MtoM #23 - First Generation Millionaire Physician

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 23.

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 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 and 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.

Alright, this is the Milestone to Millionaire podcast where we celebrate your financial accomplishments with you and use them to inspire others to do the same. So whatever your accomplishment is, maybe you got back to a net worth of zero, you're back to broke. Maybe you paid off your student loans, maybe you paid off a mortgage, maybe you became a millionaire, maybe you became financially independent. Whatever your accomplishment is, let's bring you on the podcast, let's celebrate it with you. Let's use your experience to inspire others.

To do the same.

All right, we've got our next guest coming on here who has become a millionaire recently, so let's bring him on. All right, our guest on the Milestones to Millionaire podcast today is Murali. Welcome to the podcast.

Thanks, Jim. Thanks for having me.

Tell us what your specialty is and how far you are out of training.

So I'm a pulmonary critical care physician and I'm nine years out of training now.

Nine years out of a lengthy training process to become a critical care doc.

Exactly.

And what's your approximate net worth?

So right Now I'm at $1.6 million.

$1.6 million. Congratulations. And what does that divided up into?

So about half a million is in retirement accounts, half a million in brokerage accounts and about $100,000 and then HSA and about $200,000 in Roth IRA accounts and small amounts in cash, real estate, couple other things. And I don't include my 529s or my home value into my net worth.

So it's Even higher than 1.6, it sounds like if you include all that. So that's pretty awesome. Congratulations on that, what's been your range of income throughout your career?

I started off at $275,000 at my first job out of training, and right now it's at $365,000.

Okay, so fairly typical physician income range. And you're married, you're single, married, two.

Kids, spouse work for the most part. She didn't work all throughout these nine years. Just this year she started working part time. So that hasn't been a major contribution.

At least on the monetary wise. I mean, certainly there's a big contribution being made there that's allowed you to focus on that career.

100%.

Yeah, for sure. How long did it take you to reach millionaire status? I mean, you're well over it now. So how long do you think it took you out of training to hit that?

Yeah, I would say about year and a half, two years back is where I hit the threshold in terms of actual investments.

So seven years or so.

Right.

Okay.

And what do you think was your secret, you guys, secret of becoming millionaires? Cause it's not that high of income for your net worth after nine years.

Exactly. But I think you and I, I think spoke on the phone maybe like 10 years ago. Right. I would think six months out of my training and you were doing a survey on, you know, physicians. And I've followed your blog since then. So I think a number one contribution is probably you. Otherwise I wouldn't have learned as much about, you know, personal finance, financial literacy. And I think exactly what I think you've taught all these years. Right. Live like a resident out of training. Our incomes are generally high, but the most important thing is high savings rate and low cost Vanguard index funds. And that's all I've done since graduation.

Tell us about your live like a resident period. How long do you feel like you lived like a resident after training?

I still think I do. And I did a grand rounds on financial literacy to our residents and I teach them every time they work in icu. I spend a half hour lecture on personal finance and I still think I do. My house is still less than at the same value, if not less than one time my annual income, I still think that's the biggest savings that we do is spend far less on the mortgage than compared to. I'm the head of my department and I feel the physicians who I hire almost always buy a house that's twice as expensive as mine and their cars are twice as fancier as mine and I invest my bonuses whereas people invested in upgrading their home or getting something Better. So I think I've done sort of the basic white coat investor philosophy things.

So you became rich because you spent less than all the other docs making the same amount of money. Amazing how well that works, huh?

Exactly.

What was your net worth when you came out of training, do you remember?

Pretty much zero, if not negative. Thankfully. I didn't have student loans, but before I started the White Coat Investor, I was in some ways a typical American. I actually had some credit card debt, which I built up maybe 20, 25 grand or so. You know, not crazy, but that's where I started. Which I understand compared to most people who go to school here who come out with half a million dollars in debt, you know, it's nothing. But it was pretty much, I would say, zero is probably a reasonable place to start.

How'd you get through medical school? Did you have money saved up? Your parents paid, your spouse pay? How'd you get through there without. Without a bunch of debt?

Yeah, I went to med school in India. And the advantage of going to school there is most government schools at least, you hardly pay anything. I think I literally paid $50 per year for med school in India.

