WCI #75: Increasing Your Primary Care Income - An Interview with Doc G from DiverseFI.com

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 Dahli.

Welcome back to the White Coat Investor Podcast. This is episode number 75, increase in your primary care income. An interview with doc G of diversify.com.

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Our quote of the day today comes from John Stuart Mill who said, I have observed that not the man who hopes when others despair, but the man who despairs when others hope is admired by a large class of persons. As a sage, isn't that the truth? It's amazing how much pessimists can be admired even when they're wrong, time and time and time again. Thanks for what you do. By the way, the work you do each day is difficult. It's challenging, it does not come without emotional burdens and it's difficult to leave it in the clinic or at the hospital. And so I want to be one of those, even if you don't hear it from anybody else today, that thanks you for the hard work you're putting in and for the sacrifice that you've made in your life. Be sure you've signed up for the Financial Boot Camp email series. This is a 12 email series that we send out automatically when you sign up for the White Coat Investor Monthly newsletter. You get one email a week and it's a short read as well as some homework to help you catch up with the other blog readers and podcast listeners and really get you into the same place as other people very quickly within just a few weeks. All right, we've got a special guest today on the podcast. We've got doc G from diversify.com, a physician financial blogger, previously a medical blogger, who actually just told me that his first introduction to the whole financial independence community was when I reached out to him to ask him to review my book on his blog in 2014. So welcome to the blog, Doc G. Thanks.

It's an Honor to be here and an honor to talk to you in person.

Yeah, sorry. I guess welcome to the podcast is what I should have said. But tell us a little bit about your upbringing and your family. Tell us what kind of got you here.

I guess so. I feel like I was incredibly lucky. I grew up in a very supportive household that really understood finances. My father actually died when I was 8 years old and he was a physician, so that kind of pushed me in the direction of becoming a physician. But his life insurance basically ended up paying for my schooling and paying for my medical school. So as sad of a story as that was, it actually started me on a solid financial footing. My mother eventually remarried and my stepfather was a healthcare administrator and a businessman and my mom is a cpa. And so they modeled for me. Really great financial behavior. They had several real estate properties. They also had side businesses. My stepdad used to sell coins as well as run his business. So I grew up in this very financially intelligent household and that really carried me as I became an adult. Most of what I did was follow in my parents footsteps. I didn't actually think very much about the understanding of what financial independence was or what it meant. In fact, when you reached out to me to review your book, it was the first time read the information and developed a vocabulary to understand what financial independence actually was. Before I was just kind of doing what my parents did. I was saving a lot, I was investing, I was buying and renting out real estate property, but I didn't really understand the full picture of what I was doing.

Now this is interesting because, I mean, a lot of us talk about how we didn't learn anything from our parents, you know, as far as finances and really had to pull ourselves up by a bootstrap and we're first generation wealthy. But you're kind of coming from a little bit different perspective in that I don't know that it's quite a silver spoon upbringing, but certainly a different place than a lot of docs come from. And I think a lot of us worry about raising our kids and, you know, them being spoiled, them not being able to learn how to work hard and how to carry those lessons throughout life and that, you know, our kids will never be as well off as we are, but you seem to have overcome that. So what tips do you have there for docs who worry about how their kids are going to turn out, given that they're having a much different upbringing than they had themselves.

So I'm a big believer in that you learn through financial modeling by watching. So it wasn't so much that my parents told me, here's what you do. It was that I kind of lived through their behavior. So we talk about stealth wealth a lot in this community. It's not that they said, hey, you shouldn't spend frivolously. It's just that they never did it. It was not that they said, hey, you should save 50% of your income. It was just there was always a lot more coming in than ever going out. I don't think my stepdad or my mom ever sat me down and said, you know what, doc? Go into real estate. This will diversify your portfolio and provide cash flow. They didn't really talk about those things. So I think if you're going to grow up in a household where you as adults make a decent W2 wage and there is money coming in, I think the best way to teach your children is to be financially savvy yourself. If you are not frivolous, I think your children are most likely not to be frivolous. I think they learn by watching you.

Good tips. I appreciate that. Tell us a little bit more about your education and training. I mean, you're a practicing physician, correct?

That is correct. So I after college I came back to Chicago to do medical school. I did residency in St. Louis in general internal medicine.

When I first came out, I actually.

