Orthopedist Hits $3 Million Net Worth- MtoM Podcast #184

This is the White Coat Investor Podcast Milestones to Millionaire Celebrating stories of success along the journey to financial freedom, this Milestones to millionaire podcast number 184 orthopedist hits $3 million many investors know about the historic returns, tax advantages and wealth building opportunities of commercial real estate investing, but they're confused about where to start or who to trust. Wellings Capital has created a diversified fund that offers investors an easy on ramp to access carefully vetted commercial real estate operators and opportunities. Their goal is to provide income growth and tax benefits with limited downside risk. With minimum investment of $50,000, investors get a stake in a portfolio of self storage, manufactured housing, RV parks, industrial properties and more. To learn more, go to whitecoatinvestor.com Wellings that's W E L L All right. Don't forget Early Bird. I should put my cowboy hat on when I talk about this. I got my cowboy hat right here on my desk. Early Bird WC Icon we're going to Texas this year. Okay. It opens today. The day you're hearing this podcast, you can get your tickets. This is the lowest price they're ever going to be. You're going to save $300 off the regular price. This Early Bird sale goes through September 10th or until we're sold out. I don't think think we'll sell out, but we might. We've sold out before. I don't know that we've sold out in the early bird except just one time, but it could happen. So I'd recommend if you want to come, you register as early as possible. Go to wcievents.com this is the Physician Wellness and Financial Literacy Conference. It is the biggest event in the physician finance space every year. It's a wonderful conference. You can pay for it with CME funds or you can use your, you know, if you're self employed you can write it off as business, business expense. But it's just a lot of fun. You learn a lot. You come back with real techniques that are going to help you avoid burnout and be more financially successful. Yeah, it's in the hill country outside of San Antonio. You're going to love it. It's a great facility. The conference team has done a bang up job getting this lined up. We're in the middle of the country for the first time. So those of you who don't want to go to the west coast or the east coast, here's your chance. We're right in the middle and I hope to see as many of you there as you can Bring your cowboy hats. I'm going to bring mine. We've got a great interview today. Stick around afterward. We're going to talk a little bit about how you don't have to invest in everything. All right. Afterwards. So stick around after the interview. But this is going to be good. You're going to like it. Our guest today on the Milestones to Millionaire podcast is going to remain anonymous, but welcome to the show.

Thank you for having me, Dr. Dali. It's an honor to be here with you.

Let's first of all talk about what you do for a living, how far you are out of training and what part of the country you're in.

Yeah, I'm a orthopedic surgeon with a subspecialty fellowship training in hip and knee surgery, and I'm a little over three years out of training or into attending hood.

Okay. High cost of living area or low cost?

Medium cost of living area, medium cost.

Okay. And tell us you've hit a milestone, a net worth, a pretty impressive one, for being just a little over three years out of training. Tell us what you hit recently.

Yes, sir, my wife and I just passed $3 million, about three and a half years out of training.

Wow. Three million, three years out. That's pretty awesome. You mentioned you're married. Any kids?

Yeah, we have a toddler.

Toddler, okay. Is your wife working?

She's currently not working. She's been a big part of this, though, and so she's not working at the moment to pursue some entrepreneurial interests and spend more time with her son.

I love it. I love it. Entrepreneurial doesn't count as work.

All right. Currently not paid work.

Yeah, now I understand that very well. What was your net worth when you finished med school? Approximately? Do you remember?

I didn't really keep post tabs on this until I became an attending. I would have to speculate. I think I graduated with around $120,000 of student loans.

So you was. Minus 120?

Yes, sir.

Okay, how about by the end of residency, what was your net worth? About the same or a little better?

Yeah, it was definitely better because by the end I was married. And so I always joke with my wife, the only thing that I brought to the table was a bunch of student loan debt. But she had been working for a long time. She's an mba, high earner. And so I think by the end of it, I'd have to speculate. Maybe we're at plus 50,000 or plus $100,000. So we were definitely in the positive but that was 100% significant increase.

But you weren't rich yet for sure.

No, no, no. It was. She was rich. I wasn't.

Okay, so what has your household income been approximately over the last three years?

Yeah. And I was trying to timeline all of this. I think in residency, with her salary, we were probably in the 180 to $200,000 range. And that was like. We got married the last year of residency in fellowship, I think we made around 300,000. And that's for. I can go into that later how that happened. And then three years as an attending, we've been anywhere from 700,000. The last two years, we've been over a million. But going forward, we'll definitely be less than that since she's currently not working a W2 job and I'm taking more time off.

Okay, you say over a million. Are we talking like 1.1 or are we talking like 1.9?

