Personal Finance for PhDs

Live a financially balanced life - no Real Job required

FIRE

Pursuing Your Passion in a Financially Healthy Manner

by

This episode is a podcast swap! Emily’s guest is Dr. Stephanie Schuttler of Fancy Scientist. Emily and Stephanie interview one another on the financial challenges of a career in wildlife biology and how to pursue your passion while preserving financial balance and health. They discuss the necessity and prevalence of volunteer and pay-to-play experiences in wildlife biology and how to have realistic expectations about the job availability and compensation at various levels of education. Stephanie is an expert in careers in wildlife biology, but this conversation is applicable to PhDs who are following their passions into many other competitive fields.

Links Mentioned in This Episode

Teaser

00:00 Stephanie: In this field, so much is about those experiences. So if you really want those pay-to-play experiences, because, I mean, some of them are super cool, you could focus more on getting into a school that’s more affordable and do some of those things rather than go to a really expensive school.

Introduction

00:21 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 9, Episode 3, and today Dr. Stephanie Schuttler of Fancy Scientist and I are publishing a dual interview! Stephanie is a wildlife biologist-turned-science communicator and expert in careers in wildlife biology. We have a great topic: How to pursue your passion in a financially healthy manner. Stephanie gives the financial and career lay of the land for wildlife biology, a popular and competitive field that requires volunteer and pay-to-play experiences prior to being admitted to graduate school. Even completing a graduate degree in wildlife biology doesn’t necessarily lead to the type of job young people dream about when they enter the field. Sound familiar? Stephanie and I discuss how to limit the financial risk of pursuing a career in a field that you are passionate about.

I have some exciting personal news, which is that I finally received my full vaccination course against COVID-19! I have to say, it was tough to watch my friends and acquaintances who have university and hospital affiliations receive their vaccinations over the last several months while I was waiting for them to become available to my age bracket in California. But my turn finally came. I am ecstatic that my parents are visiting us this week, whom we have not seen in person since November 2019.

01:51 Emily: Prior to COVID, as you likely know, I gave in-person seminars and workshops at universities. I honestly wasn’t sure how my business would fare without being able to travel and with universities facing the uncertainty that they did early on. As it turned out, in the 2020-2021 academic year, my speaking services in the virtual format were more in demand than ever, particularly this last spring. I feel really, really fortunate about that! My calendar is now open for engagements in the 2021-2022 academic year. I am of course offering virtual events, which I assume will continue to be popular. I’m not sure if professional development events and conferences are switching back to being in person this year to any degree, but if they are and I am asked to present, I will certainly consider it. I am over the moon about how I have adjusted my offerings for early-career PhDs this year, which you can check out at PFforPhDs.com/speaking/.

02:53 Emily: First, I got honest with myself about my most popular seminar, The Graduate Student and Postdoc’s Guide to Personal Finance. The Guide is my comprehensive overview of multiple personal finance topics. I was trying to cram it into 90 minutes, but it really is a two-hour seminar with Q&A. It’s great for the end of a workday, not so much for a lunch hour.

03:15 Emily: Second, I clarified the topics for my in-depth seminars, which are financial goals, investing, debt repayment, saving, and cash flow management. Each of these seminars comes in a one-hour lecture and Q&A version or a two-hour workshop version. The workshop version includes the teaching from the lecture version plus spreadsheet templates, worksheets, and/or small group discussion prompts. These seminars work well as stand-alone events or part of a series.

03:45 Emily: Third, I took my tax seminars off my slate of offerings. This is honestly a big risk for my business because my annual tax return seminar was second to The Guide in popularity and always drew my biggest audiences. The preparation of an annual tax return and calculating estimated tax on fellowships are my audience’s most universal financial pain points.

04:10 Emily: However, I am not leaving you in the lurch with respect to tax education and assistance. Stepping back from giving live seminars on this topic actually enables me to scale the delivery of the help. In place of these live seminars, I am licensing access to my pre-recorded workshops on the same topics. I have been offering these workshops for the past several years, and I know that they are even more effective than live events in guiding graduate students and postdocs to their goal of an accurate tax return and up-to-date income tax payments on their fellowships. Please keep these workshops in mind as we draw closer to tax season for 2021. If you would like to book a virtual or in-person event with me or recommend me to your graduate school, postdoc office, or graduate student association, the best place to go is PFforPhDs.com/speaking/. From there you can learn about all my seminar offerings, read reviews from previous event hosts and attendees, view my speaking fees, and schedule a call with me to discuss your event. I look forward to partnering with you this year to deliver high-quality, high-impact financial education to the early-career PhDs at your university, in your association, or at your conference.

Book Giveaway Contest

05:29 Emily: Now onto the book giveaway contest! In June 2021 I’m giving away one copy of The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich by David Bach, which is the Personal Finance for PhDs Community Book Club selection for August 2021. Everyone who enters the contest during June will have a chance to win a copy of this book. The Automatic Millionaire was one of the first personal finance books I ever read, and it had an enormous impact on my financial mindset and behavior. The path to becoming a millionaire is not necessarily quick or easy, but it can be simple and automatic. I can absolutely credit the key strategy that this book teaches as the reason my net worth is as high as it is today. I hope this book effects a similar result for you. If you would like to enter the giveaway contest, please rate and review this podcast on Apple Podcasts, take a screenshot of your review, and email it to me at emily at PFforPhDs dot com. I’ll choose a winner at the end of June from all the entries. You can find full instructions at PFforPhDs.com/podcast. Without further ado, here’s my interview with Dr. Stephanie Schuttler.

Will You Please Introduce Yourself Further?

06:49 Stephanie: Hi, I am Dr. Stephanie Schuttler, and I am a wildlife biologist, and now I’ve turned a science communication entrepreneur. A brief background of myself is that I kind of stumbled into this career. I didn’t know I wanted to be a wildlife biologist until my last year in college when I decided to study abroad and I randomly chose a wildlife management program in Kenya. So that changed my life. And I knew from there that I had to go to graduate school. So I got some experience doing three different types of internships over the course of three years. And then I went to graduate school to get my PhD at the University of Missouri, where I spent close to seven years there, followed by one short postdoc and one long postdoc, lasting, probably about, honestly, seven years. Yeah, so my short postdoc was at Missouri and my long postdoc was at the North Carolina Museum of Natural Sciences where I got to work on a lot of camera trap stuff that I talk about today. Yeah, and now the last part is I started my own business last year. I’ve been blogging for the past few years and I officially made it a business last year where I spread knowledge about science communication, I educate people, I started kids’ programs, and then of course I help people in their wildlife biology careers.

08:20 Emily: Fantastic. What is the name of your business?

08:23 Stephanie: A Fancy Scientist.

08:25 Emily: Great. I’m really excited to speak with you, Stephanie, today because are subject is kind of, you know, the finances of pursuing a career in wildlife biology, but it’s a little bit more general than that really, because we’re really talking about how to stay sort of financially balanced and healthy while you’re pursuing a passion that is not necessarily, or immediately, lucrative. And in fact might, you know, you might be paying for, in the form of your education, you might be paying for career experiences. So that’s kind of our general topic. So even if those of you who are coming to the podcast are not in wildlife biology, like still stick around because this is going to be generalizable information.

09:03 Stephanie: Yeah, absolutely. I would even add that our field can be more lucrative in terms of going to graduate school than other fields. Like I’ve heard about people who are getting their PhDs in English and their TAships get paid just so poorly. So a lot of the experience and advice here will definitely transfer over.

How People Develop a Passion for Wildlife Biology

09:25 Emily: Yeah. Let’s talk more about specifically how wildlife biology is positioned because it’s a science field, of course, which you might immediately think, oh, like you make money in science, of course. But on the other side of it, it’s a very competitive field and people follow it because of long-held passions. So let’s talk more about that. Like how do people develop their passion for wildlife biology and pursue that?

09:47 Stephanie: I think people develop it usually from a young age. That’s what happened for me. I always loved animals and I love nature. And like I said, I didn’t discover it until a career as later on. Like when you’re young, people always say, like, why don’t you become a vet if you really like animals? So I didn’t know it was a career option. Some people do, but when you track back to like, why people want to do it, it usually has to do with those experiences of being outside in nature when you’re young. And actually a lot of wildlife biologists, a lot of them start off like hunting and they just spend a lot of time outdoors. So I think that a big reason why people are so attracted to the field is that they think they will be spending a lot of time outside.

10:35 Stephanie: And this is definitely true for some careers. It depends on what level of education you have, and of course, what job you have. But in general, the more education you have, the less time you spend outside. It’s like an inverse relationship. And you know, we get really cool experiences. A lot of us get to travel. Of course, some of us get these really close interactions with animals that regular people can’t have, or even just accessing different types of places. Like some of the field sites I’ve been to would have been difficult to visit as a tourist and some of the experiences you have. So yeah, I think that’s what’s really attractive about it. And you’re right. It’s really interesting because there’s so much push for STEM education and especially getting People of Color and girls interested in STEM because our field is not very diversified.

11:33 Stephanie: And a reason to advocate for STEM careers is often actually like finances, that it’s a really financially beneficial career. But again, it totally depends on what you do, and wildlife biology is not very lucrative. And it’s just simply because there’s not a lot of money in wildlife and conservation work. A lot of our employment is nonprofits. The universities and, I mean, universities, you can definitely get paid well. And any of these jobs you can get paid well. But in general, if you think of like disease research, there’s going to be so much more money from the U.S. government and other sources to invest in like medical research than there is in saving wildlife. So, that’s really the big difference. But I think most people go into it because they love it so much. And that’s what I always said. I knew I wasn’t going to make a lot of money, but I loved it so much. So that’s why I went into it.

12:38 Emily: It’s so important to go into these kinds of career choices with your eyes wide open as to what the possibilities are, including the financial possibilities. So it sounds like people, maybe from the time they’re children, have a very like romantic idea of what this career is going to be, but the reality does not necessarily line up with that, especially as you advance further and further.

12:57 Stephanie: It’s interesting though, that you said that about like the romantic version, because I have a book, Getting a Job in Wildlife Biology: What It’s Like and What You Need to Know. And I had a review on there recently, it wasn’t a bad review, it was a four-star review, so it was good, but it was a parent that bought it for her daughter and she read it first, and with the intention of getting it to her daughter. And after she read it, she was kind of like, I’ll leave it up to my daughter to read. And her review was all about how realistic I was. And, and that’s exactly why I wrote it because people have this really romantic view of what wildlife biology is, like myself growing up, I saw Jane Goodall. And I mean, Jane Goodall, isn’t really considered a wildlife biologist. She’s more of a primatologist, but still that’s what you imagine it to look like, or Steve Irwin. And the reality is you’re not doing those types of things. So I pride myself on telling the truth, and I don’t want to dissuade anyone from entering this field. I just want them to know like what it’s like going into it.

Volunteer and Pay-to-Play: Are They Really Required?

14:01 Emily: So, one thing that I learned from our prior conversations is that in your field, it’s very common for people to have to do volunteer experiences or even pay-to-play experiences, to get into graduate school, to get a job, to advance. And this is not necessarily as common in other areas. So could you please tell us more about what, you know, what does pay-to-play mean? What are the kinds of volunteer experiences that people may be required to have? And are they really required?

14:30 Stephanie: Yeah, absolutely. This is a really hot topic right now. I personally think that you cannot get into graduate school without having some sort of experience. And in order to get that first paid experience, honestly, you really need experience for that. And you can, I would say you can get it in college if you volunteer with a lab and you get college credit for it. So that’s essentially not totally volunteering. And there are some work-study programs in colleges as well, but really to get your first experience, you need to volunteer. And that’s just the unfortunate reality of it. And this is a big problem because it discourages diversity from our field. So, I’m in no way, like advocating for these experiences. I just feel like that’s the reality of the situation. So there’s lots of experiences. And even our museum, when we had interns in our lab, we did have money for some of them.

15:27 Stephanie: And I constantly applied for grants to get money to pay interns, but they don’t come through. So either like I would have people email me and be like, I’m so interested in your research. Can I help you out? Or I would have a lot of research to do, and I would come across people and offer them experiences to help me with this. And there are exchanges in other ways. Like I write them letters of recommendations and I invite them to be on journal publications and stuff like that. But yeah, we can’t afford to pay for everyone. So it’s hard to deny people experiences who want them. But also, the pay-to-play thing is that some experiences are so desirable that they can afford to charge for them. And I do think there are some sort of scammy experiences out there where they profit off of it, but there are also legit scientists who are working in another country and they have to pay for the field site and the food costs and things like that.

16:35 Stephanie: So I’ve seen job advertisements where you get to maybe go to like South Africa for a summer and you have to pay to stay there. And they mention that it just covers the field costs and they’re not making money off of it, but still, I know a big reason why I got certain opportunities was because of my experience in Kenya. I had a study abroad program and an internship in Kenya. And Kenya was, it really was volunteering because I did get paid, but I got paid a Kenyan salary. And then I did have to pay for half of my airfare. So it ended up being a year where I didn’t make anything. And yeah, if I didn’t have those experiences, then I would have not had like my graduate school experience of studying forest elephants. So if somebody who comes from a financially disadvantaged background really wants to do something like work internationally, honestly, it’s really tough because those experiences are more desirable and people are willing to pay for them.

17:42 Emily: Yeah. You outlined a couple of reasons why these experiences exist. It really sounds like the field is in a bind. There’s not enough funding coming in for all the work that needs to be done, sort of from above, but from below, from the people coming up the ranks, there is an eagerness for people to do the work, even if it’s on a volunteer basis, even if they have to pay out of pocket for it. But it sounds like this just comes back to a funding squeeze, right? And the field being so popular and competitive. Those things combined have set up the conditions for this system to develop. And I agree with you. It sounds nightmarish, actually, for someone who doesn’t come from a financially advantaged background. And it’s a little bit like, you know, in the recent, I don’t know, last decade or two, there’s been so many more conversations about unpaid internships and the elimination of unpaid internships in most fields because they’re not great for anybody. Especially people who, you know, can’t afford to do them. But it sounds like that hasn’t quite touched the field of wildlife biology yet. Because these are essentially unpaid internships like on steroids, because you actually have to, in some cases, pay to access the site or what have you.

18:53 Stephanie: Yeah, absolutely. And that’s, like I said, that’s a huge conversation right now. And I think it’s especially difficult for nonprofit organizations because, you know, they obviously always need more funding. And they have been under attack, like posting unpaid internships. And I understand both sides. Like I understand that people need to get paid for their time, but I also don’t think it solves the diversity problem because if you’re just taking experiences away in general, then anything that is available is going to be so, so, so competitive. So it’s like a lose-lose situation.

Financial Risks in Pursuing a Wildlife Biology Career

19:32 Emily: Yeah. It definitely sounds like that. Okay. So we’ve kind of talked about the downsides to the field of kind of relying on these volunteer and pay-to-play experiences in the pipeline, at the beginning of the pipeline. To get into graduate school, you need to have some kind of experience. To get that first experience that maybe you get paid, well, you have to have an unpaid experience before that point. There are downsides to the field of like losing out on having great scientists, budding scientists who could be part of the field, maybe being turned away for financial reasons. What are the financial risks that are posed to an individual who tries to pursue a career in wildlife biology?

20:06 Stephanie: I think, I mean, just going into debt or living paycheck to paycheck constantly, that’s like super common in our field, but I know many people who have gone into debt for these like pay-to-play experiences or to do a volunteer experience, but they don’t have the means to cover themselves financially while they’re doing that experience. And it affects your entire life. The opportunities, I guess, like they kind of go away, but they manifest in different ways. So like once you get your PhD, well actually after your master’s too, like I talked about my friend, Rebecca, a lot of times you have these temporary opportunities, and it’s really difficult to get things lined up financially. And it’s a very demanding career. There are always things that you could be doing for your career, especially once you get to like the science route of doing more research-based things, then you are going to want to be working on your publications and things like that to get you that next job. So you don’t necessarily have the time to be able to like take on another job. So I mean, it’s really just that you have the potential to go into debt. People do go into debt, and then they don’t have the finances saved to be able to keep going, in the future, if opportunities don’t line up.

