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Hello all,

I've recently become obsessed with the idea of working from home. Not because I'm afraid to go out into the world (or anything like that), but because I want 'home' to be a fluid place. I really, really like the idea of being able to live and work all over the world.

The best idea I've had so far is to get my PhD in clinical psychology and become an internet psychotherapist (yes, they do exist).

But I was wondering if any of you guys might have some more profitable ideas? I realize that it's going to be hard for me to get hired by a firm/company (wanting to do what I want to do), so we're probably mostly talking about entrepreneurship ideas here.

Thank you very much in advance for any input!

Best,

Jim

*P.S. - If I got my PhD from a top notch school, and could charge about $100 an hour, my salary might look something like this:

8 x $100 = $800/day
5 x $800 = $4,000/week
48 x $4,000 = $192,000/year (+4 weeks vacation)

Comments (35)

  • zeropower's picture

    How will you get clients if you will work for yourself and not for a firm which (presumably) already has a nice list of people who actually want this psycho therapy thing you speak of?

    In theory, its a very nice amount to make. In theory.

  • IlliniProgrammer's picture

    Why not save up some money first?

    Find some stocks that yield a relatively safe 6%- typically REITs and stable MLPs (which get taxed as ordinary income) are best.

    Every $20K you sock away is $100/month. Save up $3.2M, and you can just volunteer every day and live on the dividends. Given your assumptions that you can earn $200K/year working 40 hours/week from just about anywhere, you should be able to pull this off in about 5-6 years of working at 80 hours/week in a stable, secure job and carefully saving. Then, you can work if you want to, or not work if you don't want to.

  • Jim Harbaugh's picture

    "How will you get clients if you will work for yourself and not for a firm which (presumably) already has a nice list of people who actually want this psycho therapy thing you speak of?
    In theory, its a very nice amount to make. In theory."

    - It's really not that much different than a traditional psychologist graduating, starting his own practice, and then advertising it.

    "Why not save up some money first?
    Find some stocks that yield a relatively safe 6%- typically REITs and stable MLPs (which get taxed as ordinary income) are best.
    Every $20K you sock away is $100/month. Save up $3.2M, and you can just volunteer every day and live on the dividends. Given your assumptions that you can earn $200K/year working 40 hours/week from just about anywhere, you should be able to pull this off in about 5-6 years of working at 80 hours/week in a stable, secure job and carefully saving. Then, you can work if you want to, or not work if you don't want to."

    - Damn dude, sorry I offended you so much. Psychologists that graduate from the kind of programs that I'd be able to get into charge over $200 an hour as private practicioners. That's just reality.

  • Soul_Reaper's picture

    Internet porn, the guys at Reality Kings must be raking in the dough.

    "Do whatever it takes to keep the legend of Wall Street as it was truly intended live on. When you think back on investment banking of the early 21st century, remember the heat—remember the passion. But mostly, remember the titans. " - LSO

  • In reply to Jim Harbaugh
    IlliniProgrammer's picture

    Jim Harbaugh wrote:

    - Damn dude, sorry I offended you so much. Psychologists that graduate from the kind of programs that I'd be able to get into charge over $200 an hour as private practicioners. That's just reality.

    Huh? Didn't mean to sound offended- as a thrifty dutch Calvinist, I'm just trying to offer you a better strategy. Work 80 hours/week at $200/hour, that's $800K/year, do that for four or five years, and you'll be getting more from dividends than you could by working 40 hours/week at $100/hour and live/work/volunteer however you want, internet connection or not.

    If we want to improve on this strategy a little further (but with a drastic career change), why not just go into consulting or banking now? At $300K/year within a few years, you'll have saved up $3.2 million a year or two after you would be graduating from your PhD.

    Oh well. I try to save 50% of my net-of-tax income every year. That way, whatever raise I get, I can tack on 3% right off the bat permanently from dividend stocks. Back in early 2009, that was more like 4% when utes, REITs, pharmas, MLPs, and oil companies were yielding north of 8%.

    People say I'm crazy for making Wednesday Ramen Noodle lunch day- I think the crazy people are the ones who work longer than they have to to give them a lifestyle that doesn't make them any happier. You create frugal habits in your working years so you can reduce the cost of retirement (and increase your retirement portfolio) at age 35 so you don't have to work until age 50.

  • In reply to IlliniProgrammer
    accountingbyday's picture

    IlliniProgrammer wrote:
    Why not save up some money first?