No, no, no. Like low seven figures.

Just over a million. Well, this is impressive, right? You make just over $3 million, maybe $3.5 million. At that income. You're paying a ton in taxes. You're probably paying a third of your income in taxes, and yet you still have 3 million left.

Yes, sir. So, I mean, without a doubt, a lot of it has just been time in the market and compound growth and both appreciation and our stocks, our primary residence. And then I kind of front loaded a lot of the sacrifices with paying off my loans quickly before I even started.

Yeah, well, I mean, you can only get so much appreciation in three years, Right? A lot of this was just brute force savings.

Yes. Yeah, absolutely right. And like I said, we did a lot of that early on. We've definitely had a lifestyle. I wouldn't say explosion, but I mean, we definitely spend way more now, particularly over the last year since we've had our son.

Okay. Yeah. So a couple of years. Kind of a live like a resident period. Would you describe or no?

Yeah, I think. I think our live like a resident period was probably about one year. One. One and a half. Yeah.

Okay. All right. But you. You set yourself on a path to success. So tell us. Tell us what you did. You know, somebody's sitting out there, and maybe they're a highly paid specialist like you are, and they're like, wow, that's cool. I'd want to do that. Tell them how you did it.

A lot of this was. Was fortuitous. I mean, I don't want to say it was totally luck, because we were intentional in trying to Follow a lot of the things that you suggested. But one thing that was unique with getting rid of the loans early is that I graduated in, I guess, July, when you finish residency. I decided to pursue an international fellowship in Australia for a year. And so their cycle is a little bit off than the American cycle. And so fellowship began in February, and I had the six month period of time with more or less nothing to do. And I didn't just want to sit there, do nothing. I wanted my surgical skills to stay sharp. And so I decided to do locums for four and a half months. And that was an amazing experience, both surgically in terms of my own confidence, and it paid pretty well. And so that four and a half months and I was working in rural Wyoming more or less knocked out all of my student loans. And that gave us a month and a half to really travel the world before we started fellowship. So we spent a month and a half in Australia and New Zealand before we began.

Wow, what a fun beginning to your career.

Yeah, yeah. Not having the student loans before you begin your last year of training is an amazing feeling. And then we were able to make significant income and fellowship as well, which I can get into as well.

Now, what's your job situation right now? Are you a partner in a group? Are you in solo practice? Are you an employee of a hospital? What are you?

Yeah, I'm in a private group with 12 partners.

And you've made partner at this point?

Yes, sir.

Was it a cash buy in or a sweat equity buy in or how'd you become a partner?

It's kind of a cash buy in. No, I'm sorry, It's a sweat equity buy in. Whenever you feel like you can cover your own overhead, then you can become a partner.

Okay, very cool. And so, you know, when I look at income surveys for doctors, right. Orthopedists are usually near the top, but they're not seven figures on average. You're making significantly more than the average orthopedist. Tell us how you do that.

Yeah, I mean, the beauty of, like you say, private practice and being an owner is there's literally no ceiling. And I think with any specialty, the beauty of what we do is that if you work hard and you take good care of patients, a lot of the success tends to follow. And I've always taken a lot of pride in my work. I spent a lot of extra time in residency trying to be as good of a surgeon as I can be. Scrubbed the extra paces. I watch technique surgery videos all the time. I even do that now, and my wife thinks I'm a crazy person, but I'm really passionate about what I do, and I think that kind of translated to becoming a new attending. I took a bunch of extra call. I mean, met a ton of people, and I kind of became the referral person within the area. I took on a lot of the cases that none of the other docs wanted to take care of, the infections, the revisions and stuff like that. And I think that helped with my reputation with patients and. And other docs in the area, I think have helped me build my practice pretty quickly.

Now a lot of new docs are scared to take those because they have more bad outcomes. I mean, it's just natural. When you're seeing sicker people or people with more complicated problems, you're going to see more bad outcomes. How come you weren't afraid of that?

You know, I had a lot of confidence in my training. I think I had excellent residency training. I think my fellowship training was excellent. And that's not to say there are no bad outcomes. Anyone who does surgery, if someone tells you they don't do. They don't have bad outcomes or complications, they're either lying or they're not operating. And so, I mean, that's part of. Part of the work that we do. It's learning how to deal with them, how to learn from them. And. And I have a good support team, too. I have senior partners that I bounce ideas off of. I've had them scrubbed with me on complex cases, and I've helped them and vice versa. So I've been in a really good practice setting up and happy with.

Very cool. All right. What do you invest your money in and why?