21:40 Emily: Yeah. This does remind me of the general like pursuit of the tenure-track in some fields where you need a PhD to get, and your goal is to get, a faculty position, but the employment opportunities, if you don’t end up, you know, landing that faculty position, are non-existent, very rare, not very lucrative. And so it’s like, yeah, if the stars completely align and you get that job that you’re going for, it all works out. But for most people who pursue that, it’s not going to work out. And so you have to realize that going in, it doesn’t mean you can’t like, you know, shoot for the stars and everything, but you need to have some kind of nets and backup plans and safety. Because the stats are that a tenure-track position is not going to work out for the vast majority of people who pursue one. And so it seems like there’s, you know, an analogy here with the field, the career in wildlife biology,

22:33 Stephanie: Do you see any additional downsides or risks?

Debt and Opportunity Cost: Loss of Compound Interest

22:38 Emily: I mean, mentioning, going into debt like you did is absolutely perfect. But to me there’s another layer on top of that, which is the loss of opportunity to get compound interest working for you. So if you go for many years in your twenties and into your thirties, maybe doing temporary work and underpaid work, and maybe you’re accumulating some debt, or even if you’re not, but you’re not doing anything like on the saving, investing front to get ahead with your finances, then that’s lost time. That decade or so is lost time. And it’s possible to make up for lost time, but you just have to save so much more later. But what if you end up, maybe in your thirties, in a job that pays, as you mentioned before, $50,000 a year, when you were hoping for something that paid more or was more stable or something like that? Like that’s where you are, and that’s what you have to live off of and save off of after that point and still try to make up for that lost time. So I think that people can be financially successful at all different kinds of salary levels, but like we were talking about earlier, you just have to be realistic about what the opportunities are, the salary opportunities are in the field that you’re pursuing, and also in your backup plans, if that primary plan doesn’t work out that well. So yeah, the loss of time to get compound interest working for you is the main one that I see there.

23:48 Stephanie: And I think that people in our field don’t think about that stuff at all and even, or I know they don’t think about that stuff at all. And even like talking about the loss of time with your first starting salary. You really don’t have at least a good first starting salary. I had a starting salary in graduate school, but like how most jobs work is you get your first job, and that’s your starting salary. And then that’s like the bar for you to negotiate a higher salary every job that you get. So for myself, when I graduated from my PhD, I was, what, thirties, close to 30. And you know, my husband who is an electrical engineer, he had been in his career for, for several years already. So not only are we getting paid little when we’re starting out, but we’re starting out later in age.

24:45 Stephanie: And another thing is people don’t do retirement investments either. So my dad grew up poor. His dad died when he was younger, and he had his brothers to take care of. So he was always like financially worried, and he always had us read financial books and stuff like that. So I’ve had a retirement account since legally you can have one, I think maybe 16 or 18. But yeah, like we’re not taught that. Like, you’re right. Like nobody’s talking about this stuff. And they, like, my friends would be like, well, I’ll get it through my job, when I get my first job, but some of my friends didn’t get their first jobs until they were close to their forties, and your retirement compounds. And that’s really where the money comes from. So if you are waiting a while to start that, then you’re missing out on a lot of that income compounding.

25:42 Emily: Yeah. And I think, again, to generalize, like this is something that I see with graduate students all the time, postdocs all the time is that there’s an optimism about what the future salaries are going to be post-PhD, post postdoc. And I certainly have the same optimism for them. But the other thing that happens as you age, generally speaking, is that your life gets more expensive in a variety of ways. You know, maybe you buy a house, maybe you have a child, maybe you have to take care of aging parents or other family members, like, so even if you do see a post-PhD, jump in salary in whatever field that you’re in, it might not go as far as you were hoping that it would. And so to me, my attitude is more like, you know, work with what you have now, that is, try as best you can to live a sort of financially balanced lifestyle and do some of that retirement investing or paying off debt or whatever it is that your goal is while you still have a lower salary, while you’re still in graduate school. And yes, like I do hope that that higher salary comes, the permanent job comes and it will all be much easier later, but just in case it’s not, let’s get started now so that you have that time, as we were talking about for, you know, your money to compound, or at least your debt to not compound as much.

26:54 Stephanie: Absolutely.

Commercial

26:57 Emily: Emily here for a brief interlude! Heads up, fellows: The next quarterly estimated tax payment deadline is Tuesday, June 15, 2021! This one always catches me by surprise because quarter two, strangely, is only two months long, while quarter four is four months long. Yet, a full quarter’s payment is due on June 15th. If you aren’t having income tax withheld from your stipend or salary and haven’t yet filled out the Estimated Tax Worksheet in Form 1040-ES, now is the time to do so. The worksheet will tell you how much you can expect your tax liability to be this year and whether you are required to pay estimated tax. If you need some help with the Estimated Tax Worksheet or want to ask me a question, please join my workshop, Quarterly Estimated Tax for Fellowship Recipients. It explains every line of the worksheet and answers the common questions that postbacs, grad students, and postdocs have about estimated tax, such as what to do when you switch on or off of fellowship in the middle of a calendar year. Go to PF for PhDs dot com slash Q E tax to learn more about and join the workshop. Now back to our interview.

Advice for Pursuing a Financially Risky Career

28:13 Stephanie: Okay. So knowing that this is a financially risky career, what do you think, like, what’s your advice to people who want to pursue it in like, they’re absolutely sure they want to do this and maybe they don’t have a financial safety net or they don’t come from a really, really wealthy background? What can they do?

28:33 Emily: I think the first thing to acknowledge is that you, as an individual, are a whole person and that you have needs and desires that are perhaps independent of this career in wildlife biology that you want to pursue, or any kind of competitive and perhaps not lucrative kind of career. And what I mean by that is that I would love for you to pursue like your career kind of passion, but just as you’re doing that, keep in mind that you still have needs as a person. You have financial needs, you have relational needs, you have spiritual needs, health needs, all these things matter as well. And I think there’s a tendency for people, especially when they’re younger and in their twenties and so forth, to drive hard at their career goals at the expense of some of these other areas of life. And it will catch up to you, eventually. You will reach age 30 or age 40 and realize that you have some deficits or dearths in these other areas, because you were trying to sort of suppress your needs and desires in those areas for so long to pursue this career.

29:35 Emily: So I don’t think that’s healthy and don’t do it. So try your best. Right? And so we’re going to talk about the finances, but there’s all these other areas of life as well. So don’t forget that you’re a whole human and you’re more than just your future career or job in wildlife biology. So that’s kind of the first thing to keep in mind. So, as we’re talking about sort of financial health and financial wholeness, as you pursue these careers, I do think you need to create your own safety net and your own financial security and backup plans as you go. And so that may mean that it will take you a little bit longer to get to graduate schoo, for example, if that’s like your next goal. Maybe you might take an extra year instead of, you know, taking a one or two year gap, take a three or four year gap between finishing undergrad and that graduate degree, for example. And that’s to build up more of your own financial security in the meantime.

30:25 Emily: And so one of the things we talked about earlier, these pay-to-play or volunteer experiences, is it possible for example, for you to plan around that and say, I’m going to have a summer job? Maybe it’s not even a job, I’m going to have a summer experience, and it’s going to cost this much money, or I’m going to be paid this much, but my lifestyle needs are this much. And how can you save in advance for that? And what kind of job can you have when you’re not actively engaged with these experiences? How can you pursue a job and a career that will allow you to have the experiences, but still give you some financial stability in the meantime? And one of the things I end up talking a lot about, and that I’ve learned a lot about from people I’ve interviewed on my podcast is regarding money mindset and limiting beliefs.

Navigate Limiting Beliefs

31:06 Emily: And so a limiting belief that someone in the field of wildlife biology might hear, and they might even get this from your work, again, the realism, is I can only ever have a temporary job and I can’t have a job the other seven or eight months of the year, because that’s not in my field, whatever. But maybe there is a way for you to build a job or an income or a career in that part of the year and still have that balance where you want to do, you know, these special experiences in the summer or the spring, or what have you, but still be making money in the other part of the year. And honestly, I think one of the most accessible ways is what you and I are now pursuing, which is entrepreneurship. So maybe there’s a way to have, you know, set up your own stream of income.

31:45 Emily: Maybe you work on it more intensely in one part of the year and less intensely in the other part of the year. And you can create that balance for yourself to still allow you to pursue the experiences in the career that you want to have, but still be making money in the other part of a year or a little bit, you know, while you’re having those experiences still. So that’s one idea. The other one is about this debt, you know, either going to have experiences or on the flip side, maybe not paying down student loan debt that you’ve accumulated in the past. I mean, we’ve had a student loan debt crisis that’s been building and building ahead of steam for a long time, but especially in the last decade. And, you know, in the last decade, I think many people have come to realize, you know, your student loans, your education, especially at the bachelor’s level is not necessarily an investment.

32:30 Emily: It’s not automatically an investment. You can’t pursue any bachelor’s at any price and, you know, be sure that that’s going to pay off. Same thing for graduate degrees. You know, your home is not always an investment. There are things that used to feel safe that used to give you a path to the middle class that are not there, they’re not guaranteed any longer. And so I think you have to be really, like, in thinking about pay-to-play experiences as an extension of student loan debt. So like I’m taking out student loan debt to pursue my education. I’m taking out some kind of personal loan or consumer debt to pursue this experience that I want to have to get into graduate school. You can think about them sort of analogously. And so one rule of thumb that works for student loan debt that maybe you could extend to, if you’re going into debt for these experiences in wildlife biology, is don’t take out more debt than one year, your first-year starting salary.

33:20 Emily: That’s like the rule of thumb for an undergraduate degree. And so if you’re, you know, going into a little bit better or forgoing salary to pursue these volunteer pay-to-play experiences, can you keep the debt level down to one year of your current salary or lower? Is that possible? So like, so yes, pursue these experiences, but make sure you’re not giving yourself carte blanche, right? To spend and go into as much debt as you might want to. You’re sort of putting some checks and balances on yourself along the way to make sure that you’re not getting in too far over your head.

Consider the Cost of Your Education

33:56 Stephanie: Yeah, absolutely. And actually one of my big, I have a lot of advice for people, something I think that people should do is not worry about the school so much. Like a lot of students are super obsessed with like, what’s the best graduate program or what’s the best college to go to. And I honestly think that students should really, especially at the college level, focus on getting in the school that’s going to cost them the least, because like you mentioned your degree doesn’t necessarily pay off. If you’re going to invest, you know, $120,000 for a college degree and you can get the same result with one that’s going to cost you $10,000. I mean, I actually regretted for a long time, my experience because I didn’t know what I was doing. I didn’t know what I wanted to be.

34:49 Stephanie: An, I even applied poorly to schools. I applied to like only Ivy league schools because that’s what I knew. And the only schools I got into were my local state school and other schools that cost like $30,000 a year or a semester. And I was like, okay, I’m just going to start from my state school because I don’t know what I’m doing. And then it also felt weird to dorm at my state school, which is like 20 minutes down the road from me. So I stayed with my parents and I regret not having the college experience, but I also love that I don’t have debt and that it was, I mean, I paid, I think a thousand dollars a semester for school. So in the long run it definitely was worth it.

35:34 Stephanie: And in this field so much is about those experiences. So if you really want those pay-to-play experiences, because I mean, some of them are super cool. You could focus more on getting into a school that’s more affordable and do some of those things rather than go to a really expensive school. And this is true for graduate school, too. And graduate school in science, you do get paid, you get a stipend, but you get paid different amounts according to the different schools and even according to the different programs. So I was actually not in the wildlife biology program for my PhD, or in the department. I was in the biological sciences department, and they had a fellowship. So I was paid a lot more and I didn’t have to TA. And that played a huge role in me deciding to do that as opposed to another program where I would have to TA and get paid less.

36:31 Emily: I think that’s a great point. Both at the graduate and the undergraduate level. It’s more about what is the actual work that you could be doing? Who can you be working with? Rather than maybe the name of the school. And of course the finances come into play as well. Because again, I think my basic point here is like shore up security for yourself as you go as best you can to keep you on this route, as long as you want to be on it in pursuit of a career in wildlife biology. So that if you get to the end, let’s say of your PhD and you realize, okay, I can get the permanent job. I’ve achieved all my goals. Everything is wonderful. Well, you have some good, you know, financial, a nest egg behind you perhaps, or at least not as much debt as you could have been in.

37:15 Emily: That would be great. But if you get to that point and you say, Nope, I’m going to exit this career now. I’m not going to have the type of job that I thought I would have. I’m going to have some other type of job. At least you won’t have the financial regret behind you of, oh my gosh, I pursued this school, that school, they didn’t pay me well enough. I spent too much on this experience. Yeah. I think what you said is perfect is like focus more on the experiences. If you want to go for, you know, a less expensive college education, but save your dollars for some pay-to-play experiences that are really high impact, then that makes a lot of strategic sense to me.

FIRE: Financial Independence, Retire Early

37:45 Stephanie: Yeah. And another route, I think we talked about this in our chat, you talked about an acronym FIRE.

37:51 Emily: Yeah. So FIRE stands for Financial Independence Retire Early, or Early Retirement.

37:57 Stephanie: Yeah. So you could either do that or do a sort of hybrid model. And I interviewed somebody who did something kind of similar to that, inadvertently. He didn’t, I mean, he didn’t retire early, but he had 20 years in a corporation that was a really good job. And he participated, he volunteered in the Citizen Science programs on the weekends and in his spare time. And his corporation actually paid for him to go back to school. So he did get a degree in environmental sciences. But when he was finished and on the job market, he got the second job he applied for. And I could not believe that I was like, oh my gosh. Wow. And it was because of those volunteer experiences, he had so much experience that he was like leading groups and organizing events and stuff like that. So that all translated really well.

38:48 Stephanie: So you could start off in a more lucrative career and volunteer with conservation organizations, with Citizen Science, and make enough money then where you can take a less lucrative career. Or if you’re a real go-getter in today’s world, like, I mean, there’s really not a financial limit to like what you can do online and with entrepreneurship and stuff like that. Like, it is tough to do, but it’s, I mean, there’s so many like millionaires who are six-figure earners from selling courses online, and in practical stuff, too. Like I remember I was listening to this one podcast, this woman, she had a podcast all about goats and she made six figures just from selling a course on how to raise backyard goats. And she had like, she had like different courses, too. So it’s like, you know, you just don’t think like, oh wow, like you can make a lot of money off of information and goats, but you can. So there’s a lot of opportunities out there.

Combining FIRE with Passion Careers

39:52 Emily: Yeah. What I think is really interesting about the FIRE movement and combined with like these sort of passion careers, whether it’s wildlife biology or whether it’s maybe some other things you want to get a PhD in. So if, you know, the most intense people in the FIRE movement, the goal is to retire in about 10 years, not retire necessarily, but become financially independent in about 10 years. That would be like a fast goal. So you get out of college when you’re 22, you know, by 32, if you’re really intense about it and chose the right career, maybe you were an engineer or something like that. You could be retired by that point or, you know, financially independent, optional to retire at that point. Now that is a route to free up the entire rest of your life from age 32, to whatever, to do anything that you want.

40:37 Emily: As long as your lifestyle expenses don’t creep up to the point they exceed your investments’ ability to support you. And so that is where you could spend the next 50, 70, a hundred years of your career working in wildlife biology in any kind of capacity that you can achieve knowing that your finances are already taken care of. And that’s a very unconventional route, right? But I think it’s something that maybe more people should consider if their passion is in a field where it’s so difficult and so competitive to get a full-time position. And, you know, I think it also goes back to the realism discussion we’re having earlier. You know, maybe there’s something about wildlife biology or whatever field that you’re in that you would like that romantic version, but you are not so enamored with the reality of having a career in that field version, and maybe becoming financially independent allows you to experience the romantic versions of the career, you know, of rather the field to a great extent without having to commit to having to earn in the career and doing maybe the work that’s not quite as exciting to you.

41:43 Emily: And so that’s, I don’t know, it’s a very like interesting idea. I actually did meet someone one time at a financial bloggers’ conference who had reached financial independence in his early thirties through, whatever, he’s like a finance guy or something. And he was telling me, oh yeah, I’m considering going back and getting my PhD in some completely unrelated area because I can do whatever I want now, essentially. It doesn’t matter if I get a stipend or not. I can support myself. He can pursue anything he likes. And so I’ve never really like discussed this idea with anyone in terms of PhDs before, but I think it’s, I don’t know. It’s not the most outlandish thing.

