What You Don’t Know CAN Hurt You

M.D. Financial ServicesI’ve learned so much about life and money in the last couple years. When I look back to mid-November, 2014, I was entirely unaware of the world of personal finance blogs. If someone were to mention MMM, I’d assume they were either referring to the Minnesota Mining & Manufacturing company (also known as 3M) or maybe the similarly named delicious chocolate with the thin candy shell.

Late November that year, I would discover Mr. Money Mustache, and within a couple months, The White Coat Investor. I would read more books, put my investments under the microscope, and start making projections for the future. And a glorious future it would be.


What You Don’t Know CAN Hurt You


But there was so much I did not know two years ago.


  • I didn’t know that the aforementioned and other great sites existed, and that they would prove to be so insightful and invaluable.


  • I didn’t know how much money I spent in a normal year. Given the winding career path I had been on, I didn’t know what a “normal year” might even look like in terms of spending.


  • I didn’t know that I would soon be able to afford an early retirement. Two years ago, I would have told you I’d probably retire sometime after our boys graduated from high school (i.e. after 2029).


  • I didn’t know I would want to retire quite so early. It wasn’t until I started studying for a bogus MOC exam that I started to wonder.
  • When my wife asked me what in life I found most stressful, every answer was job related. She was surprised, and I suppose I was, too. I’d never thought much about it. When the job isn’t optional, it’s easy not to focus much on the negatives.


  • I didn’t know how to harvest tax losses, how to best utilize a donor advised fund, the difference between a SEP-IRA and a solo 401(k), or when I could access a 457(b). This list could be much longer, but you get the gist.


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An Interesting Conversation


Not long ago, I was chatting with a physician couple I’ve known for years. As doctors often do, we started talking shop. We talked about the good, the bad, and the ugly. They have no idea I have this site or the requisite knowledge, but it kinda felt like they did. I get this feeling more and more these days. It’s not because my secret is out.

No, it’s just that I’m more interested in listening to other people’s ideas on the topics I discuss here, and I may tend to ask questions or make comments that steer the conversation that way. It’s not intentional, but perhaps natural, given where my head is at these days.

After our discussion, I felt like my friends were right where I was a couple years ago, but perhaps with a little more job dissatisfaction, which seems to be sadly more and more common among my colleagues. This is a two physician couple the same age as me, with kids about the same age as mine. Their lives are very busy, like mine. Just as I do, they wish they had more time.

I was a little sad but completely understanding when they told me they were counting down the years until they could retire.

I was quite interested when they told me how they had seriously considered leaving to do some work in Australia or New Zealand.

I was rather surprised when they said they didn’t think they’d be able to fully retire when they would have an empty nest, a situation they won’t face for more than a decade.

I should not have been surprised by any of this. It wasn’t long ago that I shared many of these same sentiments and beliefs about what the future held for my career and my family’s finances. Like me a couple years ago, I think there’s a lot they simply don’t know.


how long ’til we get to the top?


We’re taught nothing about personal finance throughout our formal education. When we finally earn a healthy salary, many of us are swamped with debt, learning the nuances of practicing medicine in the real world, and trying to balance it all with an active family life. We’re living in new cities, moving into new homes, and making new friends. There’s hardly enough time for a proper shower, let alone a self-directed personal finance education.


What You Don’t Know Can Hurt You


We didn’t get too deep into the conversation with my friends. I don’t want to come off like an authority on the subject, even if I secretly am. We had catching up to do in areas unrelated to personal finance, so we didn’t dwell on the particulars of their situation.

I don’t know exactly what this dual-physician couple knows or doesn’t know regarding their own finances, but I think it’s best for anyone who doesn’t want to work indefinitely to know the following:


  • Net Worth. It’s difficult to Mapquest directions to your destination if you don’t know your starting point. I like Empower for this, and I especially like it when you sign up via my link. Half my profits go to charity if I get a referral fee, FYI. Empower can pull information daily from all your different investment, bank, and credit card accounts, and allows you to add items such as property. All the cool kids are using it. But is anyone actually using Mapquest anymore?


my portfolio beating the S&P 500!


  • Annual Spending. I track my spending via Mint.com and I don’t give a rip if you sign up or not, because there’s nothing in it for me. But it does mostly automate the process, and I’ve been happy with the user-friendly interface, so I highly recommend it. I also recommend accumulating points and miles to drastically lower your travel expenses.


  • FI Number. Use your knowledge of your current annual spending to estimate your spending needs in retirement. Be sure to factor in expenses that might be new, like health insurance, and expenses that will go away, like professional attire and some commuting costs. Also, inflation will be a significant factor if you’ve got a long ways to go. 25 x anticipated annual expenses = your FI number.


  • Investment Fees. Transparency is one of the buzzwords of the 2010s and it’s imperative that you know what your total investment fees actually are. Investment Fees will cost you millions if you don’t take steps to minimize them.



