It’s an enviable dilemma.
How does one retire when the job is so good, pays extraordinarily well, allows for ample time for family and hobbies, and you may be able to pass the business on to a child one day?
Thus far, his answer has simply been to keep on keepin’ on, at least for the time being. Financially, he and his wife have at least triple their original financial independence goal, and the new 8-figure goal can’t be too far off. Still, he feels at least a little bit of insecurity when it comes to money, which may very well stem from the destitute situation in which he grew up.
Enjoy this rags to riches story, and if you’re interested in participating in one of our three interview series, please download the most appropriate form for your life situation: FIRE Starter, FIRE Crossroads, or Post-FI Notes. To see other posts in the series, visit our Q&A archive.
Getting to Know You
Where are you on your financial independence journey? Have you crossed the halfway point in terms of net worth and/or passive income?
Hey Leif! Thanks for the opportunity to share my story and encourage our community to keep FIRE’N off.
First and foremost, we are not financial experts by any means under the sun. We are still trying to figure it out. So, I will be ok with some of the hits I will receive in the comments, LOL. We have been very lucky in our lives and choices and are considered super savers, consistently saving 30-50% of our incomes.
We, (my wife and family, because I couldn’t do it without them) came to the conclusion we were financially independent in 2010. I contemplated “what now” a lot that year and decided to keep working for many reasons.
1) I have always enjoyed my job.
2) It became a game to see how much we could accumulate.
3) We want to help my children and leave a future legacy as much as we can.
One of my goals in life (once I became financially literate) is to have enough income to provide $100,000/year. We reached that goal in 2010 w/ $2.5 million in liquid assets not including property.
Tell us about your household. How many people and at what ages? Are you supporting anyone outside of your home? Where do you live?
I am 51 and my wife of 30 years is 48. We have three children. Our oldest boy is 18 and a freshman in college. The middle child is a girl, 15 going on 30. Our youngest boy is 13.
We wish we had two more children, but for health reasons, we could not. Our children are our treasures and one of the main reasons we FIRE, but w/o the RE. More on that later.
I feel obligated to give some background before, as Paul Harvey used to say,”…the rest of the story”.
You see, we live in an amazing country. ANYONE can make it here regardless of color, education, affiliation, etc… My father joined the US ARMY and went to Vietnam. He spoke no English. His brothers made him join when he was 17 to get him off one of the Caribbean islands.
He drove his car through the living room of his girlfriend. The girlfriend’s father was the chief of police. Back then, I was told you did not want to end up in jail in a third-world Caribbean island. No Bueno!
So his brothers lied on the application and some English-speaking person for a few bucks took the test for him and off he went to boot camp.
Long story short, he met my mother in one of the Asian countries and I was conceived through the language of Love. Neither parent spoke any English and here I came, ready or not.
Fast forward. Parents get stationed back in the states out west and learn to speak very broken English. Their marriage was very tumultuous and only lasted 10 years. My brother and I lived in sub-poverty from the ages of 10-15. Here is a version of poverty from my own personal perspective.
Living through winters with no electricity in government-subsidized housing. The landlord would find out and give my father keys to the vacant apartments which had heat for us to sleep overnight.
Each year the Catholic church gave us clothing for the school year. Two shirts, two pairs of pants, 1 pair of shoes and socks and underwear. My brother and I would pick different shirts so we could share and wear a different shirt each day of the week.
The shoes wouldn’t last the whole year without holes in the sole, so we became experts at cutting out shoe inserts before Dr. Scholls got rich off of them, LOL.
There were many nights we made soup from ketchup packets taken from various fast food establishments. You would be amazed at how creative you can get when you are hungry.
I decided to get a job delivering papers at 10 years old to help buy food. I arose at 4:30 am to deliver by 5:30-6:00 am and make it to school by 8:00 am.
I remember feeling rich when I made $100-150/month. It was an odd right of passage when my father would ask me for money for gas and various sundries. I learned that money would buy a lot of bologna and ramen!
Eventually, life became too hard for my father suffering from mental illness via PTSD. He was in and out of various mental institutes and my brother and I found ourselves homeless, living in various homes while he was institutionalized. To say the least, we had a very experienced childhood home life.