Wildlife Bio: Career or Lifestyle?

42:19 Stephanie: Yeah, absolutely. And I actually, I mention this in the last chapter of my book is, like you said, maybe you don’t want it as a career, too. And maybe that’ll actually be more satisfying to you. So I had this talk with this very prominent biologist and he was talking about his friends, how like they’re traveling all over the world and showing him all these cool pictures and all these cool places that they’ve been to. And one of the countries that he said was a country that he does a lot of work in. And I was like, you work there, you’re like always traveling there. And he’s like, yeah, but I am in like conference rooms, I’m in meetings. I’m not going to see like this beautiful waterfall or go to the beaches. So again, it might be that romantic version of like, once you get higher up with your education, you’re going to be doing like more administrative work.

43:10 Stephanie: And you’re going to be writing scientific papers and writing grants and stuff like that. And, to be honest, that’s sitting behind a desk writing. So I just want people to like really understand what it’s like and what they’re getting into. And, yeah, like, if you’re really driven because you want to travel or have cool experiences with animals, there are Citizen Science vacations, Earth Watch does this, that you can pay for that give you those opportunities. Like you can pay to work with a sea turtle biologist and help him tag turtles or help them tagged hurdles. And so you can still have these experiences. But you’re not the one leading them, which actually might be nice because then you don’t have to worry about like all the logistics of setting everything up, and yeah. And managing people and things like that.

44:03 Emily: Yeah. I love that idea. And it’s just kind of thinking outside the box, right? Like how can I get to have this lifestyle that I want? Does it have to be my career, or can it be something I do on the side as you’re building a career in another area? Or I’ve retired from my career. And so now I can do it afterwards. I think that’s a really exciting idea that you can be in wildlife biology in more ways than just a full-time professional scientist.

44:32 Stephanie: You’re so right, too, about your, your life choices changing when you get older. I talk to a lot of young people who are like, I don’t need to live in a big house. Or maybe not necessarily live in a big house, but you do want more things as you grow up. Like you want more stability and things like that. You don’t want to be moving around all the time. And like, even myself, I didn’t want to have children, but yeah, like I want to be stable and I want to stay put and not going from here to there all the time.

45:02 Emily: Yeah. What I often repeat on my podcast is money gives you options. And so really what you’re doing when you, for instance, take out a bunch of student loan debt and then go into even more debt for these, like, pay-to-play experiences and eventually go into graduate school. And you’re there for a long time. And then, you know, all the things that you might have to do to get this final career that you are going for, if all that while you’re just accumulating debt and you’re not putting money into retirement, you’re basically hamstringing yourself into this career has to work out, or I am sunk, you know? And instead if you try to pursue it, but in a more balanced manner in terms of finances and other areas of life, you can get to that point, maybe when you’re done with your PhD and say, okay, I have options. I can still pursue this career that I’ve been going for. I can get another type of job because you have built up some financial stability along the way. So it gives you options. You don’t feel like you’re stuck in just the one type of job that you’ve been going for that whole time, which might not even be available to you.

46:06 Stephanie: Absolutely.

Best Financial Advice for Another Early-Career PhD

46:08 Emily: Okay. Well, as we’re wrapping up the interview, Stephanie, one thing that I ask all of my guests is what is your best financial advice for another early-career PhD?

46:18 Stephanie: I think probably the best is, and this is where I always tell people to start out in this career, is to look at the jobs out there now that they ultimately want. And I have a tool on my website for this it’s called the Job Tracker. And you basically just like write down, or you copy and paste, like what jobs you like, how much they pay, what your education is. And then, in my course, I actually, I also have a budget planner too. And like, see if you can afford that career and see if it works out to be the type of lifestyle that you want. So really like copy the salary and the location, and look up houses in that area and how much they cost, and see if this fits into your lifestyle. But again, like really get an idea of like, where you want to end up. So there’s no surprises and you can pivot more easily along the way if you decide, okay, I love this, but I really want to make more money. Which is okay, because, like I said, some of these jobs, they pay very little and it can be difficult to live with those jobs. I knew somebody who had what other students thought was like an absolute dream job, but she was just so sick of not making money.

47:38 Emily: Absolutely. I love that advice. It goes along with the general theme of like being realistic. Okay. So where can listeners find you, Stephanie?

47:49 Stephanie: They can go to fancyscientist.com or just Google, fancy scientist I’ll come up and they can contact me any way. I check all my messages. I’m happy to answer their questions. And I love hearing from people.

48:02 Emily: And what is the title of your book?

48:05 Stephanie: Getting a Job in Wildlife Biology: What It’s Like and What You Need to Know.

48:10 Emily: Great.

48:11 Stephanie: Very blunt. Well, thanks so much for doing this. I had a good time talking to you and I learned a lot.

48:17 Emily: Thank you. It’s exciting to me to learn about a new field and kind of wrap my mind around like particular financial challenges within that field.

Outro

48:26 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 and instructions for entering the book giveaway contest. 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. If you leave a review, be sure to send it to me! 2. Share an episode you found particularly valuable on social media, with an email listserv, or as a link from your website. 3. Recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and effective budgeting. I also license pre-recorded workshops on taxes. 4. Subscribe to my mailing list at PFforPhDs.com/subscribe/. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

This PhD Found Financial Peace through Pursuing FIRE

by

In this episode, Emily interviews Dr. 50 of By 50 Journey, a federal employee who is pursuing financial independence and early retirement (FIRE). Dr. 50 came to the US after finishing college, but worked minimum wage jobs while she learned English until she could apply to PhD programs. She worked full-time to self-fund her PhD over six years. Ultimately the PhD was a game-changer for Dr. 50’s income, and within three or four years of finishing she was earning a six-figure salary. However, a higher salary was not the solution to her family’s financial problems. Dr. 50 describes her emotions at their financial low point, when they completed their debt repayment journey, and upon discovering the FIRE movement. Dr. 50 concludes the interview with an incredible insight regarding financial struggle and striving.

Links Mentioned in This Episode

PhD FIRE

Teaser

00:00 Dr. 50: And one day I was like, okay, this is it. I am making a six-figure salary and I couldn’t even afford a lunch at the cafeteria. And it’s like a wake-up call. I need to do something. We need to do something.

Introduction

00:21 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 eight, episode 16, and today my guest is Dr. 50 of By 50 Journey, a federal employee who is pursuing financial independence and early retirement: FIRE. Dr. 50 came to the U.S. after finishing college, but worked minimum wage jobs while she learned English until she could apply for PhD programs. She worked full-time to self-fund her PhD over six years. Ultimately, the PhD was a game-changer for Dr. 50’s income, and within three or four years of finishing, she was earning a six-figure salary. However, a higher salary was not the solution to her family’s financial problems. Dr. 50 describes her emotions at their financial low point when they completed their debt repayment journey. And upon discovering the FIRE movement. Listen through to the end for an incredible insight from Dr. 50 regarding financial struggle and striving.

01:28 Emily: We’ve just passed decision day, April 15th, so I’d like to extend a massive congratulations to everyone who committed to a graduate program for fall 2021. This is an incredibly exciting period of time. As you dream about and plan this new phase of your life, keep your finances top of mind. You’ve already made the biggest financial decision of your graduate career by one, choosing to attend graduate school, and two, committing to a specific stipend and location. The next biggest decisions are housing and transportation, which presumably you will lock in over the next few months. Before making those big commitments, I recommend that you sketch a budget to figure out how much you can afford while ideally maintaining some kind of savings rate. If you would like some help with that process, join the Personal Finance for PhDs Community at pfforphds.community. Inside the Community, you’ll find my How to Draft a Budget From a Distance webinar and custom spreadsheet. We also have a forum and monthly live calls where we can chat more about your specific situation. I would love to assist you with this process in any way that I can.

Book Giveaway Contest

02:44 Emily: Now, it’s time for the book giveaway contest. In April, 2021, I’m giving away one copy of Walden on Wheels by Ken Ilgunas, which is the Personal Finance for PhDs Community book club selection for June 2021. Everyone who enters the contest during April will have a chance to win a copy of this book. If you would like to enter the giveaway contest, please rate and review this podcast on Apple Podcasts, take a screenshot of your review, and email it to me at [email protected]. I’ll choose a winner at the end of April from all the entries. You can find full instructions at pfforphds.com/podcast. The podcast received a review recently titled exactly what I was looking for. Quote, having read a lot of scattered news articles and attending college workshops, I still felt a need for expert advice on investment strategies for international students. I stumbled upon this podcast while doing my weekly finance research, and I can say that Dr. Roberts does a phenomenal job at it. PF for PhDs is one of the few resources I could find which has got something for every grad student trying to figure out personal finances. Highly recommend it to incoming and current students alike. End quote. Thank you so much for this review. I am focusing more energy in 2021 on serving international students, postdocs, and workers, and I’m so glad that is coming across. Without further ado, here’s my interview with Dr. 50 from By 50 Journey.

Will You Please Introduce Yourself Further?

04:19 Emily: I am delighted to have joining me on the podcast today, Dr. 50. She actually goes by Mrs. 50 on her blog, By 50 Journey, which is a FIRE journey blog. However, she does have a PhD. So, we’re going to call her Dr. 50 today. She has an incredible story to tell us about coming to the U.S. As an immigrant, speaking no English, having no money, and you know, pursuing a PhD and ultimately being on this path to financial independence and early retirement. So, really delighted to get her story today. Dr. 50, welcome to the podcast. And will you please tell us a little bit more about yourself?

04:55 Dr. 50: Thank you so much. That was a really great introduction. Yes. That was a long time ago. I would say like over two decades, I came to this country and I had nothing. I mean, it’s nothing. So, I was trying to get a job, but I didn’t get any, because of course I didn’t speak any English. I couldn’t even answer a simple question like, how are you, what are you doing? Because I could understand, but I couldn’t express myself. So meaning trying to get a job, even a simple job. I couldn’t get it. So I was thinking, ah, this is, this is tougher than I thought it would be to start spending my life in a new country with my new husband. And I was trying, okay, let’s go back to grad school. That way I have friends. I have professor, I have, everybody so I can practice on my English. Because back in the day I didn’t have any friends, I don’t have anybody, except just for my husband. Right?

05:59 Dr. 50: And years later, I got accepted into grad school. I was so happy, but on the back of my mind, Oh well, okay, now here I am, I didn’t have any money. I didn’t have any financial support. And then I was trying to get funding, trying to get an assistantship, fellowship, whatever that was available. I didn’t get it. So, my first semester I used my credit card to pay for the tuition. I was, Oh, this is not going well. I have to do it better. So I was trying to find a job on campus. But as a student, we couldn’t work more than 20 hours. I said, this is not going to be enough to pay for everything. And not even the rent. Finally, in my second year of grad school, I got a full-time job which was wonderful. I was so grateful and I worked my way and then time flies.

07:07 Dr. 50: I got my master’s and PhD in six years because I was like, okay, let’s get this done as soon as possible so I can get a job and make real money. Right after I finished my PhD, I got a very great offer, even though I finished in the year 2008. So, everybody knows 2008 was the financial crisis. So I denied that job offer. I don’t know why, maybe because of the years, years, and the struggle of the grad school, I didn’t want to get that job because it was so stressful. So I accepted, I was a post-doc for a year and a half. During that time I was trying to find a real job. So I got a great job offer again. And then I got that job. And then my income was increased significantly. I would say, like triple. But unfortunately that job, it was in the city and I was traveling 90% of the time.

08:11 Dr. 50: And I just had a baby. I was happy with my job, but the work-life balance was not great. So I quit my dream job and then I had to find a job that’s not in the city. And then I got that with a negotiation that I negotiated with them. I managed to get the same salary that I had in the city, but I would live in the country. So, which is great. So, the struggle that was in grad school and a great job offer and determination and then patience. So I would say this is from, didn’t speak English to have a career that I wanted because of my PhD, and I was really happy. So, I’m ready to go on to the next level.

Pre-Grad School Finances

09:12 Emily: Yeah. I want to tease out a couple other pieces of that stories so that I understand it correctly. And thank you for giving us that like overarching view of how your career has evolved. So, it sounds like when you came to the U.S., it was a few years in between when you first arrived and when you were accepted to graduate school, is that right?

09:33 Dr. 50: That is correct.

09:35 Emily: And so, were you ultimately able to find some kind of job? I know that you said that you struggled at first, but how were the finances for you and your husband during that pre-grad school period?

09:46 Dr. 50: Yeah, I had odd jobs washing dishes. I answered the phone. I worked in a Chinese restaurant. I worked in a factory. I worked night shift. I did everything that I could do to earn money. And back in the day, it was the minimum wage. I believe it was $4.75 an hour. And yes, we were struggling before I got accepted into school. Even though after I accepted into grad school, we were still struggling because okay, now I spend my time studying during the day. I didn’t have time to earn money, so it was zero, but yeah. And using credit cards to pay for living expenses, even to pay for rent.

10:33 Emily: Yeah. So, it sounds like you very clearly identified the PhD, having that credential, as the path out of these minimum wage positions, is that correct?

10:44 Dr. 50: Yes. Yes. Definitely.

PhD as a Path to Professorship

10:47 Emily: If you had stayed in your home country, do you think you would have pursued a PhD?

10:53 Dr. 50: Yes, because before I met my husband I had a fellowship lined up for me, which they would pay for my school expenses, tuition, and living expenses. And yeah, I was about to go to doing my masters at the time, but decision between, okay, stay here and pursue my dream of becoming a professor or go there and be with my husband, and the love all my life. So, it’s a life-changing decision.

11:28 Emily: I am glad to hear, though, that you were already oriented in that direction. You were already planning on doing the PhD. It’s just, you decided to do it in a different country and had to take a couple steps back and learn the language and so forth. But you still got to, in terms of doing the PhD, you still got to that same goal.

11:44 Dr. 50: Yes. I always wanted to be a professor. A university professor.

Making Ends Meet in Grad School

11:49 Emily: And one other question I had about kind of the finances during graduate school. You said that you initially started out financing, you know, you weren’t funded, so you were financing it through consumer debt, and ultimately you got, I think you said a full-time job, right? So was it the case that your PhD was never funded? You didn’t have an assistantship or a fellowship, but you worked aside from doing the PhD?

12:10 Dr. 50: Yes. I worked 20 hours at the university dining hall in the morning from 3:30 to eight o’clock. And then during the day I worked as a lab technician for 40 hours. So yeah, my week was full. I would get up at three o’clock and then wouldn’t come home until 11 at night.

12:38 Emily: So you were working 60 hours at jobs plus the PhD work?

12:45 Dr. 50: Yes. And I enrolled full-time because if I did it part-time, it would drag me to eight or 10 years. I couldn’t afford that. That’s too long.

12:57 Emily: Wow. Incredible. I can’t, I can’t even fathom how you got through that. And you said it took six years, right?

13:07 Dr. 50: Yeah. It took six years, a master’s for two years and PhD for four years.

13:11 Emily: And you kept up that, I mean, I’m just like flabbergasted, you kept up that schedule the whole time?

13:16 Dr. 50: Yes. And finally, when I did my research, I quit my dining hall job because it was, Oh, it’s early. And I had that job because I got free meals. So, to save money, so I got free meals for five days. So, that’s awesome. Finally, I didn’t have time to do my research, so I quit that job and then I just kept my full-time job.

Post-PhD Finances

13:45 Emily: Yeah. I think we’re getting a real picture of how your finances were, but what it took, the work it took to keep yourself afloat, you and your husband afloat, during that time. And you know, clearly why you had the motivation to do the PhD. So, I’m really glad to hear that element of the story. Thank you. And so, you told us a little bit earlier about, you know, having the postdoc position and then, you know, taking a couple of different jobs, post-PhD. Did you want to add anything in there about how your income has been or anything like that?

