MtoM #51 - Neonatologist Finds Financial Freedom

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 51, Neonatologist Finds Financial Freedom. 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. We have a pretty awesome interview going today. I don't think we've had one quite like this on the podcast, so I let it run a little longer than usual, but I think you're going to enjoy it. All right, we've got a guest on the show today, Ryan. Welcome to the Milestones to Millionaire podcast.

Thanks, Jim. Happy to be here.

You have reached a unique milestone I don't know that we've necessarily had on the podcast before, but it's still a pretty interesting one, I think. So we're going to call it Finding Financial Freedom. Tell us your story a little bit. You're a neonatologist. You had your nose to the grindstone like crazy working 90 hours a week in the NICU. Your spouse is an internist, and you stepped back and said, what am I doing? And made some pretty significant changes in the last year in your life. Can you tell us about them?

Yeah, exactly right. So I met my wife in medical school and just kind of kept with my career wanting to save kids lives. And so that kind of got me into the nicu. And this was all before we had our own kids. And so before we kind of knew it, the life we had always thought we would have was being taken away from us by the lack of time we had together. I was working about 7 out of 10 weekends. My wife worked Monday through Friday. The kids were being raised by all pairs for two or three years. I asked my work if I could cut back my hours, but where we were living, it just kept growing so quickly that we went from having 40 patients in the NICU to 90 by the time I left. And so we were just trying to hire up and always fill in the gaps versus being able to have people step back. And so because I was able to save and put my, you know, put savings, I think we had about an 85% savings rate one year when I first was in attending.

I assume that's of your net income. I assume, yeah.

Of the net, yes, of the net, yeah. You know, that I didn't have to stay in that position if they were unwilling to cut back the hours.

So tell me about those conversations. I mean, you go to them and you say, you know, I want to work less, I want to work less. And they're like, too bad we don't have anybody. We can't do it. But then you came and said, I'm leaving. What'd they say then?

So it was a, it was about a year and a half, two years in, I passed my boards. I had initially signed a three year contract that said 60 hours a week plus overtime at the discretion of the group. And then we lost a couple of our partners. It's a big group, about 26 neonatologists split into kind of two different hospitals. So there was nine that were in the north part that I was working at. And about two years in, I said, this isn't, you know, I was working 80, 90 hours a week making 400, $500,000, but not ever having any time to enjoy it, and said, I would much rather work half of this and get paid 40 percentage. And what was funny is they sent an email out to the entire group and said, in the next one to three years, who wants to step back? Who wants to retire? And it was something like 21 out of 24 of the partners wanted to step back. And so then they sent kind of at a meeting, they said, okay, if you're kind of one of the newer partners, expect three to four years before we're able to hire up enough, before the newer partners can step back their hours. There's a long line of people ahead of you that want to cut back. As soon as we get somebody in, that's where we can start working with them. And so I kind of said, I understand you have to be fair and equitable to everybody. I'm in a position that I don't have to stay here. I gave them another six months to try, and then I kind of put my foot in the sand and said, either you cut me back to 0.5, 0.25 time per diem, or I'm going to have to leave. And they said, we understand. That was it.

Wow. Wow, huh? You know, you think a lot of times when you're serious about it, that's a pretty strong negotiating position, and they would rather have you not at all than quarter time. I guess I'm surprised that tactic didn't work.

I was a little bit, too. But, you know, I. I talked with everybody. They were. They were very aware of kind of my position. I could say, you know, I actually had wanted to do this right before COVID hit was kind of my plan. And then when Covid started, I didn't want to be the doctor that left the group that everybody got sick and they needed. So I stayed an extra year longer than I had initially kind of wanted. And so by the time I kind of put my foot in the sand, I was burnt out. And so I wasn't doing as many QI projects or helping out as much. So maybe they had seen the writing on the door beforehand.

Yeah, for sure. So how far are you out of training? How far are you out of your fellowship?

So I finished my fellowship four and a half years ago.

Four and a half years ago. And do you have any student loans?

So my wife, she went to internal medicine, so right out of. She didn't do a fellowship, and so she had 190,000 in loans, and I had 165,000. We paid hers off in the first two years that she was working when I was still a fellow, and then we paid mine off within eight months of me being an attending.

Wow.

So we paid off the 355,000 within eight months of me working.

Okay. And then before you pulled the plug, how much were you guys able to acquire? How large of a nest egg were you able to build?

Yeah, so right now we have. We have. In a taxable account, we have 300,000, and I have two boys, 8 and 4. We have $100,000 in each of their 529s. So I kind of consider that check marked we have about 60,000 in our Roth, and then in retirement savings and our 401ks and things that we've amassed, I think we have 630,000, plus we're sitting on $125,000 cash. I never know how to kind of factor this one in, but we owe $300,000 on our home that's now Zillow, worth a million dollars. So I don't know if we add that 700,000 or. We live here. We don't plan to move, but kind of our total nest egg right now is we have $830,000 in liquid assets. I guess between 401ks and cash and our taxable account, our kids have 200,000 in 529s and then we have 550,000 in home equity. So we're like 1.8 if you add all that up, or 850 if you just count our money with the taxable account and the 401s.

