MtoM #83 - Anesthesiologist 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. 83 Anesthesiologist gets back to broke. Did you know that the White Coat Investor not only has a podcast and a blog, but several books that will help you on your way to financial independence? These books cover topics such as asset protection and minimizing your taxes to keep more of your hard earned money. They discuss plans for insurance, housing spending, student loan elimination, investing and estate planning. You can learn how to become a millionaire within five to 10 years of leaving residency and how to invest in a sensible, low cost and effective manner with or without the assistance of a financial advisor. There's even a book geared directly toward medical and dental students so you can start optimizing your finances early in your professional journey. Find the book that is right for you at the WCI store, at shop.whitecoatinvestor.com or on Amazon. You can do this and the White Coat Investor can help. Got a great guest today. Let's get him on the line. All right, our guest today on the Milestones to Millionaire podcast is Austin. Welcome to the podcast, Austin.

Thank you. I appreciate it. I'm glad to be here and it's.

Good to see you again. We've met before a few years back.

Yes, sir.

Yeah, tell them. Tell them a little bit about where we met.

All right, so this is one of my favorite experiences having to do with the white co investor other than reading and listening to the podcast and all of that. A few years ago you came to speak at a conference here in town and I was a resident and a bunch of my co residents were sitting at this table and I got there and went to sit next to them and my friend that rode with me happened to sit down first and he was sitting right next to you. None of them realized that it was you sitting there. We were all there to listen to you, but none of them other than me knew who you were. So, you know, I sat down, I was just like, oh my gosh, what's up man? How are you? So, so glad to be here with you. And thankfully I had brought my copy of the White Cut Investor and even signed it for me.

Yeah, awesome. Looks like my handwriting.

Yeah, I appreciated it.

Well, I don't know if it was the book or whether it was the talk, but you got the message because you are here to celebrate a pretty awesome milestone today. You're back to broke.

Back to broke and hopefully many more milestones in the Coming future.

Yeah, Congratulations on that. That's pretty awesome. So let's start by telling people a little bit about you. Tell us what you do, how far you are out of training, what part of the country you live in.

So I am an anesthesiologist. I actually graduated from my residency last summer. Last year I worked as faculty for a year and I've actually now returned to training in fellowship. So I'm doing a one year fellowship in. In adult cardiothoracic anesthesia and I'll be done next summer.

That sounds challenging.

It's awesome.

Yeah. Okay. And Midwest.

Midwest, Yep.

All right. And tell us what your approximate net worth is now.

So as of yesterday, my net worth is about $55,000.

$55,000. That's pretty awesome to be in the positive. And what was the lowest it ever went?

So when I graduated medical school, we were negative 405.

$405,000 in debt.

Yeah, it hurts to think about it.

You know, that's about the same as somebody we had on a week ago who owed $450,000 or was $450,000 in the hole. And the week before that, I had a call in on the regular White Coat Investor podcast from a medical student who was terrified about. About owing $400,000 in student loans when he got out of residency at some point in the future. So this is good. This is like the answer to his question. We're bringing on people who have actually accomplished this. So this is good. All right. What's your net worth broken up into at this point?

So in retirement it can't. Well, I'll tell you. Roth IRA, both for me and my wife, minus 46,000. My wife's just about 28,403 through my employer, pre tax, 52,000. And Roth 403B is 40,000. Roth $457,000 is 40,000. Obviously, most of that work was done in the last year that I had as faculty. I also have a Vanguard brokerage account with 11,500 and about $90,000 of cash. We have a home whose value is $326,000 according to Zillow, and a mortgage of 178,000 and then student loans of 405.

All right. Still got 405 student loans and student loans.

Yes. Yes.

Awesome. All right, well, tell us about the approach. This has not been a, you know, it's not been a student loan heavy approach. It doesn't sound like you've gone crazy paying on the student loans. It sounds like You've mostly been saving and investing. Tell us how you decided or why you decided or how you ended up with that approach.

