Personal Finance for PhDs

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How to Cultivate a Personal Brand to Land Your Next Job or Launch Your Business

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In this episode, Emily interviews Dr. Gertrude ‘Gee’ Nonterah on why and how PhDs and even graduate students should develop a personal brand. Strategically using LinkedIn and Twitter can play a big role in attracting opportunities, including catching the eyes of job recruiters. Gee developed a personal brand that helped her transition from her postdoc position into freelance writing and teaching at a community college. Gee and Emily discuss time management when you are getting a side business off the ground and Gee’s upcoming pivot in her business.

Links Mentioned in This Episode

Teaser

00:00 Gee: You know, in marketing, going back to marketing, they are power words, right? And so, you know, throwing one power word into your value proposition is helpful because like you said, it creates some kind of intrigue and like, Oh, I want to, I want to know more about that. So for me, that power word was sizzling because when you get sizzling, it’s kinda like, Ooh, something really like delicious, or I don’t know, but you usually think about that. So definitely you know, coming up with a power word within that value proposition, within that tagline can be helpful as well.

Introduction

00:38 Emily: Welcome to the Personal Finance for PhDs Podcast: A Higher Education in Personal Finance. I’m your host, Dr. Emily Roberts. This is season eight, episode six, and my guest today is Dr. Gertrude “Gee” Nonterah on why and how PhDs, and even graduate students, should develop a personal brand. Gee explains how strategically using LinkedIn and Twitter can play a big role in attracting opportunities, including catching the eyes of job recruiters. Gee developed a personal brand that helped her transition from her post-doc position into freelance writing and teaching at a community college. We discuss time management when you’re getting a side business off the ground and Gee’s upcoming pivot in her business. I have an exciting personal update for you before we dive into this week’s episode. My husband and I submitted our very first offer to buy a home. It felt like a really rushed decision because we were not at all logistically ready to make an offer.

01:39 Emily: We had no agent, no financing, nothing. We saw a unicorn home pop up in our safe search on Friday morning. By Friday night, we had a Redfin real estate agent and were pre-approved for a mortgage. On Saturday, we saw the house. It was booked up with appointments every half an hour all day. So other people definitely recognized its charms. On Sunday, we worked with our agent to submit an offer. Like many other PhDs and millennials, generally, we have put off homeownership for a long time. We are now 35 and have two kids. Basically, we are trying to make our first home our forever home. So there’s a lot of pressure on the process. One of the reasons I’ve been talking so much lately on the podcast about buying a first home during grad school or in one of those earlier career phases is because I wish that I had gotten this first home purchase out of the way before now.

02:33 Emily: So I’d have more experience and insight by the time I reached this forever home purchase. Anyway, I’m recording this on Monday morning. So we don’t yet know if our offer will be accepted or if we’ll do this all over again the next time a unicorn goes on the market. At least we’ll be better set up the next time to make an offer with more of the logistics in place and having been through it once. Thanks for indulging me in that update. I’ll keep you posted periodically regarding this new adventure.

03:01 Emily: This coming Saturday, February 13th, is the next live Q&A call for the workshop, How to Complete Your Grad Student Tax Return (And Understand It, Too!). If you are a funded grad student in the U.S. and a U.S. citizen or resident for tax purposes, this workshop is for you. The IRS will begin processing tax returns on February 12th. So this is an ideal week to get that return ready to submit if you want to get your refund ASAP.

03:28 Emily: Go to pfforphds.com/taxworkshop to join the workshop and plan to attend the live Q&A call on Saturday to clear up any remaining questions that you have. Saturday, February 13th is also the deadline to join the winter 2021 session of The Wealthy PhD. This is a perfect time of year to work on a big financial goal, especially if you decided that 2021 was your year to get on top of your finances or are anticipating a career transition in the coming months. I hope you will consider joining the session if you want to gain financial inspiration, accountability, and actionable knowledge. You can find out more at pfforphds.com/wealthyPhD.

Book Giveaway Contest

04:14 Emily: Now it’s time for the book giveaway contest. In February, 2021, I’m giving away one copy of The Simple Path to Wealth by JL Collins, which is the Personal Finance for PhDs Community book club selection for April, 2021. Everyone who enters the contest during February will have a chance to win a copy of this book. I’m super excited to read The Simple Path to Wealth in the book club because, confession time, I have not read it before. I’ve recommended the book on many occasions on the strength of the author’s blog and its reputation, but this will be my first time through. I’m looking forward to learning alongside you. If you would like to enter the giveaway contest, please rate and review this podcast on Apple podcasts, take a screenshot of your review, and email it to me at [email protected]. I’ll choose a winner at the end of February from all the entries. You can find full instructions at pfforphds.com/podcast. Without further ado, here’s my interview with Dr. Gertrude Nonterah.

Would You Please Introduce Yourself Further?

05:24 Emily: I am delighted to have joining me on the podcast today, Dr. Gertrude Nonterah, we’ll call her Gee during the interview. And we are going to discuss something that I don’t think I’ve covered before on the podcast, which is personal branding for academics, as well as Gee’s side hustle as a writer. And so I’m really excited about both these topics, and Gee will you please introduce yourself a little bit further for the audience?

05:47 Gee: Yes. Thank you, Emily so much for having me on your show. I’m really excited to be here. So, as Emily said, my name is Dr. Gertrude Nonterah. I got my PhD in microbiology and immunology from Temple University School of Medicine back in 2015. And ever since then, I’ve been living in San Diego, California. I started out as a post-doc, worked as a post-doc for about two years and 11 months, and ever since have essentially been running my business. I also do teach at a community college, I have been doing that since the beginning of 2020. But yeah, I’m super excited to be here and to talk about personal branding and leveraging that as an academic.

Defining Personal Branding

06:32 Emily: Okay. So let’s start with a little bit of a definition, because it’s not a term that’s necessarily familiar to everyone. What is personal branding?

06:39 Gee: Right. And I think, you know, there is no one strict definition for personal branding except to say your personal brand is how you want people to perceive you or how you want to be known. And that’s the simplest way I can describe it because we could go into all the technical definitions of branding and all that. But the easiest example that comes to mind is every time you drive into a city and you see those two yellow golden arches that signify McDonald’s, you know it’s McDonald’s. Nobody needs to tell you that a McDonald’s exists there. You just know from seeing that big yellow M that there’s a McDonald’s close by, right? And that’s because over the years McDonald’s has done a great job of branding who they are, what their symbols are, and so on and so forth. And so bringing that to a more personal side, right, where you’re saying, okay, here I am. Here are my qualifications, here are my degrees, here’s my personality. And this is what I would like to be known for and to be hired for potentially if you plan on working in the corporate world. And even if you plan on building a business online or having a side hustle, it is important to build that personal brand, I believe, because it is a foundation that opens the door for many things. And as we go along in this discussion, hopefully I’ll be able to share some stories myself that will be helpful.

Personal Branding in Academia and Beyond

08:07 Emily: Yes, please do. So I think it’s pretty maybe obvious why someone who’s starting their own business would want to cultivate a personal brand. But what about for someone who is a scientist or another kind of academic who wants to either stay in academia or get another kind of employee job, you know, doing what they were trained to do for their PhD? Why is personal branding relevant for that person?

08:27 Gee: Yes. And I realized that this is such a newer concept in the world of academia, right? But I think it’s become important for a few reasons. The reason its become important is because there are a lot of people just like you, even though, you know, those of us that have PhDs only make up about 2% of the population worldwide, right. There is an increasing and growing number of people who are graduating with the same degrees as you. People who have the same qualifications, who have the same educational background, and so on. Right? So, it’s all the same. So I see personal branding as a way for PhDs and academics to stand out from the crowd, right? Because these days when recruiters receive resumes, all they receive is a piece of paper that rattles off your qualifications, right? But then here’s the thing. A lot of recruiters go on places like LinkedIn to check you out before they even give you a call.

09:26 Gee: Right? And imagine being that recruiter, put yourself in the shoes of the recruiter going on, you have 10 resumes, you go onto LinkedIn, and then you find that there’s this one person that’s super active in the topic that, you know, they’re looking for employment in. They’re sharing articles, they’re making very intelligent comments, they’re engaging in conversation. And then the other nine are nowhere to be found, even though they may have a LinkedIn profile, they’re nowhere to be found, right? Just put yourself in the shoes of that recruiter. Which one of these people would you tend to go with? Especially if all their resumes, everything being equal, what makes one of these individuals, I don’t know, of course there’s the interviewing process, which helps, but to be honest, at the very beginning, people are skimming through resumes. People are skimming through your LinkedIn profile or any other online profile you have and personal branding can really help you set yourself apart. Even if you think you’re working in a super boring topic and nobody would be interested in, I really do think that by building that personal brand and building that brand, that people begin to recognize in your field, you can set yourself apart and set yourself up for success as an academic slash PhD, whether you want to stay in academia or not.

Personal Branding Will Make You Memorable, Online or In-Person

10:50 Emily: What I’m taking from that description is that personal branding will at minimum help you be memorable to anyone who comes across your, well, hopefully resume as well, but definitely LinkedIn profile. Or even like in-person networking, maybe when that happens again, or Zoom networking, we’re recording this in December, 2020. Even with in-person networking, I’m sure there’s a way to express your personal brand, even, you know, verbally or with your business card, do people use still use business cards? I’m not sure, but in the way that you interact with someone at like in a networking like capacity, you know, people talk about having like an elevator pitch ready for, you know, what you do, like a one-sentence and you know, a one minute and so forth, that probably also all plays into personal branding. Right?

11:35 Gee: Absolutely. Absolutely, Emily. So like you said, you know, when, as we’re recording this, we’re in the middle of the COVID-19 pandemic and nobody is going anywhere, right? We’re not going to do any networking meetings anywhere. And so we don’t even have that opportunity right now. And so I think that this is actually the perfect time for you to start building that strong online brand, because now you don’t have that opportunity. So, you know, in a way, building that run online is your way of networking until we can get back to in-person networking, but yeah, absolutely. A personal brand doesn’t necessarily have to be online. You know, online tools are just easier to access these days in general. But yes, for sure, even as a person that you meet, you know, as somebody that goes in-person networking, you can absolutely establish that personal brand with in-person meetings. Yes.

How Do You Start Developing a Personal Brand?

12:32 Emily: So I really love the idea of using this, you know, COVID-19, the stay at home order period to cultivate specifically your online, personal brand. And then once other opportunities are available to you, you know, take what you’ve developed there and figure out how to express it, you know, in other ways, once in-person, you know, stuff is available again. So would you say that’s the first and like kind of most accessible way to start developing a personal brand is, you know, your website, your LinkedIn profile, and so forth?

13:01 Gee: Well, I think, I think that there’s a step before that. And the step before that is really figuring out what you want your personal brand to be. Now, I believe in building an authentic personal brand, but you know what I mean by what do you want to be known for? What do you, you know, determining what your personal brand is going to be is really thinking about the topics for instance, that you want to establish yourself in. So let’s say that you’re working on lung disease at a major, you know, medical research center, right? And you are on your way out about to get that PhD. What other, have you published papers on the topic? What did you find, you know, as long as your PIs is willing to share after you publish, after you publish, you absolutely share. Right? I know PIs are very protective of research ideas when it hasn’t been published yet.

Think About Your Personality

13:52 Gee: Right? So but if you really want to stay in that lung research lane, then that’s one thing that you can write down. I want to, I want people to associate me with lung research, for instance. Also another thing that I like to think about is your personality, right? Are you an extrovert? Are you an introvert? Are you somewhere in between? Right? It’s good to let that shine through. I know that as academics were really trained to kind of hold back on the personal part of our lives and not share that, but if there are causes you care, you know, you want to, you want to show that. And then if there are causes you care about, you know, you want to share that as well. So, you know, before you even jump into a website, before you even jump onto LinkedIn, sit down and actually write down, what do I want my personal brand to represent?

14:44 Gee: Do you know, there are people that have built a whole brand, not necessarily in academia, a whole brand around very brash talkers, right? And then there are people that have a more softer approach. There are people in between. So which one are you, and is that actually true to who you are? So once you sit down and determine what you would like to be known for so that you can leverage that to getting that dream rule and to getting those interviews and getting, you know, building those relationships with key people in your industry. You really want to sit down and think, what do I want to represent online? Right? And then once you determine that, you can craft everything else around that.

Create a Tagline or Value Proposition for Yourself

15:31 Emily: So I’m thinking, as you’re, as you’re speaking about this, tell me if I am going in the right direction here, I’m thinking of a person almost identifying like a tagline for themselves. Maybe you can give a couple of examples of that, but like I’m Dr. Emily Roberts. I, so for me, I guess my personal brand with Personal Finance for PhDs is I help early-career PhDs make the most of their money. So something really short and simple, easy to remember. Is that kind of what you’re thinking? Like, maybe give a couple examples of that, but then everything else can kind of support that tagline that you’ve identified for yourself.

16:07 Gee: Yes, yes, yes, absolutely. So it’s, you know, you’re calling it a tagline and I like to think of it in business terms as a value proposition. Like, what do you, what value do you bring to the world, right? And so, I like to say that I write sizzling content for million-dollar health brands. Like that’s my little tagline that I have, because that’s what I do. I write, I write content for million-dollar health brands. Right. And so you know, whatever it is, you could have a tagline that says, you know, award-winning lung research, or upcoming excited, enthusiastic lung researcher or something. So yes, absolutely. You can choose a tagline for yourself, but it shouldn’t be a tagline that we have to like sit down and have to figure out it should, it should clearly communicate what value you bring to people, right?

17:01 Gee: So in my case, like in your case, you, you talk about Personal Finance for PhDs. It’s absolutely clear what it is that Emily talks about. So if I wanted to find a podcast or resources that help me as an academic with my personal finances, and especially knowing that academics tend to be not paid very well, you know I would go find Emily’s podcast, right? So you want to, you don’t want to be what’s the word you don’t want to be fancy about it. You want to be clear, you can make it a little cute, but make it clear as to what people can expect from your brand and what problems that you potentially solve.

The Power of Power Words

17:41 Emily: Yeah. And I think also going along with that, and this is something, I guess I’ve learned a little bit from like marketing is to give like some kind of intrigue or like a little bit of an open loop or something within that initial one second, you know, face that you’re presenting to the world. Right? Like you said, the word sizzling. Ooh, what does that mean? What does it mean to sizzle? I want to find out more about that, right? So does that like play into it as well? Like enticing people into engaging with you further.

18:09 Gee: You know, in marketing, going back to marketing, they are power words, right? And so, you know, throwing one power word into your value proposition is helpful because like you said, it creates some kind of intrigue and like, Oh, I want to, I want to know more about that. So for me, that power word was sizzling because when you get sizzling, it’s kinda like, Ooh, something really like delicious, or I don’t know, but you usually think about that. So definitely you know, coming up with a power word within that value proposition, within that tagline can be helpful as well. But not always necessary, though.

Don’t Wait Until You Have Your PhD, Start Now!

18:45 Emily: Okay. I feel like you’ve given us a lot to chew on already with this, with this topic of personal branding. Was there anything else you wanted to add onto that?

18:54 Gee: Yes. I wanted to add onto that, that you know, don’t wait. I see, because I teach at a community college. I get to interact with a lot of up and coming, brilliant students. And I recently actually did a presentation on essentially starting to build your personal brand as a student on LinkedIn. And I was amazed at how shocked they were that they could do that as students. And so this is something that a lot of students don’t know, whether they are undergraduate students, PhD, students, even people who have finished their PhDs don’t know about this. And I’m going to kind of plug in LinkedIn here. That LinkedIn is a really powerful place for you to start building your personal brand. It’s, it’s moved on past the days where LinkedIn was sort of like a place you went to dump your resume, and you hope that a recruiter would find you.

19:44 Gee: It is now a place where you can create content, for instance. You can share ideas. You can comment on other people’s blog posts. Twitter is another great place. That’s how me and Emily met. And you know, there’s Academic Twitter and stuff like that. And so getting involved in these niche communities that are discussing topics that you’re interested in and you’re researching can really begin to get you noticed. So don’t wait until, you know, you have your PhD. Start right now. There’s a lot of conversation happening and you should jump into those conversations right now.

Opportunities Once You Develop a Personal Brand

20:21 Emily: And just to kind of add onto that. Once you kind of develop a personal brand and are starting to be known in some niche area, what kinds of opportunities might come your way? You know, maybe you can give an example of how that’s worked for you when you developed your personal brand.

20:38 Gee: So, so good. So once I developed, I’m still developing my personal brand, but once people begin to know you and begin to know that you talk about, you love to talk about certain things. They essentially file you in their heads as that thing. Which is why, again, I talked about the McDonald’s double arches, that the moment you see that, you know, it’s a McDonald’s. So people file that away in their minds. And so when, for instance, an opportunity comes for you to be interviewed on a podcast that is relevant in your niche. People begin to recommend you, right? If there’s an opportunity to speak on a subject, and that opportunity is a paid speaking engagement, people are going to refer you and say, Oh, I know a great person that talks about personal finance, specifically for PhDs. I’d love to refer you to her, right?

Recruiters Pay Attention to Your Social Media

21:27 Gee: When you begin to build those networks and you begin to get known for a specific topic, people file you away in their minds. And when opportunities come, they will refer you without you even asking, without you even knowing that somebody referred you, you know, or somebody mentioned you. So those are some opportunities. Also, as far as jobs go, when you begin to build your personal brand and begin to establish yourself in the minds of people, recruiters do take notice of this. You know, don’t believe the hype that nobody’s watching your social media. People are constantly watching it. And especially on a place like LinkedIn where there may be recruiters looking for people like you to fill positions.

22:11 Gee: And so once you begin to speak on a specific subject or to be a thought leader. I don’t like to use that word very much, but become part of the conversation, I would say, in a particular niche, the recruiters in that niche begin to take notice, because as you begin to build networks online networks with other people, those people can also refer you. All those recruiters can discover you as somebody that is super active, because when people go on LinkedIn to search and LinkedIn has a search algorithm, for instance, and it pulls up people that are maybe relevant to who they are looking for. The more active you are on a platform like LinkedIn, the more likely you’ll show up in the first few search results. So if they’re looking for somebody like you to fill a position, guess what? You get first dibs because you showed up earlier up in the search. So those are just a few of the opportunities that can come. I definitely got some speaking opportunities, opportunities to be on podcasts, even job opportunities have come to me because of the personal brand. So it’s really powerful.

23:17 Emily: Yeah. And I would say, I, I have never done a lot with my like branding, but I think as you said, because the branding, the name of my business is so clear already as to what it is. There’s no ambiguity there. And because I’ve been working in this space for several years, I have also seen all the same things that you just mentioned of, you know, networks, my network, working for me to, you know, bring more opportunities my way, which is incredible. And I’m really thankful for that. So I can see that this, you know, this advice is wonderful for a job seeker, but it’s something that has to start much, much earlier than that. As you were saying, you know, while you’re a student, not too early, go ahead and start cultivating this. Now, maybe you don’t have to be like the most active on LinkedIn.

Pivoting to Something Adjacent

23:59 Emily: Like, you’re just saying, if you, if your goal is not at the moment to show up at the top of searches, but once you’re starting to think in that direction that you need to step it up, right? You need to, you know, become even more active in these ways to show up so that people can find your profile and so forth. But yeah, I can definitely see how this, start cultivating it immediately, basically. And I also have a sense that it’s okay to pivot this a little bit, you know, if your goals change or if you need to, you know, adjust what you’re looking for or what you want to be known for. I think that’s okay, actually. Like people might still have you filed away in their mind as one thing, but going to something adjacent is not too big of a switch, I think.

