interview

This NDSEG Fellow Prioritizes Housing and Saving for Mid- and Long-Term Goals

August 5, 2019 by Jewel Lipps

In this episode, Emily interviews Lourdes Bobbio, a graduate student in materials science at Penn State and NDSEG fellow. Lourdes breaks down the top five expenses in her budget: housing, food, taxes, utilities, and subscription services. She explains the financials systems she has put in place to reach financial success during her PhD: targeted savings, automated transfers, quarterly estimated tax, high-yield savings accounts, and taxable retirement investments with a roboadvisor. Lourdes has decided to prioritize her housing within her budget, but still balances that expense with plenty of saving for her future wedding and retirement.

Links mentioned in episode

Teaser

Lourdes (00:00): Being able to pull some money from my fun fund instead of from my budget for the month is kind of nice because I can still have a nice experience but not have to worry about that taking away from like going out to dinner with my friends or going on a date night with my boyfriend or something like that.

Introduction

Emily (00:20): Welcome to the personal finance for PhDs podcast, a Higher Education in Personal Finance. I’m your host, Emily Roberts. This is season three, episode 11, and today my guest is Lourdes Bobbio, a graduate student in material science at Penn State and NDSEG fellow. In this budget breakdown, Lourdes lists her top five expenses, details her financial goals and their underlying systems, and gives her best financial advice for her peers. She shares with us how she has successfully navigated the challenges of quarterly estimated tax, irregular expenses, and her lack of IRA access. You won’t want to miss her concluding insight into the psychological benefits of budgeting. Without further ado, here’s my interview with Lourdes Bobbio.

Please Introduce Yourself

Emily (01:07): Thank you for joining me on the podcast today. My guest is Lourdes Bobbio, who is a grad student at Penn State University, and I’m just delighted to hear her budget breakdown today. So we’re gonna dive into that right now. Uh, Lourdes, would you please introduce yourself a little bit further to the audience?

Lourdes (01:24): Sure. Uh, thanks again for having me, Emily. I’m really excited to talk with you about my finances as a grad student. Um, so like you mentioned, I am currently a fourth year grad student at Penn State University, which is located in State College, Pennsylvania. Um, and I am in the material science and engineering department at Penn State.

Emily (01:45): Yeah. Excellent. Are you single? Your household is just you?

Lourdes (01:48): Yes, I currently live alone by myself, so.

What is your income?

Emily (01:51): Okay, excellent. Just wanna get that structure upfront there. Um, so with the budget breakdown episode, I’m basically gonna ask three super high level questions and we’re just gonna dive into those and see where it takes us. And the first one is, what is your income?

Lourdes (02:08): Um, so I am currently on the National Defense Science and Engineering graduate Fellowship, so I make $38,400 a year, which breaks down to $3,200 a month. Um, so yeah.

Emily (02:23): Yeah, very nice income for our grad student and congratulations on winning that, winning that fellowship. That’s excellent, okay, so that’s your income. Um, I imagine it goes pretty far in state college.

Lourdes (02:35): Yes, it does.

What are your five largest expenses each month?

Emily (02:37): So yeah. So tell us about your five largest expenses, what you’re paying for each one of those so that anyone else can get some, you know, local insight.

#1 Expense: Rent

Lourdes (02:45): Yeah, so yeah, like you mentioned, state College is a college town, so the cost of living is fairly low compared to any of like the major big cities. Um, I grew up in near Washington, DC and then went to my undergrad in Boston, so I’m kind of was very accustomed to the more high cost of living, so coming here was definitely a big change. Um, um, so for my five largest expenses, I would say my top one is definitely rent. Um, I live in the downtown area of state college, so I pay a little bit more in rent and I also live on my own, um, with no roommates. And so that’s something that another sort of factor that factors into the higher cost of rent. And um, it’s something that I determined that I valued a lot. I valued being close to campus, being able to walk, um, to work every day, um, being close to like the restaurants and stuff like that. And then also being able to live on my own. Um, and so one of the reasons why I did choose to live closer to campus is because I don’t have a car, so I actually don’t have any car payment or insurance that I have to spend money on. So sort of the money that I would normally spend on that, I sort of put it into the, my sort of rent budget category.

Emily (04:05): Yeah, that makes a lot of sense to me. Um, so first living near DC and then Boston. Have you ever owned a car?

Lourdes (04:12): No, I have never owned a car.

Emily (04:14): Okay. So this is a kind of a natural choice for you to say, okay, I’m moving to state college, I don’t currently have a car. You know, did you ask yourself, how can I set up my life so that I don’t need a car? Is this a common thing for grad students not to have a car?

Lourdes (04:27): No. I would say a majority of the grad students do have cars here. Um, I don’t think it makes it a little bit easier. Um, just in terms of, since state college, if more, if you wanna get out of state college, I would say because state college is small, there is sort of a limited amount of stuff to do that’s within walking distance and within the public transportation sort of, um, area. Um, so if you wanna sort of go away for the weekend or something, then having a car is a lot more useful. Um, but I have never had a car, so I didn’t feel the need to get one. And there’s an abundance of housing close by to campus and like I mentioned, there is a fairly good bus system, um, throughout the local area, um, that I can use if need be. So

Emily (05:15): Yeah. Um, a couple more specifics about the place that you live and did I catch, did you say the amount of money that you’re spending on rent?

Lourdes (05:22): No. Um, so I spend about $1,500 on rent a month. So it’s definitely the higher.

Emily (05:28): Sounds a little high to me. <laugh>.

Lourdes (05:29): Yeah, it’s definitely on the higher end. The apartment I currently live in, um, is a one bedroom with like, it’s called an office space, so it’s like a smaller, can be a second bedroom. And there have been times when I’ve contemplated maybe getting a roommate, but I really value having that sort of space of my own. And, um, so the reason that, um, this sort of came about is because when I first got here, so the way, because this is a college town, it runs very much on the school schedule. So as a grad student, sometimes when you get accepted and then finally learn about like, you know, finding housing and such, the big cycle of finding apartments is kind of over like, that really happens in like October, November, December. And so when you’re figuring out your grad school decision, that’s more in the spring.

Lourdes (06:19): And so there was, when I was first looking at a place to live, there was sort of a limited number of like, number of places downtown that I could live. And since I wasn’t gonna be bringing a car, that’s something that was important to me. And so, um, I did find this place. I’ve lived in the same place for my whole time in grad school. Um, and so for the first year when I wasn’t on a fellowship, my parents actually were helping me out a little bit, paying for rent. Um, and they also lived close by, um, in the DC area, so they would come to visit a lot and they liked having that sort of like that second office space bedroom to be able to stay over. Um, and then when I did get my fellowship, I sort of evaluated, um, that also came at a time for my parents when they were no longer gonna be able to help me just because of some of their own personal finance issues. And so, um, I sort of had to evaluate whether or not I wanted to move or not, and I sort of decided I liked where I was and with my fellowship I could afford it. Um, so I decided to stay where I was.

Emily (07:24): Yeah, definitely your decision making process makes sense to me. And the thing is that if you hadn’t won that fellowship, I mean, I think you would’ve had to move, right? Like it’s compared to a, you know, base sort of stipend. Yeah, it is quite high, but hey, you won it and it’s working out and you can afford it. Um, that’s, yeah, that sounds lovely. And so the reason I’m asking a little bit more about the transportation issues, um, is, is because it’s really sometimes the trade off makes sense to not own a car and then to to pay more in rent, um, but to have the proximity and to have the access to public transit and all of that stuff. So, um, I’m sort of lumping together your, like what we would talk about under transportation, under like the housing stuff. So one more question about that is, you know, you mentioned it’s, it’s easy enough to get around town. Um, what do you do about getting out of town? Like, do you not go or do you only travel with other people or do you rent a car or like, how does that work?

Lourdes (08:21): Um, so I have a, uh, long-term boyfriend. We’ve been dating for a couple of years, so usually when I go anywhere, we go together and he has a car. Um, so that’s usually how that works out. Or sometimes with friends, uh, I would say maybe half of my friends have a car, so we’ll plan group trips together and go places I hardly ever go anywhere just on my own. Um, so

#2 Expense: Taxes

Emily (08:43): Yeah. That makes sense. Um, okay, so let’s move on to your second largest expense.

Lourdes (08:50): Yeah, so for that I would say sort of, I’m not sure if I categorize it as an expense necessarily, but um, because I’m on a fellowship, um, that doesn’t take taxes out, I sort of charge myself the taxes that I would have to pay on my fellowship at the end of the tax year. Um, and so that’s sort of one of the next biggest expenses on my list of expenses and something that I take into account at the beginning of the month when I get paid, I make sure to take out that money right away and set it aside in a savings account so that when I do have to make those quarterly estimated payments, um, I have that money set aside, I don’t have to worry about trying to scrounge it out from somewhere. So,

Emily (09:27): So you just mentioned several really important things, right there for, um, fellowship recipients to consider. So first, uh, PSA <laugh>, if you’re receiving a fellowship, it’s fairly likely that your university is not withholding tax on your behalf. Mo- vast, vast majority of universities work that way. So you are withholding tax essentially for yourself instead of relying on your employer who is not your employer, um, to do that for you. So awesome system. Can you tell me a little bit more about how, you know, mechanically you actually do that? Logistically?

Lourdes (10:01): Yeah. So, um, do you mean in terms of calculating or actually set, setting aside the money? Okay. Yeah. So when I first got my fellowship and sort of realized that no taxes were gonna be withheld, I sort of had to go through the whole process of, um, I think it’s the 1040, um, es worksheet to, uh, where you input your income and it sort of takes you through the steps of sort of figuring out how much you’re gonna owe at the end of the year. And so, um, I did that and got the total amount that I would owe. And then since I also read that you would be paying these quarterly, um, divided by four, or I guess I divided the whole thing by 12, um, and then would set aside that amount of money per month. And so the way I do this and the way I do all my budgeting is on a spreadsheet.

Lourdes (10:58): Um, and so I have this budgeting spreadsheet, um, that has the entire year sort of planned out for me. So I do like a 12 month, um, overview of the year where I plan. And since I know how much I’m gonna make every month, it’s very steady. Um, I have that amount sort of as the top line, and then from there I take out taxes and then any my savings and then utilities, those types of, um, bills, um, that I know I’m gonna have to pay. And then, um, sort of from there calculate how much leftover spending money I have. But that’s effectively, so I calculated how much I would have to pay, um, each month if I were getting with like basically how much I had to pay the whole year divided by 12, and then put that into my budget spreadsheet to calculate, and then I set it aside in a high yield savings account so I can, can earn a little money off of that, um, until I have to pay it each quarter, um, to the irs. So

Emily (11:59): Yeah, I just, that’s just a perfect embodiment of, of how to handle this, the, the way that, that I think is the best way too. So I’m glad we both came to the same conclusion there. I mean, from, I’ll just review a couple things. So one, you figured out what your quarterly estimate tax would be by using Form 1040-ES, which is, um, for those of you who don’t know, it’s not something you ever have to submit to the federal government, but it just helps you figure out how much the IRS does expect you to pay throughout the year. Um, if anyone needs extra help with that, I do have a workshop on it that’s available year round, and so I’ll link that in the show notes. Um, so you use that to figure out how much you need to set aside every single month, and it’s just, it’s just another line item in your budget as you were describing.

Emily (12:42): Yep. And you have, I I would expect an automated transfer set up, um, like after you’re paid, it automatically transfers to a separate, as you said, high yield savings account. Yeah. And sort of the, the upside to paying your own quarterly estimated tax is that you do get to build it up for a few months before you send it into the IRS, uh, compared to the timing of, you know, withholding. And so, hey, you get, you know, month two, three extra of that little, you know, 2%, you know, interest rate or whatever you get on your savings account. So, um, I love that idea. Do you mind sharing who you bank with to find that high yield savings account?

Lourdes (13:16): Yeah, so, um, I bank with Discover Online Bank. I also have a credit card with them, so it kind of makes it easy. Um, and then I’m also, so that’s sort of where I put a lot of my long-term savings. And then I have a, uh, checking account with just a local credit union. Um, and that also has a savings account that has a little bit more of my, my short term savings goals, um, which I think I’ll talk about a little bit later.

#3 Expense: Food

Emily (13:39): Yeah, sounds perfect. Um, okay. Ready to move on to the next item?

Lourdes (13:43): Yeah. Um, so next item would definitely be food. Um, both groceries and going out to eat. Um, I definitely spend more on going out to eat than I would like, but I don’t necessarily feel bad about it because I generally budget for it and I know how much I can spend, so I don’t, it usually evens out in that the amount of, if I’m not buying groceries every week and going out, it’s a little bit more than I wouldn’t spend if I were buying groceries. But because it’s sort of budgeted into my overall budget, I don’t necessarily feel guilty about going out to eat.

Emily (14:19): I, I really love that I also experienced that same like, sort of psychological side effect of budgeting, which is before I kept a budget, I would maybe feel some guilt about discretionary spending, going out, making, you know, going shopping, things like that because I didn’t really have a good idea about how we would fit into my overall, you know, cash flow. And I’d be like, okay, well did I just like overdraw myself for like the end of the month? So budgeting really for me ended up being, um, a freeing exercise and something

Lourdes (14:50): I agree.

Emily (14:51): Not experience guilt anymore because as long as I knew it was in balance and I stayed within the budgeted amounts, I didn’t have to feel guilty anymore about the discretionary spending. So I’m really, really glad you mentioned that.

Lourdes (15:01): Yeah, and for me it’s also like a way, um, to get together with my friends. Generally at the end of the week we’ll go out to eat or go out for drinks and it’s just a way to unwind, um, with, and like a way to socialize. So again, it’s something that I definitely, I value, I place importance on that, so

Emily (15:21): Yeah, absolutely. Did you tell us the amount, the amount you spend on food?

