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This PhD’s Path to FIRE Has Evolved with Lifestyle Design and Having Children

March 18, 2024 by Jill Hoffman 1 Comment

In this episode, Emily interviews Dr. Amanda, a prior podcast guest who is on the path to FIRE. Since our last interview, Amanda and her husband moved to the Twin Cities and had two children. Amanda recounts the exciting start to her FIRE journey when she was a postdoc and contrasts it with the boring middle of pursuing FIRE now with long-term jobs and a growing family. Amanda and Emily discuss the extra expenses that come with children—and those that don’t have to—and how emergencies and other expensive projects mean that the progress made toward FIRE is different each and every year. Amanda and Emily conclude that pursuing FIRE really is more about the journey than the destination and all the benefits you experience along the way.

Links mentioned in the Episode

  • PF for PhDs Tax Workshops (Individual Purchase)
  • PF for PhDs Tax Workshops (Sponsored)
  • PF for PhDs S1E11:  This Prof Used Geographic Arbitrage to Design Her Ideal Career and Personal Life 
  • PF for PhDs S5E15: How a Book Inspired This PhD’s Financial Turnaround
  • PF for PhDs Tax Center for PhDs-in-Training 
  • PF for PhDs Subscribe to Mailing List
  • PF for PhDs Podcast Hub
This PhD's Path to FIRE Has Evolved with Lifestyle Design and Having Children

Teaser

Amanda (00:00): Know that your life has phases and make the most of the phases you’re in. You know, I think as as I started learning about finances, I felt so eager to be in some of the phases that I saw other people. And I felt so frustrated being at the beginning or not having the kind of income or options that I wanted. And, you know, as I’ve been on this path for a while, I’m just learning that every phase of life has, uh, some really beautiful benefits and great things you can do. And then there’s things you aren’t working on. And it’s okay to not be accomplishing every goal, uh, all at the same time.

Introduction

Emily (00:46): Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. This podcast is for PhDs and PhDs-to-be who want to explore the hidden curriculum of finances to learn the best practices for money management, career advancement, and advocacy for yourself and others.I’m your host, Dr. Emily Roberts, a financial educator specializing in early-career PhDs and founder of Personal Finance for PhDs.

Emily (01:15): This is Season 17, Episode 6, and today my guest is Dr. Amanda, a prior podcast guest who is on the path to FIRE. Since our last interview, Amanda and her husband moved to the Twin Cities and had two children. Amanda recounts the exciting start to her FIRE journey when she was a postdoc and contrasts it with the boring middle of pursuing FIRE now with long-term jobs and a growing family. Amanda and I discuss the extra expenses that come with children—and those that don’t have to—and how emergencies and other expensive projects mean that the progress made toward FIRE is different each and every year. Amanda and I conclude that pursuing FIRE really is more about the journey than the destination and all the benefits you experience along the way.

Emily (02:04): The tax year 2023 version of my tax return preparation workshop, How to Complete Your PhD Trainee Tax Return (and Understand It, Too!), is now available! This pre-recorded educational workshop explains how to identify, calculate, and report your higher education-related income and expenses on your federal tax return. Whether you are a graduate student, postdoc, or postbac, domestic or international, there is a version of this workshop designed just for you. I do license these workshops to universities, but in the case that yours declines your request for sponsorship, you can purchase the appropriate version as an individual. Go to PFforPhDs.com/taxreturnworkshop/ to read more details and purchase the workshop. You can find the show notes for this episode at PFforPhDs.com/s17e6/. Without further ado, here’s my interview with Dr. Amanda.

Will You Please Introduce Yourself Further?

Emily (03:13): I am delighted to have back on the podcast today, Dr. Amanda. She joined us in two previous episodes, season one episode 11, and season five episode 15. So we’ve seen a couple of snapshots of Amanda’s, uh, financial journey so far that she’s been, um, so generous to share with us. And we’re gonna get another update today after a few years. So there’s been a lot of changes. Amanda is on the path to FI or fire, financial independence and early retirement. And so we’re gonna talk a lot about what that looks like for a PhD today. So Amanda, thank you so much for coming back on the podcast. It’s a pleasure to see you again. And will you please introduce yourself a little further for the listeners?

Amanda (03:50): Sure. Happy to be with you again, Emily. Uh, I am Dr. Amanda. I am currently an assistant professor in education. Uh, something kind of unique about my current position is I work fully remote, so I live in the Twin Cities area of Minnesota and I work for a university that’s out of state. But my students are EDD students, so they’re doctoral students in education, they’re teachers, school administrators, principals, they have full-time jobs, so they’re doing most of their program online. So I go to campus when they have their on-campus residency type stuff. But otherwise we’re all online and it works great for me. I love teaching online. I do a lot of dissertation support over Zoom. Um, so me sitting with headphones in a setting like this is, uh, kind of how I spend my days and I really like it.

Emily (04:42): And if you wanna hear more about that, the second episode I referenced season five, episode 15 is where Amanda talked about her job search and how she strategically moved to the Midwest, et cetera, for at least partially financial reasons. So I’m sure we’re gonna hear more about that too. Um, anything else you’d like to share with us?

Amanda (04:57): Uh, I have two young kids, which I believe last time I was on the show I, I don’t even think I had either of my kids. So I’ve got a one and a 4-year-old now. And, um, one of the things I really like about my remote position is it’s flexible. It allows me to spend a lot of time with them, uh, and be there for them. So that’s really great. My daughter goes to a nature preschool now in our neighborhood, which we just absolutely love. And then my son is, he spends most of his days with his grandmas.

Emily (05:28): And that was, as I recall, one of your reasons for moving there, right? Your proximity to family.

Amanda (05:32): Yes. So my situation was I had my, uh, husband and I had moved from Los Angeles where I was a postdoc at USC and he was a technical director in the USC games division. And then I took a position, uh, way across the country in Ohio and we get to Ohio and we move there and my job’s going great, I really like it, but he’s not finding the right thing. And then the perfect job for him, he designs educational games and Twin Cities public television, uh, PBS and the Twin Cities post this job where they’re looking for somebody to lead their digital and games content for, uh, it was a new show at the time. Now it’s Hero Elementary for anyone who has littles who watch Hero Elementary.

Emily (06:16): My kids love that show.

Amanda (06:17): Yeah. And we love it too. And it was just the perfect job. So that also happened to be 10 minutes away from where my family was living, and we knew we were kind of wanting to start a family, so it was like, you have to apply. And then my university was great, like things were going well, and they said, do you wanna try something remote? And this was pre pandemic, so it was a little experimental at the time. Now I feel like this is not an unusual scenario, it was at the time, but it’s worked really well. Um, so we’ve been doing that a lot of years and it just continues to work. Great.

Emily (06:50): I love this lifestyle design. Um, I’ve been listening to a lot of Cal Newport recently. Are you familiar with him? Yes. Yeah. So I’ve, I’ve read a few of his books. I’ve been listening to his podcast and he’s all about this like, I can’t remember the acronym, but it’s basically lifestyle centric career design, something like that. Um, but basically doing exactly what you’ve just, um, exemplified is getting enough career capital, in your case, the PhD, the professorship, um, to be able to leverage it to get the lifestyle you want at the point in your life when you need it, which for you was, you know, this opportunity for your husband and the, and the kids coming and all of that. So like, ugh, I wish he did interviews ’cause you would be a great interview for his podcast, but I don’t think he does that sort of thing.

Amanda (07:26): I mean, it is scary. Like when we were doing it, I remember thinking like, I agonized for weeks over trying to figure out how to ask if I could go to remote. But thinking I’m a first year professor, I was even just a few months in really, because this all happened within really right after we moved, um, we moved to Ohio in late July, August, and over Thanksgiving I helped my husband move to the Twin Cities ’cause he was starting there. So he was only there a few months, but I remember thinking like, I don’t have this capital, we can’t do this. How am I gonna ask? And then they brought it up and I remember feeling so relieved and thinking I probably could have asked, but I think sometimes as grad students, we, I know at least I felt like there was a way you’re supposed to do things.

Amanda (08:12): Like we were trained in sort of the R1 research world where it was like, you are going for a tenure track job. That is what you are going to do. You’ll move anywhere, do whatever it takes you to, you know, and especially as a couple, like you gotta find that dual hire. And I spent my whole time as a postdoc feeling like, I don’t know if this is what I want. And just, it probably took me a few years of listening to a lot of financial podcasts and lifestyle podcasts to really get comfortable with saying, what if we don’t do that? What if we did something different? What if we, this is crazy, try to live where we wanna live, which for us, you know, is the Midwest where family is, and we actually really like it here. We like the seasons. It’s not for everyone. The winters can be brutal, but, um, it took a while to get to feeling like we could make those choices.

The Beginning of Amanda’s FIRE Journey

Emily (09:03): Yeah, I see what you’re saying, because you might not think right, getting out of grad school, getting outta your postdoc that you have any career capital at that point. But honestly, if they made the investment of hiring you as a faculty member, like yeah, it’s a big investment for them too. So, and you were just ahead of the curve, right? Because everyone’s doing the remote like thing now, so it’s all worked out. I’m so glad to hear that. Let’s get into the topic for today. We’re gonna talk about your journey to fire and how the moment you’re in this, what they call the boring middle phase. So I want you to back up a little bit and describe to us what the beginning of the journey to fire looked like when it was exciting and no longer boring like it is now. Um, and we did get some of this in that first interview that you did back in season one, episode 11 about how you read Ramit Sethi book and started making some changes and so forth. So we got a little bit of that story, but describe to us a little bit more completely what, what you think of as the exciting beginning to the fire journey.

Amanda (09:54): Yeah, I guess I would say it kind of started for us when we moved to Los Angeles after finishing grad school because that was the first time we had, uh, jobs that weren’t assistantships. So we, we had a little bit of money and we very intentionally decided to, um, try to then hit, uh, you know, some of those higher savings rates we were reading about. So when we got, we lived in a really nice, uh, condo in la but it was small. It was only about 700 square feet. And we, um, our biggest expense then besides rent was doggy daycare because we’d been talking about adopting a, a pup, uh, all through grad school. And it was like, no, no, no, we’re doing this, we’re doing this now. Um, so we were paying for doggy daycare, but otherwise we just like to be outside.

Amanda (10:41): We did our own cooking and so we were really intentional about trying to keep our costs down and then hitting our student loans really aggressively. And we were, we were in school far enough back where we did have those like 7% interest rates that you’re seeing now. And so it was enough where we were looking at that going, we’d really like to pay these off. And so, um, you know, that was just something we really focused on is not, um, not blowing up our lifestyle too much when we were starting to make it was postdoc money. It wasn’t crazy money, but it was more than we were, more than we had when we were grad students.

Emily (11:15): Yeah, I think that’s one of those important messages about those career transition points, right? I mean, you, you hear the live like a student thing, but for people with PhDs, it’s like, you were living like a student for a really long time, but please, please, please just hold on, do a, a couple of lifestyle upgrades like you got the dog, but like, don’t go crazy with it when you’re still only making postdoc salaries or after that because you can really make some good traction against your financial goals. And especially if you’re feeling behind by that point. Um, you being immersed in the personal finance like community, you probably did feel behind, I would imagine, even though like objectively speaking, you weren’t . Um, but like having those kinds of influences, you were probably really eager to get started with the savings goals and the, and the student loan repayment and all that stuff, and that you Oh yeah, you can really make good progress on that when you’re keeping your lifestyle low.

