#39: Diversify Like Crazy For True Security

Foreign. Welcome to the Passive Income MD Podcast, where we talk about creating your ideal life through multiple streams of income. I'm your host, Peter Kim. If you enjoy hearing about this stuff, make sure to hit subscribe so I can bring it to you every week. Now, let's get on with the show. Hey, everyone, it's Peter. I don't know when you're listening to this, but I am recording this as the final podcast of 2020. I mean, it's crazy to think that we're already through this year. Obviously, it's been one of the most challenging years of our lives and lives of, you know, probably everyone that's hearing this. And let's hope, you know, I particularly have a lot of hope that 2021 will be saying a lot of ways different and better than 2020 was. I don't pretend to understand what everyone else out there who's listening to this has gone through. Myself, My wife and I were a dual physician couple with two young kids at home who have now done homeschooling. Through this whole period, it's been a challenging time for both of us in terms of work and career, in terms of our home businesses or businesses that we've been working, you know, on the side, as well as kind of dealing with family and obviously being concerned about our family's health and that sort of thing the whole time. But I can let you know that this whole year has been such an amazing learning experience. I can tell you that when it comes to really forcing us as a family to get creative, to understand exactly what we're going for and what's important in terms of priorities, this has been one of the biggest years of our lives just for that. And it's really cemented some of the things that are really important, and it's helped us let go of some other things that that maybe weren't so important. I'll talk about it throughout this podcast, but one of the major things that we learned this year was the absolute need for diversification. And it's one of my favorite words. If I got a tattoo, any word anywhere that probably one of the words I get tattooed on me, don't ask where, but diversification. And there's so many ways that that word kind of can play out in someone's life. And. And so I felt it was really, really important to talk about that at the end of the year so that when you think back on this year, you think back of all the things that happen, you know, was this something that, you know, would have impacted your year In a different way. So as you look forward to 2021, you know, having diversification in your life, would that make an impact? And how can you take steps to get there? Now, we all know you know the word diversification. We've all heard it, especially when it comes to investing. You know, it might come to when somebody talks about your stocks or your portfolio, you hear about it quite a bit. But I think diversification can hit every aspect of your life. I like how Warren Buffett put it. He said it's a. It's a hedge against our own ignorance. And I think that's absolutely true. I mean, sometimes we don't know what we don't know, and, you know, we think things are one way or we're super confident in one thing, and life happens to throw you a curve. And that's just like, probably the one guarantee in life will be. That will be unpredictable. Things will change. We cannot know our future. And so how can we protect ourselves so that whatever happens, we're ready for it? And so I want to talk about diversification in different areas of your life, and I'm going to hit them one by one. The first thing is I believe that diversifying your income is absolutely important. Now, I don't know when you came out of your training or when you started your career. For me, when I came out of my anesthesia residency fellowship, it was still pretty low point in the economy. We had just started to recover from 2008, but, you know, the, the financial markets, the whole elective surgeries were down, Hospitals took a hit, and the need for anesthesiologists was pretty low. The job market wasn't that great, especially at the place where I took on my first job. I had expectations of how much I'd be able to work, but they just didn't need me that much. And I realized, I mean, it was a good time. I mean, trust me, coming out of residency and fellowship to have all this extra time was fantastic. But because of the current situation at my job, and then a couple things that happened afterwards which made me realize that, hey, I'm not in control of my time, my future, my career, that sort of thing in my life, I realized that absolutely diversifying your income and your income streams was like the number one thing that I could control and do if I wanted to secure my future as well as my family's future. And I made myself really get creative and realize that I need to make myself financially free from medicine and not rely on that one source. Now, I didn't know what to do. For those who have been following my blog and my podcast, you know, that I, you know, found real estate. That was one of the major ways I did, you know, was able to break free from medicine, but also through entrepreneurship and creating businesses and investing in businesses and things like that. You know, I got obsessed, and I'm still quite obsessed with the idea of diversifying my income. And you probably heard the old saying that millionaires have seven streams of income. Well, I really took that to heart and I tried to at least get my seven streams of income. So if there's anything that I would recommend that you do is at the end of the year here in 2020, take a look at your income streams. How many do you have? Not that you need seven, but you definitely need more than one, in my opinion. And so figure out how many income streams you want and steps to get there. Right. So I absolutely believe diversifying your income because one might dry up, one might go well. As Covid has shown us, this pandemic, nothing is for certain, especially even in the doctor world. I mean, I think that physicians, our jobs. In the past, it was kind of a given that job security would be there. But if anything has shown us, things have happened. People gotten furloughed, laid off, you know, not needed, these kind of things. And obviously, you know, with health and disability and these kind of things, you have to diversify. And I'm absolutely, you know, that's something I can't preach enough. That's number one. Now, you also have heard of diversifying your investments. People talk about how is your allocation or your asset allocation of your portfolio? And the reason people say that is that it's the same kind of thing. You know, certain investments might do well. At certain seasons, everything tends to be cyclical. So let's say certain stocks, even within certain stocks, certain stocks might do well. Certain other ones might not do well. At times, the U.S. stocks versus international versus bonds, you know, for me, I take it even further than that. I like to invest in a