What do random people on the internet need to know? Google knows.

Q:  how to live like a millionaire on a thousandaire budget

A:  Read the Millionare Next Door for tips.

Q:  can a creditor take equity from your house even though it isn’t paid off ?

A:  Depends on the state, specifically their homestead exemption in bankruptcy proceedings.  (They can force you to sell in some states.)

Q:  my roommates and i share our meals. is the money they give me toward the groceries taxable?

A:  No.  (But check with an accountant just to be sure.)

Q:  who say that live everyday like last day

A:  Lots of silly people.

Q:  do you think kids should be forced to participate in athletics

A:  No

Q:  was arnold lobel gay

A:  Who knows?  He was married to a woman (Anita Lobel, also a children’s writer and illustrator) and had two children.  But he also died of complications to AIDS in 1987, a huge loss to children’s literature.

Q:  how miserable is the average person

A:  If I recall correctly, the answer is something like content.  But I’m not sure if that’s truly weighting for areas with constant stressors like in war zones or properly getting at people who are under constant repeated stress like slaves.  I dunno, there’s lots of books on happiness, you can look it up!

Q:  do you miss high school

A:  Not really

Q:  do you miss school

A:  NO.

Q:  is tiaa cref as good as vanguard?

A:  No, but it’s not bad either.

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Where do your PhD’d friends who escape academia go?

Mike left an interesting comment re: his history phd friends

Some of my History PhD friends took jobs with corporations, e.g., HCA and Lockheed Martin. These were pretty highly compensated jobs. At least a couple took positions teaching at elite private secondary schools.

Here are some PhDs that we know of, and where they ended up:

Engineering:

80% of them are on the West Coast working for tech start-ups.  15% are on the East Coast working for tech start-ups.  One guy is a trailing spouse in a foreign country working as a “quant.”  One guy is an international “bum” in that he’s spent the last 10 years or so back-packing and couch surfing across the world and not doing much else (according to his brother who keeps in touch).  One taught high-school math and is now a software engineer.

Economics:

Many government positions in DC and at Feds around the country (also Canada’s version).  Several at think-tanks.  Some in consulting making large sums of money.  A couple on Wall Street whose salaries are measured in the millions instead of the hundreds of thousands.  One SAHP.  Freelance editor.

Political Science:

Running a local non-profit.  Consulting.  Business.  Volunteer for political campaigns.  Government in DC.  Government overseas.  Unemployed.

Sociology:

Working for the government in DC.  Working for granting agencies.  SAHP.

Psychology:

Grant foundation.  Private practice.  The VA.  Start-up.  Freelance writer.  Data manager/statistician.  Research director for a hospital.

English:

Novelist/SAHP.

Archeology:

Private school then SAHP.

History:

Investment banking.  High school teaching.

Physics:

Full-time research associate for an economist.  Think tank doing economics work.  Wall-street.  (Granted, I mainly only run into Physics PhDs when they’re doing economics.)

Math:

Actuary.  Federal Government.  Public school.  Private school.  Minister.

Let’s not forget that Mayim Bialik, actress, has a PhD in neuroscience, and Brian May, famous rock musician, has a PhD in astrophysics.

Where have your friends with PhDs ended up if they didn’t go into academia?

Shout-out to Rented Life…

I apologize for being slow and disorganized, but I DID make a donation for you!

Back in this post, we promised Rented Life a prize for being our most active commenter in 2013.  We declared that we would send all the profit from our Amazon affiliate links collected up to that point to the nonprofit of her choice.  She emailed us, and we sent the proceeds to her favorite animal shelter.  Now we all feel warm and fuzzy.

Note to Rented Life: We weren’t sure if you’d be ok or not with us posting a link to said animal shelter’s donation page, since you sent it via email. We can post it here if you’d like, or just ask people to suggest animal shelters to donate to in the comments. :)

Escheatment

Escheatment is another fun (not really) term that I learned this tax season.  #2 didn’t even know this term!

