#77: How To Be Prudent With Your Finances ft Jordan Frey, MD

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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. This is going to be an awesome interview. We've got Dr. Jordan Frey here. He's a physician. He's a reconstructive plastic surgeon in Buffalo, New York. And he's well known to probably a lot of you out there. He's at least known to me as the founder of one of the fastest growing physician finance blogs out there. It's called the prudentplasticsurgeon.com in it, he documents how he went from financially clueless to increasing his net worth by over a million dollars in one year. And he's really trying to teach other people how to do the same. I've been super impressed with him and everything he's created there at the Prudent Plastic Surgeon. And I've learned so much from him and I thought this would be an awesome opportunity for us to get him on the show, talk to him, figure out his journey, find out how he got where he's at, and hopefully some people will learn some things along the way. Jordan, how are you doing?

Good, how are you? Thanks for having me.

Yeah, no, this is fun. I mean, again, I see you all over the place now. That's just a good thing, you know? But let's, let's talk a little bit about it. I mean, did I. Did I do you justice by your bio? Is there anything that I'm missing on there? You're a reconstructive plastic surgeon. How long you been out in practice?

Yeah, I've been out now a year and a few months. I graduated July of 2020 from fellowship. So that was after six years of residency and then an extra year of fellowship. Wow.

Okay. And then how long have you had this blog now?

I've had it pretty much since the same time, like since I graduated. So a little over a year. And it basically just started because at the end of my training, I realized that I was just, like you said, financially clueless. I can't overestimate that enough. There was nobody that knew less than me about personal finance because I just totally ignored it. And mostly because I was kind of scared and intimidated to look at my mistakes. So as I started, I kind of realized that that was contributing to me feeling burned out. I also. Everyone's kind of Telling me, oh, you're going to be a plastic surgeon. You're finally going to be an attending. Everything's going to be awesome. You're going to be making all this money. It's going to be great. And I was just like, I don't feel like it's going to be great because I have half a million dollars of debt. I have credit card debt, I have zero savings or investments. And I got to try and figure out, do we buy a house? How do we do that? We're moving to New York City. We have to get cars. I was just totally overwhelmed by it. And like I said, I was leading to burnout. So then I just made a decision with my wife that we were going to learn about this stuff, get control, and try to increase our financial wellbeing, if you want to call it that. And then I just started writing about it, and it's been a lot of fun.

What made you decide at that point that you wanted to write about it? I mean, most people, when they come to that decision that they want to learn about it, they just go dive into books and that sort of thing. You decided to not only do that, but also put it online for people to read. What was involved in that decision?

Basically, I was just kind of, as I was going through and I was reading blogs like yours and everyone else, and it was super helpful. And I just thought, you know what? I'll just be someone that writes about it from the beginning, and I'll just talk about all my mistakes. Literally. I say this over and over, but I hadn't met anyone that was in a worse financial hole than I was. And so I figured if I can show that I can kind of climb out of that, that it'll help prove that anyone can do it, because that's a lot of people. I'm sure you've had the same conversations. The position I was in, I was just really scared. Even my loans, I knew I had a ton of loans, but every year I basically just closed my eyes and deferred them another year because I was terrified to look at them. And then once I finally looked at it, it wasn't as scary as I thought. So I just kind of wanted to share that. And I thought other people could relate to it.

So, I mean, is. Did you consider yourself a writer at that time? Is that something that you've done before in any other capacity?

No, not really. I mean, I wrote a lot of, like, scientific publications, plastic surgery publications, but not. Not writing in this capacity. And I'm sure My earlier stuff is a bit rough. My stuff now is probably a bit rough, but I just kind of try to shoot it off the cuff and just be, you know, the same thing as you do, which is really an inspiration. But just be really transparent and share. Share what's going on to try and help others or at least entertain others.

Yeah, I mean, was the goal of it a. I mean, like a business from the beginning or was it more just. Again, it's something that evolved into something like this.

Yeah, it wasn't really a business. Like, I just started it and I said, I'm going to do this for a year, no matter how many people are reading it, and then I'm going to reevaluate. And it's still, you know, it's become a business where I make money from it. But definitely the. I don't even want to calculate my hourly, you know, compensation at this point because it's a lot more work put in. But it's just because it's something, again, like you that I'm just really passionate about.

And then in terms of resources, how did you learn how to do some of these? Because I know that some people are going to be listening to this and they're like, oh, I'd love to share my journey. And I hear it all the time. Oh, I love. I wish I could start a blog or I could start a podcast or this kind of thing, but for a lot of people, they get stuck at the first initial stage. Right? I mean, pass the idea. They get stuck there. What did you use to help you create what you've created?

