MtoM #133: CRNA Becomes a Millionaire and Finance 101: Disability Insurance

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 133. A CRNA becomes a millionaire. Getting quality disability and life insurance should be the first financial chore for a doctor to complete. Most docs don't have the ideal policy for their gender, specialty, state, or health status. And one in seven doctors get disabled at some point during their career. Because these policies can only be purchased through brokers, we have put together a list of vetted agents who are experienced with working with the specific needs of medical professionals and who have your best interest at heart. If you have questions about insurance and what kind of policies would be the best fit for you, check out our insurance recommended list@whitecoatinvestor.com insurance feel the peace of mind that comes with knowing you have the optimal policy in place. You can do this, and the White Coat Investor can help. All right, we got a great interview today. I think you're going to enjoy a lot. We have a new millionaire among us in the white coat investor community, and we're going to be talking to him shortly afterwards. Stick around. I just got off the phone a few minutes ago with a disability insurance agent. I think I have a few pearls to share that would be worth hearing. So we're going to talk a little bit about physician disability insurance afterward. All right, our guest today on the Milestones to Millionaire podcast is Matt. Matt, welcome to the podcast.

Thank you. I appreciate you having me very much. I'm a fan.

Awesome. Well, tell us what you do for a living and how far you are out of school.

I'm a crna. I'm an independent locums provider. I've been that way for a couple of years. I graduated in 2010 from anesthesia school.

Okay, so you have worked in where? Through this. Locums. What parts of the country have you worked in?

Well, it's funny. All local, actually. So you call it locums, but I'm not on the road much. About the furthest I travel is about an hour and 30 from my house. I found that's about as far as I can go in a day and still be safe on the road.

You know, in Southern California, that's considered a normal commute.

Right. And I'm from California, so it doesn't bother me at all.

Okay, well, you have recently become a millionaire. Congratulations.

Thank you.

I appreciate that. On paper, of course.

So what was your net worth when you came out of school 12 years ago?

I was negative in fact, I wrote it down because I took notes before you call. I was negative 250, roughly.

So a swing of 1.25 million in 12 years. Pretty awesome.

1.5 almost now at this point.

Yep. Okay.

Okay.

It's been a little. Took us a little while to get you on after your application, it sounds like. So how's it all break down now? Tell us about your assets. Tell us about your liabilities.

So my only liability is the home note. I've got about 320 left on that. And then I have one car note, and that's temporary just until I get another car sold and get my tax rebate. I bought an ev. I took the plunge.

Which one did you get? Tesla Plaid plus plus plus.

No, I did not. I went Tesla Y. I did go performance, though. I can't lie on that one.

All right. All right.

So what's your zero to 60?

Three and a half.

That's fun. That's better than an amusement park ride. All right, so this is cool. So tell us about this. You know, you have a couple of pieces of land, I understand. Tell me about the assets here.

Yeah, so we. My biggest asset, obviously, is the home we live in. Hopefully that won't be forever. But we're at about 900 with the place we're at. We live out in the kind of the country. So we bought in. In a subdivision near a lake kind of deal. So I bought a. Two lots of Activists that we just got for, you know, for a pretty good price. How about that? And we're sitting on those two lots for now. We may or may not build on another one because my wife and I are in like 3,000 square feet, just us and the boys, the dogs. So we're probably going to downsize and then use the equity in here to just kind of roll back over into investments.

Okay, so tell us about the investments.

So I'm primarily in Vanguard. I have a rollover traditional ira. And then I was. I was. Can't say smart enough. I was told about it years when I first started anesthesia. Hey, do a Roth while you still can when you're in that tax bracket. So I started a small Roth then. So I've got 40 in the Roth and 100 and something in the rollover. And then I'm putting about 50 a year into my individual 401k since I became locust, I've got about four more years of doing that, 50 to 55 a year into that, and then I can really kind of scale back.

Okay, so over that 12 years. What was kind of the range of your income?

I started out, I want to say my first W2 was 140ish. And then I kind of maxed out a few years ago. It kind of gradually went up, didn't. It's more than inflation, kind of, but just enough. And I think I got to two. I was doing cardiothoracic only, so it was like 230 a year after everything was said and done. And that was about four years ago is where I topped out as a W2. And then, you know, pre Covid and right at Covid. I don't know about your specialty. I'm sure you got a hit, but anesthesia took a huge whack. A bunch of people left a bunch of, you know, there's just not enough of us. So the pay rate, you know, went up exponentially. It just made sense for me to go 1099. And I'm glad I did it. But yeah, so my gross now is a lot higher than my W2 ever was, but I'm paying myself a salary of 120 for tax implications and so on and so forth. And my CPA seems to be comfortable with it, so I am.

