WCI #139: Physician Millionaires - How'd They Do It?

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 number 139, the Physician Millionaire episode. And this is an episode we've been looking forward to for a long time and that we've been working hard on. So it's going to be great today. You're going to love it. Did you know that the White Coat Investor not only has a podcast and a blog, but several books that will help you on your way to financial independence? These books cover topics such as asset protection and minimizing your taxes to keep more of your hard earned money. They discuss plans for insurance, housing spending, student loan elimination, investing and estate planning. You can learn how to become a millionaire within five to 10 years of leaving residency and how to invest in a sensible, low cost and effective manner with or without the assistance of a financial advisor. There's even a book geared directly toward medical and dental students so you can start optimizing your finances early in your professional journey. Find the book that is right for you at the WCI store, at shop.whitecoatinvestor.com or on Amazon. You can do this and the White Coat Investor can help. Our quote of the day today comes from J.L. collins, who said, yes, it is possible for every middle class wage earner to retire a millionaire, though it's never going to happen. And that's not because the numbers don't work. I like that quote, not only because, you know, it's entirely possible on middle class income, but it's certainly possible on a physician income or a dentist income. And yet 25% of doctors aren't millionaires by their 60s and I think that's a shame. So today we're going to be talking to a bunch of millionaires and we're going to talk about what they've done and what advice they have for you. But these are real world doctor millionaires who are going to tell you about their financial journeys to the point where they're at. So it should be a really pretty awesome episode. But you'll notice that a lot of them have some sort of financial plan. They've got something they followed to try to become successful, and that's something you ought to have as well. And there's basically three ways to do it. The first is the cheapest, but it is also probably the most time Consuming requires the most amount of work, and that is to write your own financial plan by reading a bunch of financial books, becoming financially literate, interacting on Internet forums, reading blogs, etc. It can be free to very cheap, depending on what you pay for the books, but does require a fair amount of work. I have a resource that will help you with it. If you go to the whitecoatinvestor.com at the top under the books section, you'll find not only links to my books, but links to great books by others. And those are great resources for you to learn how to write up your own financial plan. Next on the scale is something that requires less time but costs more money, and that's our online courses. If you take our online courses, yes, it's going to cost you a few hundred dollars, which is obviously more than just borrowing books from the library. But I have actually taken all that and distilled it down to its most essential elements so that if you watch these seven hours of videos and you take the quizzes and the tests and do the exercises throughout the course, you'll come out of the course with the written financial plan that not only you wrote yourself, but that you now understand and you can modify and you can follow as needed to financial success. And you can find that again@whitecoatinvestor.com under the Courses tab. Now, other people might be willing to pay a little bit more money in order to get a little bit more help. And if that is the case for you, you can get a good financial advisor. We have a recommended list of financial advisors and they will teach you and help you draft up a financial plan that you can follow to investing success. Just because you hire them to help you draft up the plan doesn't mean you have to hire them to implement it or to maintain it. You know, they can teach you how to do that as well. And then you can go on and be a do it yourself investor if you like, or you can continue to use their services as probably the vast majority of positions do, and that's fine as well. But whichever of those ways that you do this, make sure you get yourself a written financial plan. All right, let's get into the episode. We have six or seven guests on today, and and this is going to be awesome because we're just going to ask them about their net worth and their income and what they did to become so financially successful as doctors. And so let's get into our first guest here. Our first guest today is James. James, welcome to the White Coat Investor Podcast.

Thank you for having me. It's a privilege to talk with you.

What is your specialty and how far are you out of training?

My specialty is emergency medicine and I am 30 years out of trade.

And what's your approximate net worth?

Around 4 million.

And how do you divide that up? How much is house, how much is real estate, how much is mutual funds, et cetera?

Oh, I'd say it's 3.5, basically retirement accounts and half a million in real estate, which is just house.

And what's been your range of income throughout your career? Obviously over a 30 year career, I'm expecting a pretty good range. But what has your range of income been from your first year out of training until now?

First year out of training, maybe 80,000 in the military and now around a half a million.

And how long did it take you to become a millionaire?

Probably 20 years.

What are your secrets to success? How did you become so wealthy? I mean, 4 million is no small chunk of change. That's very impressive even for a physician with a pretty good income. That's an impressive sum of wealth that you've accumulated over the course of your career. How did you do it?

Well, I know that I like to spend money and I just learned early on that physicians like to overspend. So just knowing my weakness of liking to spend money, I knew that I had to protect myself from myself. So I just maxed out my retirement accounts as soon as I could. And that was probably when I started practicing. And I could have done it a few years earlier, but when I started practicing, I just started maxing out my retirement accounts because I knew I would spend the money if I didn't do that.

So you basically just paid yourself first and treated your retirement account contributions like any other bill?

Correct.

What was your net worth when you came out of training? Do you remember how much you owed or how negative you were? If you were negative at all? Maybe you weren't going into the military.

I wasn't negative because I went to a cheat college and did military medical school and military training.

Did you get any help? Did your parents pay for your medical school or did you. Is any part of this, you know, 4 million due to some significant inheritance or anything?

No, none of it's inheritance. And you know, I decided to do the military route so that it wouldn't accrue any debt. So none of it was really paid, it just was zero sum, if that makes sense.

Yeah. So time debt instead of money debt.

Right.

And how much debt do you have currently?

Oh, probably $30,000 or $40,000 in a home equity loan that I just used to draw cash off if I need it here and there.

And what advice do you have for those that are a decade or two or three decades behind you? What can you tell them about how to become like you in 30 years?

Well, be better than I am. I should probably be twice as good as I am right now. And listen to this podcast and just know that you can live more frugally and not have to spend the money just because it's in the account. But definitely pay yourself first in your retirement accounts and in your long term saving plans. And that way you don't have to think about it. I never really thought about my money. I just maxed it out and never really thought about it.

And what was your savings rate over the course of this 30 years? Do you think you were saving 5%, 10%, 20% of your income? What do you think you were actually putting away?

On average, I would say 10 to 20. Definitely no more than that.

Yeah. And what did you invest in? I mean, I'm assuming 30 years ago you didn't start out investing in index funds because almost nobody was back then.

No, I did just mutual funds through retirement accounts and I did some insurance products and turned that into an annuity and now it's just mainly mutual funds. So mutual funds from the get go, transitioning towards index funds as I learn more about them.

What do you think was your biggest mistake over that time period?

That's hard to say because, you know, for example, 10 years into training, when I went into private practice, I started something called a 412i, which was an insurance product that allowed me to save $60,000 in retirement a year plus a 401k which at the time was about 11 or 12,000. So I was able to put $70,000 away a year instead of just around $40,000. Is what a SEP IRA or 401k I believe at that time, as an independent contractor would have. However, the cost of that was up front the first year. I believe that I probably paid about $30,000 for that product. So it's very complicated. You know, I think that was a mistake, but where it's put me now is in a good place and so I have the money.

Yeah. What do you think was the smartest thing that you did over the course of that 30 years?

Again, that's just putting it away where I can't touch it, can't see it, don't worry about it. When the market dropped in, I believe 2001 and then 2008. I never really worried about it. I just kept putting it in and never looked at it, never thought anything of it.

Did you ever feel deprived, like you were some sort of a hardship to save that much money?