  • Your Partner’s Wishes. If you are married or in a long-term relationship, it’s important to be on the same page when it comes to finances and career goals. Children, and what’s best for them, may be a consideration.


The Power of Information


Without this knowledge, it’s impossible to make realistic plans or projections. An informed decision requires information. If you have a good idea of the suggested bullet points above, you can actually start to formulate a ground plan for your future.


Ka'anapali beach
somewhere over the rainbow…


The information is out there. It’s right here, in fact. It’s at dozens of other blog sites much like this one, occupying our own little corner of the internet. The trick is getting the information into the hands of the people who could really use it, the people who might never wander down the side streets that lead to the corners that our sites occupy.

I wonder if my friends have a handle on those important nuggets of knowledge outlined above. My guess is they’ve got a few of the pieces to the puzzle, but with some pieces missing, and none put together, they can’t see the big picture. If they did, I don’t think they’d be talking about doing locums twelve years from now if they’re already counting down the years.

If you can live on half, you can start from zero and be a few years shy of financial independence in a dozen years. And they’re definitely not starting from zero. But how do I best tell them all of this?

Perhaps we’ll see them again, and we may revisit the idea of an early retirement, and start to get into more details. My wife and I might be more forthcoming with our tentative plans, which we alluded to, but gave far from a full disclosure. I may direct them to some websites I like that focus on the subject at hand.

Someday, I might even tell them about my own website.


I've got my 2 acres of non-leveraged, crop-producing, cashflowing farmland via AcreTrader. Get yours.


Do you know anyone that might benefit from a little more knowledge and clarity? Do you talk with your friends and colleagues about personal finance, the sites you read, and the knowledge you’ve gained?


37 thoughts on “What You Don’t Know CAN Hurt You”

  1. Great article, thanks for sharing.

    I agree that when expertise doesn’t matter, you shouldn’t pay for it. Studies have shown that actively managed mutual funds tend not to beat index funds. In the mutual fund world, expertise does NOT matter.

    That cannot be said for a lot of other areas. For example, if your neighbor could remove your gall bladder as well as a surgeon and for a lot lower fee, you might let him or her do it. However, in the medical world, expertise does matter. When expertise matters, cost is less important than value.

    If an expert can bring me a consistent return that beats the stock market net of their fees, then I would tend to care more about the value (net return after taxes and fees) than I would about the fees themselves.

    Just a different way to think about investing for those who lean toward creating passive income and equity growth in retirement instead of the traditional race to death retirement model in which you accumulate a nest egg primarily through earned income and then withdraw 4% or so per year hoping to die before you consume your nest egg.

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  3. Great post, PoF. This personal finance “hacking” community of ours is a powerful one…not just because of the specific techniques that get batted around but because of the general philosophies espoused. Altogether, they make for a potent cocktail of doing life differently – and better – than conventional wisdom allows.

    Spreading the word seems to require some deftness. It’s surprising how committed to convention many people are when it comes to things like personal finance.

    Nice work on this post, in keeping with your conventions of quality!

    • Gracias, Libre!

      On a finance forum, the question was raised, are those who are content to live on just $50,000 or $100,000 A) Lying B) Easily contented or C) Unimaginative?

      My response:

      Lying? Possibly to themselves as an adaptive behavior to help them accept a lifestyle they can afford. I would guess this is a small percentage.

      Easily contented (or simply content)? This is probably the best answer of the three options. Many who have been on the hedonic treadmill at some point have realized that having more and better things (or “grander” experiences) can be a somewhat fleeting high that leaves you wanting even more. There’s nothing wrong with nice things or grand experiences, but when they become the norm, you need even nicer things and grander experiences to get a dopamine release. When you have something you enjoy, like heli-skiing, Make it a Treat. Do it every weekend, and it loses its luster.

      Unimaginative? Quite the opposite, I would say. It doesn’t take an active imagination to spend lots of money. Conversely, having grand adventures or having everything you could want without spending a ton of money takes some level of creativity or ingenuity. I’ve seen some some good examples of this among the FIRE community. I liked Jeremy & Winnie’s post on spending 4 months in Europe at a cost of $30,000. Not a barebones budget, but not extravagant, either.spending 4 months in Europe at a cost of $30,000

  4. Good post PoF. We spend so much time thinking and writing about personal finance, it’s easy to think the rest of the world is also clued in. I have learned that it is far from true. Most don’t care and live about their daily life and hustle along without any long-term planning. They want to enjoy their parties and weekends and at work, they are often complaining about the boss or gossiping about colleagues near the proverbial water cooler. I have also learned to complain along and conceal my inner optimism – ‘cos misery loves company.