14:20 Dr. 50: Yeah, sure. So, during my grad school years, the part-time one was the dining hall one. That was minimum paid. So, it was like, six or $7 an hour for 20 hours. So, that wasn’t that much. My full-time job, I worked as a lab technician that was $15 an hour. Back in the day, that was, I’d say 15 years ago, that was a lot for me. So, I’d say that I earned the most was $34,000 a year. That was awesome. That’s great money for us. That allowed us to buy a house, this would be our first house, and I didn’t have to worry much about my school tuition. And during that time I was able to talk to my boss, have them pay for a couple of classes. So, that was great. And so, post-PhD I had a postdoc and that doubled my income. I earned $63,000. That was in 2009. I graduated in 2008. So, it was double wage. Our finances were starting to get a lot, a lot better.

15:42 Emily: I just want to ask there, what kind of setting was that postdoc position in? Because that sounds like a pretty well-paid one, especially for that time.

15:52 Dr. 50: I was in the federal agency.

15:55 Emily: Okay. Gotcha.

Money Mindset: Salary Negotiation

Dr. 50 (15:56): And I, again, I negotiated my salary. I always had this mindset, even though with the federal, we have to follow rules and although certain staff follow certain salary level. Yeah. I negotiated. So, actually, it started at, I believe back in the day, was like $51,000 and I was able to get $63,000.

16:23 Emily: I think that’s a really great tip for anyone else who’s looking to apply for federal jobs because you have the, it’s the GS system, is that right?

16:31 Dr. 50: Yeah, it’s the GS system. Even though you’ve been told, okay, this position will give you the GS level this or accept this, you can always negotiate with them. Even though they have the fixed table to follow, you always can negotiate. Yeah. So, after the postdoc, I got a really great job offer in the city. This is in New York city. I was like, Oh my God, New York city, that’s a high cost of living. But it was a job of my dreams. So, I took it and my salary was doubled again. So, I made a six-figure salary. So I came from making minimum wage and then making a six-figure salary within, I would say, three or four years after I got my PhD. So, it was very quick.

17:28 Emily: Yeah. And then you said you maintained that salary even though you didn’t live in New York anymore.

17:33 Dr. 50: Yes.

17:33 Emily: Yeah. That’s fantastic.

17:35 Dr. 50: I came back to the federal, and I negotiated with them again. Different agency. And then they said, yes. I said, Oh my gosh. Yeah. It was so wonderful.

17:46 Emily: And do you still work for the federal government?

17:47 Dr. 50: Yes.

Overcoming a Large Financial Struggle

17:48 Emily: Okay. Yes. Thank you so much. It’s an incredible income trajectory. Also in this period post-PhD, I understand you overcame a large financial struggle. Can you tell us about that?

18:01 Dr. 50: Yes. So, during my graduate school years, I mean, as I already told you guys, we didn’t have much. Plus I supported myself and my family, husband, because he was still trying to finish his college also. So, I’d been using credit cards to pay for my tuition. And I was trying to pay it off every month. Some months I did, and some months I did not. So, it’s accumulated from there. And also, when I got my first real job in the New York City, we had our first child and then baby came and husband still couldn’t find any jobs. So, he was unemployed for a long time. Plus, the daycare cost was like so high. So, it’s better for him to be at home and take care of the baby. And then I’ll take care of the financial side of it.

19:04 Dr. 50: And yes, during this time we have surgeries, hospital, car wreck, and everything you can imagine. So, we accumulated a lot of debt. And one day I was like, okay, this is it. I am making a six-figure salary, and I couldn’t even afford a lunch at the cafeteria. And it’s like a wake up call. I need to do something. We need to do something. So, I say to myself, okay, no more excuses. I don’t want to wait until he got a job or I don’t want to wait until the baby leaves the daycare and goes to school. Let’s start now. Let’s do it. Yeah, all of the frustration. I just made our plan, trying to pay off the debt and made a budget and started doing my excel sheets. And then we go from there. And then in less than six years, all the debt was gone, including the mortgage.

20:04 Emily: Wow. What was the total debt balance then? Between the mortgage and the consumer debt that you were working on?

20:10 Dr. 50: Yeah, we had one car payment that was $18,000 and credit card debt was almost $80,000 and the mortgage was $114,000. So, I would say that 230 to $240,000.

20:26 Emily: Wow. So, within six years you paid off 230, $240,000 of debt on $120k ish, it sounds like, salary. Plus your husband was not working or maybe started working at some point during that period?

20:43 Dr. 50: No.

20:43 Emily: Not working during that period.

20:45 Dr. 50: He was not working yet.

20:45 Emily: Okay. Home with the baby.

20:48 Dr. 50: Yes, home with the baby.

A Shift in Money Mindset

20:48 Emily: Yes, plenty of work there. But it doesn’t sound to me, I want to ask you a little bit more about that transition about that day you couldn’t buy the lunch, you were so frustrated. Because the things that you mentioned, you know, that got you into the debt, the medical bills and the car wreck, none of that was frivolous spending. So, what did change actually at that point?

21:13 Dr. 50: It changed because, it’s kind of embarrassing to say, but I spent hours, hours just to pay a couple of bills. Because I have to think in advance, okay, if we have enough to pay for this and that before the next paycheck comes in. So, basically, we were living paycheck to paycheck. We stressed ourselves financially. Okay, the baby crying, I was trying to pay the bills. And I spent a lot to pay a couple of bills. This is, something’s wrong here. It’s not right. So I was, yeah. From there. Okay. Let’s make a decision to tackle this issue from the cause. Yeah. I was struggling and sad, and then I had nobody else to turn to. And I would say, let’s do this. I don’t want to wait any longer. Let’s do it. Our lifestyle will change, no more shopping, no more eating out. Let’s do this. If we do this, we can do this in under 10 years. In 10 years, we will be a whole new person, a new family, and then life will be much better.

22:29 Emily: And is that how you felt when you, you know, sent off the last payment?

22:33 Dr. 50: I felt relief. Okay, I don’t have to make all these calculations and then try to predict the future if my paycheck will be the same or if we will have any unexpected expenses. But I was like, Oh, well, okay, now we are definitely, the debt is gone. I still, so surprisingly, I still felt the same. It wasn’t the financial that I was looking for. I feel I miss something. We were missing something, but I couldn’t put a word to it until I found the FIRE movement.

Discovering the FIRE Movement

23:16 Emily: Yeah. So FIRE, acronym for financial independence and early retirement or retire early. Would you please explain for my audience, you know, your version of what FIRE is and why that spoke to you, and why you decided to pursue it?

23:31 Dr. 50: Yeah. So, before I knew it was a thing I always, Oh, wait, I don’t want to work. I don’t want to do this for the next 40 years. I mean, I only get one take on this planet. I want to do something that really matters, really matters to me and to my family, and really matters, that I am passionate about. I don’t want to spend my 40 years doing this. So, but I didn’t know what that feeling was until I met the FIRE movement, which you already said stands for financial independence, retire early. So, at this point, I want to be financially independent. The retire early can come back later. So, to me, FIRE means that you don’t have to worry about money anymore, meaning you don’t have to be worried about making a living, making money to support your lifestyle, your life. I mean, you can spend your time doing what really matters. To me, I really have a passion about helping animals in need, dogs and cats at the shelter. So, I really want to pursue that.

Commercial

24:50 Emily: 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 in 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 theacademic society.com/E M I L Y for my affiliate link for the course. Now, back to our interview.

Striving for Financial Independence

26:18 Emily: It sounds like when you were heavily in consumer debt and you had your mortgage, you were stressed out and you thought that it was because you were playing this paycheck-to-paycheck game, right? Which is super common, that you have to really figure out, you know, when things can be paid so you have money in the bank to do it and all that. But then, once you got out of that level of stress, you said you still kind of felt the same. And so it sounds like you realized that it wasn’t just the paycheck to paycheck game. It was that you had to have a paycheck at all. You wanted to be freed of needing to work to support your lifestyle.

26:53 Dr. 50: Exactly. Yes. I still felt the same. I was surprised. Oh my gosh. I should just be, feel very happy. Definitely I felt relieved, but it wasn’t the happiness that I was looking for. And then, yeah, I just don’t want to have any paychecks at all. I just want to have my money working for me instead of working for the money. I had been working for the money for a long time, and I don’t want to work for the money anymore.

27:19 Emily: I see. Can you give us a little bit of more of the technicalities of how FIRE works, at least in your example? Like, do you have a number that you’re shooting for, and what are the strategies that you’re using to get to that point?

27:31 Dr. 50: Yes. I have several options. So, because my older child and my husband had a chronic disease that the health insurance is the other issue, but yeah, I have a couple options here. So, the first option would be, we accumulate enough money that we can live off the investments, mainly to live off the dividends or the 4% rules. If you Google 4% rules, you will know what it is.

FIRE: The 4% Rule

28:03 Emily: Yeah. I’ll just say for the listener that there’s kind of a rule of thumb in the FIRE movement, which is that if you are supporting yourself through paper assets, stocks and bonds and so forth, the rule is that you save up, invest, 25 times your expected spending level in your retirement, or if that’s what you’re doing, and that you can withdraw 4% per year from your portfolio over the long-term without endangering, you know, that you’re going to draw it down to zero. That’s a really brief explanation. There’s a lot more underneath that, but that’s the gist of the 4% rule.

28:40 Dr. 50: Yes. So, the first option would just live off the 4% rules and everybody will be staying home and taking care of the kids. So, I just had a baby this year, so yeah, the FIRE just came back to me again. And then the second option would be like my husband keeps working. So, we will have the health insurance that we desperately need. And I would be at home and taking care of the baby. And then the third option would be to move to another country that has the universal health insurance. So, we would get that issue covered, and then we’d just live off of the investment.

29:20 Emily: Yeah. So, which one is your plan A?

29:23 Dr. 50: My plan A is the option two. So, have him keep working so we don’t have to move. And then, because by that time they’d be about to get close to the number. The younger one was still be in elementary school. So, would be just like six or seven years old.

29:40 Emily: Okay. And I think this, you know, this health insurance thing that you brought up is something that is such a big conversation in the FIRE movement in the United States, not necessarily elsewhere. And there are plenty of people who are keeping jobs, not because they need the money, but just because health insurance or the risk that you take, if you went on certain kinds of health insurance plans, is so great here. So, it sounds like either your husband will keep working, or maybe at some point we will have a universal option and then that’ll give you a lot more flexibility.

30:11 Dr. 50: Yes, that’s true. Yeah. If you have that flexibility, that would be great. He doesn’t mind working at all. He loves working. So, I’m really grateful for that.

Federal Retirement Benefits

30:21 Emily: Since you’re a federal government employee, do you have a pension? Or do you have like defined contribution plans, or what’s the deal with your retirement?

30:30 Dr. 50: Yes, I do have a pension that is very, very small. So, let’s say if I worked for 30 years plus if you meet MRA, MRA stands for minimal retirement age, if you meet 30 years at your minimum retirement age, you will get 1% of your high three of your salary. The high three is your last three years of your salary. Let’s say, to make the math easier, if you make a hundred thousand a year for the last three years before you resign. So, 1% of that, and times 30 years, so it’s only $30,000 a year, plus tax and all the deduction, it wouldn’t be much. And we have a 401(k), like any other industry, but what we call it TSP. TSP stands for Thrift Savings Plans. So, it works just like 401(k), but it’s just called differently.

Investment Changes Toward  Achieving the FIRE Goal

31:39 Emily: And since you already went through that massive debt payoff journey before discovering the FIRE movement, was there anything that you actually started changing in your finances once you had that identified as your goal?

31:52 Dr. 50: Yes. I’m glad that you asked that question. So, it changed dramatically. So, I’ve always been maxing out my 401(k), or my TSP, every year. Okay. So, we agreed as a family that we’re going to pursue FIRE. Let’s do something different. Because if I keep my job, if I still continue trying to do a traditional retirement, I would work into my MRA at 57 or 60 years. And if you want to pursue FIRE, we need to fill a gap between that because I cannot take the money out until 59 and a half. So that gap, we cannot draw our 401(k) or any retirement account. So, we opened a broker’s account and instead of maxing out my 401(k) and his 401(k), we just contribute to the match just enough to get the match from our employer. And then divert all the money from that into the brokerage account, the taxable account.

33:00 Emily: So, that sounds like you felt like your post-60 retirement was well-funded enough. And I mean, you’re still going to get the match, so there’s still more growth and a little bit more contribution there, but it sounded like you thought that that was well-funded enough. So, now you’re going to focus on those years between whenever you do stop working and when you can start to access those retirement accounts.

33:21 Dr. 50: Yes. It would be about 10 years. So, the “50” came from, I would like to retire by the time I turn 50. Yeah, so, 10 years I calculated it. All the expenses in the future. I came up with the numbers that we have to have at least $600,000, or $600,000 to be okay, that’s the lean FIRE. If you want to get more comfortable, I say $750,000. That will get up to be better than lean FIRE. Lean FIRE is just like, minimal, barely enough to live on.

34:00 Emily: Anything else that you changed aside from the destination of your investments?

34:05 Dr. 50: Yeah, that’s the one thing. And then we also, any leftover money that we can save, any activity that we cannot pass by, like re-doing our budget, do the meal plan. Budget system number one and meal planning, not going out, basically just frugal living. And then I started a side business. Anything that I can sell. And as a family we like, talk, okay, this is the goal that we want to do. And everybody was on board and yeah. Every little thing, side hustles, living frugally, anything will go to the FIRE account.

Lifestyle and Money Mindset Pre- vs. Post-Grad School

34:54 Emily: How does, how you’re living now–you know, frugally and so forth, saving a lot, working hard–how does that compare to that pre-grad school period, or even the time when you were in graduate school, and you had that heavy workload? I guess I’m asking, how does your lifestyle compare, and also how do you feel about your finances now compared to back then?

35:18 Dr. 50: I would say I feel a little bit better. Because back in the day, we were struggling financially trying to put food on the table, trying to pay rent and then trying to pay the mortgage. Right now, we’ve comfortably more than enough to pay all the expenses, living expenses and mortgage, everything is on auto pay. I didn’t have to worry about if we have enough money. If the bill comes in, if we have a roof leak, if we have a broken pipe, we have emergency funds. So yes, my feeling was much better, but financially I was still trying to meet my financial goal, which is the financial independence. So it’s a different feeling, but I would say a different feeling kind of between struggle and the finish line, I would say.

36:14 Emily: So, sort of like struggling to get off the starting blocks. Right? To even make it, you know, to have a tiny bit of financial security, versus now, like you just said, you can see the finish line. You’re striving and you’re racing for that finish line. And yeah, I would imagine that, even if your lifestyle is pretty low, like you’ve tried to like be pretty frugal and stuff, having that financial security of the, you know, X, many hundreds of thousands of dollars, you know, in the bank and the investments, it has to be a massive, massive relief on your mind.

36:49 Dr. 50: Yes. Yeah. It would be a relief because right now we trying, I would say we are in an accumulation phase trying to get as much money into the FIRE as much as possible, as soon as possible. But at the same time, I just don’t want to stress myself out. Because one thing that I learned from our debt-free journey, our debt journey was like, because at the end of the day, you just want to be happy, right? The money doesn’t make you happy. You just need to learn to live in the moment, even though you are trying to achieve something or aim for something, but overall you just want to be happy and just trying to live in the day. I just don’t want to stress out too much because during our debt journey, I was so stressed out. I just wanted to be out of debt so badly. I just didn’t want to spend at all.

37:47 Dr. 50: And I wasn’t happy. And when we were debt-free, I still wasn’t happy. Now, we are on the FIRE path, FIRE journey. I just don’t want to be the same. I just want to enjoy a little bit more of my life. I just want to stop and breathe and enjoy every single day. I just don’t want to wait, because if you wait, you will feel depressed. And if you ever feel like it will never come. So yes, I take it easy and just live in the day. And that day will come before you know it.

Was the PhD Financially Worthwhile?

