WCI #174: How to Make Seven Figures in Medicine

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. Welcome to White Coat Investor Podcast 174. Making seven figures in medicine, the White Coat Investor is proud to introduce our no Hype Real Estate investing course which will provide the framework for developing further knowledge and experience as you progress in your estate investing career. We call it an introductory course because there's always more to learn. But this is no short, superficial course. There are over 200 lectures and videos adding up to more than 27 hours of content by over 15 different instructors. We think it just might be the best real estate course on the planet. Continue your wealth building journey today with the no Hype Real Estate Investing course@whitecoatinvestor.com courses. You can do this and the White Coat Investor can help. We're recording this on the 18th of August. I expect it to run on the 3rd of September. I think I'm gonna be having a lot offun on 3rd September, so I hope you enjoy this. If you're listening to the day I come out, it comes out I am likely off at Lake Powell wake surfing or something. So looking forward to that as my next trip coming up. All right, our quote of the day today is Charlie Ellis again who says investing is not entertainment, it's a responsibility. And investing is not supposed to be fun or interesting. Boy, nothing like taking the fun out of a podcast, huh when we tell you that right up front. By the way, thanks for what you do. I know a lot of you are on your way into work, on your way home from work, working out, trying to relax, hopefully on a day off, maybe getting a break from medicine. That's not an easy job and it's not always a job where you hear very many thank yous. So thanks for what you do. If you are in need of a financial advisor, don't feel guilty about it. I would estimate that about 80% of docs want or need a financial advisor and for that reason I have been connecting doctors with the good guys in the industry for nine years now. You can find our recommended financial advisor list@whitecoatinvestor.com under the recommended tab. There's a whole list of people all over the country that charge in all the different ways that you could want to be charged. They're all fee only advisors. Some are hourly rate, some charge an annual Fee, some charge, an asset under management fee, whatever is right for your situation and for the services you need. Pick a good advisor there that's not going to rip you off and is going to give you good advice at a great price. But if you need that resource, it's there for you. These are people that we've vetted. When I say we, I'm talking not just myself and our staff, but the readers and the listeners over the years who have used these advisors. We could also use your help with the podcast. We have a podcast survey going right now. It's a whitecoatinvestor.com podcastsurvey and we encourage each of you to fill that out and tell us what you like and don't like about the podcast. Help us make it better for you. I appreciate you doing that. We've got a special guest we're going to be bringing on here for this episode, which I think you'll find interesting because we're going to be talking about not just having a seven figure income, but making seven figures in medicine, which in some ways is harder than doing it outside of medicine. And so we'll be talking about that. Let's get our guest on the line. All right. Our guest today is Tom. He is a urologist. You may have met him before in a virtual sense. He has published some guest posts on the Physician on Fire blog where he was described as a seven figure urologist and which is a perfect title considering the subject we're going to talk about today, which is how to make seven figures in medicine, which is a surprisingly uncommon thing that happens. But before we get into that, let's talk a little bit about your upbringing and how it shaped your views on money. So thank you, Tom, for coming on the podcast and let's hear a little bit about your upbringing.

Thanks again for having me. So, upbringing, I'm from the Midwest, grew up in Northwest Ohio. I had a little bit of a non traditional upbringing. Mom didn't work, dad worked on the railroad, so nobody in medicine, meager salaries. And both my parents passed away when I was young. So dad when I was at the age 11 and my mom when I was 14.

Sorry to hear that.

Yeah, you know, it's just we all got to come from somewhere. So at that point in time, I was left with about an $8,000 inheritance. And actually very fortunately, I was left with being intelligent. So I went to a private high school in my town and was able to do that mostly on scholarships. And then they kind of, it was a Jesuit school, which is A fantastic education especially. They were very, very good to me during that time, you know, when I really needed some guidance. So they helped me along and pushed me into a college curriculum. And, you know, I did well in school too. So I ended up leaving Northwest Ohio and I went to Vanderbilt for undergrad, majored in neuroscience there. Then I left and I didn't apply to medical school right away, so I did. I had worked a little bit in between, lived in Columbus, Ohio for a little while, and then eventually went to medical school in Toledo and chose urology, which is, you know, I get the question all the time of why urology? So it's, it's kind of an interesting field, but I really think that it's a great profession. I think we do a great job with folks, you know, have a lot of great practitioners in our field. So it's a little bit about my past as far as how that shaped my views on money. There was never a whole lot of money around. I never felt poor though, anytime growing up. So when my mom passed or when my dad passed away, I knew my mom, she actually didn't work, she couldn't work. And so I was very concerned, you know, at the age of 11 about how are we going to eat and pay a mortgage and do things like that. So I think that at that point in time I probably thought a little bit more about finance than a lot of 11 and 12 year olds. And so when she did pass away and I actually got a little bit of inheritance, I started investing that money right away. And you know, that was early 90s, so there was kind of a mutual fund boom in the early mid-90s. And so when I invested that money, it actually was doing 30%, 35% just in. I believe I used the American funds, just the robust basic mutual funds. But I think from there just having that small amount of money turn into a larger amount of money for me, which now isn't a large amount of money, but it really sparked my interest in finance and, and made me probably a little bit more fiscal oriented than a lot of doctors. And I actually entered medicine under the guise that I was going to have a small business. I thought that it was a business, you know, everybody was in private practice and that's how everything worked, you know, and lo and behold, that's not how everything works. Nowhere near at this point in time. So I guess I was a little bit wrong in choosing that. You know, I love medicine, but that's really not a big part of a medical practice anymore is the business of it. I mean, there's, you know, there's huge businesses with it, but I feel the solo practitioner has gone away.