    Find some stocks that yield a relatively safe 6%- typically REITs and stable MLPs (which get taxed as ordinary income) are best.

    Every $20K you sock away is $100/month. Save up $3.2M, and you can just volunteer every day and live on the dividends. Given your assumptions that you can earn $200K/year working 40 hours/week from just about anywhere, you should be able to pull this off in about 5-6 years of working at 80 hours/week in a stable, secure job and carefully saving. Then, you can work if you want to, or not work if you don't want to.

    Dude Illini,

    I am on board with you most of the time, but I think you're pushing dividends on kids a little too hard lately. This guy, who I presume is in college, is trying to find out how to make a lifestyle choice work for him. Your solution - start with $3.2M. That's just not an option. If everyone started with $3.2M things would be easier for all of us.

    I agree saving is great, but between your shoving dividend paying REITs and $100 loafs of bread at anyone who asks a question, I think you've gone a little overboard. Has someone peed in your kool-aid lately or what?

  • IlliniProgrammer's picture

    Quote:
    I agree saving is great, but between your shoving dividend paying REITs and $100 loafs of bread at anyone who asks a question, I think you've gone a little overboard. Has someone peed in your kool-aid lately or what?

    Ehh, I don't know. I just think the great American empire- particularly the gilded era we've been living in for the past 30 years- is coming to an end. That spells doom for American bankers and people planning on living more than $100-150K/year lifestyles.

    People earning $100K/year straight out of college- or high six figures as twenty-somethings- aren't all that normal in the context of the country, the world, or even historically for folks in the top 0.5-1% of earners. 6% dividends are normal. P/Es of 10-15 are normal- take-home pay in finance isn't normal right now and we can expect it to continue declining for a number of years.

    Winter is still coming- don't eat all of your acorns just yet. IMHO, the new normal for banking, PE, and trading is going to be worse than it is now as incomes move more into alignment with those of higher-end doctors, engineers, lawyers, and scientists.

  • In reply to accountingbyday
    Victor252's picture

    accountingbyday wrote:
    IlliniProgrammer wrote:
    Why not save up some money first?

    Find some stocks that yield a relatively safe 6%- typically REITs and stable MLPs (which get taxed as ordinary income) are best.

    Every $20K you sock away is $100/month. Save up $3.2M, and you can just volunteer every day and live on the dividends. Given your assumptions that you can earn $200K/year working 40 hours/week from just about anywhere, you should be able to pull this off in about 5-6 years of working at 80 hours/week in a stable, secure job and carefully saving. Then, you can work if you want to, or not work if you don't want to.

    Dude Illini,

    I am on board with you most of the time, but I think you're pushing dividends on kids a little too hard lately. This guy, who I presume is in college, is trying to find out how to make a lifestyle choice work for him. Your solution - start with $3.2M. That's just not an option. If everyone started with $3.2M things would be easier for all of us.

    I agree saving is great, but between your shoving dividend paying REITs and $100 loafs of bread at anyone who asks a question, I think you've gone a little overboard. Has someone peed in your kool-aid lately or what?

    +1

    Had to laugh at this one. Made some good points too.

  • shark445's picture

    You're not going to book every hour of every day, so don't assume 100 x 8 x 5 x 52 = OMG I'm rich!!

    Start the company as a side project after work until it has a consistent cash flow that you are able to quit your day job. The internet is a place that HEAVILY relies on credibility. Unless you turn your company into a house hold name, charging money for hourly services online is very difficult to accomplish. I'm not trying to change your mind on the idea, but want you to be realistic about it.

    You should look into creating modules for every patient scenario. Then automate the process where you arn't interacting with clients 1 on 1. This way you can charge a lot less or even make money off advertising, and it's a scalable business model that allows for much greater profits and doesn't need your attention 24x7.

  • Jim Harbaugh's picture

    jamar - what's FP and A?

    shark - i dont think id have a problem getting clients if i got a top notch phd. outsourcing is worth consideration, but i dont think that people are going to be willing to pay money to get an automated response to their unique personal problems.

  • econ's picture

    Do NOT do a PhD, unless you are very interested in the field. PhDs are not easy to get. If your heart's not in it, then it will be very difficult to finish. Even if you do finish, those 5-6 years will be miserable. Besides, there are much easier ways to make $200K a year.

