WCI #122: Frugal Living with the Frugal Physician

This is the White Coat Investor podcast where we help those who wear the white coat get a fair shake on Wall Street. We've been helping doctors and other high income professionals stop doing dumb things with their money since 2011. Here's your host, Dr. Jim Dali. This is White Coat Investor podcast 122Frugaling down with Deesha Spath, MD. Thanks so much for what you do. I had a unique opportunity this week. I got the opportunity to take care of an 800 pound man. I wanted to give a special shout out to those you working with, the severely obese, whether you're in primary care, you're a bariatric surgeon, this is a real issue and I think you're making a big difference in helping these folks. Their lifespan is shortened so dramatically by their weight that anything you can do, even helping them to drop just 100 or 200 pounds makes a dramatic, dramatic difference in their comorbidities and their lifespan. And so, you know, it was interesting. I called the cardiologist about him because he was having chest pain. The cardiologist said there is almost nothing I can do for this man because we could not put him on the cath lab table, we could not put him on the CT scan table. You know, he's just a very, very difficult person to take care of just because of his sheer size. And so those of you who are working on this problem and most importantly probably preventing this problem, I wanted to give you a special shout out and thank you for what you do with your daily work. As much as you are trying to help others, I want to help you to be successful in your finances. And that's what the White Coat Investor Podcast is all about. I estimate that 80% of doctors need, want and should use a financial advisor and or an investment manager. Some investment gurus, such as Dr. William Bernstein think my estimate is way too low. At any rate, if you want to use an advisor temporarily or for your entire life, there's no reason to feel guilty about it. Just make sure you are getting good advice at a fair price. If you need help updating your financial plan or just getting one in place, check out our list of recommended financial advisors atWhite Coat Investor.com Financial Advisors. You can do this and the White Coat Investor can help. I told you last week about the Passive Income MD conference that is still available I believe for registration. I don't know how much longer it's going to be. That will take place on October 26th in Los Angeles. It's a one day conference with some of the biggest names in physician real estate investing that there are out there, Letty Aalto, who also be speaking at the White Coat Investor conferences there Eric Tate, Victor Mingona, Trevor McGregor, Aaron Kaplan, and I'll even be giving a talk at it. So, you know, maybe they'll let anybody in if they're letting me speak. But it should be really interesting and really fun if you can make it. I'd love to meet you there. If you missed out on registering for the White Coat Investor conference, this is your chance. Three of the speakers at wcicon will also be speaking at this conference. It's less of a time commitment, less money, especially if you're already on the West Coast. Come on down and come meet us. I hope to see you there. You can get More information at passiveincomemd. MyKajabi K A J A B I.com PIMDConference Our quote of the day today comes from my friend Taylor Larimore who said, just as the gambling industry wants people to think they can beat the casino, the investment industry wants investors to think they can beat the market. Of course, a few lucky gamblers do beat the casino, but most don't. It is the same for investors. Some will beat the market, but most won't. Thanks also to those of you telling your friends about the podcast and leaving us five star reviews on Apple Podcast. We appreciate you doing that. It does help spread the word. So please do tell your friends about it. Leave us a great review. Our guest today is Dr. Theja Spath, an internist now living in New York who may be known to you as the voice behind the frugal physician found@thefrugalphysician.com I don't think your name is actually on the website, but your picture is all over, so I don't think you're going for total anonymity there. And you're also lined up to be one of our panelists at WC. So welcome to this podcast, Dr. Spath.

Thank you so much for having me here. I'm so excited.

Well, let's start with just a little bit of introductory material. Tell us a little bit about your upbringing.

Well, I was actually born in India, far, far away from here, and I was actually born into a pretty affluent family. My father was a pharmacist and my mom was a science teacher, but my grandfather was in government there, so things were pretty good. But then tragedy hit and actually my father committed suicide when I was nine.

I'm so sorry to hear that.

Thank you. It was tough on everybody but at age 10, my mom brought us here to the States and we experienced quite an overturning of our lives and culture shock. And we quickly realized that there were really no savings. And so my mom worked as a scientist, a bench scientist, and we lived below the poverty line for most of my upbring. That's what we would call uncomfortably frugal. So I started working around 13 and babysitting and all that stuff and waiting tables a little bit later. And I helped my mom pay the bills and I was involved in the family finances pretty early. That gave me a pretty healthy respect for financial knowledge and the power of savings. As I grew up, I put myself through college with some help from my parents and took out loans for medical school.

