MtoM #85 - Nurse Practitioner Millionaire

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 85, Nurse Practitioner Millionaire. 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 Milestones to Millionaire podcast. We use this podcast to celebrate your achievements. If you'd like to come on, you can. Whitecoatinvestor.com Milestones I don't care what your milestone is. I don't care if you paid off your car or whether you are a multi deca millionaire. Whatever it is, we will use your experience to inspire others to do the same. I don't care what your profession is. I don't care what your income is. I don't care what your specialty is. I don't care, you know, if you inherited $5 million from your parents, whatever. We'll take you on here. We recognize that not every member of the audience is going to be able to relate to every person that comes on this episode. But there will be somebody out there that can relate to you. And your story will inspire them to be more successful with their finances and in turn be able to then concentrate their life on helping others, giving to charity or whatever their life goals may be. So if you'd like to come on whitecoatinvestor.com Milestones Today's guest is Chloe, who is a millionaire. Let's bring her the line. All right. Our guest on the Milestones to Millionaire podcast today is Chloe. Welcome to the podcast.

Hi. Thank you.

All right, let's let our audience get to know you a little bit better. Tell us what your profession is and how far you are out of school.

I'm a women's health nurse practitioner. I am. First, I started as an RN and I finished at 21 years old, so I've actually been in the medical field for about 11 years, but I finished as a nurse practitioner seven years ago.

Okay, and you're in what part of the country you in? You know, high cost of living, Bay Area kind of place or are you in rural Oklahoma?

So I'm from born and raised in Connecticut and I started most of my practice in Connecticut, which is still kind of expensive, but we've kind of geo arbitraged and moved to the west coast. So I live in Washington now and we're practicing out of Washington. It's working out better because I was able to get full time which was hard to achieve in Connecticut and I am making a higher income in Washington than I was in Connecticut.

It probably helps that you're not paying state income tax either.

Oh yeah, definitely.

For sure. All right, well, I understand you recently became a millionaire. Congratulations on that.

Thank you. Yes, I achieved that right after my son was born. So that was in 2020, beginning of 2021. And it was wonderful for the first couple of months to a year and then it's kind of gone down a little bit, but it's still above 1 million in net worth.

Awesome. Yeah, a lot of us have had that effect this year for some reason. I can't imagine why. All right, well, let's talk about some income. How much does your household make? What was your range of income over those seven years?

So in the last seven years it's been a pretty big range. So I was really struggling to try to make six figures in Connecticut. Like wasn't happening even though I was in my 20s and I really felt like this is the time I should be working full time pre kids. So I pushed for that a lot for a really long time. I actually worked at Yale University and they um, just never had it within the budget to give me full time hours. So I made, I feel like for seven years I made pretty much always $60,000. Cause I never was working full time. So as a nurse I was making 60,036 hours. And then as I became a nurse practitioner, I still made 60,000 because I was part time for a very long time. So that was really a bummer and it frustrated me. So we moved to Washington and now I like am making over six figures because one was full time. I just recently reduced my hours because I have a child, but I'm still making $100,000 plus with bonuses and stuff like that. Cumulatively with my husband's income we make about 250 though he is independent, he has his own business so he could make way more money. But it fluctuates and so usually we average 250.

Okay. And other sources of income, inheritance Are you a trust fund kid? Did you sell your house, Connecticut for a gazillion or anything else in there that we should know about as far as money that's come into the house in the last seven years?

No. I was lucky. My dad really did influence my financial mindset and he did provide me with. He had invested a mutual. Into a mutual fund for my college education. So he didn't do a 5:20. I think that's what it's called. I'm forgetting it.

529.

Yes. He didn't do that. He just put probably a couple thousand doll. Not much. I would say like $2,000. Really minimal amount of money in a mutual fund that was really high interest or high fee. And I switched that over when I was about 22, 23 to an index fund because I had just learned that high fee funds is not a good idea. But that's the only money I was given. And it had grown from about $2,000 probably when I was a real young child. I think he put some in at 5 years old. It had grown to about 25,000. So I was given 25,000 towards my school.

That was your inheritance? Y.

That was my inheritance and that was it. And we never, we've never owned a home. And my family definitely is, I would say maybe middle income, but it's really like a low income family, I feel like. So that is why my mindset is the way. The way it is.

Well, let's talk about that mindset. I mean, we know what you're making now. What are you spending? What do you guys live on a year?

Yeah, so we spend more now because we are in a house and it is pretty pricey out here, but we still don't spend very much money. I think it's about around 72,000 a year. So that's about 6,000amonth, which has increased over time. It was less. I think I was able to kind of get our expenses around 3 to 4,000 for a long time, but now just everything's increased. So we spend about 6,000amonth, which I think is still remarkable and still really pretty good. And I also don't think we make a ton of money in comparison to some doctors and stuff, you know, as a nurse practitioner, making good money but not making as much as some of the listeners.