Well, we'll certainly get more into that during this podcast, since it's a subject of the podcast. But it sounds like as far as your upbringing, it was, you know, I mean, you weren't. You didn't come from nothing, but you could see it from there. I mean, no one's going to describe your upbringing as privilege. Do you think that gave you of motivation later in life to be financially successful?

Well, I think that early on in life, I think I realized that I had to be responsible for my success. Like, I was the only one that was going to do well. I think that, you know, growing up and where I was and where I lived, you know, not many people did well. I believe that my dad made about $14 an hour when he passed away, and my mom didn't work, and I was the fifth child. I was very much a baby. You know, there's a lot of years between me and my next sibling. But, you know, they raised five children on that. And so moving into something like the private high school that I did, I got introduced to kind of different ways of life and then leaving there and. And moving on to, like, Vanderbilt, which was a, you know, it's a very much a wealthy place. I think I just saw other things out there, but I always knew that there was nobody. You know, nothing was given. I'm going to have to do it. And so I knew I had to do it myself. So I think that that kind of shaped a little bit of where I came from as far as being privileged, you know. No, I mean, you know, like I said, $8,000 inheritance. Here you go.

I think most people would rather have their parents than eight grand.

Yeah, yeah, I agree. I would have, too. So. But, you know, no choice in the matter. So I think that's a little bit of what shaped. I think I just. The responsibility for who I'm going to be and where I'm going to be, I think was. Was with me maybe a lot earlier than folks.

Now tell us about your first contacts with the physician financial blogosphere and how they may have shaped your views on money or were you views already shaped before you ever, ever met any of these folks?

I feel like my views on money and finance change all the time. And so I'm always, you know, and just like being a doctor, you're a doctor too. You are inundated with knowledge all the time. So I was always just looking for different ways and how do people invest and what do people do and what are alternative investments, different tax strategies and things like that. Because, I mean, I always use the motto of it's not how much you make, it's how much you keep. And so I think that's really. I was kind of looking for more tax advantage stuff that really got me into the blogging. And so I started. Not the blogging, but just reading about. So I've been on your page. I've been through the Physician on Fire page. I really like his page. And I started looking around. There's a ton more that you can look at on there, and it's almost. There's too much to take it all in. And so you got to pick a couple guys you like and kind of move forward.

You know, that's a wonderful problem that people didn't have a few years ago.

Yeah, no, I mean, you know, the fire movement in itself. You know, it's kind of funny because you mentioned the fire movement to folks, and people are usually on it. They know it, or they have no idea what you're talking about. You know, it's just the people that are. And that's the people that I think focus on their personal finance and building wealth and things like that. So. So that was really my first. It was probably about maybe just about three years ago that I got into that.

All right, let's quit beating around the bush now and get onto the subject of the show. We brought you on the show because you're relatively rare among physicians. You make seven figures a year practicing medicine. Now, urologists are far from the lowest paid doctors in medicine. In this year's Medscape compensation survey, they come in at seventh among the medical specialties behind orthoplastics, ENT, cardiology, radiology, and GI. According to that same survey, urologists make $417,000 on average. What did you do differently in order to make seven figures instead of $417,000 a year?

