Introducing Ether to FI: A New Attending Striving for Financial Independence
This is the first of what I expect to be many posts from a reader who reached out to me eager to share his path to Financial Independence in real time. I’m excited to introduce you to our new online friend who will be known as Ether to FI (E.T.F., for short).
E.T.F. and I have a lot in common — we are both anesthesiologists, husbands, and fathers with an interest in personal finance. The big difference? E.T.F. is just launching his career while I am starting to wind mine down.
E.T.F. has a keen interest in attaining financial independence and he would like to share the details of his journey from his first day as an attending as he progresses towards the goal.
You’ve gotten used to hearing the perspective of a financially independent physician — now you’ll get the additional perspective of a young physician who has made financial independence a priority. We plan to update this series on a recurring basis, sharing the numbers, thoughts, pitfalls, and celebrations along the way.
Meet Ether to FI
Hello FIRE nation. I am E.T.F. You are probably wondering what happened to the missing “RE” in my name. That was not an accident. I will probably have many different occupations in my life, but I am on a mission to find work that I love. Charlie Munger working at 93 is my inspiration. The day I become financially independent will be my last day of “work”.
I am a 31-year-old anesthesiologist starting my career in middle America, where the cost of living is low, but rising steadily. I am married with two kids under the age of five. I am a financial nerd, and proud of it. I love everything finance related; podcasts, blogs, and books. If you have any recommendations, send them my way.
My qualifications to teach anyone about personal finance: absolutely nothing. I am just a doctor who loves this stuff who thinks sharing my experience might help other people.
Before I tell you about where I am starting and where I am going, here are the most important reasons for my future FI success:
- I married the right person
- See #1, this woman has an intense allergy to spending money
- I find the process of FI extremely interesting.
What is my FI number?
How did I arrive at this lofty sum? I stuck a finger in the air. Ok, maybe I did a little more than that. I want to live on $100,000/ year in retirement. This will be plenty to spend once a few things are eliminated.
Luckily for me, I decided that residency was going to be hard, so it would be a perfect time to wallow in misery and not spend any money (you can start strumming the world’s smallest violin for me). My wife and I decided to live on her income and give my salary to Sallie Mae. We did it Dave Ramsey style, smallest to largest, and dispatched $102,000 in debt in twenty-one months.
For the record, my wife came into the marriage with zero debt, and the $102,000 was my medical school loans. We purchased a car for $5,500 at the start of residency for me in cash. She continued to drive her car from college. Paying off that amount of debt in that period of time was not easy, but without kids in retrospect, it was a breeze.
I would define myself as a reformed Dave Ramsey follower. I still believe in his approach to debt, lack of credit cards, and paying cash for major purchases (a.k.a. houses, more on this in a future post). I do not agree with his investment advice, I am basically a “Boglehead” with slight modifications. My current portfolio as of July, 2017 is as follows.
Why do I need $100,000 per year in retirement? I arrived at this figure with a 3% withdrawal rate from my “number”. I figure 15-25% in taxes, will leave me between $75,000 to $85,000 to spend. FI includes the $3.3 million, a paid for house, fully funded kid’s college funds, and no other fixed expenses besides daily living and property taxes. I estimate living expenses of $3,000 to $4,000 a month once FI. The rest of the money is to travel and take care of unplanned expenses. I plan on having a passport full of stamps.
The largest part of our current budget is daycare; I cannot wait for public school to start. We plan on maintaining our current lifestyle regardless of income. We will be in the same apartment, drive the same cars, and shop at the same places. We have a list of goals that have to be accomplished before buying a house, so I anticipate renting for five more years.
Current FI Status and Goals
- Fully fund Backdoor Roths: $11,000/year
- Max out retirement options at work: $72k for ETF and $36k for Mrs.
- Buy a 4-year-old minivan in cash: $25k
- Increase emergency fund to 6x monthly budget: additional $30k to fund
- Finish 529s for each child by age of 4: $40k each child
- Taxable Investments: Freedom fund and college savings
- Save for a house
Where are we starting? Our current net worth is a hair over $80,000; this includes an emergency fund and retirement accounts. Our combined salary plus bonuses now that I am an Attending Physician will approach mid six figures. In order to stem lifestyle inflation, we have capped our spending number at $8,000 per month. Stay tuned, and keep me honest.
My goal is to beat the PoF 10-year timeline to FI, but I am planning on enjoying the process. The budget could be slashed, but speeding to FI is not my only consideration. Remember, I am on the Charlie Munger plan. I will be working at 93, so I will likely not spend the money I am saving. My purpose in pursuing FI is to have choices.
Working is only a chore when you have to be there.