    Since I bring my own lunch to work (unless company pays me to entertain clients :-)), I stay away from such conversations. I finally realized FIRE is not for everyone, and if you have reached FI, then generally keep about your own way and unless you are asked, stay away from giving any advice. I started my own website so I can evangelize and explain to interested seekers and not waste time with colleagues, friends and family who aren’t even prepared to get the basics right. Even if you explain, eyes gloss over and people lose interest. Instant riches is all many want to hear. The very idea of retiring early means you hit the jackpot – lottery or major inheritance or stock options – that’s what most of workforce and my larger family believes. My latest post on FIRE being much harder as a couple explains how the odds are stacked.

    • Great point. We have our sounding board right here on the screen. And the audience has chosen to listen to us.

      You’re right; most people won’t be interested in hearing about LBYM, passive index funds, and the “magic” of compound interest.


  5. You’ve probably read my stock line. It goes like this: Mr. Groovy told me he was working until he was 67, to which I replied “over my dead body”. We pulled off FIRE at the ripe ages of 55 & 57.

    We’re very willing to share information but only to those who have an open mind. Unfortunately the people we love the most who are hurting financially have too much hubris to consider another approach. We don’t try to influence them because they don’t want to change.

    I love how your wakeup call came after studying for a bogus exam. Keep up the great work, congratulations on all the exposure you’re getting –and thanks for adding our website to your blogroll.

    • You are very welcome, Mrs. Groovy!

      I’ve said it before and I’ll say it again: my early retirement is some combination of “I have enough” and “I’ve had enough.” It’s probably more the former, but some days it’s the latter.


  6. I think it’s also important to remind ourselves that plans change. Two years ago, your plans for life were probably very different from today. Ten years from now, I’m sure your plans will be different as well.

    I like to remind myself that because we do this so young, financial independence is only just the beginning.

    • For sure, Mr. T.

      I may be the same person, but my priorities and desires have changed quite a bit over the years. That’s one reason I’m shooting for finanfinancial freedom (more than financial independence). Someday, I may want a higher standard of living than I currently enjoy.


  7. you said “Also, inflation will be a significant factor if you’ve got a long ways to go. 25 x anticipated annual expenses = your FI number” How do you factor inflation into this calculation?

  8. Great post! The good news is that even before 2014 you were probably frugal and financially responsible already. All you needed was to see the light and bring the ship home over the remaining few years. A lot of folks will need more time to reach FIRE.
    I try to get some mini impromptu sessions about personal finance into our lunch conversations at work: Backdoor IRA, max out the HSA, Roth 401(k) vs. regular 401(k). Quite intriguingly, despite the collective finance rocket science knowledge assembled around the lunch table, people never thought about their personal finances very much. I would like to refer them to my blog and other blogs around here in the FIRE crowd (e.g. https://www.physicianonfire.com/20steps/) but since I’m still working incognito I will hold back. In the end, people will have to find out for themselves. Heck, after I retire I might even accept them as consulting clients and make some extra dough on the side. 🙂

    • Thanks, Big ERN, and yes, I am guilty as charged. I had been relatively frugal all along, frugal without a cause.

      It wasn’t until I started really taking stock of where we were at financially, personally, and professionally that I realized just why we were saving our money. Early retirement suddenly made sense to me, and was closer than I could have imagined.

      Justin @ Root of Good does some early retirement consulting. I find the fact that anyone pursuing FIRE would drop a Benjamin or two on a consult when there is so much information available if you know where to look. Maybe there’s more to the consulting gig that I don’t understand.


  9. I love conversations like these, especially when people actually are more on the ball than I previously thought and I can be excited for them. Many FIRE folks are pretty quiet about it in public so it seems like the spendthrifts are the only ones out there, but I’m starting to wonder if there are really more of us than it seems.
    Thanks for sharing your journey–it seems like MMM is a gateway site for many of us 🙂

    • You make a good point. When you live a seemingly normal lifestyle, nothing really stands out, now does it? I don’t think many physicians like to admit that they would rather not be working, even if it’s true. I get to do some cool things at work, but the best workday is a short workday, and the best weekend is a long weekend.


  10. Where you were two years ago was where I was six months ago.

    And now that I am where I am now I feel as if I see ailing, drowning people everywhere. It is all I can do to keep my mouth shut and not turn into that person, constantly spouting unsolicited advice.

    I also have to remember to be kind to myself. And never, ever do self-destructive math (‘what if I had started five years earlier? How about ten?’) – at least not until I invent a time machine.

    • Thanks for weighing in. You jumped right into blogging, didn’t you? I had to let the ideas simmer for awhile. Starting the blog was my New Year’s resolution.

      I am very grateful to have had no exposure to FIRE principles in the early years of my career. If I hadn’t been so close to FI when I first read about it, I fear the years would have really dragged on. I’m counting down the months now to early retirement, and these occasional 18 – 21 hour workdays are starting to really get me down. It’s comforting to know I only have so many left.