I used. I kind of. I randomly. I'm sure I typed in Google, like, how to start a blog. And randomly. One of the things that came up had, like, an affiliate link to some hosting server, bluehost. I don't use them anymore, but I initially used them and I just kind of, like, started trying to figure it out. I just sat there and played around with it and kind of like, I don't know, all of us have done at some point in our medical career, we just like, YouTube a video, like, how to do something, and then we go and do it. And I didn't find that was the biggest hurdle. The biggest hurdle for me was in terms of getting started or putting it out. There was like, trying to create something or write something that's, like, perfect, you know, and that's just not achievable. And so in the beginning, I was kind of going through so much and like, oh, should I say this? Or can I say this better. And once I sort of just said, especially at the beginning, I was like, well, you know what, no one's really reading this anyway. I'm just going to put it out there the way it is and just kind of write the way I would tell a friend or something like that. So that's definitely a piece of advice, is don't try to get it perfect or don't wait until you feel like you're an expert to get started for sure. Because no one is. We're all just figuring it out.

That's great advice. Let's start talking about how this financial journey that you started on, that you started documenting from the beginning, and I want to get back to it because I think that's really interesting and it's really awesome to see what you've been able to accomplish in that year. And I know a lot of people have been reading your blog and site, have been on this journey with you, and I think it's really been cool to see. So what were some of the big decisions you made really early on when you said you got together with your wife and you said, all right, we're going to take a hold of our financial future and we're in a serious amount of debt and these kinds of things, but you're starting your new job. What were some of those big decisions that you made early on?

Yeah, a lot of the big ones was. I mean, one was figuring out how we were going to repay debt, and that was something that was really stressing me out. Luckily, my wife didn't have a lot of education debt, but I had a ton of sitting and figuring out a plan to pay that off within five years, which we're on pace to do. That was huge. And the first step of that was creating a budget, which was like not a super fun process, but a necessary process. And we created one. Not even so much for the situation we were in at the end of our fellowship, because at that point, budgeting was pretty easy. We had two kids living in New York City on one salary. So it's kind of like you just pay for the necessities until there's no more money and then that's your budget. But then becoming an attending, we really had to sit and decide what we were willing to pay at for what we weren't how big a house we were going to get. We were moving back to my hometown. So we ended up buying a house, things like what cars to get. So tough decisions. And we weren't always on the same page that's the hard thing with a partner. But we kind of went back and forth enough that we eventually got there and we keep trying to do that. Those were definitely some. Some big things.

So how did that end up. It sounds like you said you bought a house, you're buying some cars, you did some of the typical things that a lot of physicians do when they come out, but somehow you're able to increase your net worth, pay off some of your student loan debt. Because a lot of people say they're coming out, they start making more. But the next thing, when they buy a house and do this kind of thing, they end up in the same place financially in terms of whether living paycheck to paycheck or these kind of things. And so they find that it's difficult to create a dent in their debt and then really start increasing their net worth. So how were you able to do that with all the things that you had? Because, I mean, you had two kids and you have a wife and you're in a new area and you moved. How was that able to come together?

Yeah, so we were really careful in terms of buying our house. So we were prepared to just rent a house or rent a place at first. But we kind of then said we're going to set out criteria for what our perfect home would be right now. Not like people talk about forever home or something. Not like that. But the house that we're looking for right now, I mean, how much it cost? Sure. Which was about equal to our yearly salary. So we weren't going extremely above or even kind of to the recommended two times your annual salary. But even just things like having a fence for our dog and our kids, like the number of rooms it had, etc. We said if we find a house like this perfect, and we'll put a bid on it for this price, and if we get it, great. And if not, we'll just rent a house and we'll go till there. So we tried to take the emotion part out of it as much as we could. It's impossible to completely. But at least going around we had a really solid idea of what we wanted. And we ended up finding house that fit everything perfect and was less than we were expecting. And we even got them to include all of their custom furniture with the house, which was awesome because we were moving through New York City with no furniture. So that really didn't impact. We actually spend a lot less now on our housing than we did in New York City. And then cars was another thing. Before going through all this and realizing I was ready to make the classic mistake of just leasing a really, really expensive luxury car just kind of for just because. And this was one of the things I realized is I know about myself. I'm just not a huge car person. I don't get a ton of joy from that. And there's people that do and I think that's great, but it's just not for me. So I ended up just buying like a used Toyota Avalon. And so that's my car. And my wife has an SUV that she actually leases, but like a mid range SUV that suits her well. So we just kind of controlled that lifestyle. Creepy. And we were able to do that again because of that budget that we made ahead of time of what we were going to spend based on what I was going to be making as an attending. So our savings rate was like 40 to 50%. And that allowed us to really accelerate and build our net worth.

I mean, most of your investments, what are they invested in? Are they primarily the stock market or are there other things as well?