So I saw that question and I've been thinking about it, and I'm like, well, one of the things that I've done. So let me give you a little bit of background about how I got into my position. So during my third year of medical school, I did an outside rotation in a rural health about an hour from where my medical school was, which is actually about 15 miles from where my wife grew up. And I was doing an OB rotation, but I told them I was already urology. That's what I'm doing. That's where I'M going, that's what I'm going to do. And they knew that their urologist was aging and they knew my wife was from the area. So in my third year of medical school, they threw out, casted out the hooks, you know, into me. And I'm like, well, no way. I don't want to live in this little town and, and do this. And so I went through, finished up my third and fourth year and our match, you know, we have a non traditional match or outside the general match. And so after I matched, about 12 days later, I had my first child, who's now 13. And I think that my wife and I kind of looked at each other and a lot of things change after you have a baby. We had already matched. I matched at my med school, so I wasn't going anywhere. My wife is a dentist and she was already in practice there and we have family there to help us with children. So at that point in time, I called the small place back up and I said, you know, what can we do? And the comment back to me was, hey, we have a lot of time before you're going to start, you know, we can do a lot for you actually, because we have that amount of time, you know, as opposed because a contract term is longer. They can do more for you at that point in time. That was what I understood at least. So I started researching how to do this and I wanted to go into private practice, as I already mentioned. So I had them do a contract where they were going to support me when I was done in private practice for at least two years, well, one year, and then I could decide if I wanted a second year. And I had to give them either three or four years of service afterwards. And I signed that contract in my second year of residency. And they actually paid me a stipend during residency, paid me a signing bonus, and took care of about half of my student debt too. And so when I started, I was getting a median salary of a urologist in the Midwest, which is actually a touch more than the number you quoted. I think it was around 450 a year because they vary out through that when you look at like MGMA and those blended rates they'll vary from. And I think Midwest does pretty well. And so I started from there and then I kind of moved on and they needed me to go to another hospital. And so during my first year of practice I said, I'll go to this other hospital, but it was 25 miles further down the road. And I said, I'm not Going to go for free. We're like, well, we're paying you for full time. And I'm like, yeah, well full time is 40 hours. I'm getting 40 hours in by, you know, Thursday at noon, you know, and I don't do a lot of nights, but I mean I work started around seven and I finish it around six and, and you know, then my nights and weekends are usually pretty free so I got them to pay me extra to go to that other one. So then Instead of making 450 a year, I bumped up to about 550 a year just doing that extra one day a week in the outside hospital while I was building a practice.

Seems fair, 20% more work, 20% more pay.

Well, that's what I thought. I was like, I'm not going to go out there for free and you guys want me. So by the end of my first year of practice, I was doing 550 a year.

And this is after having them pay you a stipend during residency and paying off your student loans or at least a big chunk of them.

Yeah, they pay me about, I think they pay me 25 grand a year during residency and a signing bonus. I think that was $50,000. I think it was pretty significant.

This seems like a lot better deal than I got from the military.

For some reason I actually, I saw that you did the military and I actually crunched the numbers on the Navy. I don't know which one, which branch you did, but it was a seven figure decision.

Yeah, I ran the numbers once. That was a mistake. I shouldn't have done that.

Yeah, so it's, you know, I love the military guys in the military. I think it's great. But you have to do it because you want the military. It's not a good financial decision, particularly.

In the higher paying specialties and the cheaper med schools like, like I went to.

Yep. So anyhow, so that was it and I moved forward. I actually stayed in private practice for two years and from there I had to decide whether or not I was going to stay in private practice or I was going to move into an employed position. And honestly before that, three months before that was up, I never knew what an RVU was. I thought to myself beforehand, I'm like, you can't spend an rvu. So I didn't really want to know what they were or anything like that. It just seemed like it was more worthwhile of what you were getting paid. And so then I started to examine the different contracts out there and my practice was on a system called epic, which I'm sure everybody, you know, a lot of people use. And in private practice, it's very hard to do your revenue cycles, and I thought very hard to get billing to a consistent level. And then as deductibles go up, I feel that, you know, it's very hard to, you know, you used to chase 20 insurance carriers for your money, but now you're chasing those carriers and 2,000 people, you know, because they're $5,000, $6,000, $10,000 deductibles. So individual folks owe you a lot more money than they used to. So that was part of my decision. And then. So then I started to play the RVU game, and actually my income went way up when I started to play the RVU game, and I had another hospital contact me. This one was about 25 minutes south. And they said, you know, our guys are retiring. Would you be interested in staffing this? And I thought, well, okay, because by then, you know, I was into my. Almost my third year of practice, second and third year, and I had, you know, you just become. I think that that's the point when you really become efficient two to three years in. And so my productivity was fantastic, where I was even with that other hospital that I started out with, and so I added a third. And this one was great because I maintain a private practice with that one. So I'm employed when I work at the other two hospitals, and then I maintain a private practice when I work at the third hospital and then where I live. So I practice about 25 minutes from where I live. And so where I live is a fourth hospital. And they actually needed weekend coverage, so I negotiated a one weekend a month, basically a locums contract for that. So, you know, it doesn't add much, but it's about 50 or $60,000 a year for one weekend a month. So, you know, that's really how I did it. I think that it's. And now it just is evolving, and I just keep kind of honing everything, and everywhere we are, it's a kind of a hybrid between being employed at two different places and then being on my own, even though I don't do my own billing for that, I actually just charge them hourly rates for all the apps. I have one other physician who works with me for me, however you want to put it, and we man that practice, and it keeps growing, and we're moving into a new office there. And now I have two advanced practice folks and another physician. So that's kind of how it evolved into making over seven figures. I do make some money from surgery center. I own my own building and the hospital rents it for me, for me to practice in, which makes me a bit of money every year. We also as a urology group, we own lithotripsy, which actually pays pretty well. So those are really my main sources of income that get me over the seven figures. I think from the practice of urology, I am right at about a million a year.

