MtoM #107 - Cardiologist Becomes a Millionaire

This is the White Coat Investor podcast, Milestones to Millionaire celebrating stories of success along the journey to financial freedom. Hello and welcome back to the Milestones to Millionaire podcast. This is your host, Dr. Disha Spath. Today's episode is number 107, cardiologist becomes a Millionaire. And he does it in just three and a half years. I can't wait to hear this story.

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All right, we have a very exciting guest today who has chosen to remain anonymous. Hello and welcome. Hi, how are you today?

I'm doing good.

All right. We are here to celebrate you becoming a millionaire today. How does that feel?

Feels good.

So tell us, what is your profession and how far are you out of school?

I'm a cardiologist and I am three and a half years out of my fellowship.

Awesome. And what part of the country do you live in?

Midwest.

Okay. All right. And so you're three and a half years out of fellowship and you're making your attending income. Can you tell us a little bit about your total household income and. And a rough breakdown between the spouses?

So when I started my job, it was 460k. 400 from my end and 60k from my spouses. Right now I'm projected to make around 560. 500 from my end and 60k from my spouse.

Wonderful. And do you have any other sources of income?

No.

And what does your spouse do?

She's in training as well. She's in a fellowship. Internal medicine. Subspecialty fellowship.

Wonderful. And do you guys have any kids?

We have a two year old.

Wonderful. So what do you think your cost of living is annually?

10K per month. So 120k per year.

Okay. Wow, that's not bad at all. And you said you live in the Midwest?

Yes.

Okay, that sounds like it's doable in the Midwest. So what is your total net worth now? That's what we're Here to celebrate.

Yeah, I'm just looking at my mint. There has been a lot of fluctuations in the stock market showing as $1,071,000.

Nice. Did it take a dip at all during the recent downturn?

Actually, the market has been going up a lot over the past two days. So it went up by several tens of thousands of dollars over the.

That's amazing. Well, good timing.

Yeah.

Wonderful. Tell us what this money is allocated, how are you investing it and where are you investing it? Let's talk location first and then we'll Talk allocation.

So 630k is in various retirement accounts, or 529 or HSAs, non brokerage accounts. And my brokerage account, it's around 260k. And then on cash I have 60, around 60k and home equity around 120k.

Okay, and how is your brokerage allocated?

So my allocation, I look at it as throughout all my brokerage and non brokerage accounts. So I'm doing 66% either S&P 500 or total stock market index fund, and 33 or 1/3 in information technology index fund, Vanguard. So yeah, that's my asset allocation throughout all my accounts. I make sure there's a 66, 33% distribution.

So you're basically all in stocks then?

Yeah, everything is in equity index funds, just these two index funds.

Okay. So you've got S&P 500 to give you total market exposure and then more of a tech fund, but all are stocks. No bond allocation at all?

No bond allocation. Like I use the cash I get through my paychecks, like as my cash portion. So right Now I'm holding 60k in cash, anticipating some taxes. Otherwise I typically have like 10 to 20k in my bank accounts.

Amazing. So you like to take some risk, huh?

Yes, I don't have any debt, so I feel a little bit comfortable. And. Except for the mortgage.

Right, right. Okay.

And if, if I need money, I can always pull it from my brokerage. I sort of follow, follow the money. Mr. Money Mustache.

Mr. Money Mustache.

Mister Money Mustache. Yeah, he doesn't keep anything in cash and he just puts everything in brokerage. And if he needs it, I mean, he just takes it from there. And I have been investing on in my brokerage for the past three years, so I do have some allocations that are in the pods too. So if I need, I can just pull from them if I have an emergency. But thankfully I didn't need to so far.

Yeah. And I know you said you had some money in retirement accounts as well, right?

Yes, most of it is in my retirement accounts.

Okay, all right. Got it. All right. And are you contributing to your retirement accounts? Pre tax, post tax.

Except for my Roth ira, everything is pre tax.

Got it. Okay, that makes sense. And you said you had no debt, so did you have any kind of educational debt at all?

No, I did my medical school in India, so it's free for me. I was able to get a free seat.

Oh, nice. That's wonderful. And your spouse also doesn't have any debt?

No, she did her medical school in India as well.

