Post FI Notes 008: A Decamillionaire Entrepreneur & Physician

He’s financially independent many times over. That hasn’t stopped today’s Post FI Notes interviewee from continuing to work two jobs that he loves.

Like most of our interviewees, anonymity is paramount, so you won’t learn a great deal about the startup that has contributed greatly to his multiple 8-figure net worth, nor will you hear about his clinical practice.

What you will discover is his approach to life and money. I particularly like the mental trick he uses to justify splurging when he, like many of us, has some ingrained frugal tendencies and habits that can be difficult to break.

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.

 

a decamillionaire entrepreneur & physician

 

Getting to Know You

 

You’re financially independent. About how much does your household spend in a typical year? How much could you spend while still abiding by the 4% rule?

I am an incredibly fortunate, later career physician living in the northeast.  Early in my career, I worked in academics, earning a typical physician income.  Later, I started a medically themed business that became so successful that I eventually gave up my academic position.

We are beyond FI such that we don’t track how much we spend.  Because of an outsize income, income taxes dwarf anything we might possibly spend on ourselves.  Our annual US and state income taxes have been running in the 7-figures in recent years.  Our annual investment contributions also run in the 7-figures.

I would estimate that we spend around $400,000 to $500,000 per year on living expenses, — things like plush international travel, household projects, gifts, and charitable contributions.

In the past, we had always been quite careful with spending, and old habits die hard.  These days, when I ask myself if I should splurge and spend $500 per night for a luxury hotel, I rationalize the extra spending by remembering that our daily income tax bill is many thousands of dollars and many times greater than any amount that I might possibly spend.

 

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

All of our kids are now off the family payroll, working, successful, self-supporting, and living on their own.  Halleluja!  After all the various bumps in the road, we succeeded in our job as parents, working ourselves out of a job.  So we are now officially empty nesters.

Our youngest graduated from college last year and got married.  We recently welcomed our first grandchild.  They live 5 minutes away and we get to see the baby often.  That child warms my heart, what a wonderful little miracle and blessing.  We help the kids by providing occasional childcare in our home, and we take the baby overnight once a week on Friday nights to give the new parents some respite to catch up on their sleep.

Our former nanny worked for us for 2 decades, and then she left after our kids got older.  She called us one day out of the blue and asked that we consider allowing her to “come back home.”

She now lives with us and functions as our personal chef, household manager, and assistant.  So, in total, we are a 3-person household, and the kids come by frequently.

 

Are you still working? In what career? Did your work schedule or attitude towards work change once you knew you were FI?

I am a sub-specialty physician and my spouse worked as an international corporate attorney prior to transitioning to teaching.  My spouse recently retired and I continue to work.

I do a variety of things, part-time clinical work, some consulting, and leading my startup business that has become unfathomably successful.  The business that I started has grown to over 200 employees, and most of the employees earn very generous 6-figure incomes.

 

Was financial independence a long-term goal of yours? Did you think you might retire early or be able to do so when you first got started in your career?

We always paid attention to both careful spending and wise investing, but never considered that we would have the resources to retire early.  Several years back, I realized that our net worth had reached the point where work had become optional.

We ended up in this state of unimaginable wealth due to high income, careful spending, high savings, broad, diversified investing, and to more recent unimaginable growth in income due to the growth of the company that I founded.

 

Investing

 

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

Half of our wealth is in the value of the startup business that I created.  The rest is in stocks, bonds, cash, and real estate.  Our allocation is approximately 20% stocks, 5% bonds and cash, 25% investment real estate, and roughly 50% business ownership.

In my younger years, I aspired and dreamt that we might make it to a $10 million dollar net worth by age 65, but we are already about around 5-fold beyond that figure.  We could easily live quite well on the stock and bond portion of our assets alone if we so desired.  Alternatively, we could live quite well on the income from our real estate portfolio.

We own our personal residence free and clear in an extremely high cost of living location, but despite having no mortgage payment, the property taxes are ridiculously high.  With the kids out of the house, we no longer need all the space, but the gardens are magnificent and a joyful hobby for my better half.  It feels like we live in a botanical garden.  I love sitting out in the courtyard garden to have lunch, surrounded by the flowers and the foliage.

We could sell the house to downsize, but the location near the kids and our new grandchild is perfect.  For now, we are not going anywhere.

 

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

Both of us maxed out all tax-deferred accounts every year from the time we were in our 20’s, and I currently continue to allocate 58k per year to tax-deferred accounts.  When we get to the age that RMDs are required from the tax-deferred accounts, the alphabet soup of 401(k), 403(b), 457(b), traditional IRA, and SEP IRA accounts will be worth over $10 million.