My freshman year of high school was a disaster. I missed 97 days of unexcused absences due to our fathers and family situation. I think the HS administration knew my home life and for whatever reason, they passed me.
When I turned 15, I took school seriously and actually applied myself, realizing no one was going to make my life better unless I did, education was my only way out of poverty.
My Asian mother always said she wanted me to be a doctor. As she would say in her broken English, “doctor make good money, have good life…” I eventually graduated from high school and got scholarships for college.
I met my wife when we were 18 and 15 respectively and married at 21 and 18. We put ourselves through college debt-free by working full time and earning scholarships.
New Life Chapter. I decided to apply to dental school instead of medical school for various reasons. Dentists have more flexibility in creating a wonderful life more so than physicians IMHO. We also have to work with our hands and make a huge impact in improving people’s lives while being compensated handsomely, just to name a few perks.
Moving on, I received a military scholarship through dental school and proudly served 5 years taking care of America’s finest military men and women. It also checked the box of honoring my father’s military service and sacrifices by serving myself.
[PoF: As an aside, I am proud of my father, who, after graduating from dental school, enlisted in the army and served a one-year tour of duty in Vietnam.]
I was able to do a 1-year residency my first year in the service which allowed me to be very well trained in all aspects of dentistry. This training was crucial for where I was stationed and my commanding officer allowed my training to treat my patients as if I was in private practice.
I had no limit on what materials or equipment and the autonomy to provide the best care possible enhanced my military time. So how does that relate to finances? Well, obviously we had no debt after dental school.
I made a whopping $45,000 my first year and let me tell you, we felt rich! We learned to live very well with what my colleagues thought was a pauper’s pay. When I left the service, I purchased an existing solo practice and solo building of 40 years and have been here to the present day.
When each of our children were born, we paid for their college and started 529’s. Our oldest is using his 529 for room/board/living expenses. So, are we still supporting him? I would have to say yes since we still pay his insurance and have to restock our home fridge when he visits.
He tends to clean us out of food and beer. Fortunately for us, his favorite beer is Busch Light. Cheap and readily available. I’m sure his palate will expand once he finds all the craft beer joints in his college town. Let’s hope the mind exponentially expands more!
We live on the east coast. We have been very fortunate in our home purchases. Neither was purchased prior to being exposed to the FIRE concept. Our first home was purchased in 2001 prior to the housing bubble and we sold it 2005 for double the purchase price.
In what field are you working? How is your career going? What do you like best and least about your chosen profession?
I am a general dentist with an advanced education in all facets of dentistry. I had a wonderful education and residency, and mentors are who I thank for my career. I had no idea how fulfilling career-wise and monetarily my choice in dentistry would have become.
It has provided a life for my wife and children that I could only dream about as a child. Our children have all attended private school which has been a blessing to afford, and they have grown up in an atmosphere to appreciate what hard work and an understanding of career choices and finances can do to propel your life.
Two of the three want to be dentists and the third is looking into a career in Veterinary Medicine. Dentistry has allowed my wife and I to achieve our financial goals in a fashion to help our children reach their goals. And that may entail financial help through professional school and/or handing over the keys to the office for the next generation of our family dentist.
My experience in dentistry may not be that of others. I’ve been told I am what they call a “unicorn” or “niche” office. Makes no difference to me.
What I can tell you is that one of my mentors told me to start by treating my patients like family and friends. Check mark. Be a fee-for-service office and do no insurance. Check mark. See just a few patients a day and offer complete dentistry. Check mark.
These benchmarks brought about autonomy and freedom to love what I do. By practicing with those philosophies it has allowed me to purchase and pay for the practice and building within 3 years.
Other than the first year in practice, I have grossed well over $1 million/year w/ an incredulous 30% overhead. I can hear the naysayers already.
Year 10 into private practice, we had amassed $2.5 million in liquid assets (I do not include homes, business, properties, vehicles, etc for net worth) and I decided to never work a Friday again realizing the value of time through financial stability.
My average workweek since turning 40 is 27-30 hours. There is much-needed spare time for family and hobbies. As a result of not needing money (quick backdrop, we paid off our house at 40 and were completely debt free) I noticed how much less stress I had practicing.
