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FIRE Starter 013: Just Starting Out in Residency

Everyone has to start somewhere.

That old adage still rings true: the best time to plant a tree was 20 years ago. The second best time is right now.

For our interviewee today, that tree is getting planted as we speak. But hopefully, their frugal nature and a high-paying specialty will combine to make financial independence (not necessarily early retirement, as the main earner of this couple has just now finished medical school) a reality.

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.

We have just barely started our financial independence journey. We still have a long, long way to go. My husband just graduated medical school and will be starting a surgical subspecialty residency in June.

Our net worth is the lowest it has ever been but hopefully we will only go up from here. Our net worth number is -$281,541 — thank you, Empower!

Most of our debt is due to buying a $260,000 house for residency. If we had graduated 2 years ago it would have been about $170,000, but that’s life. My very generous in-laws gave us $30,000 to put down.

The plan was to rent during residency, but 6 years is a long time and we couldn’t find a house to rent in a decent, safe area that was less than $2,000 per month.

We have 2 young kids and couldn’t bear living in an apartment anymore. My three-year-old needs a yard, not a parking lot! Our mortgage, including insurance and property tax, now is $1,600.

We have been extremely fortunate so far and are looking forward to working our way back to broke. Right now $62,000 per year sounds like a lot of money!


Tell us about your household. How many people? Are you supporting anyone outside of your home? Where do you live?

We have two children, ages three and eight months. My husband is 28 and I am 27. Yes, we had children very young! Having children in medical school with hardly any income was difficult, and that’s an understatement.

But my husband and I both came from families in which our mothers were relatively old when they had us (35 and 42) and we both knew we wanted to be young parents. We want to enjoy having older kids and still be young enough to do adventurous things.

Our children have no idea that we are poor. We have lived in a dank, two-bedroom apartment for 4 years and the oldest believes it is the nicest place ever. We even had a pool!

We aren’t supporting anyone else outside our home, but I suspect we may be supporting my parents in the future.


In what field are you working? How is your career going? What do you like best and least about your chosen profession?

I work for a blog doing social media and editing articles. It is the BEST job. It’s remote and flexible, so I can work 15-20 hours a week without having to pay for childcare.

I usually work before and after my children are asleep. I make about $1,500 a month. That may seem insignificant but just this small amount of income during the last year and a half of medical school was huge for us.

It paid our $870 rent and then some! I hope to stick with this gig for awhile. It’s a nice break from my mom job and helps me feel accomplished.

My husband is starting ortho residency.


What is the most challenging obstacle to making progress towards financial independence?

Watching our net worth go down every new semester for the past 4 years has sucked! But we were lucky to graduate with just $85,000 of student loans.

How did we graduate with so little? With a family of 4? Two things: cheap Texas medical school, with a $15,000 scholarship, and my in-laws paid $30,000 of tuition.

Originally our goal was to graduate with $70,000 of debt or less, but with no interest on our student loans, we decided to take out the max and just keep it in our savings account so we could start residency with an emergency fund.

Additionally, COVID has had major repercussions on our family and my husband’s medical education (an online anesthesia elective is not going to give you the full experience).

However, we have benefitted from stimulus checks, child tax credits, 0% student loan interest, virtual residency interviews, canceled STEP 2 CS, and more. We conservatively estimate that COVID has saved us at least $15,000.




How is your money invested? Approximately what percentage is allocated to stocks, bonds, real estate, and alternatives?

I have $1,600, no $1,500, no $1,400 in a Roth IRA that keeps going down. Currently, 100% is invested in VTSAX and it will be that way for a while. Once my husband starts residency, we plan to contribute 8% to his 403(b) to maximize the employer match.

We also throw at least $100 each month to my Roth IRA. That will be saving 10% of our income. We also give 10% to our church. This is our plan going into residency but we will probably have to adjust once we start.


Are your investments primarily in tax-deferred, Roth, or “taxable” post-tax accounts?

Roth 403(b) and Roth IRA.


Do you have investments in an HSA? How about 529 Plans?


We don’t have 529 plans for either of our children. We hope to start one for each child once we are done with training.


What has been your best investment?

Our best investment has been reading up on personal finance since the first year of medical school. We have always had a plan for our student loans.

We have lived very frugally for the past 4 years—our annual spending is roughly $35,000. We do lots of free things with our kiddos; bike rides to the playground are almost a daily occurrence in our home. Maybe one day we can take them to Disneyland!

Our second best investment was going to a cheap medical school. We knew this going in. My husband aimed for Texas schools despite being out of state.


Your worst investment?

I am not sure how buying a $260,000 home during residency will pan out. Our combined income will be around $77,000 and my in-laws gave us $30,000 to put down so our mortgage is a bit less than 3x income. But it’s still a little unsettling.

We love the house and we will be there for at least 6 years, but lots of people say don’t buy in residency. (We may have just bought at the top of the market too.) We will see how this “investment” turns out!

The real worst investment was dogecoin. My husband bought a few hundred dollars of dogecoin as an undergrad in 2017 for no particular reason (he’s not typically a YOLO type). He wised up and sold it a few days later, which was smart. But if he had held on to it it would have been worth $110,000 at the top. Dumb all around.