24:37 Gee: At all, you know, and, and I’ve been, you know, I’m both, you know, in the corporate world, as well as I have a side business. I’m writing and, you know, even creating eBooks and online courses. And I’ve made micro pivots all along that path, right? So I wouldn’t, I wouldn’t even think it’s such a big deal. I’ve even seen people switch completely, switch topics completely. And that’s fine. As long as you don’t switch up on us every six months, right? You know, stick with something for long enough for us to file you away in our minds. But yes, if your goals change, if let’s say, you know, you were working in biotech industry and now you want to go work, you know, as a lawyer. And so you’re pursuing a law degree, that’s fine. You know, it’s like you said, I love the word you use adjacent. Adjacent, but slightly different. It’s fine. It’s absolutely fine to change directions. And over time, people begin to fall in love, not just with your topic, but with you, too. And so they’ll follow along for the journey as well, even if it’s no longer relevant to them.

Commercial

25:45 Emily: Emily here, for a brief interlude. If you know that you want support in accomplishing a big financial goal this spring, I recommend my group coaching program, The Wealthy PhD. You and I will meet one-on-one to identify and plot a course toward your big financial goal. Past participants have opened IRAs, set up systems of targeted savings, started budgeting, systematically implemented frugal tactics, and more. Every week for eight weeks, you’ll participate in a small accountability group that I facilitate. The group will help keep you on track to meet small weekly goals that add up to your big goal. Prospective grad students, this would be a perfect cycle to join as I and the other participants can give you a ton of support and financial insight as you interview and ultimately choose your PhD program. The deadline for registration for The Wealthy PhD is Saturday, February 13th, 2021. Visit pfforphds.com/wealthyPhD to learn more and register today. Now, back to our interview.

Gee’s Side Hustle: Writing

26:56 Emily: I’d love to pivot to talking more about your writing business and you enticed us earlier. So of course, we want to learn more about it. You know, when did you start doing that as a side hustle? How did it become, you know, one of your main things that you do now?

27:09 Gee: Yeah, yeah, yeah. So I told you in 2015, I graduated from my PhD and we moved to San Diego, California from Philadelphia PA. And for those of you that don’t know the geography of the United States, Philly and San Diego are on two completely different ends of the U.S. Okay. And they’re also different in terms of the economics. And so when we moved here, we realized really quickly how everything was three or four times more expensive. So even the salary I was going to be getting as a post-doc, I was like, wow, I don’t think this is going to be enough. So, and it wasn’t, to be honest. And so I wanted to find a way to make some extra money. So, because I had been blogging for about a year at that point, I decided to, to somehow, you know, become a freelancer of some sort.

28:04 Gee: So the first thing I did was actually sell social media services. If you’ve listened to me talking on this interview so far, you can tell I’m quite the enthusiast when it comes to social media. I think it’s a powerful tool to build brands. I think it’s a powerful tool to sell your services and products, whatnots. You know, it’s a powerful marketing tool. Anyway, so I began to sell social media marketing services, and I was helping local businesses who are not even in the sciences. They were just local mom and pop businesses that I was helping to build a social media presence. I did that for about two years and then pivoted to freelance writing in 2017. So in 2017, I pivoted to freelance writing and I began to write content for actually personal finance. I wrote content for healthcare companies. I wrote content for e-commerce stores. And so anything I could get my hands on to write, I would write and I would get paid for it. And that became a great side business that allowed us to take care of the financial deficits we were facing with how expensive San Diego was. And, you know, the meager pay I was getting, I was grateful for the pay, but it was meager compared to the living standards here in San Diego. So that’s how I got started.

Wearing Many Hats as a Postdoc: Time Management

29:25 Emily: Yeah. I think that story will probably be familiar to a lot of people in my audience. It is, of course, something I cover quite a bit is in these transitions, how do you figure out is that pay going to be sufficient? Or what am I going to have to do to, you know, make ends meet in a city I’ve never lived in before? That’s a really difficult, you know, kind of nut to crack. And so I think you mentioned, you know, when you introduced yourself that you are, you’re teaching at a community college, you have this freelance writing business, did you wear any other hats, remind me?

29:55 Gee: Oh man, I’m a mom, I’m a wife, you’re all these, and those are full-time jobs. So, so yeah, absolutely. I did wear other hats. And I think maybe this kind of segues into talking about time management.

30:09 Emily: Yeah, please.

30:10 Gee: As far as side hustles and your job are concerned. Yeah. So I don’t think it’s fair to be working on your employer’s time. I think you should carve out time on your own time to do your side hustle. And by and large, I stuck with that. And so usually what would happen would be because I’m mom, because I’m post-doc, because I’m writer and wife, I would allow my, at that time, my son was younger, so he tended to go to bed early. And so by nine, he was in bed. And so between nine and about 11:00 PM or 12 midnight, I’d be working on on writing projects. I’d go to sleep, wake up around six or seven the following day, get ready to go to my postdoc job and then go do that, you know, shindig and then come back and then do the whole thing again.

31:00 Gee: So in those early years it was a lot of, it was, I didn’t have any free time. I hardly had free time. I was using every bit of time I could to to build up some side income so that we could, you know, keep up with the bills. Now, I will say that over time. Yes, it gets tiring, but it’s not going to be like that forever, you know, some motivational speech here, but it’s certainly not always going to be like that where you have to work around the clock. But I do believe that there are seasons of life where you have to make some sacrifices. And for sure, that was a season of life where I made some sacrifices so that, you know, that the bills and everything could get paid at home. So that’s how I manage my time, is I find, I usually worked at night on my side business whilst I worked my regular job during the day.

Time Management in the Present

31:54 Emily: Yeah, I think that is a function of the postdoc position is a full-time job, and it’s not paying you that well. So, you know, for your particular goals of living in a high cost-of-living area, you know, you had to put in the hours. And of course, when you were just beginning with your, you know, the social media stuff and then the freelance writing, you know, I’m sure you’ve increased your rates since then. So your pay was, you know, the lowest for the side for the side income at that point, since you were just starting, and you had the not very well-paid post-doc position. I imagine things look a little bit more rosy now for your time management. Can you tell us a little bit about that?

32:27 Gee: Yes. So right now, because we are, you know, with stay at home orders and, you know, having to social distance because of the pandemic, I’m mostly working from home. So now that dynamic is definitely different. I still work really hard. And I think even a little harder because you have to homeschool as well, right? but I am finding that it’s hard with time management, especially when you’re starting, but nowadays it’s not so hard. Because when I wake up in the morning, I know, like today I know I have this podcast. I know I have to upload certain documents because I have a book bundle sale coming up, you know? So, I do intentionally sit down and plan my days, because I realize if I don’t have anything on a, if I don’t put it on a calendar, it does not exist in my mind. It really doesn’t. So, I use my Google calendar religiously. You know, I also have a bullet journal that I use very diligently and I write down like top three things I want to do in a day. Do I always get everything done? No, but at least having it written down reminds me that it needs to get done. And even if it has to be a day late, I’ll get it done. But being organized in that sense, having Google calendar and then having my bullet journal has been life-changing to say the least. Yeah.

33:47 Emily: Yeah. I would also say for me, my time management skills have leveled up during the pandemic with the kids being at home. And yeah, I find the same thing that I need to assign myself tasks to do certain, you know, block scheduling, right. Like block out time for different things, because it does help keep me on track.

Future Plans for Gee’s Writing Business

34:05 Emily: So, Gee, what are your future plans for your writing business?

34:12 Gee: Yeah, absolutely. So actually this is so interesting because recently I recorded an episode where I was talking, a podcast episode where I was talking about pivoting away from freelance writing in 2021. So I am pivoting away from it because, first things first, I did get a new position with a company writing content still. So I’m still going to be doing that, still be writing content, just not in a freelance capacity anymore. But, I still have the personal brand that I built online. I still have my YouTube channel. I still have my podcast. There are people that are very tuned into that and very avid listeners and watchers of my content. So I’m going to keep doing that, producing my content. But one of the things that, you know, producing podcasts and creating YouTube videos or any kind of content online does for you is when you build this audience, usually at the point they want to buy things from you. So I do have e-books and digital products currently, and also, I, you know, they do ask for coaching and they like, okay, Gee, you’ve been doing this and I want you to coach me too. So I’m moving more into just selling digital products and doing coaching in the time that I do have where I’m not writing for the company that I’m going to be working with. But I am pivoting away from freelance writing, but not away from writing itself. And I’m excited for those new opportunities. Yeah.

Where Can People Find You?

35:40 Emily: Yeah. Congratulations on the new position. I mean there are definitely advantages to freelancing, but the stability is nice as well to know where your paychecks are going to be coming from. Will you please let people know where they can find you if they’ve really, you know, loved this interview?

35:55 Gee: Absolutely. So if you want to find me, I actually, the first place you can find me is I have a free newsletter that I send out every week. You can go to GeeNonterah.com/newsletter and you can download a free checklist of how to, if you’re interested in becoming a freelance writer, even if you’re not, you can sign up still. But one of the freebies I give away is this checklist whereby you can get your first paying client. I’m also very active on LinkedIn. So if you just type in my name, Gertrude Nonterah PhD, you’ll find me and also on Instagram. So @GeeNonterah you’ll find me there.

Best Financial Advice for Another Early-Career PhD?

36:34 Emily: Perfect. And Gee, I conclude all of my interviews with asking my guests, what is your best personal finance advice for another early-career PhD?

36:45 Gee: Oh man. I wish. So this is such a great question. It’s going to be slightly different from everything I just talked about, but I wish I knew more about investing when I was an early-career PhD. I wish I did. And so ask about your 401(k)’s ask about, you know, find out about IRAs, read about it, you know, listen to Emily’s podcasts, but investing is such a great way to make money that I feel like it’s the best hidden secret that is out in the open, you know? And so, don’t sleep on that. Even as, you know, your paycheck from your job is great, but really looking, and then your 401(k) is also good, but look into even investing for yourself and learning the ropes of investing because those can pay huge rewards. So that’s one thing I wish I knew and something I’m currently doing and something that I’m always telling people to, to look into, especially for those of us that are PhDs and you know, in our early careers as academics.

37:48 Emily: Yeah. Thank you so much for that. Obviously investing is one of my favorite topics to talk about. So I love that you brought it up. I’ll actually tell people who are interested in the crossover between what we’ve talked about today. If you are a side hustler, if you are a business owner, if you are self-employed and you were interested in investing for retirement and your IRA is not sufficient, and maybe you don’t have a, you know, 403(b) or 401(k) through your workplace, please check out my Community, Personal Finance for PhDs Community, because I have a course in there on retirement investing vehicles for self-employed people. So if you’ve maxed out your IRA because you have this fantastic side income going on, but you want to do more, I discuss the different options available to you as a business owner for retirement investing. So pfforphds.community, if you want to check that out.

38:35 Emily: Gee, this has been a fantastic interview. Thank you so much for giving it. I’m so glad we found each other on Twitter. Yes. Thank you so much for coming on.

38:43 Gee: Thank you so much, Emily.

Listener Q&A: Paying Off Debt vs. Investing

38:44 Emily: Now, onto the listener question and answer segment. Today’s question actually comes from a survey I sent out in advance of one of my university webinars this past fall. So it is anonymous. Here is the question. What is the balance between paying off debt now and investing some money elsewhere? I love these questions that are like, what is the most optimal financial step for me to take? It’s definitely a good sign that the questioner has some cashflow available to do one of these two things, investing or paying off debt. To answer these kinds of questions, I refer to the financial framework that I developed for early-career PhDs. So I’ll tell you what the framework has to say about this question, but just so you know, when I do work one-on-one with individuals, the framework is only a guideline and we do often find a more individualized solution. So this question presupposes that the thing to do with the money right now is paying off debt or investing.

39:48 Emily: However, my framework has three types of steps: debt, repayment, investing, and saving up cash. So the first thing for this questioner to do is to assess all these different areas of finances. How much cash do you have on hand right now, and what is it for? What are the different types of debt you have, including the interest rate and the payoff balance? And do you already have some investments going for you, or is this something you’re starting for the first time? The very first step in my financial framework is to put in place a starter emergency fund. That’s the fund that’s going to help you pay for life’s minor emergencies that happen on, you know, maybe like a yearly basis. Basically, it’s the fund that’s going to keep you from racking up credit card debt. So that amount of savings should be somewhere between $1,000 and two months of expenses, depending on how large your financial footprint is and your risk tolerance.

40:42 Emily: Step two in the framework is to pay off all of your high-priority debt. In my book, high-priority debt is credit card debt, even if it’s at a 0% promotional balance, IRS debt, and any debt that is above somewhere between six to 8% in interest rate. Where you fall in that six to 8% is up to you and your risk tolerance. Now, if your debt includes student loans that are currently in deferment, I would not put those in step two. I’d push them off to a later debt repayment step. So if the person asking this question has any kind of debt that is high priority, the answer to the question is pay off that high-priority debt completely. As soon as you can. Now, let’s say that person doesn’t have that type of debt or has already taken care of it. Step three, in the financial framework is to save up for near-term irregular expenses.

41:35 Emily: This would likely include setting up a system of targeted savings, which I talked about in season seven, episode 15. Once you have that cash savings in place, we’re ready for step four. Step four is to start to invest for retirement or to resume investing for retirement if that was on pause during those first three steps. Now, in most of the steps in my financial framework, you have to do a discreet thing, save up X amount of money, pay off XYZ debts. Step four is different because in step four, you’re going to get your savings rate up to a certain percentage, and then you can move on to step five, but you’re going to keep saving that percentage into your retirement accounts going forward. So let’s say that the questioner has paid off or never had any high-priority debt, and they’re investing up to a minimum level in step four.

42:25 Emily: Once they’ve done those two things, it’s time to move on to step five, which is another kind of debt repayment step. And as I said, there are eight steps overall in the framework. But most people I work with do tend to fall somewhere in those steps one to four range. So I hope this answer provided you with some insight into my process of deciding on which financial goal is optimal at any given time. You can find an ebook that I wrote all revolving around this financial framework called The Wealthy PhD inside the Personal Finance for PhDs Community. You can find the Community at pfforphds.community. So if you join there, you can read the ebook, The Wealthy PhD, and read all about this framework and how to use it. And if you want to go even further, we’re enrolling for my group coaching program, The Wealthy PhD, and the deadline to enroll is February 13th.

43:17 Emily: I do use this framework when I help everyone in the program decide on what their big financial goal should be during the program. Although, as I said earlier, when it comes down to working with an individual, we often, you know, tweak this framework for their personal preferences. If you would like to submit a question to be answered in a future episode, please go to pfforphds.com/podcast and follow the instructions you find there. I love answering questions, so please submit yours.

Outtro

43:45 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs Podcast. On that page are links to all the episodes show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email listserv, or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in like investing, debt repayment, and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

This Two-Time International Graduate Student Gives Excellent Advice to Her Prospective Peers

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In this episode, Emily interviews Josephine Shikongo-Asino, a second-year PhD student at Oklahoma State University from Namibia. This is Josephine’s second stint as an international graduate student in the US, having completed a Fulbright fellowship about ten years ago. She has great advice for prospective and rising international graduate students in the US about the financial transition into graduate school. Josephine and Emily discuss funding models, the importance of saving and debt reduction prior to matriculating, researching cost of living, visa restrictions on working, credit and debt, budgeting, remittances, and more. Josephine’s excellent advice nearly always applies to prospective and rising domestic graduate students as well; this episode is for everyone!

Links Mentioned in this Episode

international grad student

Teaser

00:00 Josephine: If anyone is considering to come, I would say before you hand in that resignation letter, really do an inventory analysis in terms of your financial needs and maybe also pay off any loans, if you can. If you have any loans, you can pay them off. If you have a car, sell it, you weren’t needed at least for a year. So yeah, that’s really doing a financial inventory to make sure that you are in the right place.

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.

00:42 Emily: This is Season 8, Episode 5, and my guest today is Josephine Shikongo-Asino, a second-year PhD student at Oklahoma State University from Namibia. This is Josephine’s second stint as an international graduate student in the US, having completed a Fulbright fellowship about ten years ago. She has great advice for prospective and rising international graduate students in the US about the financial transition into graduate school. We discuss funding models, the importance of saving and debt reduction prior to matriculating, researching cost of living, visa restrictions on working, credit and debt, budgeting, remittances, and more. Josephine’s excellent advice nearly always applies to prospective and rising domestic graduate students as well; this episode is for everyone!

01:32 Emily: It’s always a pleasure for me to create content for international graduate students, postdocs, and PhDs with Real Jobs, and I’m really grateful to Josephine and everyone who has donated their time to help me and my audience learn more about how to navigate finances while in the US on a visa.

01:48 Emily: Some other episodes in which I’ve covered this topic are S4E17 Can and Should an International Student, Scholar, or Worker Invest in the US?, S2E6 Making Ends Meet on a Graduate Student Stipend in Los Angeles, and S6E3 The Financial Hurdles of Moving to the US as a Postdoc.

02:08 Emily: I’m actually working on some tax content specifically for international graduate students this spring, so if you aren’t already on my mailing list, please join to hear more! You can do so at PFforPhDs.com/subscribe/.

Giveaway

02:21 Emily: Now it’s time for the book giveaway contest! In February 2021, I’m giving away one copy of The Simple Path to Wealth by J L Collins, which is the Personal Finance for PhDs Community Book Club selection for April 2021. Everyone who enters the contest during February will have a chance to win a copy of this book.

02:42 Emily: If you would like to enter the giveaway contest, please rate AND REVIEW this podcast on Apple Podcasts, take a screenshot of your review, and email it to me at [email protected]. I’ll choose a winner at the end of February from all the entries. You can find full instructions at PFforPhDs.com/podcast/.

03:03 Emily: The podcast received a review this week titled “Crucial knowledge for a first year PhD student”. The review reads: “I started listening to this podcast a couple months ago, and the tricks I have learned have increased my confidence in personal finance has tremendously. As an international student. Not all advice work for me, but I especially enjoyed episode two in season eight, when Laura was sharing her experience as an international student. In general, this podcast have taught me to manage my new monthly stipend the best way. I now know that it’s okay not to prioritize paying down my student loans, I’m not crazy to be checking my bank account on a daily basis, in fact, it’s encouraged, and I’m now putting together a 50/30/20 budget. My goal is to one day be managing my personal finances in a way that I could be a guest on Dr. Robert’s podcast”.

03:51 Emily: Thank you for this a wonderful review and I can’t wait to have you on the podcast without further ado. Here’s my interview with Josephine Shikongo-Asino.

Will You Please Introduce Yourself Further

04:02 Emily: I am delighted to have joining me on the podcast today. Josephine Shikongo-Asino. She is a second year graduate student at Oklahoma State University. And she’s here to talk with us about international students and their transition to the US, particularly the financial aspects of their transition. This is a subject I’m highly interested in. I hope you are as well. I’m interested in for all types of graduate students, both domestic in the US and international, but I’m really, really happy to have the focus on international students on the podcast today, because it’s a group that is highly in need of more information about this. So Josephine, I’m really pleased that you suggested this topic and that you’re joining me on the podcast today. Will you please tell the audience a little bit about yourself?

04:42 Josephine: Thank you, Emily. Thank you for having me. I’m Joseph Shikongo-Asino. I am originally from Namibia, which is in Southern Africa. We are just above South Africa. I’m sure many people know where that is. My background — I’m a certified accountant. I have a master’s in strategy as well, which I did here in the US. And then I’ve spent about 10 years working in the financial sector, including financial services, banking, and investments. But currently I’m a second year PhD student at Oklahoma State University with my research interests, really more on higher-ed finance and policy.

05:20 Emily: Wow. What a great fit for this podcast. I’m so glad you’re joining us. And between your master’s and starting your PhD, did you stay in the US that whole time, or did you live back in Namibia, or elsewhere?

05:31 Josephine: No. I had to go back home because with my master’s, I was sponsored by the Fulbright program. They require you to work two years at home once you finish your program so that you can give back, which is the purpose of the Fulbright program. I had to serve two years in my country and then come back to proceed with my PhD.