  11. I've got my 2 acres of non-leveraged, crop-producing, cashflowing farmland via AcreTrader. Get yours.
  12. In an effort to remain anonymous you could certainly point them to WCI, Boggleheads, and other sites. You might even plan a future time to provide them with a document that has a listing of websites that can show them how to get there. Of course, you may come off as an Amway sales person, too, so delivery is the key.

    It may take a few meetings to determine if they are serious or not. Many people are not and for those that are fear will unfortunately take many of them out of the picture.

    Thanks for the work you do here.
    cd :O)

    • Yeah, the closer I get to saying sayonara, the easier it might be to open up.

      Pointing to WCI could lead someone to me fairly quickly, since I frequently comment on the posts and am quite active in the forum. Even Bogleheads could be risky.

      Not that it would be the end of the world if my identity were revealed, but I’m not ready for that just yet!


  13. “If I have seen further than others, it is by standing upon the shoulders of giants.” – Isaac Newton

    Doing research in technology, you often realize that you are going to come to an obvious solution. You might be the first one to go down that road or “invent” that technology, but it’s always building on what has come before. And given a certain set of constraints, different parties working in parallel will come to the same set of solutions.

    I think this not only stands with technology, but also in personal finance. We only see so much on our own, but thanks to the work of other bloggers we see further and get a clearer picture of the best path. Having a community of people creating and sharing ideas gives us an immense advantage.

    Thanks for all the great work you do here, POF 🙂

  14. It is fascinating in my work place where I work with so many truly gifted scientists. When the conversation turns to investing or travel hacking or healthcare plans and HSA’s it is as if I come from planet Zog. Looks of bewilderment, quick changes of the conversation tells me that people are not informed and are perhaps scared to get informed. Had a couple of wins recently on helping others with some topics but it is few and far between.

    Earlier this year, we put together a short summary document for some friends on great blogs out there that speak about saving, investing . The immediate response was thanks and it was awesome. However since then radio silence. Can only hope they are still reading, digesting and formulating some plans. We have learned to be very patient with others on this as it can be overwhelming for even the very well educated. Amazing that last statement when you think about it.

    When we hit FIRE, our plan is to leave a few copies of the JL Collins book at our respective workplaces in prominent places (HR suite, big conference rooms or seminar rooms).

  15. My “awakening” was in 2014 also. It was when I thought I had an financial advisor that was really an insurance salesman that left Northwestern and went to Guardian and told us we should ditch the VUL policy with NWM and start one with Guardian. This opened my eyes so wide. I was only 2 years into the VUL plan so I dropped it and my so called advisor and realized no one would care more about my money than me. So I started reading and reading. WCI and your site were like aha moments for me and I really appreciate it. I to now get looked at, at work like a wierdo! But I’ve learned to only talk to people that are interested about the topic, but now people are aware I know more than the average bear. So they come to me 😉

  16. I tend to prefer to write largely anonymously. Every so often I come out of the shadows and share some advice, but I’ve found most people just start to shift to envy if you go too far down that road. They miss the point of the knowledge. Or like one of my extended family they feel so overwhelmed they just ask me to manage their finances for them. Since I don’t have the time to manage everyone I meets finances and I don’t want half my friends and family turning green I just leave it be. Sad really as its not like its rocket science or there are high barriers to success to improving your finances. That’s one of the real reasons I wish they taught this stuff in school. If its part of a curriculum its less likely to be taken as one persons success story and more likely to be viewed as a the democratic style process it really is.

    • Yeah, FTF, everyone should have the privilege of being exposed to this kind of stuff. I spent an entire year learning macroeconomics in high school. A personal finance education would have been heaps more helpful.


    • I wish they taught this stuff in school.

      I am strongly considering a second career after “retirement” from law, and I’d urge other bloggers who maybe have the background for it to consider it too. My idea: Teach some entry-level, gen-ed type personal finance class at one of several local universities and colleges. Send the students to blogs like this for midterms. Who knows? Might go in one ear and out the other, but it might spark something in one or two students.

  17. Hey Doc! I’ve decided to “be transparent” with my blog, and it’s led to some very interesting discussions with co-workers and friends. I think there are a LOT of folks out there who “Don’t Know”, and it many cases it does “Hurt Them”. Hopefully, we can leverage the knowledge we gain in our writing to help folks in need, whether they know we’re “experts” or not. In the end, folks need knowledge to win the retirement race. If we can provide some guidance, however small, we’ll all be better off for the effort!

  18. Hey PoF, I’ve had similar situations at work as well. The talk of early retirement comes up often and people comment that there’s no way they could do it (there is) and that I am unusually versed in the subject! It’s hard not to tip your hand when you are excited about something. I never know how far to take it with people because I don’t know how serious they are about it. Or if they really want advice or are just complaining.

    I feel like Batman! Ha, ha…


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