Lourdes (15:24): Yeah, so I usually spend about $200 a month on food between groceries and going out to eat. Um, maybe 200 to 300 depending on the month,

#4 and #5 Expense: Utilities and Subscription Services

Emily (15:35): So. Yeah, it seems pretty reasonable even with a healthy, you know, eating out, uh, budget in there. Uh, okay, so what’s the fourth expense?

Lourdes (15:43): Uh, so honestly, aside from those major expenses, I don’t really have, oh, utilities obviously, um, utilities and, um, subscription services. Um, I’ve recently cut down a little bit on my subscription services, um, just because, um, I realized that there were some that I wasn’t using utilizing nearly as much as um, I could. And so I’ve cut them out, but I spend usually about, um, 30 to $40 on electricity, um, per month. And I have it budgeted as $40 because that’s usually the highest it ever goes. It’s usually in the thirties range. And then my subscription services, I think amount to about $25 a month, um, between Netflix, Spotify, the typical ones you’d expect. <laugh>,

Emily (16:34): Um, yeah, I was just gonna say what made the cut. Okay, so Netflix, Spotify, anything else?

Lourdes (16:38): Um, audible actually made the cut. It was one of the higher ones and I realized that I, I love to read and audio books for me are a great way to, um, be able to read while doing lab work very easily. Um, but I realized I was accumulating five, six credits that I just wouldn’t spend. So that’s almost, uh, it’s about $15 a month and I was like, I’m clearly not using this. I realized that sort of every year at the beginning of the year, I sort of evaluate my budget again, and that’s when I decided that I’m clearly not using this. I haven’t used it for the last six months, it’s, it’s gotta go. So, um, that helped cut that, cut that down a little bit. Um, so yeah.

Emily (17:20): Yeah. I just love that you mentioned that you do have a periodic reevaluation of your expenses. Um, and, and even, you know, earlier when you mentioned, you know, your rent, like after your first year of graduate school, you reevaluate and said, okay, is it worth being here? I mean, whether or not you decide, yes, it’s worth it or no, it’s not, it’s the reevaluation that’s so valuable and needs to happen over and over again. Just make sure that you’re still happy with your situation in every, every which way. So I’m glad that you, you know, sort of have it in your, in your calendar, in your mind, um, to happen every single year. So that’s awesome. Um, yeah. So is, is that all the five expenses? I think we got through them, right?

Lourdes (17:57): Yeah, so, um, I’m lucky that my apartment complex actually has internet and cable included. Um, and so I don’t have to pay for those. I probably wouldn’t have paid for cable anyway, just ’cause I don’t watch that much tv. Um, but it is nice to have the internet included ’cause that can get pricey. Um, especially since here there’s really not, there’s two major internet companies and not much competition, so it gets pretty pricey. Um, so it’s nice to have that included.

Emily (18:27): Yeah, good to know that that is included in that rent. So it, it sounded high at the, at first, but then, you know, breaking it down, it definitely makes, uh, more and more sense.

Commercial

Emily (18:38): This summer I’m putting forth extra support for PhDs undergoing career transitions into grad school, a postdoc or a real job. If you’re moving on to the next stage in your career or thinking about it, please visit pfforphds.com/next to check out my articles, webinars, and coaching program allow me to come alongside you during this transition to ensure that you set yourself up for financial success.

What are you currently doing to further your financial goals?

Emily (19:08): Okay. So we’ve talked about your spending. Um, let’s talk about financial goals.

Lourdes (19:13): Yeah. Um, so I have short-term, midterm and long-term goals and, um, the way I sort of, um, break these down, um, I have sort of two different savings accounts that I use to break these down. Um, so I have a savings account that’s with my credit union, um, that’s connected to my checking account. So I put a lot of the money that I save for my short term goals in there, and then my more midterm and long-term goals go into the high yield savings accounts. And so, for example, some of my short-term goals, um, I have, uh, just a general travel fund since I don’t have a car. If I wanna go home, um, to visit my parents, I take a bus that takes me straight to DC um, but I save up some money, especially near the holidays, it can get kind of pricey. So sort of saving up throughout the year for that. Um, I put maybe like $15, $20 a month towards that fund. Um, and then I have a, um, gift fund as well. So, um, mainly for Christmas, but also for any gifts that come up come up throughout the year. Um, definitely getting to the age where I get invited to weddings quite frequently, so having that sort of there means I don’t have to dip into my just general daily monthly budget and can have a separate fund for that. Um, and then I have what I call a fun fund, which is for more higher price fun experiences. So we have a lot of times Broadway shows come through, um, state college, um, and, um, those are usually a little bit more expensive. They’re like 60 to $70. So being able to pull some money from my fun fund instead of, um, from my budget for the month is kind of nice because I can still, um, go to have a nice experience but not have to worry about that taking away from like going out to dinner with my friends or going on a date night with my boyfriend or something like that. Um, and also most recently, um, I also really like to bake. And so I saw a deal online, it was like a one day deal for a hundred dollars on a KitchenAid mixer, which is a pretty good steal in my opinion. Um, ’cause I’ve been like, I’ve seen the prices for those, they can range like three, $400. So I was able to sort of buy that and take advantage of that deal without sort of having it impact my whole budget. Um, so that’s sort of what my fund fund is for. And those are some of sort of my short term financial goals, I suppose.

Emily (21:47): Yeah, let’s, I I just wanna say, you know, I, I love this system. Um, I talk about it frequently. I call it, um, a system of targeted savings accounts. Another term is sinking funds. That’s more of an accounting kind of term. Um, but yeah, the idea is just, uh, projecting as best you’re able, what your expenses are going to be irregularly, right? So something that comes up once a year, a couple times a year, um, and starting to save up in advance for those different categories. And it sounds like you’ve both, like you’re, you both have expenses that you can pretty well anticipate, like you mentioned travel, okay, it’s gonna happen around the holidays. I know approximately what amount it’s going to be in. You can save up for that pretty easily, but it also sounds like you have, um, with your fun fund <laugh>, that’s a little bit hard to say with your fun fund. Um, you have like, okay, it’s, it’s just something that you have the money there, there’s a certain amount of it that you’re saving every single month. And it’s more like as opportunities come up and you’re like, yeah, I wanna do that, this is the fund that you can draw on. Um, so again, it’s not impacting your monthly cashflow, it’s not necessarily something you’ve planned out, but it just is something that allows you to capitalize on opportunities when you see them. Like when you saw this sale for something, you’ve been thinking about buying for some time and tracking the prices for. So I really love that you have both like a, a proactive, like predictive element of this as well as a reactive like, okay, I know there’s just gonna be things that I wanna do, so let’s plan. I don’t know what it’s gonna be, but I’ll be able to do it, you know, when you see it, right?

Lourdes (23:14): Yeah, exactly.

Emily (23:15): So let’s talk about those, um, mid and long-term saving goals now.

Lourdes (23:19): Yeah, so some of those, um, so my boyfriend and I, we’ve been together for about three and a half years. And so, um, he already graduated from grad school this past, um, just this past week actually.

Emily (23:33): Oh, Congratulations to him.

Lourdes (23:35): Yeah, and I’ll be graduating in a year. So we’re thinking about, um, getting married soon and so sort of planning for a little bit ahead for a wedding since I know those can get quite expensive. Um, just putting away like a a hundred, a couple hundred dollars a month, um, towards that. And then also more long term a house is something that I definitely would like to purchase in the future. Um, this is definitely, like I said long term, um, but putting a little bit of money away each month for that and just seeing that sort of fund grow. Um, I really like having that. I have a little tracker in Excel, just a little graph that, uh, like you can see it sort of grow and it’s nice to see that and sort of gives me a goal to work for in the future, just like continually working and not having to worry about it, like when it becomes a shorter term goal.

Lourdes (24:23): And so those are some of sort of like my mid and long-term goals also, um, because I am on a fellowship, I have to pay out of pocket for my health insurance. Um, and while my fellowship does reimburse it somewhat, um, it’s not as much as if I were a regular like on a, uh, research assistantship. Um, and so it’s still quite expensive, but obviously very important. This is actually something that just, um, came up in terms of like my financial life last August because I was gonna be, um, taken off my parents’ health insurance and so I needed to sort of figure that out. And, um, thankfully at the time, I have an emergency fund as well, aside from these sort of sinking funds, um, I have an emergency fund of about, uh, $12,000, um, just set aside. And so I was able to pay for my health insurance no problem.

Lourdes (25:19): And there was some issue in getting reimbursed by my health insurance, um, which could have been an issue if I hadn’t, like if it was money that I needed to live on, but thankfully it was just money that I had set aside for this exact purpose where it’s something that I hadn’t exactly planned and hadn’t really thought of, um, but was able to pay for. And so, um, now knowing that and knowing I’m gonna have to pay for my health insurance in this upcoming August is when we have to renew it. Um, I’ve been saving aside money for that every month as well, so I can pay for that. So.

Do you have long term goals?

Emily (25:55): Yeah, what a perfect use of an emergency fund. Um, I, I kind of, I thought about what exactly is the definition of an emergency, you know, before, and to me an emergency is something that is both totally necessary, a necessary expense and also, um, unanticipated. So you knew you were gonna come off your parents’ insurance, but you did not know I would imagine what the premium was gonna be and that there were gonna be these issues with the reimbursements and so forth. So, and of course it’s a necessary expense has to be paid on time, you can’t mess around with that. So it’s just wonderful that you have that, um, fund already available for you. So do you have any other long-term goals?

Lourdes (26:31): Yeah, so I actually am also currently saving for retirement. Um, and so I was able to for one year max out my Roth IRA, um, before I, I was on my uh, fellowship. Um, but since then and since at that point I learned that I was no longer eligible to contribute to my Roth ira, I have been investing in just a general taxable brokerage account. Um, and I haven’t been contributing as, um, much as I would’ve probably to my Roth IRA just because I know that is tax deferred, but I still do try to put in a hundred or $200 a month into that, um, as sort of a very long-term goal and to try to keep that investment going even though I don’t have the tax advantage vehicle of the Roth IRA.

Emily (27:21): Yeah. So just to expand on that for another moment because this is something that, you know, I get plenty of questions about. Um, so first of all, your eligibility for an IRA depends on you having what’s called taxable compensation or earned income, which in terms of grad student pay means W2 pay, which is usually termed as an assistantship, uh, TA, RA. So you having the NDSEG fellowship, um, doesn’t count as taxable compensation or earned income. Now at that point, a lot of people who I talk with, um, throw out their hands and say, oh, well I have this higher income, I don’t have access to an IRA, I guess I won’t say for retirement. And obviously as someone who’s very, very pro investing and especially for retirement and especially at a young, as young and age as possible, um, I’m like, no, no, no. Like you can, you can go ahead, it, it can’t be inside an IRA, but you can still do it. And so I’d really love for you to talk a little bit more about how you, um, came to this understanding and found, you know, the, the way that you’re, you know, you’re using a tax taxable brokerage account, but a lot of people don’t even know what that is. So like how did you find out about this and how did you decide you know, where to open and so forth?

Lourdes (28:33): Yeah, so when I was sort of, when I got my fellowship and when I sort of learned about all the implications of that in terms of like taxes and um, investing for retirement, that’s when I also learned that um, I would have, if I wanted to invest it would have to be in a taxable account. And so I did a lot of research, um, in terms of um, I guess what brokerage I wanted to invest with. And because at the time I didn’t feel very knowledgeable about um, picking funds or ETFs or anything. I had money in a Roth, IRA, um, with Vanguard, they make it easy to have target date accounts, but I wanted to try to see if I could try something else, um, and decided to go with a, a robo-advisor, an online robo-advisor. So I currently invest with uh, Wealthfront and um, have enjoyed the experience so far, um, and just find it a very easy way to get a broad, um, a broad portfolio in terms of the different stocks that I’m invested in.

Lourdes (29:38): They sort of, um, you take a little quiz with a risk assessment and sort of I’m a little bit on the higher end and just because I’m young I know I can have that risk factor, um, and sort of um, went that route. Um, but I did a lot of research in terms of sort of what I felt would be good for me, um, and how much time I was willing to put into it. And I think maybe in the future I might move this money to somewhere with um, lower fees. I currently don’t have to pay any fees because I’m under a certain amount of money, um, which is nice. Um, but if I ever were to continue to um, uh, add money to this account and I went over that uh, threshold, I might decide to move it to somewhere where I would have, I wouldn’t have to pay an advisory fee.

Emily (30:24): Yeah, I’m really glad you you provided that detail because I learned something new. So these roboadvisors, I’ve looked into a few of them. Wealthfront is one of the prominent ones. Um, and people often ask me about using roboadvisors, so I’m really glad that you can speak to this a little bit. Um, and as you said, it’s a really, um, easy solution. You answer a few questions about yourself and they come up with a portfolio recommendation. I do in general think that it’s kind of overkill, especially for someone who is investing inside an IRA, um, and is just going for retirement and sort of a simple thing what you were already doing inside your IRA, but to me it actually makes a lot of sense once you switch to using a taxable investment account that, um, an advisory service with a little bit more of a hands-on approach can do some tax optimization for you.

Emily (31:11): So it actually makes a ton of sense to me. Um, and it’s great news actually that, you know, for now you are not being charged an advisory fee because that is really the main, as I’m sure you learned in your research, the main downside to using a RoboAdvisor or any other sort of slightly more expensive service is the fees. The fees don’t sound like very much, you know, maybe 0.25%, something like that doesn’t sound like a lot, but it adds up quite a lot over time. So it’s really exciting to me that you were, you know, able to do this without a fee. I mean, that’s kind of the best of all the worlds, right? Do you mind sharing what is that ceiling under which they don’t charge the advisory fee?

Lourdes (31:45): Um, I believe it’s $15,000. Um, and then if you refer people it, they will as a bonus, they’ll, um, increase it. I don’t know by how much, um, for each person you refer, but I think that is just the base, um, baseline ceiling for a no fee.

Emily (32:05): Yeah, that is awesome to know. Do you want to share your referral link?

Lourdes (32:11): Um, can I send that to you?