Amanda (11:57): I remember looking at those compound interest, uh, charts and thinking, what have we done with our twenties ? Oh my gosh, we’ve been in school, we haven’t made any money, you know, now we’re 30 and we’re just starting. Oh, we messed it all up. And it took me a while to go, okay, you know what? It is okay, 30 is not that old. But I, I do think that sometimes that can happen to those of us in academia who do spend a long time in school and you know, oftentimes people have a lot in loans too, so it can feel like, um, it can feel like you’re starting from behind. We actually, um, we have this little lifestyle. We just run this little Etsy shop. Um, it’s tiny. It doesn’t make a lot of money, it’s just a lot of fun. We have a laser printer and we make game tokens and wood coasters, but we named it 30 below zero because at 30 years old our net worth was below zero. And it was just a reminder for us of where we’re starting. And so it’s the name of our Etsy shop. It’s just kind of funny, but we did, we felt behind.

Emily (12:58): So you were talking about that exciting beginning of, okay, we finally have some salaries, , where we can make, you know, some progress toward these goals and a simple lifestyle. I mean, Los Angeles is expensive, the rent and so forth. But you said other than that, in the doggy daycare, you kept things pretty reasonable. Um, was anything else sort of, um, exciting or different about that phase of your fire journey?

Amanda (13:19): Yeah, I would say we did something kind of different with our wedding. Uh, you know, that that was a good example of us seeing what do we value? Let’s not do what everyone else is doing. What do we wanna do? So we were living in San Pedro at the time, which is right, just a few miles from Catalina Island, and we could see Catalina Island when we would go on hikes with our dogs. You know, you’re looking off at the coastline and there’s the island. So we decided to get married on Catalina Island, but we just did this small immediate family. So we flew our parents and siblings out and that’s it. We had this tiny little ceremony, super charming on Catalina Island. We all, we booked them all, uh, rooms in the same hotel and we just spent a couple days hanging out there on the island, hiking, eating out. Um, but we never did a big thing with DJs and catering and that just, it didn’t feel like what we wanted at the time. And so that was an example of us just saying, okay, what do, who are we and what do we wanna do? What are our values? And how do we live this FI thing while also being true to who we think we are?

Emily (14:25): Hmm. Yeah. I can see how that does fall into the exciting beginning part of the journey because you’re taking this new step with your relationship, um, you’re, you know, combining things maybe in a way you didn’t before and thinking about your values and how you really want your life to look through this period of transition. And so that, that is an exciting time of really being able to think through and set some new patterns and and so forth and, and do something a little bit counter-cultural, like what you’re saying. Um, yeah. Anything else you wanna add about that period?

Amanda (14:52): Uh, no, not a whole lot. We just, we continued to do that. Um, when I started the faculty job, we, you know, I think a lot of people when they start a faculty job, especially I think in the Midwest, in a place where houses are affordable, it’s like, well, I have to have a house. But we just, in the first year we’re like, we don’t know this place yet. We’re getting to know this area. So we rented a modest apartment. We, um, this was a, a fairly rural area, so we were getting our groceries at Walmart, which was kind of new to us, but like doing our own cooking. And then when my husband took the job in the Twin Cities, he actually lived with my parents for a short time until I moved there. ’cause for a while we were in different states. Um, but we, at that time, we had a really aggressive savings rate because I was living by myself doing yoga with Adrian and walking the dog free entertainment, playing video games and cooking at home. He was doing the same thing, new job, living with my parents. So, um, at that time it was just kind of exciting to watch those student loan balances go down and feel like we’ve, we’ve got this, we can actually do the things we’ve been reading about doing.

Retirement Accounts and Student Loans

Emily (15:57): Yeah, that is very exciting. Okay, so you’re watching the student loan balances decline, you were also saving for retirement. Is that, is that true? Can you tell me like the mix of accounts that you were working with? Yeah,

Amanda (16:05): Yeah. Um, USC was kind of unique because, uh, my husband was working as an employee of USC and I was a postdoc, so he had access to their retirement savings and a match. And I didn’t as a postdoc, I don’t know if that’s changed since then. Uh, so we were, um, LA the la he was paying into his 401k and as soon as we actually, even as grad students, we were trying to max out our Roth IRAs or at least contribute to those. So we really did start right away when we were reading about this stuff as like, all right, let’s a Roth, we can do a Roth, you know, it’s not that much money or let’s just do what we can. Um, and so it was just starting to add to that. Then we added, um, when I started as a faculty member, I eventually got access to a 403B at my institution. So yes, we are definitely investing for retirement and trying to get that going while also getting the student loans paid off.

Emily (16:59): Now I’m curious because we’ve been talking mostly about the pre pandemic time period, but did you make any different decisions with the student loans when the administrative forbearance came into play?

Amanda (17:09): We had them paid off by then, actually. So, um, yeah, we went real aggressive real fast. Neither of us had, we both worked through college and grad school, so neither of us had, um, the sort of terrifying balances that you hear about some people starting with, which is good because, uh, you know, we are, we’re in tech, but we’re in ed tech education, so we also, um, you know, weren’t gonna be making the kind of crazy money that you kind of need to make to pay off those six figure, uh, loan payments. So it really didn’t take us more than a couple years to get those paid down. So I believe by the time the pandemic hit, we had already paid off our loans.

Emily (17:49): Okay. So student loans eliminated starting, or, you know, continuing and accelerating their retirement savings. And did a house purchase come into play at some point there?

Amanda (17:57): Yes, we bought a house at the very end of 2018. Um, our daughter was born in June of 2019, so kind of right around the time I moved from Ohio to the Twin Cities area, we bought a house, um, in the neighborhood where my parents live.

Current Finances, Lifestyle, and Non-Traditional Housing Decisions

Emily (18:14): Lovely. You mentioned your daughter born in 2019, and then your son’s about three years younger. Um, so let’s, let’s fill out the lifestyle now in terms of what your finances look like. What, what your lifestyle looks like. Um, now that you’ve got the job set and the kids are present or on the way, like what does this phase of fire look like?

Amanda (18:34): It’s slower and more boring. Uh, you know, if I’m being honest, um, we did, uh, upgrade the house and part of that is because my husband’s mom lives with us, she helps us with childcare. So we wanted to have a nice space for us. And what we did, this is, uh, kind of non, another non-traditional thing we did, we swapped houses with my parents, so they lived right in the neighborhood, but they were, uh, you know, they’re kind of thinking about retiring, they’re looking to downsize. ’cause they were still in kind of the home they’d raised, uh, my sister and I in. And so they had more space than they wanted and we were, uh, as we were thinking about having a second child, we were like, ah, this, we could do this. It’s gonna be tight. We could finish the basement and create these rooms. And it just sort of worked for, um, my parents were happy to buy the house that we had bought, which is a little bit smaller, but in the same neighborhood. And we bought, uh, the house that I grew up in or I moved when I was a kid, but, you know, somewhat grew up in, uh, you know, from my parents. And so it is a bigger house. Um, you know, there are, you know, it’s a, the expenses are a little higher for sure, but, um, yeah,

Emily (19:46): How, I don’t know. I just, I’m so tickled whenever I hear about families that are able to do these kinds of things for one another. There are some people in my husband’s family who have done something similar with their, um, children and it’s just, it’s so, it’s so lovely that you get to have that proximity and you get to live this more, a more communal lifestyle than is really, you know, typical for most, um, Americans. So it’s great to hear. Um, anything else? What, what’s going on now with the, the boring middle? You’re adding kids, you’re adding expenses related to the kids.

Amanda (20:13): Yeah, we pay for preschool now. Uh, we’re trying to contribute a bit to 529s and, you know, everything’s just a little bit more expensive, you know, this, this bigger house costs a little bit more. Um, we’re in Minnesota, the heating and cooling costs, especially the heating costs are, you know, they, they add up for sure. Um, I’ve become a little bit more into health and nutrition since having kids, and so I definitely buy bougie or groceries, , you know, we, uh, just quality of food, you know, we don’t eat out a lot lot. We really do cook at home, but, um, definitely we spend a lot more on groceries than we were spending a few years ago, but that’s, it’s an intentional lifestyle choice. Um, you know, for us, we are pursuing fire, and we can talk about this a little bit, but there isn’t a point at which we feel like we need to reach it. It isn’t like, oh, we really want to be completely fire by 2035 and, you know, um, it’s just sort of a direction that we’re heading rather than a very specifically defined goal.

Emily (21:20): I’ve, I’ve noticed with our family too, you know, we, we have kind of a, you know, a, a similar trajectory. We have two children, we own a house now. Um, we’re compared to when we were renting, even when we had the two kids, we were still renting for some time when we were living in Seattle. Um, an 850 square foot apartment with the four people. Oh. And then the pandemic started , so that was fun. Um, so like the housing cost for instance was a massive upgrade to go from that apartment to like the house that we purchased, but that’s because it’s a lot bigger. There’s just a ton more to like maintain. There’s a lot more considerations you have as a homeowner than as a renter. When you look at these like estimates that are occasionally put out, I guess, that are done yearly of like the cost of raising a child, you know, birth to age 18, a really, really big, big chunk of that estimated expense, which is like $200,000 or something.

Emily (22:06): A really big chunk of that is the housing expense , because you have to find room for this extra human that’s in your family or more than one human that’s in your family now. So that’s, I think, you know, you can, you can decide to be like frugal in a lot of ways if you want to, when you have children, like maybe you, um, you know, make other arrangements for childcare. You don’t spend as much in that area, but the housing is like, maybe it doesn’t come when they’re a baby, but eventually you’re gonna have to have a bigger space to accommodate those extra people. Um, so that’s been, not, not exactly surprising, but just like it has a really big effect. Like we for instance, don’t make, aren’t making nearly as much progress with our savings as we may have expected with the nice salaries that we have now because just, yeah, a lot of our expenses are a lot higher than it was for just two adults.

Amanda (22:47): Yeah. And my husband was just showing me this graph of uh, a graph mapping what people are spending on housing. So median rent and mortgage payments with uh, US household incomes and oh, that’s it. It’s a depressing graphic to look at. I mean the real reality is, is even if you’re doing everything right, uh, it’s, especially depending on where you live, housing is going to be a really substantial part of what you’re making. It’s fairly unavoidable. And like you said, when you have kids that space is just kind of non-negotiable. I mean, you know, there are a handful of families you hear, oh, you know, we have five kids and we still live in whatever square feet. And you know what, some people make that work, but I think for the vast majority of people you do kind of elect to say, ah, you know, maybe we won’t be saving as much as we would in a really ideal world, but this space helps us live a life that, you know, is calm and happy and feels right to us in the time.

The FIRE Journey with Children and Car Buying Decisions

Emily (23:49): What are the other ways that adding these children to your family has affected your fire journey?

Amanda (23:54): We still try to, um, you know, look for wins where we can. So, um, you know, I said we spend a lot more on grocery than we used to. ’cause I just really care about the quality of food. We don’t care that much about cars. I work remotely. My husband works part-time remotely thanks to the pandemic. So he went from having a job where he was in the office five days a week to now he’s only needs to be in the office a couple days a week. So we have two kids, but we only have one car. And right now, while our kids are little and they aren’t in a lot of activities, that works great for us. So we have a, um, completely paid off car. We paid off our car. That was another thing you asked about pandemic expenses in 2020, we made the last payment on our car.