  • Jim Harbaugh's picture

    happypants -

    nice article. couple of important quotes in it though - 1) "Whining PhD students are nothing new, but there seem to be genuine problems with the system that produces research doctorates (the practical “professional doctorates” in fields such as law, business and medicine have a more obvious value)." 2) The premium for a PhD is actually smaller than for a master’s degree in engineering and technology, architecture and education. Only in medicine, other sciences, and business and financial studies is it high enough to be worthwhile.

    ...a phd in clinical psychology would fall under the medical field.

    compbanker -

    financial planning and analysis!? that sounds like something where you'd really need to spend a lot of face time meeting new clients.

  • carbon's picture

    Illini -

    Are you trying to say pay for bankers or other financial professions are becoming similar to "higher-end doctors, engineers, lawyers, and scientists" ?

    Generally, these professions vary in amount of compensation. Especially, a high-end physician as oppose to a scientist.

    And as for the gilded era becoming extinct, is that in terms of the economy overall or when the "great American empire" becomes number 2?

  • In reply to carbon
    IlliniProgrammer's picture

    carbon wrote:
    Illini -

    Are you trying to say pay for bankers or other financial professions are becoming similar to "higher-end doctors, engineers, lawyers, and scientists" ?

    Generally, these professions vary in amount of compensation. Especially, a high-end physician as oppose to a scientist.


    That's true, but the point is that if a physicist makes $15K/year and a banker makes $500K, smart people will eventually start going into banking and stop going into physics until the demand for physicists brings it back up to parity with bankers. We're starting to see that happening.

    Quote:
    And as for the gilded era becoming extinct, is that in terms of the economy overall or when the "great American empire" becomes number 2?

    I'm saying this decline in finance is really just the beginning. Everything you see that depends on cheap fossil fuels is probably going to be gone in 25-30 years.

  • baddebt88's picture

    If what Illini says is true, 6% dividend won't do jack. Looking at dividend without looking at capital appreciation is foolish. Scenario: Throw in 100k in an MLP and it nets you 6% a year. You are making $6K a year. Illini is happy. But wait, its 2008 (not even a very big disaster scenario) and MLPs tank 70-80%. So effectively you will need to wait over a decade to make back that money. But WAIT, it gets better! The company will in no way maintain such dividend yields over an entire decade while their EV is so low. Net result: You lost money.

    [Yes MLPs came back after 08...in fact I caught the bottom. But under an apocalypse scenario, banks wouldn't have been bailed out so the MLP fuel hedges would have failed and the bottom would fall out.]

    There are 2 things a guy can do to hedge himself against an adverse scenario: cash (or equivalents) and hustle. The OP is on the right track. Figure out a way to hustle a side business that generates a grand or two a month and you are beating ALL yield income without a penny at risk. And its not difficult making $1k in side income. Start a resume service. Sell a product. Start an event. Maybe even do a little import/export. But firstly, get a nest egg. 12 months of living expenses to maintain a bare bones lifestyle.

    My favorite guy to understand personal finances is Ramit Sethi (http://www.iwillteachyoutoberich.com/). Read some of his writing and automate your finances, create monetary cash flow hedges, and stick to a budget. A budget doesn't mean you are a grown-ass man eating ramen. A budget means you live within a plan whether it be spending 15 bucks a meal or 50 bucks a meal if you can afford it.

    When the apocalypse comes (if it does) in Illini's scenario, good luck defending yourself by touting your 6% dividend yields. Only hustle will matter just as it does now.

  • In reply to IlliniProgrammer
    econ's picture

    IlliniProgrammer wrote:
    That's true, but the point is that if a physicist makes $15K/year and a banker makes $500K, smart people will eventually start going into banking and stop going into physics until the demand for physicists brings it back up to parity with bankers. We're starting to see that happening.

    Except for the fact that success is not solely about intelligence. Other characteristics matter, and in some cases even matter much more than intelligence. I'm not trying to be a dick, but when I think of raw intelligence, I-bankers are definitely not the first people that come to mind. I'm not saying I-bankers are stupid, just that they're not the intellectual creme-de-la-creme. I feel like I personally know several people who are significantly more intelligent than the average I-banker. However, they would totally fail at the job, because they lack the people skills, business IQ, work-horse mentality, and money-motivation. In other words, intelligence is not the be-all-end-all of success; plenty of other attributes are important too.