Did you know that if you have a stock that is on a dividend reinvestment program and you don’t login to the webpage or call them or write to them (because it’s changed companies so you need to re-register and they send you a nice quarterly report and tax forms so there’s no reason to login), that after “some amount of time” the company has to, by law (depending on your state), declare your account dormant (even if you have ANOTHER stock from the exact same company with the exact same contact info that isn’t dormant because its dividends are going to your bank account, even if the reinvested dividends from the dormant account are buying shares in the non-dormant account).  Then they have to notify you 3 times to contact them.  The third time requires signatures from everyone on the account and you can no longer just login or call them to stop the dormancy.  The first two times can apparently be a one line suggestion that you login to their webpage to avoid dormancy hidden in the middle of a statement full of words and numbers.  So the third time with the signatures comes as a surprise.

What happens if you don’t get the signatures to the PO box across the country in time?  (Supposedly 30 days, but for some reason it takes a lot longer for the letter to get to you and then you don’t really pay attention to it until you start doing your taxes and go what is this OMG, I have 2 days.)  According to the internet, your entire dormant account is given to the state.  Then the state sells it (and you can’t sell it before that happens because your account is dormant so you can look but you can’t touch online).  If you want the money back, you have to go through the state’s lost money thing.

Of course, it isn’t clear from that third notice which state is going to get your money.  So good luck with that.

Update:  Escheatement averted.  And a reminder that I have to contact them at least once every 3 years in order to avoid escheatment, which can include logging into the account.  Maybe something to do at tax time.

So more fun with investing.  Seriously guys, Vanguard index funds.  Or target-date funds.  Maybe TIAA-Cref if that’s what your employer uses.

Link Love

We think W dodged a bullet by getting this job reneged when she tried to negotiate.  Getting that kind of a TT job might be worse than not getting it.  We agree with this comment and also this one.  Plus the number of people referring to W’s requests as “demands” is sickening.  That’s what happens when women ask, and it shouldn’t.  And here’s one from another woman in philosophy.

So how are you supposed to negotiate if you’re stuck being female?

God Damn it Texas.  WTF is wrong with you?

Stacking pennies notes that women’s week in finance shouldn’t be all about the babeez.

I like this way of understanding how interest works.  It really illustrates how debt can drag you down and keep you from spending to your potential.

I kinda want to read this book

we can’t use happiness surveys to make across group comparisons, only within group

I think my brain just exploded.   It’s apparently “News of the academic Weird” week on the internets

“The failure mode of clever is asshole” –Scalzi

Donna Freedman asks about your minor celebrity moment.

Some of our readers are interested in self-employment and aging

Am I the only one totally squee-ing about Clarice and Joshua?  #2 doesn’t read it so she has no idea what I’m talking about.  I sure hope it works out.  I think it will.  They’ll figure it out.  That’s what falling in love really is, at least the way I see it (YMMV).

Ask the grumpies: Next stage financial advice

Good saver asks:

My husband and I have done a recent financial checkup and in the process realized it’s time to do more interesting things with our money than build up savings in a savings account. The question is what.

We are both gainfully employed and spend an obscene amount on childcare for our toddler. We hope there might be a second little one running around wrecking havoc in the next year…. (Well maybe not running yet… but you know…). My husband is in his early 40’s. I’m in my mid 30’s. We both have highly stable jobs.

We own a house in a good neighborhood. The loan was taken out at a good interest rate (4.5%) with a good solid downpayment (25%). It’s a 30 year mortgage and we plan to be here for the next 5-15 years. We have 6 mos emergency fund.  We contribute to our employer’s 403(b) programs and take the match. With this combo we contribute about 15% of our salaries to retirement automatically. We can’t drop below that contribution rate and redistribute the money elsewhere.  This acct currently totals around $160,000. We also have been contributing to my husband’s Roth for the last 4 years at the max allowable contribution.  We’ve been aggressively saving and have had a couple relatives die and now have significant cash sitting around ($120,000).

