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How to Identify and Change the Money Mindset You Developed in Academia

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In this episode, Emily interviews Dr. Chris Cornthwaite of Roostervane. Chris and Emily share the money mindsets that they have observed among PhDs and academics, including believing money and wealth to be evil, scarcity, relating time to income, and anchoring. They discuss how to identify and change your own money mindset. Chris shares how his money mindset has evolved from his youth idolizing poverty through his underpaid grad student years and now into his employment and entrepreneurial journey.

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Link Mentioned in this Episode

PhD money mindset

Teaser

00:00 Chris: It’s one thing to start when you’re, when you’re 20 or 25, and have the value of compound interest over time and save that $40 a month or whatever it was. But it’s actually quite a different thing to start when you’re 35 with student loans that need to be paid off and try to create a sizeable chunk of wealth.

Introduction

00:23 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season seven, episode 11, and today my guest is Dr. Chris Cornthwaite of Roostervane. Chris and I list the money mindsets that we have observed among PhDs and academics, including believing money and wealth to be evil, scarcity, relating time to income, and anchoring. We discuss how to identify and change your own money mindset. Chris shares how his money mindset has evolved from his youth idolizing poverty, through his underpaid grad student years, and now into his employment and entrepreneurial journey. As you’ll hear during this episode, one of the best ways you can change your money mindset is by intentionally seeking out and learning from people who have the money mindset you want to move toward, whether that is through books, other media or new acquaintances.

01:22 Emily: If this episode convinces you that you should work on your own money mindset, I invite you to join the Personal Finance for PhDs community at pfforphds.community. Inside the community, you can communicate with me and other like-minded PhDs through our forum and monthly live calls. The community has a monthly book club and group financial challenges as well. In November, 2020, we’re reading Get Money by Kristin Wong and in December, it we’ll read The Millionaire Next Door by Thomas Stanley and William Danko. Our challenges for November and December are to create a frugal stack and set up a system of targeted savings accounts. One of the eBooks included in the community, The Wealthy PhD, also has a chapter on what money mindset is, why it’s important, and how to shift it. While I didn’t understand it at the time being part of the personal finance blogosphere while I was in grad school was absolutely vital to the level of financial success I had then and now, and was directly my inspiration for starting my business. With the Personal Finance for PhD’s community, I’ve attempted to replicate many of the positive elements of that experience while making the whole process more time efficient and accessible for you. If you’re interested in learning more about and joining the community, you can do so at pfforphds.community. Without further ado, here’s my interview with Dr. Chris Cornthwaite from Roostervane.

Will You Please Introduce Yourself Further?

02:49 Emily: I’m so delighted to have joining me on the podcast today, Dr. Chris Cornthwaite of Roostervane. He writes a lot about PhDs and career transitions and career over there, but he also has a lot of material about money, wealth, money, mindset, and so forth. And that’s why I invited him on the podcast today to tell us more about money mindset. So, Chris, will you please just introduce yourself a little bit further to the audience?

03:14 Chris: Yeah, for sure. So in terms of my academic background, I have a PhD in religious studies from the University of Toronto and after I finished my PhD, I was kind of lost and didn’t know what to do for work. Kind of was the impetus for starting Roostervane, eventually. But I went and I worked for a think tank. So I ran projects for Canadian think tank. Kind of a lot of different projects, but some that kind of related to money that are still interesting to me is things like economic development and prosperity and things like that. And then I went and worked for the federal government for a little while, the Canadian federal government. I worked on a project that helps other countries launch refugee programs. Basically it’s a lot of like international diplomacy kind of stuff and that was really neat. And I still do some consulting in that world, in the refugee program world, but I also run Roostervane. I started a blog, initially it was kind of chronicling my own journey out of academia, but it’s just evolved to things that I like to write about. It’s become everything from a little bit on personal finance, as you say to careers, LinkedIn, ideas about purpose, which has really been an interesting question for me. That’s become about, I would say it’s maybe like 80% of the work I do, but it’s not my full-time income yet. It’s growing, but as you know, it takes time, so I’m working on that too. That’s me.

4:40 Emily: So interesting. Thank you so much. So money mindset is our topic for today.

What Are the Common Money Mindsets of PhDs and Academics?

And I wanted to start off by asking you what are the common money mindsets that you have observed in PhDs or academics?

4:53 Chris: This is such a fun conversation. I’m really glad to have it. I think the thing that I see a lot of, I mean, we could talk about scarcity mindset and that sort of thing, and that’s certainly common. I think the thing that I deal with the most, especially as people are like leaving academia and it’s not just about money, but it’s about careers in general, but there’s a lot of constructs within academia, like ideological constructs that money is bad, money is evil. The pursuit of money is something that, especially for those pursuing life in academia, a lot of people kind of buy the idea that this is a noble cause and worth doing for nothing basically. I think that a lot of PhDs have the idea that they shouldn’t think about money or that they’re bad for thinking about it or that they’re not serious academics if they want to think about it.

5:46 Chris: The irony is that, I remember having one exchange with a student in particular and he was kind of saying some of these things to me and he was quoting his professor. And some of the things his professor had said about how this is not about money. And I said, “is that your professor who makes $170,000 a year?” There’s a huge discrepancy, I think, between the idealism of PhDs and the reality of both the Academy and just “real world”. I think that’s the biggest holdup I see in terms of money mindset is that people have this idea that poverty is noble or that earning money is bad. Investing is capitalism, capitalism’s bad. I think those become really big holdups and I think can actually seriously hinder people from first of all, making good decisions about their career, but also from actually acquiring wealth and getting comfortable, much less wealthy.

6:38 Emily: So I think here, your discipline might be showing because like in contrast, so I’ve heard the same things, but it was not until I started speaking with PhDs more widely across a lot of disciplines that I encountered that mindset. Because for me as an engineering PhD and in the STEM fields, yes, scarcity mindset was there. Yes, undervaluing yourself was there, but not the money is evil aspect of things because I think we were all expecting like, okay, yeah, this is a low-income period of life, but this is not characterized my life overall. Like overall I’m going to be a highly employable, decent to good earner as an engineering PhD or STEM PhD. And honestly, even in my let’s say path through academia in terms of the professors that I interacted with, because I was in science fields and engineering fields, I didn’t have any professors say to me, capitalism is evil or anything like that. So it’s not an idea that I found until I started interacting with humanities PhDs that I even encountered that. I think this is really feel dependent.

7:48 Chris: A hundred percent, I agree. And it’s interesting for careers too. I’m always kind of realizing where these field differences are and it’s hard because I write for PhDs, like it’s one audience, and in some cases I think there are a lot of things that are kind of universal, but you’re a hundred percent right. And I think a lot of the kinds of ideologies around money that I was exposed to, and I mean, I still see them a lot, but you’re you’re right, they’re definitely much more predominant in humanities, social science fields for sure.

8:13 Emily: Yeah, but I’m so glad you brought that one up because I think that one is maybe the most insidious, like the hardest to reverse, which of course we’ll get to in a moment, but that was a great first observation to bring up. Do you have any other ones? You mentioned scarcity mindset earlier, but didn’t actually define it. Do you want to talk a little bit more about what scarcity mindset is?

8:31 Chris: Gosh, yeah. I think scarcity mindset for me, the way I understand it is just the idea that like there’s never enough money and it’s always, I’m just going to be poor and I’m always going to be poor. I mean, I don’t know, we’ve never had the conversation about the philosophies of money behind it, but a lot of the people that I read see this as manifesting into your life, that you adopt this type of scarcity and it becomes true for you. There’s a whole different conversation we could have, but I think at least anecdotally that’s been true in my life too, that when I kind of live this kind of scarcity — there’s never enough money, I have to keep it all tight, and pinch every penny and be just really, really controlling about, about my money. I think that’s what I see and I saw a lot of that in academia and I think, I mean, a lot of people are poor. I actually did all right, because I won the right fellowships. I mean, it’s just luck of the draw. There’s not really any reason why one PhD makes $15,000, another one makes $50,000. But all that to say that I saw a lot of that scarcity mindset. But the other thing that I think one of the things that I really observed academia taught me was this idea of linking your time to money. I didn’t get paid by the hour other than when I did TA or RA work, so I think one of the really valuable lessons I learned in academia and it’s a mindset that academics have if you kind of dig for it is this idea that you can actually work on a grant application for five or six hours and it might bring you a hundred thousand dollars. I think there are also some positive money mindsets from academia too, if you want to dig for them, but it’s just hard to kind of hard to get at them sometimes.

10:16 Emily: Yeah. I think that’s a really interesting point to bring up. Actually, I wanted to go back to the scarcity mindset for a second because there’s actual scarcity in your life and there’s the scarcity mindset and those things can come together or they can be separate from each other. You can have one or the other, you can have both, you can have neither. There is actual scarcity, especially at the graduate student level in terms of how much money you’re making. Now, does that apply to everybody? No, because of course there’s fellowships you can win, you can have side hustles, but there is scarcity in a sense. But whether it limits your mindset or not doesn’t necessarily come along with that scarcity. And the other thing is the academic job market, like there is literal a lot of scarcity in the academic job market. And I think that PhD’s observing that market, even if they choose not to pursue it or don’t end up in academia long-term, they still take that observation with them onto their other career paths and imagine the kind of scarcity and other places that they have rightly observed within academia.

11:15 Chris: Yeah. That’s really interesting. One thing I’m thinking of as you say that some of my professor friends who sat on on grant committees, especially for university-level scholarships and realize how many scholarships actually didn’t get any applications. So it also kind of does make me think that like there is of course literal scarcity, but I think one of the ways for example, that that can play out is that instead of me saying as a student, how can I go make more money or how can I increase my, my income? What scholarships can I apply for in this case because there was a lot of years that they didn’t give out a lot of the scholarships. It’s easier just to say, well, I’m just poor and this is my lot in life and woe is me kind of thing. So I hear what you’re saying. I do. I totally agree with you. And I think there’s a balance there for me between the actual scarcity and the mindset that says, how can I make the most of this? There’s obviously going to be some kind of a limit, but how can I expand what I do have access to?

12:11 Emily: Yeah, exactly. I think it’s really depressing for graduate students to think about their hourly wage, because they imagine, especially because they work so many hours, usually beyond 40 and yet they’re only being paid ostensibly — you mentioned RA or TA work earlier, that’s typically limited to like 20 hours a week, at least in the US — so they’re calculating this off of like 40 plus hours per week when actually they’re only being paid for 20 and technically they’re doing their dissertation for free and a lot of people don’t understand that. So it is depressing, they calculate their hourly wage, but like you said, that’s not actually literally what they’re being paid for. And sometimes you can, as you said, win an award for just a handful of hours of extra work on top of the work that you are already doing. So I do like the idea of divorcing the hourly wage thing, but it’s disheartening to think about in the first place.

13:05 Chris: I’m trying to look on the bright side. There’s a lot to be sad about, about the financial state of academia. So overall I’m not saying it’s like, great, but there are things that I’ve realized — I know we’re going to talk about it later — but as I’ve moved into my life, there are things that academia trained me for that I’m actually like, Oh, that’s actually not a bad thing.

13:22 Emily: Yeah. So let’s finish up talking about the mindsets that you see. Are there any ones that you’ve have any other ones that you’ve observed either positive or negative, helpful or unhelpful?

13:32 Chris: Let me think. Well, I guess so, so I think the thing that initiated this conversation was you had mentioned a post that I wrote where I had identified a lot of different things that I had learned. I’m trying to think about how much they relate to mindset, but I think there are principles, some of which do relate to mindset, about money that students kind of carry forward. So we already talked about the hourly wage, but I was thinking about in terms of scale, like when you think of I don’t know, a journal publication, like creating one thing that can influence multiple people. That’s not so much a mindset though. I guess I think the answer is no, I don’t really have any other mindsets offhand that I talk about.

14:13 Emily: I think the only other one that I’ll bring up is anchoring. So when you’re in graduate school and you’re making this tiny hourly wage or maybe you think about your yearly salary also tiny, because you’re anchored there, because that’s the first, early on salary that you’ve experienced in your life, you may not really understand your value in the marketplace once you go forward from that position, whether it’s in academia or outside of academia. And so your anchored to this, as you mentioned, 15 or 30 or whatever it is, thousand dollars per year, you’re making as a graduate student and you think, “Oh, wow, could I make double that?” And that’s like amazing to you. Instead of thinking, I want to three X, four X, five X, 10 X what I was making in graduate school, or more. I think that’s another really insidious one is, is the ultimate under valuing that you do later on.

15:04 Chris: Yeah, that’s a great point.

How Do You Identify Your Money Mindset?

15:06 Emily: So we talked about the money mindsets that are common among PhDs. These are not universal. So how does an individual determine what are the money mindsets that I currently have? And this is such a tough question because money mindsets are so closely held you don’t even recognize them as such. It’s just how the world works according to you. So how do you identify your own, your own money mindset?

15:28 Chris: I think the thing that helped me most was reading. I would say the first book I read on money was The Undercover Economist. And I read that, I mean, that must be 10 years ago now. I read it somewhere in my graduate journey, I think pretty early on and it rocked my world and I started reading every single personal finance or money book I could get my hands on after that. So I’ve read a lot of them. And I think a lot of what I saw through reading kind of reflected back to me in my own life.

16:01 Chris: For example, I started to, I can’t even pinpoint like where I got it from, but I started to see like things that I was raised with. I was raised in quite a poor family. My dad worked as a maintenance man in hospital, my mom stayed home with five kids, and a lot of my money mindset came from there. There was never enough money, money doesn’t grow on trees, money is for other people, and then we were also religious, so it was also spiritualized. I don’t know if I ever heard that money is evil, but I definitely heard that poverty was kind of noble, poverty was spiritual. I think the more I started to read and just hear people name similar things to what I had felt and seeing other people who grew up in similar places, I started to unpack a lot of those. There’s one podcast I really liked, it’s called Profit Boss, and she really did a fantastic job. Is it Hillary Hendershot? Do you know that one? I haven’t listened to it about five years.

17:00 Emily: I don’t think I know that one.

17:00 Chris: She had done an episode on money mindset, and it was really good and really opened up to me a lot of my own limitations and that really helped a lot. I think just hearing people name their money mindset and seeing it in myself.

