD is this 80% running your own lab, 20% clinical breakdown, but is that like telling a PhD student that their career should be a tenure-track professorship? Like, is it that kind of, I guess what I’m asking is what are the actual job prospects for MD/PhDs coming out of residency to get a position like that? Like what percentage actually get a position like that versus go on to do something else?

32:52 Emily P: I would say, I don’t know the stats, there are definitely like papers on this topic, but I would say, this would be like you do your residency and then you try to get a full tenure-track position with part-clinical time. And I’d say, I think oftentimes people end up doing one or the other. I think it can be very difficult. Sometimes it depends on the field of medicine you go into as well. So it’s really all over the place. So I guess what I’m trying to say is that you can kind of do whatever you want. There are a lot of options with this degree. So like academia, academic medicine, and clinical are just like two of the, probably most common, fields that people go into. But also there are some options in like industry, particularly, in health tech, I guess pharmaceuticals, but that’s a whole other basket of worms. So yeah, but I’d say that there are there options, but essentially you do have to do that residency, typically. There are some nonclinical roles, but you generally want to do the residency and then, you know, pick full-time clinical or part-time clinical. And then I’d say like more of these other options might come later in your career or might be like a part-time side hustle or things like that.

34:23 Emily R: Yeah, very interesting. I guess I’m just going back to what you said, you know, near the beginning of our conversation was, you know, you’re paying in time and not money. And like, I hope that you all know by the time you get to, you know, choosing a residency, like whether that’s going to play into your future career, because that is a long time and a big salary opportunity cost to spend doing a residency, if it’s not ultimately something that plays into your long-term career plan. So tough decisions. And what about you personally, like, do you want to go for that, like 80/20 academic medicine kind of split or like, what are you thinking?

35:03 Emily P: I personally am more interested in having, so my research right now, even is fairly integrative with clinical and research, so I would like to have more of like a clinical aspect to it, and then do some collaborative research and really use kind of my skills and knowledge as a physician to inform clinical research. And I think that is very doable in my field of like psychiatry or neurology, which is currently two of the options that I’m looking at. But I’m also not a hundred percent sure. I’d say there are like a lot more and more collaborations or collaborative PI labs. I’m not sure I’d want to be like the single PI in the lab, just if I want to maintain clinical. So yeah, I’d say I’m interested in kind of both, but maybe more integrating them. And I also really am interested in health tech things. So maybe I’d be interested in starting kind of my own business or consulting, but that would be later on in my career after I had established myself clinically.

Talk to Upperclassmen for Advice

36:19 Emily R: Yeah. Well, thank you for giving us that peek into your plans. Do you have any go-to resources on finances for MD/PhDs in particular? It’s so niche, I’m wondering if any exist?

36:32 Emily P: So I haven’t come across any yet that are specific to MD/PhDs. It might exist. But I’ve been able to get a lot of what I need out of out of your content, specifically geared towards PhDs, in addition to numerous podcasts and audio books that are in personal finance. I haven’t come across anything that’s specifically geared towards MD/PhDs. I generally get a lot of my advice from talking to upperclassmen, just either casually to find out what they’re doing. I had a neighbor who was an upperclassman nearby and he would give me advice about the program and also sometimes financial things. I guess if there was something I really wasn’t sure about from the MD or MD/PhD perspective, I’d like maybe email someone and ask them specific questions. We also have like, MD/PhD it’s called like a blue book for incoming students with certain things that with many things, including personal finance things. And there are some seminars where you can ask upperclassmen different questions and stuff. So I’d say it’s more by word of mouth from what I’ve seen. However, a lot of the resources geared towards PhDs and just personal finance in general, really applied to the situation of MD/PhDs.

Best Financial Advice for An Early-Career MD/PhD

37:57 Emily R: Yeah, that makes sense. And I love the advice of like, just talk to real people who have been in your shoes a year or two back and have like the real, you know, high-quality information that definitely applies to you. So great, great, great. Do you have any other great advice? What is your best financial advice for another early career MD/PhD student or MD/PhD? Your best financial advice for that person?

38:20 Emily P: I would say my best advice is something I touched on earlier is just shifting your mindset from student to adult. It’s just way too long to consider yourself a student and not start living your life. I’d say that it might be difficult sometimes. So you should try and shut work off after you come home. Whatever hours you may need to work, just like try your best to shut it off and maintain your life outside your graduate program. And I think that if you kind of separate your program and your in your life, to some degree, it’ll help you financially and also help you develop your relationships and your hobbies, and also for maintaining your mental and physical health.

39:07 Emily R: Yes. Fantastic! Thank you so much for telling us that. Thank you so much for sharing your perspective in this interview. It’s been fantastic.

39:15 Emily P: Yeah, great! It’s my pleasure. I’m so happy to be here.

Outtro

39:23 Emily R: 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.