MtoM #82 - Gynecologist Gets Back to Broke

This is the White Coat Investor Podcast, Milestones to Millionaire. Celebrating stories of success along the journey to financial freedom. This is Milestones to Millionaire podcast number 82. Gynecologist gets back to Broke. Love what you hear on the podcast. Looking for more great white coat investor content? Head over to our YouTube channel where you can watch video recordings of our podcast, short snippets of financial tips explained succinctly by me and others, and deep dives into topics for more in depth learning. You can even learn all about real estate with webinars from our real estate partners. Check out all this and more@YouTube.com TheWhiteCoatinVestor. You can do this and the White Coat Investor can help. It's great being back on the podcast. We've got a great interview today. I know you're going to enjoy it. Let's get Nilou on the phone. Our guest today is Ni Liu. Welcome to the Milestones to Millionaire podcast.

Thank you. I'm very excited to be here.

You should be excited. You've accomplished something awesome. I understand you are back to broke.

Yeah. Yeah. That feels kind of like an accomplishment. Definitely in the timeframe. It certainly feels good.

Yeah. I mean, this is a major accomplishment. This is, you know, perhaps it's the first, first accomplishment right on the pathway to becoming a millionaire. But it is no small feat. First, before we get into the numbers, tell people what you do for a living.

I am an ob gyn. I'm a generalist.

Okay, so just standard bread and butter ob GYN practice.

Yep, pretty much exactly.

Employed or a partner or practice owner.

I work for a hospital owned practice in a kind of a smaller part of Indiana, a smaller hospital in Indiana, although we're trying to grow.

Okay, and how far are you out of training?

I graduated from residency in 2019. So just what now? Three years?

Yeah, two and a half, three years out. And what's your net worth now?

Now as of June 2022, we are right around $94,000.

$94,000. And what was it the day you walked out of residency?

So rough. So I don't know the exact value then, but we did our net worth six months after I graduated from residency and it was negative $450,000.

$450,000 in the hole?

Yeah. Yeah, it's pretty amazing.

Oh, it's terrible, right? Yeah, I just, I just recorded a podcast with somebody calling in with a speak pipe question. This was the regular White Coat Investor podcast and he's terrified because he's a medical student. Hasn't even started residency yet, and he's running the numbers and realizing he's going to owe $400,000. But your podcast today is going to give him great hope because this is pretty awesome, what you've done.

Yeah, no, I feel really pretty good because I remember just my stomach sinking when I. When I first saw that number, like, in January of 2020. That was when we did our net worth for the first time, and that was the number that we got. And I just remember feeling so disheartened.

That is step one, though, is knowing where you stand. So tell me about that. Six months, right? You came out of residency. You didn't actually know what your net worth was for six months.

No.

Tell me that process where you went from, you know, coming out and finally getting the big income until that point, where you go, I just got to figure out where I am. I want to hear about that. Six months.

Yeah. So I got to be honest. I mean, I finished in July of 2019, and I just took some time off. I just said, hey, we're going to. I'm just going to relax a little bit. I didn't start working, so probably second week of September, and really didn't start looking into the finances of things until October, November. And I just took it a little bit slower at the beginning to try to get my feet under me. I think starting a new job and just being out of residency, I gave myself a little bit of time. I also did refinance kind of in that timeframe. We also bulked up our emergency savings because we had essentially no emergency savings. So we bulked up our emergency savings during that six months. We didn't have any credit card debt or anything like that, so we didn't have that to worry about. But so I think I just kind of took it a little bit slow and then really got into the finances and the nitty gritty of everything kind of in earnest starting in January of 2020.

You're using the we pronoun. So there's somebody else involved here. Are you married? What's going on?

Yes. Yes, I am married. My husband is also in medicine. He is. He was a resident at the time, and he just finished his fellowship this year. So he definitely. I say we, and I say that loosely, because he was not very involved in figuring any of this out, to be honest, at the beginning, because he was in the thick of it in residency, and he's starting to kind of get into it now with me, now that he's finished his fellowship.

Okay. So he was Contributing a resident income to all this. But you were the attending, so this is mostly your earnings.

Yeah.

So what's your range of income been from the time you came out until now? What are we talking about? Are you making $800,000? Killing it with some crazy gynecology practice or where we at?

Not, no, not definitely. Not that I. With my, with his income, my range has probably been 2 or 350 to about 400,000.

Okay, so a pretty good income, but not, not anything crazy.

Nothing crazy, but very, very good, considering where we were.

Yeah. Okay, so $450,000 to $90,000. I mean, that's a swing of $550,000 in two and a half years.

Yeah.

Right. Only made, you know, what, seven or eight hundred thousand. So just about everything that you made has gone toward building wealth the last two and a half years.

Yeah.

Tell us how you did that.

Well, I definitely automated a lot of our savings. We maxed out all of our retirement accounts that we had access to. And then we really got aggressive with loans and paying off loans. Obviously, sometimes the market really did help us in terms of definitely the housing market. Our house has appreciated in value, so some of that is related. That appreciation is kind of where that comes from. But we really were aggressive with our loans and with our savings.

