MtoM #161: Nurse Becomes a Millionaire and Finance 101: How to Get Started

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 161, Nurse Becomes a Millionaire. We estimate that 80% of doctors need, want and should use a financial advisor and or an investment manager. Some investment gurus, such as Dr. William Bernstein, think my estimate is way too low. At any rate, if you want to use an advisor temporarily or for your entire life, there's no reason to feel guilty about it. Just make sure you're getting good advice at a fair price. If you need help updating your financial plan or just getting one in place, check out our list of recommended financial advisors@whitecoatinvestor.com financial advisors. You can do this and the White Coat Investor can help. Alright, before we get into our interview today, a couple of promotions I want you to know about student loan advice. This company we've started to help you get a fair shake with your student loans. They're running a promotion. It goes from March 11 through March 19. And if you book a consult, we are giving you continuing Financial Education 2023. This is a fantastic course. It's like 50 hours of wellness and financial content. It's good for CME and it's also just fantastic information. So you get that for free once you complete a consult. If you book it with SLA studentloanadvice.com between March 11 and March 19. So check that out if you've been wanting to get some advice about your student loans. If you're not sure you're managing them right. A few hours with student loan advice, or actually I shouldn't say a few hours. It's one hour with student loan advice is going to provide you the clarity you want in making sure you're managing your student loans properly. All right, you've got a few more days. Those of you who are students. The White Coat Investor Champion program, right? This is where we try to give away a copy of the White Coat Investors Guide for Students to every member of a first year class. We expanded it a little bit this year. It's not only MDs and DOs and dentists. We'll also send them to PAs and NPs and pharmacy students, but we can't afford to send them all individually. We gotta send boxes to your entire class. So we need a champion to pass them out. That's all you've gotta do. You get WCI swag, you save your classmates millions, you pass them out a free book. There's nothing bad here. It's great. Whitecoatinvestor.com Champion is where you sign up. If nobody has handed you a book and you're a first year student, that's because we don't have a champion for your class. We need you to volunteer and you can do that@whitecoatinvestor.com Champion. Stick around. After this interview, we're going to talk a little bit about how to get started. All right, we got a great guest today. He's a nurse and he's also a millionaire. Let's get him on the line. My guest today on the Milestones to Millionaire podcast is Tim. Tim, welcome to the podcast.

Thank you, Dr. Dali. Thank you for having me.

Tell us what you do for a living now, what you're studying to become, how far you are out of college. Tell us a little bit about your career before we get into what you've accomplished.

Of course, of course. So I am a registered nurse. I started becoming a nurse around 2011. I was about 26 years old and did a little bit of that as well as some army reserve time and then eventually decided to go back to school at the young age of 37 and become a CRNA. So I'm in the midst halfway through CRNA school at this point. But in spite of that, for our family, we've been able to meet a pretty significant milestone.

Yeah, we're pretty excited about your milestone. You are a millionaire. Congratulations.

Thank you.

I don't think I've ever had a student on here that has accomplished this milestone. So you mentioned a family. I assume there's a spouse. Does your spouse work?

Yes, she does. She's a director of marketing.

Director of marketing. Okay. So when did you first start really earning money? It sounds like you became a nurse at 26. You were doing something before that. What was that? Were you being a ski bum or did you have another career?

I was, I would say bum. I would just remove ski. But yes, just kind of like intermittent jobs. As I got done with college, I was one of probably many students who graduated with their first degree and didn't know what to do with it. And then nursing kind of walked into the picture and so working, you know, part to full time to facilitate a second education. And so that's why you see a little bit later of a start, but eventually graduated with that as a nurse at 26.

Okay, and you've been married how long?

I've been married for almost 10 years.

10 years. Okay. And what was your net worth right after you got married?

I would say probably less than $10,000 something in around there.

Okay, so you're basically started with nothing, nothing. In the last years you became last 10 years you became a millionaire. What was your range of income over that time as a household?

So we ranged, I would say probably about 100, 120 at the earliest upwards to about 275, 290.

Okay, so quite a range there. So what kind of nursing did you do?

So I was fortunate to work in several different hospitals here in Arizona and I've worked at every ICU you could possibly imagine. Cardiothoracic, neurosurgery, medical, surgical. And then I did flight nursing for a couple years and then I also did some nursing in the Army Reserve. So I tried to get a smorgasbord of experiences and challenges throughout my career.