So I mean, you're talking about four jobs that you have here. How many hours a week are you working?

So in a given week I work, like I said, I go in about seven and I work till like 5:30 or six, Monday through Thursday. I usually try to end about four, 4:30 on Friday. And then I work one weekend a month where I cover the call.

So 55 hours in a week that you're not taking call on the weekends? Yeah, and more on. More that week. So I mean, you're working hard, you're working, you're working at least a job and a half anyway.

Yeah, no, I mean, you know, I think you can be the most masterful contractor in the world and go out and negotiate all your rates with everybody. But I still don't think that unless you're able to maximize your time at each place, I don't know how you would be able to really get seven figures in just one practice.

So what support do you have in your life that allows you to work that many hours?

Well, my wife only works three days a week and her parents are close. But I think that we do a lot of juggling. I mean, it's just busy. I mean, I don't. My busy is. I put my busy against anybody's busy. I mean, we have four children ages 6 to 13 and they're in sports and they're running around. And I do employ childcare. I actually employ childcare to drive kids to sports practice. But back when we used to have sports prior to this pandemic, so I use that. I think that, like I said, my wife only working three days a week. She's a dentist and owns her own place, so that helps. So if she needs to, she. If there's anybody who needs to stay home, she usually stays home. I just can't. It's hard for me to get back from taking a day off.

How many weeks of vacation do you take a year?

I take two full weeks and then I take usually some intermittent CE or long weekends. So I would imagine I'm somewhere in the. As far as Business days off. I'm probably somewhere in the 15 to 20 business days off per year, not including holidays. So it's not a lot, but it's not a little either.

You know, most of the time when I meet doctors who are making a lot of money, it usually involves owning their practice. And you own a practice, but it sounds like it's a relatively small percentage of your work that you're actually the owner. What role do you think ownership plays in having a high physician income?

Well, it depends on. I mean, you know, business in general is pushing people to make money for you, you know, when you're making more money than you're paying them. Right. So I do make money when I. While I employ my apps, I don't make much money off the other physician. I just don't feel right doing that. So I think that it's just. I love that piece of. That piece of my practice is. I like the income, but it also is. It just saves me a ton of taxes because it's where I write off my phone, it's where I write off my cars, it's where I write off any CE that isn't covered or any kind of business expense that we incur. So it really helps out on that end of things. So I do have some. I would say I have some components of ownership, though. Like I own my own building and the hospital rents it for me, so I make about $50,000 a year on that. That's not a lot of money, but again, it's the same as taking that weekend to call. $50,000 a year. $50,000 here, 100 here, 75 here. So I always think that when I go back to personal finance, I think that multiple streams of income are important.

Especially when they're as good as your streams are.

Yeah. Yeah. Well, I mean, I just think that that's really important if you're going to. To build wealth and make a high income. But I don't feel that I'm. It sounds like I work like a dog and I don't feel like that at all.

You're not feeling. Not feeling burnout creeping in, huh?

No, I mean, I love it. I mean, like right now I'm at my lake house. When I get done with this, I've got a boat we're gonna head out for Sunset, Cruise on the boat, and I'll get up tomorrow morning. I start at seven. Takes me about an hour and 20 minutes, and I'll get there and we'll do a full day.

You know, it's interesting I saw recently recent surveys have moved critical care medicine and emergency medicine off the top of the burnout list. And for some crazy reason, urologists have been put at the top in some of these surveys. Why do you think that is?

Well, you know, they limit our numbers pretty heavily. I think that when I finished my residency, I've been out seven years. Don't quote me, but I think it was around 240 of us that graduated that year in the country. And so I think that, you know, that's why you're seeing a large amount of advanced practice folks in urology. I think that, you know, I don't know. You know, I think that burnout is more of a mindset. I've tried to read articles on burnout, and I get burnout on that because I feel like it's this, like, abstract thing that nobody ever really, you know, they don't say, like, well, you should only work eight and a half hours a day and you won't be burnout. What I do is I spend a lot of time training my advanced practice folks. Okay. And I think that that helps me a ton. I usually would train those folks for six months before I allow them to see their own patients. Costs money and time and effort and all that. But I think that it is an upfront investment. I've seen other practices where they start and within two weeks they're seeing their own patients. And I mean, my urology residency was six years. I mean, and then you have your primary care clientele sending you folks for specialty care, and they haven't even been trained. Six months is not that much when it comes to that, but it's a lot more than a lot of people get. And I focus on their ce. We go to American Urologic. We do things to try to further their education so they become more and more invested in the practice. And I think that that take some of the heat off of me during the day, like. And then I built the practice too, where, you know, I don't have to do all my results and I don't do my patient phone calls. I think that they stop. You know, I get the ones that need to be answered by me, you know, because they've been. But they've been filtered through a couple people first. At least for me, I feel like I've set my practice up so that a lot of the enjoyable things I still get to do and a lot of the other things I've hired and trained folks to do. And so I think that helps me with my burnout. But as far as urology being a burned out field, let me take this back too, because the other thing that I don't do that other urologists do is I don't do big cases anymore. I gave up robotics. So I am all bread and butter, stone work, BPH work. And so I do 15 to 20 cases a week, but they're all hour long cases. So that frees up my nights and my weekends because I don't have. I hardly have any inpatients ever. And so if I was doing big cases and I was having to come in, you know, constantly in the middle of the night or, you know, or just constant phone calls, you know, I think that that kind of stuff, especially without a residency program to back me up, you know, to kind of buffer some of that stuff, that has definitely helped me without, you know, considering burnout.

