MtoM #235: Resident Gets $100K in Assets During Residency and Finance 101: Medical School

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

This is Milestone to millionaire podcast number 235. Resident gets $100,000 in assets during residency Step away from the volatility of the markets. Put your money back to work with MLG Capital series of private real estate investment funds. With over 35 years in the real estate industry, MLG Capital has the experience providing investors with substantial returns and the track record to back it up, more than doubling every dollar invested through multiple investment cycles. Their series of private investment Funds target an 11 to 15% rate of return net to investors through tax efficient quarterly distributions. The fund structure prioritizes generous returns to investors first before MLG can share in any profits. Demonstrating their culture of absolute integrity. Experience the peace of mind that comes with investing in diversified private real estate with MLG Capital. Learn more about Investing by visiting www.mlgcapital.com Whitecoatinvestor we do something here at the White Coat Investor we've been doing for many years to directly reduce the indebtedness of medical students, medical and other professional students. You can actually apply no matter what professional school you're in, as long as it's, you know, a brick and mortar school. But we give a scholarship. We give out 10 of these scholarships every year, thousands of dollars, and students can apply for this through the end of August. Rules and details of applying can be found@whitecoatinvestor.com scholarship we're just gonna have one big category this year. We're hoping people will put a financial spin on their essays that they submit to apply for this scholarship. But we had over 1,000 applicants last year. We expect more than 1,000 applicants this year and we could use some help judging. If you'd like to be a judge for the White Coat Investor Scholarship, email scholarshipcoatinvestor.com Just put Volunteer Judge in the title and you'll have to read a few essays, like 10 essays come September and help us decide which ones are going to be the winning ones. So thank you. If you're willing to do that, please volunteer. Okay, we have a great interview today. This one's going to be a lot of fun. You guys are always telling me, don't get the multi billionaires on here. We want people that are like us, don't have that much lower milestones. This is one of those. You're going to like it. Stick around. Afterward, we're going to talk for just a few minutes about why medical school still makes sense as an Investment. Our guest today on the Milestones to Millionaire podcast is Shresh. Thanks for being here.

It's a pleasure. Dr. Dali. I've been looking forward to this moment for a long, long time now.

Yeah, it's pretty awesome to get people on that, listen all the time and celebrate with them. But let's introduce you a little bit to the audience, tell them where you're at in your training, because you're not done with training yet and what part of the country you're in and what you're doing for a living.

Sure, yeah. So I am a PGY3 internal medicine resident. I just started my third year. I've just finished my first week of PGY3. I live in a major city in the Northeast, and I'm looking to go into a primary career starting next year. So one of those rare outpatient internists that we don't really see much these days.

Awesome. We definitely need more of them, so thank you for what you do. That's pretty awesome. Okay. Northeast, Major city. That's a code word for high cost of living. Right.

So let me, let me. Let me say this. I know when we think of major northeast city, we start thinking of New York, Boston, D.C. it's considered Northeast, but it's one of the friendlier cost of living cities.

Fair enough. Fair enough. Okay. Now you are. You have somebody else in your life. Tell us a little bit about who else you're working with on these financial goals.

Yes, absolutely. So my wife, Hina is just as big of a role in this as I am, and she works full time as well as a prompt engineer for Meta. So basically everything that you put into, like, ChatGPT. Well, I guess Meta's version of ChatGPT. There's a person on the other end of that that's helping train the AI. So I get to see a lot of the crazy questions sometimes that people like to ask the AI. But, yeah, she has a really cool job and she gets to work from home. So she's been on this whole journey with me from med school to residency, and I'll become an attending next year. So she's a very, very big part of all the goals that we've achieved.

Okay, and I understand you got married and combined finances about the time you started residency, Right?

Correct. So that was May of 2023 is when, you know, we were like, let's get a chilling. Bank account, checking account, everything is combined, combined credit cards. So that way we both know the ins and out, what's coming in, what's going out. We both have full, equal access to it.

All right, well, when you applied to come on the podcast, which is weeks, maybe months ago, the milestone you wanted to celebrate was $100,000. $100,000 in assets while still in residency, which is pretty awesome. But give us a sense of what that means. Where were you guys at when you got married? Sure, A couple of years ago. I mean, what kind of net worth are we talking about? Did she bring a bunch of assets into the marriage, or were you both just dirt poor broke when you came into the marriage? Tell us where you started.

