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Allow me to correct some misconceptions.First, a house is by definition an asset, whether you have a loan on it or not. Any mortgage you may have on it is a liability. The difference between the asset’s value and the loan is called equity. Actual wealth is made up of equity. If you own a home with a value of $500,000 subject to a loan of $400,000, your equity—your “wealth”—is $100,000 (500,000 - 400,000 = 100,000).These are accounting terms, not value judgments.The second misconception in your question is that “you shouldn’t borrow money.” While it is certainly possible to abuse the ability to borrow money (actually, you are “renting” the money for a fee), the ability to use someone else’s money can be very powerful and beneficial.Here’s an example. Let’s say you have $100,000 in the bank. You can buy a home for $100,000 cash and no mortgage or you can buy a $400,000 home using your $100,000 as a down payment and getting a loan for the remaining $300,000. Let’s say further that properties in the area are appreciating at the rate of 4% per year. Your property value—and your equity, since you have no loan—will look like this:Not too bad; in just five years, you’ve increased your equity—your wealth—by more than $20,000.Now look at the second scenario, where you take advantage of “OPM” (Other People’s Money, also known as “leverage”):With the same rate of appreciation—4%—you have more than doubled your equity, from $100,000 to $213,000. This simple example disregards the reality of having to make a mortgage payment (about $1,500 a month in this case), but it does illustrate the principle of leverage. (For any MBAs and CPAs reading this, I’ll mention that we could put the two scenarios into equivalent terms by compounding the $1,500 debt service at a reinvestment rate, then add that figure to the equity in the first example. I’m not doing that here because I just want to illustrate the principle in the simplest way possible)The second part of your question, how you can buy a home with little money, is comparatively easy to answer.At the simplest level, there are many mortgage programs available nationwide requiring very low down payments. Government-insured FHA programs require just 3.5% down, and there are a number of conventional loan programs requiring 3%. There is a USDA program for rural areas that requires no down payment at all. The term, “rural” is a little misleading. Here in Northern California, for example, the community of Discovery Bay is considered “rural.” It’s made up of luxury homes on the water, yet many of them qualify for 100% financing. If you think USDA might be an option for you, go to their website and see if there are areas near you that might qualify.When lenders decide to approve your loan, they look at a key number called “debt-to-income ratio (DTI). They calculate this by adding up the total house payment (including taxes, insurance and mortgage insurance) and all debt payments with ten months or more remaining. They divide this by the borrower’s gross monthly income to arrive at the DTI. The maximum is 45%-50%, depending on the loan program.There are also first-time home buyer programs available in all states. Here in California, for example, the California Housing Finance Agency (CalHFA) has several useful programs to help handle both down payment and closing costs. It is possible for a qualifying first-time buyer to get into a home with little or no cash out of pocket.There is also a program called Mortgage Credit Certificates (MCC), available in many states. MCC gives you a tax credit for a portion of the mortgage interest paid each year. If you pay interest of $15,000 on your loan this year, for example, and the MCC was for a 20% credit, you’d reduce your tax liability by $3,000 for that year. MCC literally gives you a 20% discount in your interest rate. Furthermore, the lender considers that tax credit to be income for qualifying purposes. They’d add $250 to your monthly qualifying income if your credit was $3,000 in the first year.There are some restrictions and caveats for MCC. Just do a search to find out if it’s offered in your state and see what the requirements are. If you are eligible for it but your lender says they don’t know what it is or that they simply don’t offer it, find a different lender. The lender does have to jump through a few hoops to get approved for the program, but it offers massive financial benefits to qualifying borrowers.I hope this is useful. Good luck!