So you certainly made some changes in your procedure mix. Have you done anything unique in order to improve your payer mix?

You know, when I first started, I was more concerned about the payer mix at this point in time. The way I am, it's. I'm either hourly or per diem or per rvu. And so I don't get into the payer mix at all.

You don't care a bit?

No, I don't. I'm volume based. I see people. We focus on customer service, so our internal referral pattern is really good. I think that as a doctor, if you don't focus on that part of your business, that customer service aspect. So I think sometimes doctors get a little bit arrogant. And, you know, especially me, I'm a monopoly. I mean, I'm the only guy. If you don't want to see me, you got to drive 40 minutes, you know, at least to see somebody. But we don't treat our folks like that and we don't act like that. I think that that game focusing on payers is becoming less and less. I think that they're all kind of coming back to Medicare rates there. You know, if you do get a, you know, a premium, it's not what it used to be. So especially in our part of the country.

Speaking of your part of the country, I mean, there's a doc sitting here listening to this podcast, driving into work, a urologist in Manhattan or San Francisco or LA that's making $300,000 a year. What do you say to that, doc?

Oh, geez, I. I feel bad for him. What I would say is that I make a lot of money, but I went where there was a great need. Okay. I See this happen. You know, I saw it happening in residents, you know, who are above and below me where they, they want to go to Salt Lake City because they're, you know, their mother in law lives there, which is all normal stuff. But you know, they're pushing their way into a market in Salt Lake City where there's a lot of people that want to go. Same with San Francisco. And New York has, I think the city of New York has more residency programs than any other state in urology. And so if you go to those areas where there's, you know, where there's a high concentration of folks, then yeah, you're going to have to kick and claw. You know, I was doing an advisory board meeting on my way up to the lake in the car. We were talking about referrals from the er and you know, I have probably five hospitals where I met. When they get a referral from the er, it's to me and there's to nobody else. So if you are practicing in New York where somebody could be referred to 70 guys, you know, it's, it's just a tougher game that I'm playing out here. And so I play the game well and I'm playing a, an easier game than they are. But they live in San Francisco. You have great restaurants, you have theater, you have, you know what I mean, you have all these things that, you know, my small towns don't and so I have to travel to those. But I do, I do think about that because you know, you look at the housing prices there and you know, I have expensive houses. Both of mine are, but they're, they're massive, they're huge. They're, you know, very nice and they're still not as expensive as you know, a three bedroom apartment apartment would be in New York City.

Yeah, half a million dollars even goes a long way in the Midwest.

Oh yes, very, very far. Yeah, very far.

So do you think they realize how much income they're giving up to not live in the Midwest?

Well, first off, I don't think it's just the Midwest. I think the south is well compensated too. I think it's kind of more the. If you're in a non lifestyle city. All the lifestyle cities, you know, I think are tough to get the compensation. I think that they, they have to know somewhat. I would feel like unless that was the only places they applied to. But also I would tell you that, you know, my email is, I probably get 10, 12 job offers a week via email that are very legitimate job offers and so you have to see it, right? I don't know how they couldn't see it because I'm sure they're getting all the same emails and postcards. And I get phone calls, recruiters calling, like all the time for Locums. We're work and real work. I mean, it's. I think that we're, we're a star feel that kind of goes back to our burnout. So they have to see it. And as far as it goes, I mean, I think that maybe they would move. But again, probably their wives probably love New York City or their husbands have a job here, you know, and so you get tied down to a place and also it'd be hard for me to move right now. You know, I have four children who are completely ingrained in school and friends and sports. And I think it would be hard, hard for me to pull them out just so I can make a little bit more money. But I guess 300 grand versus what I make is not a little bit more money. I mean, that's a big, big job.

Yeah, it's pretty life changing. So do you think you're lucky? Are you particularly talented? Or is this something that most other urologists could do if they wanted to?