Emily (32:13): Yeah, absolutely. Okay. So we’ll pop that referral link into the show notes and you’ll help Lourdes and you’ll help yourself if you are already interested in wealthfront, Hey, why not? She’s giving you a tip about not having that advisory fee at the lower balances. So win, win, win, I would say all around.

What is your best financial advice that you’d share with your peers?

Emily (32:28): We will just conclude with me asking you what is your best financial advice that you would share with, um, your peers, whether that is another grad student, another fellowship recipient, someone else living in state college, anything along those lines?

Lourdes (32:42): Um, I would definitely say sort of speaking to what you mentioned earlier is not be afraid of having a budget. I know a lot of people think of having a budget or something constricting and something that will make you not like spend, not be able to spend money because you’re, you’re on a budget, but really it’s a very freeing thing, especially as a grad student where you’re on sort of a limited income. Um, being able to see where your money is going and sort of be in control of that, um, definitely makes you feel more free in terms of the things you can do on a day-to-day basis or, um, on even like a longer term. You sort of get this sort of freedom that, um, I think is really valuable and makes finances just seem less scary.

Emily (33:32): I’m in total agreement with you about the benefits, the psychological benefits of budgeting, as well as the actual, uh, financial benefits. So thank you so much for sharing that and uh, for joining us today. I’m really, really glad that you, uh, yeah. That you came on the podcast.

Lourdes (33:46): Yeah, thank you so much for having me. I really enjoyed speaking to you

Outro

Emily (33:50): Listeners. I’m so glad you joined us For today’s episode, pfforphds.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, a form to volunteer to be interviewed, a survey, and a way to join the mailing list. I’d love for you to check it out and get more involved. See you in the next episode. The music is Stages of Awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC Podcast. Editing and show notes creation by Jewel Lipps.

This PhD Developed His SciComm Career Through Side Hustling

July 29, 2019 by Emily

In this episode, Emily interviews Dr. Gaius Augustus, a PhD in cancer biology and habitual side hustler. Gaius combines his artistic talent and knowledge of science to communicate science visually and teaches others to do the same. Within Emily’s framework of side hustles, Gaius details the half-dozen side hustles he pursued during graduate school and how they have contributed to his personal and professional development. He has now turned one of his grad school side hustles into a full-fledged side business in his post-PhD life. In this discussion, Gaius shares his hard-win insights into time management, self-advocacy, and imposter syndrome. This episode is a must-listen for anyone looking to advance her career through side hustling, networking, or volunteering.

Links Mentioned in the Episode

Teaser

00:00 Gaius: When I started doing this I just went to the office and said, look, I need extra money and this is the way that I’ve found to make extra money and I’m still going to get my work done and I expect you to hold me to that, but this is something I have to do.

Introduction

00:23 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Emily Roberts. This is season three, episode 10 and today my guest is Dr. Gaius Augustus, a PhD in cancer biology, artist and side hustler. During grad school, Gaius pursued half a dozen different side hustles, which contributed to his personal and professional development as well as financial bottom line. In what is now his side business, he combines his love of science and his artistic talent and training to communicate science visually through figures, graphical abstracts, infographics and more and teaches others to do the same. In this discussion, Gaius shares his hard-won insights into time management, self advocacy, and imposter syndrome. Without further ado, here’s my interview with Dr. Gaius Augustus.

Will You Please Introduce Yourself Further?

01:15 Emily: My guest on the podcast today is Dr. Gaius Augustus, and he’s going to be talking to us about his history with side hustling and how that’s actually turned into a side business, which is very exciting. Gaius, will you please introduce yourself a little bit further? Let us know more about who you are.

01:34 Gaius: Sure. Thank you so much for having me, Emily. I actually have a kind of interesting past. I have my PhD in cancer biology, but I actually started out as an artist and in high school. I went to a fine arts high school, I loved the arts, and I actually got really into comic making and video production. When I left high school, I actually went for film and television at a fine arts university. I ended up leaving that because the culture wasn’t quite right. I went into retail and worked retail for about five years. While I was working retail, I got some experience in the pharmacy. I was like, oh, this is pretty cool, I could make a living as a pharmacist. And I was really kind of missing the science part of my life.

02:25 Gaius: And so I decided to go back to school for pharmacy and joined a lab and just fell in love with the scientific process. I got my bachelor’s in 2014 in integrative studies, which is a kind of design your own degree program where you can mix from different disciplines. I mixed biology, chemistry and a little bit of psychology. Then I went straight into a PhD program at the Arizona Biological and Biomedical Sciences Program at University of Arizona, which is an umbrella program, again so that I could choose a program within that. Then I joined the cancer biology program in 2015. I literally, two weeks ago, April 2019, defended my PhD, and now I am trying to figure out what to do with the rest of my life.

03:26 Emily: Yeah! Fantastic. I love to hear that non-traditional route to the PhD. It’s definitely going to inform the rest of our conversation today.

Why Did You Side Hustle During Your PhD?

Emily: Throughout your progress through the PhD and maybe even before that you have been a side hustler, habitual side hustler. Why did you start side hustling during your PhD?

03:51 Gaius: I want to say that when I was an artist, I took science classes for fun in high school and everyone thought I was crazy. Again, I was at a fine arts high school. When I went back to school for science, I thought, okay, this is it, right? I’ve always missed the science. Here it is. But then as I got into science more, I realized I really missed the art. And I never really thought there was a way to balance that. I thought, okay, well these are just two separate things that I have to do. During my PhD I started thinking, okay, is there a way to mix this? So I started with just like making comics where I anthropomorphize science topics and wrote those comics and never really to share, just to have them.

04:39 Gaius: As I started going on and people started being interested in those types of things, I started thinking this is pretty cool that people are interested, but I never really thought about making money with it. So along the same time, my partner, who is not in grad school or a scientist and is an artist who has been making money in our new city as an artist, was thinking about how we can make a little bit of extra money besides just what I make for my grad school stipend and something that was a little different than them having to go get a traditional job.

05:18 Gaius: We actually started our first big side hustle, which was starting a kind of art, crafty sort of side our business, which I’ll talk about a little bit more later. Along with that, when I started talking to people about that, people were really interested in that, and they were very interested in the fact that I had been an artist. As I got interested in science communication about two years ago, the people that I was talking to about that were also like, hey, you can also do this cool artsy stuff. How can we fit that in? I started by just doing infographics, and I wanted to learn animation for fun. So I just was like, if I can figure out animation in time for whatever your deadline is, then let’s do that.

06:06 Gaius: I was actually hired by the University of Arizona Cancer Center to create infographics and animations when I could. Animations weren’t difficult because I had some experience in the past with it. It wasn’t as difficult as I thought it would be to get back into that. From there, people just start hearing about it. The more people heard about it, the more people were interested in it. So I was like, I guess I can make money doing this. That would be really awesome because I could do both art and science and learn about lots of cool science. That’s really what motivated me to start. Just knowing that there’s a possibility to make money was like the original thought, but then learning that I could do something I really loved and make money doing, it was a really big reason for me to push a little bit harder.

06:59 Emily: I really love that story. I’m so happy we’re going to go even more in depth with it in a moment. Because it seems so organic. You weren’t simply out to make extra money, although that’s a very welcome side benefit and maybe an important benefit. But it was just, what do you want to spend your time doing? Where are your interests leading you? Also you’re kind of responding to the market, right? Like you were, I’m putting some things out there, oh, and people are responding and it leads me over in this direction and then it leads me over here. I’m excited to hear even more about that.

07:38 Gaius: Something I find really interesting is I remember in my undergrad talking to one of my advisors. He always talked about how intentional his path was. I was always really jealous of how intentional everything he had done and all the types of things he had tried in order to reach where he was at that point. I still think about it all the time, that he was always saying making intentional choices to get to where you are. My life has been the complete opposite. It’s just been chaos. It’s more been like, what opportunities are available? Let’s take it, let’s move on to the next one. But still, if you allow yourself to not think of those things that you’ve done as mistakes and instead think of them as intentional choices that you made that have led you to this path, I think it’s really a good way to get yourself into new opportunities and use everything that you’ve done in your path to inform what you do with your life right now.

08:41 Emily: Yeah, you’re using the word intentional, which is like, everyone can get behind that. Like of course you want to make choices that are well considered, but I think what your professor was saying was more like a linear path, right? Like, like straightforward and efficient.

09:01 Gaius: And forward-thinking. I think he was thinking, okay, 20 years in the future, this is where I want to be, I think that was more what he thought he was saying. Whereas I think like you were about to say, you just want to make choices that you are intentional about in that moment. You mean to make the choice that you make with whatever hardships you have right now or whenever you’re dealing with right now, you make what choices you can and go forward with those.

09:29 Emily: Yeah, absolutely. Not that your professor’s path was a bad one if he’s happy with the outcome of course. But there are plenty of people who set out on a path and keep at it for decades and aren’t happy with the outcome even though they were very intentional and they were very efficient. That definitely depends more on your personality. It’s about knowing yourself really. I’m so happy to hear about your journey as a counterpoint to that.

Side Hustling Framework for PhDs

Emily: You already mentioned a couple different side hustles that you’ve had going on and also were starting to say how that’s led your current business. I have this framework that I like to use when I talk about side hustling, which is that side hustles, let’s say for a grad student, can fall into one of four categories or maybe even multiple of four categories.

10:19 Emily: The first is what I call “career-advancing.” So a side hustle, and again, these all make money in some capacity or another, but it’s letting you explore a new career area or maybe it’s expanding your network or maybe it’s demonstrating skills or learning new skills. Something that we think is going to advance your career. That doesn’t have to be your scientific career. It could just be whatever else you want to do. So there’s that. The second one is an enjoyable hobby that you happen to be able to monetize. It’s something you enjoy doing, not even necessarily a hobby, but just an activity that you enjoy that you happen to be able to monetize. The third category is that you don’t enjoy this activity at all, but it does pay you.

11:04 Emily: So I’m thinking this is like, well, you mentioned working retail earlier. I don’t know if that’s your passion. It doesn’t sound like it ended up being the route you went, but that’s also something a lot of grad students do just for extra income and I doubt it’s very career-advancing or enjoyable. The last one is passive income, which may be a little bit unfamiliar to people who are not in the entrepreneurial space. Basically in those first three paradigms, I’m assuming that you’re trading your time for money more or less directly. With passive income, it’s more about investing a lot of time, money, energy, or creativity to create a product that then sells over time. The very classic example is of an author. You write a book, and then the book sells. Over time you get those royalties. This is complicated a little bit with advances and we won’t go into that, but that’s kind of the idea. You put a lot of time and energy into something and then you sell it over time. So thinking about that framework, which we’ll link from the show notes: Put the side hustles that you’ve had into those different buckets, if you would.

12:11 Gaius: Yeah, sounds good. I thought about this from, should I talk about each one individually or should I talk about the framework? I think that the framework is so well designed or so well thought out that I’m just going to talk about it from the framework side.

Career-Advancing

Gaius: When I think about career-advancing, I’m thinking about networking. Like you said, it doesn’t have to be scientific, but it can be about growing your network and people who can help you find jobs in the future. So, like I said, I worked for the University of Arizona Cancer Center. I made infographics and animations and did some writing for them as well. That was definitely career advancing. I met so many people through that. I actually did six months of work for them volunteer, so I wasn’t getting paid at all. And then I did six months where I was getting paid, but that was a great career-advancer as far as meeting everyone at the university and people who potentially I could work for in the future.

13:20 Emily: I actually have a follow up question on that one because that sounded fantastic from the first time you brought it up. I was so excited about it. How did you get into that position? It sounds like it started with volunteering, but how did you initiate that volunteer relationship?

13:36 Gaius: One of the hardest things I think all of us have to do as graduate students is promote ourselves. Right? You have to promote yourself when you learn to write grants, you have to promote yourself when you tell your PI about your cool new experiment that you want to try that costs a lot more money than your PI maybe thinks it’s worth. I actually was helping with website design. I used to do freelance web design on the side of working retail. Like you said, I’m a longtime side hustler. So I was helping my department with redesigning their website and in order to get a better idea of what they needed, they pulled in the PR person from the Cancer Center. We just were having conversations because I show up to meetings on time and he shows up to meetings on time and academics don’t.
14:28 Gaius: We were just having conversations before all of our meetings, and I mentioned that I was looking into science communication. Finally one day he was just like, you should come work with us. I’m not sure I have a budget, but I really like what you’re saying. So it was totally me just talking about things I liked and being willing to talk about myself and what I do and what I think I do well and someone being willing to say, okay, well I want to take a chance on you and give you more experience and get a volunteer to help me out to get that opportunity.

15:09 Emily: It’s very clear from that story that this was about networking. You volunteered your skills at the small circle of your initial network, which was your department, and that led you to a slightly wider network and more opportunities there. That sounds amazing. This is a bit more of a financial or technical question, but I’m just curious about how being hired by the cancer center, the PR wing, played with your stipend. Was that in addition to it? Was that all kosher at the university level? Were you hired as an independent contractor? What were all the details there?

15:46 Gaius: At the time I was on an NIH training grant. There were a lot of discussions between the department and the Cancer Center about how that was going to work. Apparently they looked into the fellowship and made sure that there was no language saying I couldn’t get paid. Then what they did was they just said, okay, well we can only pay you up to a certain number of hours because you’re a student worker. What this person did was just found the best offer he could as far as an hourly pay where I could kind of maximize my income under the guidelines that were currently there. He was a really big advocate for me and I really appreciate that. But there was definitely some arguments and conversations that had to happen between the university and the cancer center and my department.

16:44 Emily: Clearly. In addition to just the pay issue, which it sounds like that’s a very specific solution for the training grant you were on and so forth. How did your advisor feel about you…? Because a lot of people keep their side hustles quiet, right? They don’t let their advisor or other people know about it. But clearly your advisor must have known about this from the beginning or early on. How did that go over?