Although I believe many aspects of the two GOP tax proposals are morally bankrupt and fiscally irresponsible, I’m not sure that reducing the tax incentives for home ownership in our expensive housing market will have an inhibiting effect.The reason I say this is that, even though being able to deduct mortgage interest and property taxes reduces the effective cost of ownership, I haven’t seen very many people whose purchase decisions are motivated by tax considerations.In my previous life as a real estate broker and my current one as a mortgage loan officer, I would hear people say, “I need some tax write-offs,” but most people don’t even know how our progressive tax system works. When someone says, “I’m in the 25% tax bracket,” they often think that means they pay 25% of their income in taxes. This is completely false; the marginal “tax bracket” means that one pays the specified percentage of each dollar over a base amount. Someone whose gross income is, say, $100,000 will likely be in the 25% bracket. I say “likely” because we get to adjust our income with deductions and exemptions.Today, the personal exemption (we once called them “dependents”) is $4,150. A family of three will be able to claim $12,450 in exemptions.Then there are deductions. At a minimum, a taxpayer can claim the “standard deduction,” which is $13,000 for a married couple filing jointly. One would choose the standard deduction if that number is higher than what they can itemize.A married couple with one child will have taxable income of $74,550 if they choose the Standard Deduction. That drops them into the 15% marginal bracket, which covers taxable income between $19,051 and $77,400. They’ll pay a base tax of $1,905 plus 15% of all income over $19,500—$8,325. Their total income tax will be $10,230. (I’m going to disregard the $1,000 child credit in the interests of simplicity)If that same couple bought a home for $575,000 with a 20% down payment, they’ll pay about $20,000 a year in mortgage interest and $7,000 in property tax. They’ll obviously get some benefit from itemizing their deductions, since $27,000 is more than the $13,000 Standard Deduction. For the sake of this example, I’ll assume they also pay $5,000 in California income tax. Now their deductions amount to $32,000. Now their taxable income is $55,500 compared to $74,550 wit the Standard Deduction. Their income tax liability (not including the child credit) drops to $7,380—a savings of $2,850. Sweet.That’s what they save by being able to itemize their deductions under the current law. It’s not a trivial number, but it’s not a particularly motivating figure. Very few people are inclined to do the level of analysis I’ve just inflicted on you, dear reader.As long as we’re in number-crunching mode, let’s compare the two GOP proposals (at least what we’re aware of so far) to what I’ve just described.You should be aware that these two proposals are complex and massive. The House proposal, the “Tax Cut and Jobs Act,” HR1, is 460 pages—88,000 words. Just the official analysis of the bill is 320 pages. The Senate version is bigger: 550 pages and 102,000 words (yes, I counted). That mass of verbiage provides a great many nooks and crannies to hide things.One example: since 1986, there has been a program for first-time buyers of low and moderate income called Mortgage Credit Certificates, or MCC. This allows a first-time buyer whose income is below certain maximums to claim a percentage of the mortgage interest they pay as a tax credit. The credit comes off the bottom line of their taxes. Here in the Bay Area, the maximum income for MCC is $146,000 for a family of three. They’ll be able to claim 20% of the interest they pay as a tax credit. It’s a big number, and amounts to a 20% discount in the interest rate for as long as they live in the property and have a mortgage on it.One line in the House version, buried on page 76, takes the program away. The good news is that owners of golf courses can still claim their tax credits for “environmental easements.”But I digress.Both tax proposals call for increasing the Standard Deduction, but disallowing the itemization of state income taxes and limiting the mortgage interest and property tax one can claim as a deduction. The personal exemption would be eliminated.Our couple earning $100,000 would pay income taxes of $8,032 (House) or $8,379 (Senate). Compare this with the $7,380 they would pay under the current tax schedule.Oops.In fairness, I should mention that the two proposals increase the child credit from its current $1,000 to $1,600 (House) or $2,000 (Senate), so the difference in the taxes would be minimal. One of the sneaky aspects of both House and Senate versions is that the tax credits expire in 2025, so those families with children would see their taxes go up.The bottom line of this (and thanks for your patience in reading this far) is that any changes in tax law are unlikely to have much effect—if any—in the real estate market, at least in those areas, like the Bay Area, with high values and high property taxes. One argument put forth by the GOP in promoting their tax bills is that only about 30% of households itemize their deductions. It’s worth noting that all but seven states have some form of income tax that would would no longer be deductible.Disclosure: I am not a CPA or tax preparer. If anyone more knowledgeable than I am finds flaws in my analysis or calculations, PLEASE let me know, and I’ll make corrections. I’m reasonably confident in the validity of these numbers, however.