lot of real estate. I like to invest in angel investing. You know, I've invested in so many different asset classes because I know that things will go up and go down. What I'm going for is consistency as much as possible of growth and. And income. Sure, I would love the home run. I would love the Tesla 600% all the time, or the Bitcoin,000% increase, but I wouldn't put my whole portfolio in it. I do reserve a small portion of my portfolio for some, I would say Some opportunities like that might give you some asymmetric risk reward, which I've talked about before. But primarily I'm just looking for a nice spread across my investments so that something goes down, something goes up, I'm hedged. And I know that overall I will, you know, be gaining, having gains in my investments and it will produce enough cash flow for me to make a significant dent in my financial needs. Right. And actually that's a source of income for me. When I invest, I do a lot in cash flow, and so it's important for me to make sure it's allocated correctly. The other thing is I tell people to, you know, when I. I guess it's kind of going into the income streams, but to diversify your businesses. People know that I have a blog, I have a real estate company. I do different things where I invest in other people's businesses. But I actually like to have multiple businesses as well too, because it's possible, especially now in the time pandemic, you've seen certain ones were impacted more than others. And if for anybody that was unfortunately tied up in one particular business and, you know, things and circumstances change, they thought it was a home run and, you know, they lost all source of revenue, unfortunately they have to pivot and move somewhere else. But for me, I like the idea of having multiple ones, you know, as best as possible. Now, I know what you're thinking. How are you able to balance and juggle all these type of things? Well, now it really helps to put systems in place for that. And it is possible that maybe you don't. You know, there's some tricks that are, you know, I've learned through reading books, talking to highly successful people. I mean, if you talk to some of the most successful people out there, yes, they might have a one or big business that they're well known for, but I promise you that many of them have multiple businesses and ventures. And how are they able to be successful in many of them? First of all, they don't limit themselves by saying I can't. And number two, they go out and build systems and, you know, develop teams to be able to do these type of things. And I think it's absolutely possible. And then the last thing I think is really, really important for you to diversify is, I mean, it's your identity. Now, I know that might sound a little weird to say diversify your identity, but for those who are listening to this, you know, I know that so much of your identity is tied up in your career. For example, if you are a Cardiologist. So much of your identity is tied up in being the best cardiologist that you can be well known in the community to your patients, the medical establishment, you're standing in the hospital and these sort of things. And it's so funny that when, I mean, when physicians who are, who have their identity so tied up in that when things change, for example, loss of job or retirement, it's crazy how much it impacts them physically, emotionally, because their identity was so tied up in that one thing. I mean, I can understand you walk around with a doctor in front of your name and you spend more time doing this than anything else probably in your life, maybe besides sleeping, if possible. But. But what happens when that's taken away from you or you choose to walk away? It's very, very difficult. I will tell you that. Even me, as I went from full time to part time, and that's still something that's like kind of in flux. It feels strange to not be part, you know, of the full time establishment, to almost feel like in a way that you're not as important as you were before. And that can be a difficult transition for a lot of people. And for those who have gone part time, whether male, female, whoever started to work at home more or worked in other businesses, I think everyone goes through that because you unfortunately probably get seen as maybe less of a serious doctor or less dedication to your field. But for those who have gone part time, you know that, you know, if anything you're a more focused physician probably in a lot of ways, because you do it based on your choice and you're probably come to work with a better mentality and probably I hope that trickles down to patient care, that your patients see the impact of that as well. Because you're ultimately choosing to work as much as you want to work. But I think this happens with any career is that when your identity is so tied up in one thing and that changes or is shattered or there's a thing, it really makes a huge impact on you. So I think that, that my life, I'll tell you, for example, I've really started to try to elevate my identity as a, not only as a doctor, but as a businessman, as a father, as a husband. And these things I take, try to take more pride in and I think that's been important, part of my kind say transition from full time to part time. And I think that's absolutely important when it comes to diversification and especially in coming in 2021, that's going to be even a bigger focus for me. So I hope that for you 2020 that, you know, whatever challenge it was, I hope that you were able to get something out of it and in some way you were challenged to grow. Because I think in 2021, you know, you'll be able to take that and hopefully with, with hope on the horizon, with obviously better medical care, with vaccines, with hopefully the world, you know, somewhat returning to where it was before, that you'll be able to walk out with a better mentality, better prepared to tackle whatever might come in 2021 and beyond. And I think a lot of that, again, comes down to diversification, really making sure that you control your financial future, your security, your family's security. And that sets you up for success. So anyways, hope you've had a great week. You know, I hope you have a Great rest of 2020 whenever you hear this. And of course, I'm wishing you the best of 2021 and we're here to support you in any way we can as part of the PIMD family. Thank you so much for being a part of our community and take care. Enjoy the show. Let me know by dropping a review in the podcast app you're listening to us in. And if you haven't already, make sure to hit subscribe. Are you a part of our community yet? Join thousands of physicians who are also on this journey to creating their ideal lives through multiple streams of income. You can join us on our Facebook group, Passive Income Docs, and you can always learn more at our website, passiveincomemd.com thanks again for allowing me to be a part of your journey. See you next time.