Engineer and Surgeon Couple Become Millionaires - MtoM Podcast #212

This is the White Coat Investor Podcast, Milestones to Millionaire Celebrating stories of success along the journey to financial freedom.

This is Milestones to Millionaire podcast number 212. Engineering a surgeon Become Millionaires. One of the most underrated financial moves in medicine is working locum tenants. It pays significantly more on average, and you can work locum tenants full time or on the side of your full time. When you work with Comp Health, the number one staffing agency, they cover your housing and travel costs, which on top of higher pay, really adds up. Locums also gives you more control of your career, allowing you to go where you want, when you want, with the schedule that works for you. It's the perfect way to get ahead financially while getting focused on what you love, whether it's locum tenants or a regular permanent position. Go to whitecoatinvestor.com comp health to build your career your way with the power of Comp health. All right, as you're hearing this, it's March 3rd. We just wrapped up. I may not even be home by the time you're hearing this. We just wrapped up our annual WC icon, the Physician Wellness and Financial Literacy Conference. Okay? And we announced to all those people at the conference, next year's conference, we're headed back to Vegas. We're excited about this. So WC icon26 is going to be in Las Vegas. Wait, wait, wait. I know what you're thinking. You're thinking, ah, Las Vegas. I hate the Strip. It's not on the Strip. We're going to the JW Marriott. It is not on the Strip. It's not just off the Strip. It's probably a 15, 20 minute drive away from the Strip. Okay? It's a resort, okay? Out toward Red Rock. And it's a beautiful place. It's a wonderful facility. Now, the beautiful thing about Las Vegas is you can get a flight, often direct and inexpensive, into Las Vegas from just about anywhere in the country. And then a quick little Uber ride, you're out at the JW Marriott. Now, if you want to go into the Strip one evening and you want to, you know, go see a show or something, all those classic Las Vegas activities, go shoot machine guns or, you know, go gambling, whatever you want to do, you can do that. It's 15 minutes away. You can go spend the evening. We always knock off the educational sessions relatively early at WC Icon because it's a wellness conference. You can go spend the evening on the Strip if you want to, but you do not have to be on the Strip to come to this Conference. This was a very deliberate decision we made to be away from the classic Las Vegas experience, but still in a very warm place in March. And we're going to be doing. It's a little bit later than it was this year. It's going to be March 25th through 28th, 2026. It's going to be great, I'm told. I'm even leading some hikes in the afternoon and evening, which I'm excited about. Las Vegas is a destination, has been for me for many decades, not necessarily because of the Las Vegas experience, which I've had, but because of all the cool stuff that surrounds Las Vegas. It's an outdoors paradise. There's all kinds of awesome climbing and mountain biking and camping. You can even go up into a mountain not far from Las Vegas and skiing. You know, the southern Utah parks, national parks are not that far away. Lots of people tour those. By flying into Las Vegas, you can get over to the Grand Canyon, you know, take a few days onto the conference and. And enjoy some of that stuff as well. That is a great time of year to be in southern Utah and Northern Arizona. So March 25th through 28th, this is the lowest price you can get is to buy it. Now, this is what we call our pre sale, and it's through March 6th. So you've got, like, if you're hearing this, the day this podcast drops, you got like three more days. So in person, it's going to be 14.99. That's regularly 19.99. And the premium in person is 1999. That's regular 2499. Okay, so this is located in beautiful Summerlin, to the west of the hustle and bustle of the Strip, is surrounded by red rocks. It's a beautiful retreat off the Strip, but still close enough to enjoy the endless entertainment that is possible 24, 7, 365 in Las Vegas. All right, if you want to sign up, go to wcievents.com through the sixth is the cheapest pricing that you can get. So sign up for that now, and we'll see you next year at wcicon. Okay. We have a great interview today. You're going to really love meeting these folks, but stick around. Afterward, we're going to talk about state, estate and inheritance taxes. We had somebody write in to me the other day, and they basically said, hey, I didn't know anything about these death taxes from the states. Well, if you don't know about them either, let's talk about them. Stick around. After the interview, our guest Today on the Milestones to Millionaire podcast is Sean. Sean, welcome to the podcast. Hi.

Thanks for having me.

Sean, tell us what you do for a living and how far you are out of school, and then tell us about your spouse and her career.

So I'm an aerospace engineer, 14 years out of undergrad. I've been with the same company effectively that entire 14 years, and my significant other is a minimally invasive surgeon six months out of a very long training career.

Yeah, that would be a long training. So a five year residency and a one year fellowship, I assume.

Yeah, plus one year of research in med school and three years of research in the middle of residency, which I'm not going to complain about being able to see her.

Yeah, yeah, exactly. So, yeah, it was a length, lengthy training period, for sure. All right. And you're in the, in the, in the Midwest and recently accomplished a significant milestone, especially given that the doctor in this couple is only a few months out of training. Tell us about, tell us about the milestone you've accomplished.