38:24 Emily: I’m really glad to hear you say that. That’s a message I need to hear. I need to hear that and be able to focus on living in the moment more and not striving. And I’m really glad to hear you say that because I know that some people in the FIRE movement do stay very caught up in the end goal. And even though sort of the philosophy around FIRE would be to be living in the moment both while you’re pursuing it and once you’ve achieved it, a lot of people do fall into just thinking about the future and living for the future and you know, not taking the time to enjoy the time they have at the moment, which is all we have. Right? Really. So, I’m really glad to hear that you’ve, based on your debt free journey, you’ve already learned that lesson. And you’re now, you know, beyond that and into still enjoying your life even while you’re pursuing FIRE. So, I’m really pleased to hear that. Do you think the PhD was financially worthwhile?

39:14 Dr. 50: Oh, yes. In my case, for me. For me, it was worthwhile. I am glad that I made the right decision to pursue a PhD because it’s opened so many doors for us. If I were working at my minimum wage job at a factory, or I was afraid to take the risk of not having any paycheck and then just went straight to grad school without any backup plan. We wouldn’t be here today. Yes. It was very worthwhile. Yeah.

Best Financial Advice for an Early-Career PhD

39:47 Emily: Yes. I can see that clearly from the story now. And so, Dr. 50, I conclude all my interviews by asking my guest what is your best financial advice for an early-career PhD? That could be something we’ve talked about already. It could be something completely different, but would you please share that with us?

40:04 Dr. 50: Yeah, sure. I say, from my past experience as a PhD graduate, you feel like, Oh my gosh, I have a PhD behind my name now. I make a ton of money. Even though it’s not a ton, I would say, it’s increased your income. My one piece of advice would be trying to live the same. Don’t let the life inflation get you. Because if you do that, it will be never enough. I mean, it’s how much you make, how advancing your career brings you. It will not be enough. You just, if you just keep inflating your lifestyle. I’m not saying that you should be conscious as a graduate student, but on the back of your mind, trying to do like other peers are doing. I’m not saying like, you should live this way, but yeah. Lifestyle inflation, it really hurts your financial life.

40:59 Emily: Yeah. And it definitely sounds like you were there, you did that for a little while. I like to say, don’t inflate your lifestyle, but increase your lifestyle. Increase it intentionally, mindfully. But don’t, yeah. Don’t just let it float up to, you know, whatever your salary is.

41:16 Dr. 50: Yes.

41:17 Emily: Yes. I love that advice. Thank you so much. Dr. 50, it’s been a real pleasure talking to you. Thank you so much for joining me on the podcast.

41:22 Dr. 50: Oh, thank you so much. I’m glad to be here. And I’m so honored to be on this podcast. I am. I hope that my life lesson and experience will be helpful to you guys in some way, some small way. Thank you so much for having me here.

Listener Q&A: Financial Independence

41:42 Emily: Now on to the listener question and answer segment. Today’s question was asked in advance of a live webinar I gave recently for a university client. So, it is anonymous. Here is the question. Quote, can you start a journey to financial independence in grad school. End quote. Wow. It is awesome that this person is already thinking about long-term financial independence as a graduate student. The answer is, unequivocally, yes. In fact, if you’d like to think about it this way, you have already started your journey to financial independence in grad school, because you are making a long-term investment in your career, and presumably, your earning potential. While FIRE is achievable in theory by anyone, it’s definitely an easier road if you have a good salary. So, in that sense, if getting a graduate degree is going to put you on a road to a good salary, you’re already pursuing financial independence. Now, what can you do while you’re actually in graduate school to pursue financial independence?

42:46 Emily: No matter what your income, you can work on your mindset. You can learn more about personal finance. You can put strong habits into place, which you’ll definitely need during graduate school, like budgeting and frugality. Your income is always going to be rather low during grad school, but that’s not the only side of the equation when it comes to financial independence. Your expenses matter a lot as well. I would say, during this period of time, when your income is suppressed, you should take the time to master the controlling expenses side of the equation. But that’s not all. Even with a lower income during grad school, you can work on increasing your net worth. This is what I put a lot of focus on when I was in graduate school. Tactically, once you have your budget set up and hopefully a bit of free cashflow, you can put that towards saving, debt repayment, or investing, following, like I’ve talked about in recent weeks, the financial framework that I developed for PhDs.

43:43 Emily: Now, here’s one key concept that might not have occurred to you yet. While you’re in graduate school and you have this lower income, you also have a lower tax rate. Graduate students tend to, unless they’re married to someone with a much higher income, top out in the 12% federal marginal tax bracket or lower. And that means that it is a perfect time to use a Roth IRA for your retirement investments. Especially, again, if you anticipate a large income increase postgraduate school, this is probably the most optimal time in your life to be using a Roth IRA. And presumably it’s also the earliest investing you’ll do, so it has the longest timeline to compound and grow. People are crazy for the Roth IRA, and they will contribute even when they’re in incredibly high tax bracket. So, you really have, if you think about it, a great opportunity to be able to contribute to the Roth IRA without paying a high tax rate. And five years or so investing in a Roth IRA and then decades compounding after that, this will be a very big portion of your portfolio, ultimately, even if you don’t contribute in absolute numbers a lot of money during grad school. Thank you so much for this question, Anonymous, and I’m so glad to learn that you are already on your journey to financial independence. If you’d like to submit a question to be answered in a future episode, please go to pfforphds.com/podcast and follow the instructions you find there. I love answering questions, so please submit yours.

Outtro

45:18 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs Podcast. On that page are links to all the episode show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast, and instructions for entering the book giveaway contest and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple Podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email listserv, or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt repayment, and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

Working Before Starting a PhD: The Financial and Career Advantages

by

In this episode, Emily interviews Diandra from That Science Couple, a PhD student in nutrition at the University of Wisconsin at Madison. Diandra went straight from undergrad into a funded master’s program, then worked for six years before starting a PhD program. She lists the career and financial advantages to working before embarking on a PhD—and the disadvantages. Diandra and her husband are currently pursing SlowFI (Slow Financial Independence) while she is in her PhD program, and she gives excellent financial advice at the conclusion of the interview.

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

Links Mentioned in the Interview

work before PhD

Teaser

00:00 Diandra: I said that I never want to retire because I love research. And then I kind of shifted to, well, if money’s not the determining factor in the position that I choose, then we can spend more time with family. We can travel more and be open to different opportunities so that maybe money is more of a tool rather than a requirement. And if I want to donate my time to work on some really awesome, amazing lifestyle research that maybe doesn’t have much money in the budget to pay me, then I can choose to do that.

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 seven, episode 10, and today my guest is Diandra from That Science Couple, a PhD student in nutrition at the University of Wisconsin at Madison. Diandra went straight from undergrad into a funded master’s program, then worked for six years before starting a PhD program. She lists the career and financial advantages to working before embarking on a PhD. And the disadvantages. Diandra and her husband are currently pursuing slow financial independence while she is in her PhD program. And she gives excellent financial advice at the conclusion of the interview. This interview came about because I noticed That Science Couple tweeting about financial independence. I checked out Diandra and her husband’s website and noticed that she is a PhD student. So I decided to invite her on the podcast. It turns out that Diandra is a long-time listener of this podcast.

01:41 Emily: I literally did not know that until just before we started our interview. So I have a message for other long-time or short-time listeners, i.e., you. I am actively looking for interviewees right now. If you have personal finance knowledge or a skill that you want to teach through an interview, I would love to have you on. It’s absolutely fine if you gained this knowledge or skill from personal experience. So don’t shy away from volunteering because I use the word teach. Go to pfforphds.com/podcast to volunteer to be interviewed. Do not make me hunt you down on Twitter. Also, if you would like to hear me interview a particular person on the podcast and can help me make that connection, please send us both an email or tag us on Twitter. I’m actually looking for interviewees who can speak to two topics in particular. One, the proper tax treatment of travel and research grants. Two, exactly what kinds of income-generating activities are and are not permissible on F1 and J1 visas. If you know a professional who works in either of those areas in the U.S., please email me that recommendation. I hope to feature many of you on this podcast. Without further ado, here’s my interview with Diandra from That Science Couple.

Will You Please Introduce Yourself Further?

02:57 Emily: I have joining me on the podcast today Diandra from That Science Couple, and I was so pleased to run across her and her brand on Twitter, that’s where I found her, to find another science couple like me and my husband, who are passionate about personal finance. So Diandra, it’s a real pleasure to have you on today. Would you please introduce yourself a bit further to the listeners?

03:18 Diandra: Okay. Thank you, Emily, for having me today. I’m a long-time listener to the podcast. I actually listened before I got into my PhD program. So that was a bonus. And my name is Diandra and I’m a second-year student, PhD student, at the University of Wisconsin-Madison in nutritional sciences. I have a Master’s in Cell and Molecular Biology from Towson University. And before I started my PhD program, I worked in the industry from technician to scientist in the field of late-stage cancer diagnostics for six years. I’ve held five positions at four different companies over the six years and met my future husband, Brad from That Science Couple, at one of them. Each move was growth and financially motivated. And I’d like to say that it all started with a simple 1% cost of living increase.

Career Advantages of Working Before School

04:02 Emily: Wow. Okay. Very fascinating. So I heard in that description that you had a pretty big change in fields between what your master’s was in, what you worked in, in industry, and then what your PhD is in. So maybe we’ll get into a little bit why that happened. Because the topic that we’re going to discuss today is that path that you took between your master’s degree and your PhD and what the advantages are of working for at least a year or two years, few years, before you start a PhD program. The financial advantages, the career advantages. So let’s dive into that. You obviously have experience in this area, but you’ve probably also observed peers as well. So what are the career advantages that you perceive for working for at least some period of time between, you know, the first round of training, whether that’s undergrad, whether that’s a master’s, and then embarking on the PhD program?

04:52 Diandra: All right. So one of the big career advantages that I noted was that you’re able to test the waters. So you can gain experience before committing that five or more years to a program. And you can also determine what you don’t want in a career rather than like, focusing on what you wanted. So as you go through, you might identify different work environments that don’t click with you or ones that you like really do like, and that can help you channel your focus for your PhD program and what career you would want after that. You also are able to learn about the business side of things. You could go through different phases to take a project from beginning to completion. You work in diverse teams. So I specifically had worked in several different companies, and that collaboration either with inside my company, or to other branches, was very valuable, I think as well.

05:47 Diandra: It also trained me how to have proper documentation. So this is very useful for a PhD program. A lot of the beginning part of work for my program right now is all acquiring samples and making sure that we have good QC metrics and that we’re starting from a level basis for all of our samples. And then also I learned a realistic view on the cost of research. So I did a lot of ordering with my jobs, and then I could see what it would take to run the samples, how many times, what you needed for different replicates and then including like the final, like analysis cost as well at the end. So I think that was really important to get a realistic view of what a project I could propose in the future might cost.

06:34 Diandra: Also, another career advantage is that I was able to network early. So when you work in the industry, every time I changed jobs, I would go on LinkedIn and I would request my coworkers so that I could follow them after I had moved on. And they became references for my future applications. I gave several of them references as well. And then I also gained new mentors through working before going into my PhD. And they’re spread across a variety of fields. So now when I come back from my PhD, I’ll be able to see where they are and then potentially choose a path that maybe they’re already on or they switched to during the meantime. And then, also, I believe that I bring something unique to my PhD from working in the industry. It definitely helped me to improve my PhD application because I had a series of projects that I completed. Products that I helped launch. So that was something that I was able to include. And then I acquired additional skill sets, knowledge, and problem solving. And I’m definitely a lot more confident this time around, and I have more life experience. So when they throw a curve ball at you, or there’s an issue with your dissertation, then I’ve already been through so many times when we’ve had to switch projects or stop in the middle and change course and correct from there.

Projected Future Career Advantages, Post-PhD

07:55 Emily: So clearly there are advantages to you as the future PhD applicant, like having a stronger application, once you do decide to go for those kinds of programs. There are advantages to you in terms of knowing what you want out of your own career, whether or not a PhD is going to fit in that, and what you want to do after the PhD. And so you’ve described what you’ve experienced so far as, you know, your path to getting into the PhD program. I wonder if you can project forward, what are going to be the advantages of having worked prior to doing the PhD, once you’re looking for your first post-PhD position. What do you imagine will be the advantages then?

08:33 Diandra: Yeah. So one of the advantages then is that I already have this network built in. So I’ve tried to collaborate potentially with like my former colleagues and so far it hasn’t gone through. But when I’m looking towards the future, there are potentials that if I was a PI, that I could actually collaborate with them more. So it being like across industry is a good connection to have. So they can give you a discount on your study as long as you’re willing to share the information. So I think that’s a big proponent and I already have some of my former colleagues that are keeping in touch with me now and seeing like where I am. So I know that they’re vested in me and that if I were to say, “Hey, I need to start a team.” I have several people who have already told me, you know, “Just let me know when and where.” And they would be willing to make the leap and come join me potentially in the future.

Financial Advantages to Working Before the PhD

09:31 Emily: Wow, that’s fantastic. I also think that it takes a variable out of the equation for your future employers of, can this person be successful in my setting, an industry setting and not just an academic setting. And that question has already been answered, especially for like you had maybe a longer period of work experience, not just like a year or two. That’s already been well demonstrated for you. Okay. So we’ve covered the career advantages. This is not a career podcast. This is a financial podcast. So what are the financial advantages to working prior to starting a PhD program?

10:05 Diandra: Okay. So this was a big one for us because it took a lot of thought into, you know, why go back when I’m already established in my field, right? So it will make a big impact on you financially. And so I think the basis is just knowing what you’re getting into. Knowing that you’re going to have a few years of low income, but you can weigh that versus the potential future gains. So originally the program that I was thinking I wanted to go into would have given me a similar skillset and would not have provided any leverage up in comparison to where I already was. But then this past year, as I was developing and choosing which lab I wanted to go into, I was able to identify like, look, this is a gap in my knowledge, this is a skill that I don’t have.

10:53 Diandra: So if I add this, and it was data analysis, so if I add data analysis, then I can be potentially location-independent. I can also add this as like potentially a part-time job as well. So I could do research and then do data analysis on the side. So it’s a side hustle potential as well. So, it brought a lot of additional motivation to the PhD that I’m not going to just go out and make the same money that I was making before, but I can actually leverage that further in the future.

How Did Finances During Work Help with the PhD Transition?

11:26 Emily: Yeah, absolutely. I’m also thinking about, you know, let’s say traditional PhD student, you know, straight out of undergrad, straight of a master’s degree, early twenties, not a lot of capital, maybe a lot of student loan debt. What were you able to do in your finances in those years when you worked that helped you once you transitioned into the PhD program?

11:49 Diandra: Yeah, that’s a great question. So financially I didn’t have any student loan debt because my parents paid for my bachelor’s degree, which was great. And then when I got my master’s, I said, I’m only going to do it if they pay me to do it because I wasn’t quite sold on the need for it yet. And it was just at a transition point where I had an opportunity to stay on as a master’s student with my current research, my undergrad research. So it just kind of flowed right through. And I was able to get a TA position that covered it and then paid a small stipend. So I wasn’t able to pay off any, you know, credit card debt or things like that during that time. But once I started working, I was able to over the years level that out.

12:34 Diandra: So I had $5,000 of debt that I had to level out. And then Brad had also had some minor student loans that he was able to pay off during that time. So we go from a negative net worth of, you know, five, 10,000 to a positive net worth. And starting to open that 401k was a turning point for me because I had always started saving cash. And I had this number, this like specific amount that I could always get to my bank account. And then something big would happen. Like I would have a car repair or I would have a medical expense or something like that. And then I would have to, you know, bring it down again and start over in the savings. So working helped me to start investing earlier in comparison to some of my counterparts that are in the PhD program with me now.

13:28 Diandra: And I have that capital there that can grow during my program. So I was able to open a 401k, an HSA, which was very crucial. So I don’t have a ton in there since I was using it as I was contributing. But it’s been able to sustain me so far. And I’m hoping that after my program, that it will either still be there or it will have just covered all my medical expenses during the program. So I don’t have to worry, which is really, really useful. And then I’ve also started a Roth. So I’ve been able to do that post-tax money as well, that I will be able to access earlier. So if we choose to be, FI [financially independent], take time off you know, work remotely, or try to do more traveling, then I’ll have that money that I’ll be able to access since I’ve already paid the taxes on it.