So for sure. But that's pretty impressive. You're only spending about 30% of your income.

Yeah, I guess that's correct.

Now, to be fair, you're paying some in tax. I don't know maybe you're paying 15 or 20% in tax, but that, that's leaving you with the 50% savings rate. Is that about right, you saving about half your money?

I would say yes. You know, I, for some reason I don't do too many calculations. I wouldn't. Even though I'm really into finance, I wouldn't say I overanalyze it. Know a ton, read a ton of books. I am kind of very much the average investor. I know the minimal amount that I need to know just to kind of get things going so that I knew I had to Invest in a 401k when I started at 21, when I was had an option for a 401k but I didn't know what I was investing in. And so yeah, I feel like I am probably saving about 50%. Have I done the calculation? No, but I know we save, we save so much money. I practically have no paycheck right now just because it's all going into 401k. It's a 403B, but that's the same. And I have an option to invest in a 457. So we max both of those out. And then my husband also tries to use like a, like his own 401k sep IRA or something like that. I don't quite know what he does, but I know he does invest in retirement savings.

So what, what did your financial life look like? You know, seven years ago you came out of your nurse practitioner school. I mean, how much debt did you have? What'd your net worth look like then, et cetera.

So I was really fortunate and this is also probably by luck, but I didn't come out with much debt at all. I had a Pell. I had Pell grants, which I know is in the news now because those are getting.

Some free money.

Yeah, the loans, yes, they're getting like paid off or whatever. But I had because pretty low income and I had just come from. My parents divorced when I was like 15. That had changed their income levels too. And so my mom wasn't a working mom. She had more custody. That really benefited me right before I went to college because I got to use her tax information to get a lot of funds. I also had some scholarships, but I purposely did not choose a private university. My dad was kind of pushing me towards a state school because he knew my money could go further. And I'm glad he did because I do feel that as a nurse you have to basically pass the same tests. So the nclex and all These things, they all have to be certified to a certain standard. So it really benefits people to go to the cheapest school if you're going to get basically the same education. So I did go to a state school and I came out with maybe like $4,000 in loans that I had to pay back. And I paid them off pretty quickly. I also worked three jobs in college too. So I tried to cover the expenses multiple different kinds of ways.

Did you have much money? Were you worth much when you came out of school or something? Close to zero.

I think I just was worth about that $25,000 that my dad had gifted me. I think I saved some money in like a checking, but I wasn't one of those early trying to retire early teenagers. So I didn't have a ton of savings or anything like that. But I mean, to start with 25,000 is great.

So somewhere along the line you decided you were going to be serious enough about money to save 50% of your income, invest it in some reasonable way and become a millionaire in seven years. When was that moment?

I think I was about 22, 24. I think I had just, you know, fell into.

This is before nurse practitioner school.

This was. Yeah, podcasts had started to just come on the scene. I started listening to those. I don't really know how I fell into it, but I do remember having a specific conversation with my husband. He's my now husband, but back then we were dating and I mentioned something about the art of manliness and he mentioned something about Mr. Mustache, Mr. Money Mustache. And he said, yeah, I've heard of them and I kind of know about it. And so he kind of maybe had already heard about this sort of mindset before even I had. And then we started reading that blog and I started listening to some podcasts. My first podcast I was listening to was Listen Money Matters, which has since dissolved. But it was a really good entry point because it was just very light hearted. They drank a lot of beer on the podcast and. But they mainly started my gears going. And he, I think it's Andrew Feber on that podcast. He basically said, just invest in a wide swath of the stock market. You don't have to pick individual stocks. Probably not a good idea, but invest in all of it and then you can and can't go wrong. And so I really didn't know very much. So I just started to try to invest in like the S&P 500, whatever I had access to in my 401k. And that has since been transferred over to just the total stock market index. But that was good information. That's pretty much all I needed to hear. Because if I had got hung up on what specific, specific do I need to invest, how much do I need to invest in Tesla or bonds or specific stocks, what mutual fund, what index fund, what's the difference? I kind of just leaned into the total stock market as a large swath and that helped me.

Awesome. So those of you watching this on YouTube, you can see that Chloe's pretty young, but you've been very successful. You're a millionaire already. Pretty young in life. What do you consider your secrets to success? What did you guys do right, that led to this?

I was 34. I don't. I guess that that is young. That is young. But I don't feel so young.

Lots of us aren't out of training by 34. That's young.