No, absolutely not. Especially if you don't see it or feel it.

And did you use a financial advisor for most of your career or was most of this do it yourself investing?

Most of it was do it myself. I have a wealth manager that I picked up 10 years in that put me into a mutual fund that I still have. He put me into a small annuity as an asset protection device that I still have and still has about a third of my money that they manage actively.

So a bit of. A little bit of each, huh?

Correct. And then I did my own as an independent contractor for 10 years, and now as an employee for 10 years, I did SEP IRA and then the 412i and now 401k and 457b.

Are you married? Do you have any children?

Married with two children. They're 25, 26 years old.

And how do you think they contributed to or detracted from your building of wealth along the way?

Oh, they absolutely contributed to it. My wife is a frugal person where I'm not, so we're a decent match there. My sons were both very intelligent and athletes. They had scholarships. I did have a friend who mentioned a college savings account. And Texas used to have a very nice thing called the Texas Guaranteed Tuition Plan that I started paying into about seven years before they went to college. So that helped offset college costs a lot of. And also we would sit down about once a year and talk about money. And so that just kind of helped me stay on path too, by talking to them about it.

What do you drive?

I drive a Yukon Denali, very large vehicle. We ride bikes, race bikes, travel extensively. And so we have a nice big car that we travel around the U.S.

Do you remember what you drove the first few years out of residency?

Yeah, I drove a old VW Rabbit and a new VW Jetta.

Very nice. Well, we're running out of time. We need to get on to our next person on this podcast. But I appreciate you coming on and sharing your story, James, and congratulations on all your success and for dedicating your life to the practice of medicine.

Well, thanks for doing what you do. It's amazingly important to people that come after us for sure.

Thank you very much. Our next guest on the White Coat Investor podcast is Suresh, who is coming to us and going to share a bit of his journey and some of the success that he's had. So welcome to the White Coat Investor podcast.

Thank you very much, Jim. I'm very happy and honored to be here.

Now, what is your specialty and how far are you out of training?

I'm a hospitalist and medical director for health plan services in a hospital in Midwest and I'm almost around 10 years out of residency.

Okay, and what is your approximate net worth?

It is around over $2.5 million.

Okay, 10 years out of training, over $2.5 million. Congratulations. This is very impressive.

Thank you, Jim. Thank you.

And how do you divide that up? How much of it is house, how much of it is real estate, how much is stocks, how much is in retirement accounts, et cetera.

So I have retirement funds and I invest in Vanguard after taxes and I have real estate. I have my house, I have emergency fund and have some real estate home in India. And my retirement funds are mostly 401A, 403B, 457, 529 and Roth IRA and whatever. I have an equal amount of money I have in after tax as well. And I used to invest in real estate here, local, Fort Wayne. And I did something called tax sale. I don't know if many people know it. You go to the city and if you don't pay your taxes in two years, the city has a deed and they can sell your house, even you don't know it. So we go there and bid and buy houses cheap and rent it. And that's what I did for five to seven years.

So what's the split between your retirement accounts and mutual funds and your real estate at this point?

So I have 30% in retirement funds and 30% in after tax investment. I have 5% in 5 to 9 for my kids and 15% is my house and I have risked 15% invested in other real estates.

Okay, and what's been your range of income throughout your career?

So I started my, this is my first job and I've been here almost 10 years and when I started in 2010, it was $185,000. And right now I earn more than $400,000.

So between 185 and 400 plus over the course of that 10 years. And is that your whole household income? Are you married with children, single?

No, I'm married and to a beautiful lady and have two wonderful kids. And my wife right now she is going to school and completing her MBA in next summer. So right now I'm the own, but she manages my all real estate. She's the manager. And I don't have to do anything. Just take the file the legal stuff and do the taxes and all those stuff.

Okay, so how long did it take for you guys to become millionaires? How long did it take to become a millionaire?

Jim, I really didn't know. Like I studied MBA at Kelley School of Business doing business of medicine where like 50 doctors come around from United States, learn about healthcare and we are learning in accounting and finance. And one project was to do time value of money and to see your net worth. And when I did, at that time I was surprised I was a millionaire. I even didn't know that. And now when I heard in your podcast you wanted to know who are the millionaires and I said, oh my goodness, I can talk to Jim and share that. Even I did not know that I was a millionaire. Now I can talk about it. And I hear your podcast, almost all podcasts I have heard. And if you do the right thing, it is a very easy thing to do. And doctors are very financially illiterate. And at my local hospital I give grand rounds on financial freedom for physicians. And people come and talk to me and ask me and if I don't know, I, I google up or talk to someone else and help them out.

I like that story because it reminds me of the physician on fire who didn't quite realize what financial independence was until he once ran the numbers and realized that he already was financially independent without even trying. I'll bet that happens to a lot of people that are kind of natural savers. So tell me about your secrets to success. What did you do? How did you become so wealthy so quickly? Because this isn't the norm for physicians, right? I mean a quarter of physicians in their 60s still aren't millionaires. So you're pretty unusual to be able to pull that off just 10 years out of residency.

That's a very good question, Jim. And as you said, great saving habits are key to financial success. And Warren Buffett says that do not save what is left after spending, instead spend what is left after saving. And saving regularly is the key to success. And you do say that 20% of your gross income. But for me I was calculating and I was been saving 20 to 40% every year. And that's simple thing and we are high earners. How much can you spend? I know you don't want Tesla, but you can drive Tesla and still be millionaire.

I actually really like the Tesla I drove a couple of weeks ago. It was a lot of fun. It's got pretty good acceleration. Yeah, it's my buddy's Tesla. I got him to let me drive it one one afternoon after we climb in. And you know, I certainly understand the draw. It's a very fun vehicle to drive.

Yeah, I think when you have your ducks in row, I don't think you can knock it off a little bit. And I think having fun is good thing to be in life. You're not going to be there forever. So have your dog syndrome. Whatever is left, spend whatever you want to.

So it sounds like you saved 20 to 40% of your income, which is pretty much your secret to success. It sounds like you worked hard, you made a lot of money, you saved a whole bunch of it. It sounds like you invested it in some sort of reasonable manner. And here you are just 10 years out of training, worth more than $2 million. That's pretty awesome.

Yes, thank you.

What was your net worth when you came out of training, do you recall?

I do. And I hear all your stories about student loans. And I'm from Nepal. I'll tell you that in our culture, our parents pay the money for our schooling, medical school and everything. And I do remember right now we go to medical school after high school. So when you are 18 years old, we join medical school and we go for five and a half years. And then I did USMLE, came to United States when I was age of 26 and then started work at 30. So. And I'm now 40 years old. But what I did was I gave my parents money back. And not just for like they wanted it, but it was my responsibility to take care of them. And every year I used to give them $10,000. And when I came to Midwest after finishing my residency, I had $10,000 in cash. And I am never been in debt after I bought my house and I had some leverage, but I don't have any car loans, no credit cards, nothing. Everything is in cash.

So you basically came out of training with a net worth near zero. You didn't have any big student loans. But how much were you worth when you came out of training, do you think?

$40,000.