05:49 Emily: Gotcha. So you really have the perspective of having transitioned into the US twice?

05:54 Josephine: Yes.

Similarities and Differences Between Finances in Home Country and the US

05:54 Emily: Perfect. So tell us a little bit about, maybe before that first time that you came to the US, a little bit more about the finances in your home country, and how they are similar or dissimilar to the US.

06:07 Josephine: Namibia is classified as an upper middle income country by the World Bank. So it is actually, one of the better performing economies on the continent. And even when I came here, I realized that there’s not much of a difference in terms of salaries back home and being in the US, other than currency exchange, obviously. But, because I had to quit my job, I did not have a backup, I did not have any cushion, that could keep me in case something happens. In case I have an emergency, I did not have, um, any backup. And also because I’m coming from a low income family, I did not have any other backing, other than the sponsorship, which I go through the Fulbright program. I really had to do to survive on my own. I took a decision to leave my job because I thought that I would come to a better situation, which will give me better opportunities afterwards. Looking back, maybe I would have made a different decision after the two years were over. I don’t know if I would have necessarily quit my job had I known what I was signing up.

Advice for Prospective International Grad Students

07:24 Emily: I see. Okay. So I think we’re going to get a little bit more of those stories as the interview proceeds. First of all, you just mentioned that you quit your job, no savings, no backup before you came here. What’s your advice for another international student planning to come to the US? We’re recording this in December, 2020. I think it will be out sometime in the early spring, so people are receiving decisions about their admission to grad programs, but they still have a bit of time before they actually need to matriculate. What is your advice for that time period?

07:59 Josephine: I think the first question really is can you afford to quit your job. For me, that’s the first question you should ask yourself. Do you have expenses such as maybe dependents at home that depend on you on you solely, financially? Do you have a home loan? Do you have a personal loan, that needs continued financing from you?

08:20 Emily: Okay, so you mentioned paying off debt earlier, but what about generating savings? You know, I imagine a degree of savings is helpful for anyone who is moving, but more so when that move is international. So can you speak to that a little bit?

08:34 Josephine: Yes. I mean, most people plan their international studies way ahead before they happen, because you even go through the process of first researching the institution’s, researching where to go. So when you start thinking about going to study internationally, I think you should start at nest. You should start putting money that you can have in case, even if you don’t get a full tuition waiver, even if you don’t get a full scholarship, to have something that you can either supplement yourself, or you can just supplement your expenses, or you can keep paying off the debt back home with that. It’s very important to definitely start the saving nest the moment you start looking into going to study international, and as you really want to have a cushion to land on

09:22 Emily: One other thing to point out here is in this process of researching where are you going to be moving, I find this the idea very daunting of figuring out what is the cost of living in a country that I’ve never lived in, in a city that I’ve never lived in. The US is obviously very diverse in terms of cost of living, and some places I’m thinking about bringing savings, like to a place where if you’re going to rent somewhere it requires, first month, last month deposit all upfront, that can be thousands of dollars easily, as well as just the actual transit, the transitioning costs. Plus sometimes there are fees to be paid to universities upfront. It depends on how your university structures things, but sometimes there could be over a thousand dollars, multi-hundreds of dollars in fees to pay near the start of the semester, that are not like prorated over time. So all of these things have to go into the research of where you’re going to be living.

10:23 Josephine: Yes, they definitely have to and I always advise people that do not look at the big cities. It’s very tempting to want to go to the big cities, because that’s what you’ve seen on TV all your life. And that’s where maybe some of the most universities that you’ve heard of are, but smaller cities actually have just as good universities, but their cost of living is lower. When you’re in a smaller city, your cost of living could really be low, which could then make it easier for you, but as you do the research, look at programs that offer graduate assistantships, if you can, if they offer full graduate assistantships. And like you said, some of them include fees and others don’t, so if you can get a program that pays for fees, pays for health insurance, and a stipend at least close to the cost of living in the town, because those are available online; you can look up the cost of living. That could make really your life more manageable, if you can get an assistantship that can give you full tuition, including fees, health insurance, and a stipend. Otherwise, fellowships or scholarships, because all of these are really, they’re not just readily available, they are competitive. It’s important to look out. Some of them are not even advertised, so sometimes you might have to just write to people at the university and say, “Hey, I’m looking at coming into your program, can you talk to me about the funding structures of your program?” Because some things are not advertise, and if you don’t ask, you wouldn’t know. So it’s really, it’s an investment into just looking into deciding where to go to ensure that you are not under financial strain while you are in your studies.

12:15 Emily: I totally agree. This is the same process, again, that domestic students need to go through is figuring out what the funding structure is. I would say most primarily in your field, because this is oftentimes very field dependent, like whether funding typically comes from fellowships or training grants, or whether funding typically comes from research assistantships versus teaching assistantships. Versus other fields, maybe the funding is very spotty. Sometimes it’s here. Sometimes it’s not. And all that you need to be going in with your eyes wide open as to what that situation is. I usually suggest a bit of networking and informational interviewing, not necessarily with the faculty, but rather with anyone you have a connection with who’s already at a university in particular, if you have one in mind or even just your field more generally. Like alumni associations, for example, is a great way to reach out to people. You don’t know who they are, but they have some kind of connection with you and maybe they’ll be willing to have a conversation with you because you can really get the best insights, I think from current students. Faculty, sometimes they might paint a little bit too rosy of a picture about the finances in a graduate program, because well, one, they may not be aware of some of the difficulties that students are going through. And two, they may want to recruit you and so they might be a little more optimistic than things really are. So I would say talk to with current students. Of course you do eventually need to connect with faculty members as you’re in the application process, but maybe when you’re just getting more information, just trying to narrow down the field, students are really great resource.

13:46 Josephine: Oh yeah. Students will give you the true picture without needing to paint it any rosey, because they have gone through it and some of them might not have had the same guidance. They will tell you the truth, so the reaching out to current students is definitely a must, I would say.

14:03 Emily: Yeah. And the extra wrinkle there for international graduate students, you can correct me if I’m wrong about this, but the extra wrinkle there is, well, really please do talk with other international students, and even particularly if there are some from your own country that would be especially helpful, because a lot of times programs don’t pay very well, like you just mentioned pay at least equivalent to the cost of living in a certain city. The resource that I really like to point to is the living wage database at MIT, livingwage.mit.edu. That’s an awesome resource for telling you in every county in the US or every metro area, what is the baseline amount of money that this research points to as needing to just get by just necessary expenses.

14:48 Emily: Okay, so speak with other international students, because I know what happens a lot on the domestic side is that if universities are not paying well enough, domestic students will side hustle. They will have outside jobs. And that is, as we discussed earlier, at least for jobs originating in the US, not an option for international students. Also debt is almost completely not an option because you have to have a US guarantor and that’s a whole big hurdle to get over. And so pretty much student loans are not accessible to international students unless you already have connections in the country. The fallbacks that domestic students have — the safety pressure release valves on their finances — are not necessarily available, usually not available to international students. That’s something really important to consider that if a domestic student is telling you, “Oh yeah, it’s okay, but I work 5-10 hours a week tutoring or whatever outside of my primary appointment,” please know that that option is not available to you and you’re going to have to make the finances work another way.

15:48 Josephine: Yeah, absolutely. And I would say that you would also need to just manage the little that you have when you get it. If you manage to get an assistantship, if you have a scholarship, if you somehow have an assistantship, even if it’s outside of your department, in the university, really try to stick to a budget. Draw up a monthly budget, stick to it, your income is fixed, so your expenses should be. Those really include things such as like sharing an apartment, to reduce the rent costs, just keeping your expenses low, using campus resources, such as buses to get around, instead of buying a car. If the university has a good bus system, you can use that to get around, you don’t need to get a car. Medical expenses, try to minimize those. Use the university campus health facilities, because medical expenses can be really high. I’ve had experiences in both times. When I was here the first time, there was a time I had to get an ambulance, and that cost me a lot of money. And this time I also had to go to an ER and that, again, cost me a lot of money that I had to continue to pay off. So try to minimize those. Save every month. If you have a stipend that you receive, even if it’s just $20, just put away something, you never know when you might need it, especially when you’re in a country where you might not have a network at all, not anyone that you can just call up. If you don’t have obligations at home, you will manage somehow. Try to stick to your budget and save every month, if you can.

17:42 Emily: Totally, totally agree with all of that. Especially about not committing yourself to higher fixed living expenses, right away. Yes, definitely find a place that’s on a bus line. I do remember, so I went to graduate school at Duke, so Durham, North Carolina. At the time, it was a very car dependent town, so moving there as a domestic student, I was like, “Oh, I have to buy a car.” I was living actually car-free before that point, but I was like, “Oh, Durham, I have to buy a car there.” But once I moved, I noticed that a lot of the international students who were my peers did not have a car yet because, there’s a process to go through. They had to get a license. They had to be able to get credit, to qualify for a loan. It took six months or 12 months for them to buy cars. So I was realizing, “Oh, well, they’re managing to get around okay. Yeah, they have to bum an occasional ride, but mostly they’re using the buses” and it’s actually pretty manageable. Try to set your life up that way, at least in the first year. You can reevaluate in subsequent years if that’s working for you or not, but really try to get those baseline expenses low until you have kind of your bearings in your new city.

Commercial

18:54 Emily: Emily here for a brief interlude taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold your income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2020 tax return, which are available pfforphds.com/tax. I hope you’ll check them out to ease much of the stress of tax season. If you want to go deeper with the, or have a question for me. Please join one of my tax workshops, which you can find links to from pfforphds.com/tax. It would be my pleasure to help you save time and potentially money this tax season. So don’t hesitate to reach out. Now back to our interview.

US Funding Models and How They Impact International Grad Students

20:00 Emily: Was there anything else that you wanted to add about funding models in the US. We mentioned a few of them — assistantships, fellowships and scholarships. I did notice I’ll add here, in my own graduate program, a lot of international students did come with funding from their own home countries. So they were sponsored by their own federal government, so that is an option you can investigate in whatever your home country is, but I noticed that as another possibility.

20:27 Josephine: Yes. There are some countries that would have scholarships within their own funding structures, so if those are available in your country, that’s great. Some companies within the country could also sponsor you, or maybe even your employer, they might be able to sponsor something so that if you have those options, that is great. But the one thing that I also wanted to mention on the funding structure is that as you review an offer for an assistantship, for example, they usually do not include summer. That’s another aspect that you need to look at — what will you be doing in the summer? Will you be able to survive during the summer? Will you have an option to work? Would you be able to get an exception to work, or would you be able to have your assistantship extended to cover the summer? Because most assistantships do not include summer and many international students find themselves over the summer, really stranded and not having any funds. And it can be tragic.

21:32 Emily: Yeah. I would say that goes into the research that you need to be doing into how your field, and then how specifically the programs that you’re looking into are funded. Because as you said, many places do not offer summer funding, or at least the funding might be different. Like maybe you have an assistantship during the year, but then summer it’s on you to go and apply for fellowships and when win of them., so that could be the expectation. Other places do have 12 month, year round funding. It really just depends and so it’s something you have to go in your eyes wide open and aware of. Again, I’ll repeat, the same advice for domestic students read that offer letter really, really carefully, because I’ve read many that just say what your funding is for nine months, then just stop talking about what happens next. You really need to ask those follow-up questions — what’s typical, what’s on the table? If they just say, “Oh, well, yeah, you’re definitely going to be funded, we just don’t know exactly how, we don’t know exactly what the mechanism is, but don’t worry about it, you’re definitely gonna be funded.” That’s a great answer to hear, but if you hear, “Oh, well, right, summer’s on your own, you need to figure that out,” then, okay, you need to know that going in.

Money Management Tips for International Grad Students

22:34 Emily: Now in terms of strategies for money management, you already mentioned budgeting. You mentioned saving even if a small amount. Are there any other strategies that you particularly want to point out for international graduate students?

22:48 Josephine: It’s really more looking at what you can bring in from home and this simple things such as watching…I don’t know, some countries have exchange rates that really fluctuate a lot, so if you have some money at home, for example, and something your currency just suddenly became favorable in comparison to the dollar, you should set up the money transfer from home in that way to say, “Oh, look at my currency — if I transfer right now, I’ll get double the money then I would get some other time.” I mean, obviously it’s something you need to actively do, and maybe it needs a special skill, but it can benefit you if you transfer money at times when your currency is not too weak against the dollar. For me, that’s something you can, you can as well look at. Again, leaving no obligations at home, I think that that can really leave you free and be able to focus on your studies, because if you have a debt back home that keeps needing money from you, it will weigh on you and you will need to accommodate it in your budget here in the US, and that can just kind of set you back up.

24:13 Josephine: Try to find really people that you can share expenses with, like whatever you do, if you’re able to share expenses with people — I loved to travel, when I was here for my masters, because I had the time, unlike now, and I would find friends and we would go to visit a state that we have never seen before. And when we are in a big group, you are able to share that cost without necessarily breaking a bank and you you’re able to kind of also have a good time, so that you’re not just focused on your studies. You have a good time as well on a budget, but when you have friends that you can share with it keeps your expenses down. Phones, again are another thing where if you have a friend who you can share, who can maybe help you put on their family plan, which are cheaper, instead of subscribing for your own phone directly.

25:21 Josephine: Don’t get yourself into things such as getting cable and do what you can stream online. Books for school — there are many used books out there that are cheaper. There are rental options. You can also stick to just maybe borrowing books from the library and really checking which book do you really need to buy in the end, instead of just buying all the books that are required. Books can be really expensive, so I had worked with the library for the most part. At the beginning of the semester, what books do I need? Check the library. Are they available? And then if I see that it’s a book that is really important for my future, then I will actually I’ll actually go and buy it, but otherwise I just borrow, use it and take it back. That way I keep my expenses low.

26:16 Emily: I’ll add a note on the textbooks there. I ended up borrowing textbooks from other students who had taken the course the previous year or whatever. Sometimes there might be an edition change, but sometimes not. And so I found that to be really useful because yeah, some people do invest in books and they want them available to them long-term but yeah, they can part with them for a semester, especially when they know where to find you. So that’s another good resource is just students who took that class last year.

26:41 Josephine: Yeah.

26:43 Emily: I do want to bring up remittances. You mentioned earlier supporting maybe dependence back in your home country, but that could extend not just to your children, but maybe your parents or other family members. So you have any suggestions for people who are expected to help continue to support family members or the like?

27:04 Josephine: Yes. I think there’s many tools online that actually charge really, really low fees to transfer money back home and are easy and fast. If you have a bank account, which for the most part, you would probably have, there’s ways that you can send money through your bank to your country, but that tends to be more on the expensive side, in terms of the international wire fees. There are online tools, financial apps that you can use to send money back home, as long as the person back home is able to receive it, and you can track it, that’s okay. But for me, I found those services cheaper compared to doing it through my bank, because the bank is obviously to involve the process that you have to go through. The money might not be available as soon as you needed, if the people need emergency money. It’s better to use the international wire tools that are available online. I think, I don’t know if I should mention any of them, but there’s WorldRemit, there’s MoneyGram, and the likes. There’s this many of them. One really just has to look and see which one offers the lower cost for sending money to your country, because the cost also varies depending on where you’re sending the money. So check which one has a low cost of sending money to your country and a fast one as well, because often people at home are not going to wait a week if they need the funds. So find the ones that it’s cheaper and faster to send money back home instead of doing it through your bank.

28:55 Emily: Yes. Thank you so much for making those suggestions. That’s something that I hadn’t thought about, like the mechanics. And I know a lot of people hear about building credit in the US when they first move here. Can you make a couple comments about your experience with that, or the best way to do that?

29:11 Josephine: Credit card companies here just give you unsolicited credit offers. And for me, I would say resist them if you can. It’s important to build a credit if obviously you plan to stay here, and maybe eventually get a job. But credit needs discipline. And as a student who might not necessarily have the means to always service your credit, my main advice is to stay away from the credit, but if you find yourself not able to, and you would like to take on some credit, either for credit building, or just really to make up some gaps that you need, then make sure that you do pay it off. Do not take away anything that you are not able to settle within that the month. Or if you really need, if it’s an emergency, then you have to set up a fixed repayment plan to make sure that you pay back because you also don’t want to leave the country with debt. I would advise against getting debt. If you’re going to get a job, just wait until you have a job. But if you want to access the credit that’s available and you have some offers then make sure that you do pay them off.

30:44 Emily: Yeah, I think my perspective on that question is it is helpful to have a credit score, a good credit score, in terms of actually just finding rentals. And this also depends on the housing market that you’re in, so it might be different, you know, cities versus smaller cities. Go ahead and build the credit, but like you said, don’t actually use it by carrying debt or carrying balances or paying interest. Do it in a way that you don’t have to pay any fees, essentially, but you can still build your credit score for the point that you need it. And like you said, maybe you won’t really need a credit score until you need to get a job or take out, like I mentioned car loans earlier. That could be a possibility if you feel you can support the debt. It’s a funny thing because credit scores seem like they should only be useful when you’re taking out debt, but in fact, they creep into other areas of life as well. It’s like a helpful thing, although not maybe like strictly necessary depending on your housing market.

31:43 Josephine: Yeah. I mean, yes, you do get kind of penalized if you don’t have any credit history, like you have never taken out credit, they penalize you on that. But yeah, build as little as you can for what you need, but don’t get into it because you probably come across friends who have used debt to pay off their studies, especially the domestic students, but it’s different. I would say as an international student do not take on any credit that you are not able to service immediately.

31:17 Emily: I totally agree. And we talked about the dangers of having debt earlier, when you’re obligating a portion of your already very small stipend, already completely limited stipend. It’s a tool you have to be really, really careful with because it’s very easy to get in trouble.

32:33 Josephine: Oh yeah, and they just send you, sometimes the moment they have the address, they just send you offers — “you qualify for a hundred thousand”, “you qualify for a credit line and you also get this airline miles” and you’ll still have to pay for them, so just stay away from it.

The Financial Culture Shock for International Grad Students

32:50 Emily: Absolutely. Is there anything that has struck you about the financial culture in the US that you think international students need to know about before arriving?

33:01 Josephine: I think for me, what was shocking is really the 20 hours a week that that is really strict. I think when we come, sometimes we think, ah, I’ll be able to make my way around this. I’ll be able to find a job. I’ll be able to make extra money. You really can’t. So you are only allowed to work 20 hours a week and it’s important to keep that in mind, That that 20 hours a week is the only income you will have. Life is expensive. Just buying bread itself, I was shocked at how much bread cost around here. The culture of eating out for the most part and really not, not cooking at home. So you would have to resist always being out, because obviously you won’t be able to probably fund it, and find ways to really cook at home. For me, the credit card offers were the most shocking, because I’m like, “Do they know how much I earn? Why are they offering me this credit?” Because in my country getting credit is very difficult. You only get credit if you earn a certain salary and you can prove that you have a good credit history of paying off any loan that you have had before. So getting offers from companies to just say, you qualify for credit, without me doing anything, was what was kind of surprising.

34:40 Josephine: Big cities, again, very, very expensive, every little thing costs you money, so it’s better to stay maybe in like a rural town, which is very close to a big city where you can take and one hour train to a big city, for example, that takes off a lot. If you can stay in a smaller town, which has a train that goes into a big city for one hour, that kind of gives you the best of both worlds. But yeah, the financial culture in the US is just, it’s a spending culture. It’s obviously about revolving money in the economy and supporting the businesses. So it is just, we have to keep spending there’s always holidays that have different things that you need to spend on. You really need to be able to manage your spending within such a culture.

35:39 Emily: I agree. I think from what I’ve read about, let’s say permanent immigrants to the US, they come with certain, I’m generalizing, obviously the world is very diverse, but oftentimes the US is more consumeristic and then the countries that they come from. And so, maybe that first-generation keeps some of the mindsets from their home country, original culture, but it gets diluted, and within two, three generations, the descendants of those people are just totally in the thick of the consumerism of the US and completely Americanized in that way. I would imagine it can be quite shocking, and a lot of pressure to spend once you’re here.

