MtoM #144: IMG Comes to America and Becomes Financially Successful and Finance 101: Guidance for International Medical Graduates

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

This is White Coat Investor podcast number 144. IMG comes to America and becomes financially Successful. 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. One in seven doctors get disabled at some point during their career. Because these policies can only be purchased through brokers, we put together a list of vetted agents who are experienced with working with the specific needs of medical professionals 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 and feel the peace of mind that comes with knowing you have the optimal policy in place. You can do this. A White Coat Investor can can help. All right, this episode is all about the IMG experience. IMG International Medical Graduate. We're talking a doc that grew up somewhere else, went to medical school there, and then came here either for residency or fellowship, and has practiced here. This is a challenging thing to do to go to a new country, figure out not only their medical system, but figure out their financial system. And so it's a little bit of a barrier for lots of our listeners now. They often have one big advantage. They often come with no student loans, which is a huge advantage for IMGs. And you should totally take advantage of that to be investing right from the get go, where a lot of docs are trying to get their student loans paid off. But even so, it's tricky to learn all this stuff, all this new financial stuff and start your life over. So we've got an interview today with a doc who came here with two suitcases and a medical diploma and has become financially successful. So I want you to listen to her story and afterward we'll talk a little bit more about the IMG experience and what you can do to make sure you become financially successful. My guest today on the Milestones to Millionaire podcast is Raquel. Welcome to the podcast.

Thank you for having me. You have been an inspiration for so many years. It's such an honor to be here.

Thank you very much. All right, tell us what you do for a living, how far you are out of your training, and what part of the country you're living in now.

So I'm a physician, a radiologist. I actually was born and went to medical school in Brazil. I graduated like 25 years ago. And five years later, after I finished my radiology residency in Brazil, I moved to the US to pursue fellowship. So I live in the Boston area and always have lived in the Boston area.

Okay. All right. And you have recently become financially independent, I understand.

Yes, thanks to you and all the guidance I received from the white coat investor infrastructure.

Okay, so tell us what financial independence means to you.

Gives me the freedom to choose as a physician what I want to do, and that led me to change jobs to open a new venture. So it's freedom that is excellent to have.

Yeah. How did you calculate that you were financially independent?

I wanted to have, like, passive income. So in front of us a. So about 38% of my wealth is from real estate. So that's passive income. That is streamed monthly and from the retirement accounts and from the savings accounts, personal post tax accounts.

Okay, so when your income was more than you were spending, you figured you were financially independent.

Yes.

Okay. All right. Well, tell us a little bit about your journey. You've been at this for a while. I mean, there's a lot of international medical graduates out there who haven't really had any experience with the US Financial system. Come here and don't understand anything about it. You've apparently navigated that process enough to build wealth to the point where you're not that old and you're already financially independent. So tell us about your journey.

Yeah, it has been full of ups and downs. I arrived in this country 20 years ago like I had two pieces of luggage and my medical diploma. I didn't have any financial knowledge, particularly about the U.S. financial system, but I had learned luckily from my father to. To live below my means and enjoy simple things. So I did that during my fellowship and first years as an attending. And that brought me to save some money and get a head start when I needed to have some cash. And that is just the beginning because that was all I could do at the time. I didn't know about retirement accounts. I don't know about credit history. I didn't know about all the financial system, the investments, the cost of investing. So once I had your book in 2014 and I read it, I said I need to do more than just save. I need to be proactive. I need to take charge of my financial life. So I read each chapter, like, highlighting and doing everything I could. And then I started acting up on that. I had some assets, and I had asset under management financial advisor that was charging a large amount of money and wanted all my money to go into that account and never was discussed. The financial plan was never discussed. Diversification, like with real estate. And at the time, I was interested in real estate. So every step along the way, and particularly subsequently with the podcast, in 2017, you became a companion on my bike rides to work and on my jogs. And that even encouraged me further to make changes.

I mean, clearly, like most doctors, you made some mistakes, but even before you became connected to the white coat investor, you were doing well. I mean, you became a millionaire five years out of training. Tell us about that. What was it that allowed you to be successful despite not necessarily being completely financially literate yet?

I think you have been discussing this about living below your means and always saving. So even though I arrived to this country and I had a research assistant position that could make back then $23,000 a year, I always had strived to save some amount of money. And that adds up. And having a simple life, I think the pleasure in life can be achieved with so many simple things. So I liked cooking. I would bring my food to the hospital, I'd bike to the hospital. And that gave me so much happiness. And seeing my wealth increasing was very pleasant.

