WCI #204: First Year of Retirement with Physician on Fire

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 204. First year out of medicine with physician on fire.

Well, hi there.

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Thank you, Jim. Happy to be back.

Let's share our quote of the day before we get into this too much. This one is from one of our favorites, Bill Bernstein, who said a portfolio is like a bar of soap. The more it's handled, the less there is. And of course he's referring to all the croupiers on Wall street that take little cuts out of your portfolio all day long. So thanks for what you do. It's difficult work that you do. It's hard work and a lot of you are doing it on off hours, nights, weekends, holidays, through a pandemic, whatever it might be. So if nobody's thanked you today, let me be the first. Thanks for what you do. Special thank you to those of you who came to WC Icon this year. We had a really great time. What'd you think of the virtual conference? Leif?

Well, it was so much more than a virtual conference. There was a lot of interaction, a little bit on site, but everybody that was watching the talks was in the chat, in the Q and A. We got live questions. We were able to answer for them. It was really fun. And I was really impressed with the whole production. It felt like we were on a television studio because essentially we were. It was something.

Yeah, it was pretty interesting. I mean, we had a director, we had three cameramen, we had somebody running the teleprompter, Sound guy, video guy, makeup guy. You look really good getting your makeup on, by the way.

I got a lot of makeup. I don't know. Cindy needs to get some of that stuff. I feel like lost without my anti shadow.

We need some knockdown here. If we're gonna have a real YouTube channel, we need some knockdown. So that's your new job, Cindy. But yeah, it was a really good time. Everything went off so flawlessly compared to last year when a pandemic started in the middle of the conference.

Yeah, it was nice to have 12 months of heads up on that this time.

Yeah, for sure. And Kristalyn did a fantastic job planning it. I mean, that's her whole job, is to have that conference go flawlessly and she really knocked it out of the park. So we're very happy with how it if you missed has been packaged up, by the time you hear this, it will have been packaged up as an online course. I think we're going to call it CFE 2021. And you can get like 57 hours of content in it. It's going to be awesome. I can't remember the price. It'll be there on the page. Maybe it hasn't even been set yet.

But Discount if you pay in bronze coin.

Yeah, if you pay in bronze coin, there's a discount. So we'll have to explain the bronze coin joke for those who weren't there. But it's still good for the CME. So you can use your CME, pay for it. It's 17 hours of CME. I think it's good for also dental CE. So check that out. You can find that@whitecoatinvestor.com another course that's being promoted right now. Zero to freedom through cash flowing rentals. This is Letty and Kenji's real estate course. If you're interested in direct real estate, meaning you want to go buy the properties yourself or you want to become a real estate professional, you want to transition out of medicine into real estate, anything like that, this is the course for you, it's on sale through April 1st 4th. You can get information about that@whitecoatinvestor.com rental. So check that out if you're interested in a pure real estate course. All right, so bronze coin. So let's tell them about. Where did bronze come from? Can you explain?

This is no joke, right? I mean, it is, but it's April Fool's Day that this is going to be live, I believe. So it was the game of telephone. Essentially. Someone asked a question about replacing the bond funds in your portfolio, and someone read that out loud to the person running the teleprompter and it became bronze funds on the screen, which was then read by Adrian, our lovely host, who doesn't have the same financial knowledge that you or I or Alan Roth, the guest that she was interviewing, has. And the two of them went back and forth on bronze fund. Why would you want a bronze fund? But now we all want bronze funds and we're putting together a deal. So look for more on that, you know, in the coming episode.

Yeah, you take a look at the YouTube video. If you haven't seen it either, we'll put it up on the YouTube channel of the little skit we did afterward. Just making fun of the moment. It was pretty funny, but that's what you get, I guess, when you hire a host who doesn't necessarily have a financial background. She did a fantastic job hosting the conference, but it was a little bit difficult, I think, to ad lib that moment. And Alan didn't quite catch on what.

She was asking for.

Being really funny.

And it gave us something to joke about. And I'm still beating that dead horse. Yeah. Yeah.

At any rate, it's great to have Leif here. When I say we, I mean. Cindy posted a question in both of our Facebook groups asking people what they want me to ask you during this podcast. They want to hear from you.

All right.