17:08 Gaius: This is going to go back to kind of self advocacy again. I worked in retail for five years, and in retail there is no self-advocacy. You do what you’re told, and if you don’t, anyone could have your job or at least that’s what they tell you even when it’s not true. I’d had some really, really horrible bosses and really horrible experiences in retail. When I started back in school, one of my goals was never to be treated like that again. When I got into grad school and started thinking about doing on the side… Sadly it was never a question of is my PI going to be okay with this. When I chose a PI, I was very straightforward and saying I’m kind of going to do what I want to do and I need your support and how do you feel about that?

18:05 Gaius: And he was like, you know, I want to do what’s best for you and your career, and I will work with you. Wo when I started doing this, I just went to the office and said, look, I need extra money and this is the way that I’ve found to make extra money and I’m still going to get my work done. I expect you to hold me to that, but this is something I have to do. He was very worried about me and very worried about whether I was going to be able to keep doing it, but he supported me and never questioned it. He just made a couple of like side glances, but then it was just like, do what you got to do.

18:46 Emily: Yeah. You finished in five years it sounds like. So this didn’t end up tacking on any extra time at minimum. This is a great tip for anyone who has not yet chosen an advisor: to find someone who is going to be supportive of your career broadly defined – however you want to define your career. That person should be supportive, or if they’re not, know that early on and don’t work with them unless you’re 100% on the tenure track. I’m really glad that you described like your relationship with that person and how that worked out. That was so much detail, but that was such an exciting side hustle.

Emily: What’s the next one on your list?

19:24 Gaius: One thing that I’ve been doing a lot over just the past like six months is a lot of freelance sci art. I’ve been doing infographics, graphical abstracts, animations for scientists, for departments. That’s been extremely fun, but it’s also been a great networking experience. A lot of the time, I work with someone and then someone who they know is like, oh, this person told me that you are great to work with, I would like to work with you too. As far as career-advancing steps, the sci art, freelance, and I’ve done a little bit of writing as well has really helped with getting that networking done and also giving me the confidence that I needed to say people do enjoy my work. Also, they’re not just hiring me because they like me because strangers are hiring me. Those have been my big career-advancing hustles.

20:21 Emily: Yeah, that sounds like so much fun as you just said. If people want to see your work, where’s the best place to go?

20:28 Gaius: All of my work is available on my website, which is gaiusjaugustus.com, which I hope you’ll put in the notes since it’s not always the easiest to spell. If you also search Gaius Divi Filius on Twitter, you can see me and get to my website. I’m on Instagram as Process of InQUEERy with inquiry spelled with “queer” in the middle. I am on Facebook with Process of Inqueery as well.

20:55 Emily: I wanted to put that in the middle of the episode instead of just at the end so that people can go and look at your stuff as they’re continuing to listen to this conversation. I would imagine that just by the nature of what you did with that particular side hustle of it being art, it sounds like it’s incredibly shareable. You chose something where networking is easy. If you do a great job, people are going to ask who’s behind that work.

21:17 Gaius: It’s interesting you say that because I’ve never thought about that before. I’m a very visual person. I struggled to learn science because it was reading the books and reading articles and I do so much better when I started reframing it as look at the results and then try and frame your scientific ideas around the results and then read the articles and see if they agree with you. Same with learning science, go and look at the pictures in the chapter, try and figure out what they mean and then read the text and make sure I’m getting on the right track. I’ve just always been that kind of visual person. I’m drawing, in class, ideas out since I was little. So it’s interesting. I hadn’t really thought about the fact that people just see it and it automatically gives a good networking side of things.

22:09 Emily: Yeah. You’re much more in touch with the sci comm community than I am. But when I think of science communication, I initially think about the written word. I don’t go to to video or to art or anything, but maybe it’s a bigger component of it that I realize. Anyway, I just think it’s a really wonderful way of communicating that may be undertapped at this point.

22:35 Gaius: I agree completely. I think you hit the nail on the head about how most people feel about sci comm.

Commercial

22:43 Emily: This summer. I’m putting forth extra support for PhDs undergoing career transitions into grad school, a post doc or a real job. If you’re moving onto the next stage in your career or thinking about it, please visit pfforphds.com/next to check out my articles, webinars and coaching program. Allow me to come alongside you during this transition to ensure that you set yourself up for financial success.

Enjoyable Activity or Hobby

23:13 Emily: What’s the next side hustle? Any monetized hobbies?

23:18 Gaius: On the enjoyable category, one of the big ones is the side hustle that I started initially with my partner. We’re pagan and we love making stuff. As we were making things for us, we just decided to bring that to a broader audience. We actually make resin jewelry. We make pagan goods, things that maybe you would find in your house or things you might want to wear out to just kind of show off pagan pride as well as just things that everyone uses but instead of looking at it from just a regular angle, we say how would we look at this from a pagan angle? Recently my partner made plushes and instead of an animal or something, they made crystal balls.

24:12 Gaius: So stuff like that. We make a lot of the resin jewelry, but we’re also kind of pushing that a little bit further now into other things like plushes and shirts and things like that. That’s all through theindigopath.com, which if you go to is not anything yet. We took down our shop to do a bunch of conventions and things like that and we’re rebuilding it to put up our new branding and things like that. But that’s been something that’s just been pure enjoyment. It’s paying for itself, but that’s about it at this point.

24:47 Emily: Yeah. I love that you found something that you could do with your partner. Just something fun that’s a bonding experience or a fun project to work on together. I’m sure that it has relational benefits as well as the potential monetary benefits and just something enjoyable to do with your time. Although it does not sound like you are hard pressed for things to do with your time! Plenty going on already. What’s next in your list?

It Pays But It’s Not Enjoyable

25:10 Gaius: The next is the “it pays, but I don’t necessarily enjoy it.” The big one for me is web design. I do love web design, but I don’t necessarily like doing web design for other people. I love playing around with it for myself. I’ve been doing it for years and like I said I used to do it freelance. It pays the bills. When people want or need help with their website, I can get people up and running quickly. I can do trainings so that people can understand it. I was also a cheap sell for my department to be able to redo their website for very, very low pay. That’s probably my best example of something that pays, but it’s not necessarily the thing that I want to be doing with the rest of my life.

25:59 Emily: Yeah. Well it sounds like you should increase your rates on that. Do less of it, but get more out of what you do.

26:06 Gaius: Yes. You’re probably right.

Passive Income

26:07 Emily: Anything else in that category or should we move on to the passive one?

26:14 Gaius: Oh, let’s move on to the passive, which I’m really excited about, but also very skeptical about because I know that there is a lot of talk in my blogs about whether you should do passive income or whether you should wait until you have a following to do passive income. I’ll just tell you what I do. One thing that I do is I write blog articles for my website. I actually started doing that because I was part of the Grad Blogger Connect Group on Facebook led by Chris Coney, and I just decided to start this blog. It was the first thing I ever did to do any science communication, before I worked for the cancer center or anything. I just put ads in there, and I think I have like a $1.20 in my ads account. So it’s never really made me anything but it’s there. But because I’ve written the blog articles, those will continue to be there and when my site blows up in the near future and people are reading those articles a lot, those ads hopefully will make some income at some point.

27:21 Emily: Is this the same website that you mentioned earlier?

27:23 Gaius: Yes, it is the same website.

27:25 Emily: Okay, great. Glad to hear it’s all integrated together.

27:29 Gaius: Yeah, that was something I really wanted, but it’s very difficult to do the more side hustles you try. You have to figure out how to get all that branding to work together. The other thing actually, which is also on the same website, is I have a shop of just designs on T-shirts and pillows and things like that. I knew I wanted to do that because I love making up T-shirt designs. As part of The Indigo Path, we constantly are buying iron-on stuff to make designs. The shop doesn’t use my iron-ons, they are actually professionally printed. But I do like the idea of having a totally customized wardrobe. The shop has a lot of cool science-y themed designs. This is passive. I make the designs, I put them up in the shop. If somebody likes it, they buy it. It doesn’t matter if it’s a week from now or a year from now, I’ll still get hopefully about the same cut on that. I put in that up-front work. Whatever money I make down the road comes from the initial work that I put into making those designs.

28:44 Emily: Yeah. I don’t know if I told you this, but that shop was the reason that I invited you on the podcast. I saw that as a potentially passive income stream and I was like, alright, I need to talk to this guy.

29:01 Gaius: The shop feels to me like the dark secret of my website, because even though it’s up front, I don’t really advertise it that much. Bbut I just love making designs and putting them on stuff. Especially all over prints, which I don’t actually have that many of on the site, but I am obsessed with all over prints. So I make them, I put them up there and I don’t promote it but I think that it’s really cool and it’s probably one of the favorite things that I do.

29:34 Emily: Yeah. Like you said earlier, there’s talk about when to introduce potentially passive streams of income and so forth to your business, but it just sounds like the perfect medley of some of the other things we’ve talked about. It uses your unique skills and your unique subject area interests. It’s just something that you enjoy doing and you threw up the end result online. If people want to come and find it, cool. I think what’s interesting about passive income though, especially when we’re talking about web-based businesses, is that it’s not really ever truly passive. If no one came to your site, if you weren’t driving traffic to your site from other means, then no one would ever find it and no one would ever buy it. It’s really not truly passive because you have to still be active online and somehow trying to get traffic to your site, such as by doing podcast interviews! But anyway, your time is decoupled from what money you make from it. So that’s what makes it passive.

30:33 Gaius: Definitely. And I will say that if you put your work up on other websites, it can be more passive. Etsy is that if you get your hashtags right, so there’s some up front work as usual, but if you get your hashtags right, you really figure out the game on Etsy, you can do pretty passive income. As soon as you move into a realm where like you said, you have to drive traffic, then it becomes less passive. But it’s still way more passive than a lot of the work that I do. If you’re already creating things, in some ways there’s no drawback. If I’m already creating these designs to put on T-shirts for myself, at some point there’s no drawback to just putting it up for other people to have as well.

31:24 Gaius: That’s in my mind the great time to do passive income if you don’t have a lot of following, is to do things like you said, that you already enjoy and you’re already doing. I caution people when they’re like, I’m going to build this entire course and do all these things into it. It’s been a year developing it and I don’t even know whether people are going to sign up for it. No one knows who I am. That’s when it’s like, well if you really love designing courses and you’re really passionate about this, then that’s great. But as far as passive income is concerned, that year of work may take a lot longer to come back to you.

32:04 Emily: Yeah. If anyone in the audience is interested in passive income and you haven’t yet heard of Pat Flynn, please go check him out right now. His brand is Smart Passive Income. This story just reminded me of his origin story. He was an architect and studying for some kind of licensing exam. As he was studying, he created a study guide, and when he was done and he passed the exam, he put the study guide up online for sale. It sold like gangbusters, apparently surprising everyone, including him. That was the start of his passive income empire. As you were just saying, if you can put in 5 or 10% more work and make something that you’ve already created for yourself something that other people could use, why not go ahead and just see what happens. You haven’t invested any time that you wouldn’t have otherwise. There’s really no downside there.

Benefits and Detriments of Side Hustling During Grad School

Emily: I want to speed through the next set of questions, which is, what are the general benefits that you’ve experienced by side hustling during graduate school and the downsides or the detriments? Anything that we haven’t already covered?

33:10 Gaius: I think the biggest upside is just having that creative outlet. I also think for other people the greatest benefit is being able to try things out before you decide to switch careers, if that’s what you’re thinking. I’m thinking of leaving academia, and as soon as I started thinking about leaving academia, I was like, oh my God, if I don’t do academia, what do I do? Do I have to go back to retail? That was a big enough push to try out other things and see what happens and to see if building this kind of business model is possible. The downsides really are the commitment that you have less free time. I feel like I’m always working and have to schedule off time to say, okay, I’m really going to go do other things. It can slowly take over. It can become really fun and a good excuse to not do schoolwork. I know people already have problems with procrastination. So you do have to be very intentional about how you do it, and it does have the possibility of growing out of control. You really have to think hard about what you’re doing, when you’re doing it, and how much.

34:25 Emily: Yeah, that’s a great point. It’s actually something that I experienced during graduate school. I wouldn’t call the blog that I had at that time necessarily a side hustle, but it was certainly a time intensive hobby that brought in money a little bit. I was not very thoughtful at the time about why I was spending so much time on my blog instead of doing my work. It turns out finance is much more of a passion for me than my specific research area, no surprise now, but it was at the time. As you just said, be really thoughtful and be balanced, because financially having a side hustle can help you a lot with your cash flow during grad school. What’s not going to help you is delaying your graduation and delaying getting a full time job or launching a full time business or whatever the next thing is for you.

35:19 Gaius: I actually purposefully delayed writing my dissertation until the latest I could. I could’ve graduated probably nine months earlier, but I just kept pushing it because I knew that I would have that income and I was like, well at least I know I have income and so I’ll just keep pushing it until I can’t push it anymore. That was not smart.

35:43 Emily: I see what you’re saying because you were, as you just mentioned, thinking, do I have to go back to retail if I don’t have another job lined up? So certainly that’s a reasonable thing to be afraid of. I don’t want to graduate before I have something lined up. That’s a total thing that people might delay for that reason. But as you were exploring those other options, you are actively working on it, you weren’t just work like, oh no, I’m afraid to graduate and I’m not making any progress in actually getting to a point where I want to graduate, therefore I’m going to delay. It’s an understandable path.

Emily: Now, as I understand, you’ve just defended and you’re looking for a full time job, but you’re also now developing a side business, which is weaving together some of the different things that we’ve talked about so far. Can you talk about a little bit of the mindset shift from going from I’m a PhD student first and a side hustler second to now I’m starting a business.