Yeah. Now, most doctors that go to medical school in this country, they end up having a pretty good credit score because they borrowed a whole bunch of money to pay for medical school and then started working on paying it back. When you got here from Brazil, you might not have even known what a credit score was, and you certainly had no U.S. credit history. So tell us about what you did there.

Absolutely. I never heard about credit history. I had zero credit history. I got my Social Security when I arrived. And as most foreigners, I didn't even know that I had to build a credit history, like if in the future I wanted to buy a home or to borrow any money. So a friend of mine alerted me about credit history and I bought a used car from the car agency. I got a loan. It was a very high interest rate, but I wanted to build the credit history, and I did that. But to my surprise, a few months later, I learned that the car loan was not being reported to any credit agency. So I was actually not reporting. And they knew that was my intent, but was never clarified. So I kind of looked around and the credit union, those are usually good resources. So I think I wanted to emphasize, for the foreigners listening to look at their credit union as an initial, like to get an initial credit card to get a small loan, and I was able to refinance with the credit union, I got actually a lower rate interest rate and they started reporting my history. So I started having credit history pretty late in life.

Now here in the US we have an Alphabet soup of a retirement account system. I mean it is hard for those of us who grew up here to wrap our minds around 457s and 403bs and SEP IRAs and back backdoor Roth IRAs. How did you learn about retirement accounts and why is that important for IMGs?

Yeah, so I in other countries, I think most countries have pensions. So US is unique that you have to save for your retirement and that's the main source of your income after retirement. So I never heard about retirement accounts and so I didn't contribute in the initial years as trainee and as an early attending. And then I start learning about it and I was dragged more towards the 401k like tax deferred account even during my early years as an attending when my income was not much and I wasn't sure about what Roth meant and the benefit of early Roth investing and the power of like compounding interest over the years. So it was a very steep learning curve. But thanks to you. I take notes. I did your course online and I had to take notes like each, which each one of them meant. So I encourage all the IMGs, the foreigners to not be afraid. It is an Alphabet soup. But to take your time and try to understand and not be afraid and start investing. And if you are a researcher, if you are early on in your career with smaller income to do the Roth account post tax investment and then later on you can do the 401K. And then I never heard about BackDoor Roth IRA until your podcast. So I started doing that when I was listening to your podcast later on, many years later after I wasn't attending.

So looking through the notes you sent me before our interview, you mentioned that the first financial advisor you had was charging you 3% of assets under management. Is that right?

Yes, was 3% asset under management and he wouldn't do much and all he wanted was for me to get my savings into his account and the returns were dismal and I was just pretty much paying for paying him to not do much with my money. So I read your book and I said I need to understand better. So I changed to another financial advisor that charged asset in the management as well fee and I was upfront with her. So she decreased the fee to 1.2% if I remember correctly. But still her goal was to have assets under her management. And we never discussed having a financial plan. We never Discussed how to diversify. And at that time I was interested in real estate and other types of building wealth in other ways. And it was a steep learning curve. About Financial Advisor did you have a.

Hard time buying a house or getting a mortgage? As an IMG tell us about that experience.

Yeah, initially our credit score was not very good because we didn't have many years. And that's one of the main factors for credit history. So that's why I encourage all the foreigners to start as soon as they move to this country to borrow, even if it is small amount, so they can build their history. And so I we only could get from the credit union a 5, 1 ARM 30 years loan. We had minimal down payment actually was a very risky decision and that was the only loan we could get. And luckily the interest rate was pretty high and went down. So when the five year kicked in it decreased a little bit the mortgage payment. But at the time we were mostly paying the interest rate. And because we didn't do, we didn't pay a down payment, significant down payment, we had to pay the private mortgage insurance. So that's pretty much money going down the drain. So I bet that a lot of physicians, particularly foreigners that don't have a large sum of money, like usually 20% for down payment, end up paying the private mortgage insurance, the pmi, which another Alphabet soup letters that I learned. And so that was very risky, but I learned a lot during the process. In 2008, five years later, I had bought the apartment, I had two kids, I wanted to move to a bigger place was an apartment in Boston. And I tried to sell the apartment to buy the house and I couldn't because it was right in the peak of the crisis, the financial crisis in 2008. So the apartment was worth less than what I had bought for and I only had paid the bank interest and pmi. So I had rented the apartment from the bank and I was responsible for all the liabilities of the apartment, but really didn't have much ownership. So I stayed in the apartment for a few more years. And at that time my husband was graduating radiology residency and interventional radiology fellowship, so he got an attending position. And we continue to leave the same way we with the same expense levels we had before. So that allowed us to save significant amount of money. And a few years later we were able to get a house and had a large down payment and the mortgage process was easier at the time. We had more credit history and it was easier.