Amanda (24:37): So now we don’t have a car payment and we’re not looking, uh, to upgrade. Like we didn’t feel the need to get a big SUV as soon as we had kids. And I know that’s something that a lot of Americans, it feels like a very American thing to do. Like we’re having a kid, we need an SUV, we are really happy with our economical hybrid and we’re still happy with it. So that’s one way we’ve tried to control our expenses. Like I look at what’s happened with the cost of cars in the past few years and uh, they look a lot like rent and mortgage payments. Look not that long ago, .

Emily (25:10): Yeah. I want to underline this strategy as well. It’s, it’s something that, that I’ve noticed too really common that you upgrade a lot of things. Some people upgrade a lot of things pretty much immediately when they, they know a child is on the way or once the child arrives, whether that’s the bigger car or the newer car or the bigger housing arrangement. Even if a baby is very, very small and you don’t necessarily need that right away. Um, although eventually of course you do. And some other thing, other like lifestyle upgrade as well, like same for us. Like we actually have, our car is a 2003, we’ve been, my husband’s owned it that entire time, so it’s over, you know, it’s 20 years old now, it’s a sedan. Um, and yeah, I think we were maybe thinking about switching out the car before the pandemic and then like you said, because of what’s happening with prices, we were like, whoa, let’s put the brakes on that.

Emily (25:54): Like, we don’t wanna engage in this market right now. Yeah, now my kids are five and seven and they’re getting to that stage where you said they have more activities, they have more stuff going on. We’re thinking maybe we do either need a larger primary car or perhaps a secondary car. I think what’s gonna happen is we’re gonna keep the 20-year-old car as a secondary car, right? Add, yeah, just add another, um, maybe bigger, maybe the same size of car. We actually just invested in solar panels, so we’re probably gonna get an electric car for that next, um, step. But it’s like we, we put it off, right? We put it off until this stage when it’s like, okay, it’s really, really seeming like it’s necessary at this point. And I mean, I cannot tell you like how much savings that is over the years. It’s probably multi thousands of dollars each year, if not like, perhaps $10,000 in that first year. And just delaying that expense every time. You can delay a big expense, you can stretch out the time that you use, you know that item over, you get more and more value and you’re able to direct your money elsewhere.

Amanda (26:48): I think there’s a choose Fi episode where they look at driving a car for, it’s not even a crazy amount of time. It’s like 10 or 15 years for the car, but not upgrading as soon as you’ve paid it off and just continuing to drive it. And they look at that over an adult lifetime, just that one decision. And I think ultimately they get at a million dollars or close to a million dollars just in the savings of not constantly having a car payment or driving the most expensive vehicle you could possibly afford.

Emily (27:18): It’s absolutely a huge difference. And like you said, lifestyle makes a big difference here. ’cause like my husband and I both work from home that we walk the kids to school, like we don’t really need, we don’t really drive except for like going to errands and driving the kids to their activities sometimes. So it’s not even, yeah, it’s just, we don’t put that many miles on the car, I guess is what I’m saying. Now sometimes it’s convenient to have two, but we’ve been doing a lot of biking recently. We’ve been doing some Ubering when we do need the second car and that feels expensive in the moment, but when you think about it over the long term, it’s so much less expensive than owning a second car that you rarely use.

Commercial

Emily (27:52): Emily here for a brief interlude! Tax season is in full swing, and the best place to go for information tailored to you as a grad student, postdoc, or postbac, is PFforPhDs.com/tax/. From that page I have linked to all of my free tax resources, many of which I have updated for this tax year. On that page you will find podcast episodes, videos, and articles on all kinds of tax topics relevant to PhDs and PhDs-to-be. There are also opportunities to join the Personal Finance for PhDs mailing list to receive PDF summaries and spreadsheets that you can work with. Again, you can find all of these free resources linked from PFforPhDs.com/tax/. Now back to the interview.

Emergency Fund

Emily (28:42): Now you mentioned, um, in our, uh, pre-interview communications that you are at the moment very grateful for your emergency fund. So can you tell us more about why that is?

Amanda (28:53): 2023 has demanded a lot from our emergency fund. Uh, literally on January 1st, I was driving the kids home from Target and our car broke down and it turned out it needed pretty much the most expensive possible repair for that car. And it’s a hybrid, so it ended up being about $6,000, which is it. We had kept up the maintenance. They had just told us a few months before that this car was in great shape. Uh, we were not anticipating any car expenses, there was nothing we’d been deferred. So it was a real surprise to us. Uh, but given what had happened, as we just talked about to the cost of cars over the pandemic, we were looking at it and going $6,000 doesn’t even get us that far to a comparable similar vehicle. And so we decided to do that repair and uh, you know, luckily we had the emergency fund, so we were able to, uh, pay for that.

Amanda (29:51): Uh, fast forward just a few months later in the summer, uh, we found out our dog needed a pretty substantial surgery. And again, we’d, we’d worked hard after spending down some of that emergency fund to build it up, uh, you know, even over those few short months. And it’s just, we felt so good being able to not have to consider whether we can afford that surgery. Um, you know, and just, and not needing to worry about financing, but knowing we could focus on, yes, let’s do this procedure. Let’s get her the care she needs, let’s get her feeling better. And so that was just phenomenal for us. And you know, that was a good reminder. I am very happy to live below my means so that when things like this happen and things are going to happen like this in life, we just don’t need to worry about it.

Amanda (30:39): It’s, yes, we have this money, we’ll pay for this surgery. Um, and so that was just, um, really, we were very grateful to have the money to not have to worry about the cost of that and to just be able to pay for it in one fell swoop. And then, uh, just last month we decided to do an installation project. So we had new installation put in an erratic, we did a, a home energy audit in the summer and found out that we have about five inches of attic installation and they recommend 15 here in Minnesota. So, uh, you know, given the severity of our winters, we were like, yep, we’d better do this right away. Let’s get that insulation taken care of. So that wasn’t an emergency, but again, just having savings and having the fact that there’s a good chunk of money every month that we just put away for stuff that we know will come up later has just been so fantastic for us this year.

Emily (31:35): Yeah, that, that really speaks to the, um, utility and the stress relief that comes with having margin in your life. That’s financial margin, that’s time margin, that’s energy margin. Not everybody has that. It’s, it’s difficult to, to intentionally get your life to the level where you have margin in those areas, but when you do and then those things come up, you’re so, so grateful that you did that advance, you know, work and, and design and so forth to, to have that happen. Um, I like to say regarding emergency funds, that an emergency fund is what stands between something bad happening in your life and something bad happening in your life and there being significant financial consequences for it. Um, like your dog’s, um, surgery for instance. For instance, um, so like you, if you hadn’t had the money, you, you may have had that really tough decision about what do you yes.

Emily (32:22): Do you lose this, this pet and do you lose this Yeah. Member of your household. Um, but you didn’t have to agonize over that because you had the money. So it just provides so much, so much peace. And I lived for a long time with very scant emergency fund because I was in grad school and I was focused on other things, but like I, we have much larger one now and it, it does afford a lot of peace of mind, especially with the extra responsibilities that come with the home ownership and the car ownership and the kids and all the stuff that we’ve been talking about. So it definitely needs to sort of scale with your lifestyle.

Amanda (32:52): Yes, it does. We definitely have more set aside and uh, more things come up for sure. But yeah, I personally am happy to slow down on things like vacations or uh, you know, we just talked about cars, you know, if we had another car that’s money that probably wouldn’t be in that emergency fund. And just for me, I sleep so much better at night knowing that money is there for whatever is going to come up where we’re going to need it. And you know, I know not everyone, um, comes to that same conclusion. Um, and I think that post pandemic, there’s been a lot of this, um, you know, YOLO mentality and I totally understand that, that people are wanting to prioritize experiences, but I just have to say personally, I’ve landed on, I’m much happier with, um, some money just being there and waiting for what we need it for.

Emily (33:48): And the thing is like the expenses of the emergencies, whatever they’re gonna happen, whether you’re prepared for them or not. And so putting in that earlier effort at whatever stage you’re able to, to build it up then buys you the peace of mind indefinitely going forward as long as you can maintain the fund because again, the emergencies are gonna happen, but it’s whether or not it’s how you feel about it and how you can approach it, that is making all the difference. And again, it doesn’t have to be like a continual sacrifice for decades to maintain that emergency fund. ‘Cause again, once you build it up, all you have to do is pay for those emergencies. You would’ve paid for them anyway somehow. So I’m curious about that actually, because you said something like you worked hard to build the emergency fund back up after the first, you know, depletion of the fund for the car expense. So I’m just wondering like how you did that. Was it changes in your spending? Was it reducing your savings rate in other areas? Was it working additionally? How did you do that?

Amanda (34:37): Yeah, it was largely, um, cutting back a little bit on the percentage we’re putting away for retirement. Um, you know, there was a point during the pandemic where we maxed all those accounts out and that felt really great. This is not a year where we’re maxing out Roth HSA and 401k, 4 0 3 bs. Um, I would love to have another year like that. Um, but this isn’t that year and that’s okay. Um, you know, ultimately we just decided, and, and we didn’t stop contributions. We just kind of cut, cut back a little bit on that percentage to get the emergency fund back up to where we felt comfortable with it.

Emily (35:18): Uh, once again, I see a parallel in our stories here because we maxed out our available retirement contribution room for the first time ever in 2021. So that was like 2 401Ks, my employer side of my 401k and two Roth IRAs. We did it again in 22. In 2023. This is not happening again, . Um, because as I mentioned, we had the solar panels which we’re paying for upfront, like we’re not financing them. So we had to pull that money partially from savings and partially from cashflow to be able to do that. And so that alone, plus I just mentioned we may have a car purchase in our future, like yeah, uh, we’re still doing like one 401k, we’ll still do the two IRAs, but how much we contribute to that second 401k is not too clear at this point in the year. We’re recording this in, um, October, 2023, by the way. So, but that hap that’s, that’s how life is. I mean, it’s not all like perfect numbers on a spreadsheet, like perfect numbers in your financial plans, same thing happens every single year, right? You have to adapt in some ways. And now that we’ve had that taste of like what maxing out felt like those couple of times, I’m pretty sure we’ll get back to it at some point.

Amanda (36:18): It feels good, right?

Emily (36:19): Just not 2023

Amanda (36:20): Mm-Hmm, Well, congrats on the solar panels. That’s a bucket list project for us. And, uh, you know, to be able to pay for it without financing, it is not something that many people can say. So congrats to you.

Emily (36:31): Yeah, and that was, uh, it, it’s not all thanks to us, it’s partially some leftover parental gifts from when we bought the house. We got some gifts, we didn’t spend all of it on the down payment that is now being redirected to a literal investment in the house. But here in southern California, like our electricity bill is really outta control. So like the solar panels clearly are an ROI within just a few years. So it’s a, it it is literally an investment as well as, um, just like something we want to do.

Amanda (36:56): Yeah, I I was just hearing that, that the ROI is very good in California with your high energy costs, pg and e and um, and abundant sunshine in southern California.