Now speaking of medical school, let's hear a little bit about your professional pathway and your current practice.

I finished residency in 2015 and I started working as a hospitalist. And I worked as a hospitalist for about three years and switched to primary care. And I'm currently working in a multi specialty physician owned practice.

Cool. Now you've done something very unique among doctors and one of the big reasons I actually wanted to bring you on here, you actually, in your words, frugal down from an inflated lifestyle. Tell us about that and the why behind that and the how behind that and tell us a little bit what it meant to you to frugal down.

So, you know, as I told you earlier, I was, we were uncomfortably frugal when I was a kid. And so finally when I became a doctor, I was like, this is it, this is, you know, now I finally get to live it up. And when I first got my attending job, me and my husband decided to move to the beach and buy a nice house on an island. And that was relatively easy to do. What wasn't easy then was dealing with finances after that. It's not that we couldn't afford it. We could by all usual definitions. But things really came to a head when I took maternity leave. I had to take two maternity leaves during that time. And it quickly became apparent that without a steady paycheck, things could go south pretty fast. They didn't, but the potential was there, especially with a $2,800 student loan bill coming in every month. That in itself just that took the short term disability payment. We realized that we were living on the edge. And actually I was downstairs away from my baby during my maternity leave and sewing a cover to a couch because I was too afraid to spend money during that time. And listening to your book on audiobook while I was doing. And that's kind of when I realized that I had done it all wrong, that we had done it all wrong. And that's when we decided to turn things around.

Wow. I've inspired somebody to actually change. Sometimes you wonder. You spend so much time telling people about things they can do or should do, and you wonder if anybody out there ever actually does it. And it's always kind of fun to hear that you did change somebody's life.

Oh, yeah, absolutely. I remember the moment picture perfect, because it was a turnaround in my thinking. And I went upstairs and I talked to my husband and I was like, you know, this is uncomfortable. Something has to change. And so we sat down and we made a plan and we listed our debts and our assets and quickly realized that we didn't have many assets and a lot of debt. So we decided to make a plan to get out of debt. And so we started that with a debt snowball.

And this is where it gets exciting. This is pretty awesome. So listen up, listeners. This is. This is where the plan gets really interesting.

So initially we just started tracking our spending. We had no. It's really difficult to track your spending if you've never done it before. So the first month or two, we just started to list where our money was going and realized that there was a lot of different places that we were spending that we didn't realize we were spending as much as we did. And then we also looked at the expenses for the house, and that was really killing us too, because not only was there the mortgage, but also the upkeep and the upgrades and keeping up with the Joneses and all of that. So we started cutting back, just spending initially and paid off the cars. And then we looked at moving to a new location when my contract came to an end. And that was when we decided that we were going to actually downsize and go back to living like residents, just for a little bit until the student loans were paid off.

So you actually did not live like a resident initially, Right. But later went back back to living like a resident, right?

Yeah. And, you know, it was pretty recent. It was just two years prior that we were living like residents, so it didn't feel that foreign.

Do you have any idea how rare that is among doctors? How difficult that is to do? I mean, this is incredibly hard to do. Right. I mean, it reminds me, I got an email this week from a doc who was literally just out of residency and looking at buying a 700 something thousand dollars house and wanted to figure out how to buy a 35,000 doll, and student loan payments hadn't even started hitting yet. And he's trying to figure out how to borrow more money for all those things. I think it's just very incredible to see somebody that went forward kind of adopted an attending lifestyle and then changed it back to a resident lifestyle. I think that's very unique.

Thank you. And honestly, my background helps with going from being affluent to not affluent. Being frugal while I was growing up and then not being frugal and just completely rebelling against having to keep a budget. Like it was a personal insult that I would need to keep a budget because.

Yeah, I mean, that's a good point. This isn't the first time you've done this in your life.

Yeah, yeah. And so I was used to having that change and shift in the lifestyle. And really what brought it home was that I didn't want my kids to ever have to go through that uncomfortably frugal phase where something turned upside down and something happened and then they had nothing to keep them going. You know, I wanted to make sure that we ensured a good future for them. And it's really parenting and being a parent really brings that to a head. So it was worth it.

