Operation Bayes: Revealed

While I was interviewing last year, one of my interviewers asked me what I would do if I was retired. I was surprised I got asked this question since the person clearly knew how long I’ve been out of undergrad and probably from that I’m still in my twenties! It’s not so crazy to hear people in their forties mentioning this, but asking someone in their twenties? That seems bizarre to me. Anyway, I thought about it for a moment (I was caught a bit off guard) and told the person that I would go to grad school in X subfield. They told me that I could do that while working for them, since their company has tuition benefits. That got me thinking and…

I applied to grad school for X subfield of my current field! I got in! I’m pretty stoked! And scared and nervous all at the same time. But very excited!

I’d been mostly putting off grad school because it seemed like a terrible financial move (it will cost money, have an opportunity cost, and will not increase my income) and it seemed like a lot of work. My last employer wouldn’t pay a cent towards grad school. My new employer however has a sweet tuition benefits program, with no waiting period, meaning that my Master’s degree will only cost me possibly very little (somewhere around one month’s average normal expenses is my estimate). And it seems that I’ll be able to pay for my tuition with a credit card, so I may try to pick some interesting credit cards to churn with tuition.

I’ve saved up enough to pay for the entire program myself in cash and have enough to cover a year’s worth of living expenses (by some definition). I figure I would recast the mortgage and reduce some expenses, so that amount would probably last me for a second year. I could cash flow this, but I decided I felt more comfortable saving up the whole amount so that I could quit my job to do this full-time if I wanted to. Why would I choose to keep this cash even though my now-employer will pay for basically the whole program?

1) I have to pay for each course upfront and then they’ll pay me back once I finish it successfully.
2) Options! This cash will allow me to quit and pursue the Master’s program full-time if I want to, if I decide I’d rather do that than stay in industry.

My plan is to use my tuition savings account to pay for grad school and then when my employer reimburses me for the courses, use that money for whatever my next savings goal is.

My family is blue collar millionaire next door raised in working class families and didn’t really value education (my parents didn’t realize that I would likely go to college if given the opportunity until I was in high school…), but did value good work ethic and holding a job at all times, so this plan to go to grad school when it won’t increase my income has taken a long time for me to be okay with. Plus, the requisite amount of time thinking about spending this much money (five figures if my employer didn’t pay for it) on something for myself.

This is a better splurge than a comparably priced car as it is an experience rather than stuff. If my employer wasn’t paying, I would pay for it in cash.

There are a few different paths my next five years could take financially at this point:

  1. I proceed through the Master’s degree part-time, my employer pays for it in full, and nothing changes in my job when I’m done the Master’s degree. I’ve gained some knowledge, but continue at my job.
  2. I proceed through the Master’s degree part-time, my employer pays for it in full, and I change groups/teams to do something more in line with this new specialization once I have my new degree. This would see most of my grad school savings tossed into other savings buckets as time goes on and my (cash) emergency fund reduced back down to $20k-ish.
  3. I proceed through the Master’s degree part-time, my employer pays for it in full, and I decide to pursue a PhD after I finish the Master’s degree. This would see most of my grad school savings tossed into other savings buckets as time goes on, but I would probably keep my (cash) emergency fund around $30-40k in this case to help with the lower income. The mortgage will very likely be paid off before this point, which will help keep expenses lower, and the SWR on my investment portfolio should be around $1,800/month, though I would try my best to keep my expenses under/around the grad student stipend and let my investments continue growing.
  4. At some point during the Master’s degree, I decide it’s far more interesting than my full-time job and decide to quit and pursue the Master’s degree full-time and then continue on to a PhD. If the mortgage isn’t paid off, I’ll recast it, and slash expenses like crazy in order to let my savings account last for a while and keep my expenses low in preparation for a grad student stipend once I start the PhD. The SWR on my investment portfolio at this point will likely barely even cover the HOA dues and property taxes on my condo, so I’ll definitely need to acquire some more income at a later point.
  5. I decide I hate grad school and skip out partway through with no/minimal money lost and continue saving and look for a new path to pursue after I reach FI.

I can’t believe this is finally happening! I’m so excited!

