Psychiatrist Gets Back to Broke - MtoM Podcast #211

This is the White Coat Investor podcast, Milestones to Millionaire. Celebrating stories of success along the journey to financial freedom. This is Milestone to Millionaire podcast number 211. Psychiatrist gets back to broke. One of the most underrated financial moves in medicine is working Locum tenants. It pays significantly more on average, and you can work Locums full time or on the side of your full time. When you work with Comp Health, the number one staffing agency, they cover your housing and travel costs, which on top of higher pay, really adds up. Locums also gives you more control of your career, allowing you to go where you want, when you want, with a schedule that works for you. It's the perfect way to get ahead financially while getting focused on what you love. Whether it's locum tenants or a regular permanent position. Go to whitecoatinvestor.com comphealth to build your career your way with the power of Comp Health. All right, welcome back to the Milestones Podcast, the podcast that's all about you. If you want to be on this podcast, we'd love for you to come on and share your milestone, whatever milestone it might be with others and inspire them to do the same. You can apply whitecoatinvestor.com milestones. By the way, as this drops. This drops on Mondays. These Milestones podcasts drop on Mondays. I'm probably already in San Antonio by the time you're listening to this. This week is WC Icon. It's the Financial Wellness and financial or the Physician Wellness and Financial Literacy Conference. And you know, it starts up on the 27th with our, with our, you know, opening social and then 28th and the what first and second. I got the dates right, are the days of the actual content at the conference. And your schedule might not allow you to now come in person. I mean, if you're down there in San Antonio, come on in in person. You can register the day of the event, but yeah, the 27th, 28th, first are the days of the content at the conference. You can still come virtually, right? We have a virtual option for this conference and it's awesome because you get a watch not only the content that's streamed during the conference, but you also get all the content just like the people that attend live. You know, I tell them sometimes when they come, you know, don't come to every session, go sit at the pool for one of them and you can, you know, log in and watch it from the pool. Or you can just wait until you go home and listen to a podcast style on your commute. But you can do this virtually as well. And the content also goes home with you when you attend virtually. So you're going to learn how to turn your income into lasting wealth, achieve financial freedom to spend without guilt, support your loved ones, retire comfortably and give back to the causes you care about, all from the comfort of your home. And obviously you spend a little less time traveling, which I'm not a huge fan of, traveling. When you're attending virtually. And it's obviously cheaper because you don't have any travel expenses, but it still qualifies for cme. You can use your CME money to buy the virtual version of this and we'd love to have you attending virtually. You can go to White Coat or you can go to wcievents.com and sign up to attend the conference virtually if you would like. So here's a code Virtual100. We'll give you a $100 discount off the conference. So only a few days left now to save until the 27th. I think that code expires. I guess you could register for the conference even on its last day. Or we're going to catch you up with the content via online course we put together after it. So you could sign up even the last day if you wanted to. But this code virtual100 ends on February 27th, so I suggest you sign up by then. We'd love to have you. Wcievents. Com. All right, we have a great interview today. It went a little longer than most of our interviews because we were really having a good time. That's okay. Stick around afterward and we're going to talk for a few minutes about the dangers of performance chasing and just how much performance chasing I'm seeing going on out there right now. Our guest today on the Milestone to Millionaire podcast is Andrew. Andrew, welcome to the podcast.

Great to be here. Jim.

Let's introduce you to the audience. Tell us what you do for a living, how far you are out of training, what part of the country you live in and kind of your family situation.

Sure. So I'm a child and adolescent psychiatrist. I am about seven, seven and a half years out of training now. I live in New Jersey actually on the Jersey Shore. Not as raucous as all that. I mean some parts are, but usually not. And in terms of family, I have a wife and a 19 month old daughter now.

Congratulations on both of those. That's pretty awesome. And we're celebrating a milestone today. It's a net worth milestone. What's your net worth? The last time you added it up.