Okay, so compared to where you are now, that's a whole lot closer to zero, but certainly better than the average physician coming out owing two or three hundred thousand dollars these days. Certainly now your parents paid for medical school, but it doesn't sound like any of this $2.5 million came from any sort of inheritance or anything like that.

No, in fact, I Have given them around $200,000 over like 15 years now.

How much debt do you have currently.

I have 5% of my net worth in my house. That's my mortgage. But if I wish I could pay, but my mortgage is like 2.5% so I'm not in any rush to pay that back.

Okay, so just the mortgage, that's it at this point?

That's it.

Okay. Now what advice do you have for those who are a decade or two behind you? What would you tell the doc that's coming out of residency today that thinks there's no way I could have 2.$5 ten years from now as you said.

That I was been very lucky and I didn't know that I was a millionaire already. So what thing is number one is save regularly. I start with 20% of your gross income and you are high earner and you can go up to 20, 30% if you can. And number two is invest regularly. Put in autopilot, simplicity, automation and hibernation. And the most important thing I would tell you to everyone, all physicians, is take care of yourself and your family. That's the most important thing. This money is not going to be there. Eat right, exercise, have a lot of fun and don't work very hard because you need to take care of yourself. And once you do this, you are all set and everything going to be fine.

Do you have any specific advice for those coming here from another country that are now coming to the US Maybe with just a few dollars in their pocket and looking to make their fortune here?

So the advice is the same formula for everyone. Save regularly, invest regularly and take care of yourself. I think and for us. When I came out in my residency, people used to talk about investment in stocks and market. And I said what is the stocks and bonds and this. And I joined residency in 2007, that was the Great Depression. And one of my attending said that oh, I have to work more couple of years because the stock market crashed. I said oh my goodness, I don't know what is this? And I never took anything. But after I came here I had a lot of cash in hand. I said what am I going to do? So one of my friend told go to this financial advisor. So I went and I gave all my money and he put it whatever he wanted. And then once I started my MBA and I saw this, I said oh my goodness, he is like taking 1% of my asset every year just for doing nothing. So when I finished my finance course I said okay, give me my money back. I can take care of it. So I have been tax efficient, globally diversified index mutual funds. I've been doing that since then. And the money grows itself. And once you do this, you end up with massive wealth. Just even you don't know that you have massive wealth.

Well, congratulations on your success, Suresh. You have really done very well for yourself. I think you mentioned before we started recording that you're looking at going to 0.6 FTEs at this point and trying to determine what you're going to do with the other 0.4% of your time. So I'm excited that, you know, you got your financial ducks in a row and you're able to really create the life that you're looking to make. So congratulations on your success and thank you for coming onto the White Coat Investor podcast.

Thank you, Jim. And I want to say one more thing is, and you are doing an awesome job and the small things can make big difference in people's life. And just listening to your podcast, I think I have a physician here. He's in 70s and he has just a million dollar in his portfolio. I said, what are you doing and what did you do with your money? And he said, I did a lot of bad stuff. And if you do these small things correct for a couple of maybe 10 years, no one is going to stop you for being a millionaire.

Yeah. Awesome. Thank you very much. All right, our next guest here is Michael, who is going to talk a little bit about the success that he has had in his career and with building wealth. So welcome to the White Coat Investor podcast, Michael.

Thanks so much for having me, Jim. It's an honor.

Now, what is your specialty and how far are you out of training?

I'm a family medicine physician and I'm about five and a half years out from completion of residency.

Okay, and what's your approximate net worth?

So I am right around the seven figure mark. To be honest, I'm not sure if I've crossed it or gone back and forth. I only check it about every six months, but I was due to be hitting it right around now. So probably by the end of the year, I'll tally it up and hopefully we'll be around there.

Well, given recent market performance, I suspect it's probably pushed you over already. What's your net worth divided up into? How much is house, how much is real estate, how much is stock, index funds and retirement accounts, et cetera?

Yeah, it's changed a lot, but we moved to simplify everything dramatically over the past year. And so now I Can thankfully say that about 30% of it is in our personal home equity and the rest is all in index mutual funds. Most of it is in retirement accounts with some taxable as well.

And what's been your range of income throughout your career these last five years or so?

My starting salary was $160,000 annually and I've gotten up to $240,000 over the first five years.

So $160,000 to $240,000 and you became a millionaire five years out of residency. That's pretty awesome. Congratulations.

Oh, thank you. I mean, we of course did have a pretty good market, so I can't take all the credit. We did get a little bit lucky with some real estate gains too, that accounted for about 50,000 or so. But the rest of it was just boring old saving and low cost investing.

Wow. I mean, that's your secret to success, saving money and investing it in low cost index funds. Because if you look at it, you've made about a million dollars in the last five years and you have a million dollars. That's pretty awesome. Yep.

Yeah, we are extremely blessed to be in the position that we're in. And I've had a working spouse as well, and we're just starting a family now, so those have all been good tailwinds, along with living in a relatively lower cost of living area. But living like a resident for five years, it really works.

So how much did your spouse make during that time period? We probably ought to add that in.

Yeah, she made about 50,000 to start. She got some raises, pretty significant ones over the past year. She's probably up to about $70,000 now.

But even so, she's not a high powered lawyer or another physician or anything by any means.

Exactly.

That's pretty cool. So what was your net worth when you came out of training? Did you have a bunch of student loans? A big negative net worth you had to overcome to get started? Or were you fortunate enough to come out having med school paid for?

I did have a negative net worth. It was not extremely negative and I have my wife to thank for that because she had been working for a few and working towards some savings. But I still had six figure student debt. It wasn't terrible. It was in the low one hundreds, which I consider myself very fortunate these days to have walked out of medical school with that type of debt. But we got that paid off pretty quickly and started working on building wealth.

How fast did you pay it off?

It was about two and a half years.

Okay. But even so, you Overcame a six figure student loan debt. Ann built a million dollar net worth in just five years. That is pretty incredible. Pretty awesome. Certainly faster than Katie and I built wealth at least those first few years out of residency. So did you receive any sort of inheritance, any sort of bolus of money into this?

No, not at all. I came from a pretty modest background, which I think probably has as much to do with my early success as anything because that forced me to learn to be frugal and to choose colleges and med schools wisely in terms of keeping cost down. So now this was all my wife and I and just steady and slow building.

So how much debt do you guys have currently?

We are currently, as of a few months ago, completely debt free.

No mortgage or anything?

No mortgage? Yep. We paid off the mortgage. I know that'll make some of the die hard people cringe a little bit, but it was the right decision for us and we're very happy with it.

You know, it's interesting as I've done these interviews that, you know, the listeners will have heard before yours. Obviously we're recording them all at different times in advance, but a lot of them chose to kill, carry a low interest rate debt, a 2% debt or 1% debt or whatever because they felt like they could out invest it. Tell us about your decision making when you decided, you know what, we're just going to pay it all off and how you think that helped you build wealth or whether you think it slowed you down.