Yeah, that one might be on the border, a comfort for me, but I'll let you work that out with your cpa. It is, it is.

I've got friends that are a lot lower and I'm like, ah, I don't think I want to do all that.

Yeah. But yeah, feel super comfortable. Much lower as a crna.

Yeah, for sure.

Okay, so tell us about your. Tell us about your asset allocation. It's fairly straightforward. I understand.

It is, honestly. And I kind of put out some of the books I read behind me. I just read and read and read and read and read your books back here. A couple of them, honestly. But I just got the place where there was a common theme going through most of the books. That kind of 80, 20 split. I didn't want to be whole hog and go 100% inequities. And again, I'm a neophyte, so take this with a grain of salt. And then I was going to say 20% bonds. And right now where I'm at, I checked today and I'm about 85, 15, so I need to rebalance a little bit, but that's kind of where I'm comfortable. I'm sure things will change as I get a little older and my priorities change, but that's where I'm sitting.

So did all this increase in your net Worth come from working and saving? Is your spouse working? Did you get an inheritance? Did your parents give you a bunch of money? Where did it all come from?

So my spouse works, she's a, she's a nurse as well. She has case management. She's in a W2 that pays for our benefits, which is great healthcare benefits. And she's got a 403B that contributes about 15, 2 a year and gets a match like a couple grand a year. I am first generation college, so there was no inheritance. Uncle Sam paid for my undergraduate and they got their blood out of me. Trust me, I got the T shirt and everything. And thank you for your as well.

Which branch were you in?

Army.

Yeah, army.

Okay, so I'm a knuckle dragger by nature. I try and keep things very simple. But anywho, I went through a terrible divorce and I was completely ignorant to money beforehand and I was net negative in hindsight. A bunch put kids in private school, living the life, buying the big house and everything else. And then during the divorce process I realized, man, I'm gonna go completely broke. So I really had to re educate myself, reorient myself to how am I going to support my kids in divorce and then a life outside of that. So yeah, to answer your question, obtusely, it's been just kind of opening my eyes to these books and trying to figure out where I can make gains.

Awesome. So you had kind of an awakening after that. How many years ago was kind of your financial awakening that maybe you got to be saving something and investing it smartly?

2016.

Okay, so about seven years out from.

That was when I was like, you're never going to be able to retire unless you do something about it right now.

How old were you in 2017?

Well, 41.

41.

Okay.

And that was the big wake up.

Very cool, very cool.

You know, everybody has one. Sometimes it happens at 25, sometimes it happens at 35, sometimes it happens at 65.

Sure.

When it happens at 75, it's usually not a very good experience though.

Right. I'm glad it wasn't 65. I kind of wish it was 25. I'm sure you never heard that.

Yeah, yeah, I hear that from everybody. You know, of course most of us are still in School at 25.

Good point.

But anyway. Okay, so what's, what's your secret to success? I mean, there's somebody else out there that's, you know, maybe they just got cleaned out in a divorce and they want to be a millionaire.

What would you tell Them there's really no secret. It's grit. I literally at one point was so broke I was building furniture in my garage and selling it on Etsy and I was a crna, making CNN or any money. So I was like, you know what, this has got to stop. I've got to figure out a better way. And if I'm going to have any hobbies, those hobbies have to make me money, period. And it wasn't even I don't want to be rich, I just want to.

Be able to eat.

So that's where that stemmed from. And then I guess another secret would be just if you're ignorant, you got to admit it to yourself because it was hard for me. And I'm sure that some people, especially as type A, as most of us healthcare professionals are, it's hard to put your ego in check sometimes. And I was like, look, here you go man, if you don't do it, you're not and it's going to be bad for you. So I think that recognizing, identifying and saying, okay, I have the gray matter between my earlobes to make this happen. And reading books I just literally got online. I ordered every self financial book I could find. Some were good, some in hindsight were trash.

I had the same experience.

Right, right, right. And to read a few and to realize that they're trash, you're like, okay, I must be learning because I, I can tell that this actually doesn't make sense in the real world.