We invested in low-cost Vanguard index funds for our retirement accounts for decades, starting before many even knew about the benefits of low-cost index funds, and the results have been impressive.  This year, due to some one-time real estate related tax benefits, we will likely be opening our first Roth accounts with a conversion from other qualified retirement accounts.

 

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

We do not have an HSA.  We cash flowed the college tuition for our kids, and we were fortunate that each of our children also had a significant scholarship.

We are considering setting up a 529 for our new grandchild as 10k per year in contributions would be exempt from state taxes when placed in a 529 account.  But we don’t currently want to share much information with our children regarding these funds for our grandchild’s education.

We want them to continue to develop their own financially responsible habits.  There has been good progress on that front.

We pay for family vacations when we all travel together, and we pick up the check for family restaurant outings, but otherwise our young adult children need to independently establish and support their own budgets.  Those around us know that we are quite successful, but we practice stealth wealth to a degree in the hope that others have limited knowledge of the true extent of our wealth.

 

What has been your best investment?

My best investment has been my investment in myself.  First, my 14 years of higher education in college, medical school and post-graduate training got me off to a great start.

After that, growing my leadership skills, my investment knowledge, and my business knowledge has led not only to great personal wealth, but has also enabled me to make significant contributions to the lives of my patients, to many colleagues, and to our community.

 

Your worst investment?

When I was in high school, working as a landscaper, I bought some gold which went up in value and then right back down.  It was a bad investment, but that loss was tuition that led me to learn more about wise investing.

 

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Post-FI Life

 

What do you like to do with your free time? How much free time do you have these days?

I am FI but still working. I continue to enjoy taking great care of patients, and the very part-time nature of my clinical work has taken away the stress.  I also thrive on being productive, so I work at continuing to build the business that I started.

After achieving unimaginable wealth, a big part of my identity is working to maximize the positive energy that I bring to others and the contributions that I make to share and spread some of our success.  I also spend time outdoors exercising with friends every day; it is how I start my day, typically at dawn.

 

Do you enjoy travel? Tell us about a favorite trip you’ve taken.

We love to travel, and we splurge on nice international trips whenever we are able.  We have traveled all over the US and to Asia, Europe and the Middle East.  We are planning to travel to New Zealand and Australia in the near future.

My favorite trip was a trip to Patagonia.  The landscapes and the wildlife were unforgettable.

 

Do you incorporate giving (money or time) into your post-FI life?

We give generously to local, national, and international charities.  We also volunteer with at-risk youth, for local and international health care initiatives, and for other organizations.

 

If retired, do you miss work? Do you get bored?

I am not retired and I worked outrageously long hours, 7 days a week, during the worst of the severe Covid surges.  Now that Covid is waning, I am again working part-time and we are finally back to taking time off for travel.

Our first international trip post Covid is coming up over the holidays in December.  I will likely take 12 weeks or more of vacation time this coming year for travel.

 

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What advice do you have for others hoping to achieve the financial success you’ve found?

I would advise not to focus primarily on the financial success, but rather on finding productive work that is enjoyable.  I dedicated myself to the mission of my work.  My success flowed from my passion and my commitment to be the best that I could be.

During my earlier years, while earning a typical physician salary, we were quite careful about spending.  Living below our means allowed us to have the capital that allowed me to start my business.  I continued to work as an academic physician for a long time until the business became increasingly successful, and I then transitioned out of academic medical practice.

Now we spend an outsize amount to enjoy life and to contribute to various charitable causes, but in reality, given the growth in our wealth, we continue to live well below our means.

 

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

 

My next financial planning need is to work on a well-defined transition and succession plan for my business.  What happens if I get hit by a bus and become disabled or die?  And what does the transition plan look like if I simply decide I want to retire?

I currently feel that in perhaps 5 to 10 years I may want to further reduce my time commitment at work, or I may want to fully retire.  At this moment, however, I am having too much fun growing the company to consider retirement.

 

PoF: Thank you so much for sharing your story! 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.

 

 

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I’ve shared my feedback privately with today’s guest. I wouldn’t want my opinions to influence yours. Please give your take 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.

 

30 thoughts on “Post FI Notes 008: A Decamillionaire Entrepreneur & Physician”

  1. Congratulations on all your success, you will obviously have an estate tax “problem”, is there anything you plan on doing with your money in the future?

