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3 Ways Your PhD Set You up for Wealth

Updated July 22, 2020

I always thought being rich meant having a baloney sandwich on white bread.

Let me explain.

When I was a kid, we didn’t have much. My dad worked as a maintenance man to support a family of five and my mom stayed home to raise us.

They were great parents. But we were the kids who couldn’t afford things. School trips. New clothes. And baloney on white bread.

My lunch came in a washed clear milk bag (in Canada milk comes in a bag). It was usually sliced homemade bread with jam, or leftovers from supper before.

Now I don’t begrudge my mom sending me leftovers or homemade bread. And now that I have my own kids I find myself packing the same lunches.

Still, I always thought that the kids who had baloney sandwiches on white bread—in a nice shiny ziplock bag no less—had access to a level of opulence that I didn’t.

I’ve made a lot of bad wealth decisions in my life. I was poor through 15 years of studying. I was poor when I worked building highways, installing lawn-sprinklers, and as a waiter. No shame in any of those jobs, but there was no money either.

And the poverty that came with academia, and especially the poverty that it promised if I stayed, was just the last straw.

Does this sound a little superficial? Perhaps. But I decided that I’m tired of living in overdraft.

My studying was supposed to give me access to a better life, somehow. When my mom and dad sent me to university, they wanted me to get out of our small town and have opportunities that they never had.

And I did.

I traveled, learned languages, and met all sorts of interesting people. But—like a lot of firstgen students—my degree didn’t translate into a full bank account. I didn’t have the network of people to tap into and I didn’t have wealthy people around me to learn from.

Things have changed, and now that I’ve begun my career I’m able to build some wealth. And I realized that a PhD can set you up for wealth in a couple of ways.

1. You can earn more with a PhD—but start ASAP

The studies aren’t all in agreement, but there is some evidence that suggests that PhDs will eventually make a higher median wage than their counterparts and perhaps make more in their lifetimes.

Whether this makes a PhD a good investment (especially if you subtract the price of tuition and the years of lost earnings) is open to discussion and not really the point here. I’m assuming if you’re reading this that you’re already in some advanced degree and it’s a moot point.

My advice to you would be to finish fast and get the hell out.

Don’t stick around for an extra five years hoping for an academic job to drop in your lap. Or at the very least, find some well-paying work while you play the job market.

I’m convinced that one thing that devastates the financial future for a lot of PhDs is the time they waste between finishing the doctorate and getting to good, career-level income. For some PhDs this transition can take years.

(See the related post where I show how you can waste hundreds of thousands of dollars by delaying your career).

Don’t wait.

2. You think about income differently

I’ve been on the personal finance bandwagon for a while. And I know that one of the other gifts of a PhD is that we don’t get hung up on a bi-weekly paycheck.

Some months you make more than others. When the grant comes through you eat steak. When it doesn’t you fill up on ramen noodles.

This is a tremendous gift that will take you far in life. Most people think in terms of a paycheck—expecting month to month to get the steady income. And to be honest, it can be nice at times.

But the reason many people never follow their dreams is that they get tied to the paycheck.

The paycheck sticks people to jobs WAY longer than they should stay there.

Now I’m not saying to do reckless things in pursuit of a dream, nor am I saying to live in poverty and debt. I hope the point above made that clear.

But do you know who else lives like PhDs?


That’s right, in terms of the money coming in PhDs and entrepreneurs have a lot in common. Both have to learn to surf the good waves and sit out the bad ones. (I wrote more about this here.)

Hopefully by this point you’ve learned to live on what you’ve got when you’ve got it and to be content (I hope you’re not taking out debt to cover the difference).

This skill will set you free. Because if you go into consulting, or some other type of piece-work when you graduate, you’ll be able to make way more than most. And all because you know how to live without a regular paycheck.

3. You know that time doesn’t have to equal money

I was so frustrated when I went back to working by the hour after living off of grants. Hourly work, even if you’re making $40 or $60 dollars an hour, is aggravating. Because the old saying of “time is money” doesn’t mean that you have to spend your life trading your time for money.

When I won a $105k grant, the application didn’t take me much longer to do than the $5k grant I won. And it definitely took less time than a semester of TA work that paid my bills when I didn’t have a grant.

This lesson will carry you far in the real world, especially if you choose to do consulting. Your income does not need to be a result of trading your hours for dollars. If you’ve learned to live with uncertainty, you can go for big payouts.

A research project as a consultant that pays $15k pays that whether the project takes 50 or 350 hours to do. This is a way to make tons of money off your PhD that most PhDs don’t know about. If you can handle a bit of instability in your income (and as we established in the last point, most PhDs can) you can take advantage of being set free from the clock.

These are some of my wealth lessons from my PhD. What are yours?

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