Thought I was going to be a hospitalist and I worked for a hospitals company for about three months and found that I really didn't like the company I was working for and then went into general internal medicine. Since then I've done some training in hospice and palliative care and actually act as a medical director of hospice and palliative care as well as nowadays doing mostly a nursing home practice in general internal medicine.

So where are you at now in your financial life? How far are you out of training? You still have student loans? Are you financially independent? Tell us a little bit about where you're at.

So I'm financially independent. I didn't know I was financially independent until I read your book. But I'd probably been financially independent for years before. So I again, never really had that vocabulary. So you know, my mom's an accountant. And I said, he mom, how much do I need before I can think about not worrying about work so much?

And she said, you should have about.

10 million in the bank. I said, 10 million? Well, I'm not there yet. And so I asked at the time I had a financial advisor and I.

Asked my financial advisor and he took.

All my information, and he did the Monte Carlo simulations, but he didn't, for one, he never asked me how much I spent. So now that I know what I know, it's ludicrous that he would kind of try to figure out where I am in the retirement pathway when he didn't ask me how much I was spending a year. But the other thing is, he didn't want to really include any of my income or my real estate, my overall numbers. So it didn't make a lot of sense. Once I had a clue that there was this whole, you know, grouping of blogs and books and ways that I could actually take control of my finances myself, it all became very clear very quickly.

Tell me about that financial advisor. We talk a lot about financial advisors on this podcast. And how do you end up with a financial advisor? How do you find them? What do you think of the whole experience in retrospect? And tell us about that.

So I was like every other doctor, right? I came out of medical school, finished residency, and in my mindset, the only thing I had time for was to learn how to be a good doctor and to build a practice. So I wanted to outsource everything. And my money was just another example of something I could outsource. I happened to have a good friend who was a financial advisor, and. And I decided I actually used. He sent me to someone, and that gentleman, unfortunately died a few years into him being my financial advisor. So I eventually went back to my friend and he took care of our finances. And in all fairness to him, he did a very good job. But something stunning kind of happened. So my wife had been investing through her 401k at work, and she had started right when we came out of college. I was coming out of medical school, she was coming out of college, she was working for a big business, and they had a 401k. And basically there was this algorithm in the system that asked her a bunch of questions and told her what asset allocation she should have. And so she followed this five minute questionnaire. It put her in an asset allocation which we now would. Would look somewhat like a lazy 3 fund, right? It was, you know, an allocation mostly of NP 500 and total market index with a sprinkling of international and bonds. And so the next 15 years, her money grew, and then our money separately with our financial advisor grew. And one day I decided to compare them, and I found that her money grew at about 10% over 15 years or so, and that his money grew at about 9% over the same 15 years. But I Also then was paying, you know, between a 0.5 and 1% AUM, which was discount because I was a personal friend. So looking back, I can't say that he treated me poorly. What I can say is that at that time in my life, I wasn't interested in learning the knowledge necessary to do it myself. And so I paid a premium for that. And then I got older and I looked at the numbers and realized, hey, what's going on here? I can do just as good of a job on my own, but then I'm not paying some advisory fee, so it made a lot of sense to just take over everything myself. And that's what I did.

So what's in your portfolio now? What are you invested in?

So I am a big fan of simplicity. In fact, I remember your post, which to me was mind boggling. I think it was what, 150 portfolios that are better than yours. So I like simplicity quite a bit. So I have mostly a three fund portfolio. I have about a third of my money in taxable, a third of my money in a taxed brokerage account, and then about a third of my money in real estate. So that's been, you know, pretty stable over the last bunch of years.

Some of our listeners might not know what a three fund portfolio is. Can you explain what that is for them?

Sure. So basically I have about 60% of my money in a total market index on Vanguard. So it's VTSAX. I have about 30% of my money in total market international index and then 10% in bonds. So three fund portfolio is basically, you know, a US based index, either S&P 500 or total market index, some type of international based index and then bond. You can set up the different asset allocation depending on what your risk tolerance is and where you are in your career.

But you've also got about a third of your money in real estate. So if you consider that as part of the asset allocation as well, it sounds like you are. You said about 10% of the index funds are in bonds. So it sounds like you have a fairly aggressive portfolio with about a third real estate. And that's got to be about 60% stocks and then 10% bonds or so.

Yeah.

And people don't realize, you know, when you own your own business, the business asset class can help protect you.

So we're lucky.