I keep things pretty simple. You're one of the first folks that I've listened to in terms of the personal finance blogosphere. I'm pretty much 100% index funds, and I follow the lazy bobblehead 3 fund portfolio, and I don't really veer from that. I don't expect to keep things as simple as possible.

So you invest your time actively and your money passively?

Yes, sir.

All right. And have you started to give much thought to things like estate planning, asset protection? I mean, at the rate you're going, you're clearly going to have an estate tax problem someday.

We're starting to go down that path. You know, we finally met with a financial advisor to kind of consolidate and clean up the various accounts that we've had. And kind of the last. Last, like, prong of that, of that meeting has been Estate planning. So I mean that's something we need to accomplish before the end of the year, without a doubt.

Have you given much thought to your investing goals and determining how much is enough for you and what things you want to accomplish financially in your life?

Yeah, for sure, for sure. I mean, my wife and I have talked about this and we're trying to think about big picture for our son and potentially more kids if we decide to have more kids. I mean, at some point. I really love my job, but like any job, there are parts of my job I dislike. And so trying to take steps to take out the bad parts of the job as you have are going to be the next kind of steps for me. I do want to be working while we have kids in the house. I think that really helped me with, with wanting to work hard. And so at least while I got kids in the house I'm planning on working. But maybe once, once they're out of the house, we may consider some, some early retirement things.

Yeah, well that means at a minimum you got at least 16 or 17 more years.

Yeah, yeah, at a minimum.

Yeah. So unless you scale it back significantly, we're talking about retiring with, you know, $50 million at the rate you're moving, I think substantially.

Yeah, well, a lot of the steps that I've already taken have been about working less and so things to buy back our time and we, we hire a lot of help now that we didn't used to do. So you know, we have someone that helps with the lawn stuff, helps some, someone that helps us cook and things like that. And I'm making a conscious effort to take more time off and I've already done that in 2024, more so than I've done the last two years combined.

Yeah. I really like how you front loaded your financial tasks in your life though. Right. You've already got a great retirement nest egg going. You've taken care of your student loans, you're even knocking out your estate planning. You're only three and a half years out. Right. This is still in the live like a resident period for many docs, so you should be very proud of that. And you've done a great job doing that.

Thank you.

Any other tips you have for white coat investors that you can share from your success?

No, I mean, I think other than picking the job that you're passionate about, that really excites you. The only other thing I can think of is sort of like marrying the right person. I know that's obvious, everyone wants to do that, but I think being generally frugal helps early on, but at least if you guys have a clear picture on what you value, I think that helps. The marital finance discussions. I knew early on my wife and I love to travel. And among the things that we spend money on, we spend a lot of money on travel. We don't mind blowing a good amount of money doing that, but now that we have a toddler, it's not as easy to travel. And so now we spend a lot of money on things that make our life easier, whether it's convenience or buying back our time. And so being on the same page with the right person. And my wife is another high income professional as well, so she's very much been a part of this.

Yeah, very cool. Well, congratulations on all your success and thank you for being willing to come on the podcast and share it with others to inspire them.

It's my pleasure. And like I said, finding you has kind of taken me down this rabbit hole. And I do a lot of commuting, getting from site to site. So listening to podcasts, including yours, has helped my financial knowledge quite a bit.

Awesome. Thank you very much.

Appreciate it.