36:24 Josephine: I think the other thing is also to pay your taxes. Obviously in many countries, people still pay taxes, especially if you’re in a salary, your employer has an obligation to deduct that, but the deadlines on when to file and all that could be like flexible. But here it’s really, I feel it’s important to keep to the deadlines and ensure that you file the taxes and don’t do anything to feel maybe, “Oh, okay. If I say this, then I can claim more.: Don’t do it. It will ruin your life and it will ruin your chances to ever be in the US, so do pay what is due to the tax man and do not claim anything you are not entitled to.

37:18 Emily: Yeah. So I think what I’m hearing you say between the rules about visas and then the tax stuff is, there’s not flexibility here. The rules are the rules, and you need to follow them. You need to toe the line, because especially as you said, if you eventually want to get a green card and stay in the US, there could be things that come up in your history, your record, that torpedo that application, if you’ve made any missteps early on. So really, really keep to the rules. I have corresponded with international graduate students who have skirted the rules and worked extra or whatever, and they got away with it, I guess, for the time being, but I always say don’t chance it.

38:01 Josephine: No, because then you walk around looking over your shoulder, wondering if someone will come after you at some point. So I think just live, you’re in another country, just live according to their rules.

Financial Advice for Early Career PhDs

38:12 Emily: Okay. Josephine, as we wrap up, what is the best financial advice that you have for another early career? PhD could be an emphasis of something we’ve already talked about today, or it could be something completely different.

38:24 Josephine: I think there’s a few things that I just need to emphasize, which is seek funding. There are options out there. Don’t up on your dream thinking, there’s no way I can study in the US, I don’t have the money. There are options. There are funds out there that sometimes go unclaimed. Talk to as many people as possible that can help you to give you the information on where to find funding, because there are ways for you to be able to fund your PhD dream. Again, avoid debt. Live modestly. The rewards will obviously come later, hopefully.

39:04 Josephine: And then just make sure that you do it for the right reason. As you make your decision to pursue a PhD, it’s not like a master’s program where you do it, you finish maybe within two years or one year, and you can go and get a job. It takes time. So at some point it will get tough. Whether it’s financially or just the coursework, it will get tough. But if you have a clear motivation, if you have a “why” you’re doing it, you will remain on track. Don’t come to do a PhD as a way to just be in the US because when it gets tough, you will find it hard to keep motivating yourself. When the stipend is much less than the salary you used to get back home before you resigned, there will come a day when you are like, why am I even doing this? Why did I have to give up my job to come and do this thing, which is now going to take me four years to finish, but if you have a clear motivation on why you’re doing it, I think it will keep you going., when you can keep going back to your why.

40:15 Emily: Beautiful, beautiful advice. Thank you so much for adding that. For the international listeners, I will add a few links in the show notes of previous interviews I’ve done, some articles I’ve written specifically for international students. There’s one especially, we didn’t touch on investing in this interview, but if you’re interested in investing as international student, I have an interview on how you can make that happen, so that could be of interest as well. Josephine, thank you so much for joining me on the podcast and giving me this wonderful interview.

40:45 Josephine: Thank you. Thank you, Emily.

Listener Q&A: Credit Cards

Question

40:47 Emily: Now it’s time for the listener question and answer segment! This week’s question is one I ran across on Twitter from Jake Thrasher, who gave me permission to answer it in this segment. Here is Jake’s Tweet: “Does anyone have good credit card recommendations for grad students? I’ve never had a credit card before, and I have no clue what I’m doing.”

Answer

41:08 Emily: Jake got a lot of great answers to this question on Twitter, and I’ll link to it from the show notes.

41:13 Emily: I’m going to answer this question not with respect to what might be the best credit card for a grad student right now, but rather how to find a first credit card no matter when you may want one.

41:23 Emily: First, you should determine what characteristics you’re looking for in a first credit card. It is recommended that you keep your first credit card open indefinitely because having a higher average age of credit boosts your credit score. So even if you open and close other cards later, ideally you would keep this one open for many years. Given that, I recommend that you sign up for a card with no annual fee and also with a creditor who has a reputation for good customer service. Some other features that are nice-to-haves but not must-haves, in my opinion, are ongoing rewards, a sign-up bonus, and waived foreign transaction fees.

42:03 Emily: If you have any inkling in your mind that you might carry a balance on this card in the future, look for a card with the lowest interest rate that you can find. I did this when I signed up for my first credit card because I didn’t 100% trust myself to pay it off completely every statement period. I ended up creating a track record of paying my cards off completely and on time, so now when I open credit cards, I don’t even look at the interest rate. But if you’re just starting out with credit cards, that’s reasonable to take into account.

42:34 Emily: Finally, to avoid applying for cards that you won’t get approved for, you should take into consideration your current credit score. If you’re new to credit you might not have a credit score or it might be not very high yet. You can search for cards that don’t have a credit score requirement in that case. For anyone new to the US, it’s typical to apply for a secured credit card as your first one.

42:57 Emily: Once you have your lists of must-haves and nice-to-haves, it’s time to start searching for current offers. You can definitely Google “best first credit card” or some variation on that and see what you get. I also like to use the sites bankrate.com and Nerdwallet.com. Those sites typically set up categories of cards for you to peruse, such as student cards, no annual fee cards, cards for bad credit, etc. However, please note that probably any credit card review you run across online has an affiliate or commission structure in place. That means that if you click through a review to open one of the cards, the site hosting the review will get paid, and that can bias their reviews. Look across a few sources to see if some cards commonly pop up within the criteria you’re searching for.

43:46 Emily: For example, when I’m doing this exercise in January 2021, I’m seeing that Discover offers a student card that probably fits the bill. Many of the people who responded to Jake’s prompt said they used Discover cards when they were starting out. I read Discover’s policy, and apparently after you are no longer a student they reclassify the card to a non-student card with the same benefits structure, so you keep the longevity of that account going. While I’ve never had a Discover card myself, they are one of the major players in the credit card space and their online reviews seem to be solid, which leads me to believe it will be easy to keep the card open for a long time.

44:22 Emily: Another great suggestion from the Twitter responses is to open your first card at a local credit union because they are likely to be less predatory than a bank. So that’s a great approach as well, provided that you will still be able to use the card with ease if and when you move away from the area that the credit union serves.

44:40 Emily: One final suggestion for Jake since he said he has no clue what he’s doing: Read my article titled Perfect Use of a Credit Card, which is linked from the show notes, and follow its advice to the letter. It’s super, super easy to slip up with a credit card and quickly get in over your head with the high interest rate. I’m very strict about how I use credit cards, which I explain in the article, and I suggest you set up rigid rules for yourself as well, such as treating your credit card exactly like a debit card.

45:11 Emily: Thank you, Jake, for posing this question on Twitter and permitting me to answer it here!

45:16 Emily: If you would like to submit a question to be answered in a future episode, please go to PFforPhDs.com/podcast and follow the instructions you find there. I love answering questions so please submit yours!

Outtro

45:29 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest, and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email list serve, or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt, repayment and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe through that list. You’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. 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.

Turn Your Largest Liability into Your Largest Asset with House Hacking

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

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

Links Mentioned in This Episode

grad student house hack

Teaser

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

Introduction

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

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

02:18 Emily: If you would like to enter the giveaway contest, please rate AND REVIEW this podcast on Apple Podcasts, take a screenshot of your review, and email it to me at emily at PFforPhDs dot com. I’ll choose a winner at the end of January from all the entries. You can find full instructions at PFforPhDs.com/podcast. The podcast received a review this week from Emily B. The review reads: “This podcast has been so helpful to me as I apply to graduate school!! So many of these things aren’t talked about but Emily is great at explaining all of these concepts and interviewing people who have great advice.” Thank you to Emily B for this lovely review, and best of luck to you this spring! Without further ado, here’s my review of the concepts in The House Hacking Strategy.

Review of The House Hacking Strategy

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

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

Definitions: Asset and Liability

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

Turning Your Largest Liability Into Your Largest Asset

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

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

Benefits of a Successful House Hack

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

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

Why is House Hacking a Great Fit for Grad Students?

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

Curelop’s Five House Hacking Strategies

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

House Hacking: Ongoing Costs

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

House Hacking: Net Worth Increases

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

Natural and Forced Appreciation

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

Seven Common Objections to House Hacking

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

Counterpoints to Some Common Objections to House Hacking

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

Four Considerations to Purchasing a House Hack

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

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

Consider Cost-of-Living

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

Five-Year Rule of Thumb

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

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

Thought Exercise: Three Example House Hacks

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

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

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

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

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

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

Commercial

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

Welcome Back, Sam! How Can People Find You?

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

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

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

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

What Did You Think About the Book?

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

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

Did it Make You Want to Try House Hacking?

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

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

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

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

Real Example of Potential for House Hacking

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

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

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

Loan Qualifications for a ~$32K/year Stipend

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

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

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

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

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

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

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

Different Types of Loans Available in the Marketplace

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

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

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

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

41:44 Sam: This is very common.

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

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

Examples Outside of the Research Triangle

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

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

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

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

Correcting the Record: Credit Scores

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

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

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

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

47:58 Sam: Exactly, exactly.

Would You Please Give Your Contact Info Again?

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

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

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

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

Concluding Thoughts About House Hacking

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

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

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

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

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

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

53:18 Emily: By the way, if you’re interested in learning more about my tax workshop, How to Complete Your Grad Student Tax Return and Understand It Too, and potentially join it like this questioner did, you can go to PFforPhDs.com/taxworkshop to find more information. If you would like to submit a question to be answered in a future episode, please go to PFforPhDs.com/podcast and follow the instructions you find there. I love answering questions, so please submit yours.

Outtro

53:48 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episode show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest and submitting a question for the Q and A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media with an email listserv or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in like investing, debt repayment, and taxes. Four, subscribe to my mailing list at PFforPhDs.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

Knowing Your Worth in an Environment that Devalues Your Work

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In this episode, Emily interviews Sam McDonald, a fifth-year PhD student in informatics at the University of California at Irvine. Sam received the NSF GRFP, completed a lucrative internship at a tech company, has won multiple smaller grants and fellowships, and taught classes for additional income. Upon observing this, some of her peers questioned why she was still applying for awards. Even more light was shone on this issue when her department compiled a list of all the grad students’ income as part of the Cost of Living Adjustment protests in the University of California system; Sam was the highest-paid grad student. In response, Sam became discouraged and even stopped submitting funding applications until her advisor counseled her about knowing her worth. Sam has now come out the other side of this financial shaming experience and has great advice for anyone else questioning their worth and what they should be paid in academia.

Links Mentioned in this Episode

grad student know your worth

Teaser

00:00 Sam: Sometimes our expertise and our ability to do stuff is so undervalued. And it’s hard to measure how much you’re personally valued because you have all these different discrepancies in how different grad students are getting paid. And you really, I think just have to sit yourself down and look at comparatively, well, if I were to go into industry right now, how much would I be making? So I’d recommend the students to really go out there and see how much is my value in other places versus in grad school, where I think we have this skewed sense because of this limited budgeting construct of how much you’re actually worth.

Introduction

00:33 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season eight, episode three and my guest today is Sam McDonald, a fifth year PhD student in informatics at the University of California at Irvine. Sam received the NSF GRFP, completed a lucrative internship at a tech company, has won multiple smaller grants and fellowships, and taught classes for additional income. Upon observing this, some of her peers questioned why she was still applying for awards. Even more light was shone on this issue when her department compiled a list of all the grad students income, as part of the cost of living adjustment protests in the University of California system. Sam was the highest paid grad student. In response, Sam became discouraged and even stopped submitting funding applications until her advisor counseled her about knowing her worth. Sam has now come out the other side of this financial shaming experience and has great advice for anyone else questioning their worth and what they should be paid in academia.

01:42 Emily: It wasn’t until Sam brought up this topic to me, that I realized that I had my own story of financial shaming and academia. Additionally, several of my relatively well-paid grad student, friends, acquaintances, and podcast guests have told me their stipends or that they had won a fellowship, but asked me not to repeat that information. I believe this was in fear of the financial shaming they might experience from their peers. I am a big advocate of transparency around stipends and benefits, which is why I started the websites, PhDstipends.com and PostdocSalaries.com. But transparency is hindered by shame. Asking for what you’re worth is hindered by shame. Shaming someone else for their financial success doesn’t put any money in your pocket, it just discourages them and ultimately harms our whole community. I’m so pleased that Sam volunteered to give this interview. I hope her message encourages you to swing for the fences financially and to speak respectfully when discussing sensitive topics like finances. Those are great lessons for me too.

Book Giveaway

02:35 Emily: Let’s turn our focus to the book giveaway contest in January, 2021. I’m giving away one copy of the House Hacking Strategy by Craig Curelop, which is the Personal Finance for PhDs Community book club selection for March, 2021. Everyone who enters the contest during January will have a chance to win a copy of this book. I’m delighted to bring attention to house hacking, which is when you buy a home live in it and rent out part of it, thereby radically reducing or even eliminating your housing expense. It’s a new name for an old tactic that grad students and PhDs have been using for a very long time, but this book puts a highly strategic spin on it. If you’d like to enter the giveaway contest, please rate and review this podcast on Apple podcasts, take a screenshot of your review and email it to me [email protected]. I’ll choose a winner at the end of January, from all the entries you can find full instructions pfforphds.com/podcast. Without further ado, here’s my interview with Sam MacDonald.

Will You Please Introduce Yourself Further?

03:54 Emily: I have joining me on the podcast, Sam MacDonald, who is a graduate student at the University of California at Irvine and she’s here to talk with us today about kind of a touchy subject. It’s financial shaming, and she’s experienced this and I’m really just excited that she’s decided to come forward because I know that her experience is not unique. After she approached me about this topic, I started thinking and I realized I’ve experienced this. I’ve realized I know other peers who have experienced this, so she’s definitely not alone. And we’re going to treat the subject very carefully today. So Sam, thank you so much for your willingness to talk about this. I know it’s not an easy subject matter at all. Would you please tell the audience a little bit more about yourself?

04:37 Sam: Yeah, absolutely. Thank you so much for having me Emily. Like Emily said, my name is Sam McDonald. I am a fifth year PhD candidate at the University of California, Irvine studying informatics. I actually study the United States Congress and their use of constituent communication. So I’ve been back and forth in DC and in California to figure out how members of Congress use technology to communicate with their constituents and how to make it better. I have an undergrad degree from the University of Maryland Baltimore County, where I did a lot of research before going straight from undergrad to my PhD and I got a master’s along the way that I got from UC Irvine.

Funding During Graduate School

05:11 Emily: Thank you so much that overview. Super interesting subject matter, not what we’re getting into today, but thank you so much for the context. So what’s been the funding situation for you during grad school?

05:21 Sam: My funding has been different for different years. My first year I got the GAANN fellowship, which is from the US Department of Education that my department supplied to me, which was really helpful not to TA at first. Then I TAed for two years, and while I was doing that, I applied for the NSF GRFP and luckily I got it to fund my last three years of my PhD. I’ve also spent two quarters teaching as additional funding and have gotten grants from congressional research funding and travel grants. And then also I’ve worked for Facebook for an internship, so I have internship money as well.

05:54 Emily: Can you give us like an idea of much money you were being paid — and I know it might be different year to year — versus, if you’re aware of it, the baseline stipend in your department?

06:05 Sam: Yeah, absolutely. The TA baseline stipend is around $2,200 for teaching us a little bit more. And my GRFP is about $2,800 per month, just to give you a baseline ballpark for how much that is.

06:21 Emily: Okay. And it sounded like in your second year you were being funded only from TA-ships. Is that right?

06:27 Sam: Yes.

06:27 Emily: Okay. So on that year, you lived on that baseline stipend and is it every other year you’ve been above that for one reason or another?

06:34 Sam: Yeah, it’s really fluctuated for different months, depending on if I’m getting travel grants, going to DC during the summer is quite expensive, so getting additional grants for that to be moving around, but still keep my apartment in California. I think my money has fluctuated every single month, being different because of all these different activities that I’m doing in addition to this baseline salary.

06:57 Emily: That is such an interesting budgetary conundrum. One that I would love to explore, but not our subject for today. And this is maybe not super on this subject, but I’m just curious how much the internship at Facebook paid.

07:09 Sam: Let me remember. I think it was around. I could be wrong, I think it was around seven per month,

07:16 Emily: $7,000 per month?

07:18 Sam: Yeah. I think it might be a little bit higher than that. I’d have to go back and double check, but it’s definitely around that ballpark.

How Sam’s Peers Reacted to These Extra Sources of Income

07:24 Emily: Yeah. Sounds great. Well, I am of course, wanting to congratulate you on winning the NSF, gaining these other travel grants, but I understand that’s not necessarily how some of your peers reacted to you having this wonderful CV full of accolades.

07:40 Sam: Yeah, absolutely. The NSF GRFP — I want to particularly point out, I’ve had three advisors, not through my own fault, one retired, one moved, and then one picked me up like a lost puppy and she’s been great, but none of them have had funding for me, so I’ve always had to go out and get my own funding as well, which is why I was so motivated to get a lot of these grants. But I always haven’t had the best reactions to it. After I got the NSF, which is amazing and it’s given me so much more flexibility, I still had to pursue other grants for travel to DC, and then I just kept applying to more grants because it looks good on your CV. A lot of students were really supportive, but one or two would always sort of give me side comments of like, “Oh, you’re applying for this grant, I thought you already had the GRFP. Why do you need this? Why did you win this grant even though you already have these things?” So I’ve had to deal with a little bit of tension and figuring out my own worth in that process.

08:30 Emily: Yeah. How did you feel when you got those snide comments?

08:35 Sam: I felt a little bit guilty. I will say with a caveat that like I am a more privileged person. I’m white. I came from an upper middle class family. I am working in technology, so I get tech internships. I have a really supportive advisor. I live on subsidized housing and I also live cheaply because I love hiking and I bike more than I drive places. Just for context here at the University of California, Irvine it’s so expensive to live in Orange County that even the professors have their own subsidized housing on campus and there’s an entire professor community. I’ve done a lot to really sort of push myself towards getting these grants, and it kind of made me feel bad that I was getting them because I am in such a privileged position. So for a while I was feeling bad about applying to grants and had to talk to my advisor and other peers about it to figure out if I’m in the wrong here of applying for more money, even though I already have a more stable income.

09:28 Emily: So it seems like even though a lot of your peers were supportive of this and they were helping you edit your applications and so forth, a few, a minority, were making these comments. What do you think their kind of motivation was behind that?

09:43 Sam: I think a lot of students — we’ve had protests in California about this — are struggling financially in some ways, or maybe they don’t get the grants that they want, and then they’re feeling like I’m getting a lot of grants and my research is very attractive for the current context with everything going on in Congress and wanting to improve that. I naturally do have an attractive topic and I think some people feel like maybe their topics aren’t reaching that same attractiveness when it comes to advertising your own research. Also it’s hard being a grad student and I’ve worked really, really hard to have really good grants. When I did the GRFP, I went to the writing center on campus at least 12 times and had dozens of friends review it and professors review it, so I really, really take my time with grants where I know some people also can do them last minute because they’re so overwhelmed with everything else. I think it depends on the person, but it’s just the struggle a lot to get grants in the first place, I think.

10:38 Emily: Yeah, definitely. I understand that at some point, this sort of crystallized and it was not only people by happenstance noticing that you won this grant or that grant, even though you already had the GRFP, but at some point it came down in black and white. Can you tell us about that?