Definitely. Option B. Dirt poor broke. So, you know, I went to an osteopathic med school. I was grateful enough that my family helped pay for my undergraduate, but then med school was all on me, so I went to a do school, which we know are very expensive, and so. And my wife didn't have any assets when we came into the marriage. So coming out of training, May of 2023, my wife and I's combined net worth was negative $318,000.

Wow.

Yes.

Wow.

Yes.

Where are you at now? Have you added it up recently?

Yeah. So now we are at negative, negative 2, 13. Negative 212.

Very nice. Very nice debt.

And the only debt we have is that the student loans, I've kept those untouched. And I'll get into why. I kind of had a very lucky situation, let's say, with student loans. And then the rest, the assets, we've kind of is split between taxable brokerage, 2 Roth IRAs. My residency is 403B, 401A, and the majority of it is actually in cash in a high yield savings account.

Now, you have swung your net worth by $100,000 in the last couple of years and hit $100,000 in assets, which is the milestone we're celebrating today. So congratulations on that.

Thank you.

Tell us what income looked like over the last couple of years. I think we understand about what you've made as a medicine PGY1 and PGY2. That's typically in the 60, 65, $70,000 range. You mentioned you'd done a little bit of moonlighting, and of course she's working. So what's your household income look like over the last couple of years?

Yeah, so 2023 was obviously a weird year because, you know, I started intern year halfway through the year. I was a fourth year med school in the first half, and then actually, when we first started intern year, my wife was actually unemployed for about three months, and she started working in September of 23 so 2023, it wasn't very impactful. If I had to take a guess, I think on our tax returns, it was like 3, 60, 65,000. Now, 2024 was the big year. That's when I started moonlighting. My wife worked the full year. I worked the full year as a resident. And in 2024, I remember on our taxes, our, it was 129,000 in 2024. And I expect that to be a little bit higher this year as well, because in 2024, I didn't do a full year of moonlighting. And I'll probably be doing full time moonlighting this year as well, which that's pretty cool thing that I could talk about later too. It's a bit of a unique moonlighting experience, but yeah, so that's kind of what our income has looked like.

Yeah. Let's hear a little bit about the moonlighting experience. It's pretty unusual to be able to get out there, you know, at the end of your PGY one year and be, you know, not only safe, but effective enough that someone's willing to pay you something. So tell us a little bit about the moonlighting.

Yeah, yeah. It's a very unique experience, and I love talking about it. So I knew very early on in my intern year that I wanted to go into outpatient primary care. I just love it. I was like one of the. Because, you know, in my program, you know, 40% of people go on to fellowship, you know, cardiology, pulmonology. Another 50% go on to be hospitalists, and then maybe down the road subspecialized, and then there's that small 5 to 10% of us that are crazy enough to do outpatient internal medicine. And I was one of them.

Is it that few? It's 10%.

I kid you not, Dr. Dali. So there's 63 residents in my program across PGY 12 and 3. And out of all of us, there's three, there's me, and then there was two in the PGY 3 class that just graduated. So actually currently right now in the program. And obviously we don't know what the new interns want to do next yet. They just got here. But I am the only one going into outpatient internal medicine. So it's very rare. Everybody wants to be a hospitalist these days. And I get it, you know, seven on, seven off. It seems like a nice lifestyle. But to me, it felt like I was working every other weekend instead of seven on, seven off. And that's the time I want to spend with my wife. So anyways, I knew very early on that outpatient internal medicine is what I wanted to go through. And you know, at the time, my wife and I. So I'm from the east coast, my wife is from the east coast, we thought maybe we just wanted like, a complete change of scenery and maybe go to the Pacific Northwest. So, you know, I think around February, March of intern year, I just kind of put my resume out there on Dog Cafe. And believe it or not, like, three, four weeks later, I ran across this private practice based out in the Pacific Northwest. And it was a good interview. And, you know, we said we'd stay in touch. And the lady that owned the private practice, she was like, look, if after you finish your intern year, if you want to do a little bit of moonlighting, see some patients on telehealth, I'd be happy to do that. So then after my intern year, after I. So as DOS, we have to take Comlex Level 3. After I passed that, I reached out to her and, you know, because in my residency program, as great of a program as it is, once out of every five weeks is when I'm actually in the clinic. And, you know, my inpatient training will help me a lot, but it's going to. This moonlighting opportunity gave me like, an extra, like, exposure to outpatient care. And so when I got my Step through results back, I reached out to that doctor. She sent me over all the stuff I needed to do to get my license going. I ran everything by my program director. And by now this is like fall of PGY 2 year. And I showed my program director the contract, and she's like, flipping through and she was like, you know, I've never seen anything like this before. But she was like, yeah, like, I don't see why not that why I would have any issues with you doing telehealth, you know, in your free time. And it works out really well because when it's 6pm over here, it's actually 3pm over there. So it's been really nice. I'll, like, go about my day. I'll come home, and maybe two to three days out of the week, I'll see like six to eight patients. And it's nice. It's on my own time. I can do it whenever I want from my laptop. I don't have to worry about going into the hospital to pick up an overnight shift or a shift with the trauma team at 7am on a Saturday. So I've been very blessed. And the amount of experience that it's given me and something that I'm going into. I've been very, very blessed.