The Future of Amanda’s FIRE Journey

Emily (37:06): Yeah. And I can only imagine it’s gonna get worse in terms of energy costs. So it’s, it’s again, looking long-term planning kind of thing. Um, so yeah, we’re excited about that. Okay, so we’re talking about the boring middle of five. We got the kids, we got the kids’ expenses, you know, you’re doing your best you can on your 401Ks, you know, managing with life’s, you know, circumstances that are thrown your way. What is the future of your fire journey? Or maybe like you mentioned earlier that you’re not looking for like a specific super soon end point. You’re very happy with your lifestyle in many ways. So like why do you still identify with pursuing fire and what do you think might change when you get to that official where financially independent point?

Amanda (37:45): Yeah, we don’t have a specific destination, but what we are pursuing is options and flexibility. We just know for us, uh, that someday, you know, thing things happen with life and with jobs and with health. So one day, maybe one of us, we’re both happy with our jobs right now, someday, maybe one of us is in a toxic work environment. Maybe, uh, something happens with our health or the health of one of our kids, or maybe one of our kids develops some really interesting crazy hobby that, uh, you know, might require some kind of specialty training or some travel or something like that. We don’t know. But, um, we want to be able to say yes to things that life will throw at us in the future. And so for us, this FI journey isn’t about we want to move to Portugal or Thailand in 2035. It’s, we want to be able to say yes to opportunities and to never have to stay in a situation that that isn’t good for us. We always want the option to be able to make changes so that we can, uh, just live a happy, supportive life that’s good for us and good for our kids.

Emily (39:03): I, I feel like the fire movement broadly over the past few years has moved in the direction of what you’re describing. It, it, you know, 10 years ago it maybe felt much more, um, boxed in , right? Like, this is my savings rate and I have X many years until I get to this point and I’m quitting my job. And that whole attitude, and as more and more people attempted that journey, they realized that maybe the journey couldn’t look exactly like that, or maybe they didn’t even want the end point that they had imagined like earlier. Um, so many people I think are attracted to fire because they’re unhappy with their job in some way. And if you do the work of getting into a job that supports your lifestyle, as we were talking about earlier, then there’s not such a strong impetus to get out, you know, ASAP.

Emily (39:45): But like you said, that things can change with your job and with your health. And so I think it’s so smart to not, and this is what we’re doing too, like not count on I’m gonna work till I’m 72, I’m gonna work till I’m 65, and my finances depend on my ability and the market’s ability to keep providing me with work opportunities until that point. Um, and I don’t know, our, our listeners right now are probably somewhat younger than we are, but I’m 38 and I’m, I’m not exactly, I’m not tired, I’m not slowing down, but I can see in the future that I don’t necessarily want to live this way for many, many, many more decades. And that, you know, going, seeing what our parents have been going through health wise and other people around us, like, you can’t, you can’t count on that necessarily. So, like you said, just to give yourself options earlier and earlier is, is a great gift.

Amanda (40:27): Yeah, that’s exactly how we feel. And I do think you’re right, the FI community has sort of shifted in that direction, and I always struggled with this idea of what’s your fi number and your FI date, because it, there were just so many assumptions about, uh, a consistency of your spending. Um, you know, something that I’ve learned over the past few years, I mean, what my expenses looked like as a grad student were nothing like what they looked like as a postdoc or anything like what they looked like right before we had kids. You know, now we have kids, we support our kids. Um, my mother-in-law lives with us, like life changes every year. And so I don’t know what my expenses are going to be in a few years, and that’s okay. But I do know that having built up a net worth isn’t something I’m likely to look back and go, wow, I really wish I hadn’t done that.

Amanda (41:17): So, um, yeah, we’ve never been able to pin down exactly what, um, you know, specific, um, I’ve never calculated a fi date or a fi number because there’s just too many assumptions in there that I’ve never felt comfortable saying. I know what those assumptions are, but we know that life will provide us with interesting opportunities. My husband and I are both lifelong learners. You know, we’re in education, we love to learn new things. I can’t rule out that one of us might wanna do a complete career pivot, go back to grad school or something someday. If, if that’s something one of us wants to do, I hope we’ll be able to do it.

Emily (41:52): Exactly, exactly. Similarly with us, like I’ve never calculated, well, I’m, I don’t, I don’t call myself like on the fi journey, but I’ve also never calculated a fi date or a FI number because like, frankly, my husband and I bought the house we currently live in and we are not planning on living here. Once our kids are out like well outta the house, we’re gonna downsize, and who knows what that’s going to look like. So like, even when you draw closer and closer, um, to achieving that, you know, what you think might be the net worth goal of, you know, achieving fire, um, you can still make big changes and, and you may need to, and especially with the, the family unit that keeps evolving with time. Um, like you said, there’s just, every year is different. And so yeah, we may be on the journey , um, for a while. There’s not really like an end point necessarily. And so many people, again, in the fire community who maybe they did leave their jobs, they find that they’re still earning money in just other interesting ways. And so it’s like, well, you didn’t even need to reach that number necessarily. You just needed to reach, uh, coast Five, for example, or some other point where you felt comfortable changing your work situation.

Amanda (42:51): Yeah, I think it’s a very rare person in the fire community that someone retires and stops earning money, at least from what I hear in the books and the podcasts. No one knows that person. They aren’t really out there. So yeah, people find things to do. Oftentimes that comes with some kind of an income or, you know, financial incentive. Um, but again, to have the ability to pursue that, to take a risk on building a business or go back to school to learn a new skill, whatever it is, um, we just wanna be able to say yes to it in the time that it feels right.

Emily (43:25): I love it. I love the vision, I love the description of your lifestyle. Sounds lovely to me. But, you know, , we found many common commonalities between us during this episode. The listener may, uh, not want a lifestyle that looks anything like either one of ours, but the whole point here is just that you can use your finances to help you achieve that lifestyle, whatever it is that you, um, most desire it to be by having that margin, having that savings rate and the things that we’ve talked about so far. Thank you so much, Amanda. And is there anything else that you’d like to add before we conclude the interview?

Amanda (43:55): No, just thank you for your time. I’ve really enjoyed the opportunity to talk to you to catch up a little bit on your story as well.

Best Financial Advice for Another Early-Career PhD

Emily (44:02): Absolutely. And let’s, let’s end with the question that I ask all of my guests, which is, what is your best financial advice for another PhD? And that can be something that we’ve touched on in the interview, or it could be something completely new.

Amanda (44:14): Yeah, I would say this is something that we’ve touched on a bit. Um, know that your life has phases and make the most of the phases you’re in. You know, I think as, as I started learning about finances, I felt so eager to be in some of the phases that I saw other people, and I felt so frustrated being at the beginning or not having the kind of income or options that I wanted. And, you know, as I’ve been on this path for a while, but still have a long way to go, at least to that, you know, completely financial in independent space, um, I’m just learning that every phase of life has, uh, some really beautiful benefits and great things you can do. And then there’s things you aren’t working on and it’s okay to not be accomplishing every goal, uh, all at the same time.

Emily (45:02): Hmm, absolutely. And that, um, extension of our discussion reminds me of, uh, the book Die With Zero by Bill Perkins. Have you read it? Oh my gosh.

Amanda (45:09): I have not, but it seems like everyone in the community has, so it’s most definitely on my reading list because I’ve, I’ve yet to hear someone say it hasn’t transformed their thinking and just changed how they’re approaching, uh, their life and their values.

Emily (45:24): It absolutely did for me as well. I would say that was like my book of 2022 that like changed my thinking. Um, and this isn’t necessarily about specifically tying financial goals to different life stages, but just tying things you want to do to different life stages. And it really made me think differently about the opportunities that were available to me when I was in graduate school, for example, um, or out of graduate school, but before having children and what, uh, regrets I have from those times. But also what I’m glad that I took advantage of because I could see that, you know, opportunities close as you move through different phases of life. And so it’s just, um, I don’t, it wasn’t like a sad book for me, but just really helping me think about how to maximize the stage that I’m in now and thinking about what can be put off until later stages of life in terms of, um, accomplishing them, whether that’s with your finances or in other areas. So I do highly recommend that book, um, to every reader. It may make you feel better actually about the, the stage that you’re in if you’re still in graduate school or something like that. So thank you for the thought. Thank you for the opportunity to plug one of my favorite books. Um, and Amanda, thank you so much for coming back on the podcast.

Amanda (46:25): Thank you, Emily.

Outtro

Emily (46:35): Listeners, thank you for joining me for this episode! I have a gift for you! You know that final question I ask of all my guests regarding their best financial advice? My team has collected short summaries of all the answers ever given on the podcast into a document that is updated with each new episode release. You can gain access to it by registering for my mailing list at PFforPhDs.com/advice/. Would you like to access transcripts or videos of each episode? I link the show notes for each episode from PFforPhDs.com/podcast/. See you in the next episode, and remember: You don’t have to have a PhD to succeed with personal finance… but it helps! Nothing you hear on this podcast should be taken as financial, tax, or legal advice for any individual. The music is “Stages of Awakening” by Podington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing by Dr. Lourdes Bobbio and show notes creation by Dr. Jill Hoffman.

This Grad Student Purchased a House with a Friend

December 6, 2021 by Emily

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

Links Mentioned in the Episode

  • PF for PhDs Community
  • PF for PhDs: Home-buying Call Sign-Up (Free Live Q&A)
  • First-Time Home Buyer: The Complete Playbook to Avoiding Rookie Mistakes (Book by Scott Trench and Mindy Jensen)
  • PF for PhDs: First-Time Home Buyer Book Club Sign-Up
  • PF for PhDs: The Wealthy PhD
  • PF for PhDs: Open Your First IRA
  • The House Hacking Strategy (Book by Craig Curelop)
  • PF for PhDs S3E3: This Grad Student Defrayed His Housing Costs By Renting Rooms to His Peers (Money Story with Dr. Matt Hotze)
  • PF for PhDs S2E5: Purchasing a Home as a Graduate Student with Fellowship Income (Money Story with Jonathan Sun)
  • PF for PhDs S8E18: How Two PhDs Bought Their First Home in a HCOL Area in 2021 (Money Story with Dr. Emily Roberts)
  • PF for PhDs Interviews with Sam Hogan (Mortgage Originator/Emily’s Brother)
    • S5E17: How to Qualify for a Mortgage as a Graduate Student or PhD, Even with Non-W-2 Fellowship Income (Expert Interview with Sam Hogan)
    • S8E4: Turn Your Largest Liability into Your Largest Asset with House Hacking (Expert Interview with Sam Hogan)
    • Sam Hogan’s E-mail Address
    • Sam Hogan’s Cell #: (540) 478-5803
    • Sam Hogan’s Email: [email protected]
  • PF for PhDs: How to Complete Your Grad Student Tax Return (and Understand It, Too!)
  • PF for PhDs: Quarterly Estimated Tax for Fellowship Recipients
  • Personal Finance for PhDs (YouTube Channel)
  • PF for PhDs: Podcast Hub
  • PF for PhDs: Subscribe to Mailing List
This Grad Student Purchased a House with a Friend

Teaser

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

Introduction

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

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

Will You Please Introduce Yourself Further?

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

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

Finances Before Grad School

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

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

Finding and Joining the PF for PhDs Community

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

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

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

Open a High-Yield Savings Account

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

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

07:43 Courtney: Yes. Yes.