Okay, so nuts and bolts. What did you do? You were spending this money and then you weren't spending this money. I mean, how does that work?

So initially we had to sell our house, which was quite an experience. I mean, it was. We put it on the market and it sold in three months, but it had 50 showings in the meantime. And I was working a full time job and trying to get the house show ready. It was very difficult. But anyway, we did that. Then we had to find a house in upstate New York where we were going to move. And we decided to move there because we had family to help with the kids. We wouldn't have to pay for as much daycare.

So the location was chosen because your expenses would actually be lower despite going to a relatively high tax state.

Right, exactly. And also, you know, if I had all the money in the world, I'd live in New York City because I love it and so does my husband. But Albany is a much cheaper place to live, much more affordable place to live. So that along with the family factor was a huge influencing factor.

Yeah, I interviewed there for residency in a January, I think I remember the snowbanks were pretty impressive.

Yeah, it's not a good time to interview, but yeah, it's good skiing. Anyway, so we decided to frugal down up here. And it was more difficult because the rental situation is just not. The rental market isn't great and we're looking at rental houses and they were terrible. But finally we found something and frugal down. So basically what we did was take all of our belongings and whatever didn't fit, we put in the very large attic that this house had. And that was key factor in us choosing this house because it has a head of a lot of storage. And so I would, if anybody else is considering frugaling down to pay student debt off, I would keep take that into account. Because if you're going to pay for a storage facility, that kind of negates the savings, you know, that you're going to have.

So how big of a change was it? How many square feet was the old house and how many square feet was the new house?

The old house was around 2,000 square feet, but it also had a livable basement area that we had finished. And the new house was about 1500. Actually initially was around 1300 and then we moved again to a 1500 square foot house. So less square foot house.

So neither was a mansion by any means. But definitely smaller.

Yeah, definitely smaller. And initially when we had bought the house on the coast, you know, we were still looking to buy the smallest house in the nicest neighborhood we could find. So, you know, we weren't completely terrible about spending, but still downsizing did take away about $300 a month. And there wasn't a whole lot at that point, just $300 a month. But what compounded was that there was no maintenance when we were renting. There was no insurance costs. We had to buy pretty expensive flood insurance on the beach so we didn't have to do that. And that really helped us. You know, it's the little things that add up to make you gain a lot when you're downsizing. And also it's the maintenance costs we didn't have to spend on the house, but also I didn't have to make it look picture perfect. You know, when we lived in a nice neighbor, we felt forced. Not forced, but kind of, you know, you wanted to fit in the neighborhood and have a nice, nice furnishings and stuff and just the pressure was lower.

You picked up a different set of Joneses.

Exactly. Yeah, you got to surround yourself with, you know, people that you want to be like. And not that I didn't want to be like people on the coast, but still now you.

Not that Albany is all that far from the coast, but you really were on the coast before yeah. You described downsizing as a scary experience in a recent blog post. Why was it it scary and what can people do to make it less scary?

Well, it's scary because you get used to spreading out. You have a lot of stuff. Thinking about downsizing to a smaller space, it brings up all these fear points of, you know, where am I going to put this stuff? But also what are other people going to think? You know, are people going to think I'm not succeeding in my career because I'm going down in house? I mean, to be completely honest, house is a status symbol. I'm Punjabi, we're like super showy. That was a hump I needed to get over, you know, to realize that that's not what financial stability is. Having a big, big house does not mean that you are financially stable or doing well.

Now obviously you saved a lot of money in housing, you know, in decreasing your housing and housing related expenses. What other areas in your budget did you go after besides housing?

So the big three costs were housing, cars and food. We had the opportunity to upgrade our car at one point because someone hit it and got totaled. But we decided not to because we were on this journey to get out of debt. So we just took the money from the insurance and just bought as much car as we could afford to pay in cash, which happened to be exactly the same car that we had before, which is fine.

Funny how that works out, huh?

Yeah, right? Yeah. So we didn't upgrade the cars when we could have. I really cut back on the spending to go to work. What I mean by that is spending when I'm at work, buying coffee, buying food every single day. It's those little habits that you have that you know, that you don't think about that really add up to a lot of savings if you can change it. Especially going to work and then spending at work. It's you're like paying to work, which is silly. So instead I decided to batch, cook and take lunch, which made a big difference. I haven't spent on lunch at work in, I don't know, a couple of years now. And it does add up to a lot of money once you start making it a habit and doing it consistently. And I got the free coffee instead of the Starbucks coffee. However, as Ramit Sadi would say, if you really want the coffee, frickin get the coffee. If it's gonna make you unhappy, don't, but just don't make it a habit.