I mean, here it is. You've been now a year and a half retired from medicine.

Yes, August 12th was my last day of work. Wow. 2019.

So how's it been? It's been a year and a half now, granted. The pandemic kind of screwed up a lot of your plans.

Yeah.

But what are your thoughts a year and a half into this? What do you think?

Yeah, you know, I always said I would hang on to my credentials, my medical license and those things that I would need, that I could jump right back into it just in case, because then that 1 1/2, 2 year mark is. Starts to get to where it's difficult to get back, especially after two years. And, you know, getting covered for malpractice can be challenging. Just having the skills and being fresh. Well, I'm not fresh anymore, but I haven't really had much of an inclination to go back. I'll be honest. I enjoyed the job for what it was, but I'm enjoying this newfound freedom quite a bit more.

Do you feel like less of your identity is tied up in being a doctor now than a year and a half ago?

Not really. I still feel like. I mean, it was a big part of my life, but mainly I didn't have too much of my identity wrapped up in it before. And so it was a fairly easy transition for me, but now it's something that I used to do. I mean, one of the challenges is you meet new people. I'm new to town where my wife and I have moved, and so what do you do? And it's like I run a website, you know, and that's a vague enough answer where people, they might be okay, well, that's really all they don't really care to hear no more. But it might pique their curiosity if they ask more questions, follow up. Well, yeah, it's about personal finance. Retiring early, which is what I did from my other career. Then we can kind of get into the whole. I used to be an anesthesiologist. And that's kind of a fun conversation to have, too.

Very cool. All right, what about finances? I mean, this is the big worry people have when they retire. And then the market tanks, right? I mean, you retired in August. Come middle of March, the market tanked. I mean, at WCICON last year, I remember the market went down 9% on the first day. It went up 9% on the second day, went down 12% on the third day. I mean, this was just at the conference, and I think by the nearer than a month, it was down a third. How'd that feel, knowing that you'd kind of punched out of your career and your portfolio took a big hit?

Well, thankfully, I had worked another four to five years, I think five plus years after realizing we had at least our baseline financial independence. And I wanted to build that big cushion so that if another 2000 or 2809 happened and we lost half our money, we would still be in a position where we could call ourselves financially independent. And so it was. Well, surprising isn't the word. I knew it would happen. I wrote a blog post about a year before that saying that I had a life Goal to lose a million dollars. And by that I thought, well, maybe someday I'll have eight figures. And the 10% correction would be losing a million dollars, you know, well, might take 15%. So that's. I'm not 100% stock, but a normal drop would lead to a loss of a million. I didn't think it would happen within a year of retiring, but when it did, I was like, I need to update that blog post. I mean, that was like my. That was like the biggest consequence. Like, oh, it happened. All right, so we'll bounce back. And it happened much quicker than I thought. I didn't think we'd be back there to break even yet. Wow. And it took three months.

All right, well, let's dive into some of your questions. You guys submitted a lot of questions here. Some, I think may have been a little more in jest than others. Here's a few from Victor Mangona. Who would win between you a game of one on one basketball. Are you a hoopster?

No, he's taller. I wrestled in high school. I know you were a hockey guy. So it might just be 00. But I don't know if I got. I would not win, I'll tell you that.

Yeah, I'm not much of a basketball player. I can make layups, though. So if you can't make layups, I may win this.

Yeah, you got me. Yeah.

All right. How about a 5k race? You've been out running?

Not in a while, but I did a lot last year.

I don't know, we might have to actually run this one. He might take me on this one. I think the last time I actually timed a 5K was more than 10 years ago. It's been a while.

I was a 22:30 last spring when I was training in Spain. 7:15.

He's going to win.

Okay. I wanted to get one, so I'm glad I got that.

All right, Mountain climb. Which one would win a mountain climb? I guess I get that one.

I'm a climber. I'm staying at the bottom. So. Yeah.

Arm wrestle. I don't know. But what I found out is one of the things you started doing when you retired and you haven't missed a day, right?

Yeah. I've been doing push ups and sit up since I got in Las Vegas.

So tell them. How many push ups do you do every day?

I usually do this in the morning. I do 40 pushups, 10 air squats, 40 sit ups, repeat three more times.