[EDIT: I was asked to expand my analysis to someone in the Bay Area earning $300,000 owing a $1 million home. It gets a bit complicated (and, honestly beyond my capabilities to do it in proper detail), but here’s a back-of-the-envelope look at it. One thing to keep in mind is that the Alternative Minimum Tax, which was enacted as the “minimum tax” in 1969, then codified is the Alternative Minimum Tax in 1982. Its purpose is to ensure that certain high-income taxpayers with many deductions and shelters and corporations don’t get to skate out of paying any tax. Someone earning $300,000 would almost certainly pay the AMT. I am disregarding that part of the tax law in this case, but suffice it to say that the AMT would be repealed by either version of tax reform.I’m assuming that the sample case would be a married couple filing jointly, with $300,000 gross income. They may or may not have children, but at that income level, the child tax credit would phase out anyway. The couple owns a home worth $1 million. They have a loan of $800,000 at 4.5%, so they’ll pay about $35,000 interest. Their property tax would be around $12,500 per year. I’ll also assume that they pay $10,000 in California income tax, so their total itemized deductions amount to $57,500.Their Taxable Income under today’s tax code would be $234,200 (300,000–57,500–8,300=234,200). They’d be in the 33% marginal tax bracket and would pay income tax of $52,199.Under the House proposal, they’d be in the 25% marginal bracket. Their base tax would be $10,800, marginal tax (35% of the amount over $90,000) $41,375. Total tax owed would be $52,175. That’s almost the same as the current code, but the repeal of the AMT is what would really make the difference. My guess is that this couple would pay over $20,000 in AMT under today’s code, but not under either proposal making their way through Congress.The Senate version doesn’t allow for deduction of property tax and limits interest deduction to loans of $1 million. The tax would be about the same—$52,900. Again, the AMT is the big kicker.When these guys write these kinds of bills—and it’s not unique to the GOP—they make them so complex and opaque that there are lots of places to hide things. Even things unrelated to the subject of the legislation. For example, there is a provision on page 97 of the House bill stating that “unborn persons” can be named account beneficiaries. While this may seem innocuous on its face, it is designed to advance the “fetal personhood” principle to strengthen case of those hoping to outlaw abortion in all cases.As I said earlier, I am not a CPA or tax professional. I am very open to corrections from knowledgeable people. The goal is to inform.

Well, a PhD in biochem is certainly someone consulting firms will be interested in!Now, as to the specifics - some of what I say here will depend upon how far through your PhD you are, or if you have graduated already. This will influence both the time frame you are working within as well as your access to resources and availability of free time.For example, if you are only half way through your PhD, you can do things like can get involved with your university's consulting club (or start one if it doesn't exist yet!). You should also take full advantage of your university careers service. In particular, the careers service might run consulting-relevant events/seminars/courses. Most relevant will be any interview prep guidance and networking events (targeted networking is invaluable for a good application, as I will discuss below). Generally, you should take any opportunity to develop the skills I'll list below.MyConsultingCoach actually provides its course material on a subscription basis to a number of business schools/universities globally, so you should check with your careers service to see if it is already available to you (and maybe to convince them to subscribe if they haven't already!).If you have graduated already, then your access to resources and careers service events somewhat dries up (though likely not entirely depending on your university, and it is always worth enquiring - helping alumni into jobs is obviously a benefit to the university). You will generally also have more time to pursue this kind of genera personal development and/or specific consulting preparation than once you have entered the workplace.PragmaticsWhatever the case may be as regards to your specific situation, we can pragmatically consider your transition simply in terms of what is required to assemble a winning application and get through the recruitment process. After all - that's ultimately what actually gets you the job.Often, firms will have slightly different recruitment pipelines and positions available to PhDs, and this is worth looking into. However, the fundamental requirements to get through the consulting recruitment process are largely identical between firms and regardless of your academic background. In all cases, you will have to demonstrate the correct skillset in your application and perform in case and fit interviews (and possibly written tests like the McKinsey PST).Let's have a look at what you will need to do to actually land that job:ApplicationYour first step in the actual recruitment will be to put together applications. The temptation here will be to fire off applications without a great deal of thought, assuming that the real bottleneck is at the interview stage. However, this is a massive error, as over 50% of candidates are rejected at the initial application phase - so the application of the largest single driver of whether you land a job or not!Consulting resumes are very different to generic ones you might already have on