How about eating out? Did you eat out less other than lunch or.

Yeah, yeah. So what we really sat down to do was to decide the whole budgeting process really brought in front of us what makes us happy and what doesn't. Spending at work for lunch that I didn't like anyway didn't make me happy. So I decided not to spend there, but going out to eat with my family, going out on dates with my husband, those are things that make us very happy. So we decided we're not going to cut back there at all. And that's what really kept us going on this path for as long as we did. Because if you're too miserable, you're not going to sustain it.

Now you're an internist, which is generally considered to be somewhat below average specialty of medicine as far as pay goes.

Yep.

And you had just a little bit more than the average student loan burden at 208,000, yet you paid it off in 17 months.

Yep.

How'd you do that?

Well, downsizing was a big thing, but we also refinanced the loans. I had federal student loans at 6 to 8%, and when we refinanced down to 3.875%, that really helped a lot in making progress, along with the fact that we were now actually had breathing room in our budget. We were throwing money at the principal so that the interest wasn't compounding, and that was huge. We also increased our income because my husband went back to work initially. The first two years of me being in attending, I was the only earner because my husband was going to school for his master's. So once he got back to work, our income went up and that helped along the payback a lot.

So now you're playing on both sides of the ball, both offense and defense.

That's right.

You're earning more, you're spending less, and you took the difference and you threw it at your student loans.

Yep.

17 months to freedom. How'd that feel to make your last payment?

It felt really good. It felt really good. I did a little happy dance in the kitchen for quite a long time.

Give us a sense now for where you're at in your journey toward financial independence.

So when we first started keeping track of our net worth, we were worth about negative $300,000. That was four years ago. And four years later, we had a positive $300,000.

Making good progress then.

Yeah. And our FI number is 2.5 to 3 million. And we should be there in about 10 to 15 years.

And you are still in the rental house or have you kind of moved up in house? Do you have plans to move up in house.

Right now we actually still own my residency house in Nashville. So we have the benefits of the tax advantages of owning a house from that house. And currently we're renting that house out. So that's actually cash flowing positive and it's paying for our rent here. So I really just don't feel. I'm not like super excited to buy another house yet. We are going to do it at some point, but at this point we're just saving and if we find a house to buy, we'll buy it.

So how do you like owning a rental house in another state?

You know, it's not as bad. It's not terrible because we have a good management company and we have reliable renters. It's mostly just upkeep and they did burn down the deck once, but that's okay.

These are the good renters, huh?

Hey, they pay their rent. That's all I can ask.

All right, well, tell us about your investments.

What do you invest in right now? So it's the rental house and we're just doing low cost index funds in tax protected accounts. We have one taxable account that we invest very small amount in just to sort of dabble in it and kind of learn the market. But for right now, most of us, until two months ago, all of our extra cash was going towards the student loans. So we're starting now to max out all the accounts for the rest of the year.

So what does your budget look like now? Basically, what was going towards student loans is going to retirement accounts and other investments and you're spending exactly the same or do you start spending more money when you got rid of the student loans?

We were paying 8 to $10,000 a month towards the student loans. And we are still kind of living at the same level. The first month afterwards we paid for like three separate upcoming vacations. But this month we're going to be positive. That much cash.

It's exciting, isn't it?

Yeah. Yeah, it is. I mean, it is exciting. It's kind of. It's really great now because I have the plan and the financial footing to know how to handle that.

So let's talk a little bit about this. I mean, you are calling yourself the frugal physician. Tell us about what you drive and how you vacation and what frugal looks like for the frugal physician.

You know, it doesn't look all that frugal, I gotta say, because the frugal parts of my life are the ones that only affect me. The frugal Parts of my life are my smaller house, I drive an older car. And yes, people comment on it at work. You know, it's the same 2011, I think Honda Civic that I've been driving. But otherwise we go out to eat, we don't really, you know, watch. If we go out to a restaurant, we're not like just getting water. We go on good vacations. We are really blessed as high income earners to have that room. If you just cut back a little bit on the fixed spending, all the discretionary spending can still say the same and you'll still make humongous progress.