Well, I think it's easy to look back and see how the market's done over the past five years and say, gosh, if I could have stayed as leveraged as possible, we would have come out a little bit ahead. But that's probably not a fair comparison looking backward. And of course we couldn't have known that. I looked at the debt as if we were paying 3.5% with after tax dollars that might be the same as a guaranteed 5% return before tax and that's not too bad. And we had all of our other financial ducks in a row. We were saving plenty enough for our retirement that we were going to be meeting our financial goals. And we ended up getting a windfall from selling the one rental house thinking what should we do with this? And after discussing it with my wife, we just said this would probably be best if we just work towards paying off the house. And we did it. And it's hard to say that it was the best move by the numbers. But I also think that if I'm trying to play Interest rate arbitrage on a couple hundred thousand dollars that that's really not going to be the difference between whether or not we reach our goals and achieve the kind of financial goals that we've been looking for. So that the extra few thousand dollars we could have made, I don't lose any sleep over it and I'm very happy with our decision.

So I often find myself on the more anti debt side of the spectrum. Sounds bit like you. And I sometimes get some pushback from it in blog comments or emails or on Twitter or whatever. And I often ask people, well, did it work for you? Where are you at in life? You know, and inevitably they either don't want to say or they're really not in an impressive financial position. But here you are in an impressive financial position. Not only are you in a relatively low paying specialty, but five years out of residency, you have no student loans or any other debt and you're millionaires. That's an incredible financial position to be in. So it clearly worked for you. Whatever mindset led you to pay off your debt also led you to build wealth pretty darn rapidly.

Yeah, I completely agree and I think I'm very analytical on things. So I had to run the numbers and I had to say, well, what if I invested this money and it was the only a 15 year mortgage anyhow, but what if I invested this money instead and I figured maybe the sequence of market returns goes well and I come out $50,000 ahead or maybe I come out a little bit behind, but it was such an overall small percentage of where I think that we would be in 15 years that it just, it didn't make sense to me to keep carrying extra debt.

So what advice do you have for those who are behind you? Somebody coming out of residency in five years or maybe somebody going into residency, what can you tell them that you wish somebody had told you?

Well, I don't want to make it seem as though I've done everything perfectly. I certainly made a lot of mistakes. Fresh out of residency, I fancied myself pretty smart and got involved with investing in oil exploration, microcap stocks. And the worst thing possible happened, which was I doubled and tripled my money pretty quickly. But you can imagine how that ended up in 2014, 2015. I chalk it up to the school of hard knocks, but that was what it took for me to learn how to invest properly and to take a more sensible approach, a less gambling approach. So one I would say is don't think that I never made any mistakes along the way. But I think the other thing that's really important that you speak a lot about is the importance of increasing your own pay within your specialty. When I took my first job, I was all set to take a different job working for the hospital system that I did a residency with. And I was encouraged by a mentor to just go and interview somewhere else and see what the other hospital systems in town or what other people had to offer. And that simple decision to go a little bit out of my comfort zone was the difference of $140,000 in guaranteed salary and bonuses and loan repayment over the first few years of my career. So I think it's easy to focus on the little stuff in terms of saving the day to day. But when you can get big stuff like salary negotiations and cost of housing and transportation, when you can get that big stuff down, the rest of it just kind of takes care of itself. And we don't run any sort of tight budget. We go on vacation. We're not living like we're trying to scrimp and save every penny. But we got the big stuff right, and the rest of it takes care of itself.

Well, congratulations on your success, Michael, and thank you for coming on the White Coat Investor podcast.

Thanks so much, Jim. Thanks for everything that you do. I recommend you and your books and your podcast, your website, to all the residents I work with. So keep doing what you do.

Appreciate you doing that. All right, our next guest on the White Coat Investor podcast is Bob. Bob, welcome to the podcast.

Thank you very much for having me, Jim. I appreciate it.

What's your specialty, and how far are you out of training?

Well, so I practiced general dentistry for approximately six years before I went to turning to school to become a dental specialist. My specialty is endodontics, which is one of the nine recognized dental specialties. As ended us, we received training that focuses on diagnosing tooth pain and performing root canal treatment. I'm 15 years out of my specialty training.

Okay, and so how far out of school total are you now?

I just had my 25th dental school reunion.

Awesome. And what's your approximate net worth now?

It's $5.4 million.

And what is that divided up into?

So IT split approximately 50% real estate, 25% investments in cash, and 25% in business practice value.

Okay, so a pretty good mix there. Obviously you like real estate?

I do, I do, yeah.

How'd you get started in that?

Well, I mean, so we have a practice that has multiple locations. So in the locations that we have, I purchased space. And so we basically purchase the space and lease back to the corporation. But some of that real estate, too is like, you know, when I'm calculating out net worth, I kind of lump everything together. So I have my residence and a second home and all those different things.

I see. So a lot of that real estate is related to the business itself. It sounds like it is.

It is, yeah.

So what's been your range of income throughout your career?

So that. I thought that was a great question because that's actually something I don't think about a lot. But it's varied so much over my career, you know, on average as a general dentist, I hovered around 200,000. As a specialist, it's varied from $200,000 in the infancy of the practice, when I started as high as $1.2 million. My current taxable income is approximately $950,000 on three days work week.

So that's pretty good income.

Yeah.

You find that pretty easy to build wealth with once you got it up that high?

Yeah. I mean, that makes a big difference. So in the beginning, things scale pretty rapidly, and we're going to probably get into some of these points. But I think one of the things that's helped me be successful is the fact that I started my own business and had the energy to put into it and scale it, and that's made a big difference for me. Yes, for sure.

So how long did it take you to become a millionaire? Do you remember when you first became a millionaire?

Well, I'm going to say it probably took me a little longer for a couple reasons. First, I returned to school to specialize after six years of general practice. So I actually practiced as a general dentist for six years before returning to specialized. So when I went back to training, I had about a 200k net worth. And then two years, especially training, I came out with a negative 200k net worth. So I went from a positive to a negative in two years. And secondly, I went through a divorce, which also set me back a little bit. But I would say about five years after specialty training is when I hit my net worth of over a million dollars.

Awesome. What would you say were your secrets to success? I mean, how have you become so wealthy?

I think there's probably three things, and honestly, I've been kind of obsessive about your podcast and I've probably listened to every one of them. A lot of it is a reiteration of many of the concepts that you talked about at the White Coat Investors. For example, one of the mantras I've always had is living below your means so you can pay down debt. If you do that early on, not only can you grow your net worth pretty rapidly, but you can adopt the lifestyle that you and your family over time can reap the benefits of for many years. Eliminating debt also has a nice side effect of reducing stress. I know you talk a lot about burnout, and I think reducing debt is a nice answer to reducing burnout. By the way, when I say living below your means, it doesn't mean you have to live in a cardboard box. You can live in a comfortable lifestyle and enjoy living your life. I think the important metrics we look at and we talk about income, but the most important metric I think is net worth. Secondly, if you can invest in leveraging your human capital, which I think is your most important asset, an asset that doesn't always show up on a balance sheet. And what I mean by that is you never let your talents dissipate and always try to continue to learn. One of my keys to financial success was being able to start and eventually scale a dental specialty practice. It took a lot of hard work and the ability to learn from my mistakes. I think, Jim, you might agree with me that for your situation, you used your talents and capital to grow your business. And I would suspect, and hopefully you would agree, that the white coat investor continues to be a lot of hard work. But it's probably very rewarding for you as a business venture. I would suggest that people try to find something they're really passionate about to set a fire under them. I found by doing that that you can become wealthy in more than just a monetary sense. There was one good example when I was looking through the podcast I listened to is there's number 75 that you have is interview with Doc GE which is increasing your primary care income. And I found that that was surprising how well that story related to my personal venture as far as building wealth.