We're in the business of medicine and it's an incredibly stable business. So I always knew that I had a very stable income coming in every month from my business asset class. And so Therefore, I feel very safe being on the more aggressive side and having less of a bond allocation.

All right, for those just tuning in here, we're talking to Doc G, who's a blogger who blogs@diversify.com that's diverse F I dot com. Now, Doc G, your tagline is personal finance with a twist. What's the twist?

So the twist is that I'm not your average fi. Again, I came to it from a middle class family. I consider myself second generation fi. In fact, I actually consider myself third generation FI because my step grandfather retired at the ripe old age of 49 in the 60s. And therefore I look at things in a very different way. There are frontrunners who have already figured out a lot of the mechanics of financial independence. I can go look at your website and find a host of materials that tells me how to become fi, that can tell me the mechanics of a 401k or a Roth conversion. All these things that I really don't cover in my blog. Mostly in my blog I talk about.

The philosophy of fi.

How do we think about financial independence? How do we think about money, and how does that affect us?

So what would you say the message of your blog is? I mean, what sets you apart from the dozens of other bloggers out there competing for the attention of blog readers?

So I definitely get hassled for this a little bit, but my message is actually that financial independence in some ways is sort of irrelevant. And the reason why I say that is because I think our goal in life is to realize our own purpose, realize our identity, and make connections with people. I think financial independence is a tool that allows for that, but sometimes in our community it ends up being the goal. And in my opinion, financial independence is more Plan B. Right. So plan A is life. I feel like you got to work on building a good life. I've said a few times in my blog, you know, if you can find a job that you enjoy and that you love and it's fulfilling your sense of purpose and identity, then in a sense, you're financially independent before you even make a dime. And the reason why is, you know, barring disability and death, you can keep doing what you love and it's going to support you and you're always going to have enough money. So I'm still a big fan of being frugal and saving and investing and being smart with your money. But I think if you look at life and think more about your purpose, identity and connection, financial independence will come. If you're careful enough.

Now you've been blogging anonymously so far. How come? And do you expect that to change?

So I have had a medical blog for years that was not anonymous. With the financial blog, I decided to be anonymous just because my wife and I are both still working and I wanted to have the freedom to provide proof of concept. In other words, I wanted to be able to go in depth about finances or even talk about things like net worth without feeling uncomfortable about family, friends or fellow employees for my wife learning about our finances directly.

So it doesn't sound like you intend to change that at any point in the future then?

Yeah, at this point, probably. No, we'll see. As you know, things change. But for now I think I'll remain anonymous.

Has that made it difficult to grow the blog or to get sponsors and that sort of thing?

Not horribly. I do miss the fact that I do like giving talks. I do like being out there. So obviously I can't do YouTube stuff. I can't talk to the visual media as much as online. So that's the only way I would say that. It hinders me.

Now, one of the most talked about concepts and posts on your blog is about how you boosted your primary care income. And I've frequently said that the intra specialty variation of physician pay actually dwarfs the inter specialty variation of pay. And you're kind of proof of concept of that. Can you tell us a little bit about what you did as a primary care doctor to boost your income to increase your financial offense?

So there's several ways I did that. I mean, one of the first is that I was very thoughtful about my career starting from day one. So as I had mentioned before, I started as a hospitalist and I knew after three months I didn't like the company I was working for. So I knew I was going to do primary care.

That's what I was trained to do.

But the first thing I did before I left my hospital's job is I gathered a group of advisors together, people who had been practicing for a long time. And I said, well, there's a medical group that works at the hospital. Should I go work for them or should I go into private practice? And after getting all sorts of information and really thinking about it, I realized that I probably didn't have enough experience yet to do private practice. And at that point in my life I didn't understand anything about running businesses. So I was very thoughtful about setting up a timeline of five years where I'd work for a medical group and be an employed physician and then would eventually become a private practitioner. So once I joined the independent medical group, the first thing everyone told me is they said, well, you'll never get a bonus, right? So I had a base pay. This is in 2002, I think I had a base pay of $125,000 a year. And every single other physician in the group said, you know what? You'll never make more than that125. You'll never get a bonus. And so I listened to people who say, you can't. But I realized that what they were really saying is I can't. They were saying, I, I can't get a bonus, but it didn't necessarily mean that the same would happen to me. And within about a year, year and a half, I had actually doubled my salary. So kind of the first message that I learned is that when people say you can't, you listen to them, you take their advice, but you don't necessarily fully believe them. You've got to figure that out for yourself. And, you know, you'll always find a group of people who isn't excelling at their job or who isn't excelling economically, but that doesn't mean you can't yourself. And so that was like one of the big first lessons I learned.