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

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

Invest in an IRA

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

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

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

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

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

Evolution of Courtney’s House Hacking Strategy

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

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

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

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

The House Hacking Strategy

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

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

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

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

Co-Owning a 4-Bedroom

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

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

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

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

Setting Up a Joint Bank Account

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

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

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

Navigating a Home Loan with Grad Student Stipends

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

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

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

Sam Hogan, Mortgage Originator

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

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

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

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

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

23:52 Courtney: We both have 50%.

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

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

Commercial

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

Considering a Second Home for More House Hacking

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

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

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

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

Final Thoughts on Real Estate

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

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

The Community and Quarterly Estimated Taxes

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

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

Emily’s Tax Workshops

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

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

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

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

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

Best Financial Advice for Another Early-Career PhD

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

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

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

35:51 Courtney: Yeah, thanks, Emily!

Addendum with Sam Hogan

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

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

Sam Hogan’s Contact Info

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

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

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

Lender’s Perspective on (Unrelated) Co-Borrowers

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

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

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

Exit Strategies for Co-Borrowers

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

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

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

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

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

Live Q&A with Emily and Sam

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

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

Outtro

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

Turn Your Largest Liability into Your Largest Asset with House Hacking

January 25, 2021 by Meryem Ok

In this episode, Emily and her guest, Sam Hogan, explain how house hacking can benefit graduate students and early-career PhDs. House hacking is when you purchase a property, live in it, and rent out part of it. While not possible in every housing market, house hacking is within reach for many graduate students and certainly postdocs and PhD with Real Jobs. In the first part of the episode, Emily teaches some of the most salient concepts from The House Hacking Strategy by Craig Curelop. She also presents some real numbers from potential house hacks in college towns. In the second part of the episode, Emily interviews Sam Hogan, a senior loan officer at Prime Lending (Note: Sam now works at Movement Mortgage) who specializes in writing mortgages for graduate students and PhDs, especially those with fellowship income. Sam gives additional details about how an early-career PhD can qualify for a mortgage for a house hack.

This post contains affiliate links. Thank you for supporting Personal Finance for PhDs!

Links Mentioned in This Episode

  • The House Hacking Strategy by Craig Curelop (affiliate link—thanks for using!)
  • Email Emily for Book Giveaway Contest
  • PF for PhDs Podcast Hub (Giveaway Instructions)
  • This Grad Student Defrayed His Housing Costs By Renting Rooms to His Peers (Money Story with Dr. Matt Hotze)
  • PF for PhDs: The Wealthy PhD
  • Purchasing a Home as a Graduate Student with Fellowship Income (Money Story with Jonathan Sun)
  • How to Qualify for a Mortgage as a Graduate Student or PhD, Even with Non-W-2 Fellowship Income (Expert Interview with Sam Hogan)
  • PF for PhDs: Community
  • Here is the IRS link that I mention in the Q&A
  • Sam’s Email: [email protected]
  • PF for PhDs: Tax Workshop
  • PF for PhDs: Subscribe to Mailing List
grad student house hack

Teaser

00:00 Sam: The best example, which has happened I would say many times over, is in North Carolina. One student purchasing that, you know, the regular stipend amount of around $32,000 a year, he bought it at $200,000, put $10,000 down was still within his debt-income ratio. And when he started off the process, he did say he was going to house hack.

Introduction

00:28 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is Season 8, Episode 4, and I have a different episode structure for you today. The entire episode is devoted to exploring house hacking, which is when you purchase a property, live in it, and rent out part of it. We’re going to focus on how house hacking can benefit graduate students and early-career PhDs, and how it is possible for more people than you might expect. In the first part of the episode, I teach some of the most salient concepts from The House Hacking Strategy by Craig Curelop. I also point to a few real examples of potential profitable house hacks that I looked up this week. In the second part of the episode, I interview Sam Hogan, a senior loan officer at Prime Lending (Note: Sam now works at Movement Mortgage) who specializes in writing mortgages for graduate students and PhDs, especially those with fellowship income.

01:26 Emily: Sam gives additional details about how an early-career PhD can qualify for a mortgage for a house hack. Sam has been featured on two previous episodes and is now an advertiser with Personal Finance for PhDs. Reading this book came at a great time for me, actually, as my husband and I are taking steps to buy our first home within the next few months. It’s given me a different perspective on real estate investing for sure and the value of your primary residence. I’m very excited to share this material with you. Our giveaway contest is actually for the book Sam and I read for this episode! In January 2021, I’m giving away one copy of The House Hacking Strategy by Craig Curelop (affiliate link—thanks for using!), which is the Personal Finance for PhDs Community Book Club selection for March 2021. Everyone who enters the contest during January will have a chance to win a copy of this book.

02:18 Emily: 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 January from all the entries. You can find full instructions at PFforPhDs.com/podcast. The podcast received a review this week from Emily B. The review reads: “This podcast has been so helpful to me as I apply to graduate school!! So many of these things aren’t talked about but Emily is great at explaining all of these concepts and interviewing people who have great advice.” Thank you to Emily B for this lovely review, and best of luck to you this spring! Without further ado, here’s my review of the concepts in The House Hacking Strategy.

Review of The House Hacking Strategy

03:08 Emily: The House Hacking Strategy by Craig Curelop (affiliate link—thanks for using) was published in 2019 through Bigger Pockets Publishing. Bigger Pockets is a popular online real estate investment community. House hacking, which I’ll define momentarily, is popular among this community, and Curelop presents a very enthusiastic and rosy picture of the strategy. For the duration of this episode, I want you to allow yourself to dream a little. I know and you know that house hacking is not possible or desirable for many graduate students and PhDs for a variety of reasons. But just for the next few minutes, I want you to suspend your doubts. We’ll come back to reality in a little bit and talk over some numbers. For the moment, instead of confirming for yourself all the reasons that you can’t house hack, ask yourself, “How and when might I be able to make this strategy work for me?” If you are convinced that you want to house hack, you may just find that a fire is lit underneath you and you can make it happen sooner than later.

04:07 Emily: In fact, I did some searching on Redfin and Craigslist and found three properties near three R1 universities that I think might be profitable house hacks for single graduate students. I’ll present those numbers after I go through some of the material from The House Hacking Strategy. I’m going to start my teaching in the same place that Curelop starts his book. I’ll read some quotes and summarize some paragraphs from pages 23 and 24, the start of Chapter 1. Quote “What is your largest expense? The majority of the United States population would not hesitate to reply with “housing.” Whether you are paying rent or paying down a mortgage alongside with taxes, insurance, maintenance, and all the other expenses associated with owning a home, your house is likely what you spend most of your money on each month.” End quote.

Definitions: Asset and Liability

04:54 Emily: Curelop then shares the definitions that Robert Kiyosaki uses in his books, which is that an asset is anything that puts money into your pocket every month, and a liability is anything that takes money from you every month. Under this definition, your home is a liability, whether you own or rent. Quote “Arguably, the biggest misconception that most Americans have is that their home is their largest asset. When, in fact, it is their largest liability. However, there are some exceptions. A few of them are exemplified at the conclusion of each chapter. You will read fellow house hackers’ stories in this book who have used strategies outlined here to turn what could be their largest liability into their largest asset. “They strategically designed their lifestyle so housing is not their largest expense. As a matter of fact, through the strategies I talk about in this book, they have completely eliminated housing as an expense and they make money from their living situations every single month. And yes, their lives look just like yours. From the outside, you would not think that they are any different because they have days jobs, errands to run, and families to care for.” End quote.

Turning Your Largest Liability Into Your Largest Asset

06:03 Emily: Turning your largest liability into your largest asset—that is an incredibly powerful idea. How do they do that? Let’s define house hacking. House hacking is when you buy a home, live in it, and rent out part of it. The classic house hack, according to this book, is buying a multifamily property (a duplex, triplex, or four-plex), living in one unit, and renting out the others. In that case, your tenants are your neighbors. Another variation of house hacking is to buy a single-family home and rent out the bedrooms that you do not occupy. In that case, your tenants are your roommates. There are all kinds of reasons that house hacking is powerful from a real estate investment standpoint, which The House Hacking Strategy covers very well. I’m taking a different approach, which is speaking to people who are not necessarily enamored with real estate investing, but rather want to find a way to reduce or eliminate their largest monthly expense: their rent or their mortgage payment.

07:01 Emily: Whenever I speak about frugality and reducing expenses, I ask that people first consider how they can reduce their housing expenses, even though accomplishing that can be difficult and expensive upfront. I’ve published through this podcast and highlighted in my seminars creative strategies such as serving as a resident advisor, living in subsidized or low-income housing, renting your home on AirBnB, and house hacking, although I haven’t used that term before. I published two full interviews with grad students who rent out rooms in their homes, which I’ve linked from the show notes, and some of my other guests have mentioned in passing that they use the strategy.

Benefits of a Successful House Hack

07:37 Emily: If you set up a profitable house hack, you will either: 1) Bring in enough rent to completely cover your mortgage and reserves, which is the money you need to put aside monthly for future home maintenance and vacancies, or 2) Bring in enough rent that your personal housing expense is less than what you would have paid in rent had you not house hacked. If you were to move out and rent your room, the total rent from the property would be more than the mortgage and reserves. A minimally successful house hack reduces your personal housing expense. A very successful house hack puts money in your pocket on a monthly basis. I believe house hacking is a hugely powerful strategy for PhD students and a great one for postdocs and other early-career PhDs. It’s accessible to many more early-career PhDs than those who currently pursue it.

08:26 Emily: I’m going to focus in this episode on single PhD students and their numbers since they are the most difficult case. If you have a postdoc income or Real Job income, getting into a house hack will be easier, and likewise if you have two incomes to work with instead of one. I want to throw in a word of caution that this episode is just a short summary of part of a book that is not super in-depth either. So while I want to encourage you to look into this strategy, you must do your due diligence in your local market before taking the step to actually buy a home.

Why is House Hacking a Great Fit for Grad Students?

08:59 Emily: So why is house hacking a great fit for graduate students? First, a traditional grad student fits perfectly into the ideal demographic of house hackers: people without children who are willing to live with other people. That’s not to say that you can’t house hack if you do have children, but it might look different for you. Second, a grad student basically by definition lives near a university, which boasts a large pool of potential tenants. I think it would be straightforward to set up a house hack where all your tenants are fellow grad students, the way Dr. Matt Hotze from Season 3 Episode 3 did. Third, grad students have limited avenues for increasing their incomes. Yes, it is possible and you should do what you can within the rules of your visa, department, funding, etc. House hacking is a way to increase your income without violating the letter or spirit of any of the restrictions placed on you and will almost certainly take less time than a side hustle for what you earn.

Curelop’s Five House Hacking Strategies

09:56 Emily: Curelop presents five house hacking strategies. On one side of the spectrum, you have the strategy that necessitates the smallest lifestyle change but is also the least profitable. On the other side of the spectrum, you have the strategy that is the most profitable, but that also necessitates the largest lifestyle change. From least profitable to most profitable, the strategies are: 1. Rent out an accessory dwelling unit on your property 2. Purchase a multi-unit property and renting out the units you do not occupy 3. Purchase a home and rent out the rooms you do not occupy 4. Rent out your own bedroom and sleep in your living room 5. Rent out your whole residence and live in a trailer or RV in your driveway If you’re like me, strategies 4 and 5 do not sound very appealing! I’m going to focus on strategy 3 in this episode, but it’s perfectly fine if another strategy is the best fit for you.