Yeah, for sure. I run into subspecialists all the time, dental subspecialists that are making $200,000, $250,000 a year.

Right.

And then I run into people like you that are making $700,000, $800,000, a million, a million five. I mean, there's a dramatic difference in how easy it is to build wealth if you can get your income up to that level. But for some reason, some people have trouble with the entrepreneurial aspect or taking the business risks or putting in the work or the time or whatever to do that. So what do you think the difference is between those Folks that do it like you, those folks who don't.

Well, I mean, I think it's an innate thing a lot of times. I mean, I've always enjoyed business. I mean, right now I'm going back to school to get an mba and I mean, I'm pretty busy, but I look forward to these classes. I really enjoy finance, I really enjoy business. You know, for me, I had opportunities to start out as an associate when I got out of training and I just really wanted to start something from scratch. And I mean, when I got out of training I was almost completely broke. I mean, and I listened to.

You were worse than broke.

I was below broke.

Yeah, right.

I was 200k below broke. And fortunately I found a bank that could lend me a little bit of money so I could start a practice. And I did some market research and picked an area that I thought was going to support what my specialty did and it worked out really well. And I've had the ability to bring in people into the practice. I mean, when we started our business, we had, I think I had two people working with me. It was myself and two other people. And now we have 24 employees and four doctors and three locations. So I like growing things. The process of scaling things has been really exciting for me and I feel really lucky to be where we are.

Any other secrets you think that you learned or that you could share?

Yeah. So again, I'm going to give you another plug with your, with the white coat investor. But honestly, the thing that I find so crazy is 20 years ago I had advisors coming to me trying to sell me products. And you know, circling back to that whole negative net worth thing, I had an advisor who happened to be a close friend of my brother come in and try to sell me a whole life policy. And it was going to be for my, for my spouse and it was going to be $300 a month. And I didn't have $300 a month. And it's just something didn't smell right to me. So I would be very leery of advisors trying to sell you things you don't need when you're starting out. That's been a. I've gotten very lucky in that respect. If you choose to work with somebody, make sure that there's transparency in what investments you're getting involved with and the products they're going to choose for you and just really understand the fees associated with those investments and products. I think that's really important when you're starting out.

So is this pretty much all you or did your parents at some point pay for school or did you get some big inheritance or anything? Or did this entire, you know, five plus million dollars come from your hard work and saving and investing?

The first thing I'll say is I didn't receive an inheritance of any significance. I got a little bit of help from an aunt here or there with some spending money when I was in school, but my parents. So I grew up with a family of six kids. My dad was a dentist, but he had a lot of health issues and wasn't able to work to his full capacity. So my parents agreed to pay for most of our undergraduate education, but everything beyond that we were responsible for. So my parents extended that to each and every one of the kids who chose to go to four years of undergrad. But I paid for my own dental school and residency training myself. So basically I paid for it through working in student loans.

And how much debt do you have currently?

My wife and I have 260k in debt, and that's split between two rental incomes or two rental properties that are income generating. And I'm happy to say we don't have any other debt other than that.

So just your leveraged investments, basically.

That's it. Yeah.

Do you have any last advice for those who are a decade or two behind you? Maybe somebody coming out of their subspecialty training wondering how they can possibly get to the same place as you by, you know, mid to late career?

Yeah, so I'm kind of a bit of a reiteration of some of the things I talked about, but I think living below your means is really important, as I think you say living like a resident and understanding that living below your means will look very differently when you're 50 and wealthy than when you are 30 and just out of your training. So it's kind of a lifestyle you can adopt and bring through your entire career. And it's something you can model for your kids too, if you have any children. But the second thing I'd say is make sure you leverage and make full use of your human capital. Never let your talents dissipate and your skills. And if you have the ability to find something you're passionate about, just create it and grow it as much as you can. And the last thing I would really suggest is just enjoying the whole process. I realized that this is a podcast about personal finance and investing, but I believe what truly makes somebody happy is their relationships that they develop and their experiences that they develop between their friends and family. And I just remember this friend of mine from Louisiana that I trained with, that he always said years ago that he's been both happy and unhappy in the presence and absence of money and came to realize that it's not just money that makes him happy. And I'd have to say that I agree with that. So just enjoying the process and the whole thing is really important, I think.

Awesome. Great advice. Well, congratulations to you, Bob, on your success. You've certainly worked hard and I'm proud of you. You've done really great for yourself. And I appreciate you coming on the podcast today and sharing your secrets to success with the listeners.

Well, I appreciate Jim, and I think everything you're doing is great. I just completely agree with 99% of it. And I just keep doing the good work you're doing, and I appreciate you spending the time with me.

Thank you. Our next guest on the White Coat Investor podcast is Brendan. Welcome to the podcast, Brendan.

Thank you. It's great to be here. Really an honor to be talking with you.

So what is your specialty and how far are you out of training?

So I'm a general dentist and I am in my 14th year out of training.

Okay, and what's your approximate net worth right now?

Just a little bit over $1,600,000.

And what's that divided into? How much of that's retirement accounts versus mutual funds versus your home versus real estate investments or whatever? How much is in bitcoin? That's what we really want to know.

Yeah, so about half of it is in the market, mostly index funds, and that's spread between taxable and my 401k and IRAs. About a quarter of that is in physical real estate, and I also have a couple of privately held notes, and then a quarter of it is in our paid off home.

Okay, and do you own your practice?

No, actually, we owned two practices and we sold them about three years ago to a dental service organization. And that was one of the nice boosts to our wealth.

Very nice. And what's been your range of income throughout your career?

Yeah, so when I started off, my first contract was for $100,000, and my best year was about 440,000.

Okay, that's a pretty good range there. What'd you do to increase your income?

My best years came when I owned my practice and I was just working like a guy with my hair on fire. So it was great for the income, but not really great for my family life.

Not the ideal lifestyle. I think a lot of docs out there can relate to that. The problem is Every time your income goes up, your lifestyle goes down, and everyone's got to kind of find their set point. I think most of us probably go over the line and then try to come back to it. So how long did it take you to become a millionaire?

It took us about 11 years.

And what were your secrets to success? I mean, how did you become so wealthy?

Yeah, so really, I guess starting out as a child, I saw my family struggle with debt, and I just knew that that was not the path to a happy life. So I was always afraid of taking on debt. So I chose to attend a state dental school, and that was about a third the cost of the private ones. Then when I got out, I started working in public health, and I received National Health Service Corps loan repayment. So for the first five years of my career, I was killing my debt with the loan repayment and saving a lot of my paycheck because I've always been frugal. So I'll spend money on the things that I find value in. But I still like to shop for deals and make sure I'm getting the best bang for my buck. For instance, my first home that I bought was in foreclosure, and I had a $500 mortgage. I did buy a new truck, but it wasn't one of those $70,000 fancy ones. And I made sure that the fishing boat that I bought was something I could pay cash for. When I started out working, I was also taking on extra shifts. There was some other clinics in my area that needed help, so I picked up extra time there. The things that I did for fun were. Were fishing. So I bought a piece of land that I could enjoy, but it was also an investment. I was able to sell wood off of that land, and later I sold the property altogether. That's one of the privately held notes that I have. And then, as I mentioned, my wife and I bought those two practices. Part of the evaluation that I made in looking at those practices was the locations. So I bought the buildings that those practices were in, and one of them ended up being about as good an investment as. As the practice itself. And I guess it's nice to have some frugal friends. I like that saying that you're the average of the five people you associate with most. And I'm fortunate to have some friends that I can talk to about frugality and investing. And along with that line, I think listening to podcasts like yours and reading blogs lets me know that there's a community out there that we're not the only ones that are doing something crazy by living frugally, not taking on huge amounts of debt, and I guess bucking the typical American trend.