Yes, we became millionaires right about September 1st. So after she finished training and even before she walked into the office the first day as an attending.

Yeah. All right, well, that's pretty awesome. Well, so her income didn't contribute all that much to this, given at least her attending income, given she's only been attending for like, six months. Obviously she made something during residency and fellowship. But what would you say your household income has been, on average, over the last 14 years since you came out of school?

Yeah, so I started around 60,000. And then once she started getting her residency income plus mine, we're around 130,000 starting there and finished last year at 266,000.

Okay, okay. But still, if you add all of that up for 14 years, right. I mean, the total amount you earned is not that much more than a million. Right. And you've got a million dollars in net worth, which is pretty awesome. So tell us about how that's divided up, how much is in retirement accounts and home equity and that sort of thing.

Yeah, so we have about 870,000 in investments. Our IRAs are worth about 80,000 and 70,000 each. My 401K is 493. Hers is 109. So she'll be able to put over 100,000 away during her residency. A 403B that she has is 36. I have an HSA of around 38. She has a couple thousand in one. And then taxable, we have about 27 and 13,000 in taxable. We're holding about 63,000 in cash. And the house that we bought during residency, we're now holding that as a rental. There's about 168,000 inequity in that.

Tell us about that. How's the rent? How's the rental business going? Are you guys enjoying that? You expect to build, you know, a big real estate empire, or is this just kind of a accidental landlord situation?

It's a little more intentional than an accidental landlord. I've been interested in it. Looked at buying properties a couple times during residency and just never got to that point. And then when we were leaving, we didn't need the cash right away to go towards any goals. And there was a small possibility that she could go back to where she did her residency as an attending. So went through one property management company that was truly awful. Had nine months of vacancy and had to switch. So learned a little bit, enjoying where we are now with it, but not. Not actively pursuing anything else in terms of direct real estate investment at this point. Very cool.

And about what point in your careers did the marriage happen?

So technically, we're still not married.

Okay.

But we've been together since undergrad and mixed finances as soon as we moved in together and in residency.

Any concerns among you two about that, just mixing finances before being legally married?

No. I think we've had open and honest communications, and she's delegated a lot of the responsibility to me. So we've had a lot of conversations, a lot of trusts. We actually have living, durable powers of attorney over each other. So technically, either one of us could go empty the other one's bank accounts and run away. So it's just been a long relationship with building that trust.

Works well when it's a good relationship with lots of trust, for sure. But there's obviously some risks there that it sounds like you guys have considered. Okay, well, tell us a little bit about how you did this, how you became millionaires. I mean, she's six months out of training. It's pretty awesome to be a millionaire already. Tell us how you did it.

So we were incredibly fortunate with our parents. I graduated undergrad with about 17,000 in loans from, really the first three semesters. Financial aid changed, and I went to school for free for five semesters. And then her parents covered all of her undergrad. And then during med school, she racked up the loans, but then her parents came in, covered all that for us. So we were certainly set out without any kind of disadvantage of having to overcome those loans. And then I started contributing. I Think the lowest I Contributed to my 401k was 10% in my first year and gradually ramped that up. And then really the key, I think, during residency was we basically lived off of my income. I paid for the mortgage, we didn't have any loans, we didn't have any car loans, went on plenty of vacations, went out to eat. But we were basically able to put away her entire residency salary equivalent into savings to the point where she was contributing 23% to her Roth 401K during residency. And so we had a lot of time in the market with a lot of money going in there.

Yeah. And the last few years have been good for people investing, at least in U.S. stocks.

Yes, they have.

Very cool. So have you ever discussed with her parents why they decided to let her borrow and then wiped out the loans rather than paid up front for tuition and expenses, et cetera?

No, we haven't had that conversation or any kind of conversation about expectations in the future when they retire. I imagine we could end up in a sandwich house with grandparents and children if we go that way. But we're expecting that that might happen. And a nice trade for when we have money in the future, if we have to take care of them versus them taking care of us, when we really could benefit the most from those loans.

Yeah, a very cool gift anyway, because I've talked to people about this over the years and they're like, well, should I let them borrow? So they feel like they have you skin in the game. And then I'm planning to wipe it out afterward. And obviously that approach involves some expenses, you know, some interest and some loan origination fees and those sorts of things. But it's just an interesting approach I find interesting. And maybe it's that people came into money later, you know, they didn't have money when they started med school, and afterward they were able to help with it. I don't know. Okay, so the parents. You got some significant help from your parents, but still did a great deal of this yourselves. I mean, a lot of people will struggle with this concept of living off one income and saving the other one. Do you recall the conversation you had when you guys decided to do that and how you decided to substantially limit your spending in order to accumulate wealth?