17:17 Emily: So I totally agree with you that you have to start encountering other minds to recognize your own mindsets and whether that’s through reading as you were doing. I also early on in my life journey was reading the personal finance blogosphere quite a lot. So hearing from other personal stories of people who are talking explicitly about money. That’s the thing is you have to actually kind of get towards money or money related topics when you know, exchange these other minds. So it’s a little bit easier to do in an impersonal format, like reading or listening to podcasts or watching videos or whatever. But I’ll add into that talking with other graduate students, maybe like we mentioned earlier, outside your own discipline and outside your own worldview. Or not even other graduate students, but just like your peers, maybe peers who have real jobs, that can help you open up. If you’re actually, again, touching on these money or money related topics can help you recognize what’s a mindset in you and what’s like actual observable truth about the world versus just your perception of it. Encountering other people I think is crucial to identifying your own money mindset.

18:24 Chris: The kind of thing that that makes me think of is this idea of even talking about money. And I know that’s another money mindset I had is like, we don’t talk about money. We don’t talk about it with anybody. Money, politics, and I guess religion were the three things you’re not supposed to talk about. Right. And that’s definitely something that I’ve experienced. It’s funny, even with Roostervane. For example, I wrote a post a while back and it was just for fun about how PhDs can be worth a $100K or something, and it was one of the most read posts that I’ve ever done, but it’s actually one of the least shared. People were happy to kind of read about it, but didn’t really want to talk about it. I think there’s a lot of shame in talking about money and expressing an interest in money, and even an interest in having money or growing wealth. That’s another mindset that had held me back in the past. And I think it’s still pretty prevalent.

Commercial

Emily here for a brief interlude. If you are a fan of this podcast, I invite you to check out the Personal Finance for PhDs Community at pfforphds.community. The community is for PhDs and people pursuing PhDs who want to take charge of their personal finances by opening and funding an IRA, starting to budget, aggressively paying off debt, financially navigating a life or career transition, maximizing the income from a side hustle, preparing an accurate tax return, and much more. Inside the community, you’ll have access to a library of financial education products, which I add to every month. There is also a discussion forum, monthly live calls with me, book club and progress journaling for financial goals. Basically, the community exists to help you reach your financial goals, whatever they are go to pfforphds.community to find out more. I can’t wait to help propel you to financial success. Now back to the interview.

How Do You Change Your Money Mindset?

20:27 Emily: Okay, so an individual has started to identify their own money mindset by listening to this podcast or reading your articles or reading other materials. How do you think they should actually go about changing a money mindset that they’ve identified as unhelpful that they have?

20:44 Chris: I’ve given a lot of thought this. It’s an interesting question, because I think what I realized is it doesn’t change overnight and I will find myself even years later, like something identified years ago and all of a sudden I kind of will stop myself when I’m doing something and say like, Oh, that’s my X mindset that has kind of played in, but it’s kind of sneaking back in. It’s really, really hard to change the way that you are kind of hardwired to think about money. It takes a lot of time. I mean, I’ve done things like I do journaling and I will sort of journal about it. I just watch and read a lot of stuff. I think really immersing yourself in things that kind of present a different view from what you’re used to, I think that kind of immersion has really helped me a lot. I’m trying to think what else. Those would be the two main ones, just kind of exposing yourself to different ideas and kind of recognize that you’re on a journey to change your money mindset. It will definitely take time. It’s not going to happen overnight. Start taking kind of the little incremental steps to grow it. And I think also education, I would say, is a big part of that. The more you learn about money, the more you learn about growing wealth, the less scary it get. It can get confusing because there’s a lot of contradictory information, but it’s at least less scary. So ideally you’re going to, you’re going to be a little more competent and therefore comfortable with actually thinking about and dealing with your money.

22:07 Emily: I totally agree with you that I think the first stop is sort of the extension of the identification. It’s continuing to encounter other ideas about money and maybe now you can kind of selectively go towards, “okay, well, this is a money mindset that I would like to cultivate, or this is the money mindset I want to get away from, so I’m going to specifically listen to source X or source Y, which is going to help me move again slowly over time towards that more helpful money mindset.” So yeah, I totally agree. Like for instance, listen to this podcast. Maybe this is giving you a different perspective on money than you had before. Or continue to read other sources. I know I, as I mentioned earlier, totally immersed myself in like the personal finance blogosphere. That was really helpful in changing some of my money mindsets, especially around like earning more because definitely as a graduate student, I had those limiting beliefs about like, I can’t have a side hustle and like, I can never increase my stipend, but that turned out to not be true after working on it for years and years I finally figured that out. So definitely getting around other people. I don’t remember the exact phrase, but there’s that thing where like, you’re the average of the five people you spend the most time with. And so with respect to your money mindset, if you’ve had parent one, parent two, professor one in that circle before, you can maybe, at least with respect to this subject, edge those people out in favor of people who, have the mindset that you want to adopt.

23:28 Chris: Exactly. Yeah, I totally agree.

23:30 Emily: And I’ll add in, you mentioned a little bit earlier, abundance mindset and thinking and so forth. And I’ve also read a little bit about that in the entrepreneurial space. That’s how I actually first sort of encountered the topic of mindset was through the entrepreneurial stuff. One of the things that is talked about a lot in that space, which I think might be helpful, is actually writing and saying affirmations. And you mentioned, it’s a little bit related to journaling. Basically what we’re talking about is self-talk. You’ve been telling yourself money is the root of all evil and capitalism needs to die and I will never have money and all those things. You’ve been telling yourself those things for years. And so now you need to start telling yourself other things. It might be helpful to actually write down an affirmation, something that you know maybe intellectually to be true, but you don’t really feel it. You haven’t really internalized it yet and start reciting those to yourself. Maybe it’s once a day or a few times a day, to kind of get that self-talk like grooved in. And so eventually you’ll go to it more naturally. This is something I recommend to people who I work with on money mindset. It’s not something I practice all the time, but I do it from time to time when I feel like I need a little boost or a refresher with my mindset. Have you ever done the affirmation thing?

24:46 Chris: I do actually. I think I just, wasn’t clear in defining how I think of journaling because I do journaling, but within my journaling, I do affirmations as well. I have every day and there’s one in particular, there’s one that I’ll share just because it’s been a recent realization for me. I’m not particularly religious anymore, but coming from this idea of my youth that having money is evil somehow or whatever, I’ve really been thinking through like trying to get myself to adopt the idea lately that money is almost spiritual. That having money and creating wealth, especially as an entrepreneur, is actually an indication of the value that I bring to somebody else’s life. Rather than our ideas about entrepreneurship growing up is like, well, business people trick people into giving them money or whatever. In fact it’s quite the opposite. My wealth, the amount that I get paid is reflective of the value that I bring to people’s lives, and that’s really a beautiful thing. I think that’s one thing, just for example, that I’ve been kind of writing down variations of that for quite a long time now, trying to really worm it into my head because I really do believe it’s true, actually.

25:54 Emily: Yeah. I’m working on a similar one for me and my business as well. The amount of money you’re bringing in reflects the value that you bring to the world. That’s true, if you have a job too, but it’s sort of brutally true when you’re an entrepreneur, like you’re feeling that like all the time, there’s no comfort of the salary.

Chris’s Own Money Mindset Journey

26:13 Emily: Okay, so we’ve talked through what kind of mindsets you might have if you’re in academia, how do identify them, how to change them or start to change them, because you said, it’s going to be a process. You’ve talked about your own personal story here and there throughout this. Is there anything that you want to add more so about your career or your financial journey, especially as it relates to your money mindset?

26:35 Chris: Yeah, I think it’s interesting. I’ve had a constant evolution of my money mindset and it started back when I started reading personal finance books, at the beginning and each personal finance books was like a revelation. Like the first one, I remember reading a book called The Millionaire Teacher. I don’t know if you know that one. And it was like, okay, it’s low cost index funds, that’s how I’m going to build wealth. Low-cost index funds, low MER, ETFs — that’s the answer. And then I read the next one and it was like, actually people with managed portfolios do better over time and like, okay, who do I believe?

27:11 Chris: I think one of the most interesting things about my money journey has been, first of all, just digesting the huge amount of contradictory information out there. And there is a lot of it. For example, I remember reading Dave Ramsey and David Bach around the same time, and Dave Ramsey is like, pay down debt, don’t buy a house until you’re out of debt and David Bach was like buy a house tomorrow because nobody’s going to let you leverage that amount of money anywhere else. So it’s funny, I think like looking back now, I was forming my own views around money, even though there are little nuances in how they actually play out. I remember reading one book in particular and it was after I had read all these different people and the book was, I’m almost ashamed to say it. There are two money books I’m really ashamed to say that I like. I wonder if you could guess them, the first is Robert Kiyosaki’s Rich Dad, Poor Dad.

28:05 Emily: Yeah I was going to say Rich Dad, Poor Dad.

28:08 Chris: I’m so embarrassed to say that I liked that one. First of all, because if you Google Robert Kiyosaki, as an individual, I’m not endorsing Robert Kiyosaki. He’s had some interesting business practices and definitely has some interesting beliefs today. But the book was revolutionary for me. It really changed the way that I thought about business and wealth and just my own upbringing. The second one, this one it’s called The Millionaire Fastlane: Crack the Code to Wealth and Live Rich for a Lifetime! It’s by a guy named MJ DeMarco. I would almost recommend it, but I’m hesitant because it’s like a bro book. He’s just one of those…he was an internet millionaire and it’s really, especially when you read it there are just some things that like don’t sit right. But the one thing that I will say that hit me about that book is he said actually when you look at all these personal finance gurus, none of them got rich off of following their own advice. Dave Ramsey and Susie Orman, these people didn’t get rich from saving 15% of their paycheck. They got rich by creating something that had massive value, massive scale, and creating huge personal brands and putting it out there in the world.

29:16 Chris: And I think that was really like something clicked. I had been working for the government too and realizing that even though I was making quite good money compared to what I was making in my PhD and I was interviewing for jobs that would make even more, I was giving away a third of it in taxes. I was struggling. Even our family, we thought we were going to be wealthy now that we have a paycheck and have a good job and I have a pension. And I mean, the opposite was true. Trying to scrape together that 15% to save every month or whatever it was going to be, it felt almost impossible, just because of the realities of our cost of living and raising kids and unexpected expenses. And I remember kind of thinking this through and saying, okay, it’s one thing to start when you’re 20 or 25, and have the value of compound interest over time and save that $40 a month or whatever it was. But it’s actually quite a different thing to start when you’re 35 with student loans that need to be paid off and try to create a sizable chunk of wealth. It’s possible. It’s definitely possible.

30:23 Chris: At the time I was the only one working my spouse Carolyn was home with our kids and she is a graphic designer, so she does some freelance work, but she wasn’t making a full-time income. So I think I just kind of came to the reality and it was about the time I read this, that it kind of shook me. And I said like, actually the way that I’m thinking about wealth is right for a lot of people, but it might not be right for me. For your listeners, there’s probably a variety of people. If you’re a two income family earning $180,000 a year, it might be pretty easy to catch up and squirrel away 30% a month instead of 15% a month and catch up to where you would have been. But for my own reality, I fell in love with the idea of business and the idea that in my case, especially with an internet business that I could start with almost like nothing. I could start with $3 a month and create a business that’s worth a lot of money. I didn’t know where else you could leverage that. Like you have that kind of leverage or create that kind of scale from starting with like paying Bluehost $3 a month and putting my ideas online to creating something. And I don’t know exactly, like I’m not great at evaluating blogs, but I think even today, Roostervane, from what I understand would be worth like between $30 and $60,000, which is not a huge amount of money, but I started it last year.

31:39 Chris: As a business person, it’s just thinking through business has changed everything about how I see money and I’m no longer one of those people trying to squirrel away part of my paycheck. And those are totally fine if that’s the position somebody is in and that’s kind of their money worldview, that’s totally great. But for me personally, I just got a lot more interested in creating an asset. Creating this asset that’s called a business and it changes everything. I don’t really care how much I take out of the business. I don’t care how much my paycheck is because I actually love having money in the business to reinvest back into it. It’s just little things like that, that as an entrepreneur radically reorients your relationship to money and it really changes the way you view everything. It’s been a long journey and I think I’ve talked a lot about it, but it’s been really interesting, and I still have so much to learn, but it’s just that constant growth and realization, coming to the idea that there are some principles that I’ve come believe about money, about things like scale and impacting people and creating value. And that’s some of the things that I’ve put on the blog, which I haven’t really blogged about why you should invest in low cost index funds. I’ve just blogged about here are some of the kind of generic things that I believe about building wealth.

32:54 Emily: Yeah, I’m so glad to hear that narrative and I see a lot of my own story reflected in that as well. Of course, I’ve also come to entrepreneurship.

Chris’s Business

33:01 Emily: So if people want to read more stuff from you, tell us where they can, they can find you.

33:08 Chris: Yeah, Roostervane.com. It’s kind of like a weather vane, but there’s a rooster on top — Roostervane. And that’s where I blog about…my main thing is careers with purpose. It’s just thinking through like how we actually get jobs and careers, but also how we make meaning from them. That’s the kind of humanities thing that I bring to it is how we think about meaning. So Roostervane.com. You can find me on Twitter, @cjcornthwaite is my handle. You can just search my name, Chris Cornthwaite. Twitter, LinkedIn, wherever I’m always happy to chat.

33:40 Emily: Wonderful. And last question for the interview, Chris, what is your best financial advice for another early career PhD? And it could be related to something we’ve already discussed in this interview, or it could be something completely else.

33:52 Chris: Educate. Education, learn. It’s amazing how many people can spend five or ten years learning about the nuances of a field, but don’t actually want to take any time to learn about the basics of personal finance. I would say read as much as you can, listen to a podcast like this one, and just educate yourself and you’ll be empowered to actually create wealth and to get over some of those mindsets we’ve talked about.

34:18 Emily: Wonderful advice. Thank you so much for joining me for this interview, Chris.

34:22 Chris: Thank you, Emily. My pleasure.