Very cool. Okay, so let's get back to the finances. Now. You guys have not made that much money in the last two years to have built up $100,000 in assets. What was your savings rate the last couple of years? Have you calculated it? It's got to be, what, 40% or something.

It was in the high 40s. And I think a big part of what played into that is that like I had said before, like our, like, we live in a nice two bedroom, two bathroom loft style apartment. Our rent is not that much at all. We live in a pretty affordable big city in America. We don't have a car payment, we have a dog, we don't have any kids, and we have two sources of income, well, almost three. With my moonlighting as well, I, I'm on track to probably make about an extra 40 grand. Just moonlighting this year and all of that money, the moonlighting money is extra money. We just put that aside towards our savings. And so really, like I calculated how much we're living off of per month and the average was probably around like five grand a month is, is what we were living off of. So we've kept our fixed costs low. And you know, my wife and I were talking about it because when we calculated it, we're like, what it didn't feel like, you know, like the Dave Ramsey, like, eat off rice and beans type of lifestyle. Like, it felt like I was living even below a resident, but life felt fine. We go out and enjoy dates, we travel. You know, a more of a limiting factor for us is my availability to go on dates and do things versus money. So I think the biggest thing that I can suggest and what I think helped was keeping our fixed costs low, our rent is low, we don't have a car payment because we're still driving a paid off car that was part of our families that they gave to us. And because of that, we feel like we have a lot more disposable income to enjoy our lives and everything else we just put towards our savings.

What kind of car is it? How nice of a gift was? This is what I want to know.

It was a good gift, honestly. It was a 2015 Acura RDX SUV. So I can't even complain. It's a great car.

It's certainly within the range of reliable, reasonable transportation. But it is 10 years old.

Absolutely. And you know, knock on wood, we've kept up with all the oil changes and everything, it's been running well, I tell myself, you know, it's a fancy Honda. So I'm. We're planning on driving that thing into the ground.

Very cool. Okay, you alluded to a student loan plan earlier. What's your plan to deal with your student loans?

Yeah, yeah, I'm glad you brought that up because I think that's a very interesting topic these days. You know, there's a lot, there's a lot of chaos going on in the student loan world. So, you know, we can go back to 2019 was my first year of med school. So we all know that what happened that winter or January of 2020, it was my first year of med school, is when the COVID 19 pandemic broke out. And during that time, if we all remember, our loans went into a freeze. So pretty much all four years of med school, I was able to get away with no interest accruing on my loans. And then my fourth year of med school, and that's kind of when I had my like, financial awakening because I was like, you know, I'm about to get married. I'm going to start a job. Like, I have to learn what to do with a paycheck and not wait until I'm an attending when there's big numbers coming my way. I need to know how to manage this money. Now it really all started and I have both the books, they're right back here with, with the white coat investor book. This where all started. And that's why this is such a cool moment. And you know, with the podcast and one of the things I learned was I need to file my taxes as a fourth year med student. And this is when. So now this is like spring of 23. I'm a fourth year med student. All of my loans are just principal. It's only the principal because from my first year of med school, maybe not the first few months, but everything was on hold. And I remember I there were talks about the safe plan going on and in my head I got to know and I was like, well, I need to lock in a zero dollar payment because then the government's just going to get rid of the rest of the interest. So now I'll pretty much lock in another year, so my loan is not growing. So I applied, I filed my tax as a fourth year med student, locked in that zero dollar payment, my intern year residency. And then so I got away with a whole year of zero dollar payments. Still my balance isn't growing because I got on safe. And then July of now I'm a PGY2 is when the whole save lawsuit happened. And from there my loans, because I was already on save, went into the SAVE forbearance. Now I remember like as a first year med student, we had a guy come in to our lecture hall and talk to us about pslf. And at that moment, something inside me, and I don't know what it was, but it was a voice just told me that don't rely on this program. Something just told me I was uncomfortable with the fact of keeping something hanging around for 10 years to rely on the government to forgive something for me, not even knowing what like the political climate would be like, you know, in that case, 14 years from then. So at that time I told myself that I am going to make a plan for my student loans that hinges on the fact that I'm going to pay off every single last penny. This so really everything that happened, you know, after the SAVE thing, I don't pay attention to the news because I'm like, well, I don't care about making payments right now because all the payments that I could have been making, I'm just stuffing them into a high yield savings account. And that's why the majority of our liquid net worth is tied up in that high yield savings account. Because I'm just waiting for that day to hear the announcements that payments are starting back up again, say forbearance is done and dropped a massive anvil on that, on that loan balance. So for me, like, I made a plan that centered around my abilities and my hard work and not relying on a plan. And I think PSLF is wonderful. But just I am looking back, I'm so glad that I made a plan like this because all of this uproar that's going on in the news right now, I've kind of just shut it out because I'm not worried about what happens with pslf. I'm not worried about what happens with the Income Driven Repayment plan. I'm going to refinance the moment I hear that things are starting back up and just get rid of it within two to three years.

