Categories
All posts Medical Career

Q&A From Emails

WHAT DO YOU THINK ABOUT JUST INVESTING IN REAL ESTATE? MY FATHER-IN-LAW HAS DONE THIS SINCE HE WAS YOUNG AND IS DOING QUITE WELL NOW. I DON’T TRUST THE STOCK MARKET AND I’M WORRIED ABOUT LOSING A LOT OF MONEY IN IT.

I think real estate is a fantastic way of building wealth, preserving wealth and protecting against inflation. Because it is structured in the form of a business due to various regulations, you can buy into that investment with less than its actual value.

You can leverage debt the same way with mutual funds but the spread generally isn’t sufficient to justify such a move. When you buy a mutual fund you must pay for the entire value of the portfolio, unless you buy on margin.

Real estate can be purchased with a mortgage, where you only need about 20% of the value of the property to be a part owner (the bank is your partner).

It’s important to understand that when you want to make this an actual business plan then you must think ahead to the future. If you buy a property that is breaking even on the books then the bank won’t look at it as a “wise” investment and is less likely to lend you more money on future properties.

Of course, if you make enough money from your primary occupation then the bank likely won’t care – up to a certain point, up to a certain number of properties. So, it’s better to invest in positive-cash-flow properties. That means that you invest in a property which after all the overhead returns some sort of income to you at the end of the year. This is often achieved by replacing some overhead with sweat-equity.

Have you thought about talking to your father-in-law to see what recommendations he might have for you on how to get started? It seems the best and easiest way is to convert your current property into an income-stream. That means you’d either have to flip it to make money on it, rent it out, or take a portion of it to generate some income with. Which strategy does he follow?

I bought my condo with these exact thoughts in mind. It’s a property which could appreciate (flipping strategy). It’s a property in a desirable location (short-term rental strategy). It is near major businesses and colleges (long-term rental).

YOU SPENT A LOT OF MONEY WHEN YOU FIRST STARTED WORKING, YOU SAID SOMETHING IN THE $10K/MONTH RANGE. IF YOU COULD DO IT ALL OVER AGAIN, WOULD YOU PURSUE YOUR SAME FINANCIAL INDEPENDENCE STRATEGY?

If I could start over again I think I would have maintained my heavy work schedule of 55 hours a week, which I averaged from 2009-2014. But I would have focused more on paying off debt and skipped investing in the beginning – I do better focusing on one major goal at a time than spreading myself thin.

Once I achieved a point of financial comfort then I would have cut back my hours to 80% and replaced the 20% with independent work outside of the field of medicine.

At first I would have learned a different skill, such as the automotive stuff that I was into, and then I would have spent money on courses and educating myself.

I would have slowly gone down to 70% and finally 50%. By the time I was in the 50% range I would have become a per diem physician in order to have less dependence on a large medical group.

Unfortunately I burnt out sometime around 2015-2016 which meant that I didn’t make the most elegant transition to early retirement.

I DON’T BELIEVE IN A FINANCIAL ADVISER. I DO ALL MY OWN INVESTMENTS AND I’M WONDERING WHY YOU’RE PAYING THE MONEY THAT YOU’RE PAYING WHEN YOU COULD BE DOING IT ALL YOURSELF, IT’S QUITE EASY NOWADAYS.

I agree that it’s quite easy to be a DIY investor. The issue with me is that I’ve never experienced an actual down-market while being fully invested.

I’ve always had some money in the market in form of stocks, 401k’s etc. But I never had an actual investment strategy. I don’t know how I’ll behave with the next economic downturn. I don’t know if I’ll stay brave or if I’ll fold.

I am the type that needs my hand held through the tough parts of a learning process. Once I got that handled then I’m good to go solo. I am not young, at 38 I don’t have a whole lot of time to make a lot of mistakes.

Currently, earning income isn’t too hard. $125/month is a very tiny sum of money to pay for my financial adviser, it’s actually a steal. It’s money I’m spending to preserve capital. I spend several hundred every month just to be able to generate income (upkeep of laptop, phone, my living location etc) so why wouldn’t I spend money to preserve it.