14:22 Emily: Yeah. I call being able to start investing, and/or pay down debt, before you start graduate school. I call it having a financial wind at your back, right? Like if you just get that little nest egg started right at the beginning of graduate school before graduate school, and then you take whatever five plus years for your PhD training, even if you don’t add any more money to that, it’s something that it can be growing alongside you as that time passes. So it’s fantastic to be able to have that.

Common Objections to Working Before Grad School

14:50 Emily: Something I hear from people who are debating with themselves about going directly from undergrad into graduate school, debating with themselves about that versus working for a while. I hear two things. One is I’m going to get used to my financial lifestyle on my industry salary, and then it’s going to be too hard to live on a PhD stipend. So I should just go directly and never have that, like lifestyle intermediary. That’s one potential downside or whatever. The other one is that they’re concerned that their academic abilities, basically their ability to do school well, is going to deteriorate if they’re working for more than a year or two. How do you feel about those two objections?

15:36 Diandra: Yeah. Okay. So the first one, the financial aspect. I do agree. It can be really easy to get swept up in there. So I think for us, like the turning point was that we didn’t want to start like putting off our future. So we wanted to start traveling now and we didn’t want to say, “Oh, when we’re 65. That’s when we’ll start traveling.” So what we did initially was, when we started dating, moved into this nice apartment together, started saving for our first international vacation. And then when it came time to renew the release, it was going to go up. And we said, look, we can either do the vacation when we planned, or we can live in this nice apartment. And we looked at each other and I was like, I don’t want to live here. I would rather have the adventure that we planned than live in just a nice, shiny apartment that I can’t afford to have parties because I spent all my money on rent.

16:37 Diandra: So that kind of got us to stop with the lifestyle inflation. To cut back early on. And then we did back to back three years in a row, we did international trips for our birthdays and then just for the summer. So it was really nice. Like each one was only two weeks at a time, but instead of paying that extra to the nice, shiny things, we decided to pay it towards experiences. So I think if you were to work, you can still do that. But then like, what are your values? Like, does your spending align with your values? So if you value having a nice house for your children to grow up in, then that’s fine. But if you value adventure, then you don’t need to spend as much on your rent. So I think that that can be can be difficult to go up against like financially and having that inflation. But also every time I got raises, I pretended like I was still making the money that I was making in my master’s. So of course it was slightly more. But what I did was I took that extra when I got the raise, when I, the bonus and I put that into my savings and my investments, and I said, “I don’t want to see that money at all.” So I had that mindset that like, I’m still living on this fixed income, and no, I don’t have the extra to spend.

18:03 Emily: Yeah. I think that’s it’s a particular application of the advice live like a college student, live like a grad student, live like a resident, which is, if you are anticipating a future income decrease live on that future income. This is the same advice you hear, like people who are, for example, going to buy a house. Well, can you live on the mortgage payment that you’re going to make in the future? You know, is that possible for you in your budget? So like sort of projecting to your future, live on what that is, so that you make the adjustments in advance instead of having a real sudden, real abrupt, real painful lifestyle decrease when you enter, you know, something like graduate school. So I really liked that you took that approach of especially keeping your living expenses, your fixed expenses, on the lower side as if you were still a graduate student or will again be a graduate student. And saving the increase and also spending it on experiences. Because it’s not really lifestyle inflation, unless I guess those experiences become habitual for you.

Commercial

19:01 Emily: Emily here for a brief interlude. On Saturday, November 14th, 2020, I’m facilitating a new workshop: Chart Your Course to Financial Success, and you’re invited to attend. The central question this workshop will help you answer is, What should my singular financial goal be right now, and how should I best pursue it? This particular instance of the workshop is just for funded grad students. Future dates will be for post-docs and PhDs with real jobs. You can learn more and sign up at pfforphds.com/chart. That’s P F F O R P H D S.com slash C H A R T. The deadline to register is Wednesday, November 11th. So don’t delay. Now, back to the interview.

Financial Independence and Early Retirement (FIRE)

19:46 Emily: You discovered FIRE, it sounds like, in your time in industry. Financial Independence and Early Retirement. How is that pursued, or how are the principles still carrying on for you in graduate school?

19:58 Diandra: Yeah, so our basis going into graduate school was very important to see where we are and what we still need to do to get to potentially FIRE, or if not, just financial independence. So individually my husband and I are both 25% of the way towards our FI numbers. So that’s good. It means we have money that can grow. And then while I’m in my program, we’re working on our savings in two different ways. So instead of me trying to do everything and him trying to do it all separately, my focus is more on the post-tax money. So I make sure to pay myself first, every paycheck. And I have 25% of my stipend that will go in towards savings and individual investments. And then I also have another 10% that goes into a 457, and I’m treating this as a Roth account.

20:53 Diandra: So I’m paying the taxes now while I’m in a lower tax bracket in comparison to what I expect to be when I graduate. And then, so what Brad is doing is the kind of opposite. So he’s focusing on the pre-tax savings. So he’s also a university employee, but not a graduate student currently. So he’s been able to ramp up his savings and utilize a 457, 403(b), and HSA. And then while he has a moderate salary, he’s living on a similar income to me. So everything above that, instead of inflating our lifestyle, he’s saving that additional amount.

How Do You Have Access to a 457?

21:33 Emily: I was surprised to hear that you have access to a 457. How do you have access to that?

21:40 Diandra: So I have access to that through the UW system. So I actually didn’t know I had access to it in the first year of my PhD program. So I was doing like those micro investing apps. And then like, I would randomly put money into my individual retirement account, my IRA. So when Brad had gotten a job with the University, he saw all the benefits and explored it fully. And then he’s like, so I’m looking at these details. And it says that, aAt UW, that graduate students are considered employees. So since we had that label, we do have access to a 457. And I was able to go through and say, I could have it pre-tax, or it could have it post-tax. But since I know that I want to work for a few years, at least once I graduate, I’ll be in a higher tax bracket then. And so I’d rather pay the taxes now. So the whole point of it is that maybe we can get together funds that the whole first five years, when you become FI and you leave work is, it’s really hard to access your funds. So if you do like a Roth conversion ladder, that takes five years. So my aim was, what can I do now to build that initial five-year cash cushion?

Tracking Finances and Navigating Lifestyle Expectations

23:03 Emily: It sounds to me from the way you described that, that you and your husband either keep separate finances or like sort of track things kind of separately. Is that right?

23:11 Diandra: Yeah. So we don’t have any joint accounts but we do, you know, send money back and forth to each other all the time. So we keep it separately, and it’s good because then since we both did work around the same amount of time, that we have that money to grow. But we know that jointly, like if we’re going to go and buy a house, we can pull from both accounts. So like the HSA, since we got married this year, he’s going to switch over to a family plan. So I can’t contribute to my HSA during my program, but he’ll be able to contribute double. So it’s separate, but we joined them together. And like, when we look at our numbers, we’ll do both. So what do we individually and what do we combined have?

23:59 Emily: Yeah. And I think it’s also kind of a great, even though you’re keeping separate finances, it sounds like your lifestyle level you’ve agreed on. And you’re both living at this kind of grad student stipend ish level, and just doing a lot of saving above that. Because it sounded like you were saving 35 or maybe more percent of your stipend income, which is very high, very impressive. You must be keeping your lifestyle expenses quite low.

24:22 Diandra: Yeah. Yeah. So when we moved to Wisconsin from Maryland, actually, the last bonus that I got from my job paid for us to move across the country. So that was nice. It was just a net zero after that. Unfortunately I didn’t get to save any of it, but that was fine. So what we did when we moved here is we said, let’s pick an apartment that we can afford on my stipend. Since he was moving with me and for me, and he didn’t have a position to start with here. So we just immediately said, what is the lowest that we can find? And then like, you know, can we go slightly above that? You know, you want to live in a decent neighborhood, something that’s safe. But we were just very lucky. We got an apartment sight unseen.

25:12 Diandra: But it was actually only slightly higher than our rent back in Maryland. So we were able to just like, keep that nice low rent amount there. So that helped. And then one of the big things for us is that we do track all of our spending. We have a calendar. And so every day when we spend money, we have to write it on the calendar and then stare at it for the rest of the month. So it’s more like, was that purchase worth your life hours because that’s what you did and now you have to admit it. So we’re not like as stringent on what we spend, but like we always go into the grocery store with a budget. We say, we’re going to spend a hundred dollars on all our groceries. And we put every item in there individually. So we know when we’re hitting the cap. And if it’s only $5 more, well, that’s fine, but you don’t want to blow your budget. Like if you just don’t track it, then you can easily spend a lot more than you intended.

How Do You Describe SlowFI?

26:13 Emily: Well, thank you. So I actually have never heard that tip before of writing your spending on a calendar and then looking at it for a month. That’s actually a really great one. I understand that you identify as being on a SlowFI track right now. And I actually wrote a post recently on the flavors of five. So there’s all these different versions of FIRE, SlowFI being one of them. How do you describe SlowFI and yourself on that path?

26:38 Diandra: Yeah, so SlowFI is a term that was coined by the Fioneers. And so give like three big components. So they say it’s like embracing your dreams. So working in positions that will motivate you to like add to the world. To give back. Also being more intentional. So instead of just, I’m gonna work, work, work, work, work, you are in whatever you’re doing and that you’re actually like focusing on it and it speaks to you. So your position, your ultimate career should give you energy rather than take energy away from you. So I thought that was really, really key for the SlowFI movement. And then it’s also against that consumeristic kind of viewpoint of our country, where as you gain more money then you just buy more things. And then more things means more upkeep and being like environmentally-conscious.

27:38 Diandra: So for us, we just want to focus on the journey. So I think of it as what are you running towards instead of what are you running away from? So initially, we didn’t like our jobs, we weren’t satisfied. So we wanted to just get to FI so that we could take a break. But actually it’s really interesting with the pandemic right now that we’ve had glimpses of what life would be like if we were FI because we were fully remote for a while and we made our own schedules and it was interesting to see what do we choose to do with those extra hours. So finding that out now, while we still have incomes is better than leaving your job entirely, and then not knowing what you want to do, because if you say, I want to sip mojitos on the beach, that’s great.

28:30 Diandra: But how long is that going to last? So, I mean, for us, it was a really big shift when we met, I said that I never want to retire because I love research. And then I kind of shifted to, well, if money is not the determining factor in the position that I choose, then we can spend more time with family. We can travel more and be open to different opportunities so that maybe money is more of a tool rather than a requirement. And if I want to donate my time to work on some really awesome, amazing lifestyle research that maybe doesn’t have much money in the budget to pay me, then I can choose to do that. So that’s what SlowFI brings to us.

29:15 Emily: Yeah. I think the SlowFI path is probably one that’s quite appealing to PhDs. I know it’s appealing to me. Well, one, because it’s kind of necessary if you’re going to do graduate school at some point, you’re going to slow down your FI pursuit during that period. Almost certainly. It’s going to add some years. Like you said, though, earlier, there is income upside on the backside of the PhD, depending on, you know, what field you’re in. But I think PhDs also by and large have more opportunity to create work that they really love, that they’re really passionate about. That’s more, it goes with the territory, I think, of pursuing a PhD is that you found something that you love. And so yeah, work being part of your lifestyle long-term could still be attractive. Finding a job that you like, doesn’t have to be necessarily the most high-paying. Again, you don’t go into research if you want to be paid super, super, super well. You are talented enough to do other things if that’s your, you know, your primary motivation. So yeah, I think the SlowFI pursuit goes along very, very well with a lot of things that are common personality-wise to academics.

Best Advice for Another Early-Career PhD

30:15 Emily: So Diandra, as we wrap up here, would you please tell us your best financial advice for another early-career PhD?

30:23 Diandra: Sure. My best financial advice would be to fight lifestyle inflation and determine your value of enough early on. So this will be easier than trying to cut back, but instead use your bonuses or raises to supercharge your investments and move you along the path to financial independence.

30:44 Emily: So you’ve used language a couple of times in this interview that I have recognized as being from Your Money or Your Life, which I am currently reading. Would you recommend that book or how has that book shaped your journey?

30:55 Diandra: Yes. Vicki Robin is amazing. I would highly recommend Your Money or Your Life. She’s the one that talks about calculating your life-hours. And so how much money you make, and then how many hours does it take for that? So, when I was working at the startup company, I was driving an hour and a half down to the company and hour and a half back. So it was three hours. So instead of saying I had an eight-hour day, I would have to say that I had an 11-hour day, and then I needed time to wind down. So it turned into a 12-hour day. And then I had car maintenance. So then, the money that I got paid per hour started getting ticked off because of all these additional costs that I didn’t think of initially. Because you think of your hourly rate is one flat rate, but I would highly recommend it if you want to get more context and see that, is your job really paying you what you think it is or are you trading too many of your life-hours for that paycheck?

That Science Couple Blog

32:01 Emily: Yeah, absolutely. Thank you so much for that recommendation. And finally, tell us a little bit more about That Science Couple and what you’re doing with the blog.

32:08 Diandra: All right. So That Science Couple is a blog between Brad and I. And it was originally born out of a newsletter that we had written for our friends and family. So a couple of years ago, we had started our journey to becoming plant-based and we’ve used evidence-based nutrition. So there was the documentary Forks Over Knives, which I would highly recommend, and also the website nutritionfacts.org, which really motivated us to say like, look, there’s some science behind nutritional choices and that it’s not all about the macros. So we had noted that a lot of our friends and family didn’t understand the nitty-gritty details of this. And we wanted to start breaking down those complex ideas and topics into more relatable terms. So when we started our blog, we wanted it to be more holistic. Dr. T. Colin Campbell, his whole idea is treating us as like whole people.

33:07 Diandra: Also Dr. Dean Ornish does the same thing and there’s several other physicians that if we just look at one part, then we’re missing the whole picture. So what I really wanted to get across with our blog was that we can’t just talk about nutrition. But we are here because nutrition is important, but finances and having healthy finances is super important to having a lifestyle that, you know, supports health. And then our other point was the environment. So we didn’t want to tax the environment a lot. Brad was an environmental science major and got his master’s as well. So he wanted to talk about sustainability, and then that grew into, well, what makes a sustainable life? So when I was working as a scientist, it wasn’t sustainable. The commute wasn’t sustainable. The hours, the stress wasn’t sustainable. So how does that branch out further than just your impact on the environment, but your impact on you, personally?

34:09 Diandra: So those are the different categories that we’ve chosen to talk about on our blog. And, overall, we just want to provide a place for people to get information. So if you love those, you know, nerdy little citations and you want to see the references, like we’re going to be the place to go to, but then like personal growth is just like a free reign. So we had talked about The Value of Enough was a recent post that we put out. So if you’re trying to determine, you know, what makes your life sustainable, then maybe that’s a post that you would be interested in, too.

34:45 Emily: Yeah. We’ll link that post from the show notes. I can very easily see how those three topics interlock with one another and support and complement each other. So sounds wonderful. I’ve of course been to your blog and would recommend that everyone else go and check it out. And Diandra, thank you so much for joining me today and giving this wonderful interview.

35:04 Diandra: Yeah, thanks for having me. It was great.

Outtro

35:07 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind-the-scenes-commentary about each episode. Register at pfforphds.com/subscribe. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance. But it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

This PhD Student Buys Her Time Back by Living Car-Free

by

In this episode, Emily interviews Alina Christenbury, a first-year PhD student in computer science at the University of Delaware. Alina doesn’t own a car, preferring to bicycle for her daily commute to her university and around town as much as possible. She relies on her roommate, sister, and other friends for occasional rides to the grocery store, bus stop, or hometown, but also uses ridesharing apps and dreams of owning a portable bicycle. While living car-free certainly helps keep Alina’s expenses down, the reasons for and benefits of her commitment to a cycling lifestyle go far beyond money. This is a great episode for anyone interested in living car-free.

Links Mentioned in this Episode

grad student car-free

Teaser

00:00 Alina: I think, financially, it’s generally a really good idea to have your priorities figured out. Like I’ve decided personally for me right now that cars are not important at all. And that lets me focus on things that are more important and dedicate my time and energy and resources to the ones that do matter.