Now, one of the difficulties of being frugal is that if you are frugal, you usually, after a while, no longer have to be frugal. What are you going to do when you have a lot more money either from your practice or your blog? Are you still going to be frugal? Is this going to cause a disconnect for you like it does for Mr. Money Mustache who says he's living on less than $30,000 a year while making hundreds of thousands or millions from his website?

So, you know, one thing that was really critical to our success? My husband and I would sit down and have a budget date and we would go through our budget and our plans for the future as well. We're constantly looking ahead and adjusting because life changes and what we want changes. We're constantly looking forward to what our goals are and then kind of adjusting from there. As long as we meet our goals, I'll be happy. I don't, I don't hold us to a certain spending amount, but we do have a big picture goal of being phi at a certain point. And as long as we reach that, I'll be happy.

So do you feel like frugal is part of your identity? That you're always going to be frugal, or is this a means to an end? Is there a time in 10 years where you're really not frugal because you don't have to be anymore? What do you think?

I don't think I could ever stop shopping for a good deal. It's kind of part of my DNA. I'm all about. Frugal to me means getting the most value out of the dollar and not just throwing it away. I think you should and can do that at every income level. It doesn't matter what you're bringing in because if you don't save anything, it's all gone and you don't have anything to show for it.

And what's the difference between frugal and being a cheapskate. How do you distinguish between those two?

It's a good question and it's a really fine line to walk. Generally, I think people being cheap is a label someone else puts on you because they feel bad because of your spending decision. Because if you are compromising someone else's safety, your own safety, or you are compromising their happiness because of your frugality, that's when you start being called cheap. And so, you know, it's a, it's a fine line to walk. But I think being frugal is getting good value without compromising anybody's safety or well, being very well.

Now let's turn the page a little bit and talk a little bit about something you said recently about student loans. You said the student debt crisis is upon us and people are looking for a way out. Let's be real, no one is going to give doctors free money. Even Elizabeth Warren's plan won't help most high income professionals pay off their debt. We're going to need to find our own way out. What is the way out?

Well, I think you have several good resources on your side for it. But honestly, the student loan crisis is getting out of hand. We have $1.56 trillion as a nation in student debt. Actually, The Fed projects 40% of people are going to default by 2025. And this is because college tuition rates have doubled and wages haven't, Interest rates are higher and there's very little underwriting to the student loans. But nobody wants to, or should, I think, help high earners because we have the ability to pay this stuff down. Elizabeth Warren, her plan will offer $50,000 in student loan debt reduction for households with incomes less than $100,000. So 50,000 for households earning less than $100,000. And then that credit or that deduction scales down. It's $1 for every three if you're earning between 100 to $250,000 as a household. And there's nothing offered for households earning more than $250,000. So that's really not going to help any attending or most attending families. It may help residents, which is good, but again, it's $50,000. And student loan debt for medical students is averaging over $200,000. So the thing is we borrowed money to go to school and get this degree which has a lot of value. And so, you know, we will need to take care of that somehow. Whether it's paying it off or pursuing PSLF or repay. We're going to have to deal with it. We can't stick our head in the sand.

You know, it's interesting that $50,000 sounds like a lot of money, but I had a comment left on the blog from a 2 doc family who owes nearly a million dollars between the two of them. And 50 grand just doesn't move the meat needle. Yeah, it's a drop in the bucket for them. You know, and this discussion of this from Elizabeth Warren isn't necessarily new. The Obama administration in 2013 proposed limiting public service loan forgiveness to the total amount that you can get in Pell grants, which at the time was $57,000. You know, changes like that, yes, they may be great for the middle class, the lower class, but they're not going to do anything for docs, are they?

No. And, you know, honestly, we have the earning power to take care of this. We have the income to take care of it, so we should. And why not? It's ridiculous that over 40% of physicians still have student loan debt by the age of 49. According to the recent Medscape survey. At 49, they're still paying student loans off. And that results in physicians having 39% of physicians having a net worth less than $500,000. That's pretty sad.

That is pretty sad. I agree with you. But when I tell people this, you know what their response is? They come and say, my student loans are at 2% or my student loans are at 3% or 4%. So if you have 2 to 4% student loans, why should you rush to pay them off?

Well, would you take out. I'm gonna go full on Dave Ramsey here. Would you take out $200,000 in a personal loan just to go invest it in the market?