Outtro

34:24 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the personal finance for PhDs podcast. There you can find links to all the episode show notes, and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind the scenes commentary about each episode. Register at PFforPhDs.com/subscribe. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is stages of awakening by Poddington Bear from the Free Music Archive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

Fully Joint and Fully Separate Finances in Marriage: Perspectives from Two PhDs

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In this episode, Emily discusses marital finances with Dr. Michelle Roley-Roberts, an assistant professor at Creighton University. Emily and her husband keep fully joint finances, whereas Michelle and her husband keep fully separate finances. They detail their respective systems, list the advantages of each approach, consider how the legal realities line up or not with their preferred conceptions, and consider whether they would ever change their methods. They touch on IRS filing statuses, student loan debt, income shifts, living apart, and the addition of children.

Links Mentioned in the Episode

Teaser

00:00 Michelle: Every November, I have these two conferences and I know I’m going to be spending more money around that time. He doesn’t have to think about that at all. And if we had a joint account, we would always have to talk about that. And because we don’t, it’s not a thing that we need to discuss, he just knows that I go on these conferences.

Introduction

00:26 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season seven, episode three, and today my guest is Dr. Michelle Roley-Roberts, an assistant professor at Creighton University. Michelle and I discuss our methods for handling finances in our marriages. My husband and I keep fully joint finances, and Michelle and her husband keep fully separate finances. We detail our respective systems, list the advantages of each approach, consider how the legal realities line up with our preferred conceptions, and consider whether we’d ever change our methods. We touch on IRS filing statuses, student loan debt, income shifts, living apart, and the addition of children. Without further ado, here’s my discussion with Dr. Michelle Roley-Roberts.

Will You Please Introduce Yourself Further?

01:18 Emily: I have joining me on the podcast today, Dr. Michelle Roley-Roberts, and we’re doing a little bit of a different format today than my typical podcast interviews. Michelle and I are actually going to have a discussion today. The topic of our discussion is how to handle money in a relationship. And I was looking for someone to discuss this topic with me because my husband and I have our finances completely joint. And I know that that is not necessarily as common as a model as it used to be. And so I wanted to have someone on who would tell me about a different model. So, Michelle volunteered. She and her husband have separate finances. So, we have those two perspectives represented today. And there’s a third model that won’t be represented, which is the yours, mine, and ours model, which is sort of in between these two.

02:02 Emily: So, I hope you’ll get something from this that’ll be interesting to you. If you are in a relationship, if you handle money together as a couple, hopefully you’ll find some common ground with one or the other of us, or maybe you’ll disagree with both of us and say, “Well, I want to handle things completely differently than these two.” But yeah, that’s the topic for today. So, Michelle, thank you so much for joining me and having this discussion.

02:22 Michelle: Yeah, thanks for having me. I’m looking forward to talking about this.

02:25 Emily: All right. So, why don’t we start Michelle with a little bit further introduction to you, like your academic and career background and where you live?

02:34 Michelle: Sure. So, I am a clinical psychologist by training. I’m currently living in Omaha, Nebraska, and I am an assistant professor at Creighton University and I’m a licensed clinical psychologist at CHI Health Initiative. I have a PhD from the University of Toledo in Ohio and my husband and I have been moving all across the country, met in undergrad and have been together ever since then. So, he’s been really following me around through all of my steps to get to where I am now. And I think that really factors into how money has been handled in our relationship because he is not a PhD. So, while I’ve been accruing debts and lots of things, that’s not been true for him. We started out as, you know, dating and as roommates before we were ever married. And so, the roommate piece has always been a factor in how we’ve handled money. And I think as we married that never changed because we had already found a system that worked for us.

Timeline for Michelle and Emily’s Relationships

03:49 Emily: Gotcha. Yeah. Can you put some dates on this? Maybe I’ll share some dates of my own as well. So, like when did you meet, when did you move or change things in your relationship? Going from dating to living together to marry, those kinds of things?

04:05 Michelle: Yeah, so we met in 2004 and we did not get married until 2016. So, I graduated in May of 2008 from undergrad, moved from Ohio to North Carolina and lived for a year on my own while he was finishing up his degree. And then he moved to North Carolina with me. So, I was a postbac at Duke for three years, we, that sort of started our trajectory on roommates. And then he followed me from Duke to Toledo for my PhD. And we lived in Toledo for four years. And then a requirement for clinical psychologists is that we do a year-long APA accredited internship somewhere in the country. And so, I happened to match at the University of Arkansas for Medical Sciences. So, we moved from Toledo, Ohio to Little Rock, Arkansas in 2015. And then we got married in the middle of my internship year in 2016. And then from there, we moved from Arkansas back to Ohio for postdoc, where I was a postdoc for four years at Ohio State. And then from Columbus, Ohio to Omaha, Nebraska, and have only lived in Omaha for about two months.

Separate to Joint Finances vs. Maintaining Separate Finances in Marriage

05:40 Emily: Yeah. Thank you for sharing that. That is a lot of moving, but not too unusual right? In the PhD world. So yeah, I’ll share kind of the counterpoint. There’s actually some points of overlap in our story, which is really interesting. So, my husband and I, before we married, Kyle, we graduated from college in 2007. We started dating in 2006 and we lived in different cities for a year. He started at Duke and I did a postbac at the NIH. And then in 2008 in the fall, I moved and started my PhD at Duke. We lived separately for two years until we got married in 2010. So when we got married, moved in, that’s when we combined our finances. So, we went from completely separate to completely joint.

06:30 Emily: Well, there’s a little bit of a transition, but aspiring to be joint when we got married that was in 2010 and it’s been that way since. So, we did have a small period of living apart for a few months when I did a fellowship after I finished my PhD, but we both defended in the summer of 2014. We lived in Durham for another year. I was in DC for part of that year. And then in 2015, we moved from Durham to Seattle. So, that’s kind of our story. And for the listeners, we’re recording this in September, 2019. So, that’s the perspective there. So, we’ve already heard a little bit about the history of like how the handling of the finances for both of us has changed over the course of our relationships. Is there anything else that you want to add to that as to maybe like philosophically, like why you’ve chosen to maintain the system that you had been using all along? Whereas of course I, as I just said, we changed at some point.

07:23 Michelle: Yeah. So, for me personally, my debt that I was accruing was my debt for my education and my career advancement, wasn’t necessarily my husband’s. And yes, I know legally it’s his debt now because we’re married. By not having our finances joint, it makes me feel like it’s still my debt and I’m still working to pay off my debt. And it actually helps me a lot. So, on fellowship, I got an NIH loan repayment grant and I was able to do that pretty easily because I had not consolidated my loans, and his undergrad loans weren’t part of mine and we didn’t have to deal with any of that. And I was told by NIH loan repayment that our finances were much more straightforward and it was easier for them to give me money because they didn’t have any headache with that. So, it was helpful in that regard. We were not thinking about that when we decided not to join accounts.

Benefits of Filing Taxes Jointly as a Married Couple

08:39 Emily: Yeah, sometimes there are unexpected benefits that come up along the way. So, I’m curious, do you guys file taxes married, filing jointly, or married, filing separately?

08:49 Michelle: Jointly.

08:50 Emily: Okay. Because that also, that sometimes affects like this loan repayment, like loan forgiveness stuff, depending on like what program you’re in. Did you want to add to that?

08:58 Michelle: It’s definitely like, we talked about how we were going to do that. And I think because economically we would benefit more from filing jointly as opposed to filing separately. And so that was pretty much the decision. It was more of an economic decision as opposed to a philosophical one, I guess.

09:12 Emily: Yeah, there’s this really strange thing, I guess, in the tax code that it does matter a lot, whether you’re married or not. Right? That’s the sort of defining line is legal marriage, depending on how you file. And then there’s a real disadvantage to married filing separately. I mean, there are some conditions under which some people choose to do that, but it’s not at all the same to do married, filing separately as it is when you’re not married. Like those are two vastly different treatments under the tax code. So, I find that to be very I mean, I’m sure there are reasons for it, but I find it to be kind of puzzling. So, there are sort of very, very special circumstances where it makes sense to do married filing separately, but they’re kind of rare actually, and actually often involve large student loan debts. And that’s one reason that people do file separately.

Advantages of Separate Finances in Marriage

09:59 Emily: Okay. So, I would say for my counterpoint on that, the philosophy or the reasoning behind us joining our finances when we got married was around our understanding of marriage or our idea of what marriage should be. And so, there are certain attributes of a married couple that we believe in. And one of those is joining finances. That’s not to say that everyone has to do it the same way we do, but that’s how we view our marriage. And so, it was important for us to go from not having anything in common before we were married to, after we were married, deciding that everything would be in common. So, let’s get to talking about, kind of like, what are the advantages of the joint finances model and the separate finances model? And please go first.

10:48 Michelle: Okay. So, advantages that I see are control. Control of your own money and how you spend it. Like, I don’t have to ask my husband and he doesn’t have to ask me to spend money. Because we both know what’s in our respective accounts and we are decent money managers. And so, we’re not necessarily consulting eachother about money all the time. And in fact, it’s very rare for us to have a discussion about money, or I don’t think we’ve ever fought about money because we’ve never needed to. So, I would consider that definitely a pro because finances are a common theme for stress and tension and marriage, and by us having separate accounts, I’m never needing to have that discussion with him because the bills that I pay are paid and it’s on my own volition and what he’s paying is on his and I never have to track that.

11:50 Emily: So, I have kind of a follow-up question about that, which is so at some points you do have to make decisions around money like where to live, for example. So, do you just eat sort of assess your own budgets and so forth and say, “Okay, this is how much I can spend on the next place that we live.” And you both just kind of agree on a number, is that right?

Separate Finances, Shared Vision and Life Goals

12:08 Michelle: Yes. Yeah. In general, we know, so we have, even though our finances are separate, we have shared goals for our life. So, our goal right now is to live like a postdoc, even though I’ve started my career. And with the goal of paying off my student loans and our credit card debt, so that we can then save for a house and just have a better life down the line. And so, we both share that vision, but how we go about getting to that vision is a little bit different because our accounts are separate.

12:46 Emily: Yeah. I’m really glad that you clarify that. That like, the vision is united. And the, as you were just saying, I thought you put that very well. The methods by which you each get there financially could be separate, but you’ve agreed on kind of where you’re headed. And so, you do aspire to own a house together. It sounds like.

13:05 Michelle: I think so. That’s a goal one day.

13:08 Emily: Okay. Gotcha. Any other advantages? I mean, that’s a big one.

13:12 Michelle: I mean, that for me is the biggest one. And just a sense for my just having my own autonomy within my relationship. I think that’s an important value for me as a person. And so, I get to have that. And my husband supports that because we have a very, like our philosophy on marriage is very much partner-focused and that we’re in it together. And that neither one of us is, you know, the owner of the other. We don’t have that kind of philosophy. And I think that reflects true in our finances. And I find that as an advantage.

Advantages of Joint Finances

13:55 Emily: Yeah, definitely. I thought of a couple of advantages to the joint system. So, one is complete simplicity. We have one checking account, both of our names on it. We have a set of savings accounts that both of our names are on. As I said, the credit cards are a little bit more complicated. Some of those, we have both of our names on there’s like one or two on each of our sides that we only have one, mostly because the other one might sign up later to get the parks as well. So yeah, to me, that simplicity is there. Now, I’m not sure how you handle this part, but I know that for some people who, for instance, have the yours, mine and ours model, they end up having a joint checking account, separate checking accounts, joint savings, separate savings, maybe joint credit cards, maybe separate credit cards. And also there’s a lot of transferring going on. So, I don’t know, like when you pay your bills, for example, do you, like one is responsible–like, how do you handle, I guess the transferring that might need to go on? Or do you avoid that?

14:47 Michelle: Yeah, so for bills, I, in fact, up until this move, had handled all of the bill paying, and so I would pay the bills every month and then we would split finances. So, he would literally write me a check, and then I would deposit that into my account and make sure all the bills got paid. This move, because of all the stress and things in my own world that were happening around this move, he actually took some ownership on setting up some of our bills for this new move. And so, now he’s responsible for some bills that I would have previously been paying, and that seems to be working out okay. It’s just what he’s paying and then gets deducted from what he would owe for the rest of his half.

15:35 Emily: Gotcha. Yeah. So there still is some, when you live together and you have shared expenses, you still have to do some of this transferring or somehow decide how to split it up. So, one advantage of joint finances, is the simplicity. Oh, and when we get paid, like all of our money goes into that checking account. Although, you know, come to think of it. My business is something that’s separate, because the business is not in my name alone. But when I pay myself from my business, that goes into our joint checking. And I’m not like spending out of the business for personal stuff, obviously. So, kind of once it is entering into our personal finances it’s joint. So, that’s one advantage is the simplicity. Not having to do the transfers.

Complete Transparency and Agreement

16:14 Emily: And then another one is complete transparency. So, this is not something that necessarily everyone desires, but we do. And so, obviously because everything’s joint, we both have complete access to everything and there’s no, basically there’s no way that any of us could keep a secret from the other without going and opening another account. That obviously could happen. Like, logistically one of us could do that. But in terms of what we know about, we can all see everything. And actually, so in addition to actually like literally sharing the accounts in terms of his name or on them, we also have a Mint account that we share where everything goes into that. And so that was actually helpful. We started that Mint account sort of, you know, as we were getting married and joining everything. So, for the things that were separate, that we didn’t like close down right away, they were all in Mint anyway. So, we could each see what was going on, even if like, you know, that random other account was still open for a little while. So, I liked that aspect of transparency a lot. To me, another feature of joint finances is that you have to agree on everything. But of course the corollary to that is that if you don’t agree, then there’s friction, then there are problems. As you were just saying, by keeping things separate, you really minimize kind of the, the level.

17:30 Emily: Like if you agree on the big picture, like the details, whatever it’s separate, who cares as long as you’re both adhering to the shared vision, I really liked how you phrased that. But for us, it’s sort of a feature that we have to agree about everything. Like I know other people view that as like a downside, but we do have to agree on everything or agree to disagree. Right? And agree to let one another have some autonomy in our decision making and just not care. And of course we’ll still see it. As I said, with the transparency. I think this was more important to us, or it was more of a factor like us having to agree on things earlier in our marriage, because we were both in graduate school. So, we weren’t earning as much money as we are now.

18:12 Emily: And our expenses, we were just a lot more like strict around budgeting and so forth. I mean, by necessity, right? We had to be, so the incomes were lower. So, we had to agree there wasn’t really, there wasn’t really a lot of fat in the budget. Right? And so everything had–not everything, because we agreed on a lot of things automatically–but if there were any points of disagreement, we had to force ourselves to come to an agreement. Or again, agree to disagree and just spend what we will.