Very cool. Well, congratulations on thinking that all through. And certainly that plan will work. No doubt about that. You know, I'm going to talk a little bit later in this podcast after we stop the interview. I'm going to be talking a little bit about why medical school is actually still a pretty good deal. And it is, it is, it is still a good deal, you know.

Absolutely.

So it's. So it's pretty cool. That you've just demonstrated that in your student loan plan. All right, well, there's somebody else out there like you that wants to be financially successful. Maybe they're just coming out of medical school now. Maybe by the time they're hearing this, they've just started their internship. They want to be like you. What advice do you have for them?

I think the biggest and most life changing financial year of your life is that fourth year of med school. Your fourth year med school is that one time or like your med school responsibilities are dwindling down. You're not throwing because trust me, intern year of residency is a beast in as of itself. So you're not going to have time. I would say that fourth year of med school after your match, like use March until June and maybe spend a little bit of time each day learning about personal finance, reading the white coat investor books, both of them, the first one and the bootcamp one. Read them, absorb them, read the blog, learn about basic Chronicle finances, index funds, learn about the different sort of retirement accounts and apply what you learned in that fourth year of med school right off of intern year. Because I meet so many of my co residents that like to do the oh, I'll do this when I get become an attending. And to me that's kind of crazy because when you become an attending everything is happening on such a large scale. Like the paychecks you're getting are at such a large scale. And if you haven't built those habits and applied what you learned in your fourth year of med school to residency, like the amount of my co residents that don't even contribute to their 403B and don't get the match drives me crazy. And I asked, I actually spoke with the interns this year during orientation week and showed them how to do that because I was like this is a part of your side and just little things like that. If you can learn to and build the habit of that during residency, have a plan for your student loans, file your taxes. Your fourth year, if you don't have a plan during residency, I'm going to promise you that you're not going to have a plan when you're in attending. So my biggest thing is take advantage of that time during your fourth year of med school to learn about personal finance and apply that. You can read all the books you want, podcasts you want, but if you don't apply, apply what you learn during residency, you're not going to be financially successful as an attending. But if you do apply that during residency, you Know, maybe you can like, build your network up a little bit, which without even really trying. We. We did. And so I have, I have White Coat Investor to thank for that and I'm really happy that we were able to meet.

Awesome. Appreciate. Suresh. Hey, I want you all out there in podcast land to know I did not pay him to say all that. No, no, that was quite a testimonial, I think, of exactly what we're trying accomplish here at the White Coat Investor. Well, thank you very much for being willing to come on the podcast and sharing your experience so we can use it to inspire others.

Of course. Pleasure. Thanks for having me.

