MtoM #49 - EM Doc Pays Off Loans and Reaches $250K Net Worth

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 49. EM doc pays off loans and reaches a $250,000 net worth.

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 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, let's get our guest on the line who's accomplished not one, but two milestones that we need to celebrate with him.

All right, Jason, welcome to the White Coat Investor Podcast, or rather the milestones to Millionaire podcast.

Thanks so much for having me, Dr. Darley. It's an honor to be here with you.

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

I'm an emergency medicine physician, and I finished training about a year and a half ago now.

A year and a half. Wow. This is pretty cool because we're celebrating not just one, but two milestones. Tell us about your milestones.

Yes, sir. Yes, sir. So I paid off all my student loans last month, and I've also hit a individual net worth of greater than $250,000.

That's pretty awesome. So we got to go back a little bit, though. I mean, it's only been a year and a half. You're an emergency doc. I know what emergency docs make. Right. And you don't make enough to have paid off all your student loans if you had anywhere near the average amount of student loans and come up with $250,000 in additional net worth. So where were you at when you came out of residency?

What was your net worth then?

Coming out of residency, my net worth was about negative $85,000 to $90,000 at that point.

Okay, so how much did you have in student loans?

Total was about $120,000.

That's pretty good. Is that because you were really good at being frugal during med school. You got a little help paying for it, or you paid a bunch off moonlighting and residency or how did you have your loans be so low?

A combination of factors. So went to a state school for medical school. So much cheaper than average, which is most important, probably. And then I was able to get a few scholarships during medical school that helped out a ton. And I was able to go to a state school for undergrad, so I didn't have any student loan debt from there from the scholarship money on that end as well.

Okay, but even so, it sounds like you had at least some investments coming out of training, right? You must have had what, 30, 40, $50,000 or something in investments.

Exactly.

How did you do that?

Probably just got lucky during a good market because I was maxing out my Roth ira, trying to develop good habits of just investing consistently. And yeah, it worked out.

So that was all you did during your residency, was you maxed out a Roth ira?

I put probably a few hundred dollars into cryptocurrency at that point as well, which also paid off pretty well.

Did you pick the right one? And it blew up from a few hundred dollars to 100,000 or nothing crazy like.

Yeah, just a small portion.

Still, it was a good year for crypto. It was awesome. Well, this is pretty cool. So what is. I mean, you got a $250,000 net worth. What's it divided up into at this point?

About 75% of it is in index funds. So huge fan of VTSAX. And then VTIX, about an 85 to 15% split there. I've got about 5% in bonds, and then I've got about 10% in cash between emergency fund and then just started saving up for a house with my new wife and then about 10% in crypto. Okay, wow.

So, I mean, your career hasn't been that long so far, but what's been your average range of income throughout your career?

So the average. Well, this is my only full year working and it's going to be about 420. So happy with that.

So that's an emergency, Doc. That's working pretty hard. How many shifts a month are you working?

Probably 16 to 17 because I work full time in the community. But then I pick up one or two shifts a month at the academic site where I trained just because I really enjoyed the education aspect of it.

Okay. And they're eights or twelves.

The academic shifts are all eights. My community shifts are a combination of eights. Through 12s.

Okay. All right, so you're working pretty hard, and it sounds like you're living like a resident. I mean, you put a lot of money toward building wealth, paying off debt and investments. In the last year, what percentage of your income do you think went toward building wealth?

Let's see. Probably. I mean, at least 50%, maybe 60.

And probably 20 to 25% of it went to taxes or so. So what's your lifestyle been like the last year and a half?

I think you said the magic words right, is live like a resident. And I gave myself a pretty significant raise, residency, salary, and I mean, I've still been able to do a lot of incredible things this past year. So I recently got married. A few months ago, we went to Hawaii for the honeymoon. Thank you. Thank you. And was able to go to Puerto Rico for a bachelor party. So, I mean, I've been doing things, but it's still, you know, we're very lucky in terms of if you pay yourself first, invest first, and you'll realize, hey, I have a lot of money to do what I want with.

Yeah, I mean, that's pretty fun. You know, the bachelor party in the Caribbean and then Hawaii for the wedding. That's a cool combination. You know, you demonstrate a lot of things there. One, if you just have a plan and pay yourself first, like you mentioned, you can do all kinds of cool stuff on a physician income, you know, and the key is just not to grow into it all at once. And you really knocked this out of the park. You paid off those loans really quickly. Were you ever tempted to? You know what? I'm going to hold onto the loans and I'm going to invest the money into Bitcoin or BTS X and try to beat the spread. Was that ever a temptation to you, or do you just say, I'm sick of these loans. I want them out of my life?

A combination of both of those feelings. I definitely had the, well, if I refinance and get it down to 1 to 2%, and then, you know, I just pay it off over X amount of years and I invest that money instead in the meantime, then, yeah, mathematically it probably makes sense. But I hate debt, and that was kind of the big priority to me as well. You never know what could happen in the future. But if I get rid of this debt, I know that that'll be a big accomplishment. I'll be very happy about that, and that's what I did.

