MtoM #29 - Teacher and Doctor 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 episode number 29. If you're like most doctors, nobody taught you anything about personal finance or investing during your undergrad, professional school, or residency. Even though your family and perhaps even your business rely on you to be the Chief Financial officer, you have never been given the tools to succeed. Enroll in WCI Financial Bootcamp, a free educational email series, and learn to convert your high income to wealth. You will learn the basics of investing, saving, insurance, and more. Your high income alone will not lead to financial success, but as always, we want to help you on your financial journey. Go to whitecoatinvestor.com financialbootcamp to sign up today. You can do this and the White Coat Investor can help. This is the podcast where we use the stories of others reaching their financial milestones to inspire you to do the same. So whatever financial milestone you have reached, whether it's getting back to broke or paying off your student loans or your mortgage or becoming a millionaire or hitting a net worth of 422,000, whatever your milestone is, we want to celebrate it with you. So apply@whitecoatinvestor.com milestone and and we'll get you on the podcast and share your story with others. Our guest today is a millionaire and she has a great story to hear, so let's bring her on and share that with you today. All right, Our guest today is Elizabeth. Welcome to Milestones to Millionaire.

Thank you so much for having me.

We're excited to have you. I understand you are a millionaire.

I am. My husband and I are worth $2 million between the two of us.

That's awesome. So what is your specialty and how far are you out of training?

I am just five years out of training. I am an oculoplastic specialist and an ophthalmologist. I am still practicing general ophthalmologist and recently became a life coach as well.

Congratulations on all of that. And you said your approximate net worth is about $2,000,000 or so. What's that divided up into?

$1,200,000 is in retirement accounts and that's all invested in stocks and bonds. And 100,000 is in non retirement accounts in stocks and bonds or, you know, mutual funds, index funds. About 300,000 is in real estate and syndications, real estate funds. And I actively manage some multifamily rental properties. And I have an embarrassing amount in cash, about 400,000 in cash. That's partially because we're renting and still looking for our primary residence and you know, just having furnishing for that and wanting to invest more into real estate, but not having found the right deals yet.

Awesome. Well, you're going to have a substantial down payment, it sounds like when you find that house. So that should work out well. What's been your range of income during your career?

My first job was 225,000 and I was at that job for about three years. It was in private practice. I ended up leaving and going to a hospital where my base salary is 215,000 and there was a 35,000 production bonus per year if I met a certain RVU level.

And is your husband working as well?

He is a high school teacher.

High school teacher. So typical teacher income, I assume throughout this period then.

Yeah. So when we were in Virginia with my first private practice, he made somewhere, I think around 45,000 a year. So that's pretty typical. Actually, part of the reason why we returned to my hometown is that he makes a lot more here as a teacher. So he's like close to 90,000.

Wow. Sounds like a much better place for a teacher, doesn't it?

Yep.

So, so tell us a little bit about your journey. What was your net worth when you came out of training?

Do you remember straight out training? I don't quite remember, but I could actually look that up pretty easily. I've got. So I've been calculating my net worth every month for a very long time. I've been following you since residency.

So that sounds like a lot of work. I do it about once a year.

I just, you know, I like to go through all my investments, see for their. See what they're doing. And, and so by doing that I ended up calculating my net worth. So it looks like it was 651,651.

When you came out of training.

Yes.

Wow, that's impressive. We got to go back even further then. What happened in training that you were able to come out with a net worth of 651,000?

So my intern year we lived just off my husband's salary and I put all of my take home into a Roth 401K at the hospital where I did my intern year. And you know, because intern year is half in one year, half in the other year, I maxed out two years. So that was it. I've been investing in. We've been maxing out our Roth IRAs every year. Let's see what else. I did an MD, PhD. So I do have no medical school debt, so that really helps. I actually flipped two houses when I was in grad school, med school. So I finished grad school kind of off cycle. So instead of going to med school late and kind of losing all the selective time, I opted to just have eight, nine months off. And so during that time is when I flipped those houses. And that was back in that, that 2008 crash when I mean, I literally bought one house for 20,000, the other house for 33,000 and so made some good money there. Though I've lost money in other real estate investments, so honestly it was kind of a break even process between how much I spent on real estate courses, how much I lost and how much I made.

But definitely not your typical journey for sure, that we hear on this podcast. So that's pretty exciting to hear about it. What do you think were your secrets to success? How did you become so wealthy so quickly?

I think definitely my parents taught me good financial advice of always live beneath your means. I didn't actually realize that you could carry a balance on a credit card until much later. I mean, I got my first credit card when I first got to college, but I always thought it was just a way so that you didn't have to carry cash around. I, I just thought it was a convenience factor and a way for you to kind of make some money off using it. Because I always had credit cards that had cash back bonuses and I always paid the balance off every month, just always living below my means. I was always taught to have money for rainy days. So I think just those kind of good financial habits. During my MD, PhD. I have to admit I wasn't the happiest of grad students. And so I read a lot of books about personal finance and then investing and red Rich dad, poor dad, which kind of led to the real estate investing a little later on. So just being educated. I remember I went to a financial seminar and they put up a graph in a presentation and I was like, oh, did that come from? I think it was like some asset allocation book and the guy was like dumbfounded. So yeah, I think that education though is really important. It's not something we actually get in medical school or residency or fellowship or any part of our training or, you know, honestly, even high school. I think they should start teaching kids about finances.

