Financial Advice for Astronomy Graduate Students

“Someone's sitting in the shade today because someone planted a tree a long time ago.” – Warren Buffett


This is a general repository for financial advice for astronomy graduate students of the “I wish I had known that when I was a first year” variety. The glossary is a good place to start if you don't know your Dow Jones from your Standard and Poor's; if you know why index funds are such a good idea then you can probably just skip it. The other four major links were designed to be read in order. Finally, at the bottom of this page there are links to more information and bottom-line advice. Some of the stuff here, like the glossary, is totally general financial stuff. Some of the stuff is Berkeley-grad-student specific, identified by a Cal icon (cal.jpg) so you can avoid it or skip right to it, depending on why you're here.


This section contains general advice about bank accounts, credit cards, and student loans cal.jpg.


This section shows how to safely become a millionaire on the stock market. Really.


This section tells you what all that DCP “safe-harbor” stuff cal.jpg is all about (i.e. why Fidelity keeps sending you mail), IRAs, 401(a)s, Roths, and more.


This section is about what to do with your 1098-T form, fellowships cal.jpg and those education credits. This section could use some work by folks who understand this stuff.


You may want to skim this glossary of terms used above if you're not sure, for instance, exactly what a mutual fund is.

Saving for College

This section describes a great way to save for college for a child, or to help out with college for a neice or nephew. Makes a great wedding or baby-shower gift!

Learn more

Bottom line advice

Right now:

  • Pay off your credit card bills. If possible, make this your most important financial priority after school, food and shelter.
  • Open a high yield internet bank account and keep spare cash there.
  • Open a Roth IRA mutual fund. A simple thing to do is invest in a target retirement fund, something offered by most investment management companies. Assets in these funds are invested according to how close you are to retirement (higher risk, higher reward if you are retiring in the distant future, and then safer, lower return investments as you near retirement). In choosing where to open an account, pay particular attention to how much the investment company charges for managing the investment. In addition to the obvious thing like fees for having an account, look for the expense ratio of any mutual funds, which is the percentage of your investment that the company takes each year for managing the fund. Vanguard offers target funds with a 0.18% expense ratio, compared to an industry average closer to 1% (Vanguard 2050 Target Retirement).
  • If you've worked here for a summer already, move your DCP savings into something like the Spartan S&P 500 index funds, where it can start to grow for you.

Longer term:

  • Live below your means
  • Participate in the markets
  • Invest regularly
  • Get knowledgeable