MtoM #21 - Doctor and Nurse Become Millionaires 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 21, A New Millionaire. No more wading through dozens of books at the library, scrolling through hundreds of blog posts on dozens of blogs, or checking in daily with online forums, trying to gain a financial education the way the hobbyists do. For a fraction of the price of hiring a professional financial planner. The Fire your financial advisor online course will take you from feeling anxious and having no plan to having a written financial plan. You can follow the rest of your investing career as a professional and a retiree. This course is the material that should have been taught to you in college, medical school, or residency, but never was. Fire your financial advisor also has a version eligible for CME credit. Get your financial life in order today. Go to whitecoatinvestor.com courses to sign up. You can do this and the White Coat Investor can help. All right. I hope you've been aware of some of the things we've been doing lately. We have a course sale on all of our online courses, like Fire your financial Advisor, the version of Fire your financial advisor that qualifies for CME, as well as our Continuing Financial Education 2021 course. It's all on sale from July 1 through July 12. You get 10% off any course, plus a free WCI T shirt of your choice. You can go to whitecoatinvestor.teachable.com and use code WCIJELY10 to get that discount. All right, if you are interested in applying to be on the milestones to millionaire podcast, you can apply whitecoatinvestor.commilestone and we'd love to share your inspiring story with your colleagues and peers. Let's get our next millionaire on. This is Michael, and we're going to learn about how Michael became a millionaire. All right. We actually have Mike and his lovely wife Bonnie on the Milestones to millionaire podcast. Welcome to both of you.

Thank you very much.

And tell us what's your specialty and how far you are out of training?

So I'm in emergency medicine. I am just finished my fifth full year out.

Five years out of training. And Bonnie, are you a doc?

No, I'm a nurse. I'm a surgical circulator.

Okay. And how long you've been out of school?

Four years.

Four years.

Yeah.

Four years. So about the same. Pretty close. Okay, and what is Yalls approximate net worth?

About 1 2.2 million.

1.2 million in four to five years. Very impressive. Congratulations.

Thank you.

And what's that divided up into?

So a lot of the dudes in 401ks between some solo 401ks, my work 401k and hers, we have about 390, about 45 in a deferred comp plan, which seems to get threatened every year when our CMD occasionally threatens bankruptcy. About 150 in Roth, about 315 in our taxable, about 150 in our home, about 65 between our HSAs, because luckily we've been very healthy and been putting money in them for the last four or five years. And the rest is in some cash that I always seem to have laying around more than I want to.

Sounds like a common problem and a good problem to have, right? A first world problem. That's a good one to have. I got too much cash right now.

I needed some of that when I was moving from med school to residency. And I'm like, does anybody have some money I can borrow?

Yeah, you don't want to be in that situation again. I get that for sure. So what was your net worth when you came out of training? Do you remember?

I actually signed up for a budgeting software. Figured out it was negative 187,000.

Started at minus 187,000 and you got.

That's only because I married her and she had a little bit of money from inheritance. I had about 240 in debt.

Oh, wow. So really the swing here has been about 1.4 million in about five years. So it's pretty impressive. Pretty awesome. What's been your range of income throughout your career, the two of you combined?

It's been. When I first got first pseudo year out of residency, it was about 200, but then it's been kind of in the mid to low four hundreds. Just recently did taxes and turns out we just hit 500 last year, which was really surprising. I took a lot of travel gigs during the pandemic. Just went to work wherever I could. Turns out it worked a little more than I guess I thought I did.

Turns out when you work more, you make more money, huh? Pretty cool.

Yeah, it's funny how that works.

All right, so what were your secrets to success? I mean, there are a lot of emergency physicians out there and a lot of nurses out there who have not reached anywhere near your level of success. So what did you guys do differently from them?

You know that budgeting software that he signed us up for?

I'm so glad for recording this.

I was hesitant to do it at first because just financial backgrounds, growing up, how we looked at finances, I didn't think we needed it, but he was like, no, we do. Let's get this. And he came up with a plan, and we followed it, and it's done very well.

I didn't think she was going to admit all, though, but. Yeah, but I think working together and being on the same page really helped because she was all about making that forward progress in our finances to make sure we got to the spot where we didn't really have to worry about money.

Again, I didn't want to worry either, so it helped.

So I want to talk more about this conversation you guys had back there where you were hesitant, but then you agreed to go along with it. I mean, this is the way most couples are, right? One person's kind of driving the conversation, and they are either able to convince the other person or they're not. What did he do that convinced you that this was worth at least trying?

I don't think it was one conversation because, again, we both had the idea of progressing forward. It was just, how do we do it? I didn't think we needed the budgeting software. He's like, no, let's do the budgeting software. I'm like, no, why are we doing that? Why are we counting everything to a T? Like, you should just have an idea. Again, it's different backgrounds. And I think finally it got to a point maybe that you just wore me down to try it.

I'm sure that helped. And I think I just kept pointing out the things that we could do, and I think she finally started to see some of the benefit to it, because when she's like, hey, can we spend money on this? I'm like, yes, you can stop asking. We have the budget software. We have money set aside specifically for that. And I think that helped because her mother never had always had to get permission to spend money because her and her father weren't always on the same page. And I think that helped when she finally realized that she could spend money and she didn't have to ask me about it.

Awesome. Awesome. Yeah. A lot of couples have kind of set up an allowance system where you have a certain amount of money, you can blow on whatever you want without accounting to the spouse for it. Which software did you guys use?

We used you need a budget.

You need a budget. That's certainly a popular one. All right. And you mentioned that you received an inheritance. Did anybody pay for either of your schooling in addition to that?