House Hacking: Ongoing Costs

10:56 Emily: Let’s talk more about both sides of the house hacking ledger now, first your ongoing costs and then how you make money. On the costs side, every month you need to make your mortgage payment, which consists of principal paydown of your loan, interest, property tax, homeowner’s insurance, and probably private mortgage insurance or PMI. You might also have a homeowner’s association payment. Another cost, which is irregular, is the cost of maintenance and repairs on the home and also renovation if you choose to do that. Curelop recommends putting aside every month a few hundred dollars—what he calls reserves—for home repairs and also to help you make your mortgage payment when you are between tenants. He also says you should have $10,000 at a minimum in your reserves to start with. If you don’t have $10,000 yet, he suggests securing access to a line of credit in case something comes up that you can’t cover with your existing reserves.

House Hacking: Net Worth Increases

11:41 Emily: That covers the ongoing costs of operating your house hack. I’ll get to the up-front costs a little later. Now for the exciting part: how your net worth increases while you house hack. First and most importantly, you will collect rent from your tenants. As I said earlier, this rent should either completely cover your mortgage payment and reserves or at least reduce your personal housing expense. Second, each month as you make your mortgage payments, you will pay down the principal balance of your loan. Now, in the first few years after you take out the loan, only a very small fraction of your payment goes to principal due to the amortization schedule; the great majority goes to interest, tax, insurance, etc. So principal paydown is a relatively small factor early on in the mortgage. Third, your home is likely to appreciate in value over time. When you sell, it will probably be worth more than what you bought it for. Appreciation comes in two forms, natural and forced.

Natural and Forced Appreciation

12:48 Emily: Natural appreciation is the general increase in real estate prices over time. According to Curelop, historically real estate has appreciated 6% per year on average across the US. Now, as we all remember from the housing crisis, different real estate markets do appreciate at different rates, and depreciation is also possible if you get really unlucky with your timing. So while natural appreciation is likely to be in effect over the long term, you can’t count on it over the short term. Forced appreciation is when you do something to a property to increase its value, such as finishing a basement to add bedrooms and a bathroom. You of course have much more control over forced appreciation than natural appreciation. If you choose your renovation judiciously, you can increase the value of your property by more than what you spent. Appreciation can rival rent collection as the most positive factor in increasing your net worth through house hacking, but it’s only realized when you sell the home. Fourth, there are tax benefits to rental real estate. Curelop doesn’t go into much detail on this in the book and I’m not familiar with them so I won’t elaborate either, but this is another way that your house hack is less costly to you than owning a home that you don’t rent out.

Seven Common Objections to House Hacking

14:00 Emily: I hope the financial advantages of house hacking have sufficiently excited you about the idea. Curelop also presents and then counters seven common objections to house hacking. I’ll list all seven, but only go into the arguments against a few of them. Just know that if the others are hurdles for you, he does address them in the book. 1. House hacking is more work than renting. 2. When you house hack, you will share space with other people. 3. You need to keep a professional relationship with your tenants. 4. You have to live in an investment property, which might not be as nice of a location as you could afford. 5. The housing market could tank. 6. You have to put more money down to house hack than your up-front rental costs. 7. Your tenants might fail to pay you. My overall observation of this list is that these objections are all valid. They all have at least a kernel of truth or a possibility of occurring. I think it would be really helpful to identify every adverse event that could occur and come up with a plan for how you would respond. Going through that exercise might make you feel better about moving forward with house hacking instead of just being generally nervous about the downside risk.

Counterpoints to Some Common Objections to House Hacking

15:11 Emily: I want to add some thoughts to a few of the aforementioned objections. 2. “When you house hack, you will share space with other people.” Having roommates is pretty standard in graduate school for single people. Even if you could afford to rent a place on your own, it wouldn’t be strange to choose to have roommates instead. I’ve also known plenty of PhDs who continue to live with roommates even after they couple up or get married. I think this is less of an objection for our population than others, at least up until the point that you have children. 3. “You need to keep a professional relationship with your tenants.” and 7. “Your tenants might fail to pay you.” My fantasy house hack for a graduate student is to rent to other grad student peers and to be friends or at least friendly with your tenants. It is important to maintain professionalism at least within the bounds of your landlord-tenant relationship. You should be a great landlord, responsive and fair. I hope your tenants will respond in kind and not try to take advantage of your personal relationship. Curelop devotes a whole chapter to screening tenants, which as a new landlord I think you should follow to the letter. Of course, this book was published prior to 2020. The possibility of tenants not paying and not being able to evict them probably didn’t occur to many landlords, but now it’s on everyone’s radar. As a house hacker, you should make sure that you are financially capable of paying the mortgage even if your tenants are unable to pay rent for an extended period of time. If your university offers funding guarantees, I think that’s worth asking about on a rental application. You can’t prevent a tenant from misusing their money to the extent that they are unable to pay rent, but you can make sure that their income is reliable.

Four Considerations to Purchasing a House Hack

16:56 Emily: What does it take, financially, to purchase a house hack? Is it feasible where you live now? Let’s consider four elements. 1. The cost of properties appropriate for house hacking 2. The price to rent a room 3. Your stipend or salary 4. Your savings First, how expensive of a home could you buy on your income or your household’s income? Interest rates are so low now that rules of thumb like “Your mortgage shouldn’t exceed three times your income” have become outdated. Really, I’m asking two different questions here: 1) How large of a mortgage will you qualify for? and 2) How much of a mortgage would you feel comfortable taking out? Some house hackers will take out the largest mortgage they qualify for because they are counting on rental income to help pay it, but you might be more conservative, as I discussed before.

17:48 Emily: I’m going to talk this over with Sam Hogan a bit more in the second half of this episode. According to what he told us in our last interview, Season 5 Episode 17, if an applicant has no debt and excellent credit, they could qualify for a mortgage of four to five times their yearly income. If you have debt or merely good credit, the multiple will be smaller. Now, whether taking out that much debt is prudent is up to you. If you weren’t house hacking, I would say no, but if you are, it depends on your risk tolerance. Now you have a ballpark idea of the size of mortgage you could take out. You of course need to work with a mortgage originator like Sam to calculate your exact number. But going forward with the ballpark number, are homes available for less than or around that mortgage amount? Or is it way too low to buy anything? You can use a site like Redfin or Zillow to figure out what a house hack would cost you. If you’re looking for a townhouse or single-family home to house hack, perhaps you would look for a 2 bedroom place at a minimum. Broadly speaking, the more bedrooms you can purchase, the more rental income you’ll be able to generate.

Consider Cost-of-Living

18:56 Emily: If you live in a high cost of living area and you’re trying to purchase a home with one grad student income, you are likely to find that everything is out of reach. It’s disappointing, but don’t give up on the idea of house hacking for later in life. If you find that you can maybe afford to buy something, the next question is whether a house hack, in particular, is viable. Can you rent out the bedrooms that you won’t occupy for enough to at least reduce if not eliminate your housing cost? The answer is not an automatic yes for the type of home you can afford. If you’re not familiar with rental prices by the room in your area, check Craigslist and Facebook Marketplace. Having verified that house hacking is viable on your income and in your rental market, we come to the last piece of the puzzle, which is the down payment and closing costs. In the interview with Sam coming up next, we discuss the down payment requirements of various mortgage programs. If you’re not a veteran, you’re looking at 3% at minimum, but Sam suggests up to 10% in some cases. So for a low-cost property, the down payment could be as little as a few thousand dollars.

Five-Year Rule of Thumb

20:02 Emily: Curelop states in the book that closing costs are typically paid by the seller, not the buyer, so the money the buyer has to come to the table with above the down payment is rather minimal, perhaps a few hundred or a thousand dollars. Even if you don’t have the savings required to fund a home purchase in your bank account right now, how quickly could you come up with the money if a fire were lit underneath you? Over the course of a year, a vigorous side hustle, a higher-paying fellowship, or a summer internship could do the trick. Since I mentioned a year, I want to address the five-year rule of thumb. I know that many grad students and postdocs feel a ticking clock when it comes to considering real estate purchases. Many of us expect to move with every new career stage we attain. The five-year rule of thumb implies that you may not even break even if you buy a home instead of renting during grad school or your postdoc because of the high transaction costs that come with buying and selling and that you can’t count on natural appreciation over short time frames.

21:00 Emily: What I found interesting about The House Hacking Strategy is that it concentrates on the return on investment that can be achieved within one year. The reason for the focus on that timeline is that owner-occupancy mortgage loans require you to live in the property for one year. An aggressive house hacker might move every year to a new house hack, collecting rental real estate along the way instead of selling. The point that I want you to take from this is that you don’t have to listen to rules of thumb or rely on appreciation to overcome the transaction costs of real estate. Instead, you can use the rental income from your tenants. A house hack might be viable for you even if you plan to remain in your current city for only a couple of years—you just have to look at the numbers. Also, it’s important to plan your exit before you purchase your house hack. Are you open to turning it into a fully rented property after you move? Do the numbers still work if you have to hire a property management company? Or if you are sure that you will sell, you need to account for the high closing costs in your calculations.

Thought Exercise: Three Example House Hacks

22:02 Emily: Now let’s get into those numbers I mentioned earlier! As a quick exercise, I looked at the list of universities I’ve given or am scheduled to give webinars for in the 2020-2021 academic year to see whether house hacking was viable in those cities and what the numbers might be. Here was my process: 1) I searched Redfin for the university’s city with a max asking price of $150,000. I typically set a 3 bedroom search minimum, but sometimes adjusted up to four or down to two. I picked a house within a few miles of the university, something that looked move-in ready and not the cheapest available. 2) I searched craigslist for the area the house was in to get an idea of rental prices by the room and picked a price in the middle to low end of what I saw. 3) I went back to Redfin to look at the estimated mortgage payment. I set that the buyer would put 5% down and get a 3% interest rate.

23:03 Emily: I’m now going to share with you the properties and numbers I found in three of the cities I looked at. Of course, this was a cursory search, so my selections and numbers might be off due to a lack of local insight. Just consider this a ballpark estimate. Also, please note that I’m doing this exercise in January 2021, and both the renting and buying markets are really weird right now due to the pandemic and it being outside of the high home buying season. If you do this search even just a couple of months from now, it might look totally different, let alone a couple of years.

23:39 Emily: Example #1 is in East Lansing, Michigan, near Michigan State University. The property I picked is a 3 bedroom, 2 bath, 1500 square foot single family home, and the asking price is $89,900. A 5% down payment is $4,495, and the monthly mortgage payment would be $752. I picked $400 per month as the rental price per room. That means that renting out two of the bedrooms covers the mortgage payment while you live in the third. After setting aside a couple hundred dollars per month for reserves, you have reduced your own housing cost by about $200 per month. Over the course of one year, assuming that your irregular expenses did not exceed your reserves, you would have reduced your own housing expense by $2,400. Over five years, that turns into reducing your own housing expense by $12,000, and that’s without taking into account possible rent increases.

24:43 Emily: Example #2 is in Louisville, Kentucky, near the University of Louisville. The property I picked is a 4 bedroom, 2 bath, 1300 square foot single-family home, and the asking price is $134,000. A 5% down payment is $6,700, and the monthly mortgage payment would be $777. I picked $500 per month as the rental price per room. That means that renting out two of the bedrooms covers the mortgage payment and perhaps all of the reserves. You would live for free in the third bedroom and pocket the $500/month rent from the fourth bedroom. Over the course of one year, assuming that your irregular expenses did not exceed your reserves, you would have taken in $6,000 in rent above your mortgage payment and reduced your own housing expense by $6,000. Over five years, that turns into $30,000 in rent collected and reducing your own housing expense by $30,000, and that’s without taking into account possible rent increases.