10:54 Sam: Earlier this year, our department got together and decided to make a spreadsheet of everyone’s income from the department, because this was part of our consolidarity with the COLA protests. And for those who don’t know, COLA stands for cost of living adjustment. Here in California there’s been a lot of protest from grad students around, the cost of living adjustment, especially at UC Santa Cruz, where a lot of grad students are spending 50 to 70% of their income on just their housing alone, because it’s so expensive to live and they are demanding to have an adjustment to their rent because they are so rent burdened. So UC Irvine and my department in particular, especially one or two students who are really involved in the unions on campus, wanted to make a spreadsheet to show how much did we all make because we needed the data in order to demonstrate how most of us are rent burdened. Even though we have subsidized housing, even though we are a tech department, we found out that 99% of us are still rent burdened just going through this. But did find out in that instance that I do make more money than everyone else in the department. And that was in black and white and that’s on a spreadsheet that’s available to all students in my department to see.

12:03 Emily: I think this is a great process to go through actually and I am very in favor of more transparency around what people make, especially in grad school, not necessarily with your name tied to it, but just what people are making and the range. I’m kind of curious about why you ended up, I guess it was because it was asked of everyone, but what the motivation was for including people who were on fellowship, especially external fellowships like yours, along with people making the baseline stipend from the department. The argument is going to be about increasing the baseline stipend, right? So is it, we want the bottom sector here, that’s just making the baseline to be brought up closer to where you are, closer to where other people who receive outside fellowships are? I’m kind of wondering what the angle is on that.

12:47 Sam: That’s a great question. When this was sent out to students, it was completely optional. You had the option of doing it anonymously. I think most of us just decided to do it publicly and to be able to share how much, and we did put specific notes for each person of like where your funding was coming from — is this the baseline, or is this with an addition to external income? Is this pre-tax, this is post tax?. So we had all those details as well and it is a good question because I think with our department particular, there is an assumption, especially in the summertime that you’re going to go out and get other sorts of funding. And they know that there are a lot of students in our department who have Google and Facebook and Amazon and other sorts of internships because we are a more attractive group for those big tech companies that overcompensate sometimes for this wealth gap and this discrepancy for teaching.

13:34 Sam: I think that was also sort of demonstrating, even if there was a baseline, how much students were maybe feeling like they have to go for these internships in order to supplement their income. And just seeing these different discrepancies of if you were lucky and privileged enough to even get an internship. There’s actually someone in our department who studies this and how to get a tech internship, and she’s really helpful, but also shows the different discrepancies that can happen for who gets it and who doesn’t. So all those details, I think, were just really interesting to sort of demonstrate how broad the ranges and incomes in our department, just for students.

14:06 Emily: Yeah. It’s a super interesting project. I’ve actually recently heard of another, not related to the California specific protest, but another department where students took this on and used it as a negotiation tactic, as in a sense collective bargaining, although they were not in a union. So it can be a really powerful exercise. And what happened with either your peers or with your own feelings about this after the spreadsheet is out there?

14:28 Sam: The spreadsheet was out there during the pandemic, so I haven’t seen much of my peers in person, so there’s less discussion that I can have with them. Definitely for me personally, it did really two main things for me. First, it really sort of solidified this idea that I do make more money than everyone else in the department, and sort of feeling a little bit shameful and a little bit uncomfortable with that, but also at the same time, recognizing that I have a privilege to have these sort of grants and I’ve worked for it, but I’ve also been very lucky with some of these grants. And because of that, I do feel like I have a responsibility to share that and make that transparent and advocate for the people in my department who don’t. So on the one hand, it does make me uncomfortable to come out and say like, “Oh, I make a lot of grant money and I do a lot of other things to supplement that money in different ways, but also I am privileged enough to share this with you to show these discrepancies and make sure that we’re all coming up to a baseline.” And even before I had my tech internships, despite getting all these grants, I was still technically considered rent burdened. It’s kind of funny to show that you make more, but we’re all still in this sort of struggling standpoint, so it doesn’t really help to have as many tensions, in-fighting, I guess, as much as it is to collectively work together.

Continuing to Apply for Additional Grants

15:38 Emily: How did you feel regarding going after more funding?

15:45 Sam: That was a little bit hard for me. I had to talk to my advisor once about this and really figure out what’s the best path, because I did have to tell her once that I felt uncomfortable applying for more because I’ve gotten some of these comments. I was like, “I have enough, I’d be okay.” And she really sat me down and made sure I remembered what my worth is and that grants are really important for CVs if you’re wanting to go into academia, and that you should not stop applying for things just because you have some money.

16:13 Sam: I have a great example of this where actually one of my funders, the democracy fund in DC helped me fund an entire summer in DC and they asked me, “Okay, how much do you need to do your research? And I was like, “okay, well I need this much for housing and this much for food and this much for a plane ride and some Metro and like, that’s it.” And they came back to me and said, “This is great, but you forgot to mention your actual value in terms of the work that you’re doing for this grant, so we’re going to double what you’re asking for.” That just blew my mind because it was the first time that someone came to me and told me you’re worth way more than you’re asking for and you need to make sure that you’re asking for these things at a higher level. I think even now I am getting these grant fundings, it doesn’t necessarily mean that that is my baseline worth just because I get something. And that took me a while from my advisor really encouraged me to keep applying for grants coming to me and telling me that I’m worth more than what I’m asking for.

Commercial

17:06 Emily: Emily here for a brief interlude taxes are weirdly, unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold your income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2020 tax return, which are available pfforphds.com/tax. I hope you’ll check them out to ease much of the stress of tax season. If you want to go deeper with the, or have a question for me. Please join one of my tax workshops, which you can find links to from pfforphds.com/tax. It would be my pleasure to help you save time and potentially money this tax season. So don’t hesitate to reach out. Now back to our interview.

Understanding the Value of Your Work

18:12 Emily: I’m really glad that you can share that with our listeners, because some other people in the audience might be feeling the same way — sort of limiting themselves and saying, “well, I shouldn’t go after more. I shouldn’t do this. I shouldn’t do that.” You had these great mentors in a sense in your life to help you push back against that, but maybe someone in the audience doesn’t have that and they’re hearing this line of thought for the first time, which is really wonderful, so I’m really glad you’re sharing that with us now. Is there anything else that you want to say about like understanding your worth? I mean, that is not just in the context of fellowship and grant applications, but just for graduate students more broadly, this is a very tricky topic to value yourself.

18:53 Sam: Yeah, absolutely. I think sometimes our expertise and our ability to do stuff is so undervalued and it’s hard to measure how much you’re personally valued, right? Because you have all these different discrepancies and how different grad students are getting paid. How much you’re worth versus another grad student. You really, I think just have to sit yourself down and look at comparatively, if I were to go into industry right now, how much would I be making? How much is my value in terms of giving to different nonprofits or companies, which was what I was doing. I was technically partially consulting, but mostly had a grant to do my own research. Having those opportunities and making myself step out there and ask other people, “how much am I worth to you?” I think that makes a big difference, so I’d recommend to students to really go out there and see like how much is my value in other places versus in grad school, where I think we have this skewed sense because of this limited budgeting construct, of how much you’re actually worth.

19:46 Emily: I think that’s a really excellent point and I want to underline it that who is paying you, that context, matters a lot in how much you can command for your value. Your value can be the same in the academic context, in the private sector, or in the nonprofit sector. But what you can get paid is vastly different from those different contexts and if you stay stuck in just the academic context, you’re not really going to realize all those different price points, in a sense, for your work.

20:16 Sam: Yeah, absolutely. I’ve come across different discrepancies, even internally, because in addition to having the GRFP and doing my research, I was extremely lucky and my department gave me a chance to teach twice, the first time being right at the onset of the pandemic. And me never teaching before and then teaching 140 students online wasn’t the funnest, but it really showed me how much they were also paying. And actually apparently we get paid more as grad student lectures than adjunct faculty do, which is kind of crazy think about because we have a better union. Recognizing the transparency that “wait I’m a grad student, but I make more than an adjunct faculty.” That’s just telling me that the value system inside the university is skewed and I really shouldn’t use that as a metric for my worth and that I really need to go outside the university bubble to understand that metric at least for grad school.

Financial Transparency in Academia

21:10 Emily: I understand we’ve been in COVID times, you haven’t seen much of your peers so I don’t know if you’ve actually, now that you have this new mindset around going after things and valuing yourself, maybe you haven’t had a chance really to speak with your peers and receive a comment and be able to respond or push back against it. Certainly tell us, have you had that opportunity at all?

21:33 Sam: No, I really haven’t just because everything’s remote and most of the stuff is just friendly, get togethers and things like that. There was a little bit of work with COLA still going on, but that’s a little bit hard with everything being remote and kind of put off to the wayside, I think, in a lot of people’s minds.

21:48 Emily: Definitely. I guess maybe in preparation for you once again seeing your peers in some months, maybe — we’re recording this in January, 2021 — is there anything that you think that you’ll say to your peers at that time, or maybe something you wished you could go back and tell them, earlier on in this process when these comments started?

22:09 Sam: Yeah, absolutely. I mean, the biggest takeaway that I’ve really found, especially contributing to this data when it comes to COLA is that we’re really all in this together. And it’s really important to be open to this process, to share it with other grad students and to not really react negatively when other people are potentially making more than you are applying for more grants than you are, because everyone’s so different. Especially even in my department — my first advisor was an anthropologist, my second was a computer scientist, and my third had a business degree a PhD. Even in that, the professors in our department have different scales of finances just because they come from different backgrounds, so it’s all a little bit hodgepodge anyways.

22:46 Sam: But most importantly, I think it’s important to be transparent. I had an occasion where we had new grad students come into the department, like accepted grad students, and they had a panel of current grad students answering questions about what it’s like living in Irvine. What is the rent like? What is it like being a student and what type of classes do you take? And one of the accepted students asked “what is your stipend like, and how much is it to live on campus?” And none of the other students on the panel were directly answering the question. They’re like, “Oh, it’s enough. It’s reasonable.” And I was like, why aren’t you giving people a number and I just straight up said, make this much money. This is how much I pay for rent. And this is for this type of housing. And they’re like, “Oh, thank you. That’s really helpful.” And I think there’s a stigma still even just to share for accepted students, this is how much you’re actually going to make, because there’s some uncomfortableness with this transparency that I think really needs to be broken because it really does help us collectively to have those discussion.

23:46 Emily: Yeah, thank you for that. And of course, I also contribute to and promote this process through my website, PhDstipends.com and PostdocSalaries.com. That’s an anonymous way that you can share what you’re making, what the funding sources and so forth, because that is also super, as you were just saying, important in this context. Are you making a baseline stipend? Do you have supplemental money coming in from XYZ, other sources? Are you taking out student loans to supplement the income because the rent is so high? Whatever the situation is I’m definitely in favor of being more transparent about it. But I certainly understand the discomfort because this is not, of course, something that exists only inside academia, only in our context, but in our entire society. Employers, even if they can’t actually disallow it, certainly discourage employees from sharing their salaries with one another. It’s really an entire society wide situation, so it’s really commendable for you and also for your peers that you are doing more to throw back the curtain and say this is what it is and we want more and using it as like a bargaining tool. It’s really awesome.

24:49 Sam: Yeah, absolutely. And especially, I think now that we’re having more conversations about minority students and getting a leg up for a lot of people who are underprivileged, it helps to know where the line is and what they should be meeting equally. I work a lot with Congress and there are so many debates about congressional staffers, because staffers are woefully underpaid, but there’s no transparency as much. There is some in documentation about knowing people’s worth in that context. So I’ve just been around these discussions and I feel like the more that we can pull back the curtain, the more we can level up people, especially people who are underprivileged in the beginning and even that playing field.

Advice for Other Early Career PhDs

25:22 Emily: Yeah. Thank you so much and thank you for your willingness to come on the podcast and talk about this because it’s a bit of an uncomfortable process. As we wrap up the interview, the question that I like to ask all of my guests is what is your best financial advice for another early career PhD? And that could be something that we’ve touched on in this interview, or it could be something completely different.

35:43 Sam: Yeah, absolutely. Going along with the theme here, apply to everything, even if you think you have enough, because you’re often worth way more than you think that you are, things cost more than you think they’re going to be in the beginning. That’s always something that happens too. So I think that’s really, really important and always being smart with your money. I’m personally a big fan of the FIRE method. I barely eat out. My activates that I love are cheap, so I’m just naturally in that mindset of being more financially savvy than I think a lot of people want to be, but that’s okay, and that’s my position. Not everyone needs that. But I think the more that people understand to apply and to really say “I could have more and I can really utilize this to my own advantage.” Take advantage of it. There’s so many grants out there that barely anyone applies to and those micro grants really can add up. Just applying for anything that you possibly can, I think is really important. And I know sometimes you get tired, especially towards the end of your PhD, like I am now, but it definitely makes a huge effect in the long run, especially you want to talk about compound interest and investments and things like that. Absolutely doing those as much as possible in the beginning.

26:49 Emily: Yeah. Thank you so much for that advice. And I totally agree with that. I want to emphasize two components of that. One is, like you were just mentioning, kind of the only way you can get a raise as a graduate student is to win outside funding. And whether that is outside funding that replaces your stipend at a higher level or supplements a stipend that you’re receiving, maybe like you mentioned earlier, taking on extra teaching work could be another way to do that. But the fellowship and grant applications are really the way to do it without actually adding more work to your life, so it’s kind of the equivalent of getting raised rather than just taking on more hours of work. A lot of paths to higher income are barred for graduate students, but this is one that is available.

27:30 Emily: The second thing that I wanted to emphasize is, you mentioned earlier that your advisors don’t have funding for you, so this was completely your responsibility. I think that’s part of this mindset of you know that you have to provide for yourself, but I just want to emphasize for people who do have funding to fall back on as a research assistant or teaching assistant, whatever it is for their advisors or their departments, the word guarantee might be in there, but what does it actually mean? And the word guarantee you might not be in there and what does that mean? I had a friend for example who had the NSF GRFP and that finished and she still needed another year or something. And because of a situation going on with her advisor not providing funding as he had in the past, she was left unfunded for a year. That was not something she ever anticipated. That was not supposed to happen in the way the funding typically went in this department, but it did happen. She had to negotiate and say, “you know what, I brought in the GRFP, you can give me another year. I brought in three years of funding.” But that wasn’t necessarily guaranteed to work.

28:37 Emily: In a sense, in academia you’re a little bit like an entrepreneur. You have to hustle for your own money. Yes, you’re supposed to be paid by someone, but how secure is that really? It feels to me a little bit more secure to be applying for lots of different things, have a lot of irons in the fire. And if those don’t work out, at least you can say to your department or to your advisor, “I have applied for four grants in the last year. Hey, they didn’t work out, can you give me some bridge funding?” There’s a way to argue about that too. I think there’s a lot of merits and a lot of different directions for applying for as much as you possibly can. I’m really glad you came back around to that position after having these conversations with your advisor and so forth.

29:19 Sam: Yeah, absolutely. And I love what you said about thinking about it as a raise. Especially as you’re getting more and more in your PhD, you are more valuable, but your finances stay exactly the same. I love the idea of thinking about applying as a way to show that your worth increases over time. Thanks for sharing that too. Yeah.

29:35 Emily: Well, thank you so much for joining me today for this interview, Sam, this was really enlightening.

29:39 Sam: Yeah, absolutely. Thank you so much!

Listener Q&A: Investing

Question

29:42 Emily: Now onto another one of our new segments, the listener question and answer. Today’s question actually comes from a survey I sent out in advance of one of my university webinars this past fall, so it is anonymous. Please note that nothing I say in the segment or anywhere else on the podcast is investing advice.

Answer

30:00 Emily: Here’s the question: How do I invest? I don’t have time to monitor the stock market constantly, but I would like to have at least a small amount of money invested.

30:10 Emily: What a wonderful question and I am so on board with the sentiment here. I also do not have time to monitor the stock market constantly. Who does? Honestly, I feel like people who do have the time and inclination to constantly monitor the stock market should just make that their full-time job, like go become a fund manager and get paid millions of dollars to do so instead of just doing it for your own paltry assets.

30:33 Emily: The good news is that spending that kind of time on investing is absolutely not necessary. In fact, in 99+% the cases it’s actually counter-productive to do. Let me introduce a term to you: passive investing, also known as index investing. Passive investing is the most effective least expensive and most time efficient manner of investing.

31:00 Emily: The real quick gist of passive investing is that you buy one or a small number of index funds and you hold those funds in your portfolio long-term in a percent-wise allocation that you have determined in advance. Index funds themselves are collections of, we’ll stick with the stock market, collections of stocks that reflect a broad market sector. So in these funds, the fund manager is not trying to pick the winners and dump the losers. They’re just trying to buy either everything or a representative selection of everything available in that market sector. My go-to example is always the S&P 500 index. When you listen to the stock market news of the day, you’re going to hear how the S&P 500 and the NASDAQ and the Dow Jones did. So those are three indices that represent how the market overall is doing. The S&P 500 has a really clear definition. It’s simply the 500 largest companies that are traded on the US stock exchanges. So if you were to purchase an S&P 500 index fund, you would be a part owner, a very small part owner,of all 500 of those companies. So that represents the market sector of large cap companies, the largest companies. So basically the learning and the research that you need to do is to understand what passive investing is, what index funds are and which index funds you want to purchase and in what allocation. This might take you a few hours of upfront investment of your time, but it’s not something that you need to put time into on a continual basis. Once you’ve decided on your strategy, you basically just let it ride. Another really easy set it and forget it way of accomplishing this is to use what’s called a target date retirement fund, which is in itself a collection of index funds in a percent-wise allocation like I described earlier.

32:53 Emily: So where to go next for resources. I actually have a set of webinars inside the Personal Finance for PhDs Community explaining what passive investing is, what index funds and exchange traded funds are, how to choose them, which brokerage firm to use for your investments, whether you use an Roth or a traditional IRA, all these kinds of questions. So if you would like to view that webinars series, simply join the Personal Finance for PhDs community at pfforphds.community. And that webinars series will be immediately visible to you. I also have inside the community, a challenge that I ran a few months back on opening your first IRA. So you might be interested in following the steps of that challenge, which point to certain webinars to watch in a certain sequence and other steps to take. That might be relevant for you. Or you could do something like read a book such as the Simple Path to Wealth by JL Collins.

33:46 Emily: Now, another element to this question is that you mentioned you want to have a small amount of money invested. You might be tempted to use. What’s called a micro investing platform. Those are brokerages that specialize in helping people with zero capital upfront get started with investing. Some names you may have heard are Acorns, Robinhood, M1, these kinds of platforms. I want you to be really careful when you’re choosing the platform to go with. Ideally, you would only pay the fee associated with the ETF itself that you end up buying. You wouldn’t be paying fees on top of that. For example, some of these platforms charge like $1 per month to be invested with them. I want you to avoid a platform that charges, that kind of fee. Because when you are investing only a small amount of money, a fee of $1 per month actually takes a big, big bite out of that money. So if you go with a micro investing platform, make sure it’s one that doesn’t charge any fees on top of the underlying ETF fees.

34:46 Emily: You also should check whether the platform offers IRAs, individual retirement arrangements. It might not seem important when you’re just starting out with investing, but retirement investing should probably be your top investing goal when you’re starting out, because it is such a large need, even though it’s a long time away. For example, Robinhood fit some of the criteria I mentioned earlier — they don’t charge you fees on trades, you can buy ETFs through that platform, but they don’t offer IRAs, at least as of the time of this recording. It’s very worthwhile to check out what are called the online discount brokerage firms, like Vanguard, Fidelity, and Charles Schwab. Those are kind of my go tos for being able to avoid higher fees that might be charged by other companies. However, the issue is that sometimes they have minimum amounts that you need to invest to get started, like maybe a thousand dollars, which of course is not at all a that you would have that much money. So in my mind, those are the places to get to, eventually maybe when you’re starting out or maybe later on. But if you need to start out in a micro investing platform or a robo-advisor at the beginning, that’s perfectly fine.