I think it came pretty easily to us. I think Paula Pant, you've had her on as a guest. You can afford any everything. You can't, you know, you can afford anything. You can't afford everything. And we just had kind of grown up with, with that Both of our. Our upbringing. So to get everything we needed, it. It just made sense that it all fit within one income. You know, the house. We went and got exactly what we needed. And it happened to be right about 2x what I was making. So the low end of the rule of thumb.

It helps to be in the Midwest. I suppose it does.

And I think that is a huge advantage that we had too. And looking at the Midwest fellowship coming, sticking in the Midwest and then attending. Sticking in the Midwest. Once we had a couple years in residency, we knew we liked the geographic arbitrage in the Midwest.

Yeah. Now there's a whole bunch of people out there that are coupled with a doctor. Right. And it's a long road. Right. And particularly long in your case, it sounds like. But even normally just undergrad and med school and residency and maybe a fellowship, that's a long road by itself. Even without any extra stops along the way. What are the advice do you have for somebody that's looking down that tunnel and the light seems a long ways away?

Hang in there. But putting things on autopilot early I think is helpful. And building that muscle memory of just having stuff come out of your paycheck because you know it's going to pay off in the future by having that time in the market and then also recognizing that the amount of hours that have to go into residency, if you are the partner who's not in medicine and can take an active interest and do the homework, that'll pay dividends for both of you during training and after as soon as those paychecks come in. But at the same time. Right. Sizing what you're learning and passing that on so that you're not leaving your significant other in the dark.

What's next for you guys and your financial goals?

I knew you were going to ask that question. I think some reevaluation of maximizing our savings. There's quite a few accounts that she has that are kind of edge cases. Even looking over your forms and listening to the podcast, I'm discovering edge cases. So we're going to have to reevaluate those and what we want to put away into tax protected accounts that we don't have access to for a while. We need to bump up our automated taxable accounts. And then I think we're slowly discovering that we might have a spending problem on the fortunate side of not spending money.

You mean that you're not good at spending money or it's a good problem to have in the beginning.

It is. It is. And so we need to see where money can benefit us the most now and thinking about seriously spending some more on that.

Yeah. Well, congratulations, Sean, on your success. You guys should be very proud of what you've accomplished, and thank you for being willing to come on the podcast and share your experience to inspire others.

Thank you for being a resource for not just the white coat investors, but those of us that support the people in the white coats.

Okay. I hope you enjoyed that interview. Lots of good stuff to learn from their example. You can do this, right? You can become a millionaire. And that's wild for a lot of us that didn't grow up with that much money, right? And we're sitting there in residency not making much money and really busy, and we got a negative net worth. You can be a millionaire, and it doesn't take as long as you might think. Use the advantages that you have. You know, if you have a spouse that's working or you have, you know, a bit of an inheritance or you didn't have to borrow that much for school or whatever, take advantage of those things. All of us have our challenges as well that you'll need to overcome. You can do this. You'll not only become a millionaire, but you can retire as a multimillionaire and have a very comfortable retirement and awesome financial life. I promised you at the top that we're going to talk about estate taxes right now. Most of you know about the federal estate tax, okay? This is the idea that as a country, we've decided we don't want to have barons and dukes and princes that have inherited money for, you know, generation after generation after generation after generation. And so we basically tax wealth. When you die, if you're a certain amount of wealthy, you'll lose about 40% of your wealth with each generation. When the next generation dies, 40% will be gone. And the idea is to keep the wealth from all accumulated in the hands of just a few people. That's the idea behind an estate tax. Now, the gift tax is. Is technically part of that estate tax system. Anytime you're giving away more than $18,000 a year, that counts toward your estate tax exemption. Now, this exemption, or exclusion, sometimes it's called, is going to be $19,000 a year. Now that we're in 2025, is $18,000 a year. Last year, the total estate tax exemption, this lifetime exemption, also went up in 2025. It's actually scheduled to be cut in half at the end of 2025. But given Republicans control the House, Republicans control the Senate, and Republicans control the White House. I expect this is probably going to be extended substantially. But that exemption for 2025 is $13.99 million, $14 million, basically, if you're single, double it if you're married. And it's portable now, right, so your spouse can use whatever you didn't use. So $28 million. Right. If you die in 2025, that's how much is exempt from this estate tax, which gets to 40% pretty darn rapidly. I think the first million dollars may be taxed at less than 40%, but after $1 million above and beyond this $28 million, it's getting taxed at 40%. But the good news is most of you out there are not going to die with more than $28 million, at least in today's money. So if this law remains the same and it continues to be indexed to inflation over the years, you're probably not paying any federal estate tax. If you're like most white coat investors now, if you had some really successful entrepreneurship venture, or you're just really, really thrifty and high income and saved a lot of your money and invested it well, maybe you can get there, but most people just aren't going to get there. And there's lots of things you can do to make sure you don't get there. You know, you can use some trust and you can give money away to charity and you can give money away earlier in your life and those sorts of things, but it's relatively easy to deal with that estate tax exemption is so high. What a lot of people don't realize, though, is that there's a bunch of states that also have an estate tax, and their exemptions are not always as high as the federal estate tax. All right, so let's talk about what states have this. Well, Washington has one. Oregon, Minnesota, Iowa, Nebraska, Illinois, Kentucky, Pennsylvania, New Jersey, New York, Vermont, Massachusetts, Connecticut and Maine. I think I've got them all. Now, a few of those states, four of those states don't actually have an estate tax. They have an inheritance tax, which works a little bit differently. It's applied to the heir, not to the estate. And often the exemption is very low on that. And so the tax rates are different in each of these states. The exemption amount is different in these states. And a few of them have this variant called an inheritance tax. And interestingly. Oh, I don't know if I mentioned Maryland. Maryland's got both. Right. Not only does it have an estate tax, it's got an inheritance tax. So maybe not the place to be living when you die. Oh, Hawaii as well. I forgot to mention Hawaii. Hawaii has one. Okay, so what are the exemption amounts? Well, let's go through these. Connecticut, it's $13 million. Okay. That's just about what the federal one is. That's not too bad. Hawaii, it's $5.5 million. Right. That's a lot lower than the federal one. Illinois, it's 4 million. Maine, it's 6.8 million. Maryland's 5 million. Massachusetts, only 2 million. Right. Lots of people going to be paying estate tax in Massachusetts. Minnesota is 3 million. New York, it's 6.9 million. Oregon, 1 million. Right. That's a real amount and it's not insignificant. It's 10 to 16% of your estate is going to go to Oregon, above a million dollars. So if you live in Oregon, maybe move somewhere else before you die. Just kidding. But it's probably worth doing some estate tax planning. Rhode Island, $1,800,000. Vermont, $5,000,000. Washington, a little over $2,000,000. District of Columbia, $4.7,000,000. Okay, so lots of those are quite a bit lower than the federal estate tax exemption. Now, when we talk about the inheritance tax, you know, in Kentucky, it's pretty low, right? It's $1,000.