I think that the roadmap is there. I think that I've, you know, I focused on this. I've always been fiscally oriented with how I practice with where I practice with. And I think that, I hate to say it, I know it's very cliched, but we don't get any kind of negotiation skills in what we do, you know, in our training or anything like that, which is, I mean, there's so much to learn when you're training, you know, to do what we do, to have to learn all that stuff too. So I think that when you get to the table and you start negotiating, I mean, I've coached a lot of doctors in different specialties like that were my friends in residency or friends of friends or people have actually contacted me off of the, off of my physician on fire blogs. And I walk them through some of their contracting stuff. And some of that stuff that I always felt I see as like basic to me is like kind of new to these guys as they're, you know, thinking about contract. Well, did you ask for this? And then when you run out of this, like an employed contract, like, you know, they'll give you three stats, they'll give you median dollars per RVU, median salary, and then they'll give you median RVUs work. Well, they don't all equate. You know, it's not like the guy who's making median RVUs and median dollars per RVU is making the median salary. It just doesn't work out like that. So you have what to go for. You have to know that in this scenario, in not for profit hospitals, the game is you got to be below the 75th percentile of dollars per RVU. And then you've got to go, go, go, try to get that, get that, get that. And then everything else doesn't matter. And then when they stop there, then you got to move on to staff. You got to make sure you have enough staff so that you can run your factory once you get your factory set up. So that's where I, you know, I just don't think, I think that I understand contracting well, that that's probably my best thing that has allowed me to do well.

You know, I've often said that interest specialty income differences are much larger than the inter specialty income differences that we see in these salary service surveys. Do you agree with that? And if so, why do you think that is?

I do. I, I do see it. I mean, we just talked about it. I think you're in emergency medicine, correct?

That's right.

So you guys work mainly by hour.

It's highly variable. I mean, sometimes people are paid an hourly rate, sometimes they're paid by the shift, sometimes they're paid a salary in private groups, we divide up the money that's left after paying all our expenses at the end of the month by how many shifts we work, and that's what we get paid in my group. So it's pretty variable.

Yeah. So again, I think a lot of the things I already discussed are the main variables. I think that you have to go to a place where you need it. You know, I tell that to everybody when I'm going. Just because a hospital is trying to hire you doesn't mean it's a good place to go. There might already be 12 guys in a private practice there, and the hospital has just butted heads with them for the last two years and they're like, we're going to just hire our own guy. Well, you're going to go there, you'll make your guaranteed salary for two years, and then after that you're going to be kicking and screaming to try to make the money. If you can go to a town and actually get the whole lay of the land, if you're not the only guy, then I think you can understand better. You know, I think it's really about need as far as that goes. And then there's some variability in the geography. But again, why does the San Francisco doctor urologist make half of what I make? Well, it's because there's 50 other guys that somebody can go to. And so it does have to do with need. You know, is he really needed there? Can 49 guys handle what 50 guys could? Yeah, they could. So they could all make a little bit more money. And I think that that was one of the things that urology has tried to do in general by keeping their numbers down the same way that DERM does and ENT does ophthalmology. I mean, they make it so that when you get done, you're, you know, there's a very good need for you out there.

And the nice thing about going someplace where you're needed is it allows you to do well while you're doing good, you know?

Yeah.

I mean, without you in that town, people are now driving 45 minutes to find a urologist who's probably in a town that's just as busy as yours. So it's good for the patients, too.

Yes, exactly. But I think it all harkens back to need.

All right, well, let's talk about life. As someone earning a million dollars a year. In most areas of the country, your financial life is very different. Making a million a year versus making a quarter million dollars a year. All of a sudden you can pay off your debts and reach most of your financial goals in just a few years. And then you're struggling with the issues facing the wealthy, how much you give, identifying additional spending that will actually make you happier, worrying about estate taxes and asset protection and trying not to ruin your kids. I wrote a blog post about what life is like with the seven figure income two or three years ago. Very personal blog post about what that's like. I wonder what you feel like your life is like. I mean, you're earning more than the vast majority of Americans in a relatively low cost of living area. What's life like with that kind of an income?