So we ended up doing loans for my School and we did loans for your schooling because the inheritance that I got from my dad and my grandparents passing, they had kind of wanted it to either be for higher education or for a first home. And my choice was first home. So was it maybe the best choice to do at the time?

No.

But I was trying to honor thoughts and wishes, so that's what we did.

Yeah. So we had. She came into the marriage with about 60 grand inherited. We received a gift of about 30. Right. To push us over paying off our student loans. And then she also has an inheritance of some real estate, but actually always forget to include in our net worth that we get a check for every year. Well, she gets a check and then I get to benefit from it. And it has given us about 20 to 30 grand a year. And there's actually passive income because one of our family members manages it. So that. That's been a little bit helpful. But we even. I included those numbers in our when I reported our yearly income.

So certainly some help there, but nowhere near 1.5 or 1.4 million in help. You clearly still did the lion's share of this on your own. And it sounds like by simply focusing your income on your goals, by carving out a significant chunk of your income and investing it and using it to pay down debt. So that's pretty awesome. So current debt, how much debt do you have?

Right now we owe about 425 on our home and we have some rotating credit card debts. I have no idea what it is, but it's set to auto pay in full every month. And outside of that, nothing. Nothing on cars or anything else.

That's it. Basically just the mortgage, aside from your current cash flow. And do you guys have any kids?

No, just three dogs who are luckily remaining quiet.

So you got some fur babies that you've had to balance with becoming a millionaire, but hopefully that's a little bit easier than the humankind. I find it kind of interesting. You guys talk about your different upbringings. Obviously it sounds like her upbringing was a little more well to do. There's a little real estate income on that side. There's a little bit of an inheritance coming in there. And. And maybe yours was a little bit different, but how did your upbringings affect how you view money, do you think?

So I'm not going to ask my parents to watch this. While I'll say this, I had really bad examples. My dad had a really strong savings muscle. He would save up money for weeks and months at the time and he would work six days a week doing manual labor, and then he would just take four, five, six months off until the next job showed up. But he would spend all his money down and he would pretty much have to go back to work because he was out of money. My mother was never a good saver. I'm still concerned about her soon to enter retirement, but she also had problems managing her money. She would enable my brother's poor financial decisions. They both unfortunately had some gambling issues. And I kind of watched them just let their money get away from them. And I was like, I don't want that. I kind of grew up where money was always kind of hard to come by and we couldn't afford certain things. I didn't suffer by any means, but there was always that stress there and I never wanted to be in that situation.

And it sounds like you're never going to be in that situation, so that's awesome.

I don't think so. I've got a pretty good plan in place.

Whereas my dad actually was a doctor himself, so he did well with his job. But my dad was also older and just from his childhood, the timeframe than when he was born, his thought was, everything can go terrible in a second. You have to save. You have to have little hideaways tucked away. And my mom, just based on her parents, had the same mentality. Unfortunately, while they both had the idea of let's care for things, let's care for us and our family and make sure we have a good savings and still do, let's not be frivolous for just being frivolous. Their communication together on spending was not what it should have been like. He could do what he wanted with money, but everything that she did was second guessed. And so it was an example of what not to do.

Sounds like you guys learned all the lessons you could from each of your parents, though. It's pretty awesome to kind of be changing the pattern, you know, for future generations. So that'll be awesome. But, well, okay, so let's go back. Somebody that's a med student, a resident, maybe just coming out of training, they want to be where you're at. Five years out of training. What advice do you have for them?

So I think the first thing is the plan. It helps if that plan includes a spouse or potential spouse that's on the same page. And then it's really just sticking to it. And the whole live like a resident thing works really well and we gave ourselves a little bit of a boost. Even when we came out, we started living on what I was making pre tax in residency, which felt like a significant improvement on our quality of life. And it still allowed us to have a really big shovel to dig out of the hole and then build up this wealth. And having that plan of, okay, I can pay off my student loans in two to three years worked really well. And then I was like, oh, hey, we made a lot of progress, but we're very comfortable. And we just slowly grew into our income. We still haven't completely grown into it. We could spend more money if we wanted to, but we're happy where we are. And having that control over things and that defined plan allowed us to make our money do what we wanted to do.

Awesome. Well, congratulations to both of you.

Thank you.

You've done a fantastic job that I'm sure others will find inspiring as they attempt to accomplish what you've just accomplished. So thank you so much for coming on the Milestones to Millionaire podcast.

Thanks for having us, John.

All right. Mike and Bonnie did a fantastic job and, you know, it's pretty inspiring what you can do when you put a plan together. And that plan often starts with a budget. You know, simple budget. You need a budget. Every dollar, a spreadsheet, pen and paper, whatever. You gotta actually know where your money's going if you actually want to use it to build wealth. And as a doctor or other high income professional, chances are your best wealth building tool is your income. And so you got to manage it well if you want to get wealthy. And these two have done that. And congratulations to them on that. No more wading through dozens of books at the library, scrolling through hundreds of blog posts on dozens of blogs, or checking in daily with online forums, trying to gain a financial education the way the hobbyists do, for a fraction of the price of hiring a professional financial planner. The fire your financial advisor online course will take you from feeling anxious and having no plan to having a written financial plan. You can follow the rest of your investing career as a professional and a retiree. This course is the material that should have been taught to you in college, medical school, or residency, but never was. Fire your financial advisor also has a version eligible for CME credit. Get your financial life in order today. Go to whitecoatinvestor.com courses to sign up. You can do this and the white coat investor can help. Thanks for listening to the Milestones to Millionaire podcast. We'll see you next time.

My dad, your host, Dr. Dali, 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.