Wow. So I don't know. He may win the Arm wrestle?

I don't think so.

That's an impressive number.

I gotta get the biceps for me for this.

So I was very proud I started bench pressing again this winter.

Oh, good.

So I can bench press. Not my maximum that I've ever had in my life.

Two and a quarter or something. When you were talking about it before?

Yeah. I put up 240the other day. I'm very proud.

I can't do that.

When I was deployed, I put up 250. That was when I was working out two hours a day and eating everything I liked. But that was 10, 12 years ago.

Yeah. So it's good to still be in shape.

I don't know if I'll get back.

To that 10, 12 years later.

We'll see.

Very cool.

All right, good questions, Victor. Disappointed that was the best you could come up with, but good questions. All right, next one comes from David Graham, the fi.

Physician.

You may have just answered this. What does he say when someone asks, what do you do for a living?

Yeah. Yeah. Run a website. Seems like just kind of the vagueish answer that if I say I'm a blogger, people are like, weird, you know? So I don't remember what website.

What'd you say before, when people asked you that before you retired?

What did I say? Oh, yeah. I mean, I would say I'm an anesthesiologist.

Would you?

Yeah.

A lot of times I'd tell people I work at a hospital.

Yeah.

And sometimes I'd ask what I do there. But when I was in the military, I said I was a military officer. And then I didn't get any of the funny doctor questions, so I played coy.

Like, in residency, I would just say I was an orderly or something. But I've been in small enough towns that, you know, you're not gonna be able to have a. You can't be disingenuous. Yeah.

All right, next question. This one comes from Bill Yount. Thanks, Bill, by the way, for everything you do. How does the reality of retirement compare to the theory of it?

Well, the theory didn't include a pandemic, so it's been a bit of a reality check to have all of our big travel plans canceled. But I did get a couple months in Mexico with my family in the fall of 2019. A couple more months in Spain. That was really great. And then, you know, then we've been hanging out in Northern Michigan ever since.

Now, what were your plans. What were your plans after the pandemic in 2020? I know you love to do Slow travel. Go stay someplace for a couple of months with your wife and your two boys.

Yep.

What were you going to do before the pandemic?

We had a slow boat to China, booked a cruise that was going to take us through Hawaii, Guam, South Korea, Japan, different parts of China and then homeschooling the boys. Yeah, we're going to be there for by there. I mean I don't know where we didn't have everything booked but wanted to maybe see Vietnam, Cambodia, possibly shoot down to Australia, New Zealand. It was kind of a blank slate for five months and then another cruise back. But obviously none of that has happened. But it's still been good. I mean I've had all these habits like we were talking about the push ups and sit ups. I also go on these daily walks trying to learn Spanish and I've got the freedom to do these things without ever having to miss or skip a day. And I can kind of fill my time the way I want to. And our family has had a lot of close together time, maybe a little too close into the small, you know, kind of home base that we purchased as our primary home that we didn't think we'd be spending nearly as much time at. But we're buying a new house. We're going to close about a week from the day this heirs. So we'll have a little more space very soon.

So tell them about the new house.

Yeah, we, we've been looking for a lake home and we found a place with two and a half acres. It has a nice mid century home from 1960 on one side of the road which is across from the lake. But then we have an acre on the lake and I think we'll be able to build our, our latest dream home, whatever that dream is. They pretty nice, modern, but not overly huge, 6,000 square foot home.

It's not going to be the one you built out of residency.

No, that one was, that was, that was our dream then and that's not our dream anymore. You know, we'll have the empty nest at least in the back of our minds when we build this one because our kids are 10 and 12. We want to have a nice place now, but we don't want to build again. Just something that requires a lot of maintenance and a lot of upkeep.

But you're not building until the price of lumber comes down.

Well, OSB is like 30 some bucks right now. It used to be six or eight.

It's crazy.

Yeah.

Okay, so you said you're learning Spanish. How many days have you been that you haven't missed on Duolingo 503? And you're not like, paying a friend to get on there when you're not there.

That's a great idea. There's VAs that would do that, right?

I think Cindy's daughter and my daughter had some sort of arrangement, try to do that. But apparently Goliath forgot let the other one down. And it was a little bit of a sore point, I think, but anyway. All right, let's take next question. This one comes from Timothy Schmidt, who actually submitted a bunch of questions.