The advantage of paying my fees monthly is that I can cancel anytime should I feel that my financial adviser is returning no service for my fees. The monthly model makes sense to me. I have tried other models and they didn’t mesh well with me.

MY WIFE AND I TOGETHER HAVE NEARLY $600K IN STUDENT LOAN DEBT, WE OWE $1.4 MILLION ON OUR MORTGAGE AND WE HAVE 3 KIDS WHO HAVE DAYCARE EXPENSES AND WE’RE SAVING FOR THEIR COLLEGE EDUCATION AS WELL. BOTH OF US ARE FAMILY DOCS BUT I WORK PART-TIME, TOGETHER WE GROSS $450K/YEAR. I DON’T EVEN WANT TO TELL YOU ABOUT OUR MONTHLY EXPENSES. YOU’RE A SINGLE GUY, IT’S FAR EASIER FOR YOU TO ACHIEVE THE FINANCIALS GOALS YOU’VE LAID OUT. IT’S WAY HARDER WITH KIDS AND IT’S WAY HARDER WHEN YOUR PARTNER IS THE ANTITHESIS TO FRUGAL NATURED.

Wow, yea, that’s a whole lotta zeros. I would agree that it’s easier being single and aiming the direction of my life without getting any resistance.

But I would say that it’s far easier when there are 2 individuals who are on the same page. That’s double the power, sharing a single overhead.

I don’t want to downplay this person’s situation but we’re talking about a debt obligation of around $2 million, and an income-earning potential of $5 million in the next decade alone.

20% of all the physicians in the US live in just 2 States, I’m sure you can guess which ones. And because the demand for these States is high so are the taxes and cost of living.

I’m not about to lay out a plan as to what this family can do. I am not a financial adviser, I’m a backyard hobbyist at best when it comes to personal finance. But I know that as a single guy I went from spending $10k/month to spending only $1,500/month. I paid off $200k in debt on student loans and more for credit cards.

I think it’s important to have a conversation with your partner about the kind of life you want to have in the future. This person shared with me that he wants to quit tomorrow while his wife would prefer for him to go full-time. So there is definitely a bit of burn-out going on.

I don’t think it’s reasonable to compare a household of 5 to a household of 1. Even if we did, it’s not possible to compare lifestyle choices between the 2 households. I chose to leave an expensive state for a cheaper one (CA to OR). I also chose to end a marriage because we were completely on the polar opposites of our lifestyle choices.

During my earning-years, I was willing to pay more to live closer to my work and get rid of my car and I was willing to buy used clothing. My bathtub, sink and paint in the bathroom could use major upgrading, but I’m skipping it. I live without an A/C and I don’t own a TV.

This blog is just one example of one person’s journey. I want others to know that we don’t have to follow mainstream lifestyles. It’s not always easy and I don’t know anyone that envies my ass sweating in 95 degree weather on my 3rd floor condo. And when it’s 25 degrees out and I’m biking to work in snow, once again, I catch very few envious stares.

I LOVE THE IDEA OF THE VIRTUAL PRACTICE! BUT HOW COME YOU DIDN’T JUST GO FOR A BRICK-AND-MORTAR URGENT CARE, BUILD IT UP A LITTLE, HIRE SOMEONE TO WORK THERE AND THEN JUST SLOWLY WORK YOURSELF OUT OF IT? I’M THINKING OF PARTNERING UP WITH ANOTHER COLLEAGUE TO START OUR OWN URGENT CARE.

This email came very timely, right when I had sat down to do my pro/con’s for a physical urgent care and a virtual one. There is a good argument to be made for each one.

One thing I’m convinced of is that for family doctors and urgent care doctors there is still a massive market for having our own practices. With improved technology a lot of services that used to cost a ton of money are now available at a fraction of the cost.

I would have definitely considered a physical urgent care if I could have bought the commercial building and had control over the reimbursement model.

I don’t think an urgent care would fail, there is always a need for same-day care with our burgeoning Starbucks-economy. But there would be more pressure on me to ramp it up quickly in order to cover my overhead. There would be more of a need for me to be physically present and having to deal with online reviews doesn’t exactly excited me.