Both Spending Models Encourage Conversations About Finances

18:36 Emily: So, I remember like early on in our marriage, I’m a bit of a natural spender. It’s something I’ve had to kind of curb over time, especially during graduate school. And my husband could not understand. We were going to all these weddings, right? Because we were in our mid twenties, we had just gotten married. We were going to a lot of weddings. My husband could not understand why I needed a new dress for, not like literally every event, but like a lot of events. I was like telling him, “I need to buy a new dress for this.” He was like, “I’m wearing the same suit to every single one of these events.” And I was like, “Well, this is a day wedding. And this is an evening wedding. You have to consider the season and the temperature and like the fanciness level.” And so I was trying to tell him all these reasons why I had to like buy all these new dresses. And he ultimately like, did not really understand it, but he just had to like, kind of accept it for a while. And so, that was an example of sort of an ongoing, not like fight, but just like sort of puzzlement on his side of why I was making these decisions.

19:27 Emily: But what that did though, is it kind of forced him, I think, to understand something about women and women’s fashion and the constraints and the expectations that we’re under. And it also forced me ultimately, you know, I didn’t keep up that dress-buying habit for more than a few years. And so, it also kind of forced me to be like, “Well,” rethink, like, “Do I really need all these new clothes for all these new events?” And so, it was a reason for us to kind of evolve our, I guess, thinking or understanding of each other and that kind of thing. So anyway, some short-term conflicts sometimes, but I liked that we are ultimately forced to agree and work things out. So to me, that’s a feature. And then the last feature, did you want to add anything there?

20:08 Michelle: I think just, as a counter perspective, by having separate accounts, it’s actually forced us to talk about finances more than if we had a joint–and maybe not more, but in a different way. So, I like you, Emily, am more of a spender and I have to really be conscientious about saving. Whereas my husband is very frugal and he would never spend money if he could get away with that. And so, it’s more like I’m talking to him as a confidant about money and, “Okay, so I’m really, I’m considering, you know, I love shoes and I think I need a new pair of tennis shoes,” and then he’ll reflect back and say, “Well, do you really? And how are these shoes going to help you with whatever?” And sometimes I’ll listen and I’ll say, “Okay, yeah, you’re right. I probably don’t need these shoes.” And it’s more of a partnership piece as opposed to a necessity. Like, I don’t need his opinion or his approval for me to buy this thing, but I I’m seeking it because I value his input. And in some ways that’s strengthened our relationship.

21:26 Emily: Yeah. So, even though you don’t have to, at the end of the day, you do choose to, I mean, you said earlier, you don’t talk about money much, but it sounds like maybe you talk around it a little bit. Like money affects a lot of things in our lives. And so, it’s kind of hard to go without discussing it at all, at least in an oblique manner. But what I like about what you’re saying is that like you’re still bringing it up and bringing whatever the decision is out into the open. And ultimately at the end of the day, it’s still your decision, but you are seeking his opinion or his counsel. Yeah. I really like that.

Advantage of Joint Finances: Navigating Income Disparities

21:57 Emily: The last advantage that I thought of for having joint finances is that it doesn’t matter who earns what. So, like when my husband and I were in graduate school, we earned about the same amount of money. So, not really huge concerns there. Right? Two people, two incomes that were pretty much the same feels like equal, right? After graduate school, I became self-employed. My income went down–right?–initially and then has risen over time. But his income increased because he got a proper job, a proper post-PhD job. And so, he saw an income jump, and I saw initially an income decrease. And it didn’t matter, like there wasn’t tension around that. And also the decisions that we had to make, like, for example, when you were saying earlier about, okay, you need to come to an agreement on where to live. So, like had we had separate finances under that situation, it would be like, well, I almost can’t contribute anything like to the household or very little, and he would be contributing a lot.

22:57 Emily: Under the joint model, we don’t concern ourselves with that because the money all just is shared. And so, whatever we can budget and afford on the completely combined income is what is going to happen, you know, for our family. And I guess I should say that basically, had we had separate finances and were committed to both contributing, for instance, equally to the household, then I just wouldn’t have started my business. It just, it wouldn’t have happened that way or wouldn’t have happened at that time. Like I would have gone and gotten a job and had an income more equal to what his was or close to. Yeah. And so, I think that the joint finances model has actually helped me like follow my dream. Right? As starting this business. And likewise for him, like he took a job at a startup, which we know at any point the ride could be over, right?

23:51 Emily: It’s an early-stage startup. And so, I guess of course he could have like saved maybe and provided for him self, I guess, in the event of job loss or something, if that’s what an emergency fund is for. But I guess we sort of have more like peace of mind knowing there’s like two incomes going into this pot and, you know, the expenses would be paid like from those two incomes. And again, it doesn’t really matter who’s earning what. So, that’s, again, our philosophy on that. And, I guess I should also mention, we have two children and especially early on in their lives, I was doing a lot more of the childcare. So, my income was lower. I was doing a lot more of the, sort of the work for the household. Right? That was unpaid.

24:29 Emily: And he was doing more of the earning, like outside the household. And that situation has changed now, like my income has risen and we have more childcare now. So, we might be able to handle things differently if we wanted to. But I feel like at that time joint finances were really necessary because the contributions that I was making the household were not reflected in income as much. So yeah, I guess it depends also on like sort of life stage and if both people are working or what decisions are around that, but there’s, I feel like extreme advantages to the joint finances model in certain configurations of income disparities. Right?

25:04 Michelle: Yeah. And I think it might be helpful to know. So, with every transition and are, and new we’ve always moved for my career. And so, the move I was able to start working and earning right away. My husband has followed me. So, every move he’s had to find a job. And so there’s been periods of time at every step where he’d been unemployed and was living on savings until he found a job. And that is currently true for us as we just moved two months ago. So, he’s still he’s looking and does not have a job. And so, knowing that, you know, he’s set up savings, and also this piece of this transition has been around, “Okay, now my income is a lot higher than what his will be when he gets a job. And so then how do we balance bills?” Yes, jointly we have more money, but what he can contribute is less than what I could contribute. And so, we’ve talked about paying a percentage of whatever our bills are. So, if we’re going for right now, our finances are exactly the same as they were on postdoc. And so it’s easy to do what we were doing previously, but as we transition in the next few years to basically growing and towards home ownership, we might be able to afford a house that he wouldn’t be able to afford on his income alone. And so, then that’ll be a discussion of like how we’re going to handle that.

Commercial

26:52 Emily: Emily here, for a brief interlude. I bet you and your peers are hungry for financial information right now, especially if it’s tailored for your unique PhD experience. I offer seminars, webinars, and workshops on personal finance for early-career PhDs that can be billed as professional development or personal wellness programming. My events cover a wide range of personal finance topics, or take a deep dive into the financial topics that matter most to PhDs like taxes, investing, career transitions, and frugality. If you’re interested in having me speak to your group or recommending me to a potential host, you can find more information and ways to contact me at pfforphds.com/speaking. We can absolutely find a way to get this great content to you and your peers, even while social distancing. Now, back to our interview.

Disadvantages of Joint and Separate Finances

27:51 Emily: So, that was kind of the end of my list of advantages that I see in joint finances. Was there anything that you wanted to add as like maybe disadvantages of your system? Disadvantages of my system, except if they haven’t already been covered by highlighting advantages of one or the other?

28:07 Michelle: I mean, the disadvantage of the separate model is around these transitions when your finances change substantially. And now it’s a matter of us having this discussion. Whereas, like you said, with the joint model, you wouldn’t have to do that if it’s built in.

28:28 Emily: One disadvantage of joint finances that I often see brought up. I don’t personally experience it, but a lot of people will bring up, what do you do about gifts? You know, what do you want to do when you want some secrecy, but it’s for the benefit right, of the other person and for that joy of gift giving? And I don’t experience this as an issue myself and I have some like, ideas about workarounds, basically. Like, sort of in my mind, if your only hangup about joint finances is gifts, there are easy ways to get around that and still have the totally joint model. If gifts are among other reasons why you don’t like the model, then that that’s fine. That can factor in. But like after I receive the gift and I was like, “How did you pull that off?” He’s like, “Oh, I know you check Mint. So, I did it on this random card that I just didn’t update from Mint.” So, that’s very tricky. I think an easier solution is just to use cash. Just take out cash and say, “Oh, I need some cash for some reason, don’t inquire too hard.” Or, “Oh, I’m buying you a gift, but you don’t know what it is yet.”

29:31 Emily: Or go to a place like Target or Amazon where you might be buying any kind of thing and let it be a secret for the time being. So, you might need to get a little bit tricky around gift-giving or at least having an agreement of like, you know, “I won’t look at that for a little while, while you’re getting me a gift.” But to me it seems like a pretty minor, I guess, speed bump in the model for joint finance. But it’s one that comes up a lot. So, I wanted to kind of address that.

29:57 Michelle: Unless, of course, your love language is gift giving and then it’s a very big deal. And so, I could see that being more important or more impactful to defining whether to have a joint account.

30:13 Emily: Yeah, I think that’s probably where, if it was something you were doing on a very regular basis, like every month or something like that, I can see–so, there’s sort of a subset of joint finances which is like joint with allowances. And so, your allowance could come out in cash so the other person doesn’t know what you do with it. Or it could even be two separate checking accounts, but your income goes into joint account. And then the separate account gets the, whatever it is, a hundred dollars a month, whatever your allowance is. And so, that’s a way that you can regularly keep some money from your spouse seeing it while still maintaining the spirit of the joint model. But of course, yeah, the bigger the component of your life this is, the more it argues that you need to have a specific system around figuring this out, which we obviously do not.

Unique Situations for Money Management as PhDs in a Relationship

31:02 Emily: One of the last questions here, Michelle, are there any attributes or situations unique to PhDs that might inform the choice of how to manage money in a relationship? So, I thought about living apart, which I mentioned earlier, my husband and I lived apart only for about three months. So, it was very short period of time a few years ago. But I have had friends, PhDs, sometimes two PhD couples, sometimes just one PhD couple, that have been living apart for years at a time because of training and stuff. You’ve been very fortunate and very supported that your husband has been following you around. Not everyone is able or willing to do that. So yeah, I guess I can see that this might inform the decision, right? Because the more, I guess separation you have like living in one place versus another, I think the more that supports the separate, or at least partially joint, partially separate models. Because as you were saying earlier, like you don’t have to, you do, but you don’t have to consult with your husband on decisions. That doesn’t really affect him, what you do with your own finances.

32:07 Emily: So to me, that model makes a lot of sense when the day-to-day decisions don’t really involve both of you. Right? And only involves one of you. And so, I felt that a little bit. I mean, again, I was only apart from my husband for a few months, but yeah, like what I did on a daily basis, the shopping or the eating out or whatever, like he wasn’t involved in any of that. So, it was a little bit odd that, you know, the money was still coming from our joint account. And so, I think that we did have a little bit less like sort of communication around what was going on. Like he just sort of was like, well, basically by that point, like we knew each other’s spending habits. And as long as we weren’t going outside of that, it didn’t really need to come up that much. But yeah, it was kind of odd to be like living in it in a different place and still withdrawing from that joint bank account. But you know, it was just a short period of time. So for us, it wasn’t, it didn’t warrant like changing the model, but yeah, I can see how there’s a reason to be a little bit more separate if your lives are kind of separate.

33:05 Michelle: I would say that’s pretty true for us. My husband’s not a PhD, not an academic by any means. And the culture around being a PhD and, you know, having to go to conferences and networking and sort of the things we spend money on that we wouldn’t spend money on if we weren’t PhDs, that’s very real for us. Because there are many times where I’m like, “Okay, so every November I have these two conferences and I know I’m going to be spending more money around that time.’ He doesn’t have to think about that at all. And if we had a joint account, we would always have to talk about that. And because we don’t, it’s not a thing that we need to discuss. He just knows that I go on these conferences and I’m still able to pay the bills. And it’s just made things a little bit smoother, I think. And he hasn’t needed to learn the culture of being a PhD because we have these separate accounts around money.

34:08 Emily: Yeah. That’s a really good point that like, especially PhD training and even, I guess, could be as a professor to some degree as well, there are certain demands that are made of your personal finances that would not be made if you were not a trainee or an academic. And that’s super unfortunate, but the reality. And so, like you said, he doesn’t need to be fully indoctrinated in the way that we are into how academia affects your personal finances because you have things separate. Yeah, that makes sense. I didn’t think about that. That we do have to pay for more things out of pocket than maybe somebody else would in another kind of career, wow.

34:53 Michelle: Conferences, memberships for different societies and things like that. But, you know, I can only imagine if we were to actually have a joint account, he would be like, “Why do you need to spend a hundred dollars on this membership, tell me how that’s going to benefit you in your everyday life? And the answer is, “It doesn’t really, but it does help me network and that will help advance my career.” And, you know, we don’t have to have that conversation.

PhD Finances: Handling Changes in Income

35:22 Emily: Yeah. Very, very interesting. The other one that I thought of regarding PhD finances is changes in income. So you, for example, have gone from needing to take out student loan debt and so forth to having a very nice salary, presumably now, and maybe other PhDs have less dramatic swings, but usually the completion of PhD training does involve hopefully a pay raise at some point, probably a big one. So that’s just been, I don’t know how that would maybe affect advantages of one model or another, but it just does affect how you handle your finances in general. And you mentioned earlier living like a postdoc, which is a great sort of mantra to live like a college student, live like a graduate student, live like a postdoc, live like a resident. These are all meaning the same thing of live well below your means and maintaining your prior lifestyle even through income increases.

36:12 Emily: So, it’s just a good kind of personal finance strategy in general. I guess this might play a little bit into what I was mentioning earlier about income disparity. Like between me and my husband, we went from being more equal incomes to be more, at a time, more disparate. And yeah. So, if PhD do experience, let’s say hopefully a jump in income, having the joint model can be helpful, I guess, in the sense that like, you’re, I guess you’re kind of in it to gather because at a point when maybe one person isn’t contributing as much to the household, that can be sort of smoothed out, I guess over time by the other person’s income being more like stable or something like that. And the other thing is that there is an upside usually to PhD finances, which is that jump in income later. And so both people benefit from the upside, like you were talking about earlier, like you’re talking about how you and your husband together, the household might benefit from your now great increase in income by perhaps splitting the percentage a little bit differently with the joint model that sort of comes baked in, right?