Intro

00:25 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 five, episode 14, and today my guest is Alina Christenbury, a first-year PhD student in computer science at the University of Delaware. Alina is committed to cycling and does not own a car, which frees up a great amount of her income and time to be used for other purposes. We discuss how the location of your home and your city’s infrastructure can support or not support a cycling lifestyle as well as how Alina handles transporting groceries and traveling outside of her city. At the end of the episode, we touch on how Alina’s cycling lifestyle supports her values of frugality, time freedom, and sustainability. Without further ado, here’s my interview with Alina Christenbury.

Will You Please Introduce Yourself Further?

01:16 Emily: I am delighted to have joining me on the podcast today Alina Christenbury, and she is going to be talking to us about a commitment to cycling, which is a topic that I’ve been searching to find someone to talk about. So, I’m so glad that Alina and I found one another. On Twitter, in fact. I’m really excited about this. So, Alina, thank you so much for joining me on the podcast today. And will you please tell the audience a little bit about yourself?

01:37 Alina: Yeah! Thanks for having me and everything. So, I just finished up my undergrad degree at the University of Delaware in computer science, and I just started my PhD in spatial computing–well, technically computer science, but the study area is spacial computing–in June. So, that’s very recent.

02:00 Emily: Yeah, I should say we’re recording this in August, 2019.

02:04 Alina: Yes.

02:05 Emily: So, you have just, in the past few months, it sounds like, transitioned out of undergrad and into a PhD program.

Transitioning from Undergrad Into Grad School

02:09 Alina: Yeah. I wasn’t really planning on doing this, but then circumstances kind of arose where it seemed like it was a good idea for me. Particularly, they hired this professor who started a human-computer interaction lab at the university. So, that’s very related to my interests, and I kind of immediately latched onto her. She’s cool, and I’m working in her lab. I’ve been working in her lab for the past year now, since she was hired, essentially. So, yeah, it’s going pretty well, I think. For the lack of planning that it had, it’s turned out really well.

02:49 Emily: That’s really good to hear. It is a pretty easy way to get into a PhD is to just work with someone in an undergrad who you’re really clicking with and they just say, “Yeah, just come into my program, just come into my lab. I’ll accept you. I’ll make it happen. You don’t even need to apply, or you know, submit your GREs or whatever has to happen.” But yeah, it’s a great, stress-free way to go about it. So, you must like the University of Delaware to want to stay there longer, right?

03:14 Alina: It’s a good place. I started going here because it was in-state and because tuition costs are crazy and I’m not trying to incur a lifetime of debt. So, that’s kind of why I ended up going here initially. But I’ve kind of grown to really like the bikeability of the place, which is definitely really a contributing factor into how I’m going to examine life situations for the rest of my life. And I’ve gotten a lot of friends and kind of buried myself in a community here. So, yeah, I like it so far.

Personal History with Biking and Driving

03:53 Emily: Great. I’m so glad you brought up bikeability and the environment that you’re in right now because of course, that’s the topic that we have for today. So, tell us what is your personal history with biking and also car ownership? Have you always been a cyclist? Have you ever owned a car? That kind of thing.

04:12 Alina: So, in high school, I started driving. I used to live in southern Delaware, which is like an hour and a half south from where I am now. And you have to drive there because it’s just so spread out and very rural. And then when I moved to Newark, I pretty much immediately got a bike because it’s a lot closer and it’s actually viable for someone to bike here on a regular basis without too much hassle. So, I started in undergrad, like 2015 I want to say. And I’ve been biking pretty much daily ever since. Just commuting and going to classes, living life. I still do take infrequent car trips particularly for grocery shopping and visiting family downstate because they’re far away and I don’t want to take three days to go see my family, just getting there. So, yeah.

05:02 Emily: Yeah. We’ll get into kind of all those challenges in a moment. But first, I kind of wanted to ask you. So, okay, you’ve just transitioned out of undergrad. Are you living off-campus? Or were you living on campus for part of undergrad? Or what’s been the living situation versus where you work?

Commuting to/from Campus in Grad School

05:21 Alina: So, I live off-campus but very close. It’s maybe a six-minute bike ride from The Green, which is the central area for the University, pretty much. It’s maybe a 20-minute walk or so. Some people bike, some people drive. There are a lot of commuting options. I’ve pretty much always lived just off of campus within a 10-minute bike ride max, which has definitely helped a lot. So, yeah, the one time I stayed in dorms, even then it was on the northern part of campus, which is farther from the base hub of it. So, even when I was living on campus, it was kind of off-campus and still far enough away to make biking seem much more appealing than just walking everywhere.

06:12 Emily: That’s good to hear that you have been able to situate yourself so close to campus. And maybe you don’t know yet because you’ve been a graduate student for a short amount of time, but do a lot of graduate students live that close to campus or do some people live farther away?

06:28 Alina: The few whose houses I’ve been to are pretty close. There’s this one guy, Kent, who lives about the same distance as me, and I’m actually living with another grad student in another department in the same house and he’s as far away from campus as me. So, I’m not totally sure how common it is across the total grad student population, but I’m not the only person doing this.

06:53 Emily: Yeah. There are at least some opportunities to live that close to campus.

06:57 Alina: Yeah.

Bikeability of Newark, Delaware

06:57 Emily: So, tell me a little bit more about the city and how it’s set up to support cycling or not.

07:06 Alina: So, it’s very much a college town. The University really defines a lot of how Newark operates. So, during the summer it’s very, very quiet because all of the students are just gone. But beyond that, infrastructure-wise, there are a handful of bike lanes. Campus itself is very bikeable so you can pretty easily weave in between different university buildings and everything to get around, which is helpful. They’re actually redoing some of the main streets over the summer while a lot of the students are gone, which should make it even easier in the future. But yeah, so it’s set up pretty well to just be a person on a bike, which is not something you can say about every place.

07:48 Emily: Yeah. So, specifically, when you say it’s set up pretty well, can you describe exactly what you mean by that? Like, are there dedicated bike lanes? How do the drivers behave?

08:02 Alina: Dedicated bike lanes is the big one. Drivers aren’t too aggressive. I mean, it’s a small city, so there’s not hyper crazy traffic like somewhere in like New York. Yeah, I don’t think there are any protected bike lanes. There are some bike trails though that kind of snake in circles around. And then there are like some different park-ish areas that it goes through too. So, that definitely helps a lot too, I think.

Comparison to Dedicated Bike Lanes in Seattle, WA

08:33 Emily: Yeah. So, I’m at home in my apartment in Seattle right now, I’m looking out the windows onto a rather major street from my neighborhood that we live off of. And in the last couple of years that street has switched from having, I would say not actual–I guess there are bike lanes, right. But they’re not protected. So, on either side of the road, right. One going north, one going South. It switched to having a totally separate bike lane in parallel with the road that essentially takes up about as much room as a car lane. But there was, not physical barriers, but some space between the bike lane pair and the car lane pair. And my husband cycles to work along this road. And so, I think it’s really been helpful in giving me peace of mind knowing that he’s not so close to cars, you know?

09:18 Alina: Yeah.

09:18 Emily: But it sounds like there aren’t necessarily dedicated bike lanes like that, but there is designated space on either side of a lane of traffic for bikes.

09:25 Alina: Yeah, it’s more like where the shoulder would be is a bike lane and then maybe a shoulder beyond that. I do love how some cities are doing the dedicated bike lanes thing. And I wish we had more of that, but it’s hard to say how it’s going to shape out, I guess.

09:41 Emily: Yeah, there’s actually–not super close to where we live, but along the same road and bike path at a little bit of a more major intersection–the bike lane even has its own traffic light now, which I feel like is so European or something. Like, wow, the bike lane has its own traffic light and a time when they’re allowed to go and the cars aren’t allowed to go. In Seattle, there are a lot of people who commute not by single car. A lot of people cycle here. So yeah, the infrastructure is really being set up to support that. So, it’s really nice.

When Driving is a Necessity

10:11 Emily: Okay. So, we talked about Newark a bit. So, you brought up earlier that you do use cars infrequently for some certain special situations. So, when you do have a challenge, what are the kinds of things that you can’t or don’t at this point accomplish on your bike? And then what do you do to accomplish them?

#1 Grocery Shopping

10:30 Alina: So, the most frequent is probably grocery shopping, which I can kind of do, but I’m only within range of the more expensive grocery stores and the cheaper ones are a little farther away. Usually, I’ll go like grocery shopping with one of my roommates and we’ll just pick up a bunch of stuff for the week and then bring it home, everything. But sometimes for single one-off bits where I need food for just tonight, I’ll just bike to one of the stores and get like two things.

10:56 Emily: Is the main challenge more the distance or is it more transporting the groceries?

11:02 Alina: It’s more distance. For transportation, if it’s like only a couple items, I generally have a basket on the back of my bike that can handle small amounts. Not a whole truckload or anything of groceries, but enough for like two people for a week. And yeah, some of the other grocery stores are just, again, farther away and it’s like an hour-long bike ride to get there and then back would be another hour. It’s not necessarily as feasible.

11:35 Emily: You know, I saw a really funny thing the other day. I was just at Costco a couple of nights ago because I’m a Costco shopper. I actually saw someone in Costco in cycling type clothing and he had one of these little trailers that usually goes behind a bike that I see children sitting in but it was filled up with his Costco bulk food. It’s like, wow–and he also had his dog, like, you are dedicated to your craft, sir.

12:03 Alina: Part of me wants to try that one day. But I have not gotten around to it.

12:08 Emily: Yeah, I’ve never seen that before, but it happened just this week. Yeah. So, okay. So, you covered grocery shopping, but you also mentioned when you go visit your hometown because of your parents in that situation.

#2 Visiting Family

12:20 Alina: Yeah. So, my parents and six younger sisters all live in Millsboro, which is a little bit of a drive. So, maybe every couple months I’ll go down there for a weekend and hang out, you know, missing them and everything. So, it works pretty well. My sister coincidentally lives right across the street. So, she’s very close and we’ll generally drive down together for a couple of days.

12:50 Emily: So, if I’m hearing this correctly, your sister lives where you do and has a car?

12:56 Alina: Yes.

12:56 Emily: And so, you will both go back and visit at the same time. And that’s how you get there. Have you ever traveled without your sister?

Community Reliance When Car-Free 

13:04 Alina: Yeah. So, sometimes she’ll drop me off at the bus station and stuff, or I’ll just borrow her car. So, those are kind of some of the workarounds there. Sometimes I’ll take trips up to see friends in New York for a weekend or two and they’ll just drop me off at the bus station in Wilmington and I’ll just take a Greyhound, which I don’t know if I’d recommend. The Greyhound is okay. It’s very cheap but a time.

13:32 Emily: So, I had one year when I lived car-free when I was living just outside of DC. I was working at the NIH and I had a postbac there and I lived car-free. But, like you, I did some things borrowing other people’s cars or asking for rides from other people. So, the grocery situation, right? Going with a roommate. My now-husband, then-boyfriend, when he would drive his car to visit me there in Maryland, I’d be like, “Okay, well, you’re coming for the weekend. Awesome. We’re going to go to the grocery store as part of this trip. So I could mooch off you with the car situation.” So, I’m very familiar with this solution of, “Well, you end up relying on your community a little bit.” Which is not a bad thing. But I wonder, so in the 10 plus years since I did that one year living car-free, ridesharing has become a total thing. So, do you use Uber or Lyft or anything like that to any degree?

14:32 Alina: Not on a daily basis. I have occasionally used it to get to bus stations and airports and stuff. Just when the timing hasn’t worked out for other people. But generally, I try to go with friends and just make a whole thing out of it. So, yeah. I’ve mostly used it when navigating other cities when in conferences and stuff. But I kind of really want to get a folding bike so I can just take it with me and do that instead of relying on Uber and Lyft and those kinds of ride-sharing services.

Portability of Folding Bikes

15:06 Emily: Yeah, I saw a folding bike actually for sale a couple of days ago. I don’t know if I’d seen one in person before. It was very impressively small, but it looked kind of heavy. I don’t know. I didn’t try picking it up. How portable are they, really?

15:19 Alina: I mean it depends, right? There are ones that will fold to the size of maybe, I don’t know a good comparison for this, like a large dog, I guess? And then others that’ll be a lot smaller and just very light. There are a lot of variants within that whole arena. But I think if I can get one that is small enough that I could just carry it on a plane or a train or something, I think that’ll deal with a lot of those niche edge cases when traveling in other places. So, yeah.

15:53 Emily: Yeah, I would think that if you’re able to bike to a public transit hub and then take your bike with you, if it’s going to be a longer trip, that can definitely solve a lot of those issues.

Commercial

16:08 Emily: Emily here for a brief interlude. Tax season is upon us, and while no one loves this time of year, it’s particularly difficult for post-bac fellows, funded grad students, and postdoc fellows. Even professional tax preparers are often thrown for a loop by our unique tax situation. And don’t get me started on tax software. I provide tons of support at this time of year for PhD trainees preparing their tax returns, from free articles and videos, to paid at-your-own-pace workshops, to live seminars and webinars for universities and research institutes. The best place to go to check out all of this material is pfforphds.com/tax. That’s P F F O R P H D S.com/T A X. Don’t struggle through tax season on your own. Visit my website for the exact information you need in the most efficient form available. Now back to the interview.

Benefits to Living Car-Free

17:12 Emily: What benefits have you experienced by this commitment to living car-free?

17:17 Alina: So, it gets me outside, which is really nice. It’s one of those things where I am not naturally very motivated to exercise without a real reason. And transportation is a real reason that gets me consistently sort of working out, but just moving and doing something with my body. I only really recently started going to the gym regularly with some friends and that was mostly for social reasons and not necessarily for fitness. So, it kind of built-in this exercise regimen without me necessarily having to think about it and plan for it and everything, which is I think is really helpful. So, yeah.

17:58 Emily: Yeah. So, you get outside. You get your body moving. This is a personal finance show, let’s talk about the numbers. Let’s start with how much money you are spending. So, where did you get this bike from? And how much does the maintenance cost?

18:14 Alina: So, the bike I got at a local bike shop. I think it was around $500, and then another maybe $200 and little add-ons like the rack and some bike bags and stuff. And then maybe once or twice a year, I’ll take it back over there for maintenance. But initially, when I got it, I got a maintenance plan. So, even when I do get it maintained, the labor’s free and I only have to pay for parts. So, I maybe get my brake pads replaced once every year or two years, or so. And then stuff like with tires blowing out or whatever is also pretty infrequent. So, it’s really not a lot. I’d say like a hundred in maintenance a year. And I’m not paying for insurance. I’m not paying for gas. I’m not paying for the “car” bike itself. So, yeah. I haven’t really looked into buying a car, so I don’t totally know what the numbers would look like if I were doing that instead. But I think the financial savings are pretty substantial just based on the frequency of use alone.

19:19 Emily: Yeah. I mean, I can tell you as a car owner, cars are a lot more expensive. Even a very, very cheap car–several times as expensive as a bike as well. And really, the gas costs, the insurance, as you mentioned.

19:33 Alina: It all adds up over time.

19:35 Emily: Yeah. And the maintenance, too, on a car is like–if you haven’t planned for it, if you haven’t saved for it, budgeted for it–it can be a real shock. I mean $500, a thousand dollars, multi-thousand dollars easily for maintenance. And you’re just not going to get to that scale with a new bike. You’re just going to buy a new bike if things got to that degree of a problem. Yeah. So, I’m sure it helps with the budgeting and everything. So, yeah. Have there been any downsides to this commitment? Aside from the slight challenges that we’ve already discussed. Like I don’t know, maybe weather? Anything like that?

Downsides to Biking Commitment: Weather and Community Reliance

20:10 Alina: I was going to say, the weather is probably the biggest one. I definitely have to limit how I dress in certain ways during certain seasons in order to accommodate this. It’s pretty hard for me to wear longer dresses and skirts and stuff because it can just get caught up with the gears and everything. And then I definitely have to layer well, particularly in cold and rainy weather. Otherwise, my entire body just gets soaked, which is not great. I don’t recommend it. But yeah, that’s probably the biggest one, honestly. And then again, the community reliance is a little bit annoying sometimes. But we have backups for that, like Uber and Lyft, so it’s not as much of a hurdle as it would be otherwise. Yeah, those are the two biggest downsides, I think.