So last time I added up, which was December 2024, it is about $140,000, which, you know, considering. And my wife promised me she wouldn't listen to this, so I can say the number of my student loan was $371,000. So I'm back to broke.

Very cool. Very cool. So, you know, student loans are one of those things that is a big piece of the financial life of a lot of doctors out there. So back in med school, you decide you're gonna pay for med school by borrowing the money. Do you remember how you felt about that back then?

You know, so my mother is so proud of where I am in my financial journey, and I feel almost a little bit of, I guess, shame. And my mom would probably be proud that I felt shame. Feel shame about it now. I honestly had no sense of it. So I was lucky in that I went to a state school in California, Cal State Northridge, where my parents saved up the money and were able to pay for my undergrad, which is great. After that, though, medical school and everything after that had to be financed. So all my student loans and I had read things, I had understanding of it, friends who were in med school a couple of years ahead of me, but I had no real, like, sense. I had no real sense of how it would impact my life in the future. So I was just taking the money out, and I was like, okay, like, you have to pay for things. Okay, that's fine. You know, all these zeros and all these things are adding up and adding up and adding. And I think it wasn't until fourth year where I was like, I, I. I have never seen this much money attached to my name, and it's negative. So, like, I've got to come up with a plan. And I was really lucky to have met my wife. So we started dating in medical school. I went to medical school in Chicago, and we met in first year, and she's a teacher, and she just had a really good sense on her shoulders financially. And I learned a lot from her. And I. Actually there were some really financially not adventurous, conscientious students in medical school who introduced me to you, introduced me to, like, the white coat investment or the book and the website and everything. And I realized, like, I have dug myself a hole and I need to get myself out of it. So, yeah, I think as soon as everything, as soon as I got out of medical school, I was like, okay, you know, like, the flow sheet, I could do flow sheets. You know, I can do algorithms. So I started saving up for my, you know, my emergency fund and opened up a Roth IRA and, you know, doing conversions. Like, I just went through all that.

Very cool. So how much did you owe in student loans when you finished school?

I want to say off the top of my head, I think it was like 280,000. I'm trying to remember that now. I know the interest is quite significant over time, but it was probably around there.

Okay, and when you finished your residency, how much had that gone to?

I think it had to have gotten to like 320, 330 or so.

Quite a bit higher. At least $50,000 higher.

Yeah, yeah, yeah, because.

And, and you're. How far out now do you say you're Seven years out?

Seven years out from medical school. And then. And then when I finished training, because I, I did three years as a, as a psychiatrist, my general psychiatry residency, and then two years of the Child Adolescent Fellowship.

Okay, so you're really a couple of years out of training, correct?

Yeah.

Okay, this, this makes a little more sense now. I was going to say, well, maybe you're not making that much progress on your student loan.

Yeah, no, I, Yeah.

Okay, so what do you owe now in your student loans?

So now it's 371,000. Now, obviously it's been very up and down considering the various things that have gone on with student loans. But, but, but that's, you know, we have definitely, you know, I'm currently on doing pslf, so I have about.

Okay, so you're not trying to pay the loans down? It's okay that the balance is going up?

No, I don't, I don't mind it, per se. I mean, I, again, I'm, I'm very focused on, like. All right, I'm, I'm. I started, I started calculating my net worth as a sort of like a backstop that, you know, if everything kind of, you know, went south, I cash everything out and pay it off immediately. And that was actually a little bit of the agreement my wife and I had because she's very anti debt. You know, she's, you know, she's.

I bet she's thrilled to be carrying, you know, almost $400,000 in debt around.

I can't even tell her the number. I really can't. You know, like, sometimes I'll joke around with it. Like, oh, I, like, I checked, I checked, you know, my servicer, and she's like, don't. Not another word. Like, you know, do you want to eat tonight?

So how many years of PSLF payments? Do you have in now?

It's hard to say because it's been very up and down, but I want to say I have to have about seven that are counted because I did it all through training. So five years and then two years, and I think the pause has been about a year.