file. Recruiters will focussed less on specific qualifications or past experience and more on making sure you have the required consulting skillset.Firms will publish slightly different lists of skill which they are looking for, but these lists all elide very heavily and fundamentally boil down to something like the following:· Analytical - have high cognitive capacity and an analytic mindset· Problem solving - able to apply your intellect to generate effective solutions to complex problems· Delivery of results - be able to put your ideas into action to generate positive outcomes· Leadership - have the ability to take the lead on projects· Entrepreneurial spirit - have a strong personal drive and be prepared to take individual initiative· Functional expertise - be familiar with the business world and understand how it works at a practical level· Teamwork - be able to manage relationships and work productively with othersCrucially, recruiters will not take it for granted that you have any of these skills. You cannot simply state that you did a job or held a position and expect recruiters to assume that you have the skills usually associated with it. Thus, having been a team leader won't on its own show you have strong leadership skills. Think about it - we have all met people who are terrible at their jobs. Your recruiter can't be sure you weren't one of them - you could have been a lousy team leader!Rather, you will be required to prove your skills via reference to real achievements you have made which clearly demonstrate these abilities. We discuss how to identify and write up appropriate achievements in our resume guide.You might feel the need to go off and do some work to shore up your proof of some of these skills. Personal development is always great, but we also tend to find that candidates have more relevant achievements than they imagine, as experiences from outside the workplace are just as relevant. Captaining an amateur soccer team will be just as relevant to demonstrating leadership as leading a team in the workplace.Your cover letter continues in the same vein, highlighting certain skills and areas where you have particularly strong abilities ("spikes" in consulting lingo). The cover letter also shares a function with any subsequent fit interview (discussed below) in conveying your motivation to work not only in consulting in general, but also in the specific firm/office to which you are applying.As such, an ideal cover letter will be based on significant previous networking with current and recent staff at your target firm (where this is possible), as well as in-depth research on recent projects - especially where your own background might give you some insight. Get started now, if possible!For this reason, cover letters must always be unique to the specific job you are applying for.Writing consulting resumes and cover letters is actually much more involved than most candidates anticipate and very much requires that you know the "rules of the game". This is both in terms of the requirements I have just outlined as well as the need to stick to strict industry guidelines on formatting etc to be considered at all. I have only scratched the surface of what is needed here, but you should see our FREE comprehensive consulting resume and cover letter guides.If you do put in the effort to draft a decent application, you will likely want to have it reviewed properly by a real consultant, rather than rely on the opinions of family and friends. We offer a fairly priced service here if you are interested.InterviewsIf you follow the advice in our resume and cover letter guides, you should have every chance of being invited to interview. Now, the sheer competition for top consulting roles allows firms to require a large volume of prep from candidates and you will have to buckle down and put in the work if you want to stand out from the field.As you probably know, consulting interviews are qualitatively very different in other industries, and you will have to learn how to solve case studies to be able to participate at all. You can see our introduction to case interviews for more information here.In any case, the very first thing you are going to need to do is have a clear plan for your prep. Consulting candidates tend to be hard workers and many make the mistake of just jumping in and "getting on with it" without a plan of attack. However, this leads to them wasting time on areas they are already strong on and ending up with blind spots in certain other essential skills, which they wholly neglect.The specifics of what you need to cover and in how much detail will vary depending on your specific background. However, to get you started, let's run through a general outline:1. General SkillsStraight off, candidates almost invariably neglect their mental math. This is a crying shame, as it is something you can be practicing right now for free without leaving your desk. We have a free mental math tool on our website to make sure your skills are sharp. You will also find a lot of useful material - including lots of invaluable "hacks" to make your calculations much more time efficient - in our consulting math article. The video lesson in our MCC Academy then expands this material significantly as the gold-standard source on this most critical of consulting interview skills.Note that, even if you have a strong foundation in academic math, do not assume that this will carry you through interview. As we explain in our math article, consulting math is a very different beast to the academic variety.Beyond math, depending on your background, you will need to