37:18 Emily: Like both people enjoy the upside, but they also are together on the downside. So there’s, yeah. There are two parts of that. Just something to think about, I guess, with PhDs and those income swings is what you would prefer. I wouldn’t necessarily say it argues more for one or the other, but just something to consider.

37:36 Michelle: For us, my debt is a detriment to us buying a house, but my income increase is the asset. And so, the way that we’ve kind of balanced that is pay down my debt, which I’m doing and I’m taking ownership of, right? Because it’s mine, it’s, you know, our separate accounts, and he doesn’t ever have to think about that necessarily. While at the same time I’m paying down debt, he can take his income and stack it away in savings. And so, eventually what he’s been able to save will help us buy a house and my income level will help us buy a house.

Would You Consider Changing Your Finance Model?

38:18 Emily: Gotcha. Yeah. So, you’re contributing, but it’s in like different ways kind of in the future. Yeah. That’s interesting. So, Michelle, do you see your model changing at any point? Do you foresee any circumstances that might cause you to reconsider this?

38:33 Michelle: I don’t think so. I don’t think so. It’s been working so well for 15 years that it’s hard to imagine a time when we would need to do something different.

38:46 Emily: Yeah. You guys have you have it down pat now, right?

38:49 Michelle: Yeah.

38:50 Emily: Yeah. I think on our side as I said, kind of earlier, as our income has increased as a household, we have more flexibility. Like, I sort of phrase it as when we had a lower income, we were much more strict about our budgeting and we had to agree a lot more. Now we have a little bit more autonomy because our income is higher. Like, if we want to do more discretionary spending. So, my husband’s really into buying electronics. Before we had sort of a strict budget on that. And I didn’t really care as long as he stayed within the budget, but it was kind of a low budget. Now, it’s more like, “Okay, you want to buy something?” He’ll talk to me about it. But ultimately I’m just like, “Well, if you want it, go ahead and get it.” We have much more flexibility now. And so that’s kind of, I guess, changed like our attitudes about it. I mean, everything is still joint and it’s still sort of a decision, but we just have a lot more freedom, I guess, both of us do to do more spending, should we choose to, or should we desire to.

39:48 Emily: I think that we will probably stick with the joint model because philosophically, it’s kind of like, we’re married, so we’re going to be joint. I’m not really opposed to the yours, mine and ours thing if it’s under the allowance model that I mentioned earlier. If maybe like, “Okay, you have a few hundred dollars a month, you can do whatever you want with and go ahead and I don’t need to know about it.” Like I can maybe see us moving to that at some point, but I don’t know necessarily why it would happen because it’s not something that causes friction for us right now. So, I don’t think it would in the future. But if it did, I’m okay with that allowance sort of system of it. I definitely don’t see us moving to being fully separate at any point, or even to the point where we would have our incomes be like deposited separately.

40:31 Emily: Because I just think, especially now that we have kids, it’s just the family, it’s just the household, like everything’s together. So yeah, I think the model will more or less stay as it is. Yeah. So, you know, Michelle, I appreciate you having this discussion with me so much and I hope the listeners have heard something that they resonated with for your model or for the model that I use or something that they disagree with and it’ll help them decide how things are going. It seems like things are really working well for you. So, I’m super happy about that. And obviously I feel that way about how things are working for us too. So, it just shows that, you know, people are different, relationships are different and how you handle your finances. It might look different. Like we, you know, we started off saying, okay, you do separate an I do joint. This is like, these are extremes on a spectrum. But really we can see that in both cases, the relationship has a shared vision of where we’re going in the future and agrees to a great deal, whether talked about or not, generally is an agreement with how things need to go. And yeah, the mechanics of it look a little bit different, but there’s a lot of commonality here as well. So, I was really happy to hear that. Any concluding thoughts from you?

41:34 Michelle: I would agree. I think both models can be effective and I think it ultimately will come down to what you value in your relationship. And as a person, that’s what’s going to drive your decision-making about what model you choose.

41:52 Emily: Yup, definitely. So, thank you so much Michelle.

41:54 Michelle: You’re welcome. Thank you.

Outtro

41:58 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, please consider joining my mailing list for my behind-the-scenes commentary about each episode. Register at pfforphds.com/subscribe. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

How The Lucrative Artist Identifies and Reverses Negative Money Mindsets with His Clients

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In this episode, Emily interviews Dr. Brian Witkowski, a Doctor of Musical Arts and the founder of The Lucrative Artist. Brian serves as a business and leadership development coach for artists and teachers. Brian often sees money mindsets in his clients that don’t serve them well, and these mindsets are common among PhDs as well. If left unchecked, these mindsets have detrimental effects on our finances. Brian and Emily discuss how to reverse negative money mindsets and how entrepreneurship is often the most lucrative and satisfying career for a PhD with a transformed money mindset.

Links Mentioned in the Episode

toxic money mindset academia

Teaser

00:00 Brian: When you’re starting out just by yourself, you don’t have to do all that. It’s just a matter of figuring out what’s your actual service, and who are the people you’re going to serve, and then what kind of value exchange you’re going to be creating that you can reasonably get paid pretty well for it, from the right people, in the right way.

Intro

00:20 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season five, episode eight and today my guest is Dr. Brian Witkowski, a doctor of musical arts and the founder of The Lucrative Artist. PhDs, like many artists, tend to have certain money mindsets that do not serve them well, such as a scarcity mindset. Brian and I discuss how negative money mindsets can detrimentally affect our finances and how to reverse them. For many PhDs, and Brian’s clients, the most lucrative and satisfying career path forward might be through entrepreneurship. Without further ado, here’s my interview with Dr. Brian Witkowski.

Will You Please Introduce Yourself Further?

01:06 Emily: I am delighted to have on the podcast today Dr. Brian Witkowski, and we’re going to be talking about mindset work and entrepreneurship and other fascinating topics like that. So, I’m really looking forward to this conversation and learning a lot from Brian. Brian, will you please introduce yourself a little bit further for our audience?

01:23 Brian: Yeah, so I’m originally from Michigan. My grandparents immigrated from Poland. My dad grew up in a very poor area of Detroit and kind of aspired to a much higher middle-class life and worked his way up and eventually became a professor and then raised me to someday want to be a professor, too. Obviously, the world is a lot different today than it was for the generation back then. You know, I’ve had to explore how else, where I can take my teaching and my work and what I really want to do. And so, when that tenure track job, after I finished my doctorate eight years ago, didn’t quite come up, I started exploring other opportunities. I started to really think what else is not being taught that we all could be taught and how can I better serve people. So, I started studying more about business and finance and looking to see where we can help people. Especially as myself, I have a doctor of musical arts degree, and especially in music and the arts, we know nothing about finance or financial literacy.

02:13 Brian: There’s so much to be learned and needs to be learned. So, you not only can just, you know, understand about money and know how to conduct yourself in life. And because we can’t just expect those few jobs we’re trained for, we have to be entrepreneurs, we have to come up with multiple streams of income, and come up with other opportunities and open our minds up to creating new opportunities as opposed to competing for just a few things that less than 1% actually end up having. So, basically, entrepreneurship is kind of the new golden age for higher education in some ways, is what I like to say. Because we can take our expertise and leverage it in new ways and recreate different learning opportunities, not just for the people in the college classes but for the lifelong learners. So, that’s kind of where I’ve taken my teaching nowadays.

Unhealthy Money Mindsets

02:56 Emily: Oh, that’s fantastic. I’m so excited to dive more into all of that, and I’m really excited to have you on as a guest because a lot of my audience, I think, is currently still in PhD training as graduate students or postdocs or maybe closely following that. They may still be competing for that tenure-track job or not sure what they’re going to do if it doesn’t work out. And so I’m really glad to have you on as someone who’s several years further down that line and has a lot more life experience and career experience in that way. One of the things that we said that we would talk about during this interview was money mindset. Because I think the people who you work with through The Lucrative Artist and also the people who I see through Personal Finance for PhDs have some troubling mindsets around money. So, can you talk a little bit more about the mindsets that you see your clients that also maybe overlap with mine? The money mindsets that they have that don’t serve them very well?

03:48 Brian: In some ways, one thing that doesn’t serve a lot of people is just that mentality that we don’t have enough and there’s never enough there. And we always think that it’s a scarcity mindset complex that so many of us have. Even my own father did, even though his adulthood was phenomenally better than his childhood, he was still struggling financially as a professor just putting it all together. There’s a book called Rich Dad, Poor Dad* by Robert Kiyosaki. More or less, he talks about how his poor dad actually worked his way up in higher education and became the administrator in the state of Hawaii, and so forth. Back in the fifties and sixties, when his “poor dad” was his friend’s dad who didn’t have any college training and just focused on acquiring real estate and thinking about owning a business and trying to earn money that way. And so, he more or less points out how we’re not taught about how to actually earn money other than to expect the job. So, part of the mindset is having your mind open to the possibilities of where you can create new income opportunities and new sources of revenue, and so forth, for your personal life using all you have to offer.

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

04:52 Emily: Yeah, I can definitely see how the scarcity mindset–if you’re thinking only that, again, that tenure-track job is the only one for you and the only thing that’s worth doing after after a doctorate–there is scarcity in terms of that actual career path. That’s not imagined. That’s perfectly real. But I guess the mindset that doesn’t serve you is thinking of course that that’s the only or the best option for you following finishing your higher education. So, to think a little bit more broadly about your career track would be, I guess, the way to combat that scarcity mindset. Any other kinds of mindsets that you see in those populations?

Aim High: Raise Your Anchor Point

05:30 Brian: The only thing is, I guess we’ve focused so much like on student loans and the cost of higher education. It’s like we let the four-figure, accruing interest, to get in the way of thinking how we could maybe use that same energy toward, “How can I create maybe six figures of income or more later on?” We don’t open our minds up to the possibility of earning way more than what certain salaries we’re used to or what our parents or colleagues are earning. In a lot of different ways, if we package our expertise and services in the right way, you can find that clientele or that other startup, that kind of business that can easily make you enough money to more than pay off your debt and then some. And sometimes we get so bogged down with getting depressed over having a big student loan sum and we don’t realize that yes, it’s not that great, but it’s better than some other forms of debt that are out there.

06:19 Emily: Yeah. So, I think that’s like having an anchor point, right? So, like you in your mind around the amount of money you can make, you have anchor points, whether it’s what you were earning as a graduate student, if you had a stipend or as a postdoc or what you expect to earn as a faculty member or another kind of professional. Or, like you were just saying, the balance of student loan debt that you have or maybe the living expenses that you have to cover each month. These are anchor points that float around in your mind as, “Okay, I need to make this much money.” But really there’s no limit to that. Like, why are you anchoring yourself there? Go ahead and anchor yourself at 10 times that amount or a hundred times that amount, maybe.

06:55 Brian: Yeah, definitely. And there’s one interesting exercise that I sometimes give the clients to consider. Okay, what are you earning right now? What would you have to become to suddenly earn double that? Like who are some role models out there? Because there’s always going to be somebody out there we can imagine who’s already making more than what you’re making that you could easily–sometimes not even actually do a whole lot more, but just adjust the way you’re presenting yourself and to the right audience, and so forth. And then figure out how we can double that from there. If all else fails, at the end of this exercise, people usually say they’re going to be Oprah or Tony Robbins or something, which is great. You’ve got to not be afraid to think big like that.

07:32 Brian: Too often we think small, we don’t think we can be these celebrities and these great leaders, but anyone can really grow themselves to be more than just what they thought they could. And sometimes we’re not taught enough of that in our school. My father taught leadership courses when he was a professor. So, those are classes where I’ve kind of avoided anything that he taught when I was in school. Hence, I’ve got a doctor of musical arts degree. His degree was in criminal justice. And so, I wanted to make sure I wasn’t just recreating everything I absorbed by osmosis as a child. I guess you could say it was part of my motivation to make sure I picked a very different degree program. But there’s so many of these things that my father taught in his classes that are not taught to people in the arts and so many other fields as far as management skills, how to interact with people, and what kind of personal growth is out there. We’re too conditioned to just do the exact training for the exact skill to get specific sets of jobs and not necessarily create the jobs instead.

Challenges in a Culture of Volunteerism

08:29 Emily: Mmm, yeah. Great point. So, anything else on your observations around detrimental money mindsets and then how they translate to ill effects in our finances?

08:42 Brian: Yeah, I think partly the scarcity mindset that sometimes starts with just the job market and the opportunities for earning money. Another problem is, especially in the arts and education fields, it’s almost like there’s a nonprofit aspect to it or more if you’re working for a religious institution or, in my case as a professional singer, getting paid to sing in churches and so forth. There’s that guilt trip kind of situation where some people who are cutting the checks kind of make you think you shouldn’t be earning as much as what you should be. And there are other situations too where it’s kind of like the negotiation turns into a coerced charitable contribution in some ways, but not in one in which you can actually get a tax deduction for your time in a concrete kind of way. So, it’s another situation we have to deal with, whether we’re in the arts or in education. There’s that mindset, “Wait, I’m not supposed to get paid this much. I’m supposed to do it for the children and do it for God or whoever, whatever the cause is, basically.” So, that kind of keeps people from realizing their potential. And then I try to tell people to be in a position where you can actually tithe or donate that 10% back as we all ideally should later in life.

09:49 Emily: Yeah, I agree to great, great extent. There’s this, I guess I call it kind of a toxic culture of like compulsory volunteerism in academia and in other similar fields. Exactly as you were saying. When the high level institution has some kind of nonprofit-like status that somehow translates to, “We don’t pay people what they’re worth or we don’t pay people to do work for us. We expect a degree of volunteerism.” I encounter this myself sometimes with institutions who want me to work without pay or with much less pay than I’m asking for. They can kind of use that, “Okay, well we’re a nonprofit,” as like an argument, somehow. But it’s just something that it’s hard to combat because as you said, when you’re sort of indoctrinated into that culture, you think, “Yes, well I’m supposed to be giving back. I’m supposed to be doing this for X, Y, Z. What about the people who won’t benefit from receiving my talents if I don’t take this opportunity?” But at the end of the day, you have to feed yourself, right?