    Aside: Not to mention, many really intelligent people love pursuing careers in physics (and other challenging disciplines). They seem to love the intellectual challenge, and competing against other bright people mentally. In other words, lots of smart people seem to get an incredible amount of psychic-benefit from these sorts of intellectual careers.

  • IlliniProgrammer's picture

    Quote:
    There are 2 things a guy can do to hedge himself against an adverse scenario: cash (or equivalents) and hustle. The OP is on the right track. Figure out a way to hustle a side business that generates a grand or two a month and you are beating ALL yield income without a penny at risk. And its not difficult making $1k in side income. Start a resume service. Sell a product. Start an event. Maybe even do a little import/export. But firstly, get a nest egg. 12 months of living expenses to maintain a bare bones lifestyle.

    Actually, I love it when MLPs drop in price for no fundamental reason- like hedge funds getting forced out because prime services desks are panicking. It's a great opportunity to get in. I got in at 14% yields on boring, fundamentally safe pipelines. Six months later, the yield on the original investment boosted to 17% as the pipelines hiked distributions while reducing leverage. If there is another crash- even if I have no wages to invest- I will be just as thrilled, because the pipelines will keep paying the same distribution while I get to reinvest it at lower prices.

    If you're a trader, you do care about the liquidity problems of other holders. However, if you are a long term investor, it doesn't matter what people are selling the pipeline for right now. What matters are the size and security of the dividends relative to inflation. Actually, lower prices for the same fundamentals are a good thing because it means higher yields with which to reinvest distributions and/or dividends.

    Hustle, as always, is for people who *need* to hustle. For instance, people who need to get to work and meet their basic needs by buying gasoline, paying rent, and paying their utilities. That hustle turns into cash for people who have spent their early years saving money and investing it.

    So I think a much better approach for the OP is, rather than spending six years hustling 80 hours/week for a PhD, he can hustle 80 hours/week for a job in banking or consulting and have the money to retire when he would have graduated and not even need to be an internet psychiatrist.

    Quote:
    However, they would totally fail at the job, because they lack the people skills, business IQ, work-horse mentality, and money-motivation. In other words, intelligence is not the be-all-end-all of success; plenty of other attributes are important too.

    This is the wonderful thing about the 21st century. It's all moving towards computers and less financial intermediation. It's already largely happened in trading- I know a few autistic traders- and it's quickly starting to transition into banking as well. It's no longer about who you know but what you can actually do. It's not all about intellect, but neither is a PhD (just ask anyone who had to write a thesis or bite their tongue to avoid saying what they REALLY felt about some research committee who keeps asking him to focus on pointless areas.)

    My view is that with two or three years of training, anyone with a Physics PhD is capable of doing my job- or a banker's job. And what we're seeing is many people who would have been going into physics ten years ago are going into banking and trading. That- combined with the regulatory focus- is depressing the incomes of folks in finance.

  • carbon's picture

    Illini -

    In an attempt to understand your thought process I have another question for you.

    What would you consider the ideal job and/or place to be in terms of a career in the next 3-5 years?

    Your overall commitment to this thread seems to be a bit pessimistic. Therefore, in hopes of trying to understand your perspective, if you can elaborate on the question I have asked, I would greatly appreciate it.

  • In reply to IlliniProgrammer
    baddebt88's picture

    IlliniProgrammer wrote:

    This is the wonderful thing about the 21st century. It's all moving towards computers and less financial intermediation. It's already largely happened in trading- I know a few autistic traders- and it's quickly starting to transition into banking as well. It's no longer about who you know but what you can actually do. It's not all about intellect, but neither is a PhD (just ask anyone who had to write a thesis or bite their tongue to avoid saying what they REALLY felt about some research committee who keeps asking him to focus on pointless areas.)

    My view is that with two or three years of training, anyone with a Physics PhD is capable of doing my job- or a banker's job. And what we're seeing is many people who would have been going into physics ten years ago are going into banking and trading. That- combined with the regulatory focus- is depressing the incomes of folks in finance.

    You are taking an incredibly short-sighted view of the situation. Its often important to understand the war than just the battle.

    By your proxy, in the start up world which is much, much more focused on technology, the Physics PhD and the guy with the most raw talent would be the alpha dog. That is just not the case and I say this from being involved in the start up community. You need leadership skills. You need negotiation skills. You need mediation skills. You need the ability to sell. If what you say was right, our startup community would be filled at the very top by a bunch of autistic superstart programmers. It couldn't be more untrue. The top leaders in tech are very similar to the top leaders in a field like finance. They are just that: Leaders. It would be awful to have that autistic programmer to manage a big organization. He would blow it up.