make sure you are up to speed on fundamental business/finance/accounting concepts. You can try to do this by yourself by getting a few textbooks out of the local library. With this unstructured approach, though, you are likely to waste time ploughing through a lot of irrelevant material and then miss crucial elements which you need.By contrast, our MCC Academy course has a set of video lessons which give you all the foundational knowledge you need to perform in interview and do so as efficiently as possible - the lessons fully comprehensive without wasting your time with irrelevant detail.2. Case CrackingYou are going to need to make it through case interviews to land any consulting job. As such, you will need to both learn how to tackle case studies and then practice as much as possible to make sure that the method is second nature to you by interview day.You will very probably have encountered the old fashioned "framework-based" case cracking systems, such as Case in Point. However, these will not get you very far and I cannot caution strongly enough against basing your prep around them.Framework-based approaches rely on a fundamental assumption that all business problems fit into one of a small, finite number (usually 12 or so) of schemes. In reality, you already know that this cannot be the case, as, if all business problems could really be solved by applying the contents of one book which is already in the public domain, then there would be need for consulting firms at all!Given that your interviewer will typically base your case study on a recent project they were involved with - and that this was therefore a difficult enough problem to merit bringing in consultants - you can expect that your case will not be one that can be solved with simple frameworks.MyConsultingCoach's founding mission was to offer a better alternative to dysfunctional framework-based approaches. By contrast, we teach you how to flexibly approach every case on its own merits, employing the same techniques as a working consultant. Thus, with our Problem Driven Structure method, not only will you be able to tackle whatever your interviewer throws at you, but you will be doing so in exactly the way they want to see.Our MCC Academy course teaches you the fundamental consulting skillset and before explaining how to employ those skills within our Problem Driven Structure method.3. Fit InterviewIn much the same way the cover letter is the neglected sibling of the resume, the fit interview is the overlooked partner to the case interview. A lot of candidates spend all of their time prepping for case studies, thinking that they are "the important bit". This is an enormous and very damaging misconception. In reality, firms absolutely take fit interviews juts as seriously as case interviews.Fundamentally, the fit interview is a test of more "soft" skills, which cannot be easily assessed in a case study, but are still absolutely essential to the day-to-day work of a real consultant. What is more, no "average" is taken between case and fit interviews. A consultant will need the entire skillset they assess so - if you want to get the job - there is no alternative to performing well in both case and fit interviews.The fit interview is also a test of your motivation to work in consulting. Consulting firms have big problems with losing talent, and many new recruits drop out because they can't handle the demands of the job or because they always intended to parachute into another industry after gaining the minimum useful amount of consulting experience. Your interviewer is looking for someone whose backstory makes consulting the natural next step and who has the determination to stick with the job for the long haul.You can read more about the details of fit interviews and how to prepare in our article here. We created the first fit interview course, which is now also contained within MCC Academy (indeed, this is the component that completes the MCC Academy as a true end-to-end course, giving you everything you need for your interview prep). Given that so many candidates fail to prepare for fit interview, this is a place where you can really steal the march on the competition, so it makes sense to actually put the effort in for fit prep!4. Practice makes PerfectAs you are learning how to approach cases, you will want to first run through worked cases (available for free at our case bank) and then practice solving case studies by yourself. As you become more confident with the relevant techniques, you will want to start practicing with peers to better simulate the real interview. Similarly, you will want to practice fit interview questions with real people. MyConsultingCoach has you covered here, with a free meeting board which allows you to find and quickly schedule meetings with fellow applicants partners from all around the world.Whilst it will never be a service that is for everyone, you should also seriously consider case practice with an experienced consultant. Realisitically, there is only so much decent feedback non-consultants can give one another. After this point, it is simply a case of the blind leading the blind.By contrast, nobody will be able to more quickly identify your points for improvement and generally provide as useful feedback as a real consultant. Whilst these individual's time will never be cheap, when costs are balanced against even just the increased chances of your receiving an MBB salary, you can quickly calculate that it is a very worthwhile investment (we actually do the math here).****Well, that was certainly quite comprehensive - hope it was helpful!