Well, it feels like I had been sort of going for this for at least a decade now. So it feels like still a long haul of saving. Both me and my husband are not spenders. We've started to kind of spend a little bit more now that I have a child. Like you just spend more for convenience and stuff like that. But I think I was just diligent at putting money away even when I didn't really know what I was doing. And I think that's my main takeaway for people would be don't try to learn every little thing about it. You probably don't have the time to do that. But if they offer you a 401k and a 457, which is really fantastic because it's just another tool, pre tax tool to save money, try to max it out and try to go into something that is pretty large cap, I think unless you're older and then you could have an advisor. But yeah, I think just getting started as soon as possible. I mean I started at 21, which was really great and I've had so many challenges and hiccups. I got laid off pretty quickly lost the match. So that was. I was an RN during. I started when I was in 2008 and so already the market was down and the hospital I worked for was still really hurting in 2013 and they. I was part of a huge layoff. So many people got laid off. But it like devastated me because I was right before my five year mark where I would have been fully vested in the match. And so I tried to fight that a little. Now in hindsight there was a way I could have gotten it had I Gone back per diem and just made up the thousand total hours and details. But, you know, there's been a lot of hiccups where I've actually lost some money, not even of my doing. I bought a new car. I think everybody does that. That probably wasn't the best decision, but I still have that new car 11 years later. So maybe it wasn't a decision because it's still working great and hasn't cost me too much money. I even coming out here had another little challenge because it wasn't a good fit. The job that I had chosen to come out to Washington. And I don't know if they just didn't kind of like me, but within the three months, it just wasn't a good fit. And I was in a fertility practice, which is very unique and very money driven. Not that there's anything wrong with that, but it just, it felt a little disingenuous and so I wasn't really happy there either. So I wasn't working when we immediately came out here. So that took some time to get another job. So I was like six months, basically just not working until I found a better job. But you know, the hiccups and stuff, as long as you are diligent about putting money away early on, that money should grow. And yeah, so I think that has been the key to my success, is that I just kept putting money away even when I didn't really know what I was doing. And it has proven to be very successful. I mean, it was a great bull run, so things were in my favor and it was a lot of luck, for sure.

Well, it wasn't luck, right? I mean, the base for any sort of financial plan is saving money, you know, and sure, some of this is gains, but I bet if you went back and calculated what percentage of this was just brute force money you saved, it's going to be well over 50% of your net worth. You know, you saved your way to wealth and that's great. Wonderful, wonderful. Good job. Proud of you. What advice do you have for someone else that's, you know, maybe not making $800,000 in their household? They're making 100, they're making 200, whatever. But they also want to become millionaires. What advice do you have for them?

I think start as soon as you can. Try to choose something that you feel comfortable with. I mean, investing is a lot like medicine. There's always going to be some inherent risk that you're taking on, but you should know as much as you can to make a Good decision, but I wouldn't let it delay you. Try to make the decision as fast as possible to get the money in. I wish I saved more during that whole bull run, because I think it would have just been better. But you do what you can with what you have. Even when I was making, like, I think I started at 52,000 as an RN, I was saving more than 10% at 21 years old, and I had moved that up to, I think, about 20%. So that kind of just. If you can put it away right out of your paycheck, that's really helpful because then you don't see it. You don't get used to spending it. And that's another key. You know, put it in right off of your paycheck. Pre tax, too, would be good, but doing it early so that you. You don't really get used to spending it and missing it. So I think those who are in residency not making a lot of money. You really mentioned this as a key is just to continue to live like you're in residency for those first couple of years as an attending because you're used to it, and so it won't hurt that bad. And it does change. You try to change your mindset enough after a couple of years, you'll be a saver. I think. Even if you're quite a spender, I think you can change. So, yeah, getting started early, trying to put away 10, 20, moving that dial up as time goes on, especially if you're making more money, would be my biggest advice.

Awesome. Well, congratulations to you on becoming a millionaire, and thank you for coming on the Milestones to Millionaire podcast.

Thank you. It's nice to be here.

All right. I hope you enjoyed that interview. Sometimes we get people on here, they're making million dollars a year, and, yep, they're building wealth really quick. So we like to bring people on that maybe aren't making quite as much money that are much more down toward the average income of our audience or below average of our audience that are still being successful. And I think the takeaway from this one is that training yourself to not be a spender is the way you build wealth. Right. Everybody wants to be a millionaire, or at least they say they do, but in reality, what they want is to spend a million dollars. And they're actually polar opposites. They're not the same thing. They're opposites. You become a millionaire by not spending a million dollars that you could have spent. And so, you know, if you can train yourself to not spend all your money. And even better, to save half of it like Chloe is, you're going to build wealth. You know, you can do anything reasonable with it. You can even put it in whatever that crummy mutual fund or dad put the money in. And still it's going to grow, right? He put $5,000 or whatever and $2,000 ended up growing to $25,000 after a few decades. And so the important thing Save some money and get it working for you. 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 and 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.

The hosts of the White Coat 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.