25:48 Emily: Example #3 is just outside St. Louis, Missouri, near the Washington University in St. Louis. The property I picked is a 4 bedroom, 2 bath, 1800 square foot single-family home, and the asking price is $150,000. A 5% down payment is $7,500, and the monthly mortgage payment would be $925. I picked $600 per month as the rental price per room. That means that renting out two of the bedrooms covers the mortgage payment and perhaps all of the reserves. You would live for free in the third bedroom and pocket the $600/month rent from the fourth bedroom. Over the course of one year, assuming that your irregular expenses did not exceed your reserves, you would have taken in $7,200 in rent above your mortgage payment and reduced your own housing expense by $7,200. Over five years, that turns into $36,000 in rent collected and reducing your own housing expense by $36,000, and that’s without taking into account possible rent increases.

26:53 Emily: Now, if those numbers don’t motivate some of you in low- to medium-cost of living areas, I don’t know what will! You can literally buy an income stream that will benefit you to the tune of thousands or over ten thousand dollars per year for a few thousand dollars, an extra hour here or there, and the willingness to take a risk. And that’s not even counting the principal paydown, tax benefits, and potential appreciation! Keep in mind that all of my examples are completely made up. I’m just trying to ballpark some numbers and show that this is possible in some places on one grad student’s income. Curelop publishes the numbers of a real house hacker at the end of each chapter. For transparency, I didn’t examine every city on my list of candidates. I skipped the California ones, I only briefly glanced at Austin, Texas and Boston, Massachusetts to verify that $150,000 won’t buy you anything near the universities right now. I went down a road a bit in Providence, Rhode Island before crossing it off my list. But I thought these three examples were good ones. Purchasing may very well be possible in those other markets if you have more than a single grad student stipend to work with, or perhaps at a time of year when there is higher volume on the market. After the commercial break, I’ll be back with my interview with Sam Hogan.

Commercial

28:15 Emily: Emily here for a brief interlude. If you know that you want support in accomplishing a big financial goal this spring, I recommend my group coaching program, The Wealthy PhD. You and I will meet one-on-one to identify and plot a course toward your big financial goal. Past participants have opened IRAs, set up systems of targeted savings, started budgeting, systematically implemented frugal tactics, and more. Every week for eight weeks, you’ll participate in a small accountability group that I facilitate. The group will help keep you on track to meet small weekly goals that add up to your big goal. Prospective grad students, this would be a perfect cycle to join as I and the other participants can give you a ton of support and financial insight as you interview and ultimately choose your PhD program. The deadline for discounted early bird registration for The Wealthy PhD is Saturday, January 30th, 2021. Visit pfforphds.com/wealthyPhD to learn more and register today. Now, back to our interview.

Welcome Back, Sam! How Can People Find You?

29:26 Emily: I am delighted to have joining me on the podcast today my brother, Sam Hogan. Sam is a Senior Loan Officer at Prime Lending (Note: Sam now works at Movement Mortgage), and we’ve been having conversations over the last several years about how grad students and postdocs, especially, can get mortgages when their income is maybe it’s fellowship instead of employee. Maybe it’s temporary instead of a long-term thing. We’ve had these conversations before. So if you’re, you know, liking what you hear today from Sam, please go back and listen to season two, episode five, that’s a two-part interview. The first part is with a person who actually house hacked, Jonathan Sun. And then the second part of the interview is with Sam. And then Sam was also back in season five, episode 17, where we talked a lot more about this issue of fellowships and being able to qualify for a mortgage with fellowship income. So Sam’s back today to talk about house hacking. I gave him an assignment. I told him to read The House Hacking Strategy by Craig Curelop along with me so that we could have a conversation about it and get his perspective as a loan officer. So Sam, welcome back to the podcast.

30:32 Sam: Thank you for having me happy to be here.

30:34 Emily: Can you upfront say your contact information, everything for the audience?

30:38 Sam: Yep. My cell phone is (540) 478-5803. And then my email is [email protected].

What Did You Think About the Book?

30:48 Emily: Yeah. And you’ve been getting a lot of referrals. A lot of people have been finding you through the podcast episodes you’ve done before. Graduate students and post-docs and early-career PhDs. So we’ll talk about a few of those sort of case studies in a little bit, but first I just wanted to get your general impressions about the book on house hacking. I know that you are not a house hacker, although you are a landlord, but yeah, just what did you think about this book and this idea generally?

31:16 Sam: Very motivational. Definitely on the aggressive side of house hacking, giving suggestions, like living in a trailer in your driveway. Not something I would do personally, but it’s a step in the right direction. I mean, people need to know that it’s okay to live in a house for just one year and then buy another property the following year. So I liked it a lot. There were some accuracy things that I would’ve changed just regarding loan approval, but the loan guidelines and laws we have to stay within, they change annually. So there are always little tweaks and adjustments, especially 2020 was a funky year. So they made some higher credit score requirements and things like that. Generally speaking.

Did it Make You Want to Try House Hacking?

32:01 Emily: I think that’s a really good way of approaching this book. I do see it more of like a motivational book and like an overview, but maybe not once you drill down into the specifics, like, yeah, it might not be accurate year to year because things do change. The book was published in 2019, but as you said, 2020 kind of upended, a lot of things we’re recording this interview in January, 2021. So yeah, I totally agree about the book. And did it make you want to try house hacking?

32:27 Sam: It did. And then they also made me reflect on what I had when I was still living in a one-bedroom, one bathroom, how I actually rented out the common area to a buddy who needed a place to live.

32:39 Emily: Oh yeah, because you were house hacking for a little while. I forgot about that. Because your place was only a one-bedroom, but you did have a tenant.

32:46 Sam: Yeah, he was just switching jobs. He’s also in finance. And yeah, he ended up just bunking with me. And I think it was only like $4,000 for the year, but Hey, I mean that’s $4,000 I didn’t have to start out with.

Real Example of Potential for House Hacking

33:03 Emily: Yeah, definitely. And before this point in the interview, I’ll have told the listeners a lot of the principles from the book. So we don’t have to go through all of those in detail, but I wanted to really get from your unique perspective, some ideas about how a graduate student or how someone on a lower income can actually make this house hacking strategy work. Of course it will not work in every housing market. We know that. The incomes for graduate students and postdocs are too low to make it work in high cost-of-living areas. But there is a chance of it working in lower cost-of-living areas even on one income. But especially if you did have two incomes or if maybe instead of a graduate student or a post-doc, you know, there are some different situations where this does work out. So I wanted to get from you, you know, from all the clients that you’ve worked with a few examples of people who either were planning on house hacking, and you knew that at the time you were making the loan or who bought a large enough place that they could house hack if they wanted to. So can you talk us through a couple of those examples?

34:03 Sam: Yeah. So I mean the best example which has happened, I would say many times over, is in North Carolina. One student purchasing that, you know, the regular stipend amount of around $32,000 a year. I actually just looked up the property it had appreciated. He bought it at 200,000, put 10,000 down, was still within his debt-income ratio. He closed in April last year, and when he started off the process, he did say he was going to house hack. When I followed up with him a few months after closing, he didn’t end up renting out any rooms. He enjoyed having those extra spaces. So I’ll probably check up with him in the spring and see if he had changed his mind. But, I mean, it was a four-bedroom place, so he definitely had the ability to do it, but then just didn’t execute after closing because I guess he was comfortable with the payment enough.

35:02 Emily: I do want to emphasize that whenever you’re planning a house hack, it’s really vital to be confident that you could make the mortgage payment without any rent coming in. Maybe in the case like this person, you just decided not to rent out the rooms, ultimately your life circumstances change, or you want your privacy or whatever. Or it could be that, Hey, maybe you have a tenant, but that tenant is not paying you. And that’s happened a lot in 2020. It’s really a difficult situation to resolve for everyone. And so you need to be sure that, you know, if you scrimp and save and you reduce your other expenses, you would be able to make that mortgage payment still. So the example that you just spoke about and you said this has happened multiple times in North Carolina. I know that you’ve been working with a lot of graduate students in the Triangle, at UNC and at Duke, NC State, to make these loans happen in that area.

Loan Qualifications for a ~$32K/year Stipend

35:49 Emily: So let’s just take that market for example. So what size of a mortgage could a graduate student, let’s say, possibly take out? Like, I guess what I’m asking is, you know, they’re looking at their stipend, someone who isn’t ready to approach someone like you, a loan officer yet, but they’re looking at their stipend, they’re making 30 or $32,000. Like you said if everything were ideal in the rest of their finances, like let’s say they’re debt-free and they have a great credit score. How large of a loan could that person qualify for? Because that’s really kind of the question here is, are you going to be able to qualify for a large enough loan to make house hacking a possibility in your housing market?

36:27 Sam: So the highest I’ve been able to approve without a co-signer is 220,000. That was also in the Research Triangle.

36:37 Emily: So $220,000 on about a 30, $32,000 kind of stipend.

36:41 Sam: $32,000, this student did not have any student loans that were deferred. She was pretty much debt-free except for a few credit cards.

36:51 Emily: Okay. So pretty, really, really good solid portfolio otherwise. So just for the listeners, like house hacking could still be possible if you have those other kinds of debt, you’re just going to qualify for a little less. So it just has to work in your housing market.

37:04 Sam: Right. I mean, it’s important to understand that, like, even though you might have a similar situation to somebody else, it’s never exactly the same. So you want to have someone pull your credit, look at your entire financial picture in order to give you the results catered to your ability to purchase. You don’t want to just assume you’re going to fall into a bucket and everything will be okay. Because there are some very important details that go into this approval and those have to be evaluated by an expert. There’s just some things you can evaluate on your own, especially things like mortgage insurance, what will be allowable for your down payment, you know, in order to make your ratios work and make sure you’re within the guidelines.

37:49 Emily: So I think what I would encourage the listeners to do, if they are enthusiastic about this idea of house hacking but they’re not sure if they’re going to make it work is look really high level at what is your income and then what are houses, at least probably a two-bedroom home of some kind, selling for in your area. And if you’re within like striking distance of like, maybe I could get a loan, possibly, I’m not sure, for enough to make this work. That’s the time to approach someone like you that is to say, to approach you because you’re the expert in this subject and ask, well, how much can I be approved for? And then figure out whether or not there are houses in your area that would help you make this strategy work.

Different Types of Loans Available in the Marketplace

38:27 Emily: So let’s talk about the down payment for a moment because you just brought that up and we’d actually, didn’t talk about this much in our last episode. And it’s an important factor to consider. I would the two big hurdles for especially graduate students to buy homes are: one, qualifying for a big enough mortgage on their low income, and two, having enough of a down payment. So would you just really quickly run through the different types of loans that there are available in the marketplace and how much of a down payment is required for each of them?