Oh, fun.

Maybe he's stalking you a little bit, I don't know. But he's got some questions. Where do you want to be in five years or 10 years?

Oh, that's a good question. Five years from now, we will have kids in high school, and so we want to be at their events, at their matches and games and recitals and whatever else they have going on and just kind of be focused on what's best for them. Ten years from now, it'll be different. That's the empty nest that I mentioned earlier. And that's when we'd like to be back to traveling like we had in mind for these few years before high school. But then it'll be just my wife and I, and, you know, the slow travel then will be really easy when we're only booking places for two as opposed to finding family friendly, larger places for four. I can see us spending our summers, maybe spring through fall, at home in Michigan and leaving for warmer climates around the world, you know, for a few months, six months a year.

Still planning on keeping the physician on fire going indefinitely.

You know, that's. I guess that's kind of a year by year thing, right? But I enjoy it right now, and I see no reason for that to change anytime soon.

But now that you know how to retire from something, I guess you're a big risk to retire at any moment, right?

That's kind of the thing. Like, it would be nice to figure out ways to dial back. And it's been great to watch you and see how you found a whole lot of really good help, like Cindy, who is here with us today and actually helps me on Physician on Fire, too. So, yeah, we'll see how I can find the right balance. I need to have something in my mind or in my life that keeps me productive and engaged. And the blog has been great for that. I interact with people every day in a virtual way, which we've all gotten used to here during the Pandemic. So, yeah, I imagine I'll still have that.

Not just going to do more pushups.

Well, by then I hope to be doing four sets of 100 now.

All right, so next question comes in from. I hope I'm not butchering your name. Pulse. Abby, who actually had three questions for you, but I think the only one we haven't answered already is, are you happier than you were before?

I think so. I think I'm better rested, more well rested. I think there's less stress in my life. I wasn't super stressed at work, but I think I internalized it. So I was probably more stressed than I realized. And yeah, life is good. I can't complain.

Okay, here's another question from Timothy Schmidt. He's got some asset allocation questions for you. Are you. And the way you phrases it made me laugh. You still 10% bonds, bro.

Yeah, dude. Yeah, well, I kind of lump bonds and cash together. I think my spreadsheet calls for like 8% bonds, 2% cash. But I'm heavy on cash because we're about to buy this house. And yeah, I'm about 70% stock, 20% real estate and alternatives, and about 10% bond cash. And that's just one fund I have the Vanguard Total Bond Fund Index fund.

And that's about where you were before you retired.

It is. And I'm not a great test subject because I'm not yet dipping into my retirement savings because I do have this physician on fire side gig, if you will.

Yeah, but you didn't think about doing a bond tent or anything where you cut back your allocation Years ago, if.

I were to get out of all earned income sources, then I might dial back the allocation or dial up the bond allocation. That would be. But in my given current circumstances, I'm just not at a place. And it's really the five years after you retire that are the most important for sequence of returns risk. Those two years or so before are important, but not nearly as important as the returns you get right after you retire. And until you're dipping into retirement savings, then you're not in a place to really build that tent. And if anyone, I'm sure not everyone understands what do we mean by bond tent? Right. That means you increase the bond allocation, decrease the stock allocation to help mitigate the damage done by a stock market downturn. And once you've gotten through the most important years, which are the years that could be the most damaging to your portfolio, if there was a big bear market, recession, depression, then you can actually help your Portfolio last longer or have a higher ending value decades later by increasing the equity stock allocation. But you need that, like, bump of higher bond allocation. That's the tent goes up, back down. There you go.

Good explanation. Sequence of returns risk.

Yeah, avoid that.

It's a bad combination to be withdrawing from your portfolio at the same time it's falling in value.

That's selling low. You don't want to sell low.

Exactly. All right, okay. What about debt? He wants to know about your debt. Do you have any debt?

Just what I put on the credit card month to month. But of course, that's paid off automatically every month. And no. And we're choosing not to take out a mortgage, which is. I have looked at, you know, oh, it might make sense to take out $500,000 and, you know, use that money to invest. But a couple things you're doing. One is the, you know, origination fees and all the fees up front for closing costs.