36:44 Gaius: For me it was less of a change as far as I’m a PhD student to I’m a business owner and more of a shift in thinking about how other people saw me. So seeing people be like, oh Gaius draws cool stuff. This is really neat. Can you draw something for me? Going from that to wow, your work is really amazing. I would love to pay you to do it. That was a really huge jump for me. Like I said, I started out in art school, I took my first art classes like in eighth grade to start on my art career. I was always going through this thinking I’m never going to be good enough, and this is the first time that I ever thought, I am good enough to make art my living. I think having that kind of self confidence was really the big shift for me. The business side, because I’d been doing these other side hustles like The Indigo Path, it wasn’t really that hard for me, but just understanding that people appreciated me and that I was worth it and I was talented enough. That was a huge hurdle for me.

38:05 Emily: Yeah. Sounds like imposter syndrome, something we are so familiar with.

38:09 Gaius: I don’t know what you’re talking about!

38:11 Emily: It can definitely crop up in other areas besides your PhD work. That goes back to the self-advocacy theme from earlier. It’s just a different application of it. I’m really glad to hear that you’re progressing on that front and defeating your gremlins.

Last Advice for a Grad Student Side Hustler

Emily: In the last minute or so we have here, do you have any advice for another graduate student pursuing side hustling, interested in pursuing side hustling, that we haven’t already covered? We have covered so much. But did you have anything else you want to throw in there?

38:44 Gaius: No. The main thing I want to stress over and over again is that you have to balance your time. I highly suggest anyone who’s in grad school to have some kind of side passion. It doesn’t have to make you money, though it’s great if it does. Really think about how much time you’re spending, why are you doing it, why are you continuing in your PhD or grad program or whatever, and make sure that all of those things are happening in the right amount of time and the right doses as well as for the right reasons. Because the ultimate goal is for you to find a balance that makes you happy, not for any other reason. As long as you’re happy and reducing your stress overall and not just delaying your stress, I think you’re in the right place, but that balance is really important.

39:39 Emily: Oh yeah. Thank you so much for emphasizing that. Thank you so much for being my guest today.

39:44 Gaius: Thank you for having me.

Outtro

39:46 Emily: Listeners, I’m so glad you joined us for today’s episode pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There you can find links to all the episode show notes, a form to volunteer to be interviewed, a survey, and a way to join the mailing list. I’d love for you to check it out and get more involved. See you in the next episode! The music is stages of awakening by Paddington bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Jewel Lipps.

This PhD Government Scientist Is Pursuing Financial Independence: Part 2

July 22, 2019 by Jewel Lipps

In this episode, Emily interviews Dr. Gov Worker, which is the moniker used by a PhD scientist and FIRE blogger. FIRE stands for Financial Independence and Early Retirement. As a PhD, Gov Worker’s motivation for and path to FIRE are different than most and specific to his high degree of training, and he thinks other PhDs should consider FIRE as well. In this second half of the conversation, Gov Worker shares what his family is doing to achieve FIRE, how being a PhD has affected his FIRE journey, and his financial advice for early-career PhDs.

Further Listening: This PhD Government Scientist Is Pursuing Financial Independence: Part 1

Links mentioned in episode

Teaser

Dr. Gov Worker (00:00): When you do save any, any dollar you save, like buys you a little bit of freedom or a little bit of flexibility or some options. And that’s why I think that’s why I’m just such a big believer in the whole movement. Um, if it’s getting more people to think about and save some money that then they can use to like free themselves up to what they really wanna do.

Introduction

Emily (00:27): Welcome to the Personal Finance for PhDs podcast, a Higher Education in Personal Finance. I’m your host, Emily Roberts. This is season three, episode nine, and today my guest is Dr. Gov Worker, which is the moniker used by a PhD scientist and FIRE blogger. FIRE stands for Financial Independence and Early Retirement. Gov Worker and I had such an engaging and in-depth conversation that I’ve split it into two episodes last week’s and this one. In this episode, we discuss what his family does to pursue FIRE, how being a PhD has affected his journey, why other PhDs should consider pursuing FIRE and his financial advice for early career PhDs. Without further ado, here’s the second part of my interview with Dr. Gov Worker.

Did you make any changes to your lifestyle and spending when you decided to pursue financial independence?

Emily (01:18): Let’s go back to this question of, of how are you pursuing FIRE? You’re natural savers. You’ve been living within beneath your means for quite a long time. Did you make any changes, uh, when you decided that you were going to pursue FI?

Dr. Gov Worker (01:32): Yeah, and I think it’s been continual changes for the past nine months because I’ve been reading a lot. I’ve been learning a, a bunch and trying to been optimizing. So I think we’ve tried to switch more towards contributing or saving in, uh, tax favored accounts like your 401k or even your health savings account. You can save money there, shelter it from taxes, and then if you don’t need it for, well, there’s a whole whole bunch of things you can do with a health savings account. So we’re saving quite a bit of money in after tax accounts. And even prepaying our mortgage is like an after tax savings. Um, so we’ve switched a lot of our savings around, so we’re saving that in tax, tax deferred accounts, um, like 401Ks. And, um, we went through our expenses. I think one of our, the, like, the best thing you can do if you wanna get started is just tracking, um, every, every purchase you make. Um, so we do that in an Excel spreadsheet and I think there’s a lot of services where you can like track your finances, but for me, knowing that I’m gonna have to type something in a spreadsheet really makes me think about the purchase. So there’s something, there’s like, you know, if it just showed up on a computer screen, um, on like Mint or Personal Capital, that whatever, it just kind of goes through my head, but like having to write it down is powerful. And so we, with like tracking expenses and other stuff, we, we were able to cut quite a bit of money that we were spending kind of unconsciously or subconsciously or not getting, and, and our lives has, our lives haven’t gotten worse. We don’t feel deprived. We still spend a lot of money on things we really care about. Like I take piano lessons, my daughter takes piano lessons, my daughters take piano lessons. Like we really enjoy doing that, so we spend money on it. And yeah, we could reach financial independence, you know, maybe a few months earlier if we didn’t take piano lessons or something. But that’s not, that’s not what it’s about for me. It’s about, hey, we’re spending a whole bunch of money on like childcare from like three to 4:00 PM if, whereas if we switched our schedules, we could not have to pay for childcare for that thing and spend more time with our kids. Well that, that’s kinda like a win win-win. I mean, okay, it’s like tough if you both have meetings then and there’s headaches, there’s trade offs, but I think a lot of times we’re told like, Hey, you deserve it. Just do something easy. Like yeah, have somebody help clean your house or have somebody come watch the kids or you work really hard, it’s worth it to pay somebody like a few bucks an hour to do this for you. And sometimes that’s true and sometimes it’s not true. So I, I just really want people, if they’re interested in this, to like look at what they’re spending and then think about how much joy they get from that and try living without something. And if it, if you feel deprived, then like add it back in. But at least you know what it feels like to not have that.

Can you comment about high savings rates in the FIRE community?

Emily (04:51): I think we’re gonna go into this a little bit more, um, in a moment about maybe looking at your lifestyle as a grad student and then your lifestyle, maybe post-graduate school and thinking, can I still live the way that I did as a graduate student? Um, a little bit longer. But before we get there, um, I wanted to to ask you about savings rates because one of the things that’s really, um, notable and also intimidating about the fire movement is that people post these incredible savings rates. I save 50% of my income, I save 75% of my income, I save 85% of my income. Um, those things can also seem like fairly unattainable, but this isn’t a very important part of pursuing fi, which is to have, you know, a lot, a lot of money going into savings investments, um, and also dramatically lowering your living expenses. So you create this big, big gap between your income and your living expenses. So you can have that high savings rate. And also so that your ongoing living expenses, let’s say once you reach financial, financial independence, um, your living expenses being lower means your nest egg has to be a little bit smaller. Right? Did I get that right? And, uh, can you, can you comment a little bit about these savings rates?

Dr. Gov Worker (06:04): I would just like to say that if you see a savings rate, unless they explicitly say how they calculate it, it’s really hard to know how much they’re actually saving because some people include the amount of mortgage principle they’re paying each month as in part of their savings rate. Some people, I mean there’s the numerator and the denominator, right? So are you normalizing to like your gross income? Are you normalizing to your post-tax income? Some of the savings, your savings are pre-tax, some are post-tax and if your, you know, employer gives you a like 401k match, is that money you saved or is that just money that appears? So these numbers that people publish, there’s a wide range of what it actually is. So don’t, don’t get intimidated by those numbers because they could inflate ’em or I mean, not inflate ’em, but it could be misleading. So yeah, you got, you’ve gotta try to save as much money as you can and, and live on as little money as you can and still be happy with your life. And that ultimately determines how fast you will achieve this financial independence. Um, so for us, our savings rate isn’t like 90% or any of these impressive numbers, but daycare is a huge, huge chunk of our income. Our mortgage is another huge chunk ’cause it is a 10 year, uh, mortgage. So I haven’t really calculated a timeline to financial independence or anything like that. That’s not super important for me. ’cause I know in five years my youngest one will be in school and we’ll have the house paid off and our expenses will drop. I mean, those things consume like, I don’t know, 60 to 75% of our budget is just daycare and housing and there’s nothing we can do about that. Um, that’s just the stage of the life we’re in. Um, and so if I like compare myself to like a double income, no kid family, um, that’s putting away 90% of their income, that that doesn’t really help me think about my path to financial independence. So I, I mean, I know savings rate’s a key thing on how fast you achieve fi and if you start, if you start down this path, you can choose your own method of calculation and come to your own consensus about it. But it’s not, it’s comparing or seeing those numbers isn’t, isn’t really super duper helpful, at least to me.

Emily (08:37): Yeah. Thank you for pointing that out because, so I, maybe this is a misconception that I have, but I see that, um, okay, my savings rate is X and my time to fi is, is Y, um, as kind of core integral to the way people talk about this sort thing online. Not that necessarily everyone has to do it, but it’s a very popular thing to do. Um, and I really couldn’t relate to that because the listeners probably know, like I rent, I live in a city that I’m not interested in living in long term. So it’s really hard for me to see beyond, well, at some point I need to purchase a house and then maybe I can think about, you know, what this FI thing is. Um, so it’s hard for me to see beyond that. So similarly to you, I think that I have this, you know, transition point for you, it’s, you know, my children out of daycare and the house is paid off, then we’ll see, you know, what the calculations are. Until then, let’s just work, do good things and not worry too much about the savings rates. I think I’m in a similar spot to that. Just, you know, work on being solid financially, uh, for the time being until we get past this unknown point and then, uh, then we’ll see if we can do those calculations.

How does being a PhD affect how you think about financial independence?

Emily (09:44): So I’d like for you to speak, um, a little bit more specifically as to how being a PhD has affected, uh, your journey to FI or the way you think about FI or the journey there too.

Dr. Gov Worker (09:57): Yeah, I mean, I think on a super simple level, like I didn’t get my PhD until I was 27. Um, and there are people that I know in the fire community, they’re like retiring at age 30 or younger, right? So if you, if you’re getting a PhD, you’re not gonna be one of these early fire people because

Emily (10:17): By the way, getting a PhD at 27 early side, very,

Dr. Gov Worker (10:21): Yeah, Right. I I should have clarified that. So I, I guess speaking for myself and I, I do know that was on the early side, but so say at the earliest you’ll be 26 or 27 with your PhD, it’s unlikely that you’ll be able to retire at 30, um, because Right, you don’t have that many years to work, so you don’t,

Emily (10:43): Unless you are Jacob Lund Fisker from Early Retirement Extreme. Just wanna throw that in there. Go ahead.

Dr. Gov Worker (10:49): Okay. Yes. Okay.

Emily (10:51): I do not recommend following his route, but if you’re interested, Dr. Jacob Lund Fisker early retirement Extreme, another father of this movement.

Dr. Gov Worker (10:58): Yes, exactly. Um, so now that we’ve got that out of the way, um, I think, so I had a later start entry date into the workforce that’s common with PhDs. Um, I think getting a PhD was helpful in pursuing fire in that as a graduate student, I had to learn how to live really lean. And so I was comfortable with, um, not inflating my lifestyle as much as other people that I got my undergraduate degree with, um, and then saw what they were doing. Um, and then once I did graduate, my salary is much higher than the median salary. So I think those are things that help, um, what’s kind of more difficult as you interate, but I think those are just like the nuts and bolts. I think a lot of it more has to do with this identity factor because unlike someone that just gets an undergraduate degree, um, and a and has some broad knowledge in a general field, getting a PhD or, or getting an md I know that, uh, there’s several medical doctors who, who are in the fire community and have written really great stuff about this too, is that you, you, you’re really invested in your field because you, you spent so long obtaining this knowledge. And, and so when I think about, I definitely want to achieve financial independence because there’s some parts of my job that are really stressful and especially travel with, uh, having a young family and now having to, the higher you rise in science, the more you have to travel <laugh>. Um, and I think nobody ever talks about that, but, um, you know, early retirement is gonna be different for someone with a PhD because they have invested this years of knowledge and even if they really hate their job, like there, there was some spark that led them to pursue a PhD at some point and to obtain this field of knowledge. And so letting go of that is gonna be a different emotional process for someone that just, um, enters a field to just earn as much money as possible and as little time as possible and then leave. Yeah, so there’s an emotional aspect, uh, as well.

Commercial

Emily (13:24): This summer I’m putting forth extra support for PhDs undergoing career transitions into grad school, a postdoc or a real job. If you’re moving on to the next stage in your career or thinking about it, please visit pfforphds.com/next to check out my articles, webinars, and coaching program. Allow me to come alongside you during this transition to ensure that you set yourself up for financial success.

Once you have financial independence, do you think you’ll still use your PhD knowledge?

Emily (13:54): When I think about, um, academia like Ivory Tower academia, you know, there’s this stereotype that academics shouldn’t care about money. They shouldn’t money grub, they shouldn’t be concerned about their salaries or benefits, whatever. They should live the life of the mind and, and that’s it. Um, but I, but the best way to not care about money is to have enough money that you don’t need to be concerned about it. Um, so I actually really think that becoming financial independent is very, um, compatible with someone who wants to, you know, pursue scholarly work, for example, and not be, um, I don’t know, not be tied to like obtaining grants or, you know, whatever the normal stuff that comes with like a job once you reach fi if you decide to retire early, like, do you think you might still do anything with, um, you know, this knowledge you’ve, you’ve taught, fought hard for over time, or do you think you’re gonna be leaving that behind?