    BTW, that MLP trade was exactly the one I got into. I just wish I wasn't so poor so that I could invest more. My MLP basket (VNR, BBEP, LINE etc) doubled while generating 17% over 2009. It was absurd. I thought that was by far the best sector to be in post-recession but one of the value guys I talk to showed me the performance of another hedge fund manager. This 25 year old guy with a small (i think 3MM portfolio) made a big bet on airline leasing companies. 700% return. Totally absurd.

  • In reply to carbon
    IlliniProgrammer's picture

    carbon wrote:
    What would you consider the ideal job and/or place to be in terms of a career in the next 3-5 years?

    Working in energy and/or agriculture. I think an oilfield geologist working for a large energy company is going to be making a lot more than a banker in ten years. In terms of 3-5, it's a little hazier but I think it will be a lot clearer then that people who are good at finding oil have a much brighter future than people who work in more generic services like consulting or banking. I also think that there is going to be a flattening of the economic structure. Taxes need to go up and the rich will be taking home much less in five years than they are today.

    Quote:
    Your overall commitment to this thread seems to be a bit pessimistic. Therefore, in hopes of trying to understand your perspective, if you can elaborate on the question I have asked, I would greatly appreciate it.

    I have a long, storied history of being the voice of pessimism in the face of ambitious people. I started my working life earning $7.25/hour carrying around logs at a summer camp and I'm still confused by people who think six figure incomes are just pocket change. :D

    My view is that you should get a PhD because you love research and/or psychology, not because you like money. Times are really good right now- kids straight out of school can earn north of $100K their first year, and they might not be so good for working people in ten or even six years.

    Quote:
    By your proxy, in the start up world which is much, much more focused on technology, the Physics PhD and the guy with the most raw talent would be the alpha dog. That is just not the case and I say this from being involved in the start up community. You need leadership skills. You need negotiation skills. You need mediation skills. You need the ability to sell. If what you say was right, our startup community would be filled at the very top by a bunch of autistic superstart programmers. It couldn't be more untrue. The top leaders in tech are very similar to the top leaders in a field like finance. They are just that: Leaders. It would be awful to have that autistic programmer to manage a big organization. He would blow it up.

    Ironic that you'd say that. CC: Bill Gates and Mark Zuckerberg. Their social skills border on that of someone with autism, but they are reasonably good leaders and have an amazing ability to produce and teach.

    Start-ups really are about your ability to produce something that other people want or need. If you can't do that, you don't have a business. If you can do that and scale it out- by leading by example- you've got something great. Everybody learns leadership in Boy Scouts and through starting organizations- what's valuable is your intrinsic ability to produce. Leadership simply allows you to multiply that.

  • In reply to IlliniProgrammer
    baddebt88's picture

    IlliniProgrammer wrote:

    Ironic that you'd say that. CC: Bill Gates and Mark Zuckerberg. Their social skills border on that of someone with autism, but they are reasonably good leaders and have an amazing ability to produce.

    Dude thats the biggest stereotype out there. I strongly suggest not going by what the media portrays either of these 2 leaders. If your source of information is "The Social Network" then I will find out what the EUR/USD will do next week by talking to a janitor.

    Both of these guys are very good at inspiring people to back them and work with them to change the paradigm. Good luck doing that by spouting off math formulas. Yes, startups are about the ability to produce something. Many times the product to sell actually comes via iterations (read up on the Lean Startups and watch some lectures by Steve Blank). A really smart guy would stick stubbornly to his original product even if its not gaining traction. The smart, successful guy creates minimal products which he uses to test the market to find something that sticks. That requires a level of social strength that can't be mustered solely by being smart. Most super smart people would take offense to anything that challenges their view of the world. You don't need to be a genius to create a start-up. In fact, most startup founders I have interacted with have been very, very social people. They must be passionate about their world in order to sell to investors, early adopters, and then the mass public.

    Facebook didn't really create something brand-new. There was CUconnect (check out the new BBC interview about the founder), there was Friendster and all that jazz. Same with Microsoft. Microsoft benefitted from one of the biggest guffaws ever when IBM just gave their tech away. However, Zuckerberg and Gates combined their ability to program with organizational and sales capabilities. Thats why we are talking about them and not talking about the countless other smart guys who have failed.