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40 thoughts on “Operation Bayes: Revealed

  1. Leogh congrats and the employer supporting your grad school in Kind an financially. Most advanced careers do offer some sort of continuing education benefits but does depend on the employer. Good thing you waited just a little longer to start grad school!! I hope it goes well and you enjoy it follow thru letting your employer foot most of the bill!! I know I did and what a great choice that was! Yes if you are getting cash paid back enjoy those credit card spending perks.. I did the same thing!! You can churn some free points and miles that way.

    • Thanks Tim! It would definitely be great to let my employer foot the whole bill :D Glad to hear you did something similar and enjoyed it.

  2. Yay, congrats! This is super exciting! And how prudent of you to come up with so many back up plans / options.

    • Thanks! I kept saying that at my last company and now I have one, which is pretty sweet. This will save me a ton of money!

  3. Congrats on getting in. I considered getting my MBA for a while. But then financial independence was my main objective and I tossed it to the wayside due to its outrageous expense. What is the main reason you want to get your masters? You noted that it will not increase your salary. Is it just because you’re interested in that field or because you also like a structured learning environment? Thanks.

    • I want to because a) I’m interested in the field and b) am considering a PhD as a post-FI plan. I also considered doing the Master’s post-FI, but I simply don’t want to wait that long and if I end up wanting kids, I want to have done this first, plus, I now have tuition benefits, so it’ll be much cheaper to do it this way.

      Also, I don’t see financial independence as an objective that is a stopping point. You still need to have plans/ideas for what you’ll do afterwards. I honestly don’t think I’ll ever stop working entirely, but will work in various forms. Perhaps that could be attempting my own startup(s) or fun projects or perhaps it’s switching careers and then donating more of my income.

  4. That’s a really interesting question– I think I’ll have to steal it for a future blog post.

    That also sounds like a great program!

    My family is kind of the opposite of yours– it took them a while to stop being disappointed that my sister isn’t pursuing a law degree in patent law because she makes just as much as an engineer as she would as a lawyer. (Ditto with a masters in engineering.)

    I’m rooting for option 2! But all the other options are valid as well– be true to you.

    • My family is interesting. When I told them I got into grad school (I’d never told them I was applying), my dad said he maintains that I should have done a Master’s right away and my mom asked me if it was going to increase my income. It’s strange because neither of them went to college and he doesn’t feel the same way about my sibling and grad school, so I’m not sure why he’s so set on my needing a Master’s degree. I mean, he continually made fun of another relative who pursued a PhD for being in school for so long, so I think he just cares about the Master’s degree.

      I think that options 2 and 3 are the most likely. I like to finish things I start and am motivated by learning, so option 5 is unlikely. Option 1 seems silly unless I turn out to not like this subfield (which seems unlikely). Option 4 just seems expensive, which is part of why this was put off for so long!

  5. Congrats on your decision to get a master’s and getting admitted! A good friend of ours in college just finished his last course for his MS in engineering, paid by his employer. It seems like a similar situation to yours – it won’t immediately advance his career or bump him up in pay, but it was a free benefit and may open some doors later. How long with the degree take doing it part-time?

    • Thanks! I didn’t want to jinx things, so I didn’t tell very many people until I got the admission offer. I am a few years behind in making this decision – I know a few people graduating with their PhDs who did them fulltime after college or part-time Master’s programs. That’s okay though! It will ideally take me three years to do it part-time, only taking one course at a time. More than one course at a time seems like too much to me. This will open doors to more specialized jobs in my field, if I want to do that.

  6. Please don’t feel behind! I know sooooo many people who jumped into grad school too soon or didn’t quit when they should have (myself included??). I think the route you’re taking is great/preferable. In my observation, grad students who have actually been in the work force are on average more efficient, focused, and ultimately successful than ones who haven’t. One of the biggest deterrents to full-time grad school later, anyway, is the pay/lifestyle cut, and obviously you have taken that out of the equation, if you want to go in that direction.

    • Honestly, full-time grad school right out of undergrad was also a bit of a deterrent due to pay. I was quite unsure I wanted to do it and it would have meant $100k less gross annually, minimum? That was hard to give up. If I did pursue a PhD, I would be close enough to FI at that point, that the money is much less of a concern.

  7. Leigh,
    Congrats on your decision to pursue a master’s degree! That’s great that your employer is going to reimburse you. Is your master’s in the same field as your current job (software, I presume)?

    • Thanks! It’s in the same general area, yes, but it is much more specialized than my current work or my undergrad degree.

