MtoM #90 - Orthopedic Surgeon Builds Wealth By Living Like a Resident

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 90. Orthopedic surgeon builds wealth by living like a resident. Welcome to the Milestones to Millionaire podcast. We celebrate your financial accomplishments and use them to inspire others to reach the same goals that you have reached. However, in order to do that, we need you to volunteer to be on the show. You can do that@whitecoatinvestor.com Milestone. It's not that hard to do. It's a lot of fun and it's not really that big of a time commitment, but it can make a huge difference in the lives of those who will listen to your story. So if you're willing to do that, apply@whitecoatinvestor.com Milestone. The white coat Investor is proud to introduce our no Hype Real Estate investing course, which will provide the framework for developing further knowledge and experience as you progress in your real estate investing career. We call it an introductory course because there's always more to learn. But this is no short, superficial course. There are over 200 lectures and videos adding up to more than 27 hours of content by over 15 different instructors. We think it just might be the best real estate course on the planet. Continue your wealth building journey today with the no Hype Real Estate Investing course@whitecoatinvestor.com courses. You can do this and the White Coat Investor can help. We've got a great interview for you today. Let's get our guest on the line. Our guest today, Milestones podcast is Cal. Welcome to the podcast.

Thank you. Thank you for having me. Longtime listener. It's exciting to be on the podcast.

Yeah, we don't have a definite milestone we're celebrating with you. We're just celebrating that you had a really successful first year in practice.

That's right.

Well, and we're excited about that and so we wanted to talk about it with the audience and use that experience to inspire others.

Sounds like a plan. I love it. Thanks for having me.

So you've been at least somewhat living like a resident, it sounds like. Is that right?

Yeah, yeah. Ever since I was a resident, even before that and you know, we've loosened up the purse strength, so to say, a little bit. But overall, still living way below our means. Cool.

Well, tell people what you do and how far you are out of training.

Sure. So I'm an orthopedic trained hand surgeon. I work in Southern California and I work in a large multi specialty group and I'm one year out of practice.

One year out of practice.

Okay, exactly a year. September 1st was my anniversary.

Okay, so where were you at net worth wise when you came out of medical school? Do you remember what your net worth was back then?

Yeah, you know, I never really did these net worth calculations because I knew it wasn't a lot. So I didn't want to get depressed. But in preparation for the show, I did. And I was actually broke when I came came out of residency.

How do you.

I was exactly broke out of residency. You were broke. Correct.

I assume you were below broke when you, when you came out of med school.

Correct. The only debt I had was 150,000 in student loans coming out of medical school.

That's still pretty good. How did you keep it that low?

You know, a variety of things. So in for my undergraduate, I got a bunch of scholarships, small, you know, 500,000, couple thousand, but I think I had 30 or 40. I know it sounds crazy, but there are a bunch of little ones. And I still remember my high school counselor who's a family friend, every time he sees me, he says, oh my God, you're the kid who applied to so many scholarships. So in college I had the tuition portion paid off and I did a bunch of, you know, part time jobs, 5 hours doing this, 10 hours doing that. So I was able to pay for my expenses and the tuition and my parents helped me out with the room.

And you just did similar, similar process in med school. You're just careful about it. Took out debt. You had to, but not more than you had to.

It doesn't sound exactly, just enough to pay my tuition. I tutored kids, which as a medical student you can make quite a bit of money because now you're a medical student, you know, tutoring high school students. So I paid my expenses and part of my rent doing that, and my parents helped me with the rest of my rent.

And you were back to broke by the time you got done with your training, is that right? How'd you do that?

Yeah, so I was back to broke by the time I was done with my residency. I had 115 student loans like we talked about from med school and in residency. I was in a six year residency program in a relatively low cost of living in the Northeast. So we bought a house and just, I guess just by the timing of the home purchase and the home sale, we ended up making up 100 or 80,000 in home equity. And we had invested myself and my spouse in a Roth IRA. So combined we had about 70,000 in our Roth IRAs by the time we were done with residency. So between the 80 from the home, 70 in Roth, 150 to our name, and 150 in student loans offset each other.

And is your spouse working? What does your spouse.

She did originally when I started residency. She was, she still is a nurse, but she used to work in the nicu. Then along the way we had three kids and now she stays home with them. Awesome.

Okay, so since that time you come out at broke and you built a net worth of. You're not even exactly sure what your net worth is, it sounds like, but something in the neighborhood of half a million dollars, is that right?