So then you eventually left that group and opened your practice. And that five years, I presume you were watching pretty carefully how the group was run and learning as much as you could about business so you could hit the ground running. But what did you do that's different from most docs when they opened their practice?

So I did a few things. One is just kind of the mechanics, right? So when you work for a medical group, let's say that medical group says, we're going to keep 50% of your collections and you can take home 50%. So let's say you have a good year and you bill $500,000, you take home 250,000 and 250 goes to run the practice. Well, what happens when you say, I'm going to be a little more aggressive? I'm going to see two extra patients a day for the whole year. Maybe that'll come out to 50,000 more dollars of revenue. Well, when you work for a group practice and your total revenue is $550,000, you get half and they get half. Right. You walk out with 275 or whatever it is. On the other hand, when you're in private practice, you realize fairly quickly that seeing an extra patient or two a day doesn't really cost much in overhead. So when you go into private practice and you decide to see an extra patient or two, and now you bring in 550 of total revenues, you're taking home 300,000 instead of 275, because you don't have to split that difference with anyone. So immediately by going into a private practice, I could take advantage of economies of scale to basically pay myself greater. The other thing about it is, when you work for a medical group, a lot of times, if you want to start what I call a lazy side hustle, I use the term lazy not because it's easy, but because as a physician, you already have all sorts of experience and training. You don't have to go out and get new training to find a side hustle. Medical expert work is a perfect example or something that I like to do a lot of. Being a medical director of a nursing home, you already have all the skills and training necessary. So taking on one of these side hustles, it's kind of lazy. You can just do it in addition, and it doesn't cost anything to enter these side hustles. So I went into private practice. I had no medical group telling me what I couldn't be involved in. And so I started doing a lot more medical expert work, as well as became a medical director of a nursing home. And when I did that, the nursing home not only paid me a stipend for all the administrative stuff I was doing for our monthly meetings and for supervising the other physicians, but they also sent me a ton of patients that needed to be seen and taken care of. So right away, I found in private practice that just economies of scale, as well as taking on some lazy side hustles, could take me from the $250,000 I was making in the medical group up to, you know, between 4 and $500,000 just in my private practice. And that happened fairly quickly.

Now, what do you think is possible, I mean, for a primary care doc these days that owns his or her own practice and really hustles, really aggressive, makes good business decisions, runs a good business. I mean, what can they be making a year?

So I topped out at $950,000, I think, in my biggest year. And the way I did this is I took it one step further. So I finally realized in my private practice that I was doing so much nursing home work and that I also had two offices that were disparate from each other geographically, and I had tons of employees. And I realized that my office practice was somewhat awash and where I was making all my money was when I was doing the nursing home visits and doing some of these lazy side hustles. So back in 2013, I actually closed my practice. I told my 2,500 patients, I wrote them a letter and said, I'm going to start doing a concierge based home practice. If any of you want me to go see you in the home, I'll be more than happy to travel out to your house and see you. It'll cost $1,800 a year, and otherwise I will not be practicing in any other form. When I did that, I did something else that I found out later was quite magical. I pretty much cut my overhead drastically. So if you get back into that model where you know you're billing 500,000 a year and your overhead in the office costs you 250, you end up taking home 250. Well, what happens when you're billing 500,000 but you get rid of your office space? You go see patients in their own home or in the nursing home, which is zero overhead. And so your overhead for the practice goes down to $100,000. So what happens if you bill $500,000 but your overhead is only $100,000? You now make quite a bit more. And so I was able to utilize those tactics to continue seeing patients in a way that I enjoyed. And I was able to cut down on my paperwork hugely by going down from 2,500 patients to 100 patients. But I was still able to bring in quite a bit of revenue that I then kind of placed in one bucket. And then I had my lazy side hustle revenue in another bucket. And it also freed up some time to take on other things like a hospice medical directorship. So I was able to put it all together in such a way that I maximize my revenues, but also cut my overhead to the bone.

Now, what do you say to a doc who worries about doing a concierge practice or some sort of cash only practice, or doctors for patient care style practice that feels like they're abandoning a bunch of patients that really need care, but that don't happen to belong to a very good payer? Maybe they're Medicaid, Medicare, Tricare, you know, unfunded, or whatever. What advice do you have for them?