So you got about three years left and you're done, which is pretty awesome. That's exciting. That's going to be a big boost in your net worth all at once.

You know, we, we talked about it just kind of. Because it was actually a discussion between us, like, do we actually want to pay this? Because we have goals in terms of like getting a house and financing other things. And is this going to be a big drag? And I know that's a very common, you know, thing we, you know, discuss like this level of loan burden. But like, we're, we're, we're in the process right now and it doesn't seem, you know, we got a pre approval. So I mean, it doesn't seem to be the worst thing in the world. But, but, but yeah, this was a, this was a long conversation about, like, what, you know, is it, is it okay in terms of our other financial goals to have this on us while we wait for pslf? And I think right now, again, I, you know, it doesn't seem, it seems to be working out in our favor.

Yeah. So your money, what you can carve out of your budget is going toward investments mostly. I mean, I think the numbers I'm looking at here on my notes, there's like 190,000 retirement savings. You saved up 120 for a house down payment. You got another 60 in miscellaneous stuff. It sounds like you've been in kind of a live like a resident period for the last couple of years.

Oh, yeah. Oh, yeah. You know, tell us about that. Oh, yeah. So again, that started. We're a really good team. My wife, like, we're a very good. I'm again, I, I, I, I will, I will yell to, I, I tell people I married up. Like, I married far up. Like, I, I don't know how this happened to me that I met my wife. She's very, I'm very much like kind of the, you know, I'm the one who like, goes into the investments, you know, looking at obviously the various index funds, expense ratios, you know, like, who's it, you know, going to Vanguard, all that sort of stuff. And I'll admit, you know, this was, this is the best time to do it. I racked up a significant amount of Credit card debt. Trying to impress her, actually, like, trying to do nice things. And. And she was able to save. I don't know where she got this money. She was able to save. And we structured our budget in such a way that, I mean, I was starting to do some side gig stuff while in medical school to help pay off, and she was able to make it work. And, you know, there'll be, like, expenses that kind of come out of nowhere, and she's like, give me, like, 30 minutes, and then she'll be on the computer, and then boom, boom, boom, boom, boom. Okay. Nothing's changed in our finances, even though we have this $10,000. Like, it's fine. Don't worry about it. Just. Just. Just keep working. So it really. Her perspective has always been she loves numbers. She loves calculate, kind of making things work, puzzles. And so she's always been like, all right, you know, we can. We can kind of construct this and do this, and we're going to live, like, res. I mean, if we could live like medical students, she would be like, let's do that. You know, like, I'll joke with her. I'm like, you know, do you want me to wear a barrel? You know, going to work. And she'll like, yeah, that. You know, as long as it's not a professionalism issue. But. And honestly, I will say for us, we're never. We've never been particularly big spenders of things. I mean, we like experiences. We love travel. It's one of the things, you know, we'll. We'll have. You know, we'll do our typical sort of millennial, Have a. Have a latte every day. You know, we have our little things here and there. But in terms of, like, we're not. I mean, my interests, my hobbies are more like podcasts and books and things of that nature. A couple streaming services, but nothing big.

There's no wake boat.

Correct. Yeah, yeah. I, you know, I'll go on a charter with my friends, and I'll pitch in, but, like, as a general rule, I don't have that. I don't have that drive, so. So it honestly hasn't been too bad for us in that way. Like, kind of. We've lived the way we've always. We've lived the way we've always lived, and it hasn't, like, hurt us too much.

Yeah. How would this conversation be different if we were interviewing her today instead of you?

I think she'd be a bit more, like, we have so much more to go. Like, we've we, we, we've gotten through a hill, we've climbed a tiny hill and there's this Mount Everest is upon us, you know, in terms of all this stuff. And I try to, you know, again, I try to, like, you know, this is really good. Like, again, I'm the typical psychiatrist. I'm like, let's look at the strengths that we have. You know, like, we've got. We, we, we, we're back to broke and now we're looking at getting a house. And you know, even with the baby and our daughter, I mean, she'll spend money on her. She's like, me, yeah, whatever you can, you know. You know, we're going to buy some Spam from like shoprite for you. But the baby, oh, she gets, you know, she gets pasture raised eggs and all that.