We didn’t need the money. Practicing became exponentially more pleasurable, never treating patients as a paycheck. I never practiced with high-pressure sales techniques. It’s not my nature.
Ironically, not worrying about money in an odd sense made more money. This rolled into allowing the purchase of the best cutting-edge equipment and technology. It feeds into itself by allowing dentistry to be easier, better for the patient and allowing for practice longevity.
What I don’t like about my profession is the trend for young practitioners to go into corporate dentistry. Yes, there are some that are practicing clinicians doing great dentistry in corporate dental, but from what I’ve seen, it’s few and far between. I know this is going to make some of you dentists mad. Get over it!
IMHO, these young dentists come out of school with so much debt and have the mindset of instant gratification of wanting everything now, that they don’t take the time to build their skills and reputation.
I believe they are also not aware that there is an alternate path to practicing than what they are taught in dental school. They almost have no choice but to join a corporate Dental Management Services Model (DMSO). I say almost because they do have a choice.
Military and public service are great venues to pay for school. Do the research and come to your own opinion. What I am seeing is very poor quality work from most of these DMSOs.
It’s all about the bottom line, not the patient or quality of your work. Because of the pressure to produce numbers and volume you see, the quality of your work exponentially decreases. This leads to burnout and all the consequences associated with it.
Most leave and hop from one office to the next. It’s a shame, really. They don’t get to experience the fruits of staying in one location and fostering the relationships of repeat patients and family generations that truly enhance the practice of dentistry. Good fodder for further discussions.
Do you feel you’ve come to a crossroads of sorts? If so, tell us about it. What options are you contemplating?
Not really. It’s a personal choice to retire. I understand those who have had professions that had drained the life out of them and they could not wait to “get out” and retire, for various reasons. No judgement here.
I also feel there’s an underlying peer pressure for a lack of better term to retire early in this FIRE community. I’m not one of those. On my 40th birthday, my wife and I did some life reflections. We realized where we were financially and looked at the potential of continuing to do what we are currently doing. Earn, Save, and Invest (Yes I stole that and yes I read and love his site, maybe one day I’ll be invited to do his interview series as well. Yes, shameless plug.) It honestly became a game to earn, save, and invest more and see what roads it would lead to.
It has led us to becoming our own financial advisors. I fired my “money guy” in my late 30s, and we started investing for ourselves. This lead to managing and becoming our own plan sponsors and trustees of our 401(k)s and cash balance plans and the use of a third party administrators for actuarial and IRS forms. Both of which I learned about from financial books and websites, not my “money guy”.
In fact, I vividly remember the day he came to our house to discuss how we were doing. I had spent the previous year binging on financial media, MMM, WCI, JL Collins, and other various financial media to arm myself to ask questions about his fees and investing motives and why he has never discussed tax vehicles for my family and our income bracket to save and invest more.
His tongue practically fell out of his mouth as I used his financial vernacular to his dismissal. I also realized that day how emotional and motivational money can be. If we (dentists, physicians, lawyers, etc.) are smart enough to get into our professions and have a successful career, we are smart enough to manage or help manage our own finances rather than completely entrusting someone who has a conflict of interest with our hard-earned funds.
How is your nest egg invested? Approximately what percentage is allocated to stocks, bonds, real estate, and alternatives?
Our investments are pretty boring and I am working on what the perfect balance for our situation may be. And I’m sure it will constantly change as our lives and circumstances change.
Because the tax-deferred accounts have employees, I will preface the numbers with: I get 93.7% of the 401(k) and 97% of the Cash Balance Plan.
