MtoM #19 - Millionaire Status in 5 Years

This is the White Coat Investor podcast. Milestones to celebrating stories of success along the journey to financial freedom. Here is your host, Dr. Jim Dali.

This is Milestones to Millionaire podcast number 19. Millionaires five years out of training. If you'd like to be a guest on the Milestones podcast, you can sign up@whitecoatinvestor.com Milestones. Whatever your accomplishment has been, we want to celebrate it with you. I don't care if you paid off your credit card debt or whether you've become a DECA millionaire, we want to celebrate it with you and use your experience to inspire others to do the same. If you're finding our podcasts informative and helpful, we would encourage you to sign up for our monthly newsletter. It is totally free and includes useful, actionable information not available on the regular blog posts or this podcast. It's almost like being in a secret club. The kind of club that can boost your knowledge and enhance your wealth at the same time, with no strings attached. Sign up today@whitecoatinvestor.com Newsletter. You can do this and the White Coat Investor can help. All right, we have two special guests on this episode. We have Brian and Brenda, who are millionaires just five years out of training. Welcome to the Milestones to Millionaire podcast, guys.

Thank you so much.

Good to be here.

So tell us about what you do for a living, your specialty, how far you are out of training, et cetera.

So I'm an emergency physician and I.

Am a teacher by profession, but I have chosen to stay home while we have little kids. We have three kids that are between 4 and 10. And so I'm staying at home right.

Now for about five and a half years.

This sounds very familiar. I'm an emergency physician. My wife was a teacher. She stayed home when our kids were young. And so this is a very familiar story to me. I think I've heard this one before, but congratulations. What's your approximate net worth?

Approximate net worth is 1.2 million.

Awesome. And that's five and a half years out of training. What's that net worth made up of?

We have it divided into about 700,000 in the markets, which is mostly just what you prescribed, broad index funds, usually just the tsp. We have a little bit of tilt and we have some international. We have about 200,000 set aside in cash, which we are now going to hopefully look for an investment property. And then we have about 300,000 in home equity.

Cool. So you mentioned the TSP. Does that mean you're a government or military doc?

I Work part time at the va, which is a really incredible blessing that's come into our lives because otherwise my main gig is being a business owner where as you know, you don't get any benefits. But the VA is willing to employ us part time. And so I put basically all of my salary into the benefits there.

And the business is being an independent contract physician or something else.

We are a 17 physician group that works at a larger hospital and then some of us work part time at.

The va. Ah, I see. Okay, very cool. And what's been your range of income over the last five and a half years since you came out of training?

Yeah, so when he first came out, we started at about 160k and then he has increased that up to over $600,000 a year.

Awesome. Now 160k is not an awesome emergency physician salary. I'm assuming that's a pre partner position, Right?

Exactly. We started off as employees for the first couple of years and there's no buy in to our practice. The buy in was kind of sweat equity and we were kind of underpaid for that time. But then once we made partner, it was a dramatic difference.

Yeah, it's obviously paying off now, right? I mean, this is the same way my group operates. You don't make all that much for the first couple of years and then you get paid much better and you gotta say in how the groups run. So I think it's worthwhile for a long career. Obviously if you're only gonna work for three or four years, it might not be the way to go, but in the long run, it certainly pays off. So what has been your secret to success Here you are millionaires, five and a half years out. For the first couple of years you were making under $200,000 and yet you're already millionaires. Well, how'd you do it?

There's really no magic sauce. We did all the things that you recommend. We didn't take out much in loans to begin with. We lived not quite like residents coming out of residency, but we certainly didn't grow into our salary.

He moonlights like crazy too. Like he, he works in like four different locations and just works really hard. So I'm grateful to him for that, but that means more work for me too. But it's a choice, it's a conscious choice that we've made and a little.

Bit of specialization you guys have done.

Yeah.

Where you said, okay, your role is to go get the bread, bring home the bread, and I'm gonna take care of everything. Else. And that's a lot of what Katie did for us during our first years. Right. She took care of everything so that I could do a lot of work, and it paid off. It sounds like you had a similar experience.

Yeah. And like I said, that's a choice that we made. I could still be teaching right now and making like $40,000 a year as a teacher. But, you know, we just decided that I had more value here, you know, taking care of everything and, you know, the kids and making sure that the kids are brought up right and that they just have everything that they need, and that's all part of it.

Cool. So speaking of specialization, who's the money person in the relationship? Is there one person that does all the money chores?

I pretty much focus on he does.

Okay, all right.

Yeah, definitely.

Okay. All right. I've seen that go both ways. Sometimes it's a person working, sometimes it's a person not working. So what was your net worth when you came out of training?

We were 150k in debt.

So you've gone from minus $150,000 to $1,200,000?

That's right.