Aside from when you get a mortgage. Aside from the pain of filling out the underwriting paper.

Oh, yeah. And when you're not employed and you can't show them W2 income, that makes it more challenging. But you might have 10 or $20,000 in extra fees up front. It takes a while to get that back. Right? Yeah. So. Yeah, so I'm debt free.

All right. Question from William Fenton. What percent of your investments are equities at the current time? I think you answered that. 70%.

Yep.

All right, so we got that one. Next one's from Charles Bifu. The psychology of changing from the accumulation phase to the withdrawal phase. It's actually a huge hurdle to overcome. Well, I'm not sure that's a question. That's like a comment. I think a lot of people do struggle with that. I don't know that you do.

I could only do the highest.

Because you're not living off it. Right.

It is nice to still have money coming in. I'm not going to lie. So if I didn't, I know from all of the reading I've done and all these studies that others have done before me, many of which we learned about and discussed at the conference this weekend, that with a 2% withdrawal rate, it's kind of where we're at. I can expect, you know, unless World War 3 comes and the US is obliterated or something, to have a rising portfolio, given our current spending, you know, throughout retirement, most years. So that. That will help. I think having a year with no income and seeing that, gosh, our investments went up much more than we Spent would be a really reassuring thing, but we're not there yet.

Yeah, I think this is a really hard issue for a lot of retirees. My parents struggle with this. I help them with their portfolio and they mostly live on a pension and Social Security. But that's primarily because I can't talk them into taking any money out of their portfolio, you know, and every few months I'm giving them a hard time saying, if there's anything that would make you happier, go spend some money on it. And I tell them, either fly first class or your heirs will. And you know what? For the first time, they just took my advice.

Nice.

And they actually bought first class tickets for the first time in their lives. So I'm very proud of them for spending some of their money.

It is hard to make that switch from saver to spender, you know, and we're just very slowly coming around to make that to be okay with spending money that we wouldn't have maybe 10 years ago.

Yeah, I think it's a really hard thing for a lot of people to do. And I wonder if, even though maybe it's not the optimal strategy in retirement, if you run all the numbers out, you know, to annuitize some of your money, you know, buy a SPIA or something. But I think people would treat the money coming from the SPIA different than they would a portfolio with.

They might invest it. I mean, if they're that type, it's true.

They could always invest it. Right.

We have 15,000 coming in every month. We better save five.

We better save some of that.

Yeah, let's find a real estate investment.

But I would bet most people look at that and would feel a little more permission to spend. I think people with rental properties feel a little more permission to spend than someone who actually has to sell stocks or sell shares of a mutual fund.

Yeah, you can automate that too easily enough.

Do you have any plans to buy any annuities down the road?

No plans to, but never say never.

Yeah. All right, next question. This one again from Timothy Schmidt, who asks, how are you planning to give wealth to your children, if at all?

I hope it is a long ways off that they would get the bulk of my wealth anyway. We're, you know, putting money in 529 plans and they've got healthy six figure balances already. So that's one way we're going to pay for their college, keep them out of debt and there should be enough there. I think if we continue to contribute, which I believe we will at least to get the maximum Michigan state income tax deduction, which is worth $425 a year when we put 10,000 in between the different two accounts. I haven't done any UTMA. UTMA. I have not started the Roth IRAs as you have done for your kids. I do know. Get those boys a job benefit for that.

Yeah, send them out. Most of the lawns are 10 and 12 now. Put them to work.

They can do it. So that may be something that we'll look at. I would like to see them build their own wealth. I don't want to start the $15,000 a year, you know, no questions asked. This is your allowance kind of thing when they're young. Because we've both read the Millionaire Next Door, we've seen that economic outpatient care can be detrimental. Kids rely on that and there can be resentment and all sorts of things. So I would like to see, by the time they would inherit my wealth, assuming I remain healthy, they would already have some of their own.

So how much wealth are they going to inherit from you? Are you planning on leaving it all? Leave some to charity? Are you trying to maximize how much you leave to them?