21:05 Emily: Yeah, it definitely sounds like a worthwhile tradeoff given the amount of money that you are not spending. And I can just say, again, my husband cycles to work. We live in Seattle. It rains–not heavily, but quite frequently–here. And so, he’s biking in the rain a lot and like you said, he had to buy some special clothing that’s water-resistant, waterproof. But after that, he’s pretty okay. Like, it’s alright, he just takes off that layer when he gets to work and puts it back on when he leaves again.

Peer Perceptions About Not Owning a Car

21:34 Emily: So, what do your peers think about you not having a car? Is this an unusual thing?

21:44 Alina: I don’t think it’s totally unusual for this age range and location. I’ve definitely convinced some of them to try this more because I really like this, I just talk about it a lot. So, I’ve kind of seen a handful of my friends pick up their own bikes over time, which is always like, “You’re doing it! Good job, I’m proud of you.” So, I mean, they’re generally supportive, I think. So, yeah.

22:13 Emily: It’s clear from your enthusiasm in this conversation that you are a biking evangelist, right? You want to spread the good word about biking.

22:23 Alina: Yeah! It’s so much cheaper! There are so many benefits!

Additional Bike Benefit: Sustainability

22:28 Emily: Well, another benefit that you haven’t brought up yet is sustainability and energy usage. So, can you talk a little bit about that?

22:34 Alina: Yeah. So, the only thing it really costs is human energy. And even that is beneficial because it’s cheaper than a gym membership, for one, but it doesn’t pollute the air, which is a perk. And it’s very location-dependent, but if you can get past that, it doesn’t damage anything.

23:09 Emily: Yeah. I have observed that there are many, many overlaps between frugality and living a more sustainable or a smaller carbon footprint kind of life. This is one of the big areas, right? If you drive less, if you can drive less to the degree that you don’t even need to own a car, then you’re really shrinking your carbon footprint as well as not having those line items in your budget that are pretty big ones.

23:38 Emily: I mean after housing, transportation, and food are like the next two big expenses for Americans. And so, if you can pretty much eliminate one of those three big ones by using a bike instead–as we said, it’s a very small outlay of cash to buy the bike and the maintenance is very, very low–it has an incredible impact on your finances, but you can also feel good about the impact on the Earth, right?

24:05 Alina: It doesn’t use as many resources as a car, that’s just fact.

24:08 Emily: Right. And many, many of us Americans, we have calories to expend, I’ll put it that way. There’s plenty that we’re already eating that if we decided to burn it off through biking, that’s a great use. As you said, instead of maybe going to the gym. Like maybe just building this exercise into your general lifestyle and then not having to seek it out on extra time and extra kind of dedicated way that again, costs more money as you were just saying. I understand that you are, well, I don’t know what you’d like to call yourself. Some people say FIRE walkers, right? What’s the term that you like? You are pursuing FIRE, which is financial independence and early retirement, and I understand that this cycling lifestyle plays into that. Can you talk a little bit about that?

FIRE: Financial Independence and Early Retirement

24:56 Alina: I mean, I don’t really like titles. I’m just a person trying to live in what I think is the best way that I know of so far. But the FIRE movement is really inspiring and I think really had an influence on how I look at priorities in life and what really, really matters. And cars, I’ve decided really don’t matter for me and I’m willing to work around that in other ways to work on other things. I think freeing up most of my time is really important just so I can work on things that aren’t necessarily going to be paid. So, I wouldn’t necessarily say volunteering, but community organizing is really important to me. Game design is really important, and there are all kinds of other things that are more deserving of my attention than cars. So, this helps free up the most time for that, I think.

25:57 Emily: Mhm. So, you’re really thinking about and being inspired by the FIRE movement, not only in having more control and autonomy over your finances but also over your time?

26:06 Alina: Yeah, I mean I view it as buying my time back, really. This is a really big motivation for looking into it and kind of following a lot of the tenets, I guess. So, it’s one of those things where I don’t think the ultimate purpose of humanity is to work and accumulate capital, right? There’s so much else to do, but you have to have the time and autonomy to do that. And if you don’t have that, then you turn it into this negative cycle of just always working for someone else and never really fulfilling what you really want to do with your time.

More Details About the FIRE Movement

26:43 Emily: Mhm. Yeah, so we haven’t really defined this that well in this episode, but if people want to hear more about FIRE, financial independence and early retirement, I did a two-part interview with someone else pursuing FIRE, Dr. Gov Worker, that was published in season three of the podcast. So, you can go check that out. But basically what we’re talking about is lowering your expenses, raising your income, saving a whole lot of money so that you can, as you were just saying, buy back your time. Maybe you want to leave your job, eventually. That would be more like what we call retirement. Maybe you want to do that particularly early, early retirement, or maybe you just want to have the ability to be able to have more control over what your job is. Like have more negotiation ability around what your job is because you have the ability to walk away.

27:29 Alina: Being able to say, “No,” matters so much because if you feel like you can’t say, “No,” to bad opportunities and bad decisions, then you don’t really have a lot of power over your life. And then it just gets really depressing, which is where policies like universal basic income can be really empowering to kind of fix that issue for the general person across everywhere instead of specific niches that are trying to do it themselves.

28:03 Emily: Yeah. This is so interesting. I would love to talk about this topic further, but we said we were going to keep this episode about cycling, so that’s I think we’re we’ll leave it. So, there’s definitely a lot to follow up on if other people are interested in being inspired by the FIRE movement, as you were. Can you give a couple of recommendations for where you learned about this or maybe people to follow in the movement that you like?

Personal Finance Subreddit and Mr. Money Mustache

28:27 Alina: So, the only real interaction I had was the personal finance subreddit. They have a very extensive FAQ and Wiki, and it goes into a lot of different detail about different strategies for managing your finances and potentially reaching early retirement. Mr. Money Mustache is also the really big figure people probably should already know about him by now. He’s been around. And then I actually took a personal finance class in high school because I was like, “I need to be prepared for this. It’s an inevitability of adult life.” So, those are the majority of my influences here.

29:06 Emily: Yeah, that’s great to know. I also really enjoy the personal finance subreddit. Mr. Money Mustache–you have to have a certain taste for his material. I’ll say that. You either love him or not so much, but he’s a great person to have at least a little bit of exposure to, as you said, because he’s such an influential figure in the FIRE movement broadly. The thing is, his definition of frugality, definition of what living a rich life is on a low amount of money is very compatible and consistent with the graduate student experience. So, if you are looking for ways that you can be inspired to spend less money–maybe because you don’t have money to spend–Mr. Money Mustache is a great person to look to and he is, not surprisingly, a huge cycling advocate as you are. Yeah. So, if you’ve been intrigued by what Alina’s had to say, as a next step, go to Mr. Money Mustache’s blog and read more about cycling because he will definitely motivate you.

30:09 Alina: Oh my gosh. Yeah, he’s crazier about it than me.

Best Finance Advice for an Early-Career PhD

30:12 Emily: Yes, he’s very committed. So, last question here as we wrap up. What is your best financial advice for another early-career PhD?

30:21 Alina: So, I think, financially, it’s generally a really good idea to have your priorities figured out. I’ve decided personally for me right now that cars are not important at all. And that lets me focus on things that are more important and dedicate my time and energy and resources to the ones that do matter. And if you don’t necessarily have that straightened out, it can be kind of difficult to budget and figure out what you really want. And finance is just another element of that.

30:53 Emily: Yeah, I totally, totally agree. I mean getting your priorities straight, figuring out what’s most important to you is super foundational and helpful in personal finance, but it’s really something that you need to know in every area of your life. Especially as a graduate student or a postdoc and early-career PhD, you’re making a lot of decisions around your career. And so, I think, unfortunately, sometimes because of the bleak job prospects at the faculty level, we can get a little like, not very confident or down on ourselves about our employment prospects and can kind of be like, “Oh, just take whatever comes my way. Anyone who wants to get me a job, like I’m going to take that job.” And having thought through a little bit more, what are your priorities when it comes to your career? What are your priorities when it comes to your personal life? How can your career support your personal life? That can help you be a little more selective around the job choice and as you were saying, be able to walk away or design the job that you want to, if you also have your personal finances in order. That gives more power on your side of the table rather than your employer side of the table. So, Alina, it’s been a real pleasure chatting with you about this and I’m so excited for you starting your grad student journey. And yeah, thanks for coming on the podcast.

32:05 Alina: Yeah. You can find me on the internet at alinac.me and @AlinaWithAFace on Twitter.

32:11 Emily: All right. Thank you so much.

Outtro

32:14 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcast, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media or with your PhD peers. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in like investing, debt repayment, and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

Can a PhD Achieve FIRE?

by

Would you like for paid work to become optional for the rest of your life? What would you do with your time if you didn’t have to work? When you become “financially independent,” you have enough money and passive income streams to sustain you for the rest of your life without earning any more. At that point, you have the option of retiring (whether or not you actually do). Achieving this goal in youth or middle age instead of 65 is the objective of adherents of the FIRE movement (Financial Independence / Retire Early). Typically, FIRE walkers earn high salaries and save a radically large percentage of their income. This article explores whether FIRE is a good or reasonable goal for a PhD (graduate student, postdoc, or PhD with a Real Job) to set.

Can PhD FIRE

 

Further listening: This Prof Used Geographic Arbitrage to Design Her Ideal Career and Personal Life

What Is the FIRE Movement?

The FIRE movement (or at least the current iteration of the trend) started to gain traction within the last decade. Two of the fathers of the movement who documented their FIRE journeys on popular blogs are Jacob Lund Fisker (Early Retirement Extreme) and Pete Adeney (Mr. Money Mustache). They both advocate establishing a very frugal lifestyle to 1) save a high percentage of your income while working and 2) minimize the size of the nest egg needed to retire from paid work.

Now that the FIRE movement has gained popularity, it has diversified (it’s not just for young, single, male tech workers!) and splintered. One of the useful delineations is among ‘lean FIRE,’ ‘FIRE,’ and ‘fat FIRE.’ Roughly speaking, lean FIRE adherents seek to achieve FIRE primarily through expense minimization (and a high salary as well) while fat FIRE adherents seek to achieve FIRE primarily through vastly out-earning their spending (and keeping a lid on expenses as well), with regular FIRE falling somewhere in the middle.

Why Would a PhD Want to FIRE?

A person who completes a PhD has passion for her work (as well as incredible perseverance). I find it hard to imagine that such a person would want to retire early from her chosen field – especially those pursuing a life of the mind in academia.

But people who complete PhDs are also people. They end up in all types of jobs with all levels of job satisfaction. Even those with high job satisfaction might want to escape the demands of full-time work.

Even if retiring early is not attractive, becoming financially independent may be. Once you are financially independent, even if you keep working, you don’t have to be concerned about losing your job or put up with a job that’s no longer a good fit. Even during the journey to FIRE, you will have a much, much greater degree of financial security than most Americans, which brings peace of mind.

How Do You FIRE?

While difficult and rare to achieve, the mechanism of becoming FIRE is easy to understand.

To become financially independent (from active work), you need to have investments and/or passive income streams that will pay for your expenses in perpetuity. I’ll focus this discussion on the investments needed rather than the passive income streams.

Basically, to achieve FIRE, you need a nest egg of investments that is large enough that you can withdraw what you need to live on each year without eating into the principal. The higher your living expenses, the larger the nest egg you need to support them in perpetuity.

FIRE adherents usually follow the “4% Rule,” also called the Safe Withdrawal Rate (SWR), or perhaps a more conservative 3% or 3.5% Rule. The 4% Rule means that withdrawing 4% of your portfolio balance each year gives you a very good chance of your portfolio not running out of money prior to your death; it is based on historical market returns. (Early retirees may adjust this rule to be more conservative due to their post-FIRE life expectancy being longer than a typical retirement.)

The 4% Rule shows you the two vital factors to FIRE: size of your nest egg and yearly living expenses. Therefore, to achieve FIRE you must save (invest) a lot of money and keep your living expenses in check. For example, for a household with $50,000 in yearly living expenses, a portfolio of $1,250,000 is needed.

A person pursuing LeanFIRE will primarily focus on minimizing living expenses. The rough definition of LeanFIRE is living expenses of under $40,000/year or a portfolio of $1,000,000. A person pursuing FatFIRE will primarily focus on building a large portfolio. The rough definition of FatFIRE is a portfolio of over $2,500,000 or living expenses of at least $100,000/year.

There is a delightful synergy between the necessarily high savings rate and necessarily low expenses. Given a static income, the less you spend on living expenses, the higher your savings rate can become, enabling you to achieve FIRE even faster. Mr. Money Mustache published in “The Shockingly Simple Math Behind Early Retirement” a set of ratios that illustrates the relationship between savings rate and years of saving needed until the SWR could be achieved. For example, with a savings rate of 10%, you need 51 years to save before you can retire, but that drops to 22 years with a savings rate of 40% and 8.5 years with a savings rate of 70%.

Because the key to achieving FIRE is an unusually (to say the least) high savings rate, it is almost exclusively pursued by high income earners. There is a floor on how low you can drop your living expenses (although that varies person to person), so if your income doesn’t exceed your expenses by much, achieving the “E” in FIRE becomes a remote possibility.

Can PhDs FIRE?

PhDs can FIRE if they commit to the process, but they have challenges that are not shared by their peers from college who went immediately into high-paying careers. (It has been done; Jacob Lund Fisker has a PhD and retired at age 33.)

The ideal path for someone pursuing FIRE is to obtain a high-paying job immediately upon completion of their education at 18 or 22, commit to a low-cost lifestyle, set up a radically high savings rate into investments, and keep the pedal to the metal until FIRE is achieved, for instance by age 30 or 35.

A PhD becomes derailed from this ideal path upon entering graduate school. Unless he previously set up massive passive income streams, a grad student’s income is nowhere near large enough to achieve a high savings rate (even if you live in a van like Ken Ilgunas did at Duke). This means that pursuing FIRE with a high savings rate will have to wait until landing a post-PhD Real Job.

However, the graduate school experience offers a unique advantage to FIRE: A necessarily low lifestyle. The $40,000/year maximum living expense for the definition of LeanFIRE is much higher than what virtually every graduate student takes home after paying income tax. Even a couple living the graduate student lifestyle can usually spend less than that amount.

Further reading: What Grad Students Can Learn from the FIRE Movement

A PhD also confers the possibility of a high income. While PhDs are not needed in currently high-paying careers such as finance, medicine (some specialties), computer science, and engineering, a person with a PhD does on average earn much more in a lifetime than the average person with less education, and people with PhDs can absolutely land well-paying jobs.

Therefore, a PhD maintaining her grad school lifestyle (more or less) while earning a high salary post-PhD is a recipe for FIRE, albeit starting in earnest closer to age 30 than age 20. A LeanFIRE early retirement can still be achieved within a short period, and of course she could opt for FatFIRE if her income is generous enough.

However, a graduate student (or postdoc) who commits to FIRE can go further than this default:

  1. Instead of living at 100% of net income during graduate school, save (invest) as much as possible. This will have the dual effect of further lowering living expenses and getting a head start on building your nest egg.
  2. Experiment with frugality to discover whether you want to ultimately pursue LeanFIRE, FIRE, or FatFIRE. You may decide that living below a graduate student’s means is not what you want long-term.
  3. Finish your training as quickly as possible to increase your income as early as possible. Prepare yourself to land a high-paying job through professional development and networking.

Further reading: Whether You Save During Grad School Can Have a $1,000,000 Effect on Your Retirement

What Is Your Reason to FIRE?

Ultimately, it’s vital to have clarity on why you want to pursue FIRE. It’s easy to become consumed by the numbers and the process and lose track of your motivation along the way. Sometimes it’s possible to achieve aspects of the FIRE lifestyle without actually being FIRE, and I think that’s particularly true for PhDs who have a lot of transferrable skills and potential for autonomy. Remember the parable of the fisherman and the businessman. Just like you shouldn’t put your “Real Life” on hold during graduate school, you shouldn’t put your Real Life on hold while building up to FIRE.

If you are a PhD (-in-training) and seriously pursuing FIRE, I’d love to interview you on my podcast! Please fill out this form to volunteer.