MtoM #25 - Psychiatrist Millionaire

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

This is Milestones to Millionaire podcast number 25.

At some point in our financial lives, it will be time to buy a home. A physician mortgage can be a good vehicle for a young doctor who's just out of school, has, and has a more effective place to use their money than on a big down payment. These loans allow doctors to secure a mortgage with fewer restrictions and a lower down payment than a conventional mortgage. But if you're further advanced in your career or deeper into your journey to financial freedom, buying a home with a conventional mortgage and then later on potentially refinancing that loan to a better rate with a shorter timeframe could be a great move. Wherever you are in your financial journey, make sure you use the mortgage that will be most financially beneficial for you. Hop over to our recommended tab to learn more about all of your mortgage and refinancing options@whitecoatinvestor.com mortgage. You can do this, and the White.

Coat Investor can help. All right, we've got a great episode for you today. Another millionaire on the show, and I think you're really going to love this one. Let's get our guest on the show. All right, our guest today is Maryam. Welcome to the Milestones to Millionaire podcast.

Thank you so much for having me.

What is your specialty, and how far are you out of training?

I'm a psychiatrist, and I'm seven years out of training.

And what is your approximate net worth?

It's about $2 million.

About $2 million. Seven years out of training. Pretty awesome.

Thank you.

And what's that divided up into?

So it's about $1.4 million in investment, 400,000 in real estate, and then, like, the rest in cash.

Real estate, like the house you live in or real estate investments?

Yeah. One is the equity in our current home that we're living in, and one is an investment property that we have.

Okay, so two properties, and the rest are in what, boring old index funds or what are they invested in?

Yes, all index funds. Passive index funds. About half of the 1.4 is in retirement and the rest is in a brokerage.

Awesome. Well, congratulations on that. That's pretty awesome.

Thank you.

So you're a psychiatrist. What's been your range of income throughout your career?

Well, my husband also works, so between the two of us, it's been about 300 to about 560,000.

Okay, so pretty good range there, but a good Income. Clearly you've had a good shovel with which to dig.

Right? Right, of course.

Awesome. So what do you think are the secrets? I mean, there's plenty of psychiatrists out there. There's plenty of doctors of every type that make money like you make, that did not have $2 million a few years out of residency. What did you guys do differently?

Well, it's a couple of things, actually. It's interesting. About three years ago, I knew nothing. I was kind of. My head was in the sand in terms of finances, just your typical doc. And I had a friend casually ask me about a 401k and I realized I didn't even know much about a 401k, much less what the maximum was. And I was just utterly baffled and confused. And she pointed me to your website and your. Your podcast. I started obsessively listening friend to friend referral. Right. She was, she's also a doc. And I just started listening to the podcast. I did like basically a home makeover on my finances. Major rehabbed, you know, got like a 5 to 9 maxing out the 401k, all the stuff that you preach. So. And then around the same time, I actually was between jobs and I picked up this temporary sort of like a locums job and it was like a telesite gig. And then when I came time to be looking for a more permanent like day job, I just kept that job going, picked up a couple of PRN shifts here and there, and then almost was at the point of doubling my income. So that was the pretty much the big secret of just the two things kind of coincided at the same time.

You know, I often tell people that I think most people overestimate the difficulty of doubling their income. You just about doubled your income. Was it that hard? I mean, you worked hard, obviously, but was it as hard as you thought it would be to double your income?

No, not really. Because I thought that doubling your income would be like me being at the hospital till like 8pm, never seeing my family just constantly, just working all the time. And don't get me wrong, I'm busy, but because the way I chose the jobs, you know, it's manageable. I do shifts, I do jobs that are intentionally. The PRN shifts, at least that are a little bit easier to do because they're telepsych and they're from home. So, you know, I wouldn't say that I'm like definitely. I'm definitely not the doc who's like coming in right at 9pm or anything like That I don't think I've ever come in at 9:00pm actually.

Well, some, some of us in emergency medicine are going out at 9pm yes.

Right, right. And as a psychia, I don't feel like that should be something I should be doing. That's kind of why I went into the field.

Right, that's right. If you do start doing that, let us know. We'll let you come into the er. We could certainly use you in there. But take us a little bit through the journey. What was your net worth when you came out of training? Do you remember?

I think it was actually positive. It was probably like $50,000 because I did a lot of moonlighting and I doubled my income then too for a couple years actually.

Did you have student loans that you paid off during residency or did you get through med school debt free?

Well, I was kind of lucky. My parents did pay for that, so that they paid for medical school. I went to a pretty, really, really affordable undergrad about. It was like $1,900 a semester. So they were, they were able to help me for medical school. And I didn't have much debt when I got out. So that definitely was a factor as well.

Certainly helps. Yeah, yeah. And then at what point. Now obviously you're well past the mark, but at what point did you become a millionaire? Did you even recognize that you had become one?

Well, my husband was tracking it on personal capital. I actually wasn't. I didn't. So it was about five years. Five years.

After five years or so. All right, tell us about the makeover. What were you doing wrong that you corrected?

Oh, gosh, so many things. So we had a six figure income and we were like living. I went home that day, the day that my friend, this very fateful day that my friend told me about 401ks and I realized we were living paycheck to paycheck on a six figure income, which I thought was really, really ridiculous. So basically I like, we can't do this. And I started maxing out my 401k, which I had not been doing since I'd been attending, which luckily hadn't been that long. It only been about two or three years. Then what I did. The biggest, I think the most salient factor in all of this was that when I went and looked for my next job, I made sure that they allowed outside moonlighting and side gigs. And that was actually one of the first questions I asked because I didn't want them to own my time in a way. And my first Job. They did say like they paid me 185,000. And they said, okay, well you know, I'm sorry, you can't moonlight the first year anywhere. And from 8 to 5 you can't work anywhere despite the fact that even if you're off, you cannot work from 8am to 5pm So I just made sure that I could keep that high level going.