You know what most people will say to that is no. I run into a few that say yes, though. They're like, yeah, if I can get money at 2%, I'll take as many millions as you'll give me, you know?

Right. Well, and that's the thing. Leverage is risk. And it depends on how risk averse you are. But leveraging debt to make money takes on a lot of risk. The problem with that is that with leveraging student loans is that there's no inherent value in student loans. If you have a rental house, for example, you can always sell that off should things go south. And your income, you lose your job or whatever, you can sell it, and then it's not something that's hitting your monthly cash flow, but student loans are yours until you die. And not only that they're a depreciating asset. Real estate generally appreciates, but student loans, as soon as you're done with your medical education, your medical education is out of date. And then you have to work on doing continuing medical education and paying more money to update your knowledge. So you are leveraging a depreciating asset that's not transferable, and that's super risky. Paying off student debt, especially at 6 to 8%, is the safest thing you can do. It's actually a really nice way to get a financial fellowship because if you pay off your student debt right after you finish your residency, it's going to take a few years. And in that few years, you can keep your ear to the ground, learn about investing, watch the market, you know, read financial blogs like the White Coat Investor and get your head in the game so that when you do have the money to invest, you can do it with confidence.

You know, it's interesting, I think you're right that it is a good dress rehearsal for life. If you can pay off your student loans in two to five years, you can become financially independent in 20 using the exact same skills, the exact same, you know, mindset that you use to pay off your student loans quickly, you can use to achieve financial independence. And it really is kind of a dress rehearsal. But if you drag that out for 25 years, well, how long are you going to spend becoming financially independent? 100 years. You know, that's not going to work out very well with your mortality.

That's right.

The other thing I get a lot from people is when they go to buy a car, they say, I have the cash, but they're offering me a 0% interest rate. Why not borrow for cars if you can get it at 0%? I mean, you're then paying it back with depreciating dollars, aren't you?

Well, you know, that's the same thing. Why not buy furniture and finance that out? Why not buy clothes and finance that out? The thing is, as long as you're financing out your life and financing out depreciating assets, you are tying yourself to these things. You have to continue to work and your future dollars are going towards yesterday's purchase. And as long as life is stable, that's fine. You know, as long as your job is stable and you're going to work and you're not sick, that'll work out just fine. But if something happens, you will be in the dumps, your finances will be in the dumps because you won't be able to pay for this stuff. So buying a car in cash doesn't become a hit to your monthly cash flow. You own it. It doesn't own you.

That's a good way to think about that.

I like that.

But I mean, frugal is frugal really, for doctors. I mean, for doctors are in the top 1 to 5% when it comes to income. If anybody can afford to not be frugal, not be thrifty, it should be a doctor, right?

Well, yes, but that doctor can also be very poor with a very high income, because income does not equal wealth. Wealth only builds if you have space in your monthly cash flow between your income and your expenses. If you spend everything you make, you'll never have anything to invest. So even if you're making a hundred thousand, two hundred thousand, five hundred thousand million dollars, if you throw it all away, it's not yours. So doctors have this immense privilege of having a very valued skill that we are compensated for. But it doesn't take all that much with this huge income to make progress financially. All you have to do is just be a little frugal. It doesn't have to be uncomfortably frugal. And you don't have to be cheap. Just watch your spending a little bit and you'll make immense progress and become quite wealthy.

Now you're obviously kind of on a track to hit pretty early financial independence. You said something like 15 years out, something like that. You know, our friend, the physician on fire just retired a few weeks ago. I mean, he's completely out of medicine at this point. But what about these docs who say, you know, I really like practicing medicine. I've got all kinds of life and disability insurance to cover me in case something bad happens. Can I just save just enough so. So that I can retire and be financially independent at 70 instead of 45 or 50 or 55 or even 60?

Sure, it's a good question. The problem with that is that medicine is changing. And while this doctor may like their life right now, who knows what it's going to be like in 10 years? We have so many outside forces. Insurance, government, administration, private equity. Things are changing right now. Medicare for all might pass, and who knows what our life's going to look like, our job life is going to look like, having savings. Being financially independent gives you flexibility. And that flexibility is the power to choose your own destiny, create your own practice, and be a master of your domain. And that's what we need in medicine right now, is the doctors watching out for the doctor patient relationship. There are so many people and so many factors that are affecting that. And doctors as a whole need to be able to speak up and take charge and advocate for their patients, for their patients finances so that we can as a whole make healthcare better.