Dr. Gov Worker (14:48): No, I mean, when I think about my happiest times in the past 10 years since getting my PhD, there’ve been times when I’ve been on like a sabbatical. So I’ve been in a new environment, I’ve been working with people I know in the field professionally, but not close because we didn’t work together ’cause of distance. And so there was like this aspect of travel, there was this aspect of collaborating with new people and there was this applying my knowledge to like projects I cared about without having these administrative duties, which consume a lot of my time and are where most of my job dissatisfaction is. So I haven’t allowed myself to think too, too much about early retirement, but I could easily see, and if you don’t have to worry about money, then you can like, you know, travel to work with that colleague for six months or a year and not have to worry about having your salary covered. Um, and so, I mean, I could see easily and really enjoying doing like a series of like little sabbaticals with people, um, that I like working with. And I’ve like, uh, worked with on sabbatical before, um, I could see working as a consultant in my field. I mean, there’s a lot of things that I think I would like to do if I, if I do achieve early retirement that involve this part of me that spent all this time to gain this knowledge, um, that aren’t this traditional like ivory tower or, you know, achieving academic success or, you know, publishing papers in the, the highest tier journals or, you know, winning the most prestigious grants. You know, I just feel like, yeah, yeah, you could do that, but that doesn’t gimme as much satisfaction as, you know, really working on a really cool paper with somebody. Um, and it would be great to be financially in a point where I could work with people, um, but not have it be tied to these heavy things. But that being said, there’s a lot of other things I’d love to do. Like I love playing piano, I love doing all these other things. And so I had a chance to experience this. There was the government shutdown, um, earlier this year, so I had like more than a month of time off. And I think pursuing FIRE was really great because the first day of the shutdown I looked at, um, my accounts and I realized, well, okay, well if we don’t change anything, I’m good for several years without bringing in income, I don’t need to worry about buying groceries or anything. So I think that’s a really great reason to pursue FI because um, it gives you this peace of mind if something does come up I have this month to experience what I would do if I didn’t have, um, paid job because when the government shuts down, you have to hand in your laptop, cell phone, everything gets like locked up and you’re forbidden from interacting with work at all. And it was so magical to just have the time to focus on my passions and my family and like be right there and the kids came home from school and have like meaningful conversations and pursue leisure activities, which I think is really important. And our society minimizes the value of leisure. Um, and so I think I could easily achieve financial independence and also leave this all behind and really just focus on, uh, what, you know, being more intentional, living more in the moment and really enjoying the whole of myself, if that makes sense. Yeah. Sorry for the really long answer.

Emily (18:37): No, that was, that was really lovely actually because I found a lot in there that I can identify with. Um, and maybe the listeners have as well, like, especially about when I was in grad school and actually before I even started grad school and I was looking at the structure of academia and thinking to myself like, I love being at the bench. I love doing the work. I am not interested in having the job that my advisor has. You know, like, how do you stay in science and stay doing the work? Like at that, at the time, uh, I did a year at the NIH as a postbac and I was looking at the postdocs, and this is a bit naive I realize now, but I was looking at the postdocs and thinking, that seems like the best job. Like, I wanna be a postdoc, you know, you know, forever doc, right? I mean, no one actually wants that, but I really liked the idea of, um, staying doing the work and not having to do all these things that come with career advancement, which as you said, you’re kind of, you almost need to take, um, to stay in the field. But I just really love the idea of you, um, maybe finding a way to have all of this balance that you want in your life between your, the personal stuff you want to spend time on and also working when and how you want to, uh, when it, when it tickles your fancy. Right. Um, so I don’t know, maybe there are other people out there who can identify with, with something in there.

Do you think other PhDs should be thinking about FIRE?

Emily (19:57): Um, do you think that other PhDs should be thinking about FI, thinking about fire or pursuing it?

Dr. Gov Worker (20:04): Yeah, I think everybody should think about FI. Um, because even if you don’t achieve full financial independence, there’s so many benefits that come just from having a year’s worth of expenses saved up and know that they’re accessible. Um, I’ve seen not, not PhDs, but people I know socially that are in really toxic jobs but can’t afford to quit because they’re, you know, essentially living paycheck to paycheck. And that I think is, is really sad. Um, so I think FI or at least trying to get in better financial shape is for everyone. If you want to, if you want to try to achieve this early retirement and save, you know, 75% of your income plus or minus, you know, 25% or something, um, you should definitely do that. And I think there’s gonna be a lot of benefits that come along the way. And for me, even once I started pursuing FI, mentally, I was so much happier in my job because I knew that it didn’t have to be permanent and I wasn’t locked into my job. So I think mentally even just committing to this idea has benefits. Uh, saving, saving money and creating financial space has so many benefits, like mental benefits, like, you know, spiritual benefits. I think it’s just, it’s just so important to, to try and start down this path and that not everybody needs to achieve early retirement. Not everybody needs to retire by 30. There’s a lot of great voices in this kind of community. And so when I think about, when I think about fire, it’s more of an alternative path to pursuing happiness rather than this, you know, really hardcore eating rotten bananas ’cause they’re cheaper, you know, struggle to, you know, quit early, if that makes sense.

Emily (22:08): Yeah. And I think, um, I mean, looking at the fire movement as it exists online, at least that I’ve seen, um, very extreme stories get a lot of attention. Um, and maybe the ones that are more like yours, which is like, okay, I’m, I’m a family man living in the Midwest and I’ve got three kids and, and this kind of thing. Um, they don’t necessarily look as flashy, but there can be still so much personal satisfaction that’s found in, you know, living the way you want to and having freedom and having options along the path to fi and after you achieve fi.

What are the next steps for someone who wants to start on FIRE?

Emily (22:45): Um, so let’s say that, you know, there’s someone listening, um, a grad student, a postdoc, another PhD who has a real job, um, and they’re like, Hey, I want some of the things that you talked about during this episode. I wanna have these, these feelings and this, this freedom. Um, how should that person get started? What next steps should that person take?

Dr. Gov Worker (23:05): Yeah, I would say, um, the first thing to do would be, um, to get familiar with the fire movement, um, online. Like I said, there’s a lot of great bloggers, there’s a lot of great books that are being published, um, recently, um, on this topic. And I think to just try and continue living your graduate student lifestyle in your first job and saving as much of that as possible. Um, and if you’re listening to this and you’re like, oh, I don’t wanna pursue fire, that’s never gonna be me. Like, I just wanna make sure that like, no matter what you do, like, like absolutely a hundred percent, um, before your first paycheck comes, set up your 401k contribution to get the most of your employer max. Like, ’cause that, that is just so important. And, and as your salary grows with time, that will scale. And, and so like even if the rest of this podcast doesn’t apply to you, please just set up your 401k to get the maximum of your employer match. ’cause that’s free money. And if you want to pursue fire, then like, yeah, put as much of it in there as you can continue to have roommates if you had roommates in graduate school and are used to that and think you could do that for longer. Um, and just not, yeah, I think not try to buy into what your peers are spending their money on, because unless it makes you happy, there’s, there’s no reason to to spend money on it.

Emily (24:34): Yeah. This is the, this is the keeping up with the Joneses thing, right? Oh, well I am 30 years old, I’m 35 years old. That means that I should be using my money in this way. That means I should have this kind of car and this kind of house. Um, and that’s all fine if you can afford it and if you’ve, if that’s something that you really want, but don’t go down that path just because you see other people doing it, right. Um, really just find what’s going to give you the most, um, satisfaction in your life and probably options and freedom are going to give you life satisfaction. So like you said, you know, make it automatic, like contribute to your employer’s, uh, retirement plan and so you never even see that money. Like that’s an excellent first step. I totally agree. Anything else you wanna add on that?

Dr. Gov Worker (25:20): Um, no, I just, I just really think that, I really liked how you put it. Um, when you save money, you’re really buying yourself options or flexibility that you might want later on. And when I think about my life now, um, and my job, I just, I wish I had more time and money money’s not, not that important. And actually career success isn’t that important, but when you’re in graduate school, it’s like a pressure cooker that you need to like apply for these, you need to be fully devoted to your field. And people question that all the time in academia and, and I just, you know, it’s kind of a shame that you spend all this time in this like high intensity environment and realize, whoa, really if I could have anything in this world, I, I wish I had more time to spend, uh, with people I love or doing things I love or these other things that aren’t necessarily my job. And so when you do save any, any dollar you save, like buys you a little bit of freedom or a little bit of flexibility or some options. And that’s why I think that’s why I’m just such a big believer in the whole movement. Um, if it’s getting more people to think about and save some money that then they can use to like free themselves up to what they really wanna do.

Where can people find you online?

Emily (26:43): I think we need to end it right there. That was wonderful. Thank you so much for, for joining me today, Gov Worker, where can people find you online?

Dr. Gov Worker (26:50): I’d love to interact with any listeners who are interested in learning more about the fire movement. The best way to do that would be to check out my blog, uh, which is at, uh, governmentworkerfi.com. I’m also quite active on Twitter, so you can tweet at me as well. Um, my Twitter handle is @govworkerfi.

Emily (27:09): Yeah, that would be amazing. So hopefully at least a few people will find their way over to you and hopefully we’ve sparked some interest in this movement. Um, thanks again for joining me.

Dr. Gov Worker (27:17): Yeah, thank you Emily.

Conclusion

Emily (27:19): Listeners, I’m so glad you joined us for today’s episode, pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There you can find links to all the episode show notes, a form to volunteer to be interviewed, a survey, and a way to join the mailing list. I’d love for you to check it out and get more involved. See you in the next episode. The music is Stages of Awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Jewel Lipps.

This PhD Government Scientist Is Pursuing Financial Independence: Part 1

July 15, 2019 by Jewel Lipps

In this episode, Emily interviews Dr. Gov Worker, which is the moniker used by a PhD scientist and FIRE blogger. FIRE stands for Financial Independence and Early Retirement. As a PhD, Gov Worker’s motivation for and path to FIRE are different than most and specific to his high degree of training, and he thinks other PhDs should consider FIRE as well. In this first half of the conversation, Gov Worker fleshes out the FIRE movement for us, including why the current stereotypes are inaccurate and harmful, discusses what pushed him to pursue FIRE, and details what his family is doing to achieve FIRE.

Further Listening: This PhD Government Scientist Is Pursuing Financial Independence: Part 2

Links mentioned in episode

Financially Navigating Your Upcoming PhD Career Transition
Personal Finance for PhDs Podcast Hub
Volunteer as a Guest for the Podcast
Government Workers Pursuing FI (Financial Independence)
Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! by Robert Kiyosaki (affiliate link – thanks for supporting PF for PhDs!)
Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence by Vicki Robin (affiliate link – thanks for supporting PF for PhDs!)
PFforPhDs S1E11: This Prof Used Geographic Arbitrage to Design Her Ideal Career and Personal Life
PFforPhDs S3E7: This PhD Student Is Paying Her US Student Loans with Her Swedish Krona Salary
PFforPhDs S2E7: How to Successfully Plan for Retirement Before and After Obtaining Your PhD

Teaser

Dr. Gov Worker (0:00): As academics we spend so much of our time identifying ourselves as a as our career like I am an expert in this field or I am like the world’s top person in this and I travel around the world and I talk about this and I got invited to conferences because I am this person I was like whoa I don’t have to be that person anymore I can just be myself and I myself is so much more than my professional expertise and why did I lose sight of that so that was a really powerful thing to me and that made me that completely changed my life.

Introduction

Emily (0:39): Welcome to the personal finance for PhDs podcast. A higher education in personal finance I’m your host Emily Roberts this is season 3 episode 8 and today my guest is Dr. gov worker which is the moniker used by a PhD scientist and fire blogger. Fire stands for financial independence and early retirement. Gov Worker and I had such an engaging and in-depth conversation that I’ve split it into two episodes this one and next weeks in this episode Gov Worker tells us what fire is what pushed him to pursue it and what his family does to pursue it without further ado here’s the first part of my interview with Dr. Gov Worker.

Please Introduce Yourself

Emily (1:24): Thank you so much for joining us on the podcast today. I have the great pleasure of having a conversation today with someone who goes by the moniker gov worker maybe we should say dr. gov worker and this person gov worker I really wanted to find someone to talk to us about fire which is financial independence retire early which is a really big trend right now in the personal finance movement and it’s actually come up on a couple of our previous episodes one with Dr. Amanda and one with Crista Wathen and so I wanted to find someone who would really speak to this specifically and thankfully, gov worker and I have a mutual connection on Twitter and I found I found him through that person. So Gov Worker thank you so much for joining us this morning I’m really looking forward to this conversation would you please tell us a little more about yourself?

Dr. Gov Worker (2:15): Yeah thanks Emily, before we get started I should say that I’m speaking in my personal capacity and my views are not representing the government so they’re my own views so I’m a government researcher I got my PhD in 2009 I live in a flyover State and I’m happily married with three daughters that’s kind of having kids or three kids it’s kind of rare for fire so we can talk about that later on I started blogging just a few months ago because I realized well there’s a lot of fire bloggers and there’s a lot of people in the personal finance space pursuing fire a lot of them aren’t like me necessarily in that they have a PhD or that they have a government job and these these are things that make pursuing fire different from typical scenario so I wanted to kind of write content that would help people in these type situations like optimize their decisions for pursuing fire.

What is FIRE?