Yeah, nothing but the best for the baby.

No, nothing but the best.

You guys are going to eat ramen, but you're going to feed her.

You know, I do the same thing. I'm not better. I'm happy to give her everything I've got. But, but no, I, Even with her and all the expenses of a baby, we've still been able to save at the same rate or about the same rate, I'd say, as, as before. So I think she'd still be a bit more like, we have so many things to go for. But I think when we look on it and she admits this as well, she's like, even with this expense of a baby and saving for a house and all this sort of stuff, we're making progress. We're making a good amount of progress. And now we're starting to see some of the, some of the money start to work for us. Like in terms of the investments, like, things are building a little faster than I expected them to. So yeah, it does.

Doesn't hurt that the stock market went up 25%.

I was gonna say, you know, my wife was like, what's the purpose of it? Like, it's gone up 10% over the last two, three. Like, is this really doing anything? I was like, wait, wait. You know, I was like, I talked about the history of it. Like some years, some years you get like 10 years worth of growth and you've gotta like, wait, you know, time in the market beats timing the market sort of thing. And I think this was the year. This last year was like, see, sometimes I'm right about things. You know, it does happen.

Now I want to explore something else that's a little bit unique about you guys. Very early in your Live like a resident, period. You guys put your heads together and decided we're going to, we're going to work our finances in such a way that she could stay home with the baby. Tell me about that conversation and those calculations.

So, I mean, you know, so exactly that. So we, we started talking about this as soon as we found out she was pregnant. And we discussed like, so my wife is a, my wife is a preschool teacher. She made about 50 to 60,000 at the time. And we discussed like, all right, you know, what are the pros and cons of her working versus her staying at home? And if she, and we calculated out like if she had continued to work, right, we'd have to pay for daycare at the five days a week daycare because we don't have any family nearby. It would increase like our general, our adjusted gross income, which would increase my loans and just a general tax burden that we have as a teacher. It's a pension system, so there's no like pre tax retirement vehicle that we could put into and increase our tax burden. And so when we all calculated it out, we were saving, we were making that maybe about an extra 500 bucks a month, you know, and it wasn't. And then it was just the added stress of also, you know, she's a baby, she's gonna be around other babies, the kids can get sick all the time. And my wife knows, as a preschool teacher, you know, kids were out for a variety of reasons all the time. And so we're gonna end up taking our PTO days anyway. You know, so what, what are, you know, what, what's really the value here? And so my wife said, all right, she talked about it anyway. She, you know, she said, let's, let's try it. Let me stay home with her and let's see what happens there. And we've been lucky in the sense that it's been a really good experience. You know, my wife is a professional and she loves her job. But she said, you know, being with her, it's also kind of going in with being a mother. But like it's been an amazing experience and we've been able to make it work. Now admittedly, I'm also, I do call, I do have opportunities for moonlighting and doing call, like extra call for the hospital system I work at. And that's been good, especially for saving up for those big purchases. But in general we found that.

We'Ve.

Made ends like we've done really well with it and then just our quality of life has been better. Like, I don't have to. You know, if our daughter's sick, my wife can take care of her. The relationship between them has been really good. I'm very much like number two, number three or number four. When grandma or, you know, grandpa is in the house, it's like, no, Daddy is. Daddy goes to work. She'll cry every time anybody else leaves but me. Oh, no. Bye. Get me. Give me my toys next time.

Yeah, well, that comes around with time, you know, we made a similar calculation. I think I wrote a blog post about it once. Katie was a teacher when I was. And so at the end of my intern year, she stayed home with our oldest, who's now 20 in college. Right. But. But I think we calculated it out at, like, $2 an hour she was being made. Once we. Once we ran all the numbers on everything, and it just made sense. It made sense to do the traditional. For lack of another word, thing. There were a lot of financial benefits to doing it. I think for lots of families, that is what ends up being the right thing. All right, we've been talking for a long time because this is an awesome conversation, but I wanted to give you a chance to give some advice to people like you. There's somebody else out there, and that's an MS.4, clueless about their student loans, you know, wondering if there's any hope for them whatsoever. Give them some hope.