Finding Balance in Value Exchange

10:54 Brian: Yeah. And that’s the other thing. I also tell people that, at the very least, it’s a two-way street. How can they serve me in return if there’s an imbalance in the actual value of exchange that’s taking place? At the very least, maybe that institution could give you a referral for another service you’re providing, or they might allow you to advertise something else. Or, like I tell people who are performing artists, maybe they can sell CDs or trade their mailing lists. There are other ways to at least get some kind of fair exchange of value if you open your mind to those things. I try to help people think about those things and make that happen so that at least if they’re not getting necessarily the actual money, maybe they’re getting a leisurely vacation out of it if it’s a traveling musical gig or something like that. They’re getting something that makes it still worth their while to otherwise feel like they’re volunteering their time.

11:41 Emily: Yeah. Something that can be mutually beneficial instead of just beneficial going one direction. Okay. So let’s say, you know, someone in our audience has identified, “Okay, well I do have that scarcity mindset,” or “Yeah, my anchor point is 10 times lower than it should be,” or what have you. Any of these money mindsets we’ve been talking about. How do you actually go about changing a money mindset that doesn’t serve you well once you’ve identified it?

Changing Your Money Mindset: Self-Talk

12:05 Brian: For me and for people who I work with, sometimes I give meditative exercises. You have to think positively. Positive manifestation-type statements, saying to yourself, “Your bank account may be empty,” but rather than say it’s empty, say, “It’s wide open and ready to receive.” It sounds silly, but you have got to think, “Okay, the money is going to come to me eventually.” You can’t think that you’re never going to get it. It’s just a matter of figuring out the right way to find the right people willing to give you that money, basically, for when you willingly deserve it and earn it.

12:37 Emily: So, it’s kind of about self-talk, then, I guess is what you’re saying? Like it’s about, “Okay, I’ve identified my bank account is empty. Oh, it’s always going to stay empty.” That’s the toxic mindset.

12:48 Brian: So, it’s reinforcing that negative stuff. And before you know it, you’re staying on the floor at the bottom and not working your way up. And then another thing is, there’s the song “Love is in the Air,” but also you could say money is in the air, too. The way the global economy works, the way money compounds everywhere, there’s always going to be enough. You know, sometimes we think, “If I take this job then suddenly somebody else is not going to have any money,” and that’s not how the world works, actually. When we keep getting all that we’re supposed to earn, then there’s more to give around and more to grow the pie.

13:22 Emily: Mhm, yeah. So, it’s not like a fixed pool of money, right, that we all are trying to grab a little bit of a piece of,  it’s about growing the entire economy–the entire pie for everyone. Is that what you’re saying?

13:34 Brian: Yeah, exactly.

13:34 Emily: Yeah, so we aren’t thinking, “Me gaining something is someone else losing something.” That’s not how it is.

13:40 Brian: Yup.

13:41 Emily: Yeah, great.

13:42 Brian: It’s how the markets work. If you notice, if you had invested a dollar a hundred years ago, it would probably be who knows how much now. It’s partly a result of that.

13:51 Emily: Mhm. Yeah. Anything else that we can do to change the money mindset aside from turning things in a more positive way and reinforcing that by self-talk?

Open Your Mind to New Revenue Streams

14:02 Brian: The other way probably: be open to thinking of new ways to earn, and be open to new revenue streams. Don’t be afraid to think outside the box as opposed to how you can make a living. Because we all get so caught up trying to apply for the exact same jobs and thinking these are the only ways to earn. There are so many different audiences out there and clientele that we could actually be serving that we don’t even think about. Especially for myself. People, my colleagues mostly, aspire to teach students who are college students and aspiring professional singers. And it’s kind of like we subconsciously only focus on the clientele that is like ourselves. And we don’t realize there’s another whole clientele out there that might be willing to pay way more, or you could actually set up scalable situations where you could easily earn way than you otherwise are used to earning. So, you’ve got to let go of that in one direction and think 360 every way around you, there’s something more you could probably do.

15:00 Emily: Yeah, I think this kind of relates. For people who are still in academia, they might not feel very special because everyone they’re surrounded by also has crazy advanced degrees. Very smart, very talented, very trained in a similar way. But if you can turn and look outside of that immediate environment like you’re talking about, you can see that there are many, many other opportunities to serve different groups of people or to leverage your skills in a different kind of way. And once you do step outside the ivory tower, your skills are going to be regarded in a way that you’re not used to. Right? They’re going to be much more highly looked upon because you are special. There’s only like 2% of the population or less or something that has doctoral level degrees. So, it’s not actually that common if you find the right group to serve. So, this translates really well once you’ve opened your mind to these other types of clients and other types of work that you might be able to do. At that point, why is self-employment more attractive than a job? Or why does self-employment serve you better with a different kind of money mindset than a job would?

You Can Be Self-Employed and Still Have a Job

16:07 Brian: It’s not necessarily mutually exclusive from having a job. And I think sometimes people get caught up thinking they have to quit their job and suddenly be a sole business owner right away. Not necessarily, although sometimes there are situations where you just need to get out of a toxic environment that doesn’t pay you enough. Then you easily find that one client and you can easily–or a few clients–you can suddenly afford to just say farewell to the job that wasn’t really serving you. But I think when you’re stuck in a job, you’re stuck with a cap on your income. Whereas if you start a business, you could think owning your own business, being self-employed, you’re open to more possibilities and there’s no limit necessarily. So, it’s like you’re removing an artificial cap and you’re also giving yourself more freedom once you get it going, you find the right clientele to serve, and so forth.

16:51 Emily: Yeah, I think this goes back exactly to that Rich Dad, Poor Dad book or idea that you were talking about earlier. The poor dad, right, has a job and his income is, as you were just saying, capped and scaled by the employer. It’s sort of out of his hands, right? But the rich dad is an entrepreneur and–well, Robert Kiyosaki’s really into real estate, so lots of different ways to be an entrepreneur–and in that case, the income streams are unlimited. And each income stream itself is unlimited in how much money you can actually bring in. So, there’s a downside to that, but there’s a big, big, big upside too, if you choose to walk away from a job. Which, like you said, it doesn’t have to be all or nothing. So, some people in my audience, again, are still in training. Self-employment is something that they can do on the side while they’re still in graduate school, while they’re still in a postdoc for now, as long as it’s permitted by their visa and their job and everything. But it’s something you can dip your toe into and see how it’s going, and you don’t have to just take the leap, like you said, right away.

17:53 Brian: Yeah, definitely.

Commercial

17:58 Emily: Emily here for a brief interlude. Tax season is upon us, and while no one loves this time of year, it’s particularly difficult for post-bac fellows, funded grad students, and postdoc fellows. Even professional tax preparers are often thrown for a loop by our unique tax situation. And don’t get me started on tax software. I provide tons of support at this time of year for PhD trainees preparing their tax returns, from free articles and videos to paid at-your-own-pace workshops to live seminars and webinars for universities and research institutes. The best place to go to check out all of this material is pfforphds.com/tax. That’s P F F O R P H D S.com/T A X. Don’t struggle through tax season on your own. Visit my website for the exact information you need in the most efficient form available. Now, back to the interview.

Pay Attention to What is Not Being Taught

19:01 Brian: The great thing is, while you’re still in grad school, it’s your perfect opportunity to realize what is everybody doing the same? Where do you feel like you’re literally just in “the Matrix,” and what’s not being done? I stress to people that it’s the perfect time to really observe and reflect and take notes for what’s going on and what’s not being taught that still needs to be taught in real life. Because there’s just so much of that that still needs to be taught. Whether it’s with finances or just personal development or other aspects of just knowing how to live. Too many aspects of our degrees are just kind of geared to train us for specific jobs but not for creating jobs. So, one strategy is to just observe what’s not being taught. And then how could you actually teach that? I like to joke with people who are getting their terminal degrees, their PhDs, that they could actually create something in which those same people who may not hire you for a faculty job might actually hire you to do their professional development. Because you never know. That fresh perspective of being young, just finished your degree, and offering a different viewpoint is something that’s going to be valuable to them.

20:07 Emily: You’re exactly describing my own journey into Personal Finance for PhDs, because what was going on for me in graduate school was, I was learning about personal finance because I had to apply it in my own life, or felt that I had to, right? So, I was learning how to apply it and then over some time sort of looking at the way my university was or was not supporting that growth and that journey. And I should say that Duke, which is where I did my PhD, actually does a great job with personal finance in comparison to many, many other institutions. But even so, I could see that there was more that could be done there. And that’s exactly how I stepped into my business was seeing, “Okay, well no one is teaching personal finance from the perspective of a graduate student or a postdoc or a PhD. They’re teaching personal finance from the perspective of a CPA or a financial advisor who deals with very, very wealthy clients.” And this is just completely foreign to the people that I was coming out of. And so, I decided to turn around, right? And teach the people who are coming up behind me those principles. So, exactly what you described. And as you said, I never applied for jobs, universities, or faculty positions, but I am now hired by plenty of universities to do professional development in this area. So, it’s totally, totally, exactly what you said.

Different Business Models for PhDs

21:22 Emily: So, what are the different business models that you can see with PhDs or other people with doctorates that are successful, that are easy for them to access, given the skills they’ve been learning throughout their higher education?

21:35 Brian: Yeah. One thing is just to simply think, “What kind of professional development services could I offer? Are there businesses, are there organizations or clients where what I have to offer with my knowledge and expertise can be valuable to them?” And sometimes it’s not necessarily just regurgitating the same content, but how can you repackage it in a way that is more meaningful to them. Sometimes, with my work, I stress that you can kind of integrate some personal development, leadership growth, using your content as the vehicle, so that people are thinking not just that they’re learning more about a certain thing about history, but they’re realizing how their own life embodies that same historical thing you’re trying to reinforce. Find something like that.

22:19 Brian: It personalizes it more and really fits the clientele or the audience that you’re serving. So, there’s that. Sometimes you can do something as simple as different kinds of coaching, whether it’s life coaching, business coaching. There are so many forms of coaching out there that still people need to hire people. That’s not enough just to go about life waiting for the job or expecting your business to take off. We always need more people to help us in different ways to give us different perspectives, different viewpoints to push us in different ways. In the arts, even though I have my degrees, I still take voice lessons. My voice is an evolving instrument. I’m always learning how to use it in different ways. And the older I get, the different kind of repertoire I suddenly get to sing. So, it’s a never ending thing. And there are other aspects of life where it’s the same way. So, people with PhDs and other graduate degrees, just that background alone gives credibility with certain types of audience members.

Self-Employed PhD and Beyond the Professoriate

23:11 Emily: Yeah, absolutely. So, I’m part of a community called Self-Employed PhD, which is underneath the Beyond the Professoriate umbrella program. And so, what Jen Polk and Maren Wood do, who run that program, is they are career coaches for PhDs. And there are many other people who have stepped into the same area. Seeing again like we were just talking about that a lot of universities don’t prepare PhDs well for knowing the possibilities for their careers outside of academia or being prepared to actually apply for those jobs or network for those jobs or get those jobs. Many people have decided to become career coaches in this area because there is a lack of support from many universities in that area. So, exactly what you’re just saying. Any other business models that you see as very accessible for this audience?

Think Big, Think Lifelong Learning

23:56 Brian: Sometimes it can just be simply, create your own school. It might even rival your university. Don’t be afraid to think big like that. Or something else to that effect. Some kind of supplementary, after-school program for elementary kids or high school. Really any age group. I read an article that there is going to be an enrollment crash in higher education soon where suddenly, because there’s going to be way more retirees than young people, not as many young people enrolling in college. So, more job cuts and other drama might be around the corner. But at the same time, we have a retirement population that is just growing, and they’re bored. There are ways to serve them. So, rather than think higher education, think lifelong learning or higher learning and other things you can offer that can serve any kind of population.

24:45 Emily: Hmm. Yeah. If what you really wanted to do when you were pursuing that faculty position was teach–I mean there are so many different audiences and different ways that you can do that. Even within the subject matter that you were highly trained in, if you want to stay in that area.

24:59 Brian: If you’re willing to leave the country, there are 7.6 billion people in the world. There’s going to be somebody out there who will pay you to teach them something.

25:06 Emily: Yeah. Or work online, and have access to everybody in the world. Yeah. Any other business models you want to add to that list?

Other Business/Teaching Models

25:14 Brian: Yeah, one-on-one coaching, teaching, offering professional development seminars or other workshops, and so forth, using your expertise. Also, you don’t necessarily have to not teach the same students you’re expected to teach that you went through school. You just need to be offering them something that’s different from what they’re used to. So, that’s why I also, with my own business, I help people specifically in the arts figure out how can I do this likewise? How can I create something different and empower myself to have control over my career and do more of the things I actually authentically want to do? Because one thing, especially in the arts, there’s a lot of interesting toxicity that goes on when it comes to career expectations. Especially with professional singers. We have a lot of people who started their careers in the last century and sometimes they just went about teaching as if that last century way of life was still going about and everybody could easily have the same career they had. Or at least that’s how they’d go about, conduct themselves, and just kind of otherwise disregard your actual career and what you’d be doing.

26:16 Brian: You have to really be more of an entrepreneur nowadays as a performing artist if you’re not going to suddenly get some of those few jobs that are still out there. So, position yourself to help those same people who are in your field, not getting the help they probably should have had.

26:29 Emily: Mhm. Yeah. And you mentioning actually using the specific skill you’re trained in, singing. But I’m thinking about–so I have a colleague named Chris Cloney who has a business doing research. He has an independent research company, specifically translating the research that he did as a PhD student into basically another way of delivering it to the world. So, we’ve talked about teaching and coaching and speaking and so forth, which is what you and I do. But there are other ways to translate even more precisely what you were doing in graduate school into the entrepreneurial sphere instead of just going after a job. So, you brought up what you’re doing through The Lucrative Artist. I would love for you to tell us a little bit more about that. Maybe a couple of minutes on how you came to this point. We’ve already heard some of that journey, and then what you do for clients right now.