That's pretty awesome. That'll save a lot of money. I think a lot of medical students listening to this just fainted when they realized that that is an option. All right, so did you receive any sort of an inheritance from your parents or your spouse's parents or anything like that? Grandparents, this just your earnings and savings? And how much debt do you have currently? You mentioned a mortgage.

Currently, just the mortgage. I think I have about $250,000 on a home that's worth about half a million. So that's the only debt that I have.

And you mentioned a couple of kids.

How have you balanced being a parent.

And a spouse with these financial goals and becoming a millionaire?

So I think that's always hard. And I think, at least to my credit, I helped design the schedule for my job. So I think we have a decent lifestyle between, I think, working hard versus having time off. So after we work a week in the icu, we get a whole week off. So you have time to decompress, time with kids, time for travel, time for hobbies. And there are other weeks when you're doing outpatient pulmonary or inpatient. It's essentially 9 to 4, Monday to Friday with your weekends off. So I feel that balance has definitely helped. But I think it's for most of us, as I think at least full time, work, full time physicians, it's still a Tough balance between working hard, making enough RVUs, making enough of an income, making a bonus, versus having enough time both for taking care of yourself, good relationship with your wife, and quality time with the kids.

Now, I'm assuming based on the fact that you went to school in India, that you're a first generation immigrant to the U.S. exactly how did your upbringing affect how you manage money?

I think it's complicated and I think good and bad. And I do think in some ways growing up in a developing country teaches you the value of money. But on the other hand, at least in my case, we really did not grow up with money. I grew up in a family with a single mom with three kids. She was essentially working two jobs and taking care of the whole extended family. So it was essentially a strug, you know, most of my childhood. And on one hand, it does teach me how important it is to have, you know, financial independence, financial security. On the other hand, you know, I don't want, you know, the same for my kids. I want them to have financial responsibility, but not, you know, having, you know, to struggle for things that you want in your childhood. So I think it's been sort of a double edged sword in some ways.

So how do you plan to teach your kids about money?

Right. I think essentially the same thing that I think you teach, right. I think, you know, even at a young age they have, you know, piggy banks and, you know, they get some 529s from their grandparents. But I think the family meetings and I think role modeling, right? I think just them seeing you do what you do with work and savings and money, I think is the best education, you know, I can give them.

All right, so let's go back a few years. Let's go to a doc that's just moving here from India or that is just coming out of their critical care fellowship, and they want to do what you've done. What advice do you have for them?

I think the same simple advice that I think you teach people, which is for anybody, the struggle is real. There's a lot of delayed gratification. The struggles through med school, through hard hours of residency, low pay of fellowship, that's all real. But I think just to come out and not have the mindset which is typical, I feel for most physicians that, oh, I've spent 15 years of my 20, I mean, most of my 20s and even sometimes into your 30s struggling, and now it's time for me to live my life. And I think everybody wants to buy the million dollar house, the $200,000 car and they think they can afford it and live that kind of lifestyle. And I think the simple philosophy is, you know, if you don't and you do it for 10, 20 years, you're going to get to financial independence and then you can practice medicine and live life on your own terms. So I think delaying that gratification, I think just a few more years, I think makes a tremendous difference.

Awesome. That's great advice. Well, thank you Murali for coming on the Milestones to Millionaire podcast. I think there's a lot of people out there that will find your story to be inspiring and certainly want to get to where you're at. So congratulations on your success.

Thank you, Jim.

Really inspiring story. Somebody comes into the country five years later or nine years later, seven years later, I guess is a millionaire, right? It's the classic American dream, right? So pretty awesome. It's not that hard. You don't have to do anything complicated on the investment side. You don't have to do anything complicated on the earnings side. All you got to do is work your shifts, carve out a significant chunk of that, put it into some basic investments, and give it a little bit of time and you too can be a millionaire. Pretty awesome story.

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 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 and 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.

Thanks to those of you who've been leaving great five star reviews about the podcast that does help us spread the word to the rest of our colleagues and peers and trainees. So I appreciate you guys doing that. Keep your head up, your shoulders back. You've got this and we can help. We'll see you next time 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.