So I certainly hear those arguments, and I certainly, in a perfect world, would like all patients to be cared for no matter what. On the other hand, I also see a huge amount of doctor burnout. I see a very high level of physician suicide. I see residents spending 90% of their time in front of a computer screen or doing paperwork and only 10% of their time seeing patients. Our system has problems, and those problems are burning doctors out. And I think the best we can do is strive for some type of middle ground. So for me, my middle ground was I moved to a concierge practice, but. But then I also wedded that to seeing nursing home patients that were the least served, who often would have a doctor who'd do a drive by once every six months and otherwise was nowhere to be found. So by doing nursing homework and then even adding in some hospice work, I was still able to feel like I was helping my community. I was helping the underserved, but could also get rid of part of my practice that was burning me out and was just difficult and painful.

Let's change topic a little bit here. People love hearing about financial mistakes, and it's very good to learn from the mistakes of others. Otherwise you got to make them all yourself. We've all made financial mistakes. I certainly have and blogged about them numerous times. Luckily, I made most of mine early and with small dollar amounts of money. What have your biggest financial mistakes been so far?

I've certainly made a few. There's no question about it. Thankfully, I think like you have, I've been protected from them being huge mistakes. So I did have a whole life insurance policy for a short period of time. Family member decided to become an insurance agent, and I was hooked into that in my late teens, early 20s. I got rid of that fairly quickly, just as he decided he didn't want to do that for a living anymore. So it didn't hurt me too much. But obviously it was expensive at the time. But I would say my biggest financial mistake was not taking ownership of my finances from day one. So I was lucky. I found a financial advisor who generally treated me pretty well. Yes, I didn't make the returns I could have, but he was in no way fleecing me. And I do believe he was really looking out for my own good. But as I get older, I realize it was fairly reprehensible that I didn't, you know, take control of my finances from the beginning. This is my life, this is my money, and no one will manage it as well as I will. And if mistakes are made, then I want them to be my mistakes. So that's been a big part of the learning curve.

Yeah, that's one great thing about managing your own money. You're never going to burn any mate off yourself.

Yeah, very true. So you do the best you can, but I Think for any young person out there, a big message I would send out is even if you have an advisor, it's still behooves you to completely understand every single investment you're in and why.

Now your website mentions you've written a couple of books. Can you tell us a little bit about those?

Sure.

So as part of the medical blog that I've been writing since about 2006, I've written a number of stories about medicine, healthcare, as well as a number of fictional stories. So I self published two books in which I put groupings of blog posts together. So the first one came out, let's say 10 years ago, maybe a little bit less eight years ago, and the last one about five years ago. And it's just I write in various forums in various places, and so I pulled together some of the topical information. Most of it is about medicine, it's about the practice of medicine, about some of my experiences in hospice, and some of it is creative writing that often brings in medical topics.

And what do you think, financially speaking, was it a boon to you or was. It turned out to be a lot of work and not much money.

So it was probably a lot of work and not much money, but some of that was my fault. So I did do a lot of the work up front. And after the books came out, I realized that if you really want to do a good job and make money on your book, you've really got to push the marketing. And after doing that for a few months, I realized that I was starting to reach some success. But it was not bringing me joy or making me happy. And I had enough going on economically that I really didn't need the income. So it was pretty easy to just let things lie. And I still sell a few books every month. But it certainly was not an economic boon. What it was though, was an emotional boon. It certainly helped me clarify my thoughts and opinions. And I will tell you, I'm a big believer that writing in general is a life hack. And if you're willing to put it out there and pay public, you'll be amazed at what opportunities come along. So throughout my career I've been given opportunities to publish my information in periodicals or to travel to give talks. And all of that has enriched my life and made my career much more enjoyable. So I think I've gotten a lot of returns from it, even if they haven't all been economic.

Your father died quite young. How has that affected your financial philosophy?