    Reply
    • I have an estate plan, but we have not done anything complex to try to limit estate taxes. I don’t think it is healthy for the kids to get too much money. We will likely give modest amounts to our kids for special occasions, and give to charity, and probably pay estate taxes as well. I am ok with that because of all of the benefits we gained along the way from our families and our country.

      Reply
  2. Subscribe to get more great content like this, an awesome spreadsheet, and more!
  3. Not a particularly helpful post for the vast majority of docs. Nothing is actionable from this post. Would have loved to here more how the business was started. What was the idea? How was it executed? What was the first step in starting the business? Seems like a “puff my chest out” post. I’m jealous of those amazing trips and personal chef. I just graduated residency and had my first $60 steak of my life, and I don’t regret it.

    Reply
    • I surveyed my readers a few months ago, and over 40% reported having a net worth in excess of $5 Million.

      Some are already decamillionaires, and most who currently have > $5M will likely achieve that status eventually.

      So I think there is some value in hearing from someone who has tens of millions to gain insight into how that level of wealth impacts how they live and what their approach is to life and money.

      I realize that it’s not relevant to someone just starting out, but I’ve got a FIRE Starter interview series that might be of more interest.

      Cheers!
      -PoF

      Reply
    • I didn’t want to give too much detail as I greatly value my anonymity. Talking about wealth is considered poor form in polite company, maybe more sensitive than talking about sex. And these days, there are many in our country that condemn the wealthy. But I see it differently.
      The business I started is in health care, directly related to my area of clinical expertise, and provides hundreds of outstanding jobs and what I like to believe is a great work culture. I am proud of what I have helped to create.

      Reply
  4. This is just an interview, it’s never meant to be something actionable for you to do. Jealous? What you just wrote is very disrespectful to this doctor.

    Reply
    • I also feel this interview is light on substance. Obviously this physician achieved great success and took time out to be interviewed. Given his net worth of around 50 million, he probably spend thousands of dollars worth of this time. However, the information that I got was “I have 50 million. I’m doing great. my kids are great. And I pay a lot of taxes”

      POF is modeling the series after ESI millionaire interview. I do think having more specific questions will be more helpful. I’ll probably not read future interviews and stay with ESI.

      Reply
      • You would be correct if you consider that the abbreviated story shared in the interview only covers a few curated highlights.

        There were many struggles along the way as we found our way to success…. A child with substance use issues, who has been sober for almost 2 years and who is productive and contributing positively to society. Fingers crossed for this to continue.

        Reply
  5. You don’t think PoF wants his readers to have actionable items from these posts? I am the only one who is wondering about the business idea? I didn’t intend to be disrespectful. PoF has a comment section and welcomes feedback, he even mentioned that the business wasn’t emphasized, which is glaringly missing in this post. That’s by far and away is the number one factor in this doc’s success. It needs more discussion if you’re going to do an interview on a personal finance website.

    Reply
    • I thought it served as a good reminder that our finances remain secondary to value/purpose. As the interview noted,

      “I would advise not to focus primarily on the financial success, but rather on finding productive work that is enjoyable. I dedicated myself to the mission of my work. My success flowed from my passion and my commitment to be the best that I could be.”

      Reply
    • Anonymity was paramount to this interviewee, which is why he was intentionally vague with regards to the business.

      In the instructions (which are linked in the intro and outro for viewing), I ask participants to be revealing with their numbers, even if that comes at the expense of being vague in other areas to keep their identities unrecognizable.

      A few respondents have used their actual identities (other bloggers), but most who are willing to share numbers are not going to give enough clues in the interview to be potentially identified.

      Best,
      -PoF

      Reply
  6. While I also am burning for more details on this doc’s business, I found the interview very interesting. It gives us insight into the day to day of someone with a very high net worth. I think it’s fascinating that he’s still working long hours despite no financial need to do so. It lends weight to his advice at the end, which is to find work that creates a sense of passion.

    I also am gratified to read that his kids are doing well and are successful in their own right. This addresses a concern that I have — that the parents’ success can sometimes be a detriment to the motivation of the children.

    Reply
  7. Leif, I think you should share your recommendations at the end of the article like Liz at Frugalwoods does.

    Also, kudos to this physician! Great work. I think you should spend time developing your succession plan and training a mentee (or two) to take over your company. This is a great time to make sure you find someone who has the same passion as you and who cares about the company and the many, MANY livelihoods it provides. That is very important. There is a lot of responsibility in being a business owner and so you should find someone who shares your beliefs.

    Reply
    • An effective succession plan is a key goal for the immediate future. I want to find an accountability partner to keep me on track with this. It is important for me to complete this to avoid burdening my spouse should anything happen to me.