I think that's an excellent point, that financially independent doctors are better doctors. You know, they can make decisions for their patients, for their practice to avoid their own burnout rather than have to make them in order to have a big enough nut each month to pay their bills, their student loan bills, their mortgage bills, their boat payment bills, whatever they might be.

Right? Yeah. Running on the RVU hamster wheel in a system we can't control is the best way to burn out. So in order to find our way out of this mess, we have to take charge a little bit of our own house first so that we can begin fixing what's around us.

Okay, let's talk a little bit about some specifics. We've talked a lot about Mindset today. You had a recent post on how to find cheap flights. I mean, airline flights are a big ticket item, especially if you have a decent sized family like mine. When we go someplace we got to buy six tickets. You know, if we go to Alaska, we go to Europe. That's a big spend. What are your strategies for saving on this big ticket item?

So I'm a huge fan of credit card points. We do all of our spending on credit cards and utilize the points to travel and that works out great as long as you are paying off the cards on time and not accruing interest. So as long as you can do that, utilizing points and then transferring to travel partners saves you a lot of money and gets you a lot of perks too. Having a travel budget helps too because if monthly you're putting aside a little bit of money, you can really jump on the good deals. And the good deals happen every once in a while. Airline prices fluctuate a lot and it has a lot to do with demand and the time of year that you're booking it. So if you can jump on it when it goes on sale, that's the best way to get the best deal. There are a lot of apps and tools online that you can use. I like Hopper a lot because I can put in my destination and it will actually watch that route for me and then send me a notification when the price hits the lowest it's likely going to go and then I can book it then.

How do they determine how low it's likely to go? That seems like a guess. Are they just basing it on some algorithm of the lowest it's been in the last year, or how do they do that?

Magic.

It's a black box.

Yeah, well, I watched the travel flights. They have some sort of algorithm, but I'm not an expert on it.

But it actually advises you. It says, wait to buy.

Yeah, it does.

Don't buy yet. It'll get better.

Yeah, exactly.

What if they're wrong? Can you sue them? Do they guarantee it at all? I mean, how does that work?

I don't know. I don't work for Hopper. But I. I will say that I get awesome deals when I use them, and I do watch these routes on other sites as well, and I have gotten some good deals. I just booked a flight to India on Christmas and New Year's for less than $1,000 round trip, which is huge. And you can go on matrix airfare search by Google ita. And that will give you all kinds of insane information about the flights, like going out from a certain airport. You can see all the different flights that are there and what time they're going out, like the layovers in a block format. So you can really look around, do your research prior to buying as well. I watched that India trip for, like, six months, and the price that I got was the lowest I had seen it.

So my wife is good at watching things like that, like you are. She's a good shopper. I am a terrible shopper. I shop like a hunter, go out, kill the beast, slay it, drag it home. Right when I go shopping, I consider it a victory if I can spend less than five minutes in the store. You know, so how does somebody like me that really does not want to spend six months watching airfare, put in a little bit of effort and get 80% of the value? Is there a way to do that? I mean, what. What is the, you know, lazy frugalista like me supposed to do?

Well, I think Hopper would be a good match for you because it does. All you have to do is put in your dest and it'll give you a notification when it comes up. There are other email sort of listservs that will send you emails when fares go, routes go on sale, and you have to sort of jump on it. You have to be the hunter. So that might suit you. Like Scott's Cheap Flights, I think is what it's called. And there's a listserv called Next Vacay, which is paid, and they'll send you routes that are on sale from your airport. And then as soon as you see one that you like, you can jump.

On it now is this. You're obviously close to New York City. You know, you've got several airports there. You've got, you know, there are flights going everywhere in the world. You know, you can probably fly direct into India out of New York City.

Yeah.

What about somebody that's, that's in, you know, small town Indiana or some much smaller airport? Do these services work just as well there as they do out of the big centers?

It depends on what you're using most. Like Scott's cheap flights will only send you stuff from big hub airports close by. The next vacay will send it from your smaller airports. But then generally those things are from the larger airports. So it does, if you are interested in traveling, it does pay to be close to a nice, a big hub. And that is one of the factors I take into account when I'm choosing where to live is how quickly can I get on an international flight.