Yeah, I have basically in terms of my savings rate, about a third of it every month goes to paying off debt. A third of it goes to retirement accounts and that's invested in stock and bond index funds. And I have a 75% stocks and 25% bonds allocation. And then the other third goes towards real estate investing. And so my wife and I invest in long term rental, small, multifamily. So we have three properties, duplexes and threeplexes that we rent out in cash flow. So that's kind of where our money goes and how we invest right now. And it'll evolve as time goes on, but that served us really well so far.

What's your goal with that real estate? I mean, it's cool that you got into that stuff as well in terms of investing in real estate, but. And you've allocated a portion of your portfolio to that. What is your ultimate goal with that and why is it part of your portfolio?

Yeah, we really like it. And again, it's learning from people like you about how much real estate can really accelerate your wealth building. And so we want to keep scaling it. Like I said, we bought three in the past year. And it's kind of awesome to see because we buy these cash flowing properties and essentially the cash flow from the first two properties allowed us to buy the third properties. And then you kind of see how it all sort of snowballs from there. So we plan to keep buying more properties and eventually we'll buy Bigger and bigger properties, and we'll sell the old properties and hopefully we'll still be able to 1031, exchange them for bigger ones. And my wife, she's a college professor, but she's also going for rep status, which she'll qualify for this year. So we've used things like accelerated depreciation to help offset some of our taxes. So we really try to use kind of all the advantages of real estate. And it is work, for sure, but once you kind of get used to it and automate your processes and stuff, it's really not too bad. Such what I try to share with others.

I mean, it's funny because, like you mentioned, you're a plastic surgeon. And so people looking from the outside, you know, they hear you trying all these different things, investing in real estate, you're trying to grow that empire. You have a blog that you're growing, you really share with people, but also becoming a serious business, and you've got all these things, but you're also a plastic surgeon. And so I guess the question that a lot of people would have on the outside, and you kind of pointed, you know, you kind of talked about it, but, like, why, like, why have all these other things in addition to your day job? And I'm sure you could do quite well just doing that.

Yeah, I definitely could. I mean, the one side of it that for sure is there is. I just find it enjoyable. I'm passionate about it. I don't think everyone needs to do that. Certainly I could go a more traditional route and just work my job, save 20%, invest in index funds, work for 20, 30 years and be great. And then there's nothing wrong with that. But I just really fell in love with the idea of financial freedom. I don't want to quit my job. I just started working. I really like it a lot. I love what I do, but I just love the idea of being able to do what I want because I want to, not because I have to. And having some semblance of control over your job in the sense that once you reach that point, if. If something comes along or administration changes, they want me to do more for less, et cetera. I can kind of pick and choose what I want to do because I'm not tied to that paycheck. And for me, that's huge. So that's kind of the big reason.

No, I mean, obviously I feel the same way. Right? I feel the same way that, you know, it's. It's, you know, life changes and things happen and to be Able to pivot. You have to have options. It helps to have multiple streams of income. Right. Which is what you're working on, which is something you're working on really early at the stage of your career, which is awesome. And something that, even when I look back, I wish I'd been more aggressive at that time. So it's awesome that you're doing that. I mean, in terms of, like, obviously spending all your time doing these kind of things. I think, again, one of the big challenges for people is that, hey, I can't. There's no way. I'm already so busy with my day job. I'm so busy doing these kind of things, but there's no way I could do all these type of things. How are you able to do that with your kids, your big career that you're growing with all these other things? Like, how are you able to fit all this stuff in?

I don't know. It's one of those things. I always kind of use this analogy. I remember when my wife and I were about to have our first child, or she was about to have the first child, but I remember we were sitting at our kitchen table and just like, how the heck are we going to do this? We're so busy already. And then we're going to have a kid in this. How are we going to do it? And then somehow your life just accommodates to it because it's something that's really important, Obviously your children and you find a way. And then I remember with our second kid, it was the same thing. We were sitting at the same table just being like, how the hell are we going to do this? Our life is so crazy. We have one kid already, and now we're throwing another one in there. How are we going to do this? And somehow you just figure out a way. And so for us, this is something that's really important. Not at the expense of family or patient care or anything like that, but so it just kind of works. And I still, every morning, I bring my kids into school and pick them up and have a lot of time with them. So it's something that definitely you can figure out. And I'm big into planning and processes and trying to automate things. You know, I'm like. Like kind of a freak. I have, you know, on my. On my laptop right now, I have tons of sticky notes open on my Mac, and it kind of lists out everything that I have to do today and the following days. So I have everything planned out. And I know ahead of time what my day is going to look like. So then I can, you know, plan also my free time and, you know, my personal time and my time with my family, et cetera. So that's kind of my long winded answer.

I mean, that's awesome. So let's talk about all the other things you do around the brand. Prudent Plastic Surgeon, because I know it's a blog, but I know you podcast as well. Let's talk about what are the other things that you're doing beyond that. And yeah, I mean, just really growing this brand.