Yeah, that's what I would guess. And the reason why I'm not entirely sure is I don't know what to value my home, which we just purchased, but it's a brand new construction, so we don't know what the value of it would be. And the home prices have been going up and up in our area, one of our neighbors, which is kind of strange that they sold it a year after because it's a new construction, the whole development is brand new, but they sold it a year in and they made about 500,000 on that, on that home. So anyway, so my net worth now, between our savings, between all the retirement accounts, our checking account and the home value is somewhere in the 300 to 800,000 range. So the average 500, like you suggested is probably reasonable.

So you're just out of training. How'd you do income wise over that year?

So, you know, orthopedic hand surgery does do pretty well. So my guarantee when I started was 400,000. And by the virtue of where my practice is and the needs of that area, I was incredibly busy. And, you know, I adhere to the three A's of starting practice, you know, affable, available and able. So my practice has grown well, which I'm very thankful and grateful for. My guarantee was 400, but the way my group works is the guarantee is there for two years, but they do calculate your productivity over the past six months. And if your productivity is more than your guarantee, they would honor whatever the productivity is. So six months into practice, they calculated my productivity and I was at about 600,000. So they bumped up the salary of that. And just recently they redid the last six months and I'm close to 800, so it's about 790 or something like that. Okay.

But even so, almost everything you made has increased your net worth by that amount. You've increased your net worth by almost everything you made in the last year. So you couldn't have spent all that much of it.

No. And, you know, I was looking through our credit card statements and things like that to see what our monthly spending was. In the last year, we've probably spent close to 100,000, 110,000 somewhere in that neighborhood, compared to 40 or 50, which is what we were living off in residency.

So you gave yourself a nice little raise, but still Nowhere near the 400 to 600, et cetera, that you were making. How did you keep from growing into your income?

Well, you know, my wife and I are both very good about only buying things or going on vacations when we have to get things we need. We both drive the cars we did back in residency because the car works. There are Toyotas and Honda's. Like, why would you give. Why would you sell them if they're not broken? So it's just an example to show that, you know, we. We live within our means. We don't get things unless we need to. And we have rewarded ourselves. You know, we. We've been on a few vacations already, more than we've ever been on before. It just also happens that we have all these conferences for work in very nice places like Hawaii and Aspen. So we go. We go for a few more days than the conference, and I bring the family with us and we make a vacation out of it.

Do you feel like you've been making any sort of sacrifice in the last year?

Honestly, I don't think so. We have a nice house in a great school district in Southern California. We go on the vacations when we want to. We buy the things we need to. I think the only sacrifice we. And I wouldn't even call it sacrifices. We haven't been trying to keep up with the Joneses. I have a lot of friends who are a few years ahead in practice or starting out or they've been doing something other than medicine. Are VPs of firms and things like that making a lot more money driving that brand new Tesla or the Rivian or whatever, you know, the hottest car is of the month, but we just don't feel the need to do that.

Any other secrets to success that allowed you to build wealth as quickly as you have?

Honestly, no. Just living within our means. And this whole concept of delayed gratification that you've talked about, that I've read about, and I feel like we are in that delayed gratification phase a little bit. We're doing the things we want to do with our family. We're doing the, you know, taking the vacations we want to, we're buying the things we need to for the house. So I don't know, it just, it seems crazy to me when people make as much money as we are fortunate enough to make. How could you not save as much as I have been? You know what, what expenses do you have?

Yeah, what's impressive is you're doing this in a place where a lot of people have told me they really struggle to build wealth. Which is in California. Yeah, relatively high. The cost of living is relatively high. Sometimes docs don't get paid as much there as they do in some smaller towns around the country. You've still managed to be successful despite being there.

Yeah. And I don't want to make anyone feel bad or imply that they're spendthrifts and they're spending all this money when they shouldn't. We just do what we think is appropriate. We don't shop at a non GMO organic only grocery store that's, you know, that charges $20 for a pint of orange juice. We just cough.

Cough Whole Foods.

I don't want to name any names, but yeah, you know, we do things that we think is healthy for our kids and for ourselves and you know, like, like I mentioned, we've loosened up the purse strings a little bit, but we're still doing everything we want to.

So what advice do you have? Somebody that's a few years behind yet they're maybe just starting residency, maybe they're in medical school. They want to be financially successful, but they also want to practice medicine. What advice do you have for them for how they can be financially successful with a career in medicine?