The last time we did the whale, the money's going to the kids. But I think that will redo a will here once we're kind of settled in one home and look at leaving a chunk of that to charity. And we do have several hundred thousand dollars in a donor advised fund. I know you empty yours out. We don't. We kind of treat ours like an endowment. Give from it every year. They'll be the beneficiaries of the ability to gift from that, the designated. Whatever the term would be. They will be able to donate that money. Obviously no one can get it back. Right. But they'll be the successors there.

Right? Yeah. This is something Katie and I have spent a lot of time thinking about lately is how much do we want to leave to the kids? And Warren Buffett's philosophy was to leave enough that they can do anything they want, but not nothing. And I kind of like that he didn't actually put a dollar figure on that. But I think most of us can think about that and put a dollar figure that seems right for our situation on that. Right. And so I suspect my kids are probably going to inherit a minority of my wealth. This all assumes I live for a while and continue to earn some money.

And we need some compounding to happen.

But I don't really feel great about leaving 40% of it to the government.

Exactly.

I Feel a lot better about putting a whole bunch of it into a charitable foundation at death and maybe putting my kids on a board of that foundation to distribute it. Maybe they learn something from that and I'll leave them some money. But I think the way we're probably gonna write up our will trust estate plan, et cetera, is probably for them to get some money about 40, some money about 50, and the rest at 60, and maybe even put requirements on what they gotta do to get it. We kind of want to balance ruling from the grave with not enabling bad habits. And it's a little bit of a hard balance to do.

Yeah. I think if we're fortunate enough to have an estate tax problem, co unquote, that we'll probably try to give money away during our lifetime so that we won't have to figure out what happens at death because we'll be under that. And then maybe the kids can inherit what we do have, which would be less than the estate tax exemption.

Maybe you're under it, depending on what happens with it. Right. They're talking about cutting it in half.

Well, but we can do things to stay under it.

Maybe they cut it even further. You never know. Okay, next question here. If you were to die, how would your family finances work? Would they have an advisor?

No, that's a good question. You know, my wife does read everything that is published on my website and that's everything I've written. Quite a bit that you've written. Our partners passive income MD and physician philosopher. So she's got a pretty decent fund of knowledge right now. But I think she would benefit from a me completing the legacy binder which we've started but haven't finished and probably at least a one time financial plan or an hour late hourly rate person she could refer to with questions. And we know where to find those. So we've got a list on our website just like you do on yours.

Cool. So one of the reasons I decided to kind of simplify a little bit our real estate holdings and some of our alternative investment holdings is our mutual fund portfolio is very simple.

Right.

Here it is. This is where it's all at and it's all right there and very straightforward.

The money comes out.

But you know what, if you got 25 different syndications all over the country sending you K1s, maybe you're not doing your spouse a favor to leave all that behind to the spouse.

And so you can simplify that too. You know, we put a pretty good sized investment in one fund and that sends money to our checking account monthly or quarterly. And that's great. The more you can automate and just have IT money showing up every month. Well, you know, she's going to be okay.

Yeah, that's definitely one reason I prefer funds to, you know, investment properties, whether syndicated or not. I mean, imagine if your spouse isn't really into direct real estate investing, and you leave your spouse 12 properties. They might not appreciate that so much.

No, right. Put them all on the auction block.

All right, next question here. Antalyn Flores asks, how are you ensuring adequate healthcare for you and your family? What are you doing for health insurance these days?

Yeah, you know, that's a really common question that I think we both field quite often. And the answer is what we do, what tens of millions of Americans do when we buy health insurance every year. We got ours through the ACA exchange. No subsidy. But those were really the only options. I looked to see if there were off exchange options in the small county we live in. There really aren't. And the prices were the same whether I bought it through healthcare.gov or through blue Cross or Priority Health. I think might have been the options. And so, yeah, so we bought a plan. It's just under $1,000 a month for our family of four. Very high deductible. I think $13,500 or $13,600 out of pocket, and we pay the $11,000 plus in premium. So it could cost us $25,000 a year. Really? Worst case scenario, if we had a. A year in which we had a lot of health care costs and, you know, and met that deductible, which is pretty rare for our family at this stage.

Are you still putting money into an hsa?

I am, Yep. The plan we chose is HSA eligible, being a very high deductible health plan.

But that's, you know, to hit that deductible, that's. That's two years of HSA contributions that you go through in one year.