What's the most you ever made personally as a nurse in a year?

I'll give you two answers for this. Throughout the whole year, I would say probably 120. However, there were some time periods where for example, I made like $50,000 in about two months. I ended up doing some army stuff later that year which kind of capped that ability. But that was probably the most I ever made as an rn.

Okay, so you know, let's call it an average of maybe 200, maybe a little bit less on average over the last 10 years. But basically half of what you guys have made for the last 10 years you've been able to hold onto and turn into wealth. How did you do that?

So I'll kind of back up a little bit. I'm like many probably people where they're parents never talked to them about money. Like that just wasn't a conversation you knew as a part of life, but you didn't know any, anything more than that. And you get the arbitrary you should save. But any follow up questions didn't really yield anything. So my dad, the one thing he did do, and I appreciate it very much, is when I was around 25, 26, when I was graduating is he gave me a Dave Ramsey book, Financial Peace University. And that kind of opened my eyes to how money impacts every part of your life. And so what I decided to do is start educating myself and I started challenging his thought process. That's where I found yourself. That's where I found other fire websites and sources and other blogs and other books. And I tried to challenge those concepts and try to understand the financial environment. And once I did that, then I tried to then bring my wife as we got married into the picture which financial disagreements is One of the top five reasons people get divorced. And so there was some turbulence, I guess would be the best description to kind of get on the same page for me to understand where she's coming from and her to understand where I'm coming from. But eventually we got on the same page. We got into a common goal. And once we had that common goal with shared understanding, like she understood what we were doing, I understood what we were doing. We had some help with a financial advisor to kind of educate us. He taught us, which I'm extraordinarily appreciative of. But eventually we got to the point where we're managing our finances on our own to try to achieve our own goal, which our goal was to be a millionaire before we were 40. And since we are on the same page, we were fortunate enough to be able to accomplish that goal even two years early at the age of 38. So it really was being on the same team. It was understanding what we did and creating a common goal and back planning that and saying, this is what you have to do to accomplish that.

Yeah, you became a millionaire at the same age. We did very different pathways.

Right.

In my 20s, I basically didn't make anything and then made more. Coming and becoming a doc, coming out of residency at 31. And your pathway, of course, bumming around for a little while, getting married and then getting serious and working hard and saving a whole bunch of it got you to the same place. There's lots of different pathways, it turns out, to wealth, but they all share a few things in common. Generally, if you're going to be a millionaire before 40, you're going to make some good money. And you guys made good money. You're going to carve out a big chunk of that money. And you guys seem to have done that. And you're going to invest it in some sort of reasonable way. And I'll bet you've done that as well. How have you invested your money?

A majority of our money has been in index funds, has been in S and P, total stock. We've tried to keep the investments in a place where it just mirrored the general market because from our understanding, it is most mutual funds, most advisors aren't going to beat the market. So I wanted to utilize that. So we did a lot of that. And then we also were fortunate with our house. Obviously growth over the last few years for a lot of Americans has been huge. So having our house increase and appreciate has been an immense part of that value as well.

Tell us about your net worth calculation. What assets do you have? About how much are they, how much debt do you have, et cetera.

So at this point, net worth is about $1,025,000,000. And what that's made up is about $450,000 for our house, a little over $700,000 for pre and post tax retirement, it's about 60, 40 in Roth versus traditional, about $60,000 in stock options, about $60,000 in 529. And then I have about $36,000 in student loans, which unfortunately will be going up over the next year and a half. And then about $10,000 in a car, which should be paid off over the next year.

No mortgage.

I'm sorry. So we owe about a little less than $400,000 on our mortgage.

Okay. All right. And that all works out to $1,250,000. I won't verify the math, but it sounds like you're more or less in the right place. I'm curious your reasoning behind borrowing for school. I mean, you're a millionaire, right? You've got all these other assets you could draw upon. How come you decided to take out student loans?

I don't know if this was the right answer. And I've struggled with it. My wife and I have talked about it. We've talked to other people about it because there was a decision that had to be made. Decision point that said do we limit our expenses over the next year and a half, two years, and then just concentrate on negating all of the loans or do we live a certain life and limit some of the loans? Like there's a lot of students who walk out from CRNA school that have hundreds of thousands of dollars worth of loans. I will not be one of those. So what we did is we compromised and what we thought was an okay option to mitigate risk. And we have been intelligent and prudent in our spending, but still living our life, but eliminating a large portion of the loans that we would have. So Instead of owing 250 or 300,000, we may owe, we're probably going to owe about 100, but that's going to. With an income coming out as a brand new crna, that's very feasible. That's something we can pay off in six months to a year but still live our lifestyle. And for us, that, especially my wife, that was important. I got deployed previously and spent a lot of time away. And so having that consistency and having that for our family, it was a little bit more important this time than I think maybe it was in the past, when we were trying to grow our wealth.