Now that we’ve met the obvious goals, we’re not sure what to do next — How do we find people to help us think about this in a smart way? Who (broker, financial planner, bank trust dept.?) do we interview? And what are the right questions to be asking at the interviews?Do we pay off the house first and foremost (a friend strongly advocates this)? Others argue that between the mortgage deduction and the low interest rate it’s not the best way to spend our next dollar.  Do we put more into retirement savings specifically for the tax break or do we just invest and not set the money aside so particularly?  Do we try to rebalance the retirement portfolios into different investment devices (and if so, how much into what devices?) Do we seek to do different things with the different pots of money we have? College savings or retirement?

I can’t tell whether or not 160K is enough saved for retirement at your ages.  Play with online retirement calculators to see if you’ve saved “enough” or need to up that savings amount.  15% a year is the recommended amount, but it also assumes that you’ve been saving 15% a year the entire time.  If you did graduate school of any kind, or didn’t max out, or started making much less money than you are now, or had really lousy investment timing, you might be behind.  That would be the first thing to check, because it’s an easy answer.  If you don’t have enough saved for retirement, put more in your tax-advantaged savings vehicles.  You don’t need a financial planner to help you with that, just some internet calculators.  (Though, of course, you shouldn’t just take advice from strangers on the internet– our standard disclaimer applies.)

4.5% isn’t low enough to make it obvious that you shouldn’t pre-pay the mortgage, but it’s not high enough to make it obvious that you should.  So there’s no clear answer there either.  One thing to note is that, unlike most other forms of debt, a dollar spent early in your mortgage is worth more than one later.  You can play around with the GRS mortgage amortization spreadsheet to see how much different principal payments save you– that will put a dollar value on the benefit of mortgage pre-payment.  Remember also that you can unlock some of that prepayment in the case of an emergency by re-amortizing your mortgage and lowering your required monthly payment.  You can do this even in situations in which the stock market has crashed (so selling stocks is a bad idea) or the housing market has crashed (so refinancing or selling the house is out of the question).

We’ve never actually dealt with financial planners.  #2’s significant other recently had a windfall and will be getting a recommendation for a financial planner from a trusted wealthy friend.  Most of us don’t have trusted wealthy friends, however.  I point people to Walter Updgrave’s advice whenever I’m asked this question.   However, I add my own caution.  Many financial planners are terrible people who just want to separate you from your money by recommending high cost mutual funds and other terrible investment vehicles.  DO NOT stop by your local Edward Jones office to get advice.  You really do want a fee-only certified financial planner who does not get any kick-backs from recommending you high-cost funds.  Personally, I’d rather figure things out myself, possibly with the help of the Bogleheads forum (or their book), but I also have a PhD in economics and like dealing with money.

In general, we can’t tell you which saving/investment things to do first or in what order.  That is going to depend a lot on your own goals and your own situation.  How much of your children’s education do you plan on funding?  How much financial aid are you thinking you’re going to get?  How much do you like your jobs?  Do you want to retire earlier or later?  Do you want an upper-middle-class retirement or do you want to live a simpler life?  Will you have a short-term need for funds outside of your emergency fund (ex. IVF, new cars, private school, sabbatical etc.)?  Do you want to leave your own (monetary) legacy?

I can tell you what we’re doing.  We’re prepaying the mortgage, but not just prepaying the mortgage (and we stopped doing this so much when DH was unemployed).  We’re maxing out our tax-advantaged savings (we dropped this down to the required 12% when DH was unemployed), but I’m not sure we’re going to put money in the IRAs this year.  We’re hoping that we’ll be in the income bracket that keeps us paying full-tuition at private colleges or universities for our kids, and we’re planning on covering the entire bill, so we’re putting $500/month away for each kid in their respective 529 plans.  As I’ll talk about next month, we still have trouble figuring out what to do with extra money… it’s a nice problem to have, but not one with an obvious answer.