      Reply
      • I wrote a comment on another post, and POF contacted me with a request to do an interview. My first thought was, “No way!” as I was concerned about protecting my identity and continuing to practice stealth wealth as much as possible. But then I reconsidered and answered the questions.

        Reply
  8. Unless I missed, he has not even mentioned his current age or through the process, I would expect on an “Early Retirement” post to have this covered.

    Reply
  9. Great article. I found several action points.

    I have found that early on in my careers I had no clue about how to become successful. I only had aspirations. Then as my success grew I spent way too much time focusing on details. As my success grew I focused less on the details and more on the bigger picture. The more success grew, the bigger picture I looked at.

    Here are some of the main points I took away from the article:

    1) he focused on his passion, the money followed
    2) he made sure his kids were successful on their own
    3) he makes time to consider his health daily
    4) he doesn’t flaunt his wealth, but lives with a semblance of humbly anonymity
    5) he believes in generosity and lives accordingly
    6) he believes in hard work – all the time.
    7) he is considering his legacy, but his enjoyment in his work makes a transition difficult to focus on at this point in time. He doesn’t know what else he would do with his time.

    There are other points to take away. But this was my initial 7. What were yours?

    Reply
  10. I think a post like this does have value. The author started out like all of us, and was chipping away at it the way we all are: being frugal, hustling at work, trying to raise independent adult children, and supporting charities that pull on our hearts. While he is undoubtedly older than many of us (children independent, etc.), this is one of the ways the story can play out 25 years later. So, to me, its reassuring.

    So, did he catch lightening in a bottle? Maybe. But that doesn’t preclude all the work that he did when the outcome was very uncertain. I’ll bet that even without the business success, he would have been a $5-10M guy, at least.

    Reply
    • Success is about preparation and then being ready to jump when opportunity presents itself.

      Without the company I started, I would have ended up in the 5 to 10MM club at retirement, with a somewhat similar lifestyle, but likely flying to Europe in coach for vacation rather than in business class. And perhaps downsizing from the large doctor house in an expensive area. This way, we can stay in the high property tax, large house with the beautiful gardens as long as desired, without concern about the cost.

      Reply
  11. Interesting perspective from someone at the far right of the bell curve as it pertains to FI.
    Lots of good points, like Townsend pointed out, which reinforce basic tenets for not only financial success but success for life in general.
    I love the description of how his spouse makes their home like a botanical garden! and exercising with friends. Taking joy in simple pleasures is part of what makes life worth living.

    Reply
    • Yes, regardless of the degree of financial success, it is the small things that make life worthwhile. Spending time with family and friends, creating a great work culture and meaningful connections in the workplace, exercising outdoors with friends every morning, and having interesting travel experiences.

      Reply
  12. Can you share any advice on how to raise motivated and “hungry” kids? After you mentioned that your son had substance abuse, I wondered if it is because he lived in affluent neighborhood and was bored since he had everything. I mean no disrespect with this question. More for my education since I have 3 young boys and have no clue how to balance money/giving them things with not buying them everything.

    Thanks

    Reply
    • Hi Kevin,

      Each kid is different, so there isn’t a one size fits all answer. I found that it is best to keep kids a bit hungry, meaning that when in doubt, parents in affluent families should work hard at times to say no to their children. When kids have to work for what they want, it helps them define their values, it helps them feel more motivated. Having everything handed to you leads to boredom, a loss of sense of purpose, and increases the risk of depression. As we became more attuned to this over time, we worked to have kids contribute to cooking, yard work, and home projects. I found that making a meaningful contribution to the family with those contributions helps counter entitlement and reduces the risk of depression.

      Reply
      • Thank you very much. Completely agree on one answer for everybody. Also wanted to find out your view on following questions:
        – Do you think parents should pay for college, given that they can afford it, or let the kid have skin in the game by having kid pay/finance for at least 1 year?
        – What are your thoughts on private vs public schools? Are private really worth it?

        Thanks again

        Reply
        • There is good data out there suggesting that having “skin in the game“ increases commitment in college. We required our kids to make a small contribution to their education on an ongoing basis. They were required to buy books, and to pay a modest contribution to tuition to have skin in the game.

  13. Thank you very much. Completely agree on one answer for everybody. Also wanted to find out your view on following questions:
    – Do you think parents should pay for college, given that they can afford it, or let the kid have skin in the game by having kid pay/finance for at least 1 year?
    – What are your thoughts on private vs public schools? Are private really worth it?

    Thanks again

    Reply

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