Yeah. Now you've been pretty entrepreneurial compared to most docs. I always tell people I like owning stuff because when things do well, you own all the profit. And you've owned quite a bit of stuff throughout your life between the practices and between the properties and the properties practices are in and you know all this stuff. And that's worked out pretty well for you.

Yeah.

So, I mean, I guess it's important to evaluate if it's going to turn out to be a good investment. And, you know, I like your advice to stick to your plan. I like that old Ronco slogan of set it and forget it. So I try to follow that as much as possible. And I think that that starts with evaluating everything that you're going to buy and make sure it's a good buy and there's a good chance you're going to get a return on it later on.

So what was your net worth when you came out of school?

Do you remember?

Yeah, I actually was thinking about this recently, talking with some new docs, and I was about $240,000 in debt just from education debt when I got out of school.

So I'm presuming your parents didn't pay for dental school and there's no inheritance involved in this whole thing?

No, no. I got a little bit of help because I went to a private undergrad school and I wasn't able to borrow the entire amount, but the bulk of it was either I borrowed or paid through with summer or in school work.

So how much debt do you have currently?

Very proud to say that we have no debt.

None at all?

None.

In fact, you got negative debt because people are paying you interest on these things. You've sold them.

Yeah, that's the great side of the ledger to be on.

Yeah, that's what I always teach my kids. It's better to receive interest than pay it.

For sure.

So what advice do you have for Those who are 14 years behind you? They're coming out of dental school now, they owe $400,000 or more maybe, and they just don't see a pathway to even becoming a millionaire, much less doing as well as you have.

So I hope that you have the power to reach some people that are still evaluating because some of that is taking a look before they even start. And it may be better to wait an extra year or two in order to get into a state school than it is to go to that expensive private school. And for some people, it might be best to choose a different path altogether. But for new graduates, I all the time refer them to your blog as the first resource because I can't say it any better than live like a resident. But if they haven't created financial independence as a goal, I think that they need to because it just gives you so much more freedom. And if you're willing to put your nose down to the grindstone when you're fresh out of school and you have lots of energy, that freedom that you gain from having financial independence will allow you to achieve more goals and have more time to spend with your family or however you choose. As I mentioned, we sold our practice and I think this applies more to dentistry. But I would say that for people that are coming out or own a practice currently, the old paradigm of own your practice, work it until you're 65, and then sell it and use that money to fund your retirement is just not going to work at the current pace. It's about 50% DSO penetration projected to be in 10 years.

Can you explain what DSO penetration is? I think a lot of listeners don't know.

Sure, yeah. So a DSO is a dental service organization. So they take care of the administrative work. And that was one of the factors that went into us selling. So I said I was earning a lot of money, but I had no quality of life and I was doing my own bookkeeping, doing my own taxes. The sale allowed us to give that part up. We still work in our business. I can focus on being a doctor. I actually think I'm a better doctor now without worrying about that stuff. The biggest blessing was we were delaying having a family because we had so much other work to do. So we welcomed a healthy little boy into our family about eight months after we sold the practice. And so, yeah, that was great. But I guess to get back now that we've explained that there's going to be a tipping point. So as the amount of practices that are in that DSO model gets over 50%, I think current practices are going to lose value and also they're going to be out competed. You know, I would say that the corollary is the transition that occurred in pharmacy and medicine where, you know, there's no private pharmacists out there, it's all Walgreens or cvs. There's mostly groups in medicine. We're just a little bit behind that in the timeline. So I really think that the best time to sell a practice in dentistry is now to the next five years. And so if there's a new doc out there that really wants to own a practice, I would go into it with that mindset of buy one that's low performing, build it up, and make an attractive target to sell. And the same for somebody who's in their practice now. I would be looking to get an exit plan in the next five years so that you get that maximum value out of it.

Well, thank you for that and congratulations to you. You've been very successful. I'm very proud of you.

Thank you.

It's wonderful to see that this stuff actually works for real people that aren't financial podcasters or financial bloggers. So thank you, Brennan, for coming on the White Coat Investor podcast.

Thank you so much. It was an honor.

Our next guest on the podcast is Gail, who is going to be talking a little bit about some of the success she has had in finances. Gayle, welcome to the White Coat Investor podcast.

Thank you for having me.

Jim, what's your specialty and how far are you out of training?

I trained in emergency medicine and I finished my residency in 2000, so I'm 19 years out.

Okay, so you're about six years ahead of me. I came out of training in 2006. And what's your approximate worth?

Now?

This is a fun exercise. I did this today and calculated my net worth to be just shy of 3 million at 2.96 million.

Awesome. Congratulations. Coming right up on a big milestone. You have a big day in the market or a big week in the market and you're probably over it, I would imagine. So what is your net worth divided into how much is real estate, how much is mutual funds, how much is in real estate, etc.

Okay. I have about 1.6 million in retirement. That includes both my husband and myself. Majority of it is mine, as my husband is mostly a stay at home dad. So he has about 170,000 of it. The rest is mine. Ours, I should say 1.2 million is in real estate. We have about $100,000 in cash, and that is mostly in Norway. My husband is Norwegian. We spend a lot of time there. And currently the US Dollar is very strong against the Norwegian crown. So we've been sending money over there so we can enjoy vacations in the future when it's not so strong. We have about $150,000 in my husband's antique boat business and our cars are valued probably about $30,000. And I'm not including anything like furniture, jewelry, sporting equipment, like bikes or our children's 529s in our assets.

I wish we had more time to talk about an antique boat business. I was just over in Norway not that long ago and saw a lot of the kind of Viking boats that they'd been reconstructing there at a museum. It was pretty interesting to see people using older techniques to build these boats. Essentially, it was pretty cool. I don't know if that's quite antique enough for what he's doing though.

He's not that antique. He's generation master woodworker and he's working on some classic runabouts, wooden runabouts from the 1940s and 1950s.

Awesome. So what has been your range of household income throughout your career?

I just went through my W2s and when I started in 2001, my W2s show that I earned 150,000 and that's the median salary in the Northeast. And in 2018, I had $316,000 in wages from my job. I also do want to mention, Jim, that I did take a hiatus. I spent two years in Norway. So in 2012, I had a midlife crisis. So my husband and I packed up our three children who were elementary school age at the time, and we moved to Norway for a year to live off our savings. But it wasn't long before they heard that there was an emergency medicine doctor living on a potato farm in rural Norway. And I was recruited to help start up the first emergency department there. So our one year leave of absence became two years and I wound up working full time in Norway and my salary there was about $100,000 in US dollars. So much lower reimbursement for physicians in Scandinavia.