So it has in a lot of ways, in some respects, my father died when I was 8. And he was a prominent oncologist, and all I wanted to do was be like him. So when I went into my career, my purpose and identity were very much wrapped up into medicine. And for most of my career, they have been. And as I get to this age where I realize that I want to start slow down in medicine, maybe someday I will want to retire early. It's very difficult to let go of this connection that I have with my father. And leaving medicine or even becoming financially independent was a little bit of a shock to me because it made me realize that this will give me the freedom to cleave myself from this profession that so long has been a part of my identity and connection to him. Even the life insurance thing, right? So I tell the story. My first blog post ever on this blog, Diversify, was called Irony in Life Insurance. And it was the story of how my father's life insurance paid for all of his children to go to college and for me to go to medical school. And I was able to graduate without debt. And here I was realizing that I was financially independent and I was calling to cancel my own life insurance. And so it really plays a big role in everything I do. And even when I look at my career now, it's hard for me to leave medicine because of my connection to my father. But then it's also easier to leave medicine because he died at the age of 40. So I know that our time on this earth is limited. And if medicine is not bringing me as much joy as it used to be, and I am financially independent and have the resources to work less, maybe I should be taking advantage of that. So it really plays into everything on both sides.

Now, you recently had a blog post about half retirement. What do you mean by that?

So I've been slowly. I'm going to use a few catchphrases from my blog, so you have to excuse me. So I've been slowly downsizing to early retirement. What I mean by that is when I realized that I financially had enough, I just started systematically getting rid of the things that were more difficult in my job. So the first thing I did is I got rid of my concierge practice because people could call me at any time of the day or night or. Or I could be five in the afternoon and someone could call from across town and want me to go see them immediately. So the first thing I did was get rid of the concierge practice. But since then, I've been slowly whittling away things I don't like in my job. So there's certain nursing homes I worked at. I decided I didn't want to work at them. They were too far away geographically. So I got rid of those. So I wrote recently about my half retirement because right now, pretty much half of my job is being a medical director for Hospice and Palliative Care, where I work administratively. And I oversee nurses and social workers and chaplains and certified nursing assistants. But I don't actually go see patients. I'm kind of part of the resources. So that's half my practice. The other half of my practice is I have a pretty large population of nursing home patients. The nursing home patients take a lot of energy. I can bill for them, obviously, but I get a lot of phone calls. It's very common for me to get phone calls at 2 or 3 in the morning on a regular basis. So I have made the decision that over the next six months I will be getting rid of my nursing home portion of my practice and do hospice and palliative care only now hospice and palliative care is more of my joy. And I would do that even if I never had to make a cent.

So I think I'll stick with that.

But in a sense, this is a half retirement because I'm getting rid of half of my employment life.

So basically part time work, but it's the part you like.

Exactly. And so I've been trying to fashion my life as much as I can to take advantage of those things I enjoy. And being on call constantly. And some of the aggravations of dealing with incredibly sick patients who have needs 24, seven, that can be tiring. And the great thing about the hospice gig is that a lot of what I do is over the phone. So I'm on call Monday through Friday, 8 to 5, and then I have a few days of meetings, Tuesday, Wednesday, Thursday. But otherwise, the rest of my time is open to do whatever I please.

I see pushback periodically against the concept of early retirement for doctors. Do you think it's ethical for a doc to retire early?

So I think it's ethical. You know, we give our hearts and souls into this profession. I can unequivocally say that going through medical school and residency is the hardest thing I ever did. Watching people die in front of you and feeling helpless is incredibly difficult. And being a physician has been one of the most rewarding experiences in my life. But I've paid for it. I've paid for it. I'm a different person than when I was, when I started this journey And I think you can't force someone to try to do this kind of work. I think it's just too hard, it's too emotional, and our patients need us too much. And what I mean by that is you can't go halfway if you're going to do this job. You've got to care, you've got to give of yourself. And so I think anyone who feels like they've given enough or their time has come, I think it's okay to leave it. I think it's an individual choice. And I think if society's needs are great enough that we need more doctors, then we as a society have to make this job better, we have to make it more palatable. We have to make either the hours better or the respect better, or we need tort reform, or we really need to work on the system because otherwise people are going to leave when it becomes too difficult.

Now, it's interesting that, you know, in this community there's a lot of talk about, you know, cutting back, going part time, retiring early, financial independence, etc. But among medicine in general, very few doctors go half time or retire early. Why do you think that is? Why don't more docs do it? I mean, given their substantial income, even with their high student loan burdens, and particularly in the past when the burdens weren't so high, it still seems a very doable thing that I think many Americans would do given the option. But it's a relatively small percentage of docs who do this. Why do you think that is?