Emily (3:21): Yeah I’m I’m so happy to hear that actually matches really well with the reasons why I started blogging about personal finance back in 2011 not my current website but the one before that some listeners may be aware of my previous site evolvingPF.com and I was getting really interested in the personal finance space at that you know in the couple years leading up to that time and I also didn’t see myself as a graduate student represented in the space not even just as a graduate student but as kind of a lower earner I mean most of the people I saw writing I would say I was in the bottom 1% in terms of incomes of the people I started writing about personal finance which kind of makes sense few different reasons but anyway so that’s very similar to why I started writing and I’m so glad that you did because as we’ll talk about and you mentioned you sort of defy a couple of the the stereotypes about fire which we’re happy to go into. So first for audience who has no idea what fire is can you give a really brief definition

Dr. Gov Worker (4:21): Yeah so so fire is an acronym for financial independence and early retirement I guess they switch the R and the E. So in my mind those are two really separate goals but they kind of get lumped in together as one acronym and one movement.

Emily (4:36): When I first started started learning about personal finance being financially independent meant being financially independent from your parents it was like a young adult goal right so go into what each of these things means please.

Dr. Gov Worker (4:48): Right so financial independence is a state of being where you have passive income so that’s income that your money is making for you that exceeds your living expenses so I mean in that essence like even if you retire at 62 and live off of Social Security you’re I guess in some ways financially independent at that age because you’re not earning money and you’re living off of income that you don’t have to work for so that’s passive income and in the fire movement it’s it’s kind of roughly the rule of thumb is if you have 25 times your living expenses saved that you can generate enough returns on your investment to live comfortably off withdrawing 4% so 25 times your expenses or 4% of your liquid net worth that’s kind of this financial independence and some people debate whether it should be 25 or 30 or some multiple but you can look up a whole bunch of stuff on that but this idea is that you amass a pile of money and that money makes money and you live off of what that money makes for you and it could be through like rental properties it could be through stock market returns it could be through like dark arts I don’t know but you the like goal of the fire movement is to save enough money that your money works for you and you don’t have to work for a living you don’t have to you can work but it doesn’t have to earn money so you could do things that don’t make money like blogging or something that you really enjoy doing and create things but it doesn’t have to it could be disassociated from a paycheck because your money is earning your living expenses.

Financial Independence vs. Early Retirement

Emily (6:35): Yeah and there’s the there’s the key difference between financial independence and early retirement right in early retirement you are committed to not working anymore whereas in financial independence it’s just an option can work more you cannot your good either way is that right?

Dr. Gov Worker (6:50): Yeah and I mean I think there’s kind of a joke in the fire movement about this internet retirement police that like if you do achieve financial independence and you quit your main job so like if I stopped becoming a government researcher because I reached financial independence but I was still earning income doing other things and you know internet trolls might say I’m not really retired so early retirement is kind of a weird nebulous thing that I don’t feel is very well defined but I guess my goal is to achieve financial independence where I don’t need to work if I don’t want to and then I can make a decision well do I want to work part time do I want to work in an academic lower stress environment once you achieve financial independence you have a whole bunch of options available one of which is like completely quitting your profession and walking away forever which is an early retirement but you could do like a phased retirement or some part-time work or something in your field that’s different so I think just achieving some space between oh I need this paycheck to live and working because you have to and working because you want to is really important and so even if you’re not pursuing early retirement I think it’s really worth trying to pursue fire because even if you don’t reach financial independence say you’re starting off with a lot of debt or starting off from a different space and you do you think financial independence are away if you work towards that even just getting you know six months salary saved up gives you options if you’re in a toxic work environment and so I think if fire doesn’t resonate to you as a listener like don’t just shut off the podcast because there’s a lot of good that can come from working towards getting in a better financial space and that’s why I think the movement is so important for everyone even if early retirement is not for everyone.

What Are Some of the Stereotypes Associated With FIRE?

Emily (8:51): Yeah great point because when I first heard about this movement in I don’t know 2012-2013 something like that it was it was I don’t even think the acronym fire was being used at that time because really people were talking about early retirement and I wrote a post for my site that was like early retirement I don’t care about that that’s not for me and I’m gonna dismiss this whole movement but actually I had a commenter on that post come back and say well no Emily like you are pursuing financial independence you might not be pursuing it particularly early or whatever but obviously by wanting to generate more financial security for yourself being aggressive about saving for retirement you are pursuing financial independence so don’t dismiss this movement and frankly it’s based on some of the stereotypes that I heard about the movement at that time which we can discuss so these stereotypes that you see let’s still see in the media today are like well fire is being pursued by young male single childless tech workers engineers that kind of thing it’s not for people who have lower incomes it’s not for people who have families it’s not for people who live in high cost of living areas so I note I mean brought this up earlier like let’s dispel some of those stereotypes.

Dr. Gov Worker (10:11): Yeah I mean I think you put it very kindly but I mean you know I would say like a single white male who learned to code and got a really high paying job and it may be even anti-social so like doesn’t even fully understand these like things that people want to spend money on and there’s nothing wrong with spending money on things on the path to fire if that’s what brings you happiness it’s about in my mind financial independence is about spending money on what makes you happy and then like not spending money on other things just because other people spend money on them so I think the stereotype and then these people like not only are they in the mainstream media but are on social media and comment I think there’s a lot of this like bootstrap mentality that like well I you know I make all this money and so if you don’t do it then you aren’t working hard because I was able to do this which ignores a lot of privilege and other factors that go into this and if you start if you want to find out about fire and that is like the first resource you find and it doesn’t resonate with you there are tons of people pursuing financial independence or fire and you just need to find a story that resonates with you because there are stories about you can find peoples that are blogging and being really open about destroying mountains of debt they have student debt credit card debt any kind of debt and those stories are really powerful. You can find like you know there’s a lot of diversity in the bloggers and so everybody’s got these really great stories and you just got to find one that resonates with you and helps you that you can put yourself in you’re like that person shoes and like he’s like yeah they’re doing these things and we’re going through the same problems and that’s inspiring me to like work on my my finances and I just if I could like help anyone on this podcast just fine tell them that there’s somebody out there that’s probably writing a story that’s very similar to their is they should like go find this person and not just immediately get turned off right away by this fire because like early retirement sound so extreme and you’re like oh I can never do that I have that or I can never do that like I’m first-generation college or I could never do that because I grew up in this really bad neighborhood like there’s people who are who are writing about you know those exact situations and I just I just want to let people know it’s way more inclusive than you might think of if you just hear it like off the news or something.

What Led You to the FIRE Movement?

Emily (12:51): Yeah we hear so much in academia in science about the importance of having models and mentors who you can identify with on some of these you know demographic factors for example so I so appreciate your point that like yeah don’t get turned off by you know one random article that you read that only features you know this type of person like there’s so many different types people in this movement and it’s important for everyone really so let’s let’s go down to into what more specifics about you especially with you as a PhD because you know it was a little bit hard for me to track down a PhD in the fire movement who was willing to talk about this so I really want to have that aspect modeled for our listeners of how a PhD can pursue fire or at least how you are as a PhD. Let’s let’s start with what led you to this movement in the first place?

Dr. Gov Worker (13:48): Money Magazine did a feature about the fire movement last year and that was kind of the first exposure I’ve had to it I know I know people have been writing about this like mister money mustache is the most famous he started in 2011 and I just had never run across that I mean I’ve always been interested in finance like I got exposed to like the Rich Dad Poor Dad* books in like high school and was always thinking about he’s really big about passive income but his books are kind of like if you think hard enough it will like money will magically come to you or something but I mean that kind of had this idea and I was like my wife and I are natural savers but it never occurred to me that you could like retire early until I read this feature then I read Your Money or Your Life* which is like the key cornerstone book it was written I think 30 years ago by Vicki Robin it’s awesome and that book completely changed my life because at the time I was extremely stressed in my job I was kind of experiencing burnout I was having to travel a lot and I think like in academia or when you’re getting your PhD like it’s just always implicitly assumed that you’re gonna like try for like landing a major like r1 university job or like the whole mindset of my PhD experience is like you need to be the top of your field and if or like you need to at least try to be the top of your field and if you don’t get there well that’s okay because but it’s never an option just be like well I want to spend time with my family or I want this right it’s all about being the best and I worked really hard on that for a decade and it wasn’t and I guess objectively I achieved a lot of career success you know recognition and accolades and that kind of stuff but it wasn’t fulfilling because it it wasn’t ultimately what I wanted but it was really hard for me to see that that wasn’t what I wanted until I achieve career access success and then realizable why did I just spend a decade pursuing that. Reading that book just really helped me rephrase things there’s a key concept in this book that like your job is just the place where you exchange your time for money and I was like whoa like because as academics we like spend so much of our time identifying ourselves as a as our career like I am an expert in this field or I am like the world’s top person in this and I travel around the world and I talk about this and I got invited to conferences because I am this person and I was like whoa I don’t have to be that person anymore I can just be myself and myself is so much more than my professional expertise and why did I lose sight of that so that was a really powerful thing to me and that made me that completely changed my life so that was kind of how I discovered fire and how it impacted me.

[* This is an affiliate link. Thank you for supporting PF for PhDs!]

Personal Finance

Emily (16:56): Yeah of course I want to add in something in response to that though first which is that I had sort of a similar experience in a different way during graduate school when I was learning more and more about personal finance because one of these I mean really the bedrock concept in all of personal finance is regarding understanding what your own personal values are and aligning your use of money with your values with what brings you the most satisfaction in your life and I totally agree with you that inside academia inside you know work in science um our identity does become so closely tied with our profession that it’s difficult to remember that you are a whole person needs and desires outside of that and for some people their professional accomplishments and career success is the most important thing to them but that’s not everybody within academia and I think for me learning more about personal finance and realizing this caused me to do some more introspection and it’s one of the reasons why I you know decided not to pursue a more traditional career following graduate school and why instead I’m doing this because I really love this you know helping other people in my community make the most of their money so I just I really resonate with that it sounds like our exposure to the subject area even though there are slightly different variations and personal finance really caused a similar kind of change in both of us.

Commercial

Emily (18:28): This summer I’m putting forth extra support for PhDs undergoing career transitions into grad school a postdoc or a real job if you’re moving on to the next stage in your career or thinking about it please visit pfforphds.com/next to check out my articles, webinars and coaching program allow me to come alongside you during this transition to ensure that you set yourself up for financial success.

What Are You Doing on Your Path to Financial Independence?

Emily (18:58): So yeah I’d love to now dive into more about how one pursues fire you know should one want to so specifically for you what are you doing on your path to FI?

Dr. Gov Worker (19:11): Yeah so let’s see so a couple things so we before even kind of pursuing the FI path my wife and I are always very frugal like back when you could really coupon things like local newspaper did an article about my wife’s like incredible couponing skills and we’ve always lived way below our means because we didn’t really feel the need to to keep up with things so like we both ride our bicycles to work so we don’t have to pay for parking or cars or stuff we have a 10-year mortgage which were pre paying and anytime we had gotten a raise so when we started off our marriage I got married young when I was still in graduate school and my wife was working at that time and we had like absolutely no money but every time we got a raise we would just say well we’re living just fine so we would save the raise in some account like a savings account or sometimes we increased retirement accounts or other things and so we’re always just used to when we got an increase not increasing our standard of living and it would always seem like we’d be doing really well financially and then have a baby and then like a huge percentage of our salary would then go to daycare and kind of bump up that way so in many ways we’re still living well we have improved their standard of living since like the depths of graduate school but not not by much and every time we get a raise or a bonus or anything it’s like how can we save it and so that was what we had always done and that’s what fire people would tell you to do of course the fire people are gonna say like save it in retirement account but since we weren’t necessarily focused on that goal we would save it up for like improving something on the house or maybe taking a vacation or just saving it in a emergency fund or something else so that that that stuff all kind of came naturally to us.

How Did You Manage to Keep Your Living Expenses in Check When You Did See an Increase in Income?

Emily (21:19): I want to go a little bit more in depth about a couple things you just mentioned one is the time when you were in graduate school so that’s gonna speak to a lot of my audience right now currently in graduate school. Can you just talk a little bit more about how you managed to keep your living expenses in check when you did see an increase in income because I do think there’s a tendency to you know when you let’s say get out of training sounds like your wife had a regular job maybe she was experiencing raises more frequently than you did as a graduate student but like when you get that next position out of graduate school and there’s a big bigger bump in your salary how were you not just like I’m gonna go like wild and really raise my standard of living spend all this because there’s all this pent-up demand or desire.

Dr. Gov Worker (22:16): Yeah I think it was probably I think the first part of your your comment did kind of address that so my wife my wife had a traditional job or non I mean she’s highly educated as well but when I was in graduate school she was working and so I think my graduate school I wasn’t as destitute as if I were single and just living off of my stipend it it also happened that I transitioned from graduate school into a job in the same city in which I graduated so we didn’t need to move or anything so we were already living in a house at that time in the city and my wife was making money so it was kind of a real just well now I’m gonna go here instead of over here and it didn’t it wasn’t a wholesale change so it wasn’t like I was was really really stretched and then got a job across the country and like oh I’ve got my first job and my first salary at you know I’m gonna go crazy it was really nice to have that bump I mean we were really stretched because we had my daughter about two years before I graduated and so day care was a huge cost and and that kind of stuff so it give us some financial breathing room and I did get my first job and then getting kind of promotions you know throughout my career since then has just given us more more breathing room. You know I look back at my time in graduate school as and maybe this is like selective bias and filtering out like bad experiences because I know graduate school is very tough not just financially but emotionally as well but I do look back on a lot of the things we did socially then with you know just happy fond memories of kind of pulling together with this community of graduate students who is all kind of struggling and like having a really good time like that and now that we’re removed from graduate school and we’re professionals and we have kids and like the social interactions we have are like a lot different from those times and so kind of keeping that you know framework and community together of people going through similar situations I think is really key thing to like keep in mind.