35:51 Emily: I think once you really understand the concept of passive investing and how simple it is, how easy in a sense it is to build up wealth over the decades, you’re going to want to have more than a small amount of money invested. You’re going to be really motivated to increase that savings rate and a discount brokerage firm is a great place to be when you’re saving a hundred dollars a month or more, or have a thousand dollars in your account already. Personally, when I first opened my IRA and started investing, I went with Fidelity because at that time they allowed me to open an account with no money up front, as long as I set up a recurring savings rate of at least $50 per month. So I did that for a little bit over a year until I had $3,000 in my IRA. And then I transferred my account over to Vanguard. They had a $3,000 minimum at that time, and I’ve been with Vanguard ever since. So I hope that is a start to answer your question and that you have a place to go for our further resources, either with me or other people who talk about this. And I really want to encourage you at the start of this investing journey, so I do hope you’ll take that next step. If you would like to submit a question to be answered in a future episode, please go to pfforphds.com/podcast and follow the instructions you find there. I love answering questions, so please submit yours listeners.

Outtro

37:10 Emily: Listeners, thank you for joining me for this episode. PFforPhDs.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episodes show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest, and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly valuable on social media, with an email list serve, or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in, like investing, debt, repayment and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe through that list. You’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. 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.

What Happens When Personal Finance Education Becomes Your Hobby

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In this episode, Emily interviews Laura Frater, a first-year PhD student at the University of California at Davis. Laura grew up in a low-income family in Scotland and first came to the US a few years ago for a master’s degree. She went from having “zero financial literacy” at that time to being highly engaged with her finances now, and even considers personal finance education to be her hobby! Laura details the top seven tips for financial success that she has implemented over the last few years, including one just for international students. She continues to discover new strategies and experiment with her finances.

Links Mentioned in this Episode

financial education hobby

Teaser

00:00 Laura: You don’t have to sort of wait to be an adult to do those things. Like you are an adult already in grad school, and you can do other things that adults do with their money for sure.

Introduction

00:14 Emily: Welcome to the Personal Finance for PhDs podcast, a higher education in personal finance. I’m your host, Dr. Emily Roberts. This is season eight, episode two, and my guest today is Laura Frater, a first-year PhD student at the University of California at Davis. Laura grew up in a low-income family in Scotland and first came to the U.S. a few years ago for a master’s degree. She went from having zero financial literacy at that time to being highly engaged with her finances now and even considers personal finance education to be her hobby. Laura details the top seven tips for financial success that she has implemented over the last few years, including one just for international students. She continues to discover new strategies and experiment with her finances. For season eight of the podcast, I’ve shifted up the format. There are two new short segments, one before, and one after the interview. I hope this new format will encourage more interactions between me and you, the listener.

01:17 Emily: January is always an exciting month for Personal Finance for PhDs. First, it’s a brand new year, so a lot of people have a heightened interest in personal finance at this time. They want to start budgeting, increase their savings, open IRAs, et cetera, and I love that energy. Second, tax season has started. I rarely file my own tax return before April 15th, but I’ve learned that a lot of people file in January to get their tax refunds ASAP. Therefore, I’ve already kicked off my tax support for your 2020 return, which you heard about in last week’s episode. Third, I view January as the start of admissions season for PhD programs. Although, I know some people receive acceptances even earlier. So, it’s a thrilling and hopeful time of year for prospective graduate students, and a perfect time of year for them to connect with my material.

02:10 Emily: If you would like to learn more about personal finance and want a friendly environment in which to ask questions and discuss topics, including all of the ones I just mentioned, please consider joining the Personal Finance for PhDs Community at pfforphds.com/community. If you know that you want support in accomplishing a big financial goal this spring, I recommend my group coaching program, The Wealthy PhD. You and I will meet one-on-one to identify and plot a course toward a big financial goal. Past participants have opened IRAs, set up systems of targeted savings, started budgeting, and systematically implemented frugal tactics. Every week for eight weeks, you will participate in a small accountability group that I facilitate that will keep you on track to meet small weekly goals. The next round of The Wealthy PhD starts in mid-February, and enrollment is open now. Visit pfforphds.com/wealthyPhD to learn more.

Book Giveaway Contest

03:12 Emily: Now, onto one of the two new segments, the book giveaway contest. In January 2021, I’m giving away one copy of The House Hacking Strategy by Craig Curelop, which is the Personal Finance for PhDs Community book club selection for March 2021. Everyone who enters the contest during January will have a chance to win a copy of this book. I’m super enthused for my audience to learn about house hacking, which is when you buy a home, live in it, and rent out part of it, thereby radically reducing or even eliminating your housing expense. In fact, I’m bringing back a special guest from the past to discuss the strategy with me in an episode that will be published at the end of January. We’re going to tell you how even a grad student in certain housing markets can apply the principles explained in this book. And certainly, it’s even more viable if you have post-PhD income. If you’d like to enter the giveaway contest, please rate and review this podcast on Apple podcasts, take a screenshot of your review, and email it to me at [email protected]. I’ll choose a winner at the end of January, from all the entries. You can find full instructions at pfforphds.com/podcast. Without further ado, here’s my interview with Laura Frater.

Will You Please Introduce Yourself Further?

04:29 Emily: I am delighted to have joining me on the podcast today Laura Frater. She is a first-year PhD student at UC Davis, and she’s going to be kind of telling us the arc of her financial story, starting as international student, and now, you know, in her PhD. And she has a great story to tell. And she’s going to be specifically telling us a few different strategies that she’s used, seven different strategies she’s used, in the course of this time to kind of get her financial life in order and now going into a PhD program. So Laura, it’s really a pleasure to have you on thank you so much for volunteering. And would you please, you know, tell the audience a little bit more about yourself?

05:10 Laura: Yeah, sure. So, my name is Laura and I just turned 29. I am originally from Scotland. I was born and raised in Glasgow and I moved to the U.S. when I was 25. So, it’s been about four years. I originally came to do my Master’s in English in New York city. And after four years of being there for very long years, I moved to Oakland, California with my husband about three months ago. So yeah, I’m still settling in and learning how to finally manage my money properly with my brand new graduate stipend, which is exciting.

Funding Journey Over the Past Four Years

05:43 Emily: Great. And so just to get a little bit more detail there, was your master’s funded? Were you paying for yourself? What were the financials during that period?

05:51 Laura: Yeah. Good question. So, I was there as an international student but it was a private school, so I had a full scholarship. I had all my tuition paid for, and then I had a fairly modest bi-weekly stipend over the course of two years. So, obviously it wasn’t a lot of money, but it kind of paid for things like travel. And my now-husband was a rock star and he took care of things like rent. So, I was definitely in a very fortunate situation overall.

06:21 Emily: And did you finish your master’s within those two funded years? And what did you do for the next two years? We’re talking about a four-year period, right?

06:28 Laura: Yeah. Four years. So the first two years, yeah, I started 2016, finished 2018. And then I went onto what’s called the OPT visa, which is like a temporary work visa for international students. So I spent about a year working on that visa, and long story cut short, I got married and applied for my green card and became a permanent resident last year.

06:53 Emily: Okay, gotcha. So, I wanted to give the listeners as well, a flavor of like your current financials. So, you came to the U.S. What was your financial life at that time, and what are you doing now? Like sort of where are you now? And then we’ll talk about, you know, how did you get from point A to point B? So, you know, what was point A, what’s point B like?

07:11 Laura: Yeah, well, point A was just a total lack of awareness with money. So, I really, I didn’t really grow up with any financial literacy, and I grew up in a very, just like a low-income household, basically. So, money was just always associated with stress and limitations. So, I didn’t have any knowledge about managing it effectively. So I would, I tended to, you know, pay for everything I needed to pay for. And then I would try and like hoard all my money and save everything, but that’s just not realistic. So, it was kind of a mess. And when I was not able to work last year waiting for my green card, I just made a huge point to learn about finances and become as aware as possible about every dollar and where it was going. So, today it’s just much more about engagement and seeing it as a way to feel more free, basically. As free as you can be in graduate school.

Financial Strategy #1: 50-30-20 Rule

08:08 Emily: Okay. So, it’s really been a lot of like sort of mindset evolution then during that period of time. And it sounds like you went about it also very intentionally, at least for a period last year. So, let’s dive into the strategies then. You have six strategies that will be sort of applicable to hopefully anybody and then one that’s particular for international students. So, we’ll talk through each one of these. So, first strategy, what is it?

08:31 Laura: Okay, so this is something I definitely picked up listening to your podcast. So, knowing exactly where your money’s going and what the goal of those segments of money actually is. Again, this is something I learned from you was just the 50, 30, 20 rule. So, 50% goes towards everything you need to pay every month, like rent and utilities, and then 30% is for your wants–things that you want to spend money on–and then 20% towards your savings goals. So, just having those goals clearly outlined has been the biggest thing.

09:04 Emily: Yeah. I definitely like that touch point, which is why you’ve heard it from me before, but I’m curious how it struck you living in New York and now living in California. Because sometimes it’s really hard to hear that living in a high cost-of-living area.

09:17 Laura: Yeah, it’s definitely challenging. And I should definitely preface this by saying that, you know, being married, I share my expenses with somebody, so I have a benefit in that sense, for sure. We talk about our money really openly and we both stay within that 50, 30, 20 limit. So, we really talked about the kind of lifestyle that we could number one afford, and then, okay. So, were we willing to make certain sacrifices to live where we ideally wanted to live? So yeah, we probably spent about a month deciding on, you know, where we wanted to live, the cost of the apartment, did we want a car. All those kinds of things. And yeah, we definitely live, we live in Oakland, so it’s very expensive, but it’s a trade-off. We’ve had to be at peace with that choice.

Impact of Location and Commute

10:05 Emily: And let me, I’ll just ask also, so you’re living in Oakland, but you’re going to UC Davis, and those are not the same city. So, is there like, are you commuting or is it different now because maybe you’re remote or what’s going on with like your choice of location?

10:19 Laura: Yeah. So everything is online at Davis until next year. So, our lease in Oakland ends October, 2021. So, we definitely have the option to go closer to Davis if we want. But honestly, my schedule is very flexible and I only have to be up there twice a week, on average, if I was going up there. So, I don’t anticipate us moving somewhere cheaper so that I can be closer to Davis. My husband works in tech, so he has to be in San Francisco. So it’s really, we have to prioritize how much he has to commute, because that would be like an everyday occurrence almost for him.

10:56 Emily: Gotcha. Well, we’ll see how all of this evolves. You know, we’re recording this interview in November, 2020, and the future is very uncertain. I guess you at least know when your remote period will definitely go until, if not maybe further. Yeah. So, we’ll see how that goes. Anything else you want to say about that? The strategy of like, of budgeting and balancing?

11:17 Laura: I mean, I think you just have to like, not be afraid of the numbers and, you know, we really sat down, especially with the rent. Coming from Manhattan, we thought there’s no way it can be more expensive than Manhattan. And it was. So, you know, this is down to my husband’s great sales skills. He really haggled with the building and got us a really good deal. I wish I could give advice on how to do that, but I don’t. You might be better to interview him for that. So, we got about 12 weeks off of our rent. So, three months of this year we don’t pay for, and we managed to get free parking in our building as well for a little bit. So, negotiation skills is probably my next financial education to-do list point.

Financial Strategy #2: Side Hustles

12:01 Emily: Yeah, that’s incredible. And I think that’s both, it’s just good to know that it’s possible and some people are successful with it. Even if you don’t know, like particularly the script that he used or whatever, you can look up those kinds of things. But I am thinking that, you know, being in San Francisco adjacent kind of area, and also during COVID times, you know, the willingness to negotiate on behalf of the company that’s running the building or whatever is probably increased. So, it’s worth trying whenever, but I suspect your success rates are going to be higher now than they will be a year or two from now or whatever. Okay. So, what is strategy number two?

12:38 Laura: So, number two is something, again, that you’ve talked about a lot is side hustles. So, I’d always aimed to find a side hustle during grad school. You kind of have to. But, I ideally wanted something that was remote during this weird time. So, I was lucky to get, it’s a grading job with UT Austin. So, you’re basically grading papers for this program that they do for high school students who are taking college-level composition classes. And I’m not totally sure how I feel about it yet. It’s definitely a lot of work for the money that you make. So, that’s something to probably think about. You know, maybe have a goal in mind in terms of how much money you want to make off of your side hustle, how much you need to make, and then decide whether that side hustle is the best fit for you. So, I’m going to do it for a few more months and see what else is out there. But I would never say no to even like a little bit extra money in the week on those stipends. So yeah, definitely go for a side hustle if you can.

13:37 Emily: Yeah. So, I do want to note that you’re saying that you did the side hustle post-getting your green card, because you’re not allowed to have an income that you are working for as an international student. So this is only for, you know, people who are citizens or residents and also even a subgroup within that of people who are not going to be risking their funding by pursuing a side hustle or, you know, their relationship with their advisor or whatever. So, it sounds like the kind of the one that you chose is probably quite flexible. Maybe the pay is not great for the hours, but you can fit it in around the other things that you’re doing.

Flexibility and Fellowships

14:09 Laura: Yeah, totally. It’s definitely very flexible and yeah, that’s a good point. I’m on a fellowship. So, I cannot work at UC Davis or any of the UC campuses, but I’m allowed to work anywhere else off those campuses. So, this was actually recommended to me by UC Davis and I felt pretty confident going into it that it was, you know, a good space in which to work. So, yeah, I think keeping an eye on how much I’m probably making per hour, given how much work I’m doing for them. And I love the job itself. I just want to be careful that I’m not giving too much of my time for, you know, a really low rate of money. So, that’s something to definitely be aware of.

14:48 Emily: Yeah. I’m really glad that UC Davis actually gave you that clarity around what the policy was, because I don’t know that that’s actually that common. So like, here’s what’s not allowed, here’s what it is allowed. Oh, recommendations for what, you know, what work you might do. I know I had a side hustle that was doing editing for journal articles for a while after I finished my PhD. And I similarly had to be really conscious and sort of suppress my like perfectionist tendencies, because I was just like, for the rate that I’m being paid, I need to be very careful how much time I spend per paper. And like, yeah, maybe I’m just going to get it 90% of the way there. That’s okay. That’s good enough. And not, you know, toil over every like last detail. So, yeah. Great tip to be conscious about that. Anything else you wanted to add about side hustling?

15:32 Laura: So, one thing I am doing right now is I’m almost a qualified yoga teacher. So, that is something I really want to pursue. And I don’t know enough about setting up my own business yet and things like that. You obviously want to make sure that you’re not, you know, you want to be paying taxes and things like that. That’s really important. But the yoga stuff is just something I love to do. And I started becoming a teacher actually during COVID. Like right at the beginning, there was a really great online course. So things like that, you know, try and make those side hustles fit in with your schedule. Don’t be like missing time on studying just to make money if you can avoid it. So yeah, just looking for flexibility and not being exploited is the most important thing, I think.

16:15 Emily: Totally agree with both of those. And I’ll also add, I really like that you are just experimenting with things. You know, like you aren’t holding onto like, what’s exactly the most perfect thing, and that’s the only thing that’s going to be acceptable. Or you don’t have these limiting beliefs around, I’m not allowed to do anything. I can’t do anything. I can’t fit it in, I don’t have time, I’m not allowed. Yeah, you’re just trying things out and I think that’s a great approach.

16:36 Laura: Yeah. It’s definitely fun. And you know, again, podcasts like yours, you know, finding out from other people what they’re doing. It doesn’t have to be a conventional, probably pretty dull side hustle. Like, you know, try and enjoy your life as much as possible because I think these years only get more intense as you keep going with the PhD. So, try and do something that is good for your soul as well as your bank account.

Financial Strategy #3: Check Your Bank Account Regularly

16:58 Emily: Yeah, that sounds good. Okay. Let’s talk about your third strategy.

17:03 Laura: Yes. So, I think just checking your bank account every single day is, it seems like the most simple advice, but something that I never used to do. I would just, you know, live in denial and not check it for days at a time. So, like take advantage of the apps from your bank. Like they need to be good for something. So, have it on your phone, check it every day. And I also try and look at the last five to six transactions. And I try and work out, are there any patterns in my spending? Are there things that I’m wasting money on? But that also helps you figure out what you actually enjoy spending your money on in the first place, so you can be prepared for it. And it also will just show up any kind of like random transactions that were maybe incorrect, which actually do happen. Like you think that they won’t, but they definitely do.

17:51 Emily: I have an example of that actually, that I was looking at our, my husband, I share a Mint account. I was looking at it the other day, and I saw a charge from Amazon Music for like $15. And I was like, Hmm, husband, did you subscribe to Amazon music without discussing that with me? And he goes, Oh, no, like weirdly my phone was like freezing up and I thought I tapped something and then I wasn’t sure. And so anyway, it was a total mistake that he, you know, accidentally subscribed and, and he, you know, he talked with them and he got it reversed and it was totally fine. But if we had gone a month or two without like catching that, or if it had just gone into the, you know, swept away with all the other transactions, then, Hey, you’re out $15 every single month. Not just one time.

18:32 Laura: Yeah. It’s a lot of money. I mean, also like looking for those free trials that you forget to cancel. Happened to me twice this month. I was so embarrassed because I pride myself on not letting that happen, but Microsoft charged me 75 bucks, which, you know, I would have gotten that free through Davis and I forgot that I paid for last year, and Hulu as well. So yeah, we still have it for one more month, but not worth it at all.

Monitoring Short-Term Savings Goals

18:56 Emily: So, what else do you get out of the particular strategy of checking every single day? Like, are you, I mean, you mentioned finding patterns in your spending, which I think is super valuable. What else are you getting out of that practice?

19:09 Laura: I think the other thing right now that I’m getting out of it is checking on my short-term savings goals, which I’ve actually established, which is really great and has lowered my anxiety. Also like looking for avoiding any bank fees, which are really, really tricky, especially with someone like Wells Fargo, who we can talk about that later, maybe, but like that bank is terrible about those fees. Checking for example, how many times I’ve used my debit card to make sure that I avoid the monthly fee. Things like that, that I never really did before. It’s just another way to be as fully engaged as possible with my spending.

Financial Strategy #4: Make Financial Education a Hobby

19:47 Emily: Alright. So, what’s your fourth strategy?

19:49 Laura: Fourth is just making your financial education a hobby. I guess that’s the best word to describe it. I used to view finances and the education around it with a lot of fear and anxiety, but finding fun ways to learn about it has really changed my life in so many ways. For example, your podcast. I’ll go for a walk by my apartment. I’ll go running, I’ll go to the gym. And I just pick an episode and then I, you know, listen to it and I make notes on it afterwards, normally. Getting an audio book is a really good idea as well. Going on YouTube and just sifting through different people’s videos. There’s definitely some weird people out there for sure. So you can, you can judge that as you, as you figure your way through it. But just making your education a part of your lifestyle, I think is really important.

20:37 Emily: Yeah. I definitely also went down this road with when I was sort of getting, I had been learning about personal finance through reading some books and stuff, but then when I got a little bit interested and more engaged, I was reading about a lot online and like starting to connect with bloggers and then I started blogging myself. So, there was like a community, you know, developing online around it. And I definitely would call that my hobby at that time, which of course has since become my business. But at the time it was just a fun thing I was doing like, you know, wake up, like check my email and like check my like feed for, you know, what the new blog posts are. And I really liked having that perspective from other people. I think those communities have moved more towards like Reddit and YouTube now.

21:17 Emily: It’s not so much like blogging. I mean, people still do that, but it’s not quite as huge as it was at that time. But just finding like a way that you like to consume information, like you were just saying, like audio works really well for you. Obviously, I love podcasts. So, audio works for me too. Finding a way you’d like to consume information and then a few people maybe like on whatever medium that is that you like to follow. There’s a big personal finance community on YouTube now, I know. So, if that’s your thing, like you could definitely find, you know, great influences there. And yeah, I think books still have their place for sure. And if audio books can do well, or if you have the time and capacity to read, then that’s perfect too.