How old are the kids now?

So we got a two, four and a six year old.

Okay, so still young years for sure.

Yes.

You didn't get a lot of education about money. What do you plan to teach them about money?

I've tried early, just simple things that kids understand. I want to use their child development level. So for example, my 6 year old and 4 year old, they want to buy toys. Okay, let's talk about how much that toy costs. How much money do you have in your bank? What change do you get left? Can you buy this thing over here if you bought this one over here? So what I'm starting out with, and I don't know if this is 100% the right way, but we're me and my wife are starting out with, is using what they developmentally find interesting and what they can handle and trying to show how money may impact that and how it will change your decisions later on. I think it's a big part of what I would like. What we would like to do really is in order for them to progress throughout high school and later in middle school, they have to read certain books in order to gain certain privileges or opportunities. And if they can restate back what that book or that item says to me, I think that puts them in a good position to make intelligent decisions when I have zero control over anything that they do.

Yep. You can certainly lead a horse to water.

You can't make a drink. Can't make a drink.

I guess we'll find out later whether they drank or not, huh?

Yes.

Okay, well, how did it feel when you realized you were a millionaire?

It was a little surreal. You work very hard, you know, as a physician, you work, you delay gratification for a very long period of time and eventually you get it. And it was a good feeling. But I think what a lot of people realize is the feeling fades fairly quickly. And so it goes into, okay, well, now what? What do I do now? And that's one of the things that we don't actually really have an answer for. I'd love to hear your kind of side of it, because you interview people all the time. But what do you do next? What is that next goal? Because as I do the math, we expect to be around between the age of 60 and 65. We become be deca millionaires. That's reasonable. Well, we did it. What else can we do? And so some of the things we've brought in and some of the values that are important is Constantly challenging ourselves with work, finding new ways to help more people. We have other goals that are coming up. Once I graduate school, something I'd really like to do is every month I'm spending around 45 to $5,000 in donations. That is my goal, where we can do it as a family and bless other people. I think it's really important. But in general, I don't have a great answer of what you do next. So I'd say if you have any ideas, I'd love to hear them.

Yeah, well, I just. Shortly before we recorded this, it'll be several months back for those of you hearing this, but shortly before we recorded, ran a post on the blog called how to Be Rich. Not how to Get Rich, which is what most of the posts on the blog talk about, but how to be Rich. And it talks about some of the things I've learned as I'm going through that process. And it's, I think, a learning pathway for all of us, for sure. You know, we get a lot of people that complain about this podcast that all we bring on are these docs making half a million dollars a year. And we don't bring anybody on with low incomes. Well, you're a good example of somebody with, you know, I wouldn't call it a low income. I mean, you made $120,000 one year as a nurse, but it certainly isn't doctor incomes, you know, and you still managed to be successful. You've still managed to become a millionaire, as you say, you're probably going to become a DECA millionaire at some point down the road, which is more money than most doctors have, you know, net worth. Surveys of doctors show that only 10% of them have more than $5 million as a net worth. So what advice do you have for those out there that I'm not going to call them low income because I'm not sure a lot of low income people actually listen to this podcast. But let's say moderate income professionals out there, what advice do you have for them if they want to accomplish what you've accomplished?

I'll kind of compare it to what we already do in the ICU when I was working. So me and another associate, another colleague, we would have a competition, a friendly competition, to try to see who could get more people to start their 401k or 403b. And it sounds crazy, maybe to some people, but there's a lot of people who don't. No matter, regardless of their income. Nurse practitioners, PAs, residents, we talk to everyone all the way down to nursing techs a lot. A large percentage of people haven't even started it or they have no idea what they're doing at all. And so what we do, what we talk to them, is we just start approaching them with the conversation. And the number one point we talk about is you need to start now first. Just start and put more in than you think you should. If you just do that now, your future self will thank you.

Contribute till it hurts, right? Just like give till it hurts.