Yeah. Yeah. So I have the blog and then I have a couple podcasts. One is Finance Flash Go, which is just a. A simple. It's like five minutes a day, just over a really simple concept. And I started that because literally when I was starting, if someone I knew of stocks, obviously, because you hear about it, but if someone asked me to explain what a stock was, it would have been pretty embarrassing because I wouldn't have been able to. So it goes over just even really simple things like that. What is a stock, what is a bond, what is index funds, et cetera. And then the other one's Doctors and Dollars, which is a podcast with myself and another radiation oncologist in California, where we just kind of talk to other regular doctors about what they're doing and their finances and things like that. Then I have a course called Graduating to Success, which basically that was my attempt when I was going through this transition from being a trainee to an attending. There's obviously the financial transition and all that stuff, which I talk a lot about in the course. There's also the transition of just trying to find your first job and establish yourself professionally. And in the medical field, we have no experience how to do that. We go from undergrad to medical school. Literally in medical school, we just open an envelope that tells us where we're going. Same thing for fellowship. And then you get to the end and it's almost like you're agoraphobic. There's too many options. You're supposed to negotiate a contract when you have no idea how to do that and have never done it before. It's just kind of. I tried to put together everything that I learned about that whole process just to give some structure for people going through it.

That's awesome. So where do you see the brand? And, like, how is it evolving now? You mentioned the course and this kind of thing and. But, like, what is on the blog today? And, like, what kind of content can people can find there today? I know it's been part of your journey. But how has that evolved over time and what does it look like if people are trying to resources from you today?

Yeah, it's definitely evolved and there's a big component is still just sharing exactly what I'm going through. Like today the post was just my net worth update which I was finally above zero into the positive. So a lot about that and then just a lot about the things, topics or themes that I've learned about that I think are important foundational pieces for people to understand about their personal finance or reaching financial well being and then a lot of it to sort of the psychology of things or behavioral finance, which is probably the most important point.

Got it. Okay. I mean it's amazing to see what you've done in such a short time. I think that you're providing a ton of value for people because I'll say that this subject can't be talked about enough. I think a lot of people are like, oh well, there's a bunch of people talking about it. But I think that sharing your personal experience has been awesome for people. I've followed along, I've looked at your stuff and watching your real estate journey has been really, it's really inspiring for me as well. What advice would you have for somebody who's just like, who's starting right now? They want to get ahold of their finances. Right. They want to get better at where they're at. Maybe they feel that same burnout that you felt. Maybe they feel like they're in like under a like insurmountable pile of debt and that sort of thing wherever they are in their career. Like what are some advice that you have for them to get out of this?

Yeah, I think I can lay out just exactly what I did because I felt exactly those things. And I think the first step is just trying to educate yourself a little bit. And that can seem really daunting because there's a lot of resources out there. It can be tough to pick what to do first. I mean, the first book I read was the White Coat Investors book. I just said I'm going to read ten pages a day. And in a few weeks I was done and I said I'm going to read a blog post today. So I started reading your blog, White Coat Investor Position on Fire, kind of all the usual ones. I just read one post a day in between cases or in the morning. And in a month, in two months, three months, it was amazing how much more I understood. And so once you increase that knowledge base, then I think Coming up with a financial plan is such a huge thing. And I have. My financial plan is all posted on my blog, word for word, so it can be used as a template. But once I had that, even though I hadn't made a cent more, I was still a fellow. I still had the same amount of debt, et cetera. I just felt so much better because I knew, okay, I have this plan. If I follow it, I'm going to be fine. And for the longest time, I just felt like I would never be fine because I was so much in debt and didn't have a plan. So those, I think are the biggest two first steps.

That's great advice. I mean, some other people are going to listen to this and say, you know what? I want to start a blog, too. I want to start a podcast. I want to do these kind of things. I want to share my journey. What's another tip that you have for someone who's trying to start that business? The blog, podcast, whatever that might be? What's one big tip you have for him?

Just do it. Yeah, just do it. Just get started. Like I said, I had no idea what I was doing. Still figuring it out. But yeah, just do it. You might think you'll probably feel imposter syndrome. I know I have at various times. But your experience is worthwhile. And like you said, you can't talk about this stuff enough or share enough about it. So, yeah, just go for it.

All right, Jordan, want to thank you for your time. I know you're a busy guy, but you're able to somehow do all these amazing things@prudentplasticsurgeon.com if everyone's interested in learning about finances. Kind of wants to find out more about Jordan's journey as well as his podcast and his course. Go ahead and check him out there. It's an amazing resource and again, I've been a fan of his as well. So anyways, Jordan, I want to thank you for your time. Let's do this again soon and keep up the amazing success.

Sounds good. Thanks so much, Peter.

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