Commercial

21:54 Emily: Emily here for brief interlude. Taxes are weirdly unexpectedly difficult for funded grad students and fellowship recipients at any level of PhD training. Your university might send you strange tax forms or no tax forms at all. They might not withhold your income tax from your paychecks, even though you owe it. It’s a mess. I’ve created a ton of free resources to assist you with understanding and preparing your 2020 tax return, which are available at pfforphds.com/tax. I hope you’ll check them out to ease much of the stress of tax season. If you want to go deeper with the material or have a question for me, please join one of my tax workshops, which you can find links to from PF F O R P H D S.com/T A X. The first live Q&A call for my workshop on preparing your 2020 PhD tax return is this Sunday, January 17th. Also, for those of you who are paid by fellowship or training grant, the deadline to make your quarter four estimated tax payment is January 15th. If you’re not going to file your tax return by the end of January. It would be my pleasure to help you save time and potentially money this tax season. So, don’t hesitate to reach out. Now, back to our interview.

Financial Strategy #5: Decide What Makes Your Life Rich

23:21 Emily: So, what is the fifth strategy on your list?

23:24 Laura: The fifth one is actually from a really good book called I Will Teach You To Be Rich, which was actually the audio book that I just downloaded. And one of the questions, gosh, the author’s name I’ve totally blanked on.

23:36 Emily: It’s Ramit Sethi.

23:38 Laura: So, yes. He’s really great. And I wasn’t super sure about the title at first. I thought it was maybe like a little bit crass, but he has some really good advice including sit down and decide what makes your life rich. And that doesn’t mean in terms of how much money you have for retirement or how much money you have on the day-to-day, but what do you really value and what do you enjoy spending your money on? So, that was something that I kind of made my husband and I sit down and talk about. You know, like what are our individual, you know, finance goals and our joint ones as a couple in the next five, 10 years. Like where do we want to live? Like what kind of life do we want to have for ourselves? And it’s not just helped us plan our savings more appropriately, but it’s also alleviated my personal guilt when I see like what I’m spending money on. For example, I love eating out. Like I never did it growing up and I love doing it now. And that’s part of what makes my life personally rich. So, it just helps you, I think, feel less shame if you’re spending things and you’re initially worried that it’s not appropriate. But if that’s what you value, then you should enjoy it if you can afford it.

24:46 Emily: Yeah. I think Ramit’s voice is a very unique one in the personal finance space, because he does have this emphasis on, you know, spend extravagantly on the things that are really important to you and increase your income so that you can support that. And do not worry about like, cut spending in the areas that are not important to you. I was just actually listening to him as a guest on another podcast a couple of days ago. And I think he said something like, you know, he drives a super old car still and he like, there are some areas of his life that he really does not spend on, but there are a few that he’s identified they’re really important where he spends lavishly. And so that’s, I think it is a really good perspective for someone who is like you were talking about earlier, like sort of afraid to spend money or like hoarding money that like, I can definitely see how that message could help you with your own money mindset.

25:38 Emily: I Will Teach You To Be Rich actually came up earlier on the podcast and we’ll link it from the show notes. We did an interview with Dr. Amanda and she talks about how that book in particular, when it was first published like 10 years ago or whatever totally turned her like money life around. That was like the sort of inception of her money, her financial journey. So, if you want to hear another perspective on, you know, how that book’s helped someone else, that’ll be linked from the show notes. Yes.

In Other Words: What Are Your Values?

26:05 Emily: So, another way of like saying this, like figure out what makes your life rich thing, which is a little bit more like classic financial planning, is what are your values? What is important to you? You also mentioned identifying goals. And I think it’s a wonderful process. Not, you know, not a lot of graduate students might get into this because they feel like they’re more on the survival level. But what I like about this exercise of figuring out what’s really important to you, what really makes you happy, what really makes you feel satisfied, is that there are sometimes ways that you can find a way to fulfill those values that don’t involve spending. And that’s okay. Like for instance, you know, you said earlier that you’ve been trained to become a yoga teacher. So, maybe, I’m guessing, physical health and mental health and balance and things like that are important to you. And it doesn’t take a lot of money to have a yoga practice, right? So, there are ways to find fulfillment, even if you aren’t able to spend right now. But then later, you know, when your income is higher, post-PhD, you can maybe think of ways that you could spend and even enhance that more later, but still find some ways to do it now and fit it into your life right now. Instead of just sort of saying to yourself, I can never do anything. I can never spend anything. I can never afford anything because of my stipend right now. And just sort of shutting all of that down.

27:19 Laura: Totally. Yeah. And I think that’s something as a cohort when you’re in your PhD program, like you should definitely talk about that with other people. Because the attitude, at least from what I witnessed, is like, everyone’s scared about their money. But you’re totally right. If you sit down and think about what brings a particular richness to your life. But when I did it, I realized, Oh, wow, I do yoga. I love hiking. I love going for walks. Like I’m such an old lady that way. So it’s like, I have all these things already there for free. And it just helps you feel, it gives you perspective on your money. It’s, you know, you don’t have a lot right now, but that’s okay because X, Y, and Z doesn’t cost me anything.

Financial Strategy #6: Talk to Your Partner About Money

27:55 Emily: Well, it’s a wonderful point. Thank you so much for expanding on that one. Sixth strategy. What’s that one?

28:02 Laura: So, the sixth is to anyone in a relationship. Talk to your partner about money. It’s not something you talk about the first couple of years, probably, when you’re on your first dates. But I mean, my husband and I have been together for almost nine years, married for just over a year. And you know, he’s so good with money and he has such a natural interest and I have such a fear of it normally that we’re kind of a perfect match that way. But the more we’ve talked about it, the more our relationship has improved, the better our goals are with our spending. There’s no awkwardness about things that we’re both buying. We do also keep, you know, separation there, which I think is healthy. I don’t know everything that he’s spending his money on, but we both know exactly how much the other person makes every month. We both know our bills when they’re due and if there’s any kind of more extravagant purchases that we’re both thinking of having as individuals, we do run them past the other, because it’s just a respectful little gesture. So, just making it a not scary thing. Just talk about it with your partner. The worst thing is to keep it a secret, for sure.

29:10 Emily: It sounds like you two have found like a balance. You have transparency but you also have a degree of autonomy. So, no secrets, anything that needs to be flagged as brought to the other person’s attention, but the decisions are still ultimately your own individually for certain aspects of your spending. And obviously certain aspects you have to come to an agreement. I did a pretty interesting podcast interview recently with Dr. Michelle Roley-Roberts where we talked about joint and separate finances.

29:40 Laura: Yes. I listened to that.

Financial Strategy #7: Learn About U.S. Credit Card Culture

29:42 Emily: Cool. Yeah. So, I’ll link that in the show notes, in case people want to follow up on like, okay, well, what is the money management system that might work well for me? And you can certainly hear, you know, Michelle and I discuss our respective systems, which are somewhat different and somewhat similar. I think that your last strategy is specific to international students. So, will you share that one please?

30:00 Laura: Yeah. So this one, I so wish I’d known before I moved here, but better late than never. Learn about credit card culture in the USA, because it’s not going away and you will be all the better for accepting it. And I know it’s not always possible on a student visa to get a proper credit card. That was the problem I ran into, but they will give you something like a credit card from certain banks, and it will be a way to transition into an adult credit card, so to speak. I just got my first credit card. I’m not ashamed to admit it. So if anyone else out there is thinking, Oh gosh, I don’t even have one yet. It’s okay. Like better to just go and do it. But I just had so many questions about them because growing up in Scotland, we were always told don’t get a credit card. It’s, you know, it’s because you’re a failure financially, if you need to get one. But here it’s a very valuable thing to have a good credit history. So, learn about it as soon as you can, and go to your bank and just ask a ton of questions. And do not leave until you know the answer to all of them. Because they’ll try and just brush you off most of the time.

31:08 Emily: So, the credit card culture that you were just mentioning. It’s so closely held for me. I was taking a second, like, what do you mean by this? What is this culture? So, what you’re saying is like the importance of credit, like your credit score, your having good credit reports and so forth is not just for when you want to get a mortgage or when you want to take out a car loan or whatever. It can be checked by landlords. It can even be checked by employers in some cases. And so it’s like, yeah, weirdly important to have a really good credit or, you know, a decent to good credit score. And it doesn’t mean, like you were just saying, that you’re necessarily in debt or, you know, taking out lots of debt, or that you’re in a need or anything like that.

31:50 Emily: But yeah, it is it’s pretty weird and it’s pretty insidious that other kinds of payments are not reported on your credit report. Like, Hey, I pay my rent every month. Shouldn’t that count for something? And it’s also weird that your income doesn’t factor into your credit score. So, it’s a very strange system. I agree. And so, okay. So, I understand. So you had to understand what was going on with the U.S. system and kind of accept that, yes, you did need to establish a credit score. These are the steps to do, you know, get a secured card, later on, get a regular credit card once you have a credit score, and then kind of work it up from there. Is that right?

32:26 Laura: Yeah, totally. And again, like I was in a very privileged position because my husband has a credit score. But again, I didn’t know that to get an apartment, for example, in New York, even with his credit score, which is really solid, it was still a challenge. Like you got to wait until it’s processed. There are a lot of questions afterwards as well. So, just establishing that, the sooner the better. It will lift your anxiety about it and it, unfortunately it just will give you more freedom down the line. So, I would start off really small. You know, I just got my credit card and I’m only allowing myself to use it for certain expenses in the month so I can practice using it appropriately. So, just figure out how to use it properly and stick to the rules. And I think you should be good to go.

Credit Cards Can Intimidate Anyone 

33:12 Emily: I’ll actually like add in, even for, you know, people have grown up in the U.S. or whatever. Like, I also was very afraid of getting my first credit card, which thankfully I don’t know how, because I was very ignorant at the time, but thankfully I did not sign up for any credit cards during my undergraduate degree. So, I got through all of that with only, you know, I had student loans and so I actually had a credit score, but I didn’t have any credit cards. Thankfully. And by the time, I don’t know, I had just been like warned so strenuously about the dangers of credit cards that I was very, very nervous to get one for the first time. But like you, I was reading about how important it is to build credit. And this is, you know, an easy way to do it without actually paying interest on anything, which is also nice.

33:52 Emily: So, I like very carefully picked out my first credit card, very reluctantly, like signed up for it, used it very infrequently. And, you know, have still maintained that account to this day because it’s my oldest account. So, it’s definitely not just international students who can be kind of like perplexed and nervous about this whole system. It’s a little bit easier, of course, if you did go to college in the U.S. and you did take off student loans because you will have a credit score, even if you have never made a payment on student loans or anything like that. It’ll actually probably be a decent, I don’t know. It’s so weird. It’s such a weird system.

34:26 Laura: It’s so weird. Yeah. I mean one last thing I would say is just when they give you those documents at the bank with all the terms and conditions. It’s very tempting to just put it in an envelope and not look at it again. I have a whole box, actually in my office right now, and I’ve gone through the whole thing with a highlighter. And I asked my husband the definitions for things. I search online. I called the bank twice more because I wanted to confirm something. Like, ignorance is just not bliss. You just, you need to know what exactly you signed up for to really feel confident about it.

Benefits of Reflecting on Your Money Mindset

34:55 Emily: Yeah. Well, thank you so much for adding that. I know that a lot of international students I think hear this advice of open up a secured credit card when you get to the U.S. But I think a lot of them will kind of find some kinship with you in your like trepidation about this. And what exactly is this about and what are the attitudes? So, yeah. Thank you so much for adding that. So, what are the benefits that you’ve experienced from going through this, you know, this process and reflecting on your money mindset that you grew up with and putting all these strategies in place. Obviously, I’m assuming your hard numbers of your financials are looking rosier than they would have if you hadn’t gone through this process. But is there anything else that you want to add about benefits aside from the, you know, the black and white?

35:38 Laura: Yeah. I think that the biggest benefit is just, you know, getting out of this mindset as a grad student that you can’t have any savings goals. That was the big misconception that I had. You know, once you learn, for example, what an emergency fund is, what a Roth IRA is, all these little things. You realize, Oh, wait, it is possible to save for the future. Yeah. It’s not going to be as much as someone working as a lawyer or whatever, but it’s going to add up over the five, six years that you are on this smaller stipend. So, you know, it gives you a lot of hope and I think the mental health during graduate school, that’s something you have to be aware of. And putting aside, you know, a couple of hundred dollars a month to your Roth IRA, for example, that’s a great feeling. And that’s, you know, one of my goals that I have by the spring. You don’t have to sort of wait to be an adult to do those things. Like you are an adult already in grad school, and you can, you can do other things that adults do with their money for sure.

36:35 Emily: Yeah. I also, very coincidentally, I gave an interview this morning for Roostervane, which is Dr. Chris Cornthwaite’s brand. And I was talking about this as well, the mindset of really that label of being a student. It makes sense in a context, but it can really trip you up and mess you up, like in your mindset, because I think, you know, at least in the U.S., you know, for traditional college students, we’ve kind of accepted that it’s an extended adolescence period of time until you graduate from college and it’s okay to be dependent on your parents. And, you know, you may be still not really working on your finances because, Hey, you’re probably taking out a bunch of debt. We’ve kind of accepted that. And then when that student label gets applied to funded PhD students, there’s really a disconnect. And it’s much healthier, as you were just saying, to not really make that student like the closest part of your identity, but recognize that you are an adult, you need to have a well-rounded life, you know, financially healthwise, in your relationships, all these other areas. It’s not really feasible for you to kind of suppress and ignore various different facets of your life for the length of a PhD, which is very long.

37:42 Laura: No. Yeah, I completely agree. And also, I do understand the anxiety of the student label, right? But at the same time, you do have to kind of wake up to the fact that people are actually offering you money from a lot of different resources. Like, especially at Davis, where they are excellent at emailing us with fellowships and funding, money here and there. You do have to be proactive about it. You know, it’s still very hard and it’s stressful, but for example, go through your emails every month. And if you’ve missed anything with free money, put it in a spreadsheet like I’ve been doing. It does add up after a while and you realize, Oh, wait, year two, I can apply for, you know, $2,000 here for this. It doesn’t have to be so limited for the entire time.

38:26 Emily: Yeah. It’s kind of funny because I think in some ways earning more money while you’re a graduate student is like frowned upon in certain corners of academia or even not allowed as we talked about earlier. But there are other ways where earning more money is like completely sanctioned and encouraged by everyone which is applying for fellowships and applying for grants and doing all these like academia-style, like raises and like, you know, the things that we would use different terms for it outside of academia, but inside it’s still allowed and still a good idea. And like you were saying, some programs are pretty good about, you know, showing those opportunities to you and presenting them in a way that’s easy for you to take advantage of. So yeah, that’s wonderful to hear.

Best Advice for Another Early-Career PhD

39:04 Emily: So, I’d like to conclude with your best advice for another early career PhD. I feel like we’ve already heard a ton of great advice throughout the whole interview, but if there’s anything you want to add to that in a different area or something you want to emphasize, make sure the listeners walk away with, you know, please let us know.

39:20 Laura: Yeah. I mean, just, I think two things. My main points of advice would be to just make your financial education, or whatever you want to call it, a hobby. The more you know, the less anxiety you’re going to feel. And don’t think that saving for things like retirement or long-term savings goals have to be put on pause. It’s better to have a little bit saved towards that kind of goal than to have nothing in five years. So, the longterm does not have to be on a permanent pause by any means.

39:48 Emily: Yeah. And even, as you know, from compound interest, any little tiny bit of investing or debt repayment that you can do right now makes a massive difference later on. So, you know, don’t feel bad if it’s like $10 a month, $50 per month. Anything on that scale is still going to really, really add up over time. Well, thank you so much for this wonderful interview, Laura. I really enjoyed getting to know you a little bit.

40:09 Laura: Yeah. Well, thank you for having me. This was really fun.

Listener Q&A: Savings

40:16 Emily: Now, on to the second of two new segments. The listener question and answer. Today’s question actually comes from a survey I sent out in advance of one of my university webinars this past fall. So, it is anonymous. Here is the question. How can I effectively build my savings back up while still feeling like I have room to go out to dinner or buy a book when I’d like to? I feel so guilty whenever I make unnecessary purchases. Thank you so much for that question, Anonymous. It sounds like your main financial goal right now is to build up savings. And you’re struggling to find a way to balance that with discretionary expenses. And you might hear this as a strange solution, but I think the answer is budgeting. Most people think of budgeting as a way to cut back on their expenses or reduce their expenses or beat themselves up when they go over the amount they were supposed to spend in one category or another.

41:17 Emily: But that’s actually not how I see budgeting. I see budgeting as a method of intentionally and thoughtfully creating balance among the different purposes that your money has. So, what I think you should do is write into your budget “unnecessary purchases,” like going out to dinner and buying a book. And in this sense, these are not categories that you should, you know, try to spend much, much less than the cap. Your goal is instead going to spend right at that level that you identified when you set up the budget. This means that you have to decide what is an adequate savings rate. There are not just two broad categories in your budget, that is paying for your necessary expenses and saving. There are three. Necessary expenses, discretionary expenses, and saving. I’ll point you to the balanced money formula, which I really like the idea behind, although I have to acknowledge that it does not work in every city in the U.S. on any grad student stipend. The balanced money formula is that you would devote no more than 50% of your after-tax income to necessary expenses, 30% to discretionary expenses and 20% to savings.

42:31 Emily: Now, for your budget, that savings rate might be a little bit too low, or it might be unattainable, depends on where you are right now. But the point is that discretionary expenses hold a place in a balanced budget. It is really psychologically difficult to go for months and years spending little to no money on discretionary purchases. If you accept what I’m saying, that you need to build discretionary expenses into your budget, but you’re still saying to yourself, I’m not saving as much as I would like to, instead of cutting back on those discretionary expenses, I want you to take a really hard look at your necessary expenses. Necessary expenses are almost like this misnomer because, yes, it is necessary to house yourself and feed yourself and clothe yourself. But often we’re spending more than we absolutely baseline need to, to accomplish those things. So, for pretty much every quote, unquote, necessary expense, there’s going to be an actual necessary portion, and a discretionary portion.

43:34 Emily: So, I would really encourage you to go through your necessary expenses with a fine-tooth comb, starting with your largest fixed expenses like housing, perhaps transportation, moving to other fixed expenses like utilities. Then moving into your large necessary expenses like groceries. Then moving into your smaller necessary expenses, like maybe gas for your car. Reevaluate every single one of those expenses in that order to try to find a way that you can reduce them. Now, that may not happen instantaneously, if you have to do something like move, obviously. But the point is that you don’t just have to focus on your discretionary expenses and your savings. You can also pay some attention to those necessary expenses. In my mind, it’s way more fun to save money and also to spend on discretionary expenses. Spending on necessary expenses doesn’t really light people up. So, it definitely makes sense to reevaluate them and see where you can cut back.

44:34 Emily: Now, if you’ve done all of that, you’ve built the discretionary expenses into your budget. You’ve really evaluated if you can reduce any of your necessary expenses, and your savings rate is still not as high as you want it to be, then you need to consider increasing your income. Maybe that is the right solution. Some grad students are able and allowed to side hustle. So, you can look into that, if that’s your case. Some grad students are not allowed to work outside their appointment as a graduate student. And so in those cases, you might have to look for side incomes that don’t require work to generate them. I’ve talked about this quite a bit on my site. You can search for a side income or side hustle to find more discussion about that. Okay, Anonymous. I hope this helped. It is legitimate to spend money on discretionary or quote unnecessary purchases.

45:22 Emily: Absolutely. It’s just a matter of finding the right balance between your savings, your discretionary expenses, and your necessary expenses. And oftentimes, the two culprits in those areas are your necessary expenses and your income being too low. I hope that helps. Thank you so much for submitting this question. If you would like to submit a question to be answered in a future episode, please go to pfforphds.com/podcast and follow the instructions you find there. I love answering questions. So, please submit yours.