Yes, it does. And I remember when I first came out of school, I made, I think $50,000, wasn't married, and I ended up doing a Roth, which obviously it takes, you have taxes and then that. And it, it hurts your paycheck when you're taking 15 or 20% out. Like that takes your breath away, the first paycheck you see. But the person, I always make decisions based upon how I'm going to look at it five or 10 years later. And so I knew that later on it would be helpful. So I always, I will tell people, start the conversation, start now. And then what I'll do is I'll give resources that say this. I need you to understand it because just some random nurse who's talking to a resident who's overwhelmed or talking to a co colleague who doesn't know anything about money, don't believe what I say, but start educating yourself so you can understand a hundred percent what you're doing. Because you worked too hard in nursing school or as a physician not to take advantage of the income you're being provided. And you are absolutely, especially physicians, way smarter than what it takes to be a financial, like to own your own finances. Like what you know about medicine I think is much harder than what finances provides or what you need to know about finances. So we talk to them, we say, let's start having this open conversation. Talk to your spouse, if you're married, start educating yourself. Start now. And then the final piece is because people are like, I don't know where to start. Well, we can real quickly put on a piece of paper and go, okay, how much money would you want? How much annual salary would you want in retirement? Okay, how much is it going to take? If you do a 4% or 3.5% withdrawal, is that going to, how much are you going to need to accumulate? Let's back plan that. And I'll do that real quick in less than five minutes just to give them an idea that goes, oh, that's how much I need to put in. And so now now they have a framework and a conversation that hopefully they build upon. Once you have that, it's 100% possible. Is it maybe a little bit. Is it easier if you're making $400,000 or $500,000?

Yeah. Gotcha.

But you can 100% do it if you're making 60, 90, or 100. It's very feasible. It's very doable. You just need to start talking about it, educate, and plan.

Awesome. Great advice, and congratulations to you, Tim. You've accomplished something incredible. It's inspiring to others, and I hope others take from your message that this is not only possible for you, but it is possible for them. So thank you so much for being willing to come on the podcast.

Yeah, thanks for having me. Dr. Dalian, it's a privilege. And thank you again for all your help. You've been an immense, immense resource for me and a lot of my colleagues.