Well, I think the best financial decision. I tell my wife to listen to this because I think I've talked a lot about her. The best financial decision I ever made was finding a partner with the same sort of perspective I had on finances. I think, number one, that was the biggest one, and I think that's fairly underrated. I think, number two, in terms of, like, helping us stick together is, you know, make yourself knowledgeable. I think that was the biggest thing because it, you know, when you're a resident and everything, money comes in, and if you're able to, like, understand and have a plan and know, kind of, all right, you know, even. Even if this goes south, you know, you're building those habits, and things may go south in the stock market or expenses may come up, but as long as you continue to work and you have a pretty concrete, reasonable plan and you're knowledgeable about works out, I'd say, yeah, the first thing we saved for was the emergency fund. And then after that, we went to the stock market and so on. It's pretty. How do I say it? I guess foolproof. I mean, it's a very reasonable plan. To go through, like, keep yourself knowledgeable and then have a partner who thinks the same way you do about money, because I think that really eliminates a lot of the stress around finances.

Good advice, Andrew. Congratulations to both of you on what you've accomplished. Your daughter does not yet appreciate what you are doing here, but she will with time. When, you know, in 18 years, she's going to be 20, she's going to be in college, and she's going to have conversations with you. Like this text I had with my daughter the other day who said, I didn't know you were a student body president in med school. You know, and I'm like, there's a lot of things you don't know about me, you know, and there'll be a lot of things she doesn't know about you, like the sacrifices you've been making the last two or three or four years in order to give her this awesome life that she's going to enjoy. So congratulations to you, well done, and thanks so much for coming on the podcast and inspiring others to also get back to broke.

Thank you so much. Thank you for your time, Jim.