Hiring staff is not an easy task. It would be even tougher to hire a physician. It’s impossible to tell a doctor what to do, even if you’re a doctor yourself.

There is an area in my city that is extremely short on healthcare which would lend itself quite well to an urgent care or walk-in clinic. I’m sure anyone can find such niches in their city. The problem is that large medical groups have caught the bug of these “Minute-Clinics”, often run by inexperienced NP/PA’s and offering limited services.

Just like back in early 2000’s when Target and Rite Aid were all opening Minute-Clinics, large medical groups are taking another stab at it. The ZoomCare model, even though ineffective for patient-care, is taking a lot of patients away from real clinics.

I’m always working on my business plans however, and I’m working on something right now when the time is right. It’s incredibly easy to open a medical-mill and sadly the US population isn’t discerning enough to tell the difference. I would hate to make money through that kind of clinic.

THE NET WORTH POSTS YOU HAVE PUT UP SHOW YOU HAVING AROUND $500K INVESTED IN MUTUAL FUNDS WHICH IS ENTIRELY TOO LITTLE TO RETIRE OFF OF. I AM CONCERNED THAT IF YOU ARE GIVING SUCH ADVICE TO OTHERS YOU’RE POSSIBLY MISLEADING PHYSICIANS.

I try to be careful to not recommend my exact lifestyle to anyone. I am merely talking about the day-to-day of my life for curious readers who are interested in increasing their ratio of free time to work and trying to become less income-dependent.

I don’t think retirement depends on your net worth, that’s probably the least significant factor. It depends on your expenses and your lifestyle preferences and how creative you’re willing to be.

Even though I write about this stuff, I know only 1 person in my circle of acquaintances who wants to retire early. I don’t know any doctor who wants to have anything less than $2 million in the bank and I don’t know a single person without a car.

There are so many different ways to live in the US that it is incomprehensible to think that we must all follow one formula for our careers, for savings, investment and retirement.

I can make a case to retire on $200k, I can make a case where $10 million wouldn’t be enough. I think my 3.5 readers all know that I’m a complete weirdo and that they shouldn’t be following my exact footsteps, instead learning from my mistakes and taking on some of the things which seem to be working well.

WHY IS IT THAT EVERYONE ON THE INTERNET SEEMS TO BE TALKING ABOUT EARLY RETIREMENT? IF YOU DISLIKE YOUR CAREER SO MUCH WHY DON’T YOU CHANGE IT, GO HELP ORPHANS IN ANOTHER COUNTRY, GO BECOME A ZOOKEEPER. I AM A SPECIALIST IN *** AND I LOVE WHAT I DO, I WOULD DO THIS UNTIL THE DAY I DROP.

I love the idea of doing the kind of work that you love so much that you’d never want to retire from it. I don’t hate my work but there are things about it that I could do without.

I’m not sure how many years you’ve practiced, how many patients you’ve seen and what kind of disasters you’ve deal with. I think all situations are different.

I have worked at around 55 hours a week since 2009 and I’ve seen on average 5 patients an hour. I’ve dealt with patients threatening me, trying to sue me, lying about me behind my back, filing complaints about me, stealing my scripts. I’ve dealt with burning out and I’ve made major patient mistakes.

I think it’s important that you figure out exactly why you love what you do so much and try to do more of what makes the job wonderful. Also, pay some attention to things that give you a bit of heartburn and try to minimize those as well.

If you are young in your career then make sure that you get yourself to a point where money can’t exert much stress on you. From 2007 when I started moonlighting until 2012 I had the same exact emotions, that I would do this work for free and that I’d wanna die practicing medicine. For whatever reason my sentiments changed, or medicine changed, or I changed or a combination above. Maybe I became aware of things which I was previously oblivious to.

If you are further along in your career then I’m sure you already are enjoying a level of financial stability where income isn’t a big deal. In which case, kudos to you.

If you have questions or comments email me, these were fun to answer.

2 replies on “Q&A From Emails”

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

× How can I help you?