So not necessarily financially independent, but certainly in a very good place for somebody that's four and a half years out of training.

Yeah. And, you know, one of the things that we were able to look at was kind of how much we spend a year and how much money we need. And so the kind of constant battle that I had was if I keep my head down and kept going, in three to four years we would have hit our magic four million dollar mark. But then my kids would have been 13 and 11. I was already kind of becoming the tired, kind of surly dad when I came home. And I was home, I was kind of tired and burnt out and wasn't all that much fun to be around. And then the big discussion was with my wife, who has always wanted to be an outpatient internist. I kind of. My job's a little bit like yours, where I go in, see my kids in the nicu. Maybe I get to see them for a week or a couple months, but then they kind of turn over. Whereas my wife has her patient panel that just follows her for the rest of her career. And so she doesn't want to step back. She doesn't want to limit her time with her patients because she wants to be there for them. And so when she started saying that she had no interest in retiring until she was 55 or 60, I said, well, then why am I busting our butt so much to save so that I can retire by 40? She goes, well, I don't want to retire at 40. I want to worked my whole life to do this. And so her income being about 300,000, mine being about 600,000, we lived off, well, less than she made. And so even though I made more, we didn't need it. And I was unhappy and kind of, we were unhappy. So that's why we were able to make that stance. Even though everything in me was, how do I walk away from a job paying me this much? My life was pretty miserable. It wasn't what I had wanted it to be.

Now you guys had a pretty awesome 2021. Tell us about what you and your boys did in 2021.

Yeah. So, you know, one of the. Because I. What was pretty funny was I had talked to my son before COVID that I'm going to call my, my, my boss's boss and I'm going to tell him I'm either going to get my, my job cut in half or I'm going to quit. But then Covid hit and I drugged my feet for an extra year. And so right before I went into the last meeting where I was definitely going to say, I need the summer off or I'm leaving, I booked. I asked my son, where do you want to go? Anywhere in the country. And he said he wanted to see the Grand Prismatic Springs in Yellowstone. And so I booked that, went into work the next day, told him, you know, I'm done. And that's, you know, when I put in my 90 days. And then I have a $10,000 little Jayco travel trailer and I did a 75 day road trip with my boys. My wife was able to fly out for about 28 of the days between weekends, holidays, and her vacation time. But a lot of the leg work and driving was just me and the boys. You know, going through Montana, going through Washington, it was, it was awesome. We're from Texas, so it was a, it was an incredible journey. I got to see things that, you know, the way my life was going and the way my hours were, I wouldn't have seen until I was 50 and unable to hike any of this stuff. So it was, it was wonderful.

Now, I don't know that at 50 you can't hike anything. I'm getting close to 50 now, and I hope I can keep hiking for a while, but that sounds like a pretty awesome summer. But at this point, you're, you're thinking about going back to work on your own terms. Now tell us about what you've lined up.

Yeah. So, you know, one of the things my wife and I had discussed was she is in her dream job. She loves it, she loves her patient panel. So she was completely on board with me leaving, but she didn't want to move. And so that's when, you know, locums or commuting kind of became, you know, kind of my options. We're in a position where I don't have to work, but I do love neonatology. I do love taking care of the babies. And so I found a position that's about two and a half hour drive away. But it's per diem, meaning I tell them when I want to work and I can do a 48 hour shift. So I drive for two hours, work for 48 hours and then drive back. And they only ask that I do that once a month. But I can do several more shifts if I want. There's a need for, for, for this area. So if I love it and I want to do six, eight, you know, shifts a month, I can. But as it is, I, you know, I just have to do one 48 hour shift. I get the other 28 days to travel with my, my kids, do whatever I want to do. It's, it gives me that kind of, that time. And so, you know, with your podcast and kind of everything that was, was in my head while I was working was trying to become financial independent so I have money. So I finally have that time to do what I want with my life and to spend with my kids. And I kind of, kind of looked it over and said we, you know, we could rush really hard and get there in three years or you know, my wife can do what she loves doing. I can do a little part time gig. And then when my kids are in high school or middle school and maybe don't want to spend as much time, then, you know, I can go back to working full time. But because we were able to get our loans paid off so aggressively, get a nice start, you know, that we could kind of slow down and be here for our kids when they need to.

Pretty awesome. I mean, you truly lived like a resident. You're working 90 hours a week, spending very little and put it all away toward your loans and toward your nest egg. And now you've got this freedom to do what you want. Now some might say, hey, he's married to a doctor. But still you guys took care of business very quickly. And so that's pretty awesome.

Yeah. And one of the things that my wife really wanted to make sure we, that I said on here was we have felt like we spent so much money. So she was raised very poor. She lived in a trailer. I've actually, I think had a podcast named after me because I asked how do we start taking care of her parents who have no money? They have no 401k and he doesn't work anymore. But we felt like we were richest residents. We rented a little house. We were making like $80,000 in Gainesville, Florida, which was enough for us to go out to eat dinner anytime we wanted. And so it was very incremental. When she got her first job, we each got a new car and bought a house and you know, and Even now, we have a million dollar house kind of via the valuations on Zillow. But we're still living well below our means, which I think geographic arbitrage has helped that. We live in Texas, but we can kind of do anything we want. We sit kind of in the nosebleeds when we go see football games or go to events, but we still get to go to them. And camping is, you know, 12 bucks a night for a campsite. So we get to do a lot of stuff. We never feel like there's things we have to say no to, but we don't buy designer clothes. We drive Hondas and Fords from, you know, 2015. And it's been very easy to be satisfied with what we have because we feel like we can do more than we ever thought we would be able to.