You got to tell me about this moment when you learned that credit cards could carry a balance though. Do you remember where you learned that from or how you learned it, or.

You know, I don't Actually know, I think it was talking to somebody and finding out they had credit card debt. And I had to ask them what that was. I mean, it was during college at some point.

So let's talk about debt. How much debt do you have currently?

Debt. So I do have a loan on my car, and that's just because the loan is at 0.9% and I just felt like that interest rate. So when I got that loan, I was actually getting more in just a money market than the interest rate on the car. So I figured, well, I've got the money in this money market and I could pay it off anytime. Interest rates definitely went down with COVID Now the interest rate on that money market is lower than 0.9%. And so I've been thinking, should I pay it off since I have so much cash? But I've kind of let it ride because I do have investments I'm looking at. Then my credit cards again. I just pay off the balance every month. I've never not done that.

Mostly because you didn't know you could.

I did find out later that I could though, but that seemed like a very bad deal. There have been times where I applied for a card at 0% interest and rode that 0% interest for a little while and then paid it off before I ever paid any interest.

What about mortgage on your home or on the rental properties? I guess you're still saving up for a home. So not on the home, but what about the rental properties?

The rental properties. I have $193,000 in mortgage, so a.

Little bit of debt there still for sure. Okay. And are you a parent?

No. No kids. I guess that helps too.

Yeah, that certainly doesn't hurt. They can be kind of expensive. But I hear few regrets from those who have them. Of course. And you mentioned your upbringing a little bit and how that kind of affected how you think about money. What lessons do you think were useful from your parents versus maybe not so useful from your parents?

Useful was definitely. I think my parents really taught us the value of money young. So at some point, I would say around the young teenage years, if we wanted some bigger ticket item like a bicycle, then we went 50, 50. So we had to earn half or save half from gifts from grandparents, things like that. Or saving for allowance. We also got an allowance. So we got allowance so that we could buy our lunch every day in high school if we wanted to, which was $2 a day. Or we could save that money and pack our out of leftovers or any food at home. So I always packed my lunch and, you know, every so often might buy like an ice cream bar or something like that as a treat. But I think the managing of money with allowance, the actual, like, learning how to save money in order to buy things that we wanted. You know, I had jobs in high school. I babysat. I actually got paid $20 an hour to teach people how to use their computers. So I was actually paid pretty well as a high school student.

That is a pretty good income. So, I mean, let's go back to somebody that's maybe where you were at five years ago, 10 years ago, whatever. They're an MD, PhD student, they're a resident, whatever. What advice do you have for them? They want to get to where you're at.

Yeah. So I think really seeking out a financial education is really important. Like I said, we don't get that in our training. And also learning about the business of medicine, that's also something that we really don't get in our training. So I've met a lot of people who kind of think, well, as a doctor, I make plenty of money, so I'll be fine. But if you spend all that money, then you're not really keeping much of it, and it's not what you make, it's really what you keep. I think working on mindset, I definitely met people who are just, they're scared of the numbers or it stresses them out and, you know, they don't want to look at even what their current situation is. But if you don't know what your current situation is, then you really don't know how to map out a way to get to your goal. If you don't have a goal, then you're definitely never going to get anywhere. So I think working on mindset is also really important.

Mindset goals and education. Great advice. Thank you so much for coming on the White Coat Investor podcast. Congratulations on your success. Your inspiring story will help many others to do the same.

Thanks so much. I'm so happy to be here.

What I like about that story is it's not really the traditional pathway to becoming a millionaire for doctors. Right. Shouldn't you come out with a negative net worth coming out of training and then live like a resident for four or five or six years or whatever and put all that money away and pay off the student loans and stick it all in index funds? Her story started back during her MD PhD years. Right. Dabbled in real estate, made some money, lost some money, earned some money, and pretty impressive net worth, actually. By the time she came out of residency, and that can be done, particularly if you have a long training period in there. If you have a working spouse, if you have a real focus on moonlighting during residency, it's entirely possible to come out with a significant amount of money before you even really get started with your traditional career. So I thought that was probably the most significant takeaway there, that you don't have to start from broke if you are in one of those unique situations. So take advantage if you are. If you're like most doctors, nobody taught you anything about personal finance or investing during your undergrad, professional school or residency. Even though your family and perhaps even your business rely on you to be the Chief Financial officer, you have never been given the tools to succeed. Enroll in WCI Financial Bootcamp, a free educational email series, and learn to convert your high income to wealth. You will learn the basics of investing, saving, insurance and more. Your high income alone will not lead to financial success, but as always, we want to help you on your financial journey. Go to whitecoatinvestor.com financialbootcamp to sign up today. You can do this and the white coat investor can help. Thanks to those of you who are leaving us reviews on this podcast. Five star reviews really help us spread the word and so we thank you if you have left us one of those. If not, please do so today on Apple Podcasts or wherever you download your podcasts. Keep your head up, shoulders back. You can do 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.