Excellent. All right, so what was your net worth when you came out of training then?

It was negative 50k, mostly in credit card and car car loan.

Okay.

And I didn't know much about finances back then, so I. I got exposed to white coat investor podcast, the end of my fellowship, beginning of my attending year. And then I realized I need to make some changes. So first thing I did was I paid off the 50k in debt and then started contributing to the retirement accounts. And once they got maximized, then I put. Put the extra money in the brokerage.

Awesome. Do you. Did you use the debt snowball or the avalanche technique?

I used Dave Ramsey's method. I don't know what you call it. Is it. I think it's the snowball. That's the snowball. Yeah. Yeah.

Nice.

Paid off the smallest debt first, so I get that momentum, psychological momentum, and paid off the rest later.

I see. And what was your smallest debt at that time?

It was probably one of the credit cards, which might have been like around 5 to 10k. It's been three and a half years, but my card debt has been around 30k, I think.

Okay. So that probably works out on the avalanche side too. You went for the highest interest rate, incidentally, as well.

Yeah, incidentally. It worked out that way too. Yes.

Yeah, we did the snowball in my family, too. We just really needed those psychological hits just to keep us going, and it was so motivating.

Yeah.

Okay, so how long did it take you to take to pay your debt off?

I think two or three months. Yeah, because I was getting that attending paycheck. Maybe four months. Yeah, around four months, I think.

Wonderful. That's great. Yeah. It must have felt really good to pay all that off and then start investing. What kind of car do you drive?

I drive a Toyota.

All right, well, we're going to remain anonymous, but way to go to stick with the WCI style of car. All right. All right. Okay. So how. How did your parents help you? Are your parents really money savvy.

They were big savers so I, I think I sort of got it from them.

Nice. And did you get any kind of help from them in your money situation at all?

Not much except they send like 10 to 20k every year to put it in my son's 529, but nothing too much, I guess.

Yeah. All right, so pretty much a self made millionaire. You and your wife, congratulations. It's a huge accomplishment and you've done it in three and a half years right after fellowship. So how would you describe your secret? What is your secret to success? It's amazing progress that you're making.

I think I was just lucky that I didn't have any medical school debts.

Sure.

Apart from becoming financially literate, I don't think I did anything else. I mean I didn't know what a stock or a bond was towards the end of my fellowship and then I just blindly followed whatever the white coating was. Podcast Jim Dolly teachers.

Well, you're humble but you know, starting with zero knowledge and attaining that financial education is quite a feat. So congratulations. And I think that in itself, to learn from zero to learning how to invest completely and becoming a millionaire in three and a half years is something to be congratulated for. Sure.

Thank you.

Yes, absolutely. So what advice would you have to give to someone that's just like you before you started? What would you tell them?

I would say I'm just talking from my experience. If you're like me, just get financially literate and don't go for any sources. Especially don't go with financial advisors who cold call you almost always. In my experience, they don't have your best interest in heart and I would suggest following good online resources like White coat investor or physician on Fire or Mr. Money Mustache. These resources help me a lot.

Wonderful. So what are your next financial goals?

Nothing really. Just I wanted to keep doing what I'm doing right now and see where it takes me.

Keeping chugging, keeping on investing. Do you have auto auto investment set up or do you do it manually?

For now I'm doing it manually but once my wife becomes an attending, I think we will just do it automatic. And doing manually helped us a lot especially over the past three years with to bear markets. I was able to do a lot of tax loss harvesting but I think going forward, once my wife becomes an attending, we'll be doing it automatic.

Okay, awesome. Do you tend, do you plan to stay 100% stock?

I'm following JJ Collins advice for now. So during my earning years yes.

Okay.

And then once, if and when we get to the retirement stage, then we might do 10 to 25% bond allocation again, total bond market index fund.

Okay. Okay. All right. And you know, your. Your cost of living going back to that you said $10,000 a year. That's pretty reasonable for an attending. How does your budget break down? Do you track your budget at all?

So for home, which includes mortgage is around $2,000, and other home expenses is $500. So 2,500. For home under financial, it's around thousand dollars. That is mostly both our disability and life insurance cost and my accountant cost. For charity and donations, we do $502,000 a month. Eating out around thousand dollars. Groceries around thousand dollars. Shopping 500. 2,000. Auto expenses around 500. Travel, 500. Everything else, thousand.