Yeah, and you guys learned from that because you didn't just buy your own house, not quite half, but a significant part of your wealth is now in rental property. So what got you excited about investing in rental property?

Yeah, so our apartment didn't sell. Like, even when we bought the house a few years later, it still was worth less than what we had bought for. We had mostly paid interest rate and private mortgage insurance. So I decided to keep the apartment and rent. It was scary. It was a new endeavor, but it turned out to be a very profitable experience. So 11 years ago, I enjoyed it was actually not a burden to have the property to manage myself, to find tenants, good tenants, and I never had any issues with the tenants, so. So I started buying other properties. So I leveraged, like the interest rate was very low, like 2%. So I have properties with very low interest rate, like 2, 2.5%, and they have been rented. And it has been a very profitable experience.

Yeah. Now you haven't worked full time your whole career. You spent some time with kids, working part time, but still found time to do the real estate on the side.

Yes, it's something that I actually enjoy. I think it's not for everybody, but I like the properties I bought. I built then or renovated them. So I was able to get a very good income after the renovation. So I was fortunate to have the savings to invest in the properties both to buy, to purchase then and to renovate. So I got good deals from the properties and was able to manage that. I think that's with kids. It gives a flexibility that you can actually do at your own time. And I think it's like having autonomy of what you do. It's so crucial for someone's happiness and fulfillment. So I think that's what I draw from it in terms of fulfillment and the independence and autonomy on their business.

Yeah. You know, I often talk about three different pathways to wealth, one of which is going and putting your nose to the grindstone, working hard, saving a good chunk of your income, investing it wisely. You've done that. Another one is kind of entrepreneurship in a box. You know, things like franchises and real estate investing, that sort of thing. And you've done that. The other one, of course, is, you know, riskier entrepreneurship, opening your own company and trying to do something that hasn't been done before. You've also had the opportunity to do that. I think financial independence has given you the freedom to take a chance on something like that. What's it been like now, running your own company?

It has been fantastic. And again, thanks to you, if you Weren't for all the guidance I received from the white coat investor, the courses, the book, the podcast would not have been possible. But I was able to leave the job I had as a physician recently and open a company that is providing clinical trial and research services to pharmaceutical companies and contract research organizations. And we have a group of physicians working with us. And this was a company that was created by a physician to empower other physicians to let them be the experts, let them be in charge of their lives and make extra money as a result of that. So it has been an amazing experience. I felt empowered by you like to become financially independent and I really feel happy that I'm able to pass that along with the company. Provide consulting work for other physicians to have an extra income and add to their path to become a financially independent physician or professional.

Yeah. All right. Well, you are an American success story. You are living the American dream. You came with nothing but what was in your suitcases and a medical diploma and have become successful in just about everything you've done here. What advice would you give to a younger IMG that's just arrived or thinking about coming to the US and wants to be successful like you've been here? What advice do you have for them?

I think first and foremost enjoy simple things. This is an amazing country. There is so much joy in just being outdoors and cooking at home and enjoying friends. Those are priceless. So if you don't spend much and then you start building your credit history very early on. So get as small even it's a credit card that you initially I would put a hundred dollars because they only gave me a hundred dollars and then I would put the money up front and then I had to spend and then the next month they increased to 200 and then I did that and then to 300 and then a thousand. So every month I'll be at the credit union like asking them to increase my my so don't, don't waste time. As soon as you arrive in this country, go and start your credit history. If you get a loan, if it's a large loan like think about the possibility of refinancing, not having penalty, not being stuck to a very interest rate, high interest rate loan. Learn about retirement accounts. Like I have been able to save even when I was a research assistant. So like save and try to invest in retirement accounts early on. Small amounts adds up. So it's small savings that you can do and adds up. Understand all the types of retirement accounts, the Roth ira. If you are a low income, a Low earner, a low income and all the other types of retirement accounts. And learn from James, your resources. It's unbelievable resource, very tailored for physicians. So the book like you can skip some chapters as an img because we don't have that usually, but otherwise there are so many resources. The book and the course is like the dumbed down version of the course that you have is like, I think IMGs will benefit from that because it's all new, all the, the terms and all the nomenclature. It's all new. And be careful. Like if you are a foreigner, many of us want to have a place and want to buy a place to call home because you are away from home. And you want to sometimes to feel that you have a home, but don't rush. Like you can rent. It's okay. And it's probably going to be your last, your biggest expense buying a place. So try to take it carefully and only buy after you check that you'll be in that area for a long period of time, that you are not actually being going to be like locked into that place and having to work for that employer. Give yourself the freedom to be able to move. And little by little, if you follow the advices and if you get educated, I'm sure you'll be a millionaire soon.