That's it.

Above that inheritance tax, 0 to 16%. Nebraska, it's 100,000. New Jersey is 25,000. And who did I forget? Maryland, I don't know. There is an exemption there, 0 to 10% in Maryland. So learn your state's estate tax and inheritance tax rules. Most states don't have this, but some do. If you're in one of those states I listed, and they're generally, you know, what we call blue states, you know, mostly in the northeast, Minnesota, Illinois, Washington, Oregon, you know, not California, though, and nothing basically in the southern half of the country. So keep that in mind. It's worth knowing about. If you're in one of those states, you need to do a little bit more estate planning than you might if you're not in one of those states. Earlier we mentioned working locums with Comp Health, the number one staffing agency. But Comp Health isn't just a locums agency. Comp Health staffs regular permanent positions across the nation as well. They also offer telehealth, medical missions and more. And that's what makes them unique. They can look at your situation and offer multiple solutions to build your career the way you want it and meet your financial goals. And they know their stuff, especially when it comes time to negotiate contracts, which they're willing to do for you. So whatever career move you're looking for, go to whitecoatinvestor.com comp health and use the power of comp health to build your career your way. You know, when I think about Locums, I'm reminded of a friend who basically did Locum straight out of training. He was married at the time too, and went to work for these places that paid him pretty well because they really needed the help, but also paid for all the expenses of living there, a food stipend, a housing stipend, et cetera. So there were basically no expenses for several years at the beginning of the career, and the pay was a little bit higher than it otherwise would have been. Well, no surprise that friend got to financial independence very quickly. In fact, I suspect if you combine a Locum's approach with something like a short term rental empire strategy, that might be the fastest pathway for a doctor to get to financial independence. And, you know, so if financial independence, early financial independence, you know, within 5ish years of getting out of training is something that's really important to you. You know, consider Locums and consider combining it with something like short term rentals. Okay, we've come to the end of another great episode of the Milestones to Millionaire podcast. This episode is, or these episodes. This podcast is centered on you, okay? About your challenges, your triumphs, et cetera. So we need people to apply for it. You go to whitecoatinvestor.com Milestones. You can apply to be a guest on this podcast and otherwise continue to send in your questions on the Speak Pipe for our regular podcast. Those can be left@whitecoatinvestor.com speakpipe or just send an email to editoritecoatinvestor. This is all driven by you and what you find interesting and what you want to talk about on this podcast. Thanks for being a listener. Without you, there's not much of a podcast. It's just me talking to the wall. So we're glad you're here. Keep your head up and your shoulders back. You've got this. We'll see you next time on the Milestones to Millionaire podcast.

The hosts of the White Coat Investor are not licensed accountants, attorneys, or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.