Awesome. So let's say there's somebody that's in residency or fellowship and wants to do what you did. What advice do you have for them?

I think importantly is to dual physician couples. I think there was something like 14 couples got married in my med school class. And so when we got into it, oh, it's great. I'm marrying a doctor. And then we've been married for 12 years. We realized how little we got to see each other because we were always opposite weekends, opposite hours, trying to figure out, well, how can one of us be off to be with the kids while the other is working? And then we realized we were never together. But with it came a lot of, wow, we make way more money than we ever thought. And so instead of being hindered into, oh, no, we've worked our whole lives. We have to continue working our whole lives. Wait, I'm married to a doctor making 300,000. One of us can step back. Her job lets her take off whenever she has weekends free. So it's having the communication with your spouse being on the same page as your spouse. Getting my loans paid off early, getting a nest egg saved up, just let me feel like I had opportunities to do whatever I want. Nobody could tell me my job couldn't say, you have to be here. The loan officer couldn't say, you have to keep paying off. I could do whatever I wanted. We could do whatever we wanted. And that freedom is worth so much. Versus I asked everybody I worked with and a lot of my friends, and they all wish they could have done it, but because they had a baby, a spouse that didn't work or had gone through a divorce or like Portia's or whatever it is, they had to keep working their three to five more magical years in order to have enough. So kind of living, being satisfied with what you have, which, I mean, we have more than we ever, ever could want, has really given me opportunity to be really flexible and have. The last seven months that I've had with my kids and my wife and getting to do things every weekend has by far been the best seven months of my life. So I wouldn't have traded for anything.

Do you think it was a mistake to take that job? Do you think you took the wrong job for you?

It was actually the second I interviewed at four places and the first one filled by somebody else. And so this was my second option. Our family was in the area, but I did know when I took it, they're going to work me like a dog, but they're going to pay me a lot. So if I could just do it for a few years, we'd be so far ahead of the game. And so the amount of experience that I got taking care of 90 really sick babies, I feel like I can intubate, red lines, manage a crazy nicu, gives me the confidence that I can now go to kind of a smaller town, be by myself and have that confidence. So I knew it was probably not going to be the long term job for me. I was hopeful that once I got in and showed I was a good employee, was loyal, worked my hours, that then I could change the schedule and work less. But they have kind of always had that work schedule and there was no change in it. So. But looking back, I don't, you know, I think we're financially in a very stable place. My wife loves her position. Our families all live very close to us, and I have great experiences and great, you know, many babies are alive because I took care of them and their parents still email me and talk to me, and that means the world to me. And so I don't regret the four years at all, but I knew I couldn't keep doing it for four more.

Awesome. Well, congratulations on your success. Thanks for coming on the podcast and sharing your story with us.

You're welcome. Well, thank you so much for having me. And, you know, I think a lot of times we get funneled into, we have to, you know, go to med school, residency, fellowship, then you just start working and you got to save your $5 million before you can kind of look over the side. And I'm just here to tell people there's other ways. And I have no doubt that we will be able to retire. We'll be able to retire well and that we can continue to live well. But right now we get to spend more time with each other, with our kids and do some fun stuff and it's been great.

Yeah, I don't think you're going to regret your decisions. Congratulations.

Yeah, thanks, Jim. Bye.

All right. Some great lessons to learn from that, one of which is it's always great to marry another high income professional. There's challenges associated with it. You may find yourself with a bunch of nannies and au pairs raising your kids and you may find you don't see each other as often as you otherwise might. But you also have two incomes, which is a very powerful tool, especially if you focus them on building wealth and taking care of business. I mean, just four and a half years out of training, these guys had not only become millionaires, but they'd paid off both of their student loans and had a very reasonable mortgage that even on just her income was only 1x. Geographic arbitrage helped. The fact that he worked his tail off those first four years was a big help, of course, and they're obviously not huge spenders. But you put it all together and all of a sudden, just four and a half years out of training, he's got the ideal life that he was looking for. And it's really awesome. I've said it many times that if you possess both financial discipline and financial literacy, it's like having a superpower. You look around and nobody else knows this stuff. Nobody else is doing this stuff. You don't have to live like everybody else. There are lots of options available to you. Whether you want to work until you're 60 or 70 because you love your patient panel, or whether you want to spend seven months straight with your kids. Both are options. If you take care of your financial business, 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've 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. If you'd like to apply to come on the Milestones to Millionaire podcast, you can do that@whitecoatinvestor.com Milestones. Otherwise, tune in next week. We'll have another great episode of the Milestones to Millionaire podcast. Keep your head up, shoulders back. You've got this. See you next time. 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.