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FIRE Kindling



What attracts you to the FIRE movement? Do you think you’ll retire early when you’re in a position to do so?

Right now, the FI is significantly more important to us than the RE. Ortho residency is grueling and my husband wants to use his skill set throughout a long career. Financial independence will allow us to prioritize location and lifestyle, rather than paychecks in life after training.


How do you anticipate your life changing post-FI?

We hope to have the flexibility to do (sustainable) international surgery and education once our kids are older.

Maybe we could take some vacations other than to our parent’s house, too!


What steps have you taken to hasten your time to FI?

So far, we’ve just been educating ourselves and living frugally. We’ll try to minimize lifestyle creep after we finish training so we can dramatically increase our savings rate.

We are very debt-averse, so we hope to pay off our loans in the first 1-2 years out of residency, even if it’s not mathematically the best use of our money.

Growing up, I saw my parents leverage everything and they still do to this day, with huge cars, a barn, and home loans. My parents are almost in their 70s and are still paying through the roof in loans.


Are your friends, family, or coworkers aware of your interest in financial independence?

Yes, our families know of our financial goals. My husband started saving for retirement as a teenager… who does that?


What advice do you have for others beginning their own FIRE journey?

Educate yourself, spend less than you earn, insure against catastrophe, VTSAX and chill. We are just starting out, but it feels empowering to know what we will do with our loans and future income.

Just reading this blog and others like it will give you more than a head start.


Finally, is there anything under the sun that you’d like some help with? The hive mind would be happy to weigh in.

Have I mentioned we are just starting out financially? We are naive and have probably done some dumb things.

Husband here: I tend to be overly austere. I recognize that residency will be challenging for our family and want to loosen the reins a bit. Is living off of 80% of residency income reasonable? We are in a relatively low cost of living area. Should I invest a bit more in my family’s fun fund?

What advice do you have for us? Does contributing to both a Roth IRA and the 403(b) work?



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.


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5 thoughts on “FIRE Starter 013: Just Starting Out in Residency”

  1. We are an internist couple. Residency completed 16 years ago. The remarkable thing is that you have figured out your priorities and future plans. Just get through ortho residency for now and things will fall into place.

  2. Subscribe to get more great content like this, an awesome spreadsheet, and more!
  3. well done! you probably already know this, but take it from me who lives in NJ- stay in Texas or some other no income tax state! I just paid $70,000 in NJ state income tax last year- I hate this state! Once that high income comes with your hubbie as an ortho attending, our tax system really penalizes you including individual states. I regret not being financially literate and settling in this godforsaken state as it really hurts our ability to gain financial independence.

  4. Find the amount of spending that feels like you have a great lifestyle. Moonlight only as much as the extra money helps your quality of life.
    If you feel like you have a great lifestyle during residency years then when you 10x your income, you will have a mich easier time keeping expenses low. Why spend more if you’re already living a great lifestyle, right?
    The amount you can save as a resident can be made up for in 2 paychecks as an attending.

  5. First of all, congratulations on where you are! You are so far ahead of most people just tracking your finances and having a solid plan. You are so far ahead of where we were at that age! We had two kids in medical school and two in residency. This was not easy and is not recommended, although there is some payoff later in life being younger parents that you will also enjoy.

    Just writing to really encourage you to start those 529 plans as soon as you can and not put it off. Sounds as if you have very generous in-laws so perhaps they will contribute and/or replace future birthday and holiday gifts with contributions. We have been able to fund each of our children’s undergraduate and in some cases graduate education with college saving accounts and it is huge gift to start them off with no debt early in life. Also, each of them were able to get at least some form of scholarship and were therefore able to withdraw some of the 529 money to help them get started after graduation. My wife and I believe strongly in the value of education and it was a life accomplishment to provide this for them and it has made a difference.

    Lastly, some purists will disagree, but I never count our home (mortgage or equity) in net worth calculations. Having bought and sold multiple homes we lived in over the years, we generally seem to always break about even once all the transactional costs are counted. It is extremely likely that in 6 years you will be able to sell your house for more than you paid and at least break even as well. Focusing your net worth tracking on liquid/retirement investments makes more practical sense and won’t bog you down looking at a large negative number for the next few years that probably will never be relevant to your financial reality. It is mental accounting for sure but FIRE is a long journey and positive encouragement is important.

    Again, congratulations on your great start and wish you and your family the best!

  6. First of all congrats and best of luck.
    I was an ortho resident 25 years ago and had 2 little ones as well during residency.
    It may seem hard to believe but you are in great shape at your stage .
    I would suggest only focusing on the family and the surgical training for the next 5 years.
    Pay the monthly mortgage, get any employer match and continue to do fun cheap activities.
    I would not suggest trying to save every extra dollar. Focus on small things that would make your relationship and home life less stressful and more enjoyable as a young couple .
    Pay a babysitter, go on a date night, join a local pool, take a day trip, maybe even get a once a month cleaner ,( did I say go on date nights ) – these things will give best best return on your money by far.
    I have lived it and it’s essential.
    Best of luck


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