It’s often said that multiple streams of income are not only helpful, but perhaps necessary, for most folks to achieve financial independence, and to make their dreams of retiring early come true.
Our interviewee today has a heck of a second income, and that side hustle is making it possible for him to have a greater than 50% savings rate.
At that rate, he’ll be able to FIRE in no time, which may be something he’s interested in as he begins to settle down and start a family.
If you’re interested in participating in one of 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 reached a positive net worth? It’s OK if you haven’t! Most of us started out in the red.
I am an orthopedic surgeon in private practice on the west coast roughly two years out of training. My current net worth is roughly $800,000.
I started reading more about FIRE and personal finance with all the extra free time I had during my final year of training during the start of the COVID-19 pandemic.
Tell us about your household. How many people? Are you supporting anyone outside of your home? Where do you live?
I am planning on getting engaged and moving in with my long-term girlfriend later this year. I currently live in a multi-unit home that I bought together with my mother after training.
I help cover half of the $4,000 mortgage and will plan on continuing to do this after I move out later this year. My girlfriend and I have not yet decided on whether we are going to buy or rent. She is also a high-income professional.
In what field are you working? How is your career going? What do you like best and least about your chosen profession?
I am an orthopedic surgeon. My career is overall going well, and my practice has been slowly growing. I love the increased sense of autonomy being outside of training and the gratitude that comes with helping patients from different types of orthopedic ailments get back on their feet.
What I dislike most about my job is the amount of call I am currently taking. I would like to decrease my call burden as I get ready to start a family.
What is the most challenging obstacle to making progress towards financial independence?
My biggest obstacle is undoubtedly my student loan burden that I am paying off aggressively. My burden is currently $207,000 (down from $287,000) post-training.
I have refinanced and my current interest rate is 3% with monthly payments of $5,000 with a five-year repayment plan, of which I’ve completed a year and a half. I am frugal in nearly all other aspects of my life and have always made travel and experiences a priority instead of material things.
How is your money invested? Approximately what percentage is allocated to stocks, bonds, real estate, and alternatives?
- Taxable Account = $86,000
- Roth IRA = $61,000
- IRA = $50,000
- 401(k) = $10,000
- Deferred Pay Call Compensation = $25,000,
- Same Day Surgery Center Partial Ownership = $45,000
All low cost index funds, no bonds.
I have an investment property from residency that I lived in but continue to rent out to other residents. I’ve been managing this property myself and fortunately have had a 0% vacancy rate for the entire 3 years I have been renting it. I don’t make any cash flow on this property after maintenance costs but do increase rent every year and have held onto it with the rationale that I am continuing to build equity.
Current value: $625,000, Mortgage Loan: $260,000 Current equity: $364,000
Current property that I bought with my mother: Value: $1.3 million, Mortgage Loan: $670,000
Do you have investments in an HSA? How about 529 Plans?
I do not have an HSA. I started a 529 plan with only $1,000 in it for my nephew.
What has been your best investment?
My best investment has been real estate with both my investment property and current property benefiting from the bullish market.
Your worst investment?
I jumped on the Bitcoin bus at its maximum peak last year; fortunately, I only invested $5,00, but I have lost about 20% currently. I do not truly consider that an investment.
What attracts you to the FIRE movement? Do you think you’ll retire early when you’re in a position to do so?
As I get ready to start a family, I am realizing the true value of time and not falling trap to the “hedonic treadmill.” I am also drawn to autonomy over my time.
I don’t think I would completely retire from orthopedics when I am in a position to do so, as there are aspects of my work that I truly enjoy. I would want to tailor my work to include more of these things.
How do you anticipate your life changing post-FI?
I see myself spending more time with my family and pursuing my passions outside of medicine. I also hope to travel more. I want to dedicate more time to my own mental and physical health, too.
What steps have you taken to hasten your time to FI?
I have tried my best to live well below my means and continue living like a resident while still investing my time and money in things that bring me true joy.
I have also taken on a consulting side gig that currently takes up a couple of my weekends each month and many weeknights, but has provided me with an additional $300,000 annually. This has been one of the smartest decisions I have made post-training from a financial standpoint, and it has provided me with leverage both in terms of my job opportunities as well as investment choices.
This lucrative side gig has allowed me to keep my savings rate well above 50% monthly.
Are your friends, family, or coworkers aware of your interest in financial independence?