That's an incredible swing over the course of five years. Very, very impressive. And did you get any help from your parents? Did they pay for any of your schooling, or did you get any sort of inheritance?

Well, in undergrad, 40k from his grandmother. So we didn't have to take out as much in loans. You know, we didn't take out any loans during undergrad. During medical school, we took out, you know, what we needed, but certainly not as much as our peers were.

Awesome. And what about debt now? How much debt do you guys have?

We don't currently have any debt except for just 300,000. Still on the mortgage?

Yeah, just the mortgage. That's all that's left. Very cool. Okay, so let's go back to somebody that's five, maybe eight years behind you. They're looking at you going, man, that would be awesome. To be done with student loans and be a millionaire five years out of training. What advice do you have for that person?

What I'd say is what you always say, pay off your debt now. Because our financial lives received a supercharged when we paid off our debts, we were throwing all our extra cash at the debt. And then once that was gone, everything changed. We had enough to open up a brokerage account, triple pay the mortgage, open up the 529s, and be able to do anything we want. It was kind of interesting how for the first few Years we were considered the ghetto doctors in town. We didn't have all the fanciest things. But now we're able to do anything we want. And we can just cash load our brand new cars. Any house renovation we want, we can just pay for it. In fact, sometimes we have to just kind of reality check ourselves and say we can do anything we want. Now, now let's figure out what we should do. Especially with our children, we try not to let them know exactly how much we're worth and that we could do.

Anything, anything they want and overindulge and.

Better not let them listen to this podcast when it runs here on June 21st. This might be one you want to listen to on your own. All right, so let's talk about those kids. How are you trying to transmit your philosophy on money to them?

Oh, well, it's really cute. He has like tax and finance talks with the kids. Our oldest in particular, the 10 year old helps him pay the taxes and go through all of that, and he goes through the spreadsheet with them so that he sees all of our earnings and everything. And so it's important that they know what life costs. But also I think that it's important to us to bring them up with a healthy sense of thrift. We plant our own garden. I can. I know that sounds really old fashioned, but I grew up with that and just being able to. To take care of yourself, to be self reliant, to produce things by yourself. We don't hire a lot of help for things. We take care of our own lawn and just not a lot of extra things. And we have the kids work alongside us, which we think is important. It's important for them to know that hard work equals success.

Awesome. Well, congratulations guys, on your success. This is no small feat. You've really accomplished something really great here and you should be proud of yourselves. And I think a lot of other people will find your story to be very inspiring. And you certainly beat Katie and I to Millionaire hood. So it took us seven years. You guys managed to do it in five. So congratulations on your success and thank you for being willing to come on the podcast.

Well, thank you so much. We really appreciate everything you've done. We wouldn't be sitting here right now on this podcast with you if it weren't for the teachings that you guys give us. So we appreciate that.

Yeah.

Awesome. You're very welcome. It's our pleasure to help.

All right.

Pretty awesome stuff. I hate to say that's a familiar story, but that's A familiar story. That's basically Katie and my story. Maybe what it would have been if I hadn't gone into the military, maybe I would have hit millionairehood a little bit faster and would have had money. Student loans instead of time, student loans. But that's the story for a lot of docs. There's a lot of traditional doctors out there, right? And this is kind of the traditional doctor story. And it's true. If you just pay attention early on, you can be free. I thought it was really remarkable what they said about how they really felt that financial freedom when the loans were gone, not when they reached financial independence, not when they became millionaires, but when the loans were gone. All of a sudden they felt like they had money coming out of their ears, could do whatever they wanted, increase their lifestyle a bit. They were saving like crazy, maxing out retirement accounts, investing in a taxable account. And I think there's a lot of truth to that. You know, the math might show that you're better off carrying around those 2% loans forever, but that's just not the experience I see from people when I talk to them over and over again. Those who crush their loans early on are happy they're successful. It doesn't seem to hold them back in any way, shape or form. So I encourage you to really take that into consideration when you're deciding what to do with your student loans. I think you ought to take them into the corner and drop an anvil on them. If you're finding our podcasts informative and helpful, we would encourage you to sign up for our monthly newsletter. It is totally free and includes useful, actionable information not available on the regular blog posts or this podcast. It's almost like being in a secret club. The kind of club that can boost your knowledge and enhance your wealth at the same time, with no strings attached. Sign up today@whitecoatinvestor.com Newsletter. You can do this and the white coat investor can help. All right, well, we're going to have another great episode for you next week, so keep your head up, shoulders back. You've got this and we can help. I want to have you soon on the Milestones to Millionaire podcast.

My dad, your host, Dr. Dalla, is a practicing emergency physician, blogger, author, and podcaster. He is not a licensed accountant, attorney, or financial advisor. So this podcast is for your entertainment and information only and should not be considered official personalized financial advice.