Yeah, it definitely makes a difference.

Yeah.

Sounds like you can save a lot of thousands. I mean, it takes a while even for a physician to make $5,000 after tax. You know, save that by, you know, researching your flights. Well, and by, you know, looking for deals and by being flexible. I suppose that can make that difference up pretty quickly.

Yes.

I mean, maybe that's easier than going seeing another hundred patients.

Yes. Yeah, absolutely. I think especially for big ticket items like that, it's worth waiting and watching. And I kind of, I enjoy the process, you know, because it's like hunting to me. But in a long term, what other.

Spending tips do you have for things that people spend a lot of money on and how they can maybe spend a little bit less?

So my biggest thing is to cut down fixed expenses. One way we found to do that was to cut the cord with cable and actually just stream everything. We have an Apple TV and we just get apps for that and we subscribe to Hulu, Netflix and hbo. And then we get Amazon prime tv, which has a lot of stuff too. And between those things, and actually just an old fashioned antenna, which by the way, still works, you can get everything that you ever need to watch. I mean, I watch things live from the antenna and then I can watch other stuff, you know, on the streaming services.

Although if your blog keeps getting bigger, between your family responsibilities and the blog and the practice, I'm not sure you'll have any time to watch it, any tv.

So true. I mean, yeah, I barely do now, but when I do, I do watch the Bachelorette.

Yeah, See, this is painful for me because I have all that stuff. I got the cable, I got the Netflix, and I'm like, wow, I hardly watch it at all. I mean, I really don't watch much TV at all. So it really is a lot of money being thrown away for us. We could probably save quite a bit there. Yeah, I could. Frugal down dramatically. I assure you, we spend more money than we used to make for a long time, for sure. All right, what else should our audience know about frugal living? I mean, you've got the year here of somewhere between 20 and 30,000 docs that are going to listen to this episode in the next month. What should they know about frugal living? What is your message to them? If you could just sit down with each of them for five minutes and talk to them, what would you say?

Just focus on fixed expenses and don't deprive yourself, because that's the sure way of not being frugal anymore. Frugality is about getting closer to what you want, getting closer to what's important to you in your life and valuing the heck out of that spending there. But cut back on everything else. Cut back on things that don't make you happy, that don't get you closer to your goal. And if we can do that, we can get out of debt, we can be financially healthy, and we can also be mentally healthy. And if I could just. Just tell every doctor that that would be. That would make my life. That'd be awesome.

So generally frugal and selectively extravagant.

There you go. I like that.

Excellent. Thank you so much, Dr. Spath, for coming on the White Coat Investor podcast. If you want to learn more about her or her message, you can find that@thefruglephysician.com where she's been blogging now for a year and a half or so. How long has it been?

One year.

Well, congratulations on hitting the one year mark.

Thank you.

And we wish you success going forward.

Thank you so much for having me on, Dr. Daly. It's been a true pleasure.

That was fun to have her on. I really wanted to bring her on to talk about frugality. I feel like it's a subject I can't really speak to anymore. I felt like I was frugal for many years, but not so much anymore. Part of that is just because we can spend more. We often do. And we're not nearly as intentional about our spending, I think, as we have been in past years occasionally. We do certainly buy things that are much less expensive than we could. You'll be hearing, I think soon, a blog post about an $800 car we purchased, for instance, which I think will be a very interesting story, especially as we follow along and see how long this car lasts. But there will be more on that on the blog coming up in the future. I estimate that 80% of doctors need, want and should use a financial advisor and or an investment manager. Some investment gurus, such as Dr. William Bernstein, think my estimate is way too low. At any rate, if you want to use an advisor temporarily or for your entire life, there's no reason to feel guilty about it. Just make sure you are getting good advice at a fair price. If you need help updating your financial plan or just getting one in place, check out our list of recommended financial advisors@whitecoatinvestor.com financial advisors. You can do this and the White Coat Investor can help. Thank you for giving us a five star review on the podcast and telling all your friends about it. Head up, shoulders back. You've got this and the entire White Coat Investor community is here to help you. See you next time on the White Coat Investor Podcast.

My dad, your host, Dr. Daly, is a practicing emergency physician, blogger, author and podcaster. He is not a licensed accountant, attorney or financial advisor. So this podcast is for your entertainment and information only and should not be considered official personalized financial advice.