Sam (38:55): Yeah. So some of your most popular loans, FHA loans and conventional loans. FHA a classic first-time home buyer basically program. It’s insured by the Federal Housing Administration, and the down-payment is three and a half percent. So they make it very achievable. There’s some employment and income that’s not accepted for FHA. So you want to check with your lender. And then when we get over to the good stuff, the conventional loans, taken out, allow you to go as little as 3% down and that can come from a gift from a family member or a friend. It doesn’t have to be your own verified funds. More commonly, Epic FHA loans are not a good fit for fellowship income, but if you have regular W2 income or some other employment, maybe a second job you’ve had for a year or two, this is also a good option.

39:45 Sam: Now if you have excellent credit, you’re going to want to get into the conventional loan bucket because it’s going to have lower mortgage insurance. It allows as little as 3% down. When we’re thinking about stipend income at $32,000 a year, you going to want to lean towards 5%–or 10%–down to make your ratios work. This is all going to depend on working with, you know, someone you trust so they can evaluate your personal qualifications. Okay. But outside of those two popular loan products, we have VA loans. So if you’re a veteran and you’re back in school, VA loans are a piece of cake. They require no down payment. There’s no mortgage insurance. There are a lot of good other good benefits. Like the VA loan can be assumed by another person and take over that low rate that you’ve already established.

40:39 Emily: Yeah. Thank you for explaining that. So we’re talking about 3% down, as little as 3% down for conventional, although you’re recommending five or 10% as maybe a better fit, depending on the person. FHA loans, three and a half percent down. VA loans, 0% down. So the kind of range of downpayment costs that we’re talking about are, it sounds like, okay, let’s say on a $150,000 property, that would be like four and a half thousand dollars at 3%, up to $15,000, if you were putting down 10%. So kind of somewhere in that range is what we’re talking about as a minimum down payment. I don’t know, in one sense, it’s a lot of money for a graduate student to come up with that. That’s a pretty, you know, it’s a good chunk of a year’s salary. However, if the outcome is getting you into a house that cashflows you every month, or at least reduces your housing expense every month, in the long-term, it’s a small amount of money. It can be a larger amount of money to come up with in the moment. And you just mentioned for conventional loans, it is acceptable for someone like a parent, perhaps, to gift you the down payment.

41:44 Sam: This is very common.

41:48 Emily: And I was of course, very impressed by, you know, the case studies that were in the house hacking strategy of people making back their entire initial investment and more, you know, within the first year of owning their house hack, that is the down payment money. Plus maybe they put in some renovation funds. It was some really, really inspiring case studies. And of course you have to take everything with a grain of salt because the author is going to be picking the absolute best to include in the book, run the numbers in your own situation. But I mean, as you just said, compared to renting, which is a pure drain on your net worth, you have a really good chance of, you know, actually coming out ahead with house hacking–with buying, but like house hacking makes it even more sure. You know, that you’re going to come out ahead when you have that rental income coming in.

42:33 Sam: Yeah. And I do want to say the examples he gives in this book, they are very good examples. I also feel like he’s kind of, double-dipping on some of the numbers sometimes because I mean, you’re not paying $8,000 down on your loan amount in your first year of ownership. You’re paying mostly interest. So I just felt like he was kind of double-dipping with, Oh, if I have this extra rental income and I have that, plus I’m using that to pay down my loan, you know, and then he’s making it motivational, I’ll say. But is that realistic at all markets? Definitely not.

Examples Outside of the Research Triangle

43:13 Emily: I wanted to get an idea of you of a few other housing markets that you’ve worked with grad students in. Maybe not specifically for house hacking, but just grad students who have been able to buy homes around other universities. Can you give us a few examples outside of the Research Triangle?

43:28 Sam: Yeah. I mean, I’ve had success in outside of Boston, Massachusetts, where you think it’s a high-cost area and then someone on a fellowship wouldn’t afford it. That has been successful. Outside of Denver, Colorado. We’ve also had some purchases there with a post-doc. Gosh, Miami, Florida, we even had someone purchase who was going to University of Miami. Atlanta, Georgia is popular. Emory University has a good funding letter, which I’ve helped a few students out down there. It’s really all over. I mean, we have from Texas to Rhode Island to Tennessee and Ohio.

44:11 Emily: Yeah. That gives us a good idea. Thank you. So I was actually surprised to hear some really big markets in that list where you’ve made this work. So yeah, I would say for a grad student or postdoc, whoever who’s listening who is wondering about this strategy, just run some really high level numbers in your area. According to like what’s in the market right now and what your stipend is, and then yeah, if you think you’re within striking distance, like reach out to Sam, reach out to a few lenders and see if they can make the numbers work for you.

44:38 Sam: Yeah. I just want to put the emphasis on like, if you feel like you’re well-qualified, like you know you don’t have $200,000 in student loans. You know income’s going to continue for years plus, just reach out to myself or someone on my team because there’s very often a personal touch that we have for this community. I work with some students that have been denied by two other lenders. But they’re already in contract and you know, I’m two weeks late on working with them. So just in respect to your own time and maybe these other lenders that aren’t familiar, you know, we work a lot with the PhD community. I mean, we’re doing at least five plus deals a month right now, all over the country.

Correcting the Record: Credit Scores

45:27 Emily: Was there anything else about the book that you wanted to kind of correct the record on?

45:33 Sam: Yeah. I mean, there are a few things regarding credit score that changed in 2020, after this book was written. So last spring, when everything with COVID-19 was restricting some lenders, they upped credit score requirements. So a lot of FHA loans, you can’t really apply for them unless you’re over 640. And for conventional loans, no lenders typically go down to 620. There’s a breaking point. It’s at 660. So if your FICO score, if your middle FICO score is above 660, it’s going to be cheaper for you to go conventional monthly. The mortgage insurance is lower. Now, if your middle FICO score is below 660, it’s going to be cheaper for you to go FHA. That’s just a rule of thumb that all lenders use. When we price out everything and when we compare monthly payments, that’s the breaking point.

46:27 Sam: So if you’re at 661, I’m going to put you in a conventional loan. You’re at 660 or 659, FHA is for you. It does mention in the book, how, if you’re in an FHA loan, you will have to refinance into a conventional loan. This is a very common thing. Everybody does it. It reduces your mortgage insurance and also allows your mortgage insurance to drop off at 78% of equity. Okay. But everything else was looking really good. He had some very clear things to say for these first-time home buyers or house hackers. I would just suggest everyone to get better results. You should work with a loan officer, either myself or someone who’s also a senior loan officer who has a few years experience, so they can make something cater to your needs. But generally speaking, it was a great read. Very aggressive when he starts talking about, you know, living in a tent in the backyard and renting out every room in your three bedroom.

47:29 Emily: That strategy also was a little too much for me. And I think, you know, when I’m presenting this to my audience, it’s more about what can you make work over the course of five years? Not necessarily over the course of like one year. The book is very focused on one year and you know, there’s reasons for that from a real estate investing strategy, why that’s the case. But I think for the people who are listening to me, they’re more likely to want to stay in a place for a few years and have their own bedroom during that time.

47:58 Sam: Exactly, exactly.

Would You Please Give Your Contact Info Again?

47:58 Emily: Okay. Sam, thank you so much for this interview. Great information. I really hope we’ve gotten some people excited about house hacking, about buying homes, making it seem like a possibility earlier, even during graduate school. I know that I wish that I had seriously considered this or known about this concept when I was in graduate school. So as we close out, will you please give your contact information again?

48:19 Sam: Yeah. Thank you for having me again. The best way to reach me is by phone. It’s (540) 478-5803. My best e-mail is my work e-mail. It’s [email protected].

48:34 Emily: Wonderful. Sam, thank you so much for joining me.

48:37 Sam: Of course. Thank you for having me.

Concluding Thoughts About House Hacking

48:39 Emily: I’m back with a few concluding thoughts. I fervently wish I had learned about the power of house hacking earlier in my life. I did my PhD at Duke between 2008 and 2014. I knew several fellow grad students who were house hacking, though I didn’t know the term at the time. So it was possible to make the numbers work. My husband and I together definitely could have purchased a home in 2010, the year we got married, based on our two stipends and our existing savings. However, I was still psychologically scarred from watching the housing market crash and there was a lot of talk about rigorous lending standards. We thought that we would leave Durham in 2013 perhaps, so following the five-year rule we did not pursue homeownership. We didn’t end up moving away from Durham until 2015. So in retrospect, house hacking was possible and almost certainly highly profitable, and we lived there long enough that either selling or keeping the home as a rental would have been viable options.

49:38 Emily: All that is water under the bridge for me, of course. What I can do now that I have learned about this strategy is two things: 1) I can consider how I can house hack in my present life. My husband and I are planning to buy our first home in the near future. We do want a detached single-family home but could consider adding an accessory dwelling unit. If that turns out to be impractical, perhaps we could house hack during a sabbatical year in another area of the country or once our kids are grown. 2) I can share this strategy as widely as possible, as I’m doing in this episode, and support anyone in my audience who wants to investigate or pursue house hacking. A perfect place to talk over these ideas as you pursue them is inside the Personal Finance for PhDs Community. In fact, we have one member already who is planning a house hack in the next few months! The House Hacking Strategy by Craig Curelop is our monthly Book Club selection for March 2021. So jump into the Community at PFforPhDs.community and we will discuss house hacking!

50:39 Emily: I want to continue this conversation not just in the Community but also on this podcast. If you are a grad student or PhD who is currently house hacking or has done so in the past, please get in touch with me. I’d love to publish a compilation podcast episode with several real case studies. If you’d like to volunteer, even anonymously, you can reach me at [email protected].

Listener Q&A: Do I Report My Stimulus Checks?

51:07 Emily: Now, on to the other one of our two new segments, the listener question and answer. Today’s question comes from a grad student in my annual tax return workshop, How to Complete Your Grad Student Tax Return and Understand It Too. Here’s the question: Do I report my stimulus checks as part of my gross income? This question has a really short answer, which is no. Your stimulus checks, or your economic impact payments as the IRS calls them, do not have any effect on your tax return unless you did not receive one when you were supposed to. I’m going to read from an IRS newsroom release from last spring titled, What People Really Want to Know About Economic Impact Payments. And I’ll link to this page from the show notes. Quote, “Is this payment considered taxable income? No, the payment is not income and taxpayers will not owe tax on it. The payment will not reduce a taxpayer’s refund or increase the amount they owe when they file their 2020 tax return next year. A payment will also not affect income for purposes of determining eligibility for federal government assistance or benefit programs.” End quote. So there you have it. Super straightforward.

53:18 Emily: The stimulus checks, the economic impact payments, are not taxable. Really the only catch, like I just mentioned, is if you were in fact eligible for these payments in 2020, but the IRS didn’t know that you were eligible and you didn’t receive the payments, then you will claim what’s called a recovery rebate credit on your tax return. So on form 1040 in line 30, you’re going to have a number in that line. It’s going to be an additional credit to you, which means you’ll get more of a refund than you were expecting essentially. Now, if you’re not sure if you’re eligible for the recovery rebate credit, there is a worksheet in the instructions for form 1040 called the recovery rebate credit worksheet. And you can fill out that worksheet and it’ll tell you exactly, you know, whether or not you were eligible and whether or not you can claim the recovery rebate credit. So thank you Aanonymous for that question.

53:18 Emily: By the way, if you’re interested in learning more about my tax workshop, How to Complete Your Grad Student Tax Return and Understand It Too, and potentially join it like this questioner did, you can go to PFforPhDs.com/taxworkshop to find more information. If you would 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

53:48 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 and 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.

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