Brian’s Work with The Lucrative Artist

27:16 Brian: Yeah. So, what I do is I help clients literally figure it out. Sometimes, the biggest barrier that we need to break through is figure out what else we can do other than those few jobs we were conditioned to expect to get. And so I help people think, “Okay, how can I assess all your skills and your strengths, your weaknesses? What’s something that you can synthesize that can actually become a viable product or service that you could give to other people? And you’re more or less in a position where you’re not having to worry about competing against other people and you’re serving the audience that really wants you to serve them and so forth?” And so helping people really package that together. We do authenticity training where we think, “What is it we really, truly want to do?”

27:57 Brian: Like, “What is your purpose? What really drove you to want to teach? And how can you get more to that?” Like for me, it wasn’t really necessarily about the actual content, but it’s about helping people really actually change their lives. Like I’ve witnessed my father as a child, growing up. He did the same thing with his students, seeing people who were, likewise like him, grew up really poor, had no idea what they’d be doing later in life. Then finally they realized, “Oh, I can learn this. I can do this.” And suddenly they have great jobs or they have their own businesses, they’re making a great living, and so forth. So, helping people realize there is another way out there, and anyone’s capable of doing it. And then basically once people figure out what ideal business would be for them, what kind of service they’d be providing–sometimes there’s not a specific service, it’s like a bunch of different services related to themselves through their art form. So, for people in singing, for example, sometimes it’s teaching lessons, sometimes it’s teaching speaking lessons, presentation lessons, helping people patch together other skills related to their singing. So, they’re not just performing, but they’re also providing expertise and educating the public more about the works to bring awareness and you know, make that same connection between a certain classical work and you know, what its audience is going through right now.

Combat Limiting Beliefs and Imposter Syndrome

29:12 Emily: That sounds like, based on what we were kind of talking about earlier, you help people identify the limiting beliefs they have, the mindsets they have around their career, for example, and then coach them in how to combat that within themselves. I guess I just think about this as related to imposter syndrome, right? There’s nothing that we are trained for to do outside of academia. All we can do is teach. And if we can’t get that job, we’re like worthless, right? That’s a horrible thing to think about yourself. But I think it’s indoctrinated into so many of us who go through academia to have that imposter syndrome that “I’m not worthy of another kind of job. I’m not worthy of being able to start a business. I don’t have translatable skills into these other areas.” And so, once people see, “Okay, well this is what’s holding me back. I’m going to engage Brian,” you help them turn those mindsets around in a very practical way. Because you can say, “No, here is what you need to be telling yourself instead of what you have been thinking.” And then they do the work, right? To actually uproot those mindsets.

30:14 Brian: Yeah. And then once they get through there, once they realize what they want to do, then I coach them through step-by-step, “What can I do to actually make a viable business take off the ground.” And it’s not always necessarily too scary or confusing. Some people, you tell them you’re helping them grow a business, they want to see all these weird numbers and other things. And when you’re starting now just by yourself, you don’t have to do all that. It’s just a matter of figuring out what’s your actual service and who are the people you’re going to serve and then what kind of value exchange you’re going to be creating that you can reasonably get paid pretty well for from the right people in the right way. And it’s a matter of figuring out how you can package that and who you’d be serving.

Growing a Business is a Gradual Process

30:52 Emily: Yeah. I think some people when they hear like starting a business, they think about the startup world and where you have to have a highly refined business plan you’re pitching to investors and so forth. And it is really important to have this high degree of models and understanding of what you’re going to be doing in that world. But just to dip your toe into self-employment is much, much, less than that. You don’t have to do all that. You have to try out some things, see what people aren’t going to pay you for it, see what you like to do. It’s a lot of experimentation at the beginning and it’s not really high stakes.

31:21 Brian: Yeah, exactly. I love helping people, walk them through that and realize, “Oh, I can do this.” And yes, there’s actually a demand. One interesting exercise to really take people through is just called hot or not. What are some ideas that can work, and we talk them out. And then we also might contact some other people and see what they think about that if it’s a totally new thing that they hadn’t heard of before. And just a matter of, you need an opportunity to just test the waters and you openly be in a safe environment where you can express ideas without somebody thinking you’re stupid or whatever. There’s no stupid idea. There’s, you know, millions of ideas everywhere. And it’s a matter of figuring out how to piece together to create something viable as far as the business goes.

Origin of The Lucrative Artist

32:00 Emily: Mhm. Yeah, that gives me a good idea of what your services are. But I wanted to ask you about your name, The Lucrative Artist, which is very provocative. So, can you tell us a little bit how you came to that?

32:09 Brian: It’s fascinating. It’s a provocative word. It’s a word they say all the time on CNBC and all the other finance channel for other businesses. But for some reason we’re conditioned to think we have to starve as artists. And it’s not necessarily the case. So, I try and help people realize, “No, actually if you’re getting paid what you deserve and what you should be, you’re actually in a position to make even higher quality art and you’re serving people even better.” So, it’s actually an empowering mindset that better serves them later on.

32:39 Emily: Yeah, I love that. Oh my gosh. Well, where can people find you?

32:42 Brian: Well, my website, thelucrativeartist.com, the lucrative artist, three words there, .com or there’s facebook.com/thelucrativeartist where I’m active on a Facebook page. I also have a Twitter and an Instagram where I try to be accessible to as many people as possible through all those platforms, wherever the world’s taken me. There’s a Self-Employment in the Arts conference taking place in Chicago in February that I’ll be presenting at. And also some universities here and there. I’ll be doing some presentations and masterclasses and so forth. So, I try to be all-around.

Best Advice for an Early-Career PhD

33:13 Emily: Sounds awesome. So, final question. This is a standard one that I ask all my guests, which is what is your best advice for another early-career PhD or another early-career doctor? And this could be something related to what we’ve talked about today or it could be completely other.

33:30 Brian: Yeah, I think as far as the best advice, always keep a mind open to creating new sources of income and having multiple sources of income coming in. And think of ways you could create some passive income for yourself as well as the active income. And then, when you’re in your PhD, look and see what everybody else is doing and then think, “What is everybody not doing they should be doing?” And realize that might be a gold mine of a business opportunity just waiting to happen. So, just to open your mind up to that possibility and not being afraid to go for it.

34:03 Emily: Thank you so much, Brian. Thank you so much for the interview. I’ve learned a lot. I hope the audience has as well.

34:07 Brian: I really appreciate it.

Outtro

34:07 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcast, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media or with your PhD peers. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in like investing, debt repayment, and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode. And remember, you don’t have to have PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive, and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

This Behavioral Finance Expert Gives Incredible Career and Financial Advice to PhDs

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In this episode, Emily interviews Dr. Daniel Crosby, an author and expert in behavioral finance. Upon completing his PhD in clinical psychology, Daniel realized for the first time that an academic salary would not afford him the lifestyle he wanted. He instead pivoted to translating the academic research in behavioral finance for working financial advisors, and he currently serves as the Chief Behavioral Officer for Brinker Capital. Daniel shares how he’s applied the principles of behavioral finance in his own life and specific career and financial advice for early-career PhDs, particularly those exiting PhD training.

Links Mentioned in This Episode

PhD behavioral finance

Teaser

00:00 Daniel: And rather than saying, “Oh, I’m a PhD in psychology, so let me do PhD in psychology things”, I thought, well, I know to have great conversations with people. I know how to run a training. I know how to read human emotion and human behavior and all of these things, when you conceive of them as building blocks, you can repurpose those building blocks in different ways and create a host of opportunities for yourself.

Introduction

00:34 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season four, episode eleven and today my guest is Dr. Daniel Crosby, an author and expert in behavioral finance. Upon completing his PhD in clinical psychology, Daniel realized, for the first time, that an academic salary would not afford him the lifestyle he wanted, so he pivoted to translating the academic research in payroll finance for working financial advisors. Daniel shares how he’s applied the principles of behavioral finance in his own life and gives specific career and financial advice and encouragement for early career PhDs, particularly those about to finish their PhD training. Without further ado, here’s my interview with Dr. Daniel Crosby.

Will You Please Introduce Yourself Further?

01:23 Emily: I have the pleasure today of hosting Dr. Daniel Crosby on the podcast. He is a certified expert in behavioral finance. I’m really, really pleased that he agreed to come on. And Daniel, will you please introduce yourself a little bit further and tell the listeners about the fantastic career you’ve had?

01:41 Daniel: Great to be here. Thank you for having me. I am the chief behavioral officer at Brinker Capital, which is a multibillion dollar asset manager based outside of Philly. There’s not many chief behavioral officers in the world, I guess, so by way of explanation, what I do is I create training, tools, and technology that help people make better decisions with their money. I am a clinical psychologist by education, but really haven’t spent any of my professional career in a clinical setting. I quickly learned in grad school that I loved thinking deeply about why people do the things they do, but I didn’t love working in a medical setting. I’ve looked for business applications of the thing that I studied, and I know you know what it’s like to pivot, so my career has been wild and crazy, but it’s been a great one.

Going from Psychology PhD to Chief Behavioral Officer

02:39 Emily: Can you take us back? Tell us more about your education and at what point you decided that you weren’t actually going to go that traditional, clinical route with your degrees?

02:50 Daniel: My undergrad was in psychology. Loved it. I’m the son of a financial advisor, so I went into school thinking I would study finance and be a financial advisor. Took some general ed courses in psychology and just absolutely fell in love, knew that that’s what I wanted to do, started my PhD three days after I finished my bachelor’s. I was really just on a good path to get going with this. But about three years into my doctoral program, I had just kind of had enough. I don’t think I’m wired to listen to 40 hours a week of heavy stuff. It’s hard to be that empathetic. It’s hard to not let that bleed into your own life and your own wellness, and I was just really taking my client’s problems home with me, candidly. And I said, you know, this is just a lot. The final nail in the coffin for me though, I was still sort of on the fence as I was wrapping up my PhD, I had an inkling that I would like to apply this in a business setting, but wasn’t quite sure how, so I interviewed for a dual appointment position at a local university, which would have been half teaching, half counseling and the pay was so bad. I got offered the job and the pay was just so ridiculously bad that when I sat down and did the math with my wife, I was just, there’s no way this can work. I think it’s instructive that I, as the son of a financial advisor, someone who is interested in finance, finished an entire PhD, kind of never doing the math on how the thing I was studying would put food on my table. That’s sort of an embarrassing, but true story, is to get to the end of this road that I was passionate about and then go, “Oh, well geez, what am I going to do with this?” So then I was sort of left scrambling with how can I actually make a living at this thing I’ve just spent eight years studying.

05:05 Emily: I think that’s going to be a very relatable story to a lot of people in the audience of hearing that advice, follow your passion and doing it, and doing it at a high level, and getting to the end of it and saying, “well, now what do I do?” In your case, it was because the dual position that you applied for was not attractive, financially. That could be the reason, certainly for people in the audience, why they don’t continue on the expected career path. But for many people who want to go into academia, it’s just that the jobs aren’t there. That’s the main problem is that there’s just no jobs to be had or very, very few, and so they end up having to look elsewhere. So super, super relatable story there. Would you mind me asking, was your graduate degree, did you go into debt for that or was that paid for, was it a combination?

05:52 Daniel: It was paid for. PhD programs in psychology are very selective, they’re very small, so there were only like five people in my cohort. If you get in, it’s paid for through assistantships. Then, through nothing but luck, I had parents who were in a position to support me in other ways. My parents kept the food on the table and a roof over my head, and the tuition itself was paid for, so I came out with no debt.

06:26 Emily: I see. So when you were sitting down to do that salary calculation, it wasn’t debt that was necessarily causing your initial needed number to rise, but rather just simply the cost of living and supporting your family and so forth.

06:39 Daniel: Yeah. It wasn’t debt. It was just like, “wow, I’m going to work forever.” It was crazy because it paid less than a kindergarten teacher. You go teach at a high level, at a college, go to all this school and you should have just taught first grade. The pay was much better, if you can believe it, and I think you probably can. That was just a shock to me. I had never really put pen to paper about how the jobs that were available to me would coincide with the kind of life I wanted to live. Then the other thing is, as you said, so many of the jobs — I was lucky to get a job offer in my hometown — but you know, many, many times you’re forced to move to someplace you don’t want to live or somewhere very out of the way to start your career. And that’s its own set of trade-offs, certainly.

07:34 Emily: When you decided, “okay, that’s not a viable route over there, I have to pivot and do something else,” ten or so years later, you’ve come to this point where you’re the chief behavioral officer somewhere.

What is Behavior Finance?

Emily: I want to hear more about what behavioral finance is and did that exist as a field when you came out or have you been part of developing that? What’s been the transition both for your career and also for that field over that time?

08:00 Daniel: Great question. I got out and I said, “look, I need to pivot to something that is a little better for my sanity and is also a little better paying.” I began to explore jobs in organizational behavior, organizational psychology, behavioral economics, behavioral finance, and really, no one would take a chance on me because this is 2008 and the economy’s not exactly fantastic. I’m out there, 29 years old looking, looking for a job and I’m applying for jobs in fields where I candidly have no experience, because I have this PhD in clinical psychology and they go, “well, this is, you know, industrial psychology or organizational psychology.” And so I got a lot of doors slammed in my face. And really it was just luck. I applied at an organizational behavior firm where the boss, the founder of this firm had a clinical background and had sort of made his way in the world. My story resonated with him and he saw enough potential there to take a chance. Again, I think anyone who has any modicum of career success can point to times in their career where they just got lucky. That was certainly one for me, where he saw himself in me, took a chance on me and knew what it was like to be in my position, because I just wasn’t getting a look at most places because I didn’t have the right sort of psychology background.

09:47 Daniel: In terms of the field of behavioral finance, behavioral finance is just sort of the study of finance that incorporates the messiness of human beings. A lot of standard financial and econometric models are based on simplifications of human behavior that make humans look more rational than they really are. Behavioral finance is just finance with human irrationality factored in and talking about the way that we make quirky decisions with our money. This was a field that was around. Not too many years later they gave out a couple of Nobel prizes for it. The good thing for me, sort of the niche that I found, was there were people out there charging $200,000 an appearance. These Nobel prize winning folks were out there charging a $100,000 to $200,000 every time they gave a speech and multimillion dollar contracts for consulting, but there was no one that was more affordable and there was no one that was more applied. There just weren’t many people doing more reasonable applied behavioral finance work and taking these great ideas that these folks had come up with and taking them out of the ivory tower and putting them on the desks of everyday people or everyday financial advisers. That’s sort of where my niche — my niche became being the more affordable, more practical options.