You know, there are surveys they do of physicians that suggest that docs in their 60s, about 11 to 12% of them, have a net worth under half a million dollars, which to many of us is just an appalling statistic.

I know.

What do you think would have happened if you had not had that, that financial makeover moment? And you just kept plodding through your career basically hand to mouth throughout your career. Do you think you could have been one of those docs?

I mean, yeah, I could have 100% been one of those docs because one of the. So what I basically did at the same time, same exact time. And you know, being a type A doctor, this like, you know, I go through all these analyses when I get into something and I did analysis of what, how much I would have, if I had continued to contribute to my 401k, at the rate that I had been contributing, I would have had that much. So I could have been 100% me if I had continued the way that I had.

How about the role of debt in your life? Do you have any debt?

Currently we just have our primary mortgage of our prime of our residence, which is about, it's about 600,000.

About 600. Okay. And are you a parent?

Yes, I am.

How have you balanced parenting with this journey to become financially successful?

You know, one of the main things I think is, is my specialty as a psychiatrist. I can do a lot of these jobs from home. You know, I do a lot of PRN work, but it's telepsychiatry and it's kind of on demand. So I can cook dinner, feed the kids and like run upstairs and do some work as well. So I just think it's, it's a lot to do that. I also have very support family and a supportive husband who he's not a doctor, but he always, you know, when I'm working the weekends, he's taking care of the kids, things like that.

And how do you teach your kids about money? Are they old enough to learn about money yet?

Well, they're, they're only three and four, but pretty young. I mean we tell them like, you know, they're like mommy, daddy, like why are you going to work? And we're like, well, we have to earn money so that we can continue to pay for the stuff that you have. And another thing that we're going to implement is like earning things with like charts and tokens. And we haven't gotten quite, gotten to that yet.

Yeah, they're pretty young. What about your upbringing? How did your upbringing affect how you manage money?

Well, so my parents, you know, they chose a really, really low cost of living in of area. They kind of geo arbitraged before I think they even knew what that concept was. It was in a very rural area. So we lived well within our means. And my dad always has, was maxing out his solo 401k since 1980. You know, sometimes when it came time to be like putting the money into the solo 401k, he'd be like scrambling to get the funds. But he always maxed it out, you know, each year. And we always lived, you know, well within our means. Never made the, never bought the most expensive home in the neighborhood or you know, things like that. No expensive vacations. So I think that really like influenced how, you know, I'm able to do that now.

So you had these great examples, right, that taught you all this stuff about money and yet still you still had to have your own aha moment.

Of course, I had to have my own awakening. Just that one fine day in April 2018.

And you realize that, oh yes, if I don't do what my parents did, I'm not going to end up where I want to end up.

I'm going to be with one of those statistics.

Pretty awesome. So let's go back to where you were five years ago, 10 years ago, you got a doc, med student, resident, someone coming out of training just like you, wants to get to where you are. What advice do you have for.

Well, I would say, you know, discover your, your blog and your podcast early. I wish I had, I did it as an attending. But you could. This is like, you know, find the stuff early, don't have a financial advisor, you know, do it yourself, read a few books, read your book, you know, get that and manage it yourself. And I think the biggest thing that people sort of overlook is a lot of people just choose job and they allow that corporation or that hospital to own their time and to just really look at a contract and say like, you know, if you do that, if you say like if you work somewhere where they aren't allowing you to work elsewhere, then that's you've reached your ceiling of your income. You know you've reached that. So just to be open to looking at that piece of it when you are choosing a job.

Yeah, ownership matters for sure.

Yeah.

Well, Maryam, thank you so much. Your story is very inspiring. I know somebody's going to hear you and go, I can do what she did. And you will cause them to be successful as well. So thank you so much for coming on the podcast.

Thank you so much for having me. And thank you for everything you do.

You're very welcome. It's my pleasure. So pretty interesting takeaway there, right? We've compared this to some of the other episodes we've had recently where people maybe didn't get the best example from their parents. Here's someone that had their parents given him a great example and still found herself as a doc living paycheck to paycheck. And it just demonstrates how intentional you have to be. It's not that this stuff is hard. It's not hard to become wealthy on a physician income, but it doesn't happen automatically. There's still a few things that you have to do and you have to do them right in order to get there. And I hope these episodes are inspiring to you to help you put those steps into place so you also can become wealthy.

At some point in our financial lives, it will be time to buy a home. A physician mortgage can be a good vehicle for a young doctor who's just out of school and has a more effective place to use their money than on a big down payment. These loans allow doctors to secure a mortgage with fewer restrictions and a lower down payment than a conventional mortgage. But if you're further advanced in your career or deeper into your journey to financial freedom, buying a home with a conventional mortgage and then later on potentially refinancing that loan to a better rate with a shorter time frame could be a great move. Wherever you are in your financial journey, make sure you use the mortgage that will be most financially beneficial for you. Hop over to our recommended tab to learn more about all of your mortgage and refinancing options@whitecoatinvestor.com mortgage. You can do this and the white.

Coat investor can help. Keep your head up, 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. Dahl, 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.