Hope you enjoyed that interview as much as I did. One of the things I learned about when we weren't recording is this fellowship he did in Australia. Right. You would love doing this sort of a thing. It was very interesting though, what he got paid there. He got paid about $150,000 as a fellow, so making twice as much, a little more than twice as much as a fellowship in the U.S. so not only is it a cool international experience, you get to make more money. I don't think that's the case. When you're an attending, you go work in Australia, but apparently as a fellow, it is so maybe a cool way to arbitrage it a little bit. Finish training there and come back and work here, and you get the best of both worlds. He also mentioned that he got a signing bonus from his group while he was in that fellowship, kind of a fellowship stipend. And that sure is nice, right? To get it while you're in a little bit lower tax bracket and when the money's a little more useful to you. All right, I told you at the top of the podcast, we're going to talk a little bit about how you don't need to invest in everything. You don't have to do everything that somebody else is doing successfully. And that sure is the truth. Stocks tend to be the mainstay of most people's portfolio, and that's Fine. Stocks are the basically most profitable corporations in the history of mankind. That's what stocks are. You're an owner and you can buy them all very quickly. In 30 seconds, you can buy all the stocks in the world, right? You go to Vanguard or your favorite brokerage and you buy vt, right? This is the worldwide stock index. Or you buy the US and the international one separately or whatever. You own all the stocks. There's like 4,000 traded in the US, there's like 8,000 traded overseas. 12,000 most profitable companies in the history of the world. You own them. It's a great mainstay for your portfolio. I think most people own stocks. If they don't, I'd encourage them to buy some. It's so easy to invest, so easy to diversify. They're great investments. Even if one or two or 300 of them go broke, you're still doing fine. Cause you're so diversified with them. So I think that's a pretty good thing for just about everybody to be invested in. But after that, lots of people invest in things that I don't invest in and vice versa. You don't have to invest in everything to be successful. There's lots of people out there that are young, they still have most of their earnings ahead of them and they're like, I'm not gonna panic sell. I'm not even gonna own bonds or have much in cash other than my emergency fund for a few more years. Great, right? You don't have to invest in everything to be successful. Real estate I've talked to you about all the time about being optional. I think real estate's a great asset class. I find a lot of things very attractive about it, both tax wise as well as return wise and correlation with my stocks and bonds. But it's optional. You do not have to invest in real estate to be successful. I think there's lots of things going for it, but you don't have to invest in everything. You know, I often get feedback on a blog post. You know, I write a blog post about some sort of investment. You know, maybe it's the way the person's investing in that investment, or maybe it's just the asset class itself. And I'm not super keen on it. You know, I'm not investing it. And it's almost like they take personal offense to it that I'm not doing what they're doing. They think I'm crazy, that I'm leaving money on the table, that I'm, you know, I'm misleading those who listen to this podcast by not telling them about what they're doing, you know, because they just think it's is the best thing in the world. Now it might be picking individual stocks, it might be time in the market or using some sort of a momentum strategy. It might be one specific tilt, some sort of factor investing. It might be the method they're using to invest in real estate. Maybe they're buying individual properties for instance, or perhaps they're into syndications or whatever. More recently it was somebody that buys individual municipal bonds. I mean I invest in municipal bonds. I let Vanguard manage it for nine basis points a year. I let them run my bond fund. And this person couldn't believe I let them do that. Couldn't believe I was leaving all that money on the table, not managing my own bond fund. Right. Nevermind. This person was entirely invested in municipal bonds and relatively small portion of my portfolio. I'm not going to spend the several hours a week this person was spending managing their bond portfolio. I don't even look at my investments, but about once every couple of months. So it was very interesting there that he thought I was crazy to not be managing that actively. Another one was a fellow that was into buffered ETFs and after about four or five emails swapped back and forth, he told me he was spending several hours a day trading these buffered ETFs. You don't know what a buffered ETF is. It's basically four types of options wrapped up in an ETF wrapper. And it's got some cool things about it, but it's kind of like Bitcoin. I think it's cool, I think it's interesting, but I'm more than content to stand on the sidelines and watch what happens with it. And that brings you to the Bitcoin Bros. Right? They can't believe I don't invest in bitcoin. Well, you know what? I've reached my financial goals without using Bitcoin and I have no idea what's going to happen with bitcoin in the future. It might be incredibly successful. It might go to zero, I don't know. But I don't need to take that risk to meet my financial goals. So I don't. You don't have to invest in everything to be successful. And one asset class I was very interested in a few years ago, I don't know, 10, 12 years ago, something like that was viaticals. These are basically people selling their whole life policy. They don't want it anymore. They go to the company and they're like, what can I surrender this for? And the company gives them a number and they're like, that sucks. And they're like, well, I don't want to keep feeding it. I don't want to hold onto it for 10 or 15 or whatever more years. So what are my options? Well, there are people that will pay them funds essentially that will pay them more than the company is offering, less than the death benefit, obviously. And then they pay the premiums until the person dies and then collect the death benefit. It's a biadical investments. And some of these funds have pretty good track record. I was very interested in it. I thought it was really cool. Obviously, no correlation whatsoever with your stocks and bonds and real estate and that sort of thing. Katie says, heck no, we're not investing in that. So we didn't. Right. It's important to be on the same page with your spouse, but you don't have to invest in everything to be successful. So avoid having fomo. This fear of missing out because you're not investing in something somebody else is investing in. When they talk to you about their investments, they're going to be telling you about the ones that have been doing well lately. So that's natural for you to feel FOMO when that happens. But it's far more important that you stick with your written investing plan. Right. If you're diversified, something in your portfolio isn't going to be doing great and you're going to be like, why did I buy that? Why do I invest in this? But if you stick with it, two or three or five years later, it's going to be the best thing in your portfolio. And so that's the whole point of having a diversified portfolio. But don't go chasing your tail, don't go chasing returns, don't go chasing what other people are doing. You don't have to invest in everything to be successful. This is a single player game. It is you against your goals. Right. Never forget that.

All right?

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