Yeah, yeah, true.

Maybe they need to raise HSA contribution limits.

Well, that would be.

They're going to allow you to have deductibles that high.

Right. You can match the highest deductible. Yeah.

All right. Dominic Leung had the same question about health insurance, so I think he answered that. All right, this next one comes from Sonya Longbotham. Thoughts on prepaid tuition plans versus 529s for kids, college savings or a combo of each. Sounds like she's in Texas, but okay, I think we can talk about this generally.

Right. I'm not familiar with that particular plan. I don't love anything that kind of narrows down your options. Now, I know typically when you have a prepaid tuition plan, if you end up not staying in that state or not choosing a public school, you'll get credits and be able to apply that to a certain dollar amount at a different school. But it gets more complicated and there are conversion rates that might not work out in your favor. I'm guessing they probably would until. So if you are somehow very certain that A your child is going to be college material, B, that you won't leave the state you're in, C, that you and them will both be okay with a public school, I mean, that's a lot of ifs. Then it might be a reasonably good idea. But I think just going with a general 529 plan that you manage, that's just money in an account that can be used at any institution nationwide and even some institutions worldwide to cover tuition and fees and room and board and all of that. That's, to me, the better way to go. And I did have that option when my kids were born in Michigan. They had a prepaid plan and the standard 529. We went with the standard 529.

Yeah. Every one of those prepaid tuition plans is different. Sometimes if your kid goes out of state, all you get is the money you paid in. You don't get any gains or interest applied to that at all.

That's what I was saying.

After 20 years, can you imagine, you know, you put all this money in and then you get nothing out of it.

I think half of the money in our 529s, and they're about 150,000 a piece right now. It's half of it is earnings, half is what we put in.

So you gotta look really carefully at it. I don't think either one of us have looked specifically at Texas's prepaid tuition plan. Texas is a great place to go to school, though, whether undergraduate or med school. Those are the cheapest med schools in the country are in Texas. And there's obviously lots of institutions in Texas. It's a big place. So maybe the Texas one isn't a terrible one to use, but you gotta really look at the details. What happens if your kid doesn't go to a Texas state school? What happens if they don't go in state at all? What happens if they don't go to college? What happens to that plan and really understand it and then decide whether you want to try to transfer that risk to the state of Texas or whether you just want to take it yourself with a standard 529 plan. And obviously in Texas you don't have to use the Texas plan. Right. There's no state income tax break you're going to get from it. So you can use. You know, I think I did a 529post recently. Your state won. I ranked your state the highest. Michigan is the best plan in the country. Not by much, though.

No, I know there's 10 of them.

That probably the next 10 or 15 plans are all very good. Right? Your usuals. Utah, Nevada, New York, California, New York, California. Although the one thing you gotta not like about California is they like hate their own residents.

Oh, I know.

Yeah, right.

If I lived in California, I'd probably not choose it.

Yeah, it's like, come on, give us a little more of a break. I don't even think they give you a state tax break for a 529 contribution at all. And then what was the other? Oh, California and New Jersey. Hate your HSA too.

Oh, yeah. You don't get the state tax deduction there either.

You don't get a state tax deduction. I think you actually have to pay on the gains every year in your HSA on your state taxes in California and New Jersey. So boo California government on that sort of law. Knock it off.

Nice weather.

Yeah, nice weather. A lot of fun stuff. Some terrible laws. All right, this one from Marie. Oh, boy. N, G, K A I, O, N. How do you pronounce that? Is it like win Kayon? We'll go with that. Marie Kayon. Talk about the risks of retiring early from a medical career. Physician reentry and training is a real and serious thing. Physicians should. To understand getting back. We're talking about getting back into medicine. What thoughts did you have or what precautions did you take before punching out that would allow you to retrain and re enter if necessary?