In terms of where to put your retirement savings– if you have access to Vanguard, then you have one stop shopping with their Target-Date funds.  Pick a date, set, and forget.  If you don’t have access to Vanguard, then the Boglehead forums are a good place to look for asset balance heuristics for your particular situation.  You should be looking for a combination of low fees and the right diversification of risk for your planned retirement date and risk tolerance.

Don’t worry so much about the “best place” for the next dollar.  The best place in hindsight is not going to necessarily be the place you think it is because none of us can predict the future.  The best you can do is to make a lot of good choices.  For us those good choices are never going to be best or worst because we’re doing a number of different things with our money.  That’s the essence of diversification.  We’re not going to win as big on the stock market as we could because we are pre-paying the mortgage.  But we’re also not going to lose as much as we could for precisely the same reason.  Are we getting the percentages “right”?  Well, there’s really no wrong answers.  We have enough places to tap short-term that we’ll be ok in a number of scenarios, but we’re also taking advantage of many of the tax-advantages to saving for retirement.

The bottom line though, is that an extra 120K in cash on top of your 6 month emergency fund is way too much.  Put that somewhere soon!  Each month you delay making a decision, you’re potentially losing more money than you would if you just randomly chose any one of your good suggestions for potential vehicles*.  If it were me, I’d max out the retirement for this year (there’s still time to fund your 2013 Roth!), put some in a 529, maybe put some in taxable (Vanguard Index fund) stocks (because it sounds like you don’t have any, and taxable stocks are a nice secondary emergency fund), then put the remainder into the mortgage. If you don’t need a secondary emergency fund, then skip the taxable stocks in favor of the other options. Remember that the Roth can function as a secondary emergency fund just like taxable stocks can because you can withdraw the principal.  That gives it a slight advantage over just taxable funds.  But anything you choose from that list you gave is going to be better than sitting in savings.

*exception:  120K is probably too much to put into one kid’s 529 plan, depending on where you think they’ll go and if they’ll be eligible for financial aid.

Grumpy Readers, What advice do you have for Good Saver?

Are PhDs entitled to tenured jobs? A deliberately controversial post.

We have argued before that academia is just a job.

We have marveled at how willingness to do math opens up a world of opportunities.  (Though not necessarily with a math PhD… but if you’re willing to do the same math as say, an engineer, you’re in better shape.  And hey, you can always take actuarial exams or maybe work for the NSA with that math degree.)

So… does the fact that you’ve suffered for 5-7 (or more!) years in a PhD program and gotten your hood and your diploma mean that you are entitled a tenure-track job?  What about your debt?  Your lost opportunity costs?  Are you entitled to compensation for that?

The fact is, there’s an excess supply of PhDs compared to the demand for tenure-track professors in most fields.  In fields where industry can absorb those extra PhDs at salaries higher than their t-t counterparts, that’s not so bad.  You can cry about your industry job all the way to the bank, so to speak.  In fields where the PhD doesn’t provide many additional earnings opportunities, that leads to a lot of unemployed and underemployed people with doctorates.  We end up with a lot of people being exploited as adjuncts in the hope that if they put their time in they can get one of those elusive tenure-track jobs.  People are willing through their actions to accept very little pay and bad working conditions simply because they hope it will lead to better employment later, and there’s enough of these people that it drives the cost of adjuncts down.

Sometimes you work hard and you take risks and those risks don’t pan out.  It would be nice if there were exactly the number of jobs available for the people qualified for them who wanted them and they matched up perfectly and paid well.   But not only are there differing demands for different skill sets, but some sets at the same skill level seem to be more likable than others.  People like studying the humanities.  There’s not enough demand for PhD level humanities skills to ensure all humanities PhDs a living wage using those skills.

So… are PhDs entitled to tenured jobs?  Is anyone entitled to anything besides life, liberty, and the pursuit of happiness?