- Tax-deferred: 401(k)/profit sharing $3,469,801.91 (50%VTSAX, 20%VGLSX, 20%VTIAX 10%VBTLX)
- Cash Balance: $1,179,992.11 (50%VTSAX, 50%VBTLX)
- IRA’s: $200,113.88 (100%VTSAX) This IRA was leftover from my days of using an advisor. We switched to Vanguard and had it transferred in kind and are unable to contribute because of income and using our 401(k)
- HSA: $70,000 (This is just in cash mainly because I just haven’t gotten around to it. And yes I know I have missed an opportunity. By the time this is posted, it will have been taken care of so back off haters 🙂 Besides, as the country song by Thomas Rhett goes, “…ain’t nothing that a beer can’t fix”
- Taxable: $1,405,512.54 (90% VTSAX, 10%VBTLX)
- Cash: $700,000.00 (This is our rainy day fund as well as a bucket for purchasing property)
- Real Estate (which I do not include in net worth b/c of non liquidity), no mortgages, and according to Zillow and realtor (a patient of mine):Primary home: $1.3 million, Primary coastal home: $650,000, Golf rental home: $200,000, Coast waterfront rental 1: $400,000 Coast waterfront rental 2: $350,000 Coastal property for future rental build $70,000
- Office building, practice, equipment: $1.5 million
We are currently carrying a $150,000 HELOC @ 3.24% to fund our remodels of our rentals. My wife who is very debt-adverse wants to pay it off immediately. I keep trying to convince her to allow the renters to pay it off over time (use other peoples money).
It is a constant topic of discussion. Her mindset is that we cash flow more than enough not to carry debt. I would like to use other people’s money to pay it off through rentals and learn the tax advantages of real estate. This will be one of the questions for The Hive (i.e. you).
I do not include our children’s IRAs, 529s or other college funds in our net worth.
I also do not include automobiles or boats in net worth either. They are terribly depreciating ($320,000 vehicles, $95,000 boats, Yes, I am somewhat embarrassed) Ironically we have six vehicles and four boats. Three of the vehicles are classics that I have restored, with one of them (1971 K5 blazer) appraised for $106,000 purchased for $16,000 with $25,000 in parts/paint to restore. I have hand-built 2 of the four boats, remodeled the other two, and soon will start my fifth Maverick style skiff for those who know boats.
Are your investments primarily in tax-deferred, Roth, or “taxable” post-tax accounts?
401(k) 52.45%, taxable 21.8%, cash balance 17.95% , Cash 10%
I use Personal Capital for the percentages. Obviously, the cash % is off and higher because we do not have our business account tied to Personal Capital at this time.
Do you have investments in an HSA? How about 529 Plans?
Yes. We max out our HSA annually and have not touched it. Our plan is to use it to supplement medical costs when we retire. We save all receipts.
Our oldest is a freshman in college and is using his 529 that we started 18 yrs ago to pay for living expenses. We also fund 529’s for our other children. As a side note, we also pre-paid their college fund through the state we live in to cover tuition. Our oldest received a scholarship, so his tuition is paid for.
The drawback of prepaying tuition is that you can get it back, but with no interest. However, it is transferable to other family members. Thas is why we decided to do both for our children: 529s and pre-paid tuition.
Our middle child is already taking senior classes as a freshman in high school. She is set to graduate with her associate’s degree and will likely pick up a scholarship as well. We will end up with at least two prepaid college tuitions with no interest over those 18 years. Maybe an opportunity lost by not fully investing in only 529s? But we are comfortable with our decision to do what we did to ensure their education.
What has been your best investment?
My best investment would be marrying the wife I have today. Without her, I would not have the greatest treasures that bring me the most joy, our children. She has always supported our endeavors and been the voice of reason and devil’s advocate in decision making.
She is stunningly beautiful and charming with Busch beer taste. She can buy anything she wants but won’t. The kind of wife that drives a beater Honda minivan just to tick off all the other “fancy Dr. Wives.”
The second best investment would be taking care of oneself. If you can’t take care of yourself, how can you help others? Body, mind and soul. Don’t skimp on your health. No matter how much money you have, you can’t buy another body. Well, sort of.
And of course, surround yourself with your biggest fan base. Your children. Funniest, most entertaining, thrilling live 24hr movie you’ll ever experience. Because in the end, it’s not the money, it’s the experience and memories!
OK, ya, ya. I know you money voyeurs want to hear about the saucy nickel and dime stuff since this is a Financial Blog. But Leif gave us a long leash, so deal with the wishy-washy.