First of all, I'll say I was. I've been following your blog regularly since probably 2013. I was reading it all the time. So that's kind of helped me come in with a plan of how I was going to handle my loans, you know, so consolidated my loans immediately after graduating med school so that my payments were as small as possible. Enrolled in revised pays you earned. So I was trying to just make my loans grow as little as possible throughout my training and just trying to get through training without going more in the hole. We did buy a house here for residency. We bought it for about $200,000 and it's gone up in value substantially, like everywhere else in the country. So that's been a portion of that increase in net worth. A few years ago, I received an inheritance from my grandfather, I think my second year of residency, so four, four years ago or so of about $100,000. So that obviously made a big impact. And we saved the majority of that. We spent a tiny portion, but most of it just kind of stayed in our bank account or funded our Roth IRA for several years since then. And then everything after that has been, you know, that one year that I had as faculty. I earned about $400,000 during that 12 months and saved like crazy. We, we lived on pretty much the same budget that I had as a resident because we were going back into training a year later, knew that we, we didn't need to expand our spending too much. And so we just, in that 12 months, we saved about 150, almost $160,000 in retirement accounts and $30,000 as a fund to help us throughout fellowship. So I didn't have to moonlight or feel a need to know, earn extra money and, and then, you know, probably about 20,000 more just for a future car purchase whenever one of our cars gives out on us.

Sounds like a very well paid gap year.

Yes.

Yeah. Sounds like you're married, right?

Correct. Married with three kids. We had all our kids, you know, college and then in med school.

So is your, is your spouse staying home with the kids or working or.

She has stayed home. We've been fortunate that she's been able to stay home through the, with the kids, through med school and through residency. Now that they're all in, she's able to. She uses her time to work a little bit, but still stays very busy.

So I'm hearing kind of a longer residency A fellowship a year as faculty. Are you going for PSLF or are you planning to pay off your student loans?

Now, I never thought I would do pslf. I kept it in my pocket as a possibility, but I thought, no, I'll just graduate and I'll pay them off super fast. But I've actually lined up a job that will qualify for public service loan forgiveness that I'll be taking next summer. And so I will already have six out of the 10 years done. I figure, why not?

Yeah, four more years. And that, my friends, is why you do not refinance your federal student loans until you are 100% sure that you're not going to take a job that qualifies for pslf. So good job there. That's pretty awesome. All right, so you got a year of lower income and you've got a plan for it. You've got kind of a war chest saved up for it. Sounds like you guys do quite a bit of planning and that's probably been one of your secrets to success. What would you describe as your other secrets to success?

I think the biggest thing is my wife and I are just on the same page. I remember, you know, we've been married about 12 years, and when we first got married, it was really hard for me to come to terms with my money and her money and really realizing it's our money and we have, we should have the same goals and be okay with the fact that, you know, I'm doing the working and my wife's doing most of the spending and. But that's just how our house functions. And so we're very on the same page with a budget and financial goals. We talk very regularly about what our vision is for our future, what we want, and how we're going to, you know, live to achieve those goals. And that includes, you know, not growing into our income too fast and, you know, what. What kind of things are financial priorities? So I think ultimately having very open discussions with my wife all the time about where we want to be on our finances has been the ultimate key.

Was there a time during your medical school or even your residency that you kind of panicked about owing that much money when you were done?

I would say I was nervous, but I would say that being a very close follower of the WICO investor has given me calm throughout the whole process. It's kind of helped me feel like, okay, I can handle this. I've got a plan, I'll be okay.

Yeah, the long term perspective helps, doesn't it? What about the upbringing for you and your spouse, did any of that affect how you manage your money?

You know, probably a little bit. My dad was a mechanical engineer, grew up very middle class. And I remember earning an allowance as a kid and him sitting down and putting an envelope in front of me and riding on it and saying, okay, this is how much you earn, this is how much your tithing should be, and this is how much you need to save and, and just making that a regular habit my whole life growing up. And then I, I will say I had a number of years, you know, after high school and stuff, that I splurged and wasted money and didn't save anything. And I, I wasn't wise with my money, but thankfully it was small change at that point.