Outtro

45:53 Emily: Listeners, thank you for joining me for this episode. Pfforphds.com/podcast is the hub for the Personal Finance for PhDs podcast. On that page are links to all the episode show notes, which include full transcripts and videos of the interviews. There is also a form to volunteer to be interviewed on the podcast and instructions for entering the book giveaway contest and submitting a question for the Q&A segment. I’d love for you to check it out and get more involved. If you’ve been enjoying the podcast, here are four ways you can help it grow. One, subscribe to the podcast and rate and review it on Apple podcasts, Stitcher, or whatever platform you use. If you leave a review, be sure to send it to me. Two, share an episode you found particularly on social media with an email listserv or as a link from your website. Three, recommend me as a speaker to your university or association. My seminars cover the personal finance topics PhDs are most interested in like investing debt, repayment, and taxes. Four, subscribe to my mailing list at pfforphds.com/subscribe. Through that list, you’ll keep up with all the new content and special opportunities for Personal Finance for PhDs. See you in the next episode! And remember, you don’t have to have a PhD to succeed with personal finance, but it helps. The music is Stages of Awakening by Podington Bear from the free music archive and is shared under CC by NC. Podcast editing and show notes creation by Meryem Ok.

Catching Up with Prior Guests: 2020 Edition

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Emily published the first episode of this podcast in July 2018. This is the one hundred and seventh episode, and over the last two and a half years, the podcast has featured 94 unique voices in addition to Emily’s. The last episode in 2020 catches up with the guests from Seasons 1 through 3. The guests were invited to submit short audio updates on how their lives and careers have evolved since the time of their interview. The question with which all the interviews are concluded now, “What is your best financial advice for another early-career PhD?” was not one that was asked in the earliest seasons. The guests who didn’t have the opportunity to answer the question in their initial interviews answer it in this update, so you’ll hear lots of financial advice throughout the episode as you have grown to expect from this podcast.

Link Mentioned in this Episode

financial interviews

Introduction

00:10 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 16, and today I’m featuring many guest voices. I published the first episode of this podcast in July, 2018. This is the 107th episode and over the last two and a half years, the podcast has featured 94 unique voices, in addition to my own. For a last episode in 2020, I thought it would be fun to catch up with the guests from seasons one through three. I invited them to submit short audio clips to update us on how their lives and careers have evolved since the time of our interview. The question with which I conclude all of my interviews now “what is your best financial advice for another early career PhDs?” was not one I asked in the earliest seasons. I asked the guests who didn’t have the opportunity to answer the question in their initial interviews to do so in this update, so you’ll hear lots of wonderful financial advice throughout the episode, as you’ve grown to expect from this podcast. The audio clips in this episode are ordered by when the original episode was published. If you’d like to circle back and listen to any of the previous interviews you can do so in your podcatcher app, or at my website, pfforphds.com/podcast. To keep up with future episodes, please hit subscribe on that podcatcher and/or join my mailing list at pfforphds.com/subscribe. Since I featured my own financial story from graduate school in season one episode one, you’ll hear an update from me first followed by the rest of the guests. Happy listening and here’s to the end of 2020!

Dr. Emily Roberts

01:53 Emily: Hi, this is Emily Roberts from Personal Finance for PhDs. I was on season one, episodes one and two, and season three, episode one and it’s been about two and a half years since I recorded the first of those episodes. Not a whole lot has changed career-wise in that time. My husband still works for the same startup that brought us to Seattle, and I’ve expanded my business into a few new areas. I now offer one-on-one financial coaching, run a group coaching program called The Wealthy PhD a few times per year, and facilitate the Personal Finance for PhDs community. And of course, continue to host this podcast and give seminars and webinars for universities and conferences. The big personal changes are that we had a second child, so our daughters are now ages four and two, and we moved from Seattle to Southern California in August, 2020. Moving in a pandemic with toddlers was much more challenging and less enjoyable than the move I described in my earlier episode, but it went very smoothly, all things considered my husband and I are now technically location independent, at least for the time being. Our current big financial goal is to buy our first home in Southern California in 2021. For the last several years, we’ve balanced investing for retirement with saving a down payment, so hopefully we’ve done enough on both fronts. I’m really looking forward to stability in the housing area of my life. Thanks for listening to my update. If you want to get in touch, you can visit my website pfforphds.com or find me on Twitter at @pfforphds.

Dr. Caitlin Faas

03:27 Caitlin: Hi there listeners. My name is Dr. Caitlin Faas and I was on episode seven of season one, October of 2018. A lot has changed for me since then. I left my position as a faculty member. I was tenure track at the time earned tenure, became a department chair and then left the position at the end of 2020 to work for myself full time as a certified life coach, I made that decision officially in February of 2020, right before COVID hit. And I knew it was time to take the leap. And then the universe sent me all the tests, my husband being laid off and COVID and so many other things, but I still trusted and knew it was time to leave. And I’m proud to say this year, I’ve earned over a hundred thousand dollars and we paid off all of our debt and all my concerns and worries that I managed along the way are what made it possible for me to be ending the year of 2020 successfully.

04:33 Caitlin: We also, in that time adopted our teenage daughter out of foster care and something I wish I could tell myself, looking back in 2018, as I had an idea that I might want to leave academia and continue to grow my business was I just wish I could tell myself not to stress as much about the debt we had. I took it a little too seriously. It all worked out as it was supposed to, and I didn’t have to hustle and grind my way there. I definitely followed a budget and Dave Ramsey’s plan, but the biggest thing was money mindset and law of attraction, setting those goals for myself and continuing to trust the flow and surrender to the process. That’s what made the difference. So best of luck as you hear my update and go about your own path with Emily.

Nicholas Giangreco

07:13 Nicholas: Hi, this is Nicholas Giangreco from season one, episode 10. I am a systems biology PhD student at Columbia Medical Center. I’ve kept a budget throughout my studies and living in New York City, logging in my expenses and savings. First switching to a rainy day fund goal, then a more moving fund/cushion goal, and now recently, been able to transition to more heavily into a retirement saving, and that’s because having the budget has helped me be more conscious of my spending and saving decisions over time. That would be my advice for new graduate students — keep a budget. I use Google sheets. Whatever makes you conscious of your decisions and helps you stick with a goal that you have in mind is really important throughout your graduate career. As well as taking advantage of opportunities, such as tutoring, teaching, and internship. They can help you get to your goals and become more financially stable. Hopefully that helps out people and enjoy the rest of your listening.

Bailey Poland

08:51 Bailey: Hi, my name is Bailey Poland, and you can find me at Patreon.com/BaileyPoland. I was originally on season one, episode 12. I’m now a fourth year PhD candidate in rhetoric and writing studies. And I’m about a chapter and a half away from being done writing my dissertation. I’m currently on the job market, both for academic and industry jobs, especially given the way the COVID-19 pandemic has affected the academic job market. In the original episode, Emily and I talked a lot about side hustling, so I wanted to give a little bit of an update about that. While I do still have my Patreon, my other side gigs have changed a lot and this year I’m on an assistantship that allows me to focus exclusively on my dissertation, so that’s my main priority right now. But in the past couple of years, I’ve worked as a virtual social media assistant for a women-focused finance organization called city girl savings. I took on some extra work in my department as a digital development and promotional outreach assistant, and I’ve done various freelance jobs in writing and editing, especially professional writing and editing, as I’ve had the opportunity to work on those. So despite my stipend only going up a little bit across the time that I’ve been in the program, I’ve managed to hit a six figure net worth over the past couple of years by keeping my expenses low, doing that extra paid work and investing.

10:14 Bailey: And on that note, my best financial advice for another early career PhD is to find a way to save and ideally invest as early as you possibly can, even if it’s just to get into the habit of having some money set aside or having an automatic transfer of some kind of set up. Even if you’re still paying off other debt, even if it’s only a little bit of money here and there, that really, really adds up, especially over the long-term. Time is a huge factor in creating financial security for yourself and the earlier that you can build those foundational habits, the better off you’ll be.

Dr. Lauri (Lutes) Reinhold

10:51 Lauri: Hi, my name is Lauri Reinhold, formerly Lutes, and I was on season two episode one. My main updates are to share that I completed my PhD and amidst the pandemic, which was quite an achievement for me. And I now have a postdoc position. In my episode, I spoke a lot about the ways I took advantage of resources in my area to overcome some of the challenges of being a single mother and a graduate student. One of the goals later on in graduate school that I looked into was home ownership. And I wanted to share this with you because had I looked into it sooner, I probably would have benefited a little bit more. I am settling into a higher cost of living area, especially in comparison to where I grew up in the Midwest. And looking into home buying is quite intimidating due to the average cost of a home. I found in my state in Oregon, there’s a program called an individual development account or an IDA, and this is a three to one matching program where I can contribute $2,000 and walk away with $8,000 that I can use for a variety of different expenses — educational buying a car retirement. However, I was most interested in using these funds for a down payment on a home. Unfortunately since I looked into this later in my career and my admittance into this program was delayed due to the pandemic and this perfect storm of things occurred, my current income puts me just over the threshold to qualify for this program, so I’m no longer able to participate. However, I am happy to report that I have learned a lot about the home buying process along the way, and that I am still actively pursuing this long-term goal. My advice to you is if you have these financial goals, I encourage you to see what’s available in your state and take advantage of these programs sooner than later, so that you can start saving. And perhaps you might be more likely to meet some income thresholds and take advantage of some of these opportunities to get ahead.

Dr. Gary McDowell

12:54 Gary: Hi, I’m Gary McDowell and I work as a consultant on early career researchers and affecting change for and with them. I’m now based at Lightoller LLC, but you may have heard from me on season two, episode three, when I was the executive director of the nonprofit Future of Research. I’m doing almost exactly the same kind of work and have the same motivations to work on behalf of the interests of early career researchers. Now I’m just in a different business model. I’m also now more permanently settled in Chicago, Illinois. I spoke about our effort on postdoc salaries with you before, and I’m still working on that in my spare time. I’m currently embarking on a new set of data requests from universities, and I hope to have five years of data to look at and share with you all in the not too distant future.

13:38 Gary: But I think the best advice that I can give to you at the moment is that you should be very proactive in bringing up the topic of salaries when talking with current or potential supervisors in an academic setting. I mentioned this for a couple of reasons. Firstly, my sense is that compared to when I started working on salaries nearly five years ago, it has become much more acceptable to talk about money, hopefully in no small part because of the efforts of people like myself, constantly putting this up as an issue publicly with academics. This is particularly true, I think, in the present situation with the COVID-19 pandemic and the increased financial burdens that that’s placing on early career researchers. I think it’s important that you try, if you can, to advocate for yourself.

14:23 Gary: Secondly, I always advise that you bring this up with a potential supervisor because how they react can tell you a lot too. Even if you don’t get a raise in the salary offer from the discussion, if they react with, “why would I pay you more?” I think you should probably question generally whether this is the person you actually want to work for versus someone who might respond that they can’t give you a raise, but then talks about how that could be explored through fellowship applications or talking to the department chair, or just generally seems willing to about it. If you don’t feel able to advocate for yourself, maybe you have a precarious visa situation, for example, find ways of advocating with others through a union or association. There’s strength in numbers and decades of recommendations from blue ribbon panels that you should be paid more. So make sure you’re advocating for your worth because you are worth it. Feel free to contact me. You can do so through my website, lightoller.org or emailing [email protected]. Or you can always contact me on Twitter at @GaryMcDowellPhD, or find me on LinkedIn. Thanks for listening.

Maya Gosztyla

15:33 Maya: Hi guys, this is Maya Gosztyla from season two, episode four of the podcast, which came out in February of 2019. And that episode was about how during my postbac fellowship at the NIH, I was able to save about 30% of my income despite having a fairly low salary of only around $30,000 a year. We also talked about how I use science communication as a side hustle to earn a bit more money on top of that. It’s been almost two years now, about a year and a half since that was published and a lot has changed since then. I got married to my then fiance and we had a very simple wedding. We just eloped at the cherry blossom festival in DC and spent some money on a two week honeymoon abroad, which was lovely. I also started grad school at the University of California, San Diego, which is also lovely. I love it here.

16:25 Maya: A lot of the things that I talked about in that episode have continued. I still live very simply. I don’t eat out very much and I try to budget very carefully. But of course, 2020 had a lot of things that made it much harder to live the way I had last year. In grad school, I have a pretty similar stipend as I did as a fellow and I also have a fairly similar cost of living, but the difference is now of course it’s me and my husband, not just me living by myself since we were long distance during my fellowship. As a result of COVID, like so many other people, my husband does not have a job right now so we’re basically both living on my grad school stipend. As a result of that, I’m no longer able to save 30% of my income. Unfortunately, we pretty much just break even with the stipend alone. However, I have continued doing my little side comm side hustle, and all of that is kind of on top of my stipend just goes into savings. So that just gives us a little extra buffer to continue saving a little bit toward our goals as much as we can. And having that emergency savings that I did build up during that fellowship was super helpful. It gives us a lot more peace of mind in case we have any major expenses, like when we just had to get some car repairs done, and having to buy health insurance from my husband when he aged out of his parents’ insurance. We were able to do that without much problems. So that’s been really helpful to have that little cushion.

17:45 Maya: Our plans for the future are basically when my husband does get a job, and hopefully this pandemic ends, people can go back to work, we’re going to continue to live on my stipen as much as possible and then try to use anything that he makes to just work on paying down student loans, and eventually saving toward retirement. My advice for students would be definitely save up some emergency savings before grad school, if you can. And if you’re living with a partner, try to live on one income, if you can. I’d be happy to talk to people who are in a similar financial situation and gives some advice, so you can feel free to reach out to me on Twitter. My username is @alzscience on Twitter. Good luck to everybody.

Dr. Jill Hoffman

18:25 Jill: Hi, this is Jill Hoffman from Toddler on the Tenure Track. I was on season three, episode four, where I talked about public service loan forgiveness, as well as the decision that my husband and I made to have him become a stay at home dad. Career-wise, I’m still on my tenure track position and I’m on track to submit my tenure package in October of 2021. Also in September of 2020, my husband started a part-time position that he does from home. So he’s still doing the bulk of the childcare, but we’re switching off with childcare responsibilities when our work hours overlap. Financially, given the pause on student loan interest that’s happened as a result of the pandemic we’ve put our more aggressive student loan payments on hold for now. I still have a significant amount left on my loans and I’m still on the public service loan forgiveness program. And with my husband’s loans we’re waiting to see what happens when the new administration takes office before we start back up with our focus on paying those off.

19:24 Jill: Personally, we’ve had some major ups and downs since I was in the podcast and are currently trying to work out the logistics of a move back East to be closer to family. We’re currently in the Pacific Northwest. Sadly, my dad passed away in late 2019, and we had some other family emergencies that really made us reconsider the distance from family at this point in our lives. And financially, the money associated with traveling back and forth isn’t sustainable for us at our current income level. on a happy note, we’re expecting our second child in may of 2021, so that’s also playing a role in our interest to at least be an easy driving distance to family. You can find more about what I’ve been up to toddleronthetenuretrack.com.

Crista Wathen

20:08 Crista: Hi everyone. This is Crista Wathen from Richful Thinker. Last time you heard from me was season three, episode seven, where I spoke about the benefits of completing your education abroad and how I am using my PhD salary and Swedish kroner to pay down my US student loan debt. The biggest update since the interview that I have for you is I have finally reached positive net worth after being negative for so many years. I was also asked what was the best financial advice that I can give you, but that has changed in the meantime, and it is increase your savings rate so you can let that. You do have to decide the vehicle in which you want to place it in, but you have to let that grow. Now you can follow my journey as an American abroad. You can go to my blog, richfulthinker.com or my Instagram account, which is @richfulthinkerblog. Thank you guys so much for listening and I hope to speak to you soon.

Dr. Gov Worker

21:12 Gov Worker: Hi, this is Dr. Gov Worker and I appeared on season three, episodes eight and nine. Emily and I talked about the FIRE movement and the FIRE movement stands for financial independence and early retirement. Since that time I’m still on a path towards early retirement and financial independence. And in fact, with the large market gains that have been going on since the time we recorded, I’m further ahead than I thought it would be towards achieving financial independence. Once I reach financial independence, I’m still planning on working right now, but it’s nice to know that if something were to happen, I’d never need to work again, but I’m enjoying my job right now too much to leave.

21:58 Gov Worker: And I know I gave advice on the podcast, but if I had more advice, it would be really understand your employee handbook. Or if you work for a university, the university rules, or the federal government rules. Whatever your workplace is, understand all the rules about your employment, because sometimes you might find a benefit buried somewhere deep in an employee handbook that you don’t know about. And I think a lot of what I am really passionate about right now is educating people on how to get the most benefits out of their jobs that they’re they’re already at. I definitely recommend doing that. And if you want to get in touch with me, I’m on Twitter. You can tweet at me it’s @govworkerfi, and I’d love to hear from you. I love hearing from my readers. I also have a blog governmentworkerfi.com, but if you just tweet me, you can get to my blog.

Dr. Toyin Alli

22:59 Toyin: Hi, this is Toyin Alli from The Academic Society. I was on season three, episode 12 of the podcast where I shared how grad students can find the perfect side hustle while working on their degree. Since recording my episode, my job hasn’t changed much besides doing it remotely. I’m still a lecturer at the University of Georgia, and I’m up for promotion this year. My business, The Academic Society has grown so much since the episode. My YouTube channel has grown to almost 6,000 subscribers and my time management programs and courses are helping so many grad students. I’ve also revamped my signature grad school prep course for new grad students. It’s the resource for new grad students. Inside of my program I help recently accepted in first year grad students uncover grad school secrets by learning about the culture of grad school. I help them transform their mindset from an undergraduate mindset to a grad school mindset. I help them up level their productivity so that they can actually get their work done, and master time management so they can have time for themselves without worrying about how grad school works. I help grad students become more prepared and understand what grad school is all about so they don’t feel anxious about starting. I’m so happy that my business is in a place that allows me to not depend solely on my income as a university lecture. This summer, I was able to buy my first home, a condo in a pandemic. I’m paying off my student loans from undergrad, and I’m excited about building wealth from my side hustle.

24:41 Toyin: Thank you so much for taking the time to listen to my update and catching up with me. You can find me on my website, theacademicsociety.com on YouTube, my channel is called The Academic Society with Toyin Alli. You can also follow me on Instagram @theacademicsociety_, and you can join my Facebook group for grad students, it’s called The Academic Society for Grad Students. Across all platforms, I talk about time management and productivity, but my overall mission is to show grad students and academics that you can live a fulfilled life and be successful in academia at the same time.

Follow-up from Emily

25:23 Emily: Hey, it’s Emily again, adding onto the last update. After Toyin and I got back in touch for this update episode, she invited me to guest lecture for Grad School Prep, the course you just heard about. The recording of the workshop I gave, “Set yourself up for financial success in graduate school” now lives inside Grad School Prep. If you are a prospective or first year grad student, I highly recommend joining Toyin’s course. In hindsight, I recognize how desperately I needed the skills and information in Grad School Prep when I started my PhD. My contribution lets you in on the financial secrets of grad school, explains the financial mindset you should adopt, and walks you through the financial steps you should take during your application year and first year of grad school. Toyin gave a free masterclass on what to expect from your first semester in grad school and how grad school prep can help you with the transition, including a description of my workshop. You can sign up for the free masterclass theacademicsociety.com/Emily.

26:28 Emily: Toyin’s interview was the last one in season three so we are finished with this update episode. I hope to devote an episode at the end of each calendar year to updates from previous guests. I hope you have a restful and joyful holiday season, despite the year we’ve had. We’ll be back with a new episode on Monday, January 4th, 2021.

Outtro

26:51 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.