First Person

What Savings?

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By Robert N. Sollod

The other day I was in a bookstore and found myself perusing a book on financial planning. It had a seductive title that suggested anyone could grow wealth automatically if only they knew the secret.

I discovered the catch when I read just enough to see that the entire premise of the book was on saving money early in life. A chart showed that $3,000 saved each year in your early 20s would grow to a sizable, if not astronomical, sum by retirement age -- thanks to what the book referred to as "the magic of compound interest over decades."

That advice, I quickly realized, was irrelevant to me. Why? Because I had an academic career. Or should I say that an academic career had me.

I teach psychology at a public university, and thanks to a state retirement system, I am going to have a good pension. But looking backward over the almost 40 years I have been in academe -- first in graduate school and then in a variety of appointments -- I've realized that I hardly had an opportunity to save any extra money for my retirement until pretty recently.

I often compared my situation with that of friends in the legal profession. Their graduate education lasted three years to my nine. Upon landing their first jobs in law firms, they waited 6 to 10 years before going up for partner -- much like my six years on the tenure track. The difference between us: Becoming a partner meant they got to share in the profits. Earning tenure gave me job security and a sense of accomplishment, but not much in the way of current or potential financial rewards.

I did not enter academe with the goal of making money. I was brought up in an affluent upper-middle-class household, and my father spared no expense sending me to a prep school and then to an Ivy League college. Later, however, the family's financial fortunes went downhill and I was on my own in graduate school and thereafter.

Probably because of my financially secure upbringing, I've often felt affluent, even with nothing in the bank. My earliest academic appointments were at two universities in the New York area. My pay as an assistant professor was on par with the national average at the time. At first, I was just happy to have a steady income.

I even tried to save a little money each pay day and contributed to TIAA-CREF. At the same time, however, the high cost of living in New York meant I was also building up a balance equivalent to my savings on my credit cards.

One event in particular signaled just how low my salary was, compared with other professionals. As a Ph.D. in psychology, I had published in some major journals and had an appointment at a relatively prestigious department. I thought I should go ahead and undergo a traditional psychoanalysis -- both for the experience and to gain insight into my behavior (including my lack of earning power).

I set about interviewing some psychoanalysts about the possibility of becoming a patient. One young analyst informed me of the cost and frequency of his treatment. The sum, I shortly realized, was greater than my net income.

I told him that while I was interested in becoming a patient, his fees were beyond my income. He replied that his fees were standard and that he would not reduce them for me (or any other prospective patient) because it could affect my "transference," or my manner of approaching therapy and relating to the therapist.

In short, it was my problem.

Another eye-opener was an admissions interview I conducted with a promising applicant to our graduate program. At the end of the interview, he told me that he needed a large assistantship because he came from a poor family with many brothers and sisters. I probed a little, and he responded that his family had to live on his father's salary and his father was, of all things, a college professor.

About a year later, during a department meeting, I looked at my colleagues who were sitting around the table. I did a quick and rough analysis of the variance concerning what I knew of each of their salaries, financial resources, level of private practice, and apparent level of happiness.

What I concluded was that my colleagues had either married money, inherited money, had an extensive and time-consuming private practice, or seemed unhappy if not depressed. I could account for each and every one with this simple categorical system.

I had not pursued an academic career only to spend most of my time and energy in a private practice. My path became clear: I had to relocate to a less pricey city. So I left New York for a large state university in the Midwest.

My new colleagues seemed happy with their salaries and did not need to moonlight in order to make ends meet. Interestingly, they were also more community- and department-minded, including more willing to accept committee assignments.

Here it was possible to spend time on scholarly activities, on class preparation, on committee work, and on advising students -- and still make ends meet.

Unfortunately, by the time I reached this point, I was well beyond the age at which the financial-planning book said I would most benefit from compound interest. And while I wasn't scrimping and accumulating as much debt as I had in New York, I wasn't exactly flush with extra cash to contribute toward my retirement either.

I am saving money now, a few years before my retirement, and I am looking forward to my excellent pension from the state system, but as to additional savings, I must admit that they are still quite meager. Academe, alas, is not structured to help faculty members accumulate savings early in their careers.

I once calculated that earning tenure was an achievement that should have been rewarded with the equivalent of an additional $40,000 a year in salary (instead of the few thousand I had actually received upon promotion). In my mind, I actually received that extra 40K, but donated it back to the university. So, whenever I am asked to contribute to various campus fund-raising drives, I donate a nominal amount and remember that I have already sacrified a much larger amount of my (virtual) salary to academic life.