Yeah, very cool. So what's next for you? What's your next financial goal you're working toward?

That's funny that you ask is I want to, I'm trying to get my wife well at her behest as well. I want to get her in a mobile job so we can start traveling the country after my youngest is out of private school. So we're looking at getting into doing some Locum's work in terms of owning our own small firm. So that's my next financial goal, is to get an established company in that to work with people I want to work with and then really just to plug away these next four years at the same savings rate and then once that's done, then I can kind of peel it back and hit our goals and I'm not trying to be greedy, but two and a half million would be plenty for me to retire on and that's kind of where we're set to hit.

Cool.

So you're a first generation college you mentioned, right?

Yes sir.

What does your family think? Do they know you're a millionaire.

You know, I don't know. Uh, and I don't, I don't think of myself as that. Again, it's on paper, but no, they don't. My dad's construction grew up in that. In fact, I was going to be a contractor myself for many years. Um, and he finally said, son, you're going to make more using your, your brain than you will your spine. And just kind of fell into nursing. And long story short, but yeah, no, no financial advice from my parents, but just all self taught and learning from other people, I guess.

Very cool.

All right, well, if there's someone else out there like you, I think you provided them some inspiration. So thank you so much for coming on the White Coat Investor, or rather the Milestones to Millionaire podcast and sharing your story and inspiring the next person to do the same.

Take care of yourself. Thanks. I appreciate your time. All right.

Hope you enjoyed that interview with Matt. You know, I love the can do attitude. It's kind of a little bit army esque, right? I can do this. You know, just put my path in front of me and I will go down it. But it's pretty cool that, you know, even at what a lot of people consider mid career, kind of early career for docs when you're only 41, he really turned things around. Started basically from zero at that point.

Right.

Came out of school, plenty of debt, you know, very negative net worth, and yet he has become a millionaire as well. And that before 50 years old. This is something you can do. You can do this. If you're a doc, you, you can do this. If you're a crna, you can do this. If you are a nurse, you can do this. It is entirely possible. You just need to get a little bit of financial literacy, a little bit of financial discipline. The information is out there waiting for you. When the student is ready, the teacher will appear. We put it out in every format we can think of. You know, whether it's a subreddit or a Facebook group, or whether it's books or an online course or this podcast. We want to get you this information. We cannot instill in you the discipline you'll need to do that yourself. And it will require some not a terrible amount. If you're already a high income professional, you're probably already plenty disciplined. You just need to apply it to your financial life. All right, I promised you I was going to talk for a few minutes about disability insurance. And I'll tell you what, disability insurance is one of those things that you do need to shop around a little bit for. Policies are complicated. If life insurance is black and white, right, you're either alive or you're dead. And there's a little bit of gray in there, about 15 minutes worth. And I see that all the time as an emergency doc. But you know what? Pretty soon you got to sort it out. People are either alive or they're dead. So the policies for term life insurance are very straightforward and simple. It's very much a commodity. It's relatively easy to shop for. Even if you have a lot of medical problems, it's still a relatively straightforward thing. You'll either qualify for it at some price or you just won't. Disability, though, is like 50 shades of gray, right? And so the policies have to be a lot more complicated. They have a lot of riders, they have a lot of exclusions. They have a lot of definitions that matter. And so it takes an education to buy disability insurance. And that's why we have that list of vetted disability insurance agents, right? And they're all a little bit different, a little bit different personalities. Occasionally one of them will have a discount that some others won't have. But I'll tell you what drives them nuts. When you apply to all nine of them, you're not applying to nine insurance companies. There's only really six that you apply to anyway, and one agent can apply with all six for you. When you apply to nine, you're just wasting your time and theirs.

Okay?

You don't need to get on an hour phone call with nine different agents to get educated about disability insurance. One of them will do if you're worried that they maybe aren't giving you the best advice, or you're worried that maybe another one will have a better discount. Check two. But you don't need five, much less nine.

All right?