So what advice do you have for somebody that's coming out of Med school, they've got some student loans. They're trying to decide if they've got to put some money in a Roth ira, pay off their loans, whatever. You know, starting to think about becoming financially literate. What advice do you have for that person? If they're looking at you going, that's what I want to do. I want to be out of debt, a year and a half, out of training, and be building wealth like crazy. What advice do you have for them?

My advice is find mentors and learn from others who've done it extremely well beforehand. So read the White Coat Investor, right? That was probably one of the first books I read in terms of finances. That taught me, hey, I don't know anything about this stuff, so I need to learn more about it. That was a great option. Reading the Physician Philosopher's book on Physician's Guide to Financial Freedom, Listening to podcasts like the Financial Residency, of course, like Good Investor. There's a ton of great high quality resources out there from other physicians saying, hey, we get it. We also want to make sure that you don't make these turbulence six with your money and, you know, get paid well and use that money wisely. So here are some basic steps. It's a lot easier than medicine, though.

Yeah, it turns out it is. It's certainly easier than working all those shifts that you've worked in the last.

Year and a half.

So thanks for doing that. By the way. It's been a tough time for you to come out of training and be thrown into, you know, the pandemic as an attendee. It's been a wild place in the emergency department for the last couple of years. Not only at the beginning, just when we all wondered if our jobs were going away because the volumes dropped 40%, but also lately when most of us are busier than we've ever been and really getting hammered at work. So thanks for doing that, for what you do, and for sharing your story.

With the listeners here.

I mean, this has been a pretty impressive year and a half that you've had with your finances. Where do you see yourself going forward? I mean, at what point do you stop living like a resident and go on even more trips than just Puerto Rico and Hawaii?

So I think that just sort of a graduated adjustment. I think that's my biggest thing, is no massive mistakes financially. So the next goal is in a little less than two years to have enough money saved up by a house. And then after that I think I'll have a bunch more expenses. Probably be trying to have kids by then that will add up quickly, I'm sure as well. But the plan is just to keep investing aggressively now, especially when at the beginning of the career, I have so much more time for this money to work for me with compound interest. And that's the plan.

What's your spouse think of all this? Watching you go crazy paying off debt in the last year while getting ready for marriage and all that.

So she's happy for me. And it's funny to see how she doesn't have anywhere near as much interest in it as I do from like, oh, look at this cool thing that I did. And check out how if we project it this way and look at this rate of compound interest, what it could do. And she's like, yeah, whatever, I trust you. You got it.

Yeah, for sure. Doing it together is very helpful, but it's almost every companionship of any kind that one person is more interested than the other. So the key is just keeping them in the loop and working together on your goals. You don't necessarily have to be on the same page, but you both need to be reading from the same book. Now, you mentioned mentors. Who have your mentors been on your journey to success here?

So I'm very lucky in the sense that my brother and I were both first generation college graduates, but he's also an emergency medicine physician, so he was able to give me some pretty applicable financial advice, saying, hey, watch out for these things, don't do these things. Pretty helpful.

Save your money, don't buy whole life. The usual, huh?

Exactly. Exactly. And then my residency program itself, McGovern Medical School, formerly known as UT Houston, we always had some great speakers there. Some of our faculty, like Jonathan Rogg, who actually won a White Coat Investor Financial Educator Award, as well as Ryan Huebinger, they've been instrumental as well in saying, hey, guys, here's basic finances 101, personal finance. Don't make these terrible mistakes. You're going to be okay.

Cool. Well, congratulations to you. You've reached two impressive milestones. You should be proud of yourself and you've given yourself a great start to your career and to your financial life. So congratulations and thanks for coming on the podcast.

Thanks so much for having me and thanks for all that you do, Dr. Galle. We all appreciate it and very happy to learn from you. You're very welcome.

It's my pleasure. All right.

I hope you enjoyed that episode as much as I did. It's always good to talk to a fellow emergency physician and see what they're accomplishing. I love the fact that docs are passing around this information from one to another, right? Watch out for the bad apples in the financial services industry. Don't spend all your money. Realize, especially as an emergency doc, that your income's probably never going up beyond what you start with in your first couple of years out of residency. And just be smart about how you manage money. If we will give this information to each other, the entire profession will be better. Health care will be better, people will be able to concentrate more on their patients and be able to take better care of their families, partners, et cetera. I truly believe that a doc who has his or her or their financial life, their ducks in a row, is going to be a better partner, better parent, and a better practitioner.

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 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.

Keep your head up, shoulders back. You've got this and we can help. We'll see you later this week on the White Coat Investor podcast and next week on the Milestones to Millionaire podcast. Thanks for what you do.

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.

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