Emily (25:00): That was great actually and I I just wanted to talk a little bit more about you know you’re reflecting on that time to kind of make your current situation a little bit more relatable to my audience because I mean you could look at someone you know several a decade out from graduate school who’s on this path to financial independence and think like what like that’s so far distant from where I am I could never achieve that I’m just a graduate I’m just a postdoc whatever it is at this time but that’s why I wanted to like sort of make this connection to you back at that time so it sounds like you were living in maybe a little bit better than the average guide student lifestyle because of your your wife’s job and having these wonderful low-cost experiences in social life with your fellow grad students which I really love and miss as well. And then as you guys were increasing in your salaries at work you only slightly maybe increase your standard of living you didn’t really move at least it right away it sounds like and really you just sort of kept living more or less the same life style that you had during graduate school. This is something that I have talked about before on the podcast for instance my interview with Dr. Brandon Renfro we talked about really trying to keep lifestyle inflation lifestyle creep in check when you receive those raises so it’s just good to have an example of someone who did that.

Outtro

Emily (26:21): Listeners I’m so glad you joined us for today’s episode pffordphds.com/podcast is the hub for the personal finance for a phd’s podcast. There you can find links to all the episodes show notes, a form to volunteer to be interviewed, a survey, and a way to join the mailing list I’d love for you to check it out and get more involved see you in the next episode. The music is stages of awakening by Poddington Bear from the free music archive and a shared under CC by NC podcast editing and show notes creation by Jewel Lipps.

This PhD Student Is Paying Her US Student Loans with Her Swedish Krona Salary

July 8, 2019 by Jewel Lipps

In this episode, Emily interviews Crista Wathen, an American PhD student in archaeology at Stockholm University. As a PhD student in Sweden, Crista is considered more of an early-stage researcher than a student, which was one of the reasons she chose to study there. Crista’s salary and frugal living habits permit her to pay down her US federal student loans from her master’s degree. Finally, Emily and Crista discuss her blog, Richful Thinker, and why she is pursuing FIRE as a graduate student.

Links mentioned in episode

0:00 Introduction

0:58 Please introduce yourself

Crista Wathen is a US citizen doing her PhD in Sweden. She is in the field of archaeology. She’s from Florida and went to the University of Florida for her undergraduate degree. She did her Masters in the UK.

1:51 What made you choose to go abroad for your Masters and PhD?

Crista says when she was an undergrad, she did an archaeology excavation trip in Ireland. She met another student who was applying to Masters in the UK, who explained that a Masters is cheaper in the UK.

Crista says that a Masters in Archaeology in the UK is only one year. This makes the degree half as expensive as a two year Masters degree in the US.

3:24 Was a Masters degree from the UK viewed differently than a degree from the US?

Crista says the degrees were viewed the same. For PhD programs in Sweden, they looked for people who could speak English or Swedish. She says most people speak English. Crista started learning Swedish, which helped her when she first arrived. However, she does not have a proper immersive language experience in Stockholm because most people speak to her in English.

5:24 What are the differences between doing your PhD in the US and doing your PhD in Sweden?

Crista says in Sweden, she is considered an early stage researcher as opposed to just being considered a student. When she applied, she had to propose a project and submit a research plan. She has two years of classes and two years of only research, though she does research all four years.

Crista says that many Masters degrees in Europe are research based. PhD programs in Sweden require applicants to have a Masters degree. Crista says she already has experience creating a project, and she built upon what she did for her Masters for her PhD application. She explains her PhD classes emphasize reading theory, and do not focus on lab or skills training.

8:33 How is your pay for your PhD research?

Crista shares that she has a salary for her PhD and she doesn’t have to worry about applying for grants. She receives monthly pay. The university pays into an annual pension fund on her behalf. In Sweden, she receives socialized healthcare. She pays up to about $100 US dollars out of pocket. She receives dental and vision care, and she has access to several other benefits such as parental leave.

Crista says she thinks she can take her pension with her if she leaves Sweden, or she can leave the pension in Sweden until she retires. When she moved to Sweden, she was given a person number and is always in the tax system.

Emily says that PhD stipends in the US are not generous, and in many cases they are barely enough to live off of. Crista says that she lives frugally. She lives in subsidized student housing, which she is able to stay in for the duration of her degree. She estimates she is paid about the median income for Stockholm, about $2,000 to $3,000 per month. She explains that the pay for PhD work increases each year. She gets 28 days of holiday leave.

14:26 Tell me about your student loans

Crista had a full ride for her undergraduate degree, the the state of Florida Bright Futures. Her loans are for her Masters program. When she exited her Masters, Crista’s loan balance was $60,000 and now it is $45,000.

Crista has federal student loans, even though her Masters was at a UK institution. When she was accepted into the PhD program in Sweden, she called the loan offices to learn about income based repayment. The loan offices told her that her pay in US dollars is effectively zero, so her loan payment is zero.

Because of compounded interest, Crista wanted to make loan payments even though she wasn’t required too. Crista is considering whether to keep her savings and make payments or to take her savings to pay off all her loans. The interest rates on the loans are nearly 7%.

Crista says the loan payment process has been smooth except for the fees to send money to the US and the exchange rate. Recently, the Swedish krona has been worth a little more than the US dollar.

22:02 Do you have any advice for a US citizen who is doing graduate work abroad and has student loan debt?

Crista says she was looking for a university that would take her project. It’s a new culture and experience, which is worth a lot. She advises to save up because it’s expensive to move. She says take logistics into account.

23:21 Where can people go to learn more about your story?

Crista has a blog called Richful Thinker. After her Masters, she worked in banking. She learned about the benefit of having a banker and all the things a banker can do for you. She thinks more people should know about this. She also talks about what it’s like to be an American doing her PhD abroad.

24:30 What is the FIRE movement and why are you part of it?

Crista explains that FIRE is financial independence, retire early. She is most interested in financial independence. She says most people who retire early are in their 30s or 40s. But since retiring is typically 65, even retiring at 50 is retiring early. Crista says she wants to be comfortable without worrying where her money is coming from.

Emily adds that for many young adults learning about personal finance, financial independence refers to being independent of parents. In the FIRE community, financial independence is being independent of a job. This could be through passive income, like making money from rentals or investments.

Crista says she knows it can be difficult to find a job after your PhD, so financial independence is a way to assure she finds a job that she will like. She doesn’t want to take the first job that’s open. Emily shares that financial independence can make having a job more fulfilling.

28:49 Conclusion

How Finances During Grad School Affected This PhD’s Career Path

July 1, 2019 by Jewel Lipps

In this episode, Emily interviews Dr. Scott Kennedy, a bioengineering PhD who now works at a start-up in a data science position. During the course of his PhD, Scott got married and had two children. While he hadn’t considered personal finance of great importance when he started grad school, he certainly did by the end. Scott considered pursuing a tenure-track faculty position, but ultimately took an industry position because the salary and location better supported his young family. This conversation around Scott’s reflection on his financial path during grad school is excellent food for thought for an early-career PhD considering different career and family formation options.

Links mentioned in episode

0:00 Introduction

1:20 Please Introduce Yourself

Dr. Scott Kennedy has an undergraduate degree in Mechanical Engineering. He became interested in neuroscience of motor control and the neural basis of body movement. He went to the University of Pittsburgh and received a PhD in Bioengineering. His adviser was in the neuroscience department.

As Scott neared the end of graduate school, he began to explore options outside of academia that made use of his skillset. He took a job as a machine learning engineer at a startup in St. Louis, Missouri. He is enjoying the transition out of academia and into startup culture. Scott adds that you have to be creative about how your skills apply outside of academia, because graduate school training typically funnels you into academic careers.

6:25 Tell us about your family.

Scott got married in 2013, during his third year of graduate school. He says they knew they didn’t want to wait until after graduate school to start their family. They had two daughters while Scott was a PhD student. He says his adviser was supportive and he had examples of other parents in the lab.

8:40 What does your wife do? What was her job while you were in graduate school?

Scott says he met his wife in Pittsburgh when she was finishing her physical therapy degree. His wife started working as a pediatric physical therapist before they got married. Their combined income was enough for them to live comfortably. After they had children, Scott’s wife wanted to stay home but his graduate stipend was not enough money to support the family. His wife started working part time but they had to be very conscious about their finances.

10:11 When you started graduate school, what was your interest in personal finance?

Scott says he was fairly naive but he had interest. He says at the end of undergrad, he developed a spreadsheet to track his spending. Although he kept a budget, he didn’t have any financial goals. He wasn’t thinking about saving for retirement. He had some savings tucked away but for no reason. He was focused on simple living.

Emily shares that she was in a similar place when she was in graduate school. However, she had this sense of “doing the right thing” with her money and that motivated her to learn. Scott shares a story about his friend who was shocked that he didn’t have a Roth IRA yet. Scott thought investing was for people with money, then he learned that he should start during graduate school.

14:40 What was your transformation process into someone who cares about personal finance?

Scott says his first step was saving for retirement. Then, he wanted to purchase an engagement ring and pay for a wedding. He saw that his savings, his safety net, was being drained. He realized that he had to become more serious about budgeting and manage finances in partnership with his wife. He says personal finance is a balance between living your life, having goals, and having security. He adds that childcare was another big factor. Cost of childcare is about the same cost as rent.

17:27 What frugal strategies did you put in place to adjust to the new expenses?

Scott emphasizes that they leaned on their families a lot. They were fortunate to have families willing to support them and help them travel, but their vacations were to go home to see family. At home, they spent time at friends’ houses and chose very low cost entertainment options. They stopped going out to eat and would go for a run instead of having a gym memberships. Scott says that taking little steps adds up in savings in the long run.

20:34 How did finances during graduate school affect your career path?

Scott says two years before he graduated he thought carefully about what he wanted to do. Before he started graduate school, he thought he wanted to work in engineering and rehabilitation. He fell in love with science and could see himself being an academic and working as a professor. He felt like he wanted to go that route until he saw one of the graduate students from his lab defend, work as a postdoc, and apply to jobs while also having a family. He said there was a research faculty member in the lab as well who had a family and was having a hard time getting a faculty job. Scott says there were also stories of professors who got divorces during the tenure process.

Scott says he didn’t feel like he was able to support a family through a postdoc and a search for a faculty position. He says that even if everything worked out for him, his kids would have been in high school by the time he got tenure. He shares that this was difficult for him to comes to term with. After he realized this, he started to look for jobs outside of academia.

25:49 Are you happy in the startup job you have now?

Scott says he’s happy in his position now because he has freedom, flexibility, and autonomy in his work. He feels he works on interesting problems. He can work with leadership and have a more say in the work than you can as a graduate student. The location in St. Louis is closer to his family.

26:54 If you could go back and give yourself financial advice, what would that be?

Scott says he would tell himself to have goals in mind. He would tell himself to have an emergency fund and build it up. He says he would build savings for housing and consider buying a house to build equity. Scott says thinking ahead for childcare options, if at all possible, would have been a gamechanger for them.

Scott admits that as an early graduate student, it’s hard to know what your goals are. He advises that to the extent you can, think a couple years ahead. He says have saving goals and investment goals.

Emily advises that people at least consider buying a house if you’re in a place with a housing market that makes sense for graduate student budgets. She also says that it’s a reasonable assumption that anyone’s financial responsibilities will increase over time. Graduate school is a fairly long period of time and chances are that you will have more responsibilities.

32:17 Final Comments

Scott shares that he didn’t expect the number of weddings and the cost of going to them. He says that he regrets not being able to go to some weddings. Scott advises to find balance between living your life and having savings so that you can have buffers and cushions so you have money for unexpected expenses.

interview

Links mentioned in episode

Teaser

Introduction

Please Introduce Yourself

What is your income?

What are your five largest expenses each month?

#1 Expense: Rent

#2 Expense: Taxes

#3 Expense: Food

#4 and #5 Expense: Utilities and Subscription Services

Commercial

What are you currently doing to further your financial goals?

Do you have long term goals?

What is your best financial advice that you’d share with your peers?

Outro

Links Mentioned in the Episode

Teaser

Introduction

Will You Please Introduce Yourself Further?

Why Did You Side Hustle During Your PhD?

Side Hustling Framework for PhDs

Career-Advancing

Commercial

Enjoyable Activity or Hobby

It Pays But It’s Not Enjoyable

Passive Income

Benefits and Detriments of Side Hustling During Grad School

Last Advice for a Grad Student Side Hustler

Outtro

Links mentioned in episode

Teaser

Introduction

Did you make any changes to your lifestyle and spending when you decided to pursue financial independence?

Can you comment about high savings rates in the FIRE community?

How does being a PhD affect how you think about financial independence?

Commercial

Once you have financial independence, do you think you’ll still use your PhD knowledge?

Do you think other PhDs should be thinking about FIRE?

What are the next steps for someone who wants to start on FIRE?

Where can people find you online?

Conclusion

Links mentioned in episode

Teaser

Introduction

Please Introduce Yourself

What is FIRE?

Financial Independence vs. Early Retirement

What Are Some of the Stereotypes Associated With FIRE?

What Led You to the FIRE Movement?

Personal Finance

Commercial

What Are You Doing on Your Path to Financial Independence?

How Did You Manage to Keep Your Living Expenses in Check When You Did See an Increase in Income?

Outtro

Links mentioned in episode

0:00 Introduction

0:58 Please introduce yourself

1:51 What made you choose to go abroad for your Masters and PhD?

3:24 Was a Masters degree from the UK viewed differently than a degree from the US?

5:24 What are the differences between doing your PhD in the US and doing your PhD in Sweden?

8:33 How is your pay for your PhD research?

14:26 Tell me about your student loans

22:02 Do you have any advice for a US citizen who is doing graduate work abroad and has student loan debt?

23:21 Where can people go to learn more about your story?

24:30 What is the FIRE movement and why are you part of it?

28:49 Conclusion

Links mentioned in episode

0:00 Introduction

1:20 Please Introduce Yourself

6:25 Tell us about your family.

8:40 What does your wife do? What was her job while you were in graduate school?

10:11 When you started graduate school, what was your interest in personal finance?

14:40 What was your transformation process into someone who cares about personal finance?

17:27 What frugal strategies did you put in place to adjust to the new expenses?

20:34 How did finances during graduate school affect your career path?

25:49 Are you happy in the startup job you have now?

26:54 If you could go back and give yourself financial advice, what would that be?

32:17 Final Comments

34:45 Conclusion