Way back in dental school, I once served on an admissions panel where prospective students and their concerned, hopeful parents could ask current attendees about the school’s particulars. In one of these sessions, four or five questions into a discussion on finding housing on campus and why having a new facility means the world to us (it didn’t, really), a bespectacled elderly gentleman raised his hand to ask what kind of work-study opportunities there were for his son in dental school. I’m ashamed to say that I almost laughed–up until that point, I considered it impossible to consider looking for a job while in professional school. There was so much material to learn and technique to practice, and when there wasn’t, hadn’t we earned our free time? Plus, everyone was gunning for the highest-earning specialties, which meant that the best opportunity to get ahead was when other people were hanging by the pool together or working out for two hours at a time. I told him as much, and our collective conversation moved on to campus parking (nope, we don’t have that) or something equally inane, but the seed had been planted.
What I really meant by that answer: you can’t search for and hold down a job like you did in high school or college. You can’t have some insecure boss putting you on a schedule at a restaurant or bookstore, and your time is definitely worth more than the $8 an hour most campus jobs pay. But then I thought about it, and looking back…people did work. I had several friends that kept bartending jobs they’d had as undergrads, where they would choose one or two weekend nights a month and walk out the door with $300. Two more worked for restaurants their families owned. And I had a lot of Mormon friends in school, and church for them might as well have been a place of employment. Plus, many of us did research jobs over the summer. And most importantly, hadn’t nearly every conversation about professional school returned again and again to the pernicious nature of education debt? Fast forward a few years, and I am still in professional school (medical school this time). I also take care of two kids, maintain a home, and write this blog. And now I work 2-4 days a month. What I deemed laughable when I was in dental school when I had no kids and no house is actually doable with both!
In my retrospective analysis of my answer, I was blinded by my history in the workforce of restaurants, bars, and research labs. What I did not take into consideration at the time was how millennials make money. We us apps, we freelance for remote companies, we use our social networks, and we use the internet. Cue lightbulb moment. There are ways–many ways–that millennials make substantial, fast, relatively easy money. I’ll get to my favorites in a bit–but think about this. I have classmates who take online surveys and make $700 a month, friends who make $30-35 an hour driving for Lyft, and I know people who make $100 a night for watching people’s dogs or renting out a room in their apartment. Those opportunities, and many, many more, are available to professional students. In keeping with the MiM philosophy, anything we undertake needs to be high impact with minimal investment. As I’m about to present in an uber-compelling manner, it doesn’t take much effort to make a big splash.
So, how much should you work? Enough to make $5,500, exactly–in whether you can do it over a summer, a month, or a in day. That’s it, and that’s all. It is the smallest, most manageable amount of income that delivers the most impact. Why? Twofold:
- $5,500 is the maximum amount that you can contribute in a year to the tax-deferred account of choice, the Roth IRA. You probably already have one, in fact. If you don’t, you can read about it here. Also important: you need to earn at least the amount you contribute to an IRA, and report that income, in a given tax year. Now: say you follow this advice and sacrifice a few hours a week in professional school, maxing out your Roth while making a total of $22,000 over four years. Due to the miraculous capacity of investments to compound, if you invest in an index fund (recommended and discussed here), and the market follows historical trends (roughly increasing 7.7% a year), just this amount will be worth $26,573.84 when you graduate, $38,506.39 when you finish residency (assuming 5 years), and $479,586.27 when you hit standard retirement age (65), meaning you would have around 1/4 of what you need to retire. Without ever adding another cent.
You need to earn some income to qualify for the Earned Income Credit on your tax return (more than $1 but less than $14,880 if single with no children). This credit is unique because of it’s magnitude and because it is a credit, not a deduction, which means the government gives it to you in cash money even if you didn’t pay any taxes (this will be you, assuming you don’t own an income farm, have off-shore accounts, or married a high earning spouse). If you are single and you earn any money and file a tax return, you will receive at least $510. For nothing. If you have one child, you will receive up to $3,373. For nothing. The income levels and maximum credits increase with important life events like marriage and the miracle of birth. If you’ve already maxed out your IRA, I would do with that money what you please. I would say you earned it, but…well I guess it’s called the Earned Income Credit for something.
- Perhaps most importantly, earning $5,500 in a year as a professional student is doable. The usual rules for side hustles apply: you want to be able to do it on your schedule and/or at the location of your choice, it needs to be high value for low time commitment, and you need to be able to take a hiatus near exam time or whenever your schedule is murderous. I have a list of my favorite side hustles. So do two of my favorite blogs, The Money Habit (here) and Millennial Money (here, though I find them less relevant). Most of these have the above in common. What else do they have in common? Almost none of them existed before the millennial generation.
You should have no trouble making $5,500 this year in less than four hours a week. And hey, please remember to thank me for that half mil when you’re 65. Or just subscribe here now for free instead!