Wow, that's a. That's a lot of question. So, you know, it's. I'm busy, so we don't have, you know, it's not like I'm taking very fancy vacations. This is going to sound kind of corny, but one of the. My favorite things is, is that I don't worry about what I spend ever. You know, if I go out to eat, if I go anywhere and I get a chance to do something, I do it. You Know, I don't ever worry about the cost. So that's something that, that affords me to do. We don't necessarily follow a budget. We have a lot of money left over all the time. I think that helps. I think the children thing, I struggle with that because obviously my children are in a situation that is a lot different than I was. I mean, my boys try to go to a store and buy stuff with their country club number, you know, so I like, that's a parent fail right there, you know, so I understand that they're, they're doing things and I look around sometimes and I worry about like their grasp of reality, you know, So I try to take them back to where I'm from, take them back to where my wife is from. She had a very meager upbringing too. And you know, make sure that they get to spend some time there, spend time with our family who is, you know, not as affluent and good people, you know what I mean? So they have to realize that money doesn't equate to good people. But, you know, and my children are kind of coming around to that. They're not quite to the age where they really understand a lot of this. They are starting to ask about what things cost and how, you know, this, that and the other thing and you know, but I mean they always, they're always in million dollar houses and big boats and, you know what I mean, big vacations. And most of the people we know are in that same scenario. And so I think it is going to be a struggle. I think it's going to be more of a struggle as I, as they age. And you know, I always, I always look back to my childhood and think about like when I was in a store and I would want something and I would ask my dad or whatever and he would say, oh no, we can't afford that or we don't have money for that or something like that. And I'm like, I get kind of upset. I never have that excuse. I mean, I just, I tell them.

And if you do, it's totally manufactured.

Yeah, you know, I'm just, I tell them I'm exercising my right to say no. So I think those are challenges and I think that what would be great for them and the goal for me with them is to raise them and give them, you know, you want us, your kids, right? You would give them everything you didn't have as a kid and more and everything on top of everything if you could. But I think that it's important for us to make sure. That they appreciate what we give them, when we give them and not just take it for granted, not expect it, and know that it isn't, you know, that they have to fight in this world too for what they get. So I do struggle with that. I will admit. I'm. I have definitely, I've. I've tried to buy reading material on that, you know, and figure that one out too, but I don't think that's anything you can read about. I think you just gotta keep working with them because they all I4, you know, and they're all different personalities and they all value different things and. And they're all their own complex, unique individuals. But, you know, I will say this because we're on the personal finance paid that life with money is better than life without money. No argument there. And we definitely get to do some great things and, you know, drive nice cars and have nice vacations and do things that weren't available to me as I was younger. But, you know, I don't think that we necessarily feel wealthy because we work. You know, I think that I have a lot of small business owner friends. I have a couple guys who have sold out in their late 30s and they don't work and they make a lot more money than I do. And that's wealthy, I think. I think we're just kind of glorified worker bees, I feel like. Because if I didn't go to work, no money would, you know, keep rolling in. Well, some of it would with my, with my advanced practice folks, but nothing like it does when I'm there.

So what do you drive?

I have a Lincoln Navigator.

A Navigator. And what did the. The kids in private school.

They are in private Catholic school.

And what's. What's tied up out at the dock?

Oh, are you a boat guy?

Yeah, I'm a boat guy.

Oh, okay. I got a. I got a 35 foot formula.

Okay.

Formulas are made in Indiana. So they're a great boat. Great lake boat. This is Lake Erie. So it's not. It's not like an inland lake. I mean, we get some waves out there. Yeah, we do six, eight foot waves. And I could drive that boat to Florida if I wanted to. Out of the, out through the seaway. So it's. It's great. We love it. We're new to boating actually this year. We've had the lake house for about five years with the COVID and everything. I thought we were going to do a lot of social distancing, so I thought this was the year to Take the plunge.

Yeah, you can definitely socially distance out on the lake.

You can, yeah.

So how do you feel about your tax burden? Too much, too little. Have you gotten used to writing those big, you know, six figure quarterly estimated tax payments yet?

So I find myself obsessing about taxes all the time. Early on in practice, I was just moving along and I didn't do anything, you know, like, we'll try to buy vehicles or I have a great story about a dinosaur and taxes that I want to sell. I want to tell you. But anyhow, so early on I would try to. We buy vehicles. We've invested in some things, we've created some paper losses, we've done a few things here, buildings, whatnot. And about my second year in practice, like, I just went. A year went by and I just didn't focus on that. And then my accountant, you know, tells me, hey, you owe. I was close to $100,000. And I'm like, wow. I mean like to stroke those big checks like that just to the government where you feel like you get little value really kind of set me back and really made me think about it. So I have a group of couple guys that I invest with and we own some restaurants and we've tried some other things, you know, just to kind of create, just for some tax havens. But I gotta tell you this story, it's great. So my buddy calls me and says, hey, do you wanna by a dinosaur? And I'm like, well, okay, like a dinosaur. Like a real dinosaur. He goes, yeah, he goes. So the play is, is that we actually sponsored a dig from a college archaeology program. They went to South Dakota. They already knew there was a full. It was a triceratops, a full triceratops there. We paid about $50,000 between the three of us. And at the end we get the dinosaur. So we got it. It was mounted. We found about 70% of it actually, including the skull, which is pretty amazing. So we actually donated it, donated it to a school over in Pennsylvania. But we had a write off value, an appraised value of 635,000 for it. And so we had to hold it for a year and then we were able to donate it and so then we had a write off. So I don't own it anymore. I've donated it.

That might be the most unique investment I've ever heard of.