Awesome. What a great experience though, to be able to experience that and start something up new there. So how long did it take you to become a millionaire?

I don't remember exactly, but I knew that I had a goal of having a million dollars net worth by the time I was 40, and I did reach that goal. So probably around 39.

What are your secrets to success? How did you become so wealthy?

Well, first of all, I don't consider myself wealthy. That may help. I come from a very humble background. So my father was a sanitation worker and my mom was a stay at home parent. So no matter how much money I earn or accumulate, I'll always be the daughter of a garbage man. So one of my secrets, I think is being frugal and a minimalist. And I would say that that's probably in comparison to other high income professionals because I know there are a lot of Americans living off a lot less money than we are. I've always lived below my means. I just read a post on Facebook today about coupon clipping and I still do that. I shop in bulk at BJ's and I clip coupons and yes, I could probably earn more money working an extra shift, but I have to shop anyway so might as well save some money doing that. We also like to spend money more on experience rather than things. So by the time this podcast airs, we will have just come back from a family scuba diving trip to Mexico over Christmas vacation. We're not buying each other gifts. Our family gift to each other is the experience of scuba diving in Cozumel together. And then another trick is that I always pay myself first. What I mean by that is I'm a W2 employee so I have all of my retirement savings taken out of my paycheck before I ever see it. So I max out my retirement savings every year and as a result of that I've never had to keep a budget, but I've never under saved for my retirement either. I'm also very debt averse, so I've never had a car loan or credit card debt and I consider myself relatively concrete in my thought process. In that meaning I tend to understand things that I can actually see and touch as opposed to things that are a little bit more theoretical, which is why I'm so heavily invested in real estate. So I know that you don't recommend this, but I bought my first house my internship year and I did my residency in Detroit and housing market was pretty cheap there and I bought my starter home at $63,000 back in 1997 and I met my future husband a few months into internship and he was about ready to move back to Norway. His visa was about to run out so we had to make some pretty quick decisions and did the financial calculations and he moved in with me and our expenses turned out to be $250 per month per person and that covered the mortgage, the homeowner's insurance and taxes. So when you say to live like a resident, I think back to those years and we actually lived like a king and queen. We went to scuba diving, we traveled to Mexico and Malaysia, all while paying down a mortgage and paying down student loans. We were then able to flip that house three years later. As I mentioned, my husband's quite handy and he's a woodworker. So we sold the house three years later for $85,000. So quite a nice profit and gave us a nice down payment for our next fixer, upper house that we bought. As soon as I took my first attending job in New England, we put a lot of sweat equity into that house. And we also turned my remainder of my student loans into the mortgage. So they disappeared because they didn't have student loan refinancing back in the early 2000s. And then I waited to buy our doctor house until my third year as an attending once I knew that I was going to be in that area. And in addition to those real estate investments, we also have two duplexes for a total of four rental units. We've had those for 15 to 18 years. And they have a positive cash flow. And the money we bring in from that actually pays for our primary home mortgage. And then just a couple of other things. We did some geographic arbitrage. So when I finished residency, we looked at expensive cost of living areas like San Diego and realized that we couldn't afford to buy a house there. So we eventually settled on New England because the cost of living was more reasonable and the school systems were good. So our children have gone to public school all along. They're in high school now. And then. One other thing that I recommend that will probably get a bit of backlash is that we've always had a 15 year mortgage. And others will say that you can take that money and invest in the stock market. But like I said, I like to kind of see where my money's going. And we've always considered it to be like forced savings. I think it takes a lot of discipline to invest the money once you have it in your pocket and it can be easily spent.

So.

And I'm a pretty disciplined person. I'm an endurance triathlete, ironman races. So I know about discipline and training and diet, and I don't trust myself to not spend that money once it's in my pocket. So we hope to have our primary home paid off for within the next year before our oldest child starts college.

Awesome. And that'll be your last debt?

That'll be my last debt. We have about a little over $100,000 on our primary mortgage. And we have $6,000 0% on a loan for installing a solar system at our house.

Now, I'm presuming your parents didn't pay for medical school or leave you any significant inheritance. Do you remember how much you owed when you came out of training?

I do. I owed just under $100,000. I think about 97,000.

Any last advice for those? A decade or two behind you who are wondering, how can I be worth $3 million by the time I'm 20 years out of residency?

I would say the biggest thing is to just live below your means, so don't spend more money than you earn. I would recommend not over leveraging. Like I said, our rental properties are all paid for and it's a safe thing, but at least we know that our real estate is ours. I would insure against catastrophe. So I've had disability insurance ever since my senior of residency, and once I had children, we got life insurance. I wouldn't buy anything without being able to sleep on the decision first. So I speak from personal experience after getting roped into buying a timeshare where you had to decide on the spot, and that was probably about a $14,000 waste of money right down the drain. So I recommend not make any decisions that you can't sleep on and think about. And I would also recommend starting saving for retirement on day one as soon as you start earning an income, because it's more about habits and discipline rather than asset allocation. Again, I didn't really understand the stock market when I was in my 30s and 40s, and retirement also wasn't something that I completely grasped. It wasn't until I turned 50, just recently, that retirement has started to become more of a reality. I think about the next 10 or 12 years. One other thing my husband and I have always had is what we call a go to hell fund, which other people might consider an emergency fund that just keeps your options open. So if for some reason you don't like your job or you have a midlife crisis and want to move overseas, or you want to take time off and write a book, it gives you those options. And then I think, lastly, I would say that it's not always about the money. I think it's about finding the proper balance, enjoying life and your job, and just trying to help make the world a little bit of a better place.

Awesome, Gail. Well, congratulations on your success. I'm very proud of you. You've done some wonderful things, both in this country and in Norway, and I appreciate you coming on the White Coat Investor podcast.

And thank you for all you do, Jim.

So our next guest on the White Coat Investor podcast is Rich. Welcome to the podcast, Rich.

Thanks for having me on.

What is your specialty and how far are you out of training?

My specialty is maternal fetal medicine, and I've been out of training for 17 and a half years.

And what's your approximate net worth now?

$5,700,000.

Okay, and what's that made up of? How much of that is your house, how much of that is real estate investments, how much mutual funds, et cetera?

$1,500,000 is in just various retirement accounts. About $1,500,000 is IN various taxable accounts. I do have $1,000,000 in a cash value in an available universal life insurance policy, $300,000 in various 529s for my children, and then $1.4 million in our home, which is paid off.

Awesome. And what's been your range of income throughout your career?

It ranges since I finished training, anywhere from $220,000 to $575,000 a year.

And so how long did it take you to become a millionaire? If you recall, back then?

Yeah, I was 40 years old when I hit the first million, which is about four years after I finished training.

That was pretty quick. What was your net worth when you came out of training?

About 100,000.

You had a positive net worth when you came out of training?

Yeah, positive net worth.

Interesting thing is it was the time of the dot com. So actually at one point during my training, it was up to 450,000 with all those Internet stocks, and it dropped down 100,000.

Oh, that's a painful story. So you wrote out that crash, huh?