I mean, you know, I think some of the recurring theme of living within your means the whole concept of delayed gratification. That delayed gratification portion comes before you know it. And also, you know, there's a lot to be said about thinking positively and a lot of people have all these self doubts about, well, I don't know if I want to do medical school. I don't know if I'm smart enough. I'm going to take a couple of years off after college and just kind of do research or just do my own thing and then maybe I'll apply. I think when you have those self doubts and you don't think positively, you waste a lot of time, a lot of earning potential. When, if you, as opposed to, if you just say, hey, my goal is to go to medical school or my Goal is to get an orthopedic residency or get that hand surgery fellowship. Find ways to achieve that goal as opposed to doubting yourself, you know? Okay, the way to get into orthopedics is doing research or talking to your mentors in your medical school who can vouch for you. Build a meaningful relationship with them, Work on some projects with them. Be ready for the operating room when you're in the operating room with them. Just finding ways to achieve your goals. That way you don't waste your time and get to the point you want to get to. Networking is huge, obviously, in all things, but orthopedics especially. It's still, for better or worse, an old boys club where who you know matters. And I don't mean old boys club as in a masculine or misogynist way. I just mean your contacts, your mentors matter.

So what's next for you? What's your next financial goal that you're working on?

Get to a million. That's the. That's the first one.

At the rate you're going, it might only be a year away.

Yeah, we'll see. We're certainly heading in that direction once we get to a million. I've always had this idea of being real estate investors. I've learned a lot by the recent articles and newsletters that you guys have put out about real estate investing. So that might be something that my wife and I might venture into. And I think that will probably time. Well, with my kids being old enough that they're in school the whole day, so my wife and I have the time to actively learn about it and engage in it.

Awesome. Well, the sky's the limit for you guys. You guys are going to be so successful. I'm proud of you and appreciate you coming on the podcast to share your experience with other white coat investors.

Absolutely. No, thank you. And thanks for everything that you do because it certainly is a huge source of inspiration. And honestly, anytime I have any financial question, I will type in that question and White coat investor to see what you've written about it or the contributors to your website have written about it, because that's become kind of my gold standard for information. So I appreciate what you do, too.

Well, thanks for sharing. Appreciate your kind words, and it's been our pleasure to serve.

Take care. Bye. Bye.

Boy, that is a great example of just how quickly you can build wealth when you combine a high income with a commitment to live like a resident. You know, you don't have to live like a resident forever. The goal is not to impoverish yourself. The goal is not to feel deprived like you can never spend any money. The point of the live like a resident philosophy is to do this for two to five years after you come out of your training and get a jump start on your financial life. And obviously you can see if you have pretty high income and you are willing to do that to live anywhere near the lifestyle you were living as a resident. You can do some pretty awesome stuff in investing very short period of time. So I hope you take that away as the lesson from this podcast. The White Coat Investor is proud to introduce our no Hype Real Estate Investing course which will provide the framework for developing further knowledge and experience as you progress in your real estate investing career. We call it an introductory course because there's always more to learn, but this is no short, superficial course. There are over 200 lectures and videos adding up to more than 27 hours of content by over 15 different instructors. We think it just might be the best real estate course on the planet. Continue your wealth building journey today with the no Hype Real Estate Investing course@whitecoatinvestor.com courses. You can do this and the White Coat Investor can help. Remember, if you'd like to be on the podcast, you can apply whitecoatinvestor.com Milestones if you are a first year medical or dental student, please volunteer to be the WCI Champion for your class. All you have to do is pass out one one copy of the White Coat Investors Guide for Student to each of your classmates. We will supply the books, we will ship them to you, we'll even give you some swag for doing it and you'll be a hero in the eyes of all of your classmates. But we need one volunteer from each medical and dental school in the country to make this program work. We want to get one of these books into the hands of every first year student this year. Hope you enjoyed the podcast today. The message here, of course, is that you can do this. So you should feel empowered. Whether you're on your way into work, your way home from work, you're working out today, I want you to feel a little bit more empowered than Maybe you did 20 minutes ago when we started and be able to apply these lessons in your lives. You've got this. We can help you at the White Coat Investor. But you can do this. Doctors. Many doctors before you have done this. They have become financially successful despite having difficult challenges ahead of them, and you can do it as well. Keep your head up and your shoulders back. You've got this and we can help. We'll see you next time on the Milestones to Millionaire podcast.

The hosts of the Y 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.