11:23 Emily: But it sounds like what you were doing was really taking academic research and translating into what can be then used on the ground by, as you said, advisors and perhaps other people, is that right?

11:35 Daniel: Yeah, that’s right. I mean that’s been sort of the trajectory of my whole career is as an intermediary between people who are much smarter than me and people who haven’t been exposed to these ideas. I sort of view myself as a translator to take these ideas, this research, and make it speak to the lives of everyday people.

11:57 Emily: This actually reminds me, from what you were saying, of my physics training, which is what I did my undergraduate degree in, where you basically assume that everything is a sphere, so the calculations are actually manageable because if you actually look at what things are, real shapes and so forth, it’s just the math is completely beyond what’s possible. Of course, not everything is a sphere, but you have to assume they are to make the math work. It reminds me of that.

12:23 Emily: I am curious if anything in your personal history — going through the PhD process and then, and then coming out as an early career PhD, and this job search and so forth — has any of that informed the work that you’re doing now within behavioral finance? Any of that personal stuff informing that?

12:41 Daniel: I don’t think so, really. I don’t think that really informs a ton of what I do from day to day. It probably informs my parenting more than my work. I have three young children and my wife and I talked, that as we raise them, I’m just trying to give them a more expansive look at the world of work and maybe a more detailed look at finding the sweet spot between following your passion and doing work that gives you the kind of life that you want. Because one thing that my studies have shown me is that we all measure what normal is on a relative basis. This is true of everything from mental health to wealth. Normal for you is financially is just kind of what you grew up with, so I think you need to be candid with your children about how they grew up and what normal is and what normal isn’t. So yeah, it probably impacts the way that I parent more than more than anything else.

13:51 Emily: Gotcha. What about the reverse ways, from taking what you’ve been learning about personal finance and behavioral finance since you pivoted into that field? Have you taken any of what you learned and applied it in your personal life or were you already kinda there with what you grew up with your particular parents?

14:09 Daniel: Yeah. What’s interesting is I have applied a lot of what I’ve learned from behavioral finance into my own life. But one of the primary ways that I’ve done this is by knowing what I don’t know. I remember, and I think every PhD has this experience, I remember I started my program when I was 23 years old. I start this PhD in psychology, 23 years old, thinking I know everything, get out a couple of years later and I’m like, did I learn anything? I feel like I know less than I did before. I think I have more questions than answers now. Especially when what you’re studying is something as hard to get your arms around as human behavior, you never quite get good at it. One of the primary things that I’ve learned from my years of study of finance is that nobody really knows anything and that knowledge is a weak predictor of behavior. I work with a financial advisor myself. And not to toot my own horn here, but I think when it comes to knowledge of markets and things, I probably know more than my advisor, but that’s not why I pay him. I pay him to keep me out of my own way. I pay him to be a barrier between me and the sort of bad behaviors I study because I know that simple knowledge of the sort of biased, irrational poor behavior that I study is a weak predictor of doing the opposite. I know I’m no better than the next person, no matter how many books I write on the subject. I take pains to diversify, to keep my fees low and to work with someone who will keep me out of my own way.

16:01 Emily: Yeah. I think this is something that’s maybe not well understood by the public. That you may be paying an advisor for expertise — you are not necessarily, but someone else may be — but an even more important role is, as you just said, to kind of talk you off the ledge from carrying out bad behaviors that you’re inclined to do as any human naturally would. You’re specifically talking right now within the realm of investing, is that right? Or does your advisor help you with other decisions as well?

16:31 Daniel: He does help me with things around, you know, the purchase of a home. He’s sort of a sounding board for things like college savings for my kids, the purchase of a home. But I’m primarily focused on investing and investing professionally is my primary focus.

Commercial

16:53 Emily: Emily here for a brief interlude. As a listener of this podcast, every week you hear strategies that another PhD has used to improve their financial picture. But listening and learning does not automatically translate into action in your own financial life. If you are ready to change how you think about and handle your money, but need some help getting started, I can be of service. There are two main ways you can work with me to create and implement a financial plan tailored for you. First, I offer one-on-one financial coaching, either as a single session or a series, as you make changes over the long term. You can find out more at PFforPhDs.com/coaching. Second, I offer a group program called The Wealthy PhD that is part coaching, part course, and part community. You can find out more and join the wait list for the next time I open the program at PFforPhDs.com/wealthyPhD. I believe it’s possible to succeed with your finances at every stage of PhD training and throughout your career. Let’s figure out together how to make that happen for you. Now, back to the interview.

Human Emotions and Financial Decisions

18:08 Emily: Is there anything else that you have learned, and then applied in your own life, aside from putting a bit of distance between yourself and being able to make a fast decision?

18:18 Daniel: Well, one of the hallmarks of behavioral finances talks about overcoming emotion. A lot of what we talk about is how do we keep people from making these emotionally laden decisions, but one of the other things you learn when you’re studying human behavior is that it’s always easier to roll with a behavioral tendency than to push against it. There’s cool research that shows that people who look at a picture of their children for five seconds before making a financial decision save more, are more likely to stay the course, et cetera. Similarly, we find that people who invest in ways that are aligned with their own personal preferences around the world that they want, in terms of social issues, environmental issues, tend to be better behaved. So I’ve tried to build some emotion into my process. I’ve tried to keep the things and the people that I love at the front of my mind and central in the planning and investing process, and I’ve tried to invest in a way that’s consistent with my values, because I think that it makes it a little stickier than say owning the S&P 500. It just personalizes it a bit. I think that those are both powerful ways to make investing a little more fun, to make the investing and planning process a little more personal and to bring about some good behavior in the end as well.

19:51 Emily: I really love those suggestions. I think I’ve also, maybe in the similar vein of looking at a picture of your children, I’ve heard that if you look at a picture of yourself aged up, you make different decisions. Is that right?

20:04 Daniel: That is right. Yeah. One of the things you learn a lot about in behavioral finance is salience and salience is just the ease with which you can sort of imagine or tap into a situation. As I sit here, I’ll be 40 next week, so as I sit here at nearly 40 years of age, it’s hard for me to imagine 80 year old Daniel, right? The idea of a guy who walks with a cane and has gray hair and stuff, it feels a little remote. People have found that if you age your face, you’re basically making it a more visceral experience to imagine yourself as this 80 year old version of yourself, it brings about better behavior. Again, that’s an imperfect example of how you imbue the process with a little emotion to help you make the right decision.

20:56 Emily: I actually had a client asked me recently what I thought about the particular RoboAdvisor Ellevest and she followed that up with, well, I’m really passionate about women and empowering women and all these things that were sort of in line with Ellevest’s mission. And I said to her, well, it sounds like you’re really excited about that, so I think they’re fine and go for it. Because, as you were saying earlier, if it it lines with her values, that particular manner of investing, she’ll probably be more likely to throw more money at it, engage with it more, and have a better outcome. Is that right?

21:27 Daniel: Yeah, that is. Without speaking to the particulars of Ellevest, I don’t know all the ins and outs of it enough to say one way or the other, I have a lot of respect for Sallie Krawcheck who heads up a Ellevest. But in general, you’re more likely to contribute to, and stay the course in your women’s leadership fund than you are your S&P 500 fund because it’s personalized, it’s tailored to you and your values and, not making any promises here, but there is also research to suggest that the kind of companies folks like Ellevest seek out, companies that have better female representation on boards and things, there’s historical research to suggest that those companies have outperformed the broad market, at least historically. I think there’s every reason to try and personalize your investing to your own preferences, feel like you’re doing a little good in the world, and if that helps to animate you to stay the course or to set aside a little money, both of which are very psychologically difficult, more power.

Behavioral Finance Strategies for the PhD

22:35 Emily: Absolutely. Yeah. Another question here. We’ve started to get some insights into this behavioral finance stuff, maybe for the general population, but I’m wondering if you see that there are any personal finance pitfalls that you think PhDs might be particularly susceptible to falling into, and then what strategies might there be to not do that?

22:59 Daniel: I’ve observed — I’ll speak to psychologists, doctors of psychology in particular, but I think that this probably applies to PhDs broadly — a lot of times we get a PhD because we want deep domain-specific knowledge, right? We get into this because we love it. We want to be the best in the world at it, but almost every position needs a bit of business savvy, and I think that we have more power than we realize. I think this power takes a couple of forms. I think first of all, you need the power to negotiate a salary. That first job you get is more predictive of your ultimate wealth than just about anything else, because it benchmarks every subsequent salary conversation. Being comfortable negotiating that first salary — I remember that first job, you feel lucky just to be there. You beat out 20 other talented people to get the offer, but don’t be afraid to know your worth and to negotiate that salary. I would say PhDs need a little business training, because we have this deep domain-specific knowledge, but we don’t know, sometimes I feel like, how to do more practical things. I think get a little bit of business knowledge.

Daniel: Then a third thing and I would say the thing that has probably served me best in my career, financially, is to just think creatively about your role. If I had stayed on the prescribed path of being a dual-appointed college counselor, I would make a fraction of what I make now. Because I thought expansively about the things that I learned in school, and rather than saying, “Oh, I’m a PhD in psychology, so let me do PhD in psychology things” I thought, well, I know to have great conversations with people. I know how to run a training. I know how to read human emotion and human behavior and all of these things, when you conceive of them as building blocks, you can repurpose those building blocks in different ways and create a host of opportunities for yourself. Rather than thinking about one prescribed path, think about your education as a series of building blocks, a series of competencies that you can repurpose in any number of ways to do a host of different things. Finally, I would say don’t be scared to get out of academia. Because when I was in academia, you’re a face in the crowd, you’re one PhD among many. But when you get out in the real world, when you get out in the business world, you’re special and people respect your expertise in a way that they might not necessarily in a university setting. Lots to be said for a university setting of course, but I think don’t be scared to get out there to try something new and to know your worth.

Dealing With an Income Increase Post-PhD

26:20 Emily: Such wonderful advice and you put that so well. Thank you. I’m wondering if you have any advice for a person in this situation, which is something that you went through, which is a person who is about to come on a large income increase? They’ve been in training, grad school, postdoc, whatever it might be, and now they’re going out there and doubling or tripling, or more, their salary, potentially in industry, or similar. What behavioral finance concept should that person know about and be applying in that situation?

26:50 Daniel: This is a great question. The concept to know here is what’s called the hedonic treadmill, which says that, as our earning increases, our consumption or spending tends to increase in ways that are commensurate with the increase in earning. And then you never feel richer. You never feel better off because your lifestyle has risen as fast as your income. My number one piece of advice here would be to not let your lifestyle rise faster than your income and to make sure that as your income increases, so does the amount you’re setting aside, because lifestyle creep is a really, really big problem. What’s fascinating is, and I’ve been certainly bitten by some of this and haven’t followed my own advice here in certain instances, but the things that seem so extraordinary to you — I think about my house; when we bought this house it was the most beautiful house I had ever seen and soon it’s just where you throw your dirty socks — it just quickly becomes the backdrop against which you live your life. So really watch out for lifestyle creep. Make sure that if your income increases 50%, that your spending only increases 25%. Have a little fun, but make sure that they don’t increase in lockstep because that’s not where happiness is.

28:26 Emily: Yeah. I guess, I think I would add onto that — you put it very well about how the hedonic treadmill operates — I think that for some PhDs, when they get out of training and they finally have that larger salary, there’s some pent up demand. There’s some pent up wanting to spend behavior because they have been on this constrained income for so long. My advice to that person, in addition to what you said, would be to splurge on something that’s a one time expense, like a grand vacation or something, and not upgrade your housing this high degree, not upgrade your transportation to a high degree, not upgrade those fixed or recurring expenses in your life, but rather have this one wonderful, pleasurable experience and then get back to a lifestyle that is, as you were saying, far below what you could actually “afford” with your new salary, just so you aren’t stuck on that treadmill over the long term.

29:15 Daniel: I love that advice and I think it’s also consistent with understanding how you can spend money in ways that make you happy. When you look at the research on how to spend in ways that makes you happy, giving money away makes us happy, spending on experiences makes us happy and spending on getting rid of stuff we hate doing makes us happy. Having someone mow your lawn for example, makes happy. Buying time, buying experiences, and giving for goodwill — these are the things that make us happy. Don’t go buy a fancy car. Don’t go buy a big house that’s going to lock you into this recurring expense trap and it’s not even going to make you feel any better. It’s a trap.

Last Words of Advice and Where to Find Dr. Daniel Crosby Online

30:01 Emily: It’s great insight. Thank you. Do you have any final pieces of advice? We’ve already heard so much, but anything more for that early career PhD in terms of personal finance or behavioral finance advice?

30:11 Daniel: Again, just really to know your worth. I felt like when I broke out of my swim lane and got out of the cattle call that was sort of herding me towards this very prescribed life and once I sort of broke out and got into the world, I found that people had a lot more enthusiasm and respect for my ideas than they might have in a more constrained academic setting. So know your worth, don’t be afraid to ask for what you’re worth and go get ’em.

30:46 Emily: Wonderful. And if listeners want to follow up more with you, want to learn more from you, read your books, listen to you, where should they go?

30:54 Daniel: Yeah, I’d encourage folks to check out my books. The Laws of Wealth* is probably the place to start, The Behavioral Investor* is next. I’m super active on LinkedIn and Twitter, @danielcrosby.

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

31:07 Emily: Thank you so much, Daniel, for this interview.

31:10 Daniel: My pleasure.

Outtro

31:11 Emily: Listeners, thank you for joining me for this episode. PFforPphDs.com/podcast is the hub for the Personal Finance for PhDs podcast. There, you can find links to all the episode show notes and a form to volunteer to be interviewed. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcast, Stitcher, or whatever platform you use. Two, share an episode you found particularly valuable on social media or with your PhD peers. Three, recommend me as a speaker to your university or association. My seminars covered the personal finance topics PhDs are most interested in, like investing, debt repayment, and taxes. Four, subscribe to my mailing list at PFforPhDs.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode, and remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Poddington Bear from the Free Music Achive and is shared under CC by NC. Podcast editing and show notes creation by Lourdes Bobbio.

This PhD Government Scientist Is Pursuing Financial Independence: Part 2

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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

financial independence government PhD

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

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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

PhD financial independence 1

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.

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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.