Okay, wonderful. And so you're keeping your grocery budget around $1,000 a month. Do you guys cook at home? That's pretty reasonable.

Yes, we do cook at home a lot, and we shop at Sam's or Costco.

Nice. Awesome. So you bulk shop and cook at home. Any other tips to keep those costs low?

I don't know. This is how we have lived all our life while we are in the US So I don't know if I'm doing anything different.

Okay. All right. Well, thank you so much for coming on to share your story with us. This is very illuminating, and it's really interesting how you have kept your lifestyle at a moderate year lifestyle, clearly. And made so much progress in your investing so early in your career. Sure, there's nothing but opportunities to inflate in front of you. So I wish you luck, and I hope your net worth continues to grow and your family continues to grow and stay healthy. And thank you so much for being here.

Thank you.

So what I love about that episode is that this doctor actually got himself in a little bit of financial trouble initially and then turned it around. He had taken on some credit card debt and had financed out a car. But as soon as he heard about the white coat investor and got into learning about finance, he decided to go ahead and pay off all his debt. And he did that in just three or four months. And then he decided to just start shoveling money into his investment account. And he's doing it at 100% stock allocation, which is pretty aggressive. And it's in line with J.L. collins's simple path to wealth book, where he talks about, early in your career, you can afford 100% stock allocation. And clearly this guy has the mindset to be able to do so since he was relishing in the tax loss harvesting opportunity last year that he had. So it has worked for him and he at just three and a half years later, after graduating fellowship and turning his financial life around, he now is a millionaire. And while he didn't have any student loan debt, which is fortunate, he didn't really start with much of an advantage other than that. And he taught himself how to invest and apparently deep dove into the financial community and started following the white coat investor. And the other thing was he didn't really think too hard about all the options. He just said, I'm just going to start investing in stocks. And that's what he did. And that's actually pretty valuable sometimes, because sometimes when we have so many options that you're thinking about, okay, I could buy a short term rental, I could buy a long term rental, I could invest in a syndication, I could be investing in this or that. You tend to get caught up in analysis paralysis and a lot of times your money just sits there and doesn't get invested at all. So instead of doing that, he's keeping things simple and just shoveling it into the brokerage and the retirement accounts. And clearly that's paying off for him. Another thing I loved about his story was that they're actually living pretty frugally for making half a million dollars a year. And once his wife finishes fellowship, they're both probably going to be making more than a million dollars a year total, but they're only spending $10,000 a month. To the average American family, that might seem like a lot, but for his income, he's saving a significant chunk of his income and his savings rates. Fabulous. So that is really something to be applauded. And he's clearly doing it through really mindful budgeting. He knew exactly what he was spending on what and was tracking it on the Simplify app, which is awesome. And that really is one of the keys to wealth, is to know where your money is going. It sounds like he's doing a lot of things right and sounds like there's going to be a lot of growth ahead for him and his wife. And while there'll be chances to inflate the lifestyle and all of that, I'm sure they're still going to be continuing to invest and keeping up a high savings rate.

The white coat investor is proud to introduce our no Hype Real estate investing course, which will provide the framework for developing further knowledge and experience as you progress in your real estate investing career. We call it an introductory course because there's always more to learn. But this is no short, superficial course. There are over 200 lectures and videos adding up to more than 27 hours of content by over 15 different instructors. We think it just might be the best real estate course on the planet. Continue your wealth building journey today with the no Hype Real Estate Investing course@whitecoatinvestor.com courses. You can do this and the White Coat Investor can help.

I'm so glad this doctor took the time to come share his story with us today. I'm so glad you're here listening. I hope you found something valuable in this episode that you can take and apply to your own financial journey. What you do isn't easy and if no one else has said thank you to you today, let me be the second after Dr. Dali. Thank you for everything that you do. Keep your head up, shoulders back. You've got this and we can help at the White Coat Investor. See you next time. The hosts of the White Coat Investor Podcast are not licensed accountants, attorneys or financial advisors. This podcast is free 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.