All right. I hope you enjoyed talking with Andrew as much as I did. It's always fun to see somebody relatively early in their career and just killing it. And like our situation, Andrew is blessed with a wonderful spouse who is really helping him to have success with this new high income. But they're managing it well and they're making massive progress. And in a few more years, they're going to get PSLF and probably be millionaires not long afterward because they are really doing great. What a lucky daughter to come into that family. All right, I said we were going to talk a little bit about performance chasing at the top of this podcast, and I'm seeing a lot of it out there. And I think it's just because stocks, particularly us large growth tech stocks, have done so well the last two years, right? 2023 and 2024 both had returns of like 25% a year. And so a lot of people are looking at that, and I don't know how much of it's conscious and how much of it isn't. And saying, oh, that's what I should invest in. I should invest. Large growth tech stocks have done so well the last two years, right? 2023 and 2024 both had returns of like 25% a year. And so a lot of people are looking at that, and I don't know how much of it's conscious and how much of it isn't and saying, oh, that's what I should invest in. I should invest in U.S. large growth tech stocks because they return 25% a year. Well, I got news for you, all right? The US stock market does not return 25% a year, every year. Okay? If you are thinking this is normal, I've got news for you. This is not normal. In fact, in a lot of ways, the last couple of years have felt an awful lot like the late 90s felt. Now for those of you that are in your 50s or 60s, you know this because you were investing in the late 90s when we all got excited about anything with dot com after its name and people started saying, well, shoot, I'll just have this big tech allocation in my portfolio. I'm gonna invest in qqq. Who needs all these other things? Who needs real estate and who needs bonds and who needs small stocks and who needs international stocks? I'm just going to invest in this stuff that does great. Well, what happens? Well, in 2000, in about March 2000, it began, it was a pretty nasty bear market, lasted 2 years plus in the overall market as the tech stocks took a tumble. But what a lot of people don't realize, especially if they're relatively young in their investing careers, they don't realize that the US stock market is measured by something like the S&P 500, basically had no return from 2000 to 2010. Now that's a cherry picked time period that decade because obviously 2000 is when that tech bust started. And by ending it in 2010, you include the entire global financial crisis as well. But the return on S&P 500 stocks, even with dividends reinvested, was barely positive for that decade. It was not 25% a year. It rounded to 0% a year. And that is something that can and does happen relatively regularly. You know, if you look at long term returns for the US stock market, it's about 10% a year. But that includes a number of years like the last couple of years where you're making 25 or 30% a year. And it includes years like 2008. It includes years like 2000 and 2001 and 2002. Okay? It includes episodes like what we saw in March of 2020. It includes episodes like we saw in 2022 when interest rates went up 4% in a year and both stocks and bonds got pummeled. Okay? This is not normal to get 25% on stocks every year. Now my crystal ball's cloudy. I can't tell you what stocks are going to return in 2025. But if I had to make a bet on what returns are going to be going forward from right now over the next 10 years compared to the last 10 years, I would expect much lower returns on US large growth stocks in the next decade than we have seen in the last decade. So I want to discourage you from performance chasing. And here's some of the ways I'm seeing people doing performance chasing. I see people abandoning what are very reasonable diversified portfolios in order to put more money into large growth tech stocks. They're leaving international stocks. They're abandoning small value stock tilts. They're saying, well, why do I need bonds anyway when stocks always go up? In the long run, I'm going to make more money with stocks. I'm just going to put it all in stocks. They're abandoning real estate. They're borrowing money to put more money into stocks. They're not paying off debt in order to have more money in stocks. This probably doesn't end well. I don't know when it ends. You know, it's hard to say whether we're now sitting in 1996 and I'm, you know, the chairman of the Fed saying this, there's a irrational exuberance in the markets, or whether this is 1999 and it really is about to crash in a few months. I have no idea. But I want you to be a student of financial history. I want you to realize that trees do not grow to the sky, that your stocks will not have a 25% return every year, and that diversification is important even when it works. It's disappointing to have your diversification work. Right? I mean, if you compared your portfolio to the s and P500 last year, you probably underperformed it dramatically. Right? My portfolio return was something like 10% last year. Right. The S&P 500 made 25%. Why did mine underperform? Well, I own small value stocks, I own real estate, I own bonds, I own international stocks. And none of those made 25% last year. So, yes, I rejoice that 25% of my portfolio is invested in a Vanguard Total Stock Market fund and did awesome last year. And then of course, you kick yourself that you didn't have all your money in it. Well, that's the way diversification works. And diversification matters not necessarily in years like 2024. It matters in years like 2022 years like 20, 20 years like 2000, eight years like 2000.

Okay.

And then, you know, having all your money in US large growth stocks may not look so good as did the last couple of years. So be careful. Don't get sucked into performance chasing. Pick a reasonable plan that you can stick with for decades and stay the course with it. You know, whether the market goes down or the market goes up. Stay the course with your plan. It was a reasonable plan when you set it up. Fund it adequately and you'll be able to reach your financial goals with it. Don't get sucked into performance station performance chasing earlier we mentioned working locums with Comp Health, the number one staffing agency. But Comp Health isn't just a locums agency. Comp Health staffs regular permanent positions across the nation as well. They also offer telehealth, medical missions and more. That's what makes them unique. They can look at your situation and offer multiple solutions to build your career the way you want it and meet your financial goals. And they know their stuff, especially when it comes time to negotiate contracts, which they're willing to do for you. So whatever career move you're looking for, go to whitecoatinvestor.com comp health and use the power of Comp Health to build your career your way. Thanks for listening to the podcast. We appreciate those of you leaving us five star reviews. That really does help spread the word about this podcast. Keep your head up, shoulders back. We'll see you next time on the Milestones to Millionaire podcast. The hosts of the White Coat Investor are not licensed accountants, attorneys or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice.

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