I openly discuss this with my family and friends. They are all supportive.
What advice do you have for others beginning their own FIRE journey?
I don’t believe I am quite in a position to offer advice as I am still trying to figure this out, but I would say that knowledge is power. I am an avid reader and spend most of my time outside of work reading about personal finance and development.
Finally, is there anything under the sun that you’d like some help with? The hive mind would be happy to weigh in.
My biggest dilemmas at the moment are what to do regarding my investment property and my student loan situation.
Should I continue to hold on to my current investment property despite the lack of cash flow or does it make more sense to sell it and use the equity to pay off my student loans and free up the extra $5,000 a month for other investment opportunities? Both my student loan and investment property interest rates are 3%.
Lastly, based on my current situation, do you think it is possible to reach FI in 10 years?
Thank you for your time. I am a huge fan of your work. Reading your “Sunday Best” has become a part of my Sunday morning routine.
[PoF: Glad to hear it! Be sure to follow Ether to FI’s journey. He had a goal of FI within 10 years and has been updating his progress for nearly 5 years now.]
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!
Again, if you’d like to partake in a future Q&A, please download a FIRE Starter, FIRE Crossroads, or Post-FI Notes interview form.
10 thoughts on “FIRE Starter 012: Orthopedic Surgeon With a Lucrative Side Gig”
How can you NOT expand on the side gig?! Haha, enjoyed the interview; but seriously, would love to hear more about this. I’m also a young Ortho surgeon, first year out of fellowship (adult recon) so I can relate to you in many ways. Thanks!
I also own rental property on the West Coast and like you, the value is all in the appreciation, not in the cash flow. I have a cash trickle in a good year, but no significant flow.
I advise you to take a sobering look at the reality of Capital Gains tax in your state. I am in California, and speaking in broad, general terms, the profit I would make from selling a property would be added to my taxable income for the year. Which means that the Real estate profit would push above the highest tax threshold and as the ‘last dollars in’ would be taxed at a very high rate.
I am way older than you and my FI is visible on a near horizon. (I missed the boat on the RE part). Personally, I am planning to sell the property that I want to sell, in a year of non income after I stop working. For me, if I wait a couple years to sell after working, I will get to keep way more of the proceeds.
I get it, you are not planning to sell yet. Or to stop working. All the same, I encourage you to learn all the painful details about Capital Gains in your state. The knowledge will feed into your decision on what to do.
Yes, tell us about your side gig!! Your RE investments are wise, and it seems you have a good handle on that considering seeing the amount of equity you’ve built up. I would recommend that you figure out how to actually make cashflow from the rental you have for the residents; you state that you raise the rents (that’s smart), but you need to reduce the expenses somehow. A rental that doesn’t cashflow will turn into trouble someday…. Overall, at two years out of residency with a NW of +800k, you’re amazing!
That is a very lucrative side gig doing consulting. I would be interested in hearing about it too.
As for the property, if you continue to build equity, it probably is worth hanging on to. On the other hand, if you find a great MF deal that can give equity and cash flow, you might consider pulling the trigger. The question is do you need the cash flow right now though? It really depends on your stage in life and your need.
I am also interested… what is this side gig?
Came here to ask the same thing about the consulting side gig..
I’m curious about your consulting side gig. That is super lucrative. Wondering if I could do the same. More details would be great. Also curious to hear PoF advice/answers to your questions. I have chosen not to pay off my school loans that are at less than 3 percent interest and instead invest passively in real estate. This is simply based on numbers and coming out on top when I subtract the loss of money from school loan interest and the much larger gain through passive real estate investment. I have 2 active properties as well. I do think that cash flow is important but you have to look at the big picture and weigh out your options of keeping vs selling your investment property. This will likely depend on whether you have another investment lined up that you see as better and is aligned with your financial goals.
My advice was to be in no hurry to pay off those loans at <3% interest, and to evaluate the rental property from an objective point of view. Run the numbers and see if the metrics make sense to continue owning it.
Properties don't necessarily need to cashflow to be profitable, but there might be a better use for that money, and there may be opportunities to create cashflow if the rent being charged is below current market rent (which is up a lot in the last year or two).
What kinds of passive real estate investments are you involved in? I’m looking into some syndications. I have two properties with a property manager but want to be completely hands off.
Every one of them, along with the returns I’ve seen from them, can be found here.