So save yourself some time there. The other thing to keep in mind is rarely is the difference in price you're getting from one agent to another agent a result of their discount. For the most part, you're getting the same discounts from every agent. And so you got to make sure when you see that a policy is substantially differently priced, you need to make sure that you're looking at the same policy that you're comparing apples to apples. For example, one thing an agent might do is they leave off the cola rider, the cost of living adjustment rider. This is something if you're buying a policy in your 30s or your 20s, you need to buy, because if you get disabled, you need that benefit. If you Get a long term disability till you're 65 or whatever. You need that policy benefit to keep up with inflation. And so that's something that's worth buying when you're 30. Maybe if you're buying a policy at 58, you don't need to buy this, but if you're buying it at 32, you do. So if one agent is showing you a policy without an inflation rider and the other one isn't, well, of course the policy without the inflation rider is going to be cheaper, but that's not because that agent has given you a better deal. They're just selling you a different policy. And in some respects they're probably giving you a worse deal. So make sure you're comparing apples to apples in that respect and have the agent put up multiple different policies and talk to you about the pros and cons of each one. Yes, this one's going to be another $115 a month, but here's what you're getting for that $115. So is that worth it to you? Let's get you this one. If not, let's get you that one. The other thing you need to do that drives agents nuts is I can't believe how many people lie to them about their health problems, about their dangerous hobbies, whatever, right? These insurance companies have access to your insurance claims. They all go in a database and they check them. So you tell the agent that you don't have any medical problems whatsoever, and the insurance underwriter goes and looks at your prescription history and sees that you're on Metformin. There's going to be some questions and you might have a denial. And getting a denial for insurance, for disability insurance is a very bad thing. And the reason why is that a lot of docs are eligible for a guaranteed standard issue policy, particularly while you're in residency or fellowship or while you're working in an academic center, a big medical center, you often have access to one of these where you can get the policy very quickly without having to prove that you are a good bet for the insurance company. And so if there's any doubt whatsoever about your health status or you being declined, you want to do two things. Number one, you should apply for a GSI policy. If you're eligible for one, you can always get a fully underwritten one. That might be cheaper afterward, but get the GSI one in your pocket to start with. And two, you want to have that insurance agent shop you around informally to call up the underwriter at principal or at emeritus and Say, hey, I got this doc. He had testicular cancer eight years ago. It never got out of his testicles. It hasn't come back. He's been cancer free for seven years. He gets scanned every year and it looks fine. It's been seven years. Is this gonna cause him a problem? Applying cause, we don't wanna get him declined. And so that's what a good agent will do for you if you had any sort of medical problems in the past. But don't hide these from the agents. The agents are not the ones doing the underwriting. That is a completely different person who has access to all kinds of information that maybe the agent doesn't even have access to. So be honest with the agent, all right? Because that's going to run you into problems. You'll get declined, and then you won't be able to get insurance and becomes a big problem. That's one of the questions on all the applications is had you been declined for insurance? You don't want to be answering that question. Yes, it's going to make it a lot harder to get. Now, occasionally I run into docs, they literally, they just can't get disability insurance. What are your options if you can't get it? Well, remember, you don't necessarily need disability insurance. You just need a plan. That plan might be, you know that you have a family trust with $10 million in it. Great, that's your plan. If you get disabled, the family trust will support you. Your plan might be your urologist's spouse is going to support you in the event that you get disabled.

Right.

Your plan might be that you're now financially independent and you no longer need disability insurance. You need a plan. You don't necessarily need insurance. So think this through. Put the plan in place. If disability insurance is part of that, buy disability insurance. But think about the plan to start with.

All right.

Hope that's helpful to you when it comes to thinking about disability. Thinking about disability insurance. But this thing is important. Doctors need this. Almost every doctor needs this for at least part of their career. And so if you don't have disability insurance and you don't have a plan in the event that you get disabled, one out of seven docs that happens to you need to put that plan in place. All right, well, shoot. Our sponsor for this episode is also our disability insurance list. I think I've talked enough about disability insurance, but there's a reason we have a recommended list there. These are people that sell policies to hundreds of doctors a year. They know the ins and outs of these policies, they can help you get the policy that's right for you. Yes, they're going to get paid for it. You ought to spend time to get all your questions answered because they're getting paid a nice commission for it. Okay, but go to this list because they're good people and they're going to help you get the right policy. Okay. Whitecoatinvestor.com insurance is the list.

All right.

If you want to come on milestones, you apply whitecoatinvestor.com milestones. We'd love to have you. We want to celebrate your successes. We want to use them to inspire others. We want to put on the content that you are interested in listening to, whether it's on your commute, while you're working out, while you're puttering around in the garage, whatever it is you do. We want you to be able to have something enjoyable and educational to listen to. You guys are great. Thanks for everything you do. See you next time on the 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.

Sam.