  8. Congrats on getting admitted and way to score the tuition reimbursement so that you can try grad school out with little downside. So is this an in-person program at a nearby university, or will the masters have a distance learning component while you decide if you want to go somewhere for an in-person PhD?

    • It is at a nearby university and I could continue on to a PhD program there if I wanted. It’s a pretty winning plan! Local program, easy to combine with work, tuition reimbursement from work, possibility to continue on with the PhD program at the same university, my current company has jobs that I could leverage this degree to do, and my boyfriend and I both like our city.

  9. Grad school is a nice self-improvement achievement. You can look back and see the mountain you have climbed. Even if you do not get more money, you have the achievement that no one can take away.

    It took me a while to get mine, but in the end, it was worth it.

    • That’s about how I’m looking at it. I want to do this for me, for the learning and growth, not for any amount of money. It’s quite convenient though that my current employer will pay for said growth.

  10. Keep in mind that many employers with tuition reimbursement programs require a certain length of service – e.g. at least a year after the last date of reimbursement, or something similar. Make sure you have all the details locked down – don’t waste your savings by quitting too soon!

    • I’ve definitely checked into all the details and told my manager. I’m eligible for the program and there’s no tricks or anything.

  11. Congrats! My work has a tuition reimbursement program also and I took one class a semester for 5 years (yes, that long). I tried two classes (in engineering) once while working full time and it was too much work for me. It did take me a long time to get a Master’s. However, I am happy that I did it while I was still in my 20s and I’m still in the same field.
    Best of luck as you make your final decision!

    • Five years! Someone suggested taking two courses at a time so the program would go by faster, but that seems like far too much at once to me. I’m not quite sure I will finish 100% before my 30th birthday, but I’ll come close at this point to finishing it in my 20s ;)

      • I do have other friends that took two courses at a time. It can definitely be done. But your personal life will be compromised, including relationships, fitness, and even your work. I tried two courses once and one of the instructors actually told me to drop one of the classes because I didn’t put enough time into the work.

  12. How very exciting. It would be nice to have gone this route myself. Like Emily above, I’m not sure I should have stayed on the PhD train as long as I did. Live and learn, and call me Dr :P I also think it’s a great game plan to test the waters for after FI. Give you something o do with your days :) congrats.

    • Thank you, Dr. Alicia! I know very few people who have finished their PhDs who started right out of undergrad. A lot of people quit partway through. Then again, I know very few who started out at all. CS industry is just so darn lucrative…

    • Thanks! I’m pretty excited! :D It might also be possible to do a PhD part-time with my employer paying the costs since it’s just a blanket tuition reimbursement program. I only applied to one program, so I was really worried I wouldn’t get in.

    • Thanks! I looked into tuition tax credits, but I make too much money for that. I doubt workplace reimbursement would affect the 529 thing since I pay for the courses upfront and then my employer pays me back later and I have to pay taxes on some of the reimbursement as regular income. I wouldn’t be enrolled at half time though.

  13. I meant to comment on this a while ago, but congratulations!

    I also had an employer pay my education costs for a masters, and it was awesome. It was really busy, but very worth it for me since I went to a relatively unknown regional undergrad university. To be honest, the coursework was specialized and really interesting for sure, but the primary value for me was the brand name to the resume. I get the sense your goals are a little different than mine were, which makes sense.

    • Thanks! I thought of you as I was writing my post as I remembered you did something similar several years ago. Yes, it sounds like our goals are/were different. My resume is strong enough at this point in my career that I don’t care about more brand names.

      • Yes! It was really common at my first 2 companies for relatively new grads to pursue a degree.

        The classwork was interesting/challenging and was my original motivation – but the real pay off turned out to be the branding. The work line with what i was doing already rather than branching out into a new areas. I had (have) little interest in phd. After watching my husband go through it (and he had a more positive experience than a lot of people), it just isn’t for me, at least not at this point in life. You never know, though. My work right now is pure engineering, but for a research institution – that is really fun for me.

        Does bayes have anything to do with the research area, or just a code name?

        • I think Bayes was more about the conditional probability of getting in to grad school :) I don’t plan to have children in the future, so we’ll see how I feel after the Master’s degree on more grad school or not – it could be something interesting to spend my early thirties doing and then do a career switch over to the research side of engineering. I’ve never done research, in undergrad or now, so I have no idea how I’d feel about that.

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