All right. That was fun. I let him go for a while. He was a little bit chatty, which is awesome because, hey, you know, sometimes people that are chatty say things that are pretty awesome. You know, that was a great testimonial he gave and I hope you all take that advice. You medical students, you residents, take that advice. Learn this stuff early. It's way easier to learn this stuff when you're working with four figure portfolios instead of seven figure portfolios. It just induces a bunch of stress when you have more money. Unless you've already been doing it for years and then it's easy. It's really not that hard at all. Okay, I promised we were going to talk a little bit about medical school. I get emails all the time. I see it on forums all the time. Is medical school still makes sense now after Covid and with AI and all the debt I'm going to have to borrow, does this still make sense? Well, the truth is that it does. Financially, medical school still makes sense. It's still a good investment. Now, if you can't get in and you spend 10 years applying to medical school, that's a different story. That's not what we're talking about. Or if you struggle so much in medical school that you're having trouble matching into a residency, maybe it's not such a great investment. But for the vast majority of medical students, medical school is a great investment. Okay, let's look at the averages. Okay. If you look at the average, the average physician right now is making $375,000. That's the average. So some doctors are making more, some doctors are making less. Obviously, the average student loan debt coming out last time I looked, which is not that long ago, was about $200,000. $205,000 for an MD school. It's higher for a pushing 250. Dentists are pushing 300. But that's the average. Okay, so with the average income for a physician and the average debt for a physician, basically you only have to live like a resident for two years to pay off med school. Right. If you live on $75,000, you pay your $75,000 in taxes. That basically leaves you something like $200,000, $200,000, $225,000, something like that, that you could throw the entire thing at your student loans. Okay? That would wipe out the average student loan in a year. Even if you have double the average in student loans, you could wipe that out in two years. Now, I know not every doctor makes the average physician income. You know, some of you come out and you get a job that's making 200 or 225 or 250 or something like that, and it might take a little bit longer, okay? But this is not a bad investment. This is a good investment. It can be even better too, because a lot of you these days are not actually paying for medical school. The taxpayer is paying for it on your behalf because of your willingness to work at a taxpayer approved job, whether that is in academic medicine, whether that's at the va, whether that's with the military, as some sort of government employee, whatever it is, taxpayer said, you do this, we're actually willing to pay for your medical school. And so you spend your four years in school and you rack up two or three or four hundred thousand dollars in student loans. You go to residency or Fellowship for three to seven years and those payments all count toward your 10 years of payments and another year or two because of the way they certify your income, you're still making low payments. And then you make a year or two or three of big payments and the rest gets forgiven tax free because you're doing what the taxpayer, via their elected representatives has asked you to do. So a lot of you are only paying a tiny percentage of what medical school costs. So both of those are great options to deal with the cost of medical school. There are other contracts available you can sign up for HPSP with the military like I did, that will also pay for medical school. You owe time instead of money. Of course, it might take you longer to pay off the time than it does to pay off the financial debt. But medical school still makes sense. I'm not sure that's necessarily the case for every profession out there. Right. A lot of dentists are racking up almost, or not dentists. A lot of veterinarians are racking up almost as much debt as the physicians are and often getting jobs that are nowhere near as fruitful as what human physicians are being paid. It's not as good of a ratio for lots of dentists, particularly if you end up in some employee level job. You know, attorneys tends to be bimodal. You know, you're in big law making the big bucks or you're in, you know, some sort of job that's not making that much money. But for physicians going to medical school, this makes sense. Don't let somebody talk you out of it that it's a bad financial deal. Yes. You know, AI is going to have effects on medicine. It's going to have effects on every profession and a lot of other jobs too. It's not a reason not to go into it. Okay, we're still going to need doctors even with AI. Nobody's going to go out and do everything doctors are doing now just using AI. I wouldn't let that scare you out of medical school. If this is your dream, if this is what you want to do with your life, it has been a wonderful career for me. I'm still doing it now even though I don't have to, which is like the greatest endorsement for a career that you can have. If it's something that this practitioner would do for free, that tells you an awful lot about it. Okay? So don't bail out of medical school. Don't be afraid of medical school because it's expensive, because the debt will be high. Hopefully there are ways to keep that debt down and get it paid off quickly when you're done with your training. If you learn to manage money, you can handle it, I promise. Our sponsor for this podcast was MLG Capital. Step away from the volatility of the markets and put your money back to work with MLG Capital's series of private real estate investment funds. With over 35 years in the real estate industry, MLG Capital has the experience to provide investors with substantial returns and the track record to back it up. More than doubling every dollar invested through multiple investment cycles. Their series of private investment Funds target an 11 to 15% rate of return net to investors through tax efficient quarterly distributions. The fund structure prioritizes generous returns to investors first before MLG can share in any profits, demonstrating their culture of absolute integrity. Experience the peace of mind that comes with investing in diversified private real estate with MLG Capital. Learn more about investing by visiting www.mlgcapital.com whitecoatinvestor. You can also go to whitecoatinvestor.com MLG. It'll get you the same place. Okay. This is the Milestones to Millionaire podcast. You can come on it. Apply@whitecoatinvestor.com Milestones we'd love to celebrate your milestone and inspire somebody else to do the same. Thanks for what you're doing out there. See you next week.

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.