It's our pleasure. Okay. I hope you enjoyed that interview. Tim's great. What a nice guy. No wonder he's being so successful. They're killing it. They're doing awesome. Their income's about to go up dramatically, and they're gonna be able to save even more. I mean, imagine already being a millionaire before finishing, really, your training for your eventual career. It's pretty awesome. So they're just doing awesome. So super proud of them. I promised you at the beginning that we'd talk a little bit about getting started. Obviously, you don't get started as a millionaire. Right. You get started at the very beginning. And for many of you, within the sound of my voice, getting started isn't even starting at zero. You're starting out in a huge hole. And so I think the best way to get started is to figure out where you stand. And you might have to pour yourself a stiff drink to really figure out where you stand. But I want you to do this if you're single, you know, do it just with the drink. If you are married, you need to include your spouse in this process. Okay? So two stiff drinks and your spouse and some time together without anybody interrupting you and actually sit down and figure out where you stand. Okay? So like any business, and if you start thinking of your family, at least financially speaking, as a business has two important documents. It's got an income sheet, and it's got a balance sheet. And the balance sheet tells you what the business has, essentially a net worth. The income sheet tells you what the business brings in and what it pays out. That's essentially a budget. So if you can calculate your net worth and calculate your income and your expenses. You are dramatically ahead of the vast majority of Americans. Yesterday I was writing a blog post. I don't know if it'll run before this podcast does or not, but it was a blog post based on an article out of the White or the White the Wall Street Journal, where they had four people on who were essentially living on Social Security and to a T. They basically all said they didn't start budgeting until they were already retired and already living on Social Security. There's no reason to put it off that long. You should do it now. The sooner you get started, the better off you're going to be. So sit down, figure out where you're at. You've now got the stiff drink in hand, right? Pull up all your student loans, write them down, how much you owe, what the interest rates are, maybe what the monthly payments are. Make a spreadsheet or do it on a sheet of paper, whatever. Go to the next one, write them all down, total them up. Add your other debts, credit card debts, car loans, you know, some sort of consumer debt on a couch or a boat or an atv, whatever, your mortgage, you know, your HELOC mortgage on the other house, whatever. Put it all down there, Add up all your debts. Find out what the total of your debts is. You might be surprised. It might be less than you think. If you're like most people, it's probably more than you think. Don't actually know how much it is. It's probably more than you think it is. That's why you need the stiff drink. Okay? Now sit down, write down your income. What did you bring in last year? What do you make in a month? Now include your spouse's income. Include any investment income you have, any side gig income. Right? Now you've got your debts, you've got your income. Add up all your assets, right? Everything you own. That's worth something. If you have a house, the value of the house, right? You got the mortgage to offset it on the other side of the ledger. But you've got the value of the house and you've got the value of your investment accounts. If you have anything you've started investing in or your bank account or whatever, anything that you could sell, if you could sell it for some sort of, you know, more than $1,000 and in the next month, then you probably ought to include that sort of a thing as an asset. Okay? So you put your assets on one side, you put your liabilities, your debts on the other side. You know, you add up all your assets, you subtract all your liabilities. That's your net worth. Write that down. That's where you're starting. And I want you to repeat this exercise once a year. Just by measuring this, it's going to improve. You'll pay more attention to it, and you'll try to win at life in finances. And winning means that number's going up each year, even if you're starting at minus 400,000. If next year you're minus $250,000, you're winning, you're going in the right direction, you're not quite back to broke. You know, that guy living under the Aqueduct actually has a higher net worth than you do, but you're going in the right direction. Likewise, on the income sheet, right, we've added up your income. Now add up your expenses. Figure out where your money's actually going to. You can go back to the last three months and do it and say, okay, well, this much went toward food, and this much went toward restaurants, and this much went toward the rent, and this much went toward a car payment. Add all that up and offset it. Put that next to your income. If you subtract all of your expenses from all of your income, what's the difference, right? If it's negative, you're really in trouble. You're hemorrhaging money, you've got a debt emergency, you're in a bad place, okay? So you've got to adjust that. You've got to get the expenses down, you've got to get the income up. You got to make that number positive. And probably more importantly, it's got to be significantly positive. For doctors, I tell them 20% of their gross income needs to be going toward retirement. That means when you take what you're earning and subtract what you're spending, there better be at least 20% of it left. If there's not, you need to start making adjustments. And chances are, by tracking this, you'll see some places where money is going that you don't really care about. You know, maybe you don't really care about eating out that much. You don't care about fancy restaurants, and yet you're spending a significant amount of money there. Well, cut that out. You're not going to be any less happy, and you'll have a whole lot more money. You know, it might be, you know, cars, it might be vacations, it might be kids, activities. Who knows what it is? But look for those things where you can cut expenses and get that savings rate up. And once You've got that savings rate up and you just got to figure out how to invest it. And that part's actually the least complicated part. For the most part. You're putting this money into retirement accounts. Once those are full, you can invest it in a taxable account. And typically you're going to put that into low cost, broadly diversified index funds as the mainstay of your portfolio. You can put everything like Tim did, everything in his portfolio is basically going into total stock market index funds. That's okay, it's not crazy. And it's super simple and easy to do. And you know what? If you keep doing it year after year, eventually you become a millionaire just like Tim was. And so that's basically the process. But does that take a little bit of time and effort? Sure. You gotta log into the 401k website, you gotta create a password, you gotta look at the document and figure out what's going on in there. You got to figure out which ones are the low cost, broadly diversified index funds and actually allocate money in there. You have to transfer money from your bank account to your investing accounts. You have to do a few chores, yes, but none of them are hard. They're way easier than whatever you're doing day to day. And you can do this step by step, I promise. It becomes easier as you go along. It gets exciting as you see your net worth starting to go up. And it's exciting to actually be in control of your finances. And it brings a great deal of peace into your life as well. Fewer fights with your spouse, less worry, less laying awake at night worrying about money. And all of a sudden, after a while, you're able to not only not have to worry about money yourself, but able to be a blessing in the lives of those that you care about. It all comes from getting started. So get started today. We estimate that 80% of doctors need, want, and should use a financial advisor and or an investment manager. Some investment gurus, such as Dr. William Bernstein, think my estimate of 80% is way too low. He estimates it at 99%. But at any rate, if you want to use an advisor temporarily or for your entire life, there's no reason to feel guilty about it. Just make sure you're getting good advice at a fair price. If you need help updating your financial plan or just getting one in place, check out our list of recommended financial advisors@whitecoatinvestor.com financial advice advisors. It's under the recommended tab on the main website as well. You can do this the White Coat Investor is here to help you. 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.