Yeah, yeah. All of that's kind of pretty minimal when you start talking about $400,000 in loans and anesthesiologist income. So. Yeah.

And then I just remember when I was in college, I had a full time job and my dad said, just make sure with the retirement funding, just make sure you get the match. That's the one thing that stands up. He said, it's free money. Don't miss out on it. And so that definitely made me always focus on kind of saving a little bit more.

Awesome. So let's say there's somebody like you, they're coming out of medical school, their net worth minus $400,000. What can you tell them to give them some hope of where they might be a few years from now?

I would say you can do it for one thing, if you just honestly take a little bit of interest in personal finance and read the White Gunvestor and read other financial blogs or podcasts or books or anything like that, keep yourself up to date and I mean, you can figure it out and it will give you the knowledge that you need to be able to accomplish all of your financial goals and achieve that success throughout your life.

Awesome. Well, Austin, congratulations on your success. You should be very proud of yourself. Thanks for what you're doing. Those who need CT surgery are going to be very appreciative. Your specialization and all these years you spent learning your craft. And we appreciate you sharing your story because I know it'll inspire somebody else out there to do the same, that there is hope that you can get back to broke and start building wealth quickly. So thanks for coming on the podcast.

Thank you. I appreciate it.

Awesome. Well, I hope you enjoyed that. I think the takeaway here is that this dog got back to broke. Was it over five years? Well, kind of but it was really over one year. Right. It's really taking the power of that first year out of training and using it to build wealth. Right. There was a small inheritance, but his spouse isn't working. Right. Parents didn't pay for medical school. Sounds like their main advice was, yeah, you should budget and get your match. But they didn't exactly give him some thorough financial education. But basically what did he do? He lived like a resident for a year. And what happened? He got back to broke. And he's also acquired the knowledge that he's going to need to take care of those student loans. By the time he's done with these student loans, he's going to have 300 plus of them forgiven via PSLF. That's going to be a huge boost in his net worth in just a few more years when that happens. So this is the power of financial literacy. This is the power of having a plan. This is the power of having some financial discipline. This is the power of living like a resident. It works. You can do this too. There's nothing special about what Austin's done. There's nothing here that required him to have some sort of secret knowledge or to pick the right stock or the right cryptocurrency. What did he do? He lived on a budget. He put some money in retirement accounts. Right. Save some money for his future. You know, bought a house that he could afford. You know, nothing complicated. And you can do it too. Did you know that the White Coat Investor not only has a podcast and a blog, but several books that will help you on your way to financial independence. These books cover topics such as asset protection and minimizing your taxes to keep more of your hard earned money. They discuss plans for insurance, housing spending, student loan elimination, investing and estate planning. You can learn how to become a millionaire within five to 10 years of leaving residency and how to invest in a sensible, low cost and effective manner with or without the assistance of a financial advisor. There's even a book geared directly toward medical and dental students so you can start optimizing your finances early in your professional journey. Find the book that is right for you at the WCI store, at shop.whitecoatinvestor.com or on Amazon. You can do this and the White Coat Investor can help. Hey, thanks to all of you who are leaving us reviews on wherever you're downloading your podcast. Leaving a five star review because anything but a five star is actually a bad review. It's just kind of like VRBO and Airbnb that way. But leaving A five star review actually helps the podcast get out and reach more people. It helps it be shared with more people and helps them to find it. So I appreciate those of you leaving us five star reviews. If you'd like to come on the podcast you can apply whitecoatinvestor.commilestones. we'd love to have you. I don't care what your financial accomplishment is. Maybe you're a multi deca millionaire, right? Maybe you sold your practice, maybe you paid off a car. Whatever it is, we'll celebrate with you and we'll use it to inspire others to do the same. Till then, keep your head up and shoulders back. You've got this. We can help. See you next time. 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.