Starting a 401(k) plan as soon as I could have was paramount. Stumbling into a Cash Balance plan has really opened doors to funnel all the excess profits into a tax-sheltered vehicle. In a nutshell, getting started with any sort of personal financial education as soon as you can will lead to investing as soon as you can with some clarity.
Your worst investment?
Trusting financial advisors. Thinking they have YOUR best interest first. Don’t kid yourself. They’re really not your friends, they just love YOUR money.
Don’t get me wrong. I’m sure there are some that are truly your financial fiduciaries, but in my experience, they are far and few between. If you’re beginning, pay them for their advice, hence financial advisors. Fee for service so to speak. Not to manage.
Answer quick MicroSurveys for cash. Designed with convenience and timeliness in mind, 70% of surveys are answered on a mobile device in just a few minutes.
Physicians, Pharmacists, and other healthcare professionals are invited to join Incrowd today!
Into the FIRE
Numerically, what is your FI goal?
Our FI # is $10 million. Why? Because it’s sexy and sounds really cool!
Honestly, thats some arbitrary number I’ve had stuck in my head from a decade ago. Why? Because I’m an overachiever and have a few OCD issues, LOL. Realistically we are hoping to live off $100,000/yr.
I have no plans on retiring. It’s too much fun, and the money is pretty ridiculous. So, at some point in the near future, I am thinking about only working Tuesday, Wednesday, and Thursday until one of the children takes over.
When do you suspect you will achieve financial independence? Will you retire from your career once you’re comfortably FI?
Based on our modest $100,000/yr goal, we are already there. We have 5 more years of high school, so the plan is to continue 4 days/wk and re-evaluate the working situation when we are kidless. For some reason, I can’t fathom completely retiring with a child still in high school.
Maybe I need some therapy, or Beer-apy (did I just coin a new medical term?). Kudos to Pof and all the ones who have and are homeschooling and getting the best of freedom and family!
When I bought the existing practice of 44 years, the retiring dentist was 74 years old and had been practicing dentistry since he was 24. 50 years he practiced!
I remember thinking to myself, “why would he work so long?” Several years into owning the practice and getting to know his patients who have been with him for decades and their children and grandchildren, it was apparent he didn’t need the money as he came from a family of dentists and was married into “old money” of this little city.
He was one of the ones who remained healthy enough to practice doing something he loved doing. He loved healing his patients and a purpose to get up everyday and be appreciated by his staff, patients, and the community he served.
I think I understand and relate to him now that I’ve been here 23 years. Besides the practice success both monetarily and high job fullfilment, I’m worried I might become one of those doctors who will miss the respect and all the drapings that follow the title Doctor. Is it wrong or egotistical to think that way? I now look at the previous dentist with a sense of honor and awe that he was so privelaged to have had such a long and happy career. I’m still unsure whether I can walk away when the glass is so full.
What are your post-FI plans? How will your life change? What do you look forward to the most?
That’s hard to say. I feel like we have been living a retired life since 40 with the exception of childcare. I imagine we will continue to do hobbies and passions to more of an extent that we are now, again without the time constraints of children.
For instance, we love to cook exotic foods, go to concerts (man crush on Kenny Chesney) exercise, build boats and cars and travel the US. I have completed 4 Ironman Triathlons and numerous halves, olympic and century bike rides.
I also have a very nasty fishing habit that has made me very allergic to any kind of work on Fridays and weekends which would result into horrible hives that only a beer seems to fix. 🙂
We have always toyed with the idea of purchasing an RV. It would allow us to enjoy our slow travel and we are avid college football fans who love tailgating with our alm mater fans as well as bike and do triathalons in different parts of our country. Being that I grew up out West, I miss the mountains and luckily my family has embraced them too.
With that said, we would like to spend a month or two a year living in the mountains during the summertime, which may lead to purchasing property. One half of myself (the one easily influenced by beer), thinks the best of both worlds would be to continue to travel those summer months and not be locked into a property purchase. However, they’re not making any more land.
Have you made any major changes in your lifestyle or investments to accelerate your FI path?
We have a home on the coast where we spend 10 to 12 days per month recharging. We have always discussed renting it while not in use. Unfortunately, my wife is not keen on sharing our home with total strangers. Even after I showed her the $$$ numbers and potential to have passive (still active IMHO) income.