Yeah, luckily I wasn't margin, so it ended up about 100,000 when I finished. And what I did learn is that money that you don't have to hit home runs and just singles and doubles to reach independence. So at that time, I stopped buying individual stocks and just focused in on mutual funds, asset allocation, dollar cost averaging, boring investing.

You know, a lot of people say the worst thing that can happen to you as an investor is hitting a home run early. And it's actually better for you to lose money earlier because you learn about investing faster and you put in appropriate risk control management techniques. So maybe it was good for you to lose all that money early on. It certainly didn't impede you from becoming a multimillionaire relatively quickly.

No, I think it was a good lesson. I mean, it was definitely a good lesson and good to learn it early on instead of late in the career.

So what are your secrets to success? How did this work for you? How did you become so wealthy?

I don't really consider myself wealthy, but I think my father was helpful financially educated early on. No one really cares about your money more than you. And you have to realize that. My father was an immigrant over 50 years ago, came here with nothing, and he's made some good choices and he probably has an 8 figure net worth now and taught me a bunch of money principles early on. I think the main thing is to pay yourself first. Pick a percentage that you want to save and stick to it. That's ranged anywhere from 10% to 35%. In my career, live definitely below your means. There are times when you can have unpredictable situations come up. My first wife died of cancer about nine years ago and during residency she was pretty ill. So I took a year off during my residency and probably made half as much money as I was making as a resident, which wasn't very much and interesting because of good financial. We weren't impacted financially from that. And also living below your means because it allows wealth building. I mean, the homes we owned before we got the doctor home a few years ago was less than one times my annual salary, which fortunately we make pretty good money. So it's not like we were living in a shack or anything.

That's a common trend, I think among physicians who do well is they don't max out what they can buy house wise. They're not out there with a 3x4x house. They're certainly under 2x and often under 1x like you were. And then all of a sudden, because they're not putting all that money into housing, it just piles up and before they know it, they're millionaires and then they're multimillionaires and then they're financially independent and they don't feel like they did anything hard because the people are living around live in the same size houses.

They do a couple other things that's helpful is just prioritizing spending. You know, you can't buy everything all at once. My dad told me when I took off for residency, he said you can either be rich or look rich, but you can't do both at the same time. You got to pick one and if you pick the right one, you might be able to do both down the road. And just being generous also I think helps if you're generous. I think it makes you more disciplined in your spending. We try and give over 10% to our church and we be generous with our kids schooling and local charities. And my first wife, we did set up endowed scholarship where we went to college. That generates a scholarship a year for a cancer survivor. So I think that's helped over the years be more disciplined in how we spend our money.

That's awesome. That's awesome. I think that is also a common theme among millionaires and people who've done well is yes, they spend less than they make and yes, they generally work hard and make a lot of money, but they also tend to give a fair amount away. And I think that's also true in the position financial blogosphere year. So awesome for you. So you mentioned that your house is now paid off. Do you have any debt at all now?

No, no, we're debt free, fortunately.

I assume you mentioned your dad now at least has an eight figure net worth. Did they cover your medical school? Is that how you were able to come out with not a big student loan burden?

That was interesting. They didn't cover it and it's been a lot of compounding. I mean, he's pushing 80 now, so that's why it's very large. But I was really blessed. My dad's a college professor and one of the fringe benefits, which I feel very fortunate, was to free tuition at medical school.

I mean, obviously that helps, but this net worth you've built, it doesn't sound like there's been any big inheritance. Your parents are still living, at least your dad is. And doesn't sound like they've given you some big chunk of money at some point, is that right?

No, no, no, they haven't really given us a big chunk. I mean, there'll probably be some company down the road, but I mean, they did teach us good. And then also, I mean, that was a huge. I mean, it's like getting a medical school scholarship basically, which is unheard of. So to be able to get tuition for medical school was huge. To not come out like negative 300k out of training.

Yeah, it's a big trend at the local medical school here. If your spouse works for the university, I think they have to work there for a year or so, then your tuition's half price. And so I remember a lot of my medical school classmates had a spouse that was a nurse or did something else at the university because it was like a huge raise for them to be able to get tuition half off. Medical school tuition is hardly an insignificant side benefit. It's a big deal and so kudos to you guys for taking advantage of it. So what advice do you have for those who are a decade or two behind you? Someone that's coming out of training now they're thinking, man, there's no way I'll ever even be a millionaire, much less a multimillionaire. What advice do you give to them?

Just a few things. I mean, I would say start investing early. Definitely get in the habit of paying yourself first. Even though the dollar amounts may be small, if you could set aside some money during residency and just get in that habit of saving, that's helpful. And then when you actually make the dollar amounts, you'll already be in that habit of saving. Definitely avoid debt as much as possible because you do have to pay it back. Living definitely below your means getting financially educated and then learning to be generous with, you know, the different benefits and blessings that, you know, you'll be blessed with as a physician. I mean, we make like crazy amounts of money, but we do make a good amount of money and live a good life.

Awesome. Well, you are in the top quartile of physician net worth, so over 5 million puts you in the top quartile as physicians go. So congratulations to you and thank you for what you're doing for your patients and for, you know, the causes that you support. And congratulations on your success.

Thank you.

Okay, you've now heard from seven different doctors who have been particularly financially successful, and each of them followed their own path. There are all kinds of different specialties, some very well paid, some really not that well paid. And you'll notice that there's no real trend there in what their income was, but there was a trend in how they treated money. Every one of them said they lived below their means, sometimes far below their means, at least for a period of time. And this is basically the story for all physicians who become wealthy. You know, they may not have had a perfect live like a resident kind of period, but they usually had something similar to it. And so I hope you've seen in these examples a pathway that you can follow even if you're not starting at the same spot, even if you're starting with minus $600,000 net worth from a big student loan burden, or even if you're living in a high cost of living area, or even if you're a relatively low paid physician, or even if you also have childcare responsibilities or whatever. I hope you've seen a pathway to become wealthy in your own way and a way at least you can have money. Stop being a worry in your life and start being a tool that you can use to improve your life. Did you know that the White Coat Investor not only has a podcast and a blog, but several books that will help you on your way to financial independence. These books cover topics such as asset protection and minimizing your taxes to keep more of your hard earned money. They discuss plans for insurance, housing spending, student loan elimination, investing and estate planning. You can learn how to become a millionaire within five to 10 years of leaving residency and how to invest in a sensible, low cost and effective manner with or without the assistance of a financial advisor. There's even a book geared directly toward medical and dental students so you can start optimizing your finances or early in your professional journey. Find the book that is right for you at the WCI store, at shop.whitecoatinvestor.com or on Amazon. You can do this and the White Coat Investor can help. Remember, if you need a financial plan, there are three ways to get it. You can read some books. We have some recommended books on the website. Be sure to check those out. You can take an online course and we have one specifically designed to help you get a written financial plan. And also if you need help with from a professional, from a financial advisor. You can hire those as well. We have a list of recommended ones on the website. You can see their applications, you can see how they've been vetted, and you can hire them for whatever your needs may be, whether they're short term or long term. So be sure to check those out. Thank you for leaving us a five star review. Thank you for telling your friends about the podcast and the blog and the conference and all that. Head up, shoulders back. You've got this and we can help. Let's all have a great 2020.

My dad, your host, Dr. Dahl, 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.

Sam.