Yes.

That's awesome.

I thought you'd appreciate that. But yeah, no, I think that, I think I said that in the beginning. It's not what you make. It's what you keep. And as a big chunk of my money is on a W2, I mean we try to do all the pre tax investing. We can get everything that we can in there and out of the sites. But I don't know, I mean, I could talk for another hour about how taxes are. I guess we all got to pay them.

Beats going to jail anyway.

It does. You know, they'll always find you so you might as well just pay them.

Yeah. What do you wish people knew about very high earners?

This is going to sound bad, but I mean, I think that, you know, money doesn't solve everything. You know, my wife and I come home and we have the same struggles that everybody does. You know, cooking dinner, getting kids to practice, trying not to keel over before 9 o' clock when we get our kids in bed and then we wake up and we do it all again. It's just at the end of the day when we tally up what we made that day, it's a lot more than other people. But I don't think that it doesn't provide a worry free, stress free life. I think that it just provides hopefully an earlier retirement and some legacy. I think we meant it was in your questions and just so that maybe the kids can have a little leg up afterwards. And I think that's what I would know. I mean, I do have friends who are from, you know, a long, long time ago and you know, they don't make a lot of money and they look at me and they think everything is just sunshine and rainbows and it's not always, you know, I mean, it's good to make the money but it definitely. Life always has the same ups and downs and ins and outs as everybody else. I don't know. You feel that same way?

Yeah, same way for sure. It's nice not to have the financial worries, but it doesn't necessarily eliminate all the other worries.

I do think that my wife and I have a fantastic relationship and I think that part of that is when you do read articles about marriage, it's a ton of financial stress and, and we don't have any financial stress. I mean there's no, we don't talk about, we don't even talk about money really except to kind of update and keep things, keep everybody abreast of what's going on. But never ever. So I think I will say that that probably is just something that we don't feud about at all.

Well, we better wrap up here. We're starting to push an hour. But you now have the ear of 30 to 40,000 doctors and other high income earners. Is there anything we haven't talked about today that you think they need to hear?

No, I think that some of the things that I talked about today that I really wanted to get out to folks were, you know, that, you know, find an area where you need it, especially if you're a specialist. Make sure that even if you are the only guy in town, that you're focused on customer service. I think that as a specialist and as a doctor, I think you can have great relationships with your advanced practice folks. Train them well, don't expect them to know what you know and just keep your eye on the ball. I think that, you know, in medicine, I think that we're going to see more evolution, there's going to be more changes, and I think that in order for you to be the highest earner that you can, you're going to have to be pliable and you're going to have to change. You might have to be private, you might have to be employed, you might have to be on a hybrid model, you might have to, you might have to really focus on RVUs, you might have to focus on hours, you might have to, you know, I mean, I think that you really gotta not be set in your ways and you've got to keep your eye on the ball and focus on what's around you. And I think that's the key to really making, you know, making the most money you can while you're away from your family, which is the goal.

Yeah. Well, Tom, thank you so much for coming on the White Coat Investor podcast. Congratulations on your success and I hope you enjoy your, your lake cruise this evening.

Thank you. Take care.

Bye.

Bye.

I hope you enjoyed that interview. It's fun sometimes to lift the COVID and look at what's going on in other people's financial lives. You feel a little bit like a gawker, but it is enlightening because you compare and you contrast to your own life and you think about the things that you can do better and think about the decisions that you might not have made, trade offs you might not have made. And, and maybe that's why you make less money than Tom does. But certainly I think there's a lot of lessons there for people to realize, particularly among surgical subspecialists. There are areas of the country where you can make a lot of money if you need to. So those of you that have a ton of student loans and don't seem to be making much traction financially, geographic arbitrage is very real and you can have a very different life if you're willing to live somewhere else. Thanks for those of you who've been leaving us five star reviews. We appreciate those this one comes from Doug Nice, who said WCI should be required reading and listening in medical school and residency. I listen to every podcast and have learned so much from listening. Jim, thanks for the great work and helping us docs get our finances on track. Thank you for that Doug. And thank you to those of you who leave us five star reviews and tell your friends about the podcast. If you need a financial advisor, be sure to check out the Recommended Financial advisor page@whitecoatinvestor.com the white coat Investor is proud to introduce our no Hype Real Estate Investing course which will provide the framework for developing further knowledge and experience as you progress in your real estate investing career. We call it an introductory course because there's always more to learn, but this is no short, superficial course. There are over 200 lectures and videos adding up to more than 27 hours of content by over 15 different instructors. We think it just might be the best real estate course on the planet. Continue your wealth building journey today with the no Hype Real Estate Investing course@whitecoatinvestor.com courses. You can do this and the White Coat Investor can help. Keep your head up, your shoulders back. You've got this and we can help stay safe out there. We'll see you next time on the White Coat Investor Podcast.

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.