Well, I think there are a few reasons. One, we have to realize that docs have high wages. But if you look at America in general and you understand the mechanics of fi, you realize that a large portion of the United States could probably become financially independent if they truly wanted to. It's not a difficult thing, right? So J.L. collins wrote a book, the Simple Path to Wealth. Right. It might be hard, you might have to work a lot, it might take a lot of time, but there's a simple pathway to become financially independent for most of America, and yet most don't do it. And the reason why, and this gets a little back more into the headspace of the philosophy of Phi, is most of us can't wrap our heads around it. So I don't think physicians are much different. Most people go into medical school, they don't envision a time when they will be so financially independent that they'll never have to work again. Most Americans don't. When they start their work life and Physicians are no better than the average at managing their finances. So we all have friends who are physicians who make tons of money and yet are still scrounging to meet their weekly bills. I had a partner once who was making $400,000 a year and he had to borrow money from our office manager to pay his nanny. So just because we make high wages doesn't mean we understand philosophically what financial independence means, nor have the motivations to get there. So just like everyone else, I think doctors were fallible. We have different interests, we have different motivations, and only a small percentage, I really think, want to be financially independent and have decided to walk this path.

Let me ask you another question. Since you've had an experience that I think a lot of our listeners have not. You are actually having a significant decrease in your income over what it has been in the past. You're kind of past your peak earnings years. Can you tell us what that's like and whether that brings you any anxiety or any worry about, about that fact and how you adjusted your yourself and your life and your philosophy to that?

So, yeah, it's actually very anxiety provoking. We all like to talk about the hedonic treadmill. And everyone knows what the hedonic treadmill is. At least most people in our community get the idea that once you start spending money, it makes you feel good. But then when you stop spending money, that feeling good goes away. So you accelerate your spending and it's all this big treadmill. You kind of spend lots of money, but you never get anywhere. Well, I think making money and achievement are the same way. I mean, I think we have a money making treadmill, an achievement treadmill. And I think us high earners, there's a certain high that comes with making lots of money. And at some point you realize that you don't actually need any of that money that you're making, you're just on that treadmill. And in order to get that high, you have to go faster and faster. So for me, and this gets back again to the philosophy of financial independence. I've done lots of deep thinking about this and it doesn't always sit easy with me. You become a victim of the what ifs. What if the market drops out? What if I become a victim of the sequence of returns risk? What if we have a world war? I mean, you can go to all sorts of levels of what ifs, but the problem with most treadmills is they just don't make you happy. And so that's where I'm at I realize that I've gleaned all the happiness I can get out of life in making money. Like I'm never going to get more happy by making higher than almost seven figures in a year. There's nowhere for me to go with that. So I can either keep doing the same thing, which I don't think ultimately will make me a contented person, or I can try to change. So this blog that I write, this life I've been living, this downsizing in half retirement, it's all an attempt philosophically for me to try to change what I'm doing in order to maintain or grow contentedness.

We're starting to run out of time here, but I wanted to give you a chance to give any last messages you have for our readers or listeners rather, you've got the ear of 15,000 doctors and other high income professors professionals. What do they need to know?

I think there are a few basic messages and we've sprinkled them throughout this interview. I think that no one will manage your money as well as you do, so pay attention to it from the beginning. I think that anyone, especially a high income earner, can make it to financial independence. But if you don't understand your own headspace, if you don't think a little bit more about the philosophy, you'll never get there. And most people don't get to financial independence. So you've got to be somewhat thoughtful about the way you're going to go at things. I think money and financial independence sometimes are somewhat irrelevant, especially for high income earners. I think it's really, really important to focus on your purpose and identity and the connections you make. And I think if you do those three things right and then are a little bit frugal, you invest, you pay a little bit of attention, you'll find yourself not only financially independent, which is important, but hopefully content and happy, which I think is even more important.

Thank you so much Doc G for being on the White Coat Investor podcast today. For those who are interested in learning more about his philosophy and reading his writings, you can find them at diversify.com that's D I V E R-S-E-F I.com where you can read all kinds of great articles he's written about his philosophy of financial independence and other tips for you. Thanks so much for being on the podcast.

Oh thanks. It was a pure pleasure.

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Head up. Shoulders back. You can do this. We can help. Be sure to check out all the resources available to you@whitecoatinvestor.com and you can learn more about the stuff discussed in this podcast in the show Notes on the Site published today.

My dad, your host, Dr. Dahl, is a practicing emergency physician, blogger, author and podcaster. He is not 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.