Yeah. Awesome. Well, good advice. Well, congratulations to you and your husband on your success. You guys have done fantastic and it's pretty awesome to hear your story. So thank you so much for sharing it with us and using it to inspire others to do the same.

Thank you so much. It's such a pleasure to be here. And thank you so much for all you do for us physicians and other professionals.

All right. I hope you enjoyed that. I like her focus on figuring out our debt systems and figuring out our retirement account systems and just realizing that you can do this. And I think that's a big part of my message for you as an img. You can be successful. I have met many, many, many docs who came here as IMGs who were very successful. And there's a few reasons I think for that. One, they come without student loans. That helps, right? Two, they grew up in a situation economically where, which is usually not awesome. You know, even if they are, you know, their parents were in the professional class in this other country. It's often, you know, American middle class, true middle class, not all you white coat investors out there calling yourselves middle class, but a true middle class upbringing or less. And so they have lower expectations of what life has to look like. They also are Often very big on saving, particularly for the next generation, helping the next generation get ahead. This has been the immigrant mindset in the United States for Centur. You know, you want to come and have the American dream and your kids have a better life than you. And so people tend to be big savers, which is a big piece of it. So you come here, you work hard, you save a lot of money, you figure out the system as best you can. And a lot of you do become very, very successful financially like this doc. So it's pretty awesome to hear that story. A couple of tips I have for you as an img. One is to recognize that there is another language you need to learn. It's not just English. It's not just medicine. You also have to learn to speak finance. You got to learn what these terms mean. You know, you got to know what a Roth IRA is. You've got to know what a credit score is and what an interest rate is and how compound interest works. You got to learn these basics if that's hard for you. We have found that a huge number of IMGs take our fire your financial advisor course because it teaches financial literacy. Actually another great resource. You're probably not a student still, but picking up the white coat investors guide for students. What a lot of you don't realize is like the last half almost of that book is just financial literacy. It's terms that you need to know. I mean, it reads a little bit like a glossary, but it's gold, right? It's financial terminology and literacy that you need to know as a doc taught by another doc. It's great. And it's cheap book, right? It's our guide for students. We give it away to the first and your medical and dental students every year. Go down to one of them that doesn't want it and take their book and figure out how financial literacy works, because we'll teach you that. But the course is great. It'll walk you through completing your own financial plan. It'll help you to interact appropriately with the financial services industry. That is not work with somebody who doesn't even do any planning with you and charges you 3% of assets under management. You won't have that problem once you've become financially literate using our fire your financial advisor course. So check that out. That's a great resource. And I've been amazed what percentage of our students taking that course are IMGs. It's a big percentage. And you just got to learn this stuff. You learn it little by little. You put away a little bit of money every month. And before long, you're not only a millionaire, you're a multimillionaire. And then you're financially independent. And you're another great American dream success story like this dog. So I hope that's helpful to you. Don't forget, at the beginning of the process, you need insurance, okay? When you don't have any money, that's especially when you need insurance, right? Because you got nothing to live on if you become disabled. Your family has nothing to live on if you die. So getting quality disability and life insurance should be the first financial chore for a doctor to complete. And many, maybe even most, don't have the ideal policy, their gender, specialty, state, or health status. And as many as 1 in 7 docs get disabled at some point during their career. Earlier today, we interviewed a doc for the Milestones podcast who got disabled. I'm not sure if you'll have listened to that interview by the time this one gets published, but if not, it's coming right up. It's a doc living on disability insurance two years out of residency. Happens all the time. You got to get this stuff. And because these policies can only be purchased through brokers, we put together a list of vetted agents who are experienced with working with the specific needs of medical professional professionals who have your best interest at heart. So if you have questions about insurance, not sure if your policy is right or what kind of policies would be the best fit for you, check out our insurance recommended list@whitecoatinvestor.com insurance and feel the peace of mind that comes with knowing you have the optimal policy in place. All right, we're at the end of our podcast. It's been wonderful having you. If you'd like to come on the podcast, you can apply whitecoatinvestor.com Milestones the white coat Investor podcast as well as this Milestones to Millionaire podcast are both driven by you, your questions, your content, your experiences. This is a community. It's not Jim Dali sitting here jabbering away at whatever he wants to talk about. This is driven by what you guys want to talk about. And so keep sending us that feedback and we'll continue to help you as best we can. It's a pleasure to serve you and we thank you for what you're doing and we'll 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.