And sorry for butchering your name, Marie. We really don't know. But yeah, that's a tough one. So I did renew my license in November. Minnesota state license is the only one I kept. And I kept PELs, ACLs, BLs. I did most of those within my last year of work so that they would be good for one or two years beyond that. And I figured doing that would carry me to the point where if they expired and I still wasn't interested in going back, I'm kind of. Kind of there. I'm kind of done. But if you do go two, three, five years, you will very likely have to do some remedial training. There are re entry programs that you can pay to be a part of, to be supervised, to shadow other physicians and be shadowed. But it is time consuming, costly, and it might be difficult to find a setup that would accept you and that would be accepted by your state medical board and your hospital and the privileges that they would be granting. And so, you know, think long and hard first before you take the leap that I did and then keep a toe in the water. I think my pals expired. That's Pediatric Advanced Life Support about a year after I left and I had to decide, do I do a one day refresher course now and pay for it and put in the day or I do I wait and see if I need it and just do a two day after I let it expire? And I kind of did the cost risk, you know, benefit ratio in my mind, like, well, I think I'll just wait and see and I can do the extra day if I need to get that back because I figured at that point my odds of going back were less than 50%.

All right, last question for you. This one comes from Victoria Migdal, who asked, did you ever consider international locum's work as a transition to retirement? I see it as a potential way to incorporate slow travel while still working. So international locums or maybe volunteer mission kind of work.

That's a great question, Victoria. I actually did look very seriously into working in New Zealand. I had a buddy that I worked with when I was a locum at the VA Hospital in Pittsburgh, Dave DeVere. He had done several stints in New Zealand and really enjoyed his time there. When I looked into it and I thought it might be kind of my last hurrah, maybe do a year there between the exchange rate in New Zealand to US dollars, about 67 cents to the dollar, and being paid about maybe half. Well, now, now I realize I can work an extra three or four months in the US and make as much money as I would in a year there and I wouldn't have all the hoops to jump through. There were some specifics to anesthesia where you're covering the ICU over there typically. And that's something I haven't done since residency. And I just realized it'd be a lot easier to work another three or four months here, earn the same amount that I would in a year there, and then I could go and spend a few months or more in New Zealand, Australia, Tasmania, and enjoy my time more if I didn't have a job. There. So I think it's a cool idea and I think it'd be really neat experience and something you would have to talk about at cocktail parties forever. I know you attend a lot of cocktail parties, Jim, but no, it's not something that I entertained once I really looked into the details. I did do a little bit of volunteer work, did a couple missions with One world surgery down in Honduras. Those were really fulfilling. I got to bring my family and my wife and kids, got to interact with the kids that are living on this ranch where the surgical center is. It was a really neat thing, but I was hoping it might rekindle something in my career that would make me say, oh, I need to stay in this job. And it really didn't. It was just something that I was happy to do for a week. Pretty exhausted when it was over, felt good about what we did, but it didn't, you know, make it this calling that I needed to remain in my job.

You know, it's interesting you bring that up because one of the reasons, one of the reasons I keep working in my practice is because I'm like, well, what if I want to do mission work later? You know, and if I, if I punch out and just do white coat investor stuff now, five years from now I'm gonna be worthless as far as going back to practice. That optional way, it just closes a door and I just hate closing doors, I think. But I don't know that it's something I think I'm sure to do. I think it's just something I might want to do.

Yeah, and you've done it.

I just don't know what the 55 year old me is going to be like or the 65 year old me is going to be like.

It's hard to guess. And so you keep that door open and that's, that's good.

So somebody out there looks at you, they admire you, they like your work, they want to do what you did, they want to fire five years from now. What encouragement can you give them?

Encouragement, I would just say that do everything you can to make the job that you have right now one that you like and enjoy. And the best job is one that you don't want to retire from. But if that is your ultimate goal, I obviously tell people to save as much as they can. In the short term, investment returns don't matter as much as your savings rate. Setting money aside for the future is really what you need. Once you accumulate a nest egg that gets into the seven figures, then investment returns matter as much or more as how much you're actually saving each year. But I've been happy with the decisions I've made and I don't really have any particular regrets. So keep a toe in the water. Don't close all doors the day you walk out. See what happens.

Awesome. Well, Leif Dalin, the physician on fire, thank you for being here in Utah. Thanks for coming out to the conference this weekend and being on the podcast today.

Thank you for hosting me. Thank you for inviting me into your home. It's a lovely home. I got to see the before and after of the massive remodel and it is an amazing, amazing place to live. So congratulations.

Yeah, after this we're gonna have to go slide down the fire pole.

Oh yeah, I already did once.

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