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.
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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.
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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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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