The answer was still NO, because as she would say, “we don’t need the money”. It took several years for her to realize the potential income in our area that lead her to purchase two other homes on the same street and waterfront for vacation and short term rentals.
I would not consider this a vehicle to accelerate our FI path since I consider we have arrived, rather, a side gig to earn income while being “retired,” (here’s where internet retired police enter comments). Other homes in the same area are earning $50-$70K/year. Our goal is to have 5 homes to manage when we offically remove ourselves from dentistry.
I’ve always read you should retire “to something”. Because I’m very poor adverse, this would potentially allow earning income (again something you shouldn’t do if your retired, LOL) so we may not have to touch any of our savings and allow us to figure out what in the heck will we do with our RMD distrubutions (first world country problems).
Are you facing any unique challenges making FI or RE more difficult?
Yes. Making RE more difficult. Or simply just (R) retiring. I have a 30 hour/week work schedule, that for the most part it is very relaxing, fun, and intellectually challenging, and this year we will gross over $2 million. My work schedule and lifestyle allows us to do whatever we want for the most part. How do you give that up and how do you give up that yearly lottery ticket?
What advice do you have for others who are seeking financial independence?
Without hesitation, start saving and investing as early as you can. Read and ingest financial literature from a fire hose. Knowledge is power and leverage, and if you have a family, it is one of the best forms (FI) of offense/defense for their lives.
Also try and find a balance with your time. Money isn’t everything, and I know patients and friends worth well north of 7 figures who are miserable. With that said, as country singer Chis Janson says in his song, “money can’t buy happiness, but, it could buy me a boat, it could buy me a truck to pull it, it could buy me a Yeti 110 iced down with some Silver Bullets.”
So live life one day at a time, and spend some money on things that bring a little joy. Speaking of joy, don’t compare yourself with others. As I’ve read somewhere, “comparison is the thief of joy”. Do you and find your own path, but advice from others sure helps.
Finally, is there anything under the sun that you’d like some help with? The hive mind would be happy to weigh in.
1) I’m battling with the concept of taking money off the table if you’re already there. Not sure I completely buy into that. Interested in what The Hive has to say with the allocation of stock to bonds that we hold. Should we transition more to the bond side since we have a large shovel and are kind of “already there”.
2) I’m very concerned with healthcare and where it is going. My dear wife has an autoimmune disease that results in our household carrying the best insurance available deducted through the business.
As a control freak (daily beer is used in lieu of Prozac), I’m not convinced the government has our best interest in providing affordable care for wealthier families with pre-existing conditions. By working longer, generating money is my buffer for when the poop hits the fan with healthcare.
3) As I mentioned earlier with the kids, I can’t see myself selfishly retiring and selling the practice when we have two children who want to be dentists. There is no guarantee that that will happen as competition for dental school seats are fierce, but I feel obligated to hang on for them in case it does come to fruition.
I’ve even gone as far as putting in our will that if I pass away, the building and equipment shall be maintained in good working order for them until such day arrives. They would have such a leg up, financially speaking.
And since I want to gift it to them, one of my requirements would be to assist the other two siblings in a manner that seems commensurate to parents helping a child out. We don’t want to show favoritism (although I do have my favorite and will never tell). Just kidding!
4) In a world and an economy that is shifting so quickly, how does one feel $10M will be enough. It may be enough today, but what about 10 years from now where healthcare may be so unattainable even for the weathier citizens (dentist, physicians, lawyers, etc).
And of course, there’s the elephant in the room of taking care of aging parents, spouses, and even children that may come down with an unforeseen illness. Talking to a banker who just retired and built a home a few houses down from us on the coast, he told me that whatever number you have in your head to retire, quadruple it, and you should be safe. $40M, REALLY? Oh my, I need a beer!
Cheers, and many thanks in advance!
PoF: Catch all the future interviews from those just getting started, at a crossroads, or at the end of their FI journey with a free subscription to Physician on FIRE.
I thank today’s interviewee for sharing their story, and I’ve shared my feedback privately with them. I wouldn’t want my opinions to influence yours. Please give your take and answer any questions they have had in the space below!