Yeah. What have your loans done over the last two and a half years?

So I started personally, my loans were about $230,000, and now I'm almost down to five figures. So in just a couple more months, I'll be under a hundred thousand dollars left on my loans. We have recently refinanced my husband's loans and are starting to be a lot more aggressive with his loans. We did take advantage of the moratorium on federal payments and the 0 interest, 0% interest for the last couple of years. But we did recently refinance his. And then we also took advantage last year of the good interest rates and refinanced our mortgage. So we were able to put a bigger dent in our mortgage over the last year or so. So that's been a big part of the swing into the positive.

So a balanced approach. Some of it's appreciation of the home, some of it's paying down debt, some of it's maxing out retirement accounts. You've kind of taken a three prong approach.

There's, I think.

So how much money are you actually spending, do you think?

Well, you know, I had this very ambitious goal of very much living like a resident and being super, super frugal. And that really didn't pan out. We have definitely, you know, spent more than we used to. You know, we saved up for a trip to Spain just a couple of months ago, for example. So we're definitely not living exactly like a resident, but we track our spending fairly closely, and we try to live more frugally or as frugally as possible with some of the, you know, fun stuff kind of built in. So, yeah, I mean, we definitely are spending more than we did as residents, but not by a lot.

What do you think you're spending? A hundred thousand, 125,000, something like that?

To be honest, I don't actually track it that closely, but I would say probably about 100,000.

And what would you say to somebody else? You know, somebody else that wants to do what you've done? They're like, wow, that's really awesome. I really worried about how I was going to ever get out of this huge hole I'm in. What advice do you have for that person?

Well, I'm not so into all of the really nitty gritty aspects of investments and financing and things like that. I think I have a very elementary level, probably understanding of some of the. Some of your podcasts are probably a little over my head. But I think the basics for us has been having a plan as quickly as we could. We might have taken a few months off, but we kind of had a plan even vaguely early on that we wanted to be aggressive with our loans and we wanted to be aggressive with our savings. We automated as much as we could in terms of, you know, everything kind of going immediately into the savings, into our retirement accounts, even our Roth IRAs or IRAs or backdoor Roth and all of that kind of stuff. That's all automated for us, so we don't have to think about putting that money away ourselves. It just happens. And then automating all of our loans and all of our. Yeah, all of our loan payments. So that's been really, really helpful for us. I think that's been the key for us.

What would you say to somebody that knows they need to sit down and do what you did in January 2020 to figure out where they are to actually calculate their net worth?

That's really funny, because I actually had a friend just ask me this question. What did you do? I need to really sit down and do this. And I recommended your book firstly, and then your podcast secondly. And then I said, you need to write. You have to have goals, and you have to write them down. You have to have a sense of when do you want to pay off your loans by when? Do you want to be able to retire by and start by writing down, even if it's general goals, writing it down and giving yourself something concrete to look at and then creating the steps and the path that's going to get you there.

So what's your next goal? What's the next financial goal you think you'll accomplish?

Well, I'm really hoping to have my at least my loans paid off by the end of in about 12 months. My husband is going to start soon his real job, so that's going to be a big contributing factor. But we're going to be really aggressive with our loans in the next year or two. Hopefully be debt free within three years.

Awesome. Well, Nilou, you have done awesome. You should be very proud of the work you've done. This is no small feat. I know it might seem silly to people outside of medicine to celebrate getting back to broke, but in medicine it's a big deal.

It is, it is.

So congratulations to you and thanks for being willing to come on the podcast and using your experience to inspire others to do the same.

I really appreciate you having me on. It was great. Thank you. All right.

I hope you enjoyed that interview as much as I did. It's always great to have some of the first few steps on the milestones to millionaire process on the podcast. Not everyone can relate to someone becoming a deca millionaire, and so we like having episodes where people are getting back to broke or people are paying off their student loans or their mortgage or even just buying a car, you know, which is one episode we did once. But the takeaway there, I think is having a plan works. Dedicating a big chunk of your income toward building wealth works. Does it take a little bit of time? Yes. It's not a get rich quick scheme, but that was a swing of over $600,000 in net worth in just two and a half years. That's a big deal. And Elu should be proud of herself. And you know, they're about to get another shovel that can really help them dig, particularly out of their student loans. But for the most part, this was on one attending income and the resident income. It's not like it was a massive amount of income that they've been building wealth on. So lots of lessons to learn there. Love what you hear on the podcast. Looking for more great white coat investor content? Head over to our YouTube channel where you can watch video recordings of our podcast. Short snippets of financial tips explained succinctly by me and others and deep dives into topics for more in depth learning. You can even learn all about real estate with webinars from our real estate partners. Check out all this and more@YouTube.com TheWhiteCoatinVestor. You can do this and the White Coat Investor can help. If you'd like to come on the Milestones to Millionaire podcast, you can sign up@whitecoatinvestor.com Milestones. We'd love to have you. We'd love to celebrate what you've done and help use your story to inspire others to do the same. Until next time, keep your head up, shoulders back. You've got this. We can help. The hosts